Chun v. Bd. of Trustees of ERS

992 P.2d 127, 92 Haw. 432
CourtHawaii Supreme Court
DecidedFebruary 2, 2000
Docket22012
StatusPublished
Cited by76 cases

This text of 992 P.2d 127 (Chun v. Bd. of Trustees of ERS) is published on Counsel Stack Legal Research, covering Hawaii Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chun v. Bd. of Trustees of ERS, 992 P.2d 127, 92 Haw. 432 (haw 2000).

Opinion

Opinion of the Court by

LEVINSON, J.

In the present appeal, we are asked to reconsider Montalvo v. Chang, 64 Haw. 345, 641 P.2d 1321 (1982). In Montalvo, we adopted the “lodestar” method of awarding-attorney’s fees to plaintiffs’ counsel in class action litigation where the recovery has resulted in the creation of a common fund from which the attorney’s fees are drawn. 1 Montalvo, 64 Haw. at 361-62, 641 P.2d at 1332. The central question presented herein is whether the circuit court possessed and should have exercised the discretion to award attorney’s fees based on a percentage of the common fund recovered in the class action suit.

The appellants-appellants Michael A.S. Chun, Gladys Farm, Herbert T. Imanaka, Jimmy T. Izu, Samuel Y. Kakazu, Billy G. Southwood, Eishin Tengan, Thomas Y. Yano, Valerie Yamada Southwood, and Barbara Jane Luke (collectively, the Retirees) appeal from the order of the first circuit court, entered on October 21, 1998, awarding attorney’s fees in the amount of $1,027,625.50 to the Retirees’ attorney, Charles K.Y. Khim. 2 The Retirees raise the following points of error on appeal: (1) the circuit court violated the “law of the case” doctrine when it reversed its own decision regarding the standing of the appellees-appellees Board of Trustees of the Employees’ Retirement System of the State of Hawai'i (the Board) and the Employees’ Retirement System of the State of Hawai'i (the ERS) to challenge the amount of attorney’s fees being sought by the Retirees; (2) the circuit court erred in ruling that the ERS had standing to challenge the amount of attorney’s fees being sought by the Retirees; (3) the circuit court abused its discretion by declining to consider calculating Khim’s attorney’s fees as a pure percentage of the “common fund” recovered by the Retirees; (4) the circuit court’s statement that it was “personally offended” by Khim’s behavior rendered its ruling invalid; (5) the circuit court erred in rejecting the doctrine of comity as relevant to the present case; and (6) the circuit court erred in finding that the ERS’s attorney had been lawfully retained. The Retirees’ third point on appeal has merit. Accordingly, we vacate the order of the circuit court, entered on October 21, 1998, and remand the matter to the circuit court for further proceedings regarding the method of awarding attorney’s fees to Khim. Athough our holding with *435 respect to the foregoing point is outcome-dispositive of the present appeal, we address the Retirees’ remaining arguments in order to provide guidance to the parties and the circuit court on remand. Cf. State v. Staley, 91 Hawai'i 275, 277, 982 P.2d 904, 906 (1999).

I.BACKGROUND

A. Chun I

Prior to retiring, the Retirees (as public school principals, vice principals, or teachers) were all “ten-month” employees of the Department of Education (DOE). The present appeal arises out of two class action lawsuits—one (Chun) brought on behalf of retired principals and vice principals and the other (Southwood) on behalf of retired teachers—filed in the first circuit court. Each complaint sought relief based upon the allegation that the ERS had undercaleulated the benefits to which the Retirees were entitled. The circuit court (1) entered summary judgment in favor of the retired principals and vice principals, (2) ruled that “the lump sum payment of ‘earned summer salary,’ paid upon retirement^] was compensation attributable to the month in which the member of the class retired,” and therefore (3) ordered the ERS to include those amounts in the recalculation of the principals’ and vice principals’ “average final compensation.” Chun v. Employees’ Retirement Sys., 73 Haw. 9, 10, 828 P.2d 260, 261 (1992) (Chun I). The ERS appealed. In Chun I, this court vacated the circuit court’s order and remanded the ease with directions that the circuit court remand the matter to the ERS for a full administrative hearing before the Board. Id. at 11, 828 P.2d at 263. Based on Chun I, the circuit court likewise remanded the claims asserted in Southwood for an administrative hearing.

B. Chun II

Subsequent to the administrative hearing, on March 23, 1995, the Board issued a “decision” denying all of the Retirees’ claims. Chun v. Employees’ Retirement Sys., 87 Hawai'i 152, 158, 952 P.2d 1215, 1221 (1998) (Chun II). The Retirees appealed the Board’s decision to the circuit court. Id. On March 4, 1996, the circuit court entered its “final order” reversing the Board’s decision and directing that retirement pay be increased both retroactively and prospectively. The March 4,1996 order provided in relevant part as follows:

2. [The ERS and the Board] shall recalculate the [average final compensation (]AFC[)] of all [Retirees] by including the earned salary paid in lump sum upon retirement in its calculation. However, [the ERS and the Board] should only include those mon[ie]s earned in the three years used to calculate [the AFC]....
3. [The Retirees] are awarded attorney’s fees only insofar as attorney[’]s fees are to be paid by the [Retirees] from the funds they recover through the relief granted herein. In accordance with [the Retirees’] request, [the ERS and the Board] are ordered to deduct said reasonable attorney’s fees from the additional payments that will be made to the [Retirees]. Following a final resolution of this case, ... this court will make a final determination of the award of attorney’s fees, both the amount and manner of calculation.
4. [The ERS and the Board] shall recalculate the monthly retirement and post retirement allowances of all members of the Chun class from two years prior to the filing of the complaint in Chun v. Employees’ Retirement System in Civil No. 86-3904, and of the Southwood class from [two] years prior to the filing of the complaint in Southwood v. Employees’ Retirement System in Civil No. 90-0510-02, in light of the recalculation of [the] AFC for all [Retirees].
5. [The ERS and the Board] shall make a lump sum payment to each [Retiree,] which represents the difference between the newly recalculated monthly retirement benefit each [Retiree] would have received pursuant to the recalculations noted hereinabove, and the monthly retirement benefit each class member received, from two years filing to the relevant complaint[s] ..., or the date of retirement to the date of this order.

*436 On March 11, 1996, the circuit court entered a final judgment, reversing the Board’s decision dated March 23,1995, in favor of the Retirees and against the Board and the ERS. The ERS and the Board appealed the judgment. Chun II, 87 Hawai'i at 155, 952 P.2d at 1218.

In Chun II,

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Bluebook (online)
992 P.2d 127, 92 Haw. 432, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chun-v-bd-of-trustees-of-ers-haw-2000.