Gepaya v. State Farm Mutual Automobile Insurance Co.

14 P.3d 1043, 94 Haw. 362, 2000 Haw. LEXIS 441
CourtHawaii Supreme Court
DecidedDecember 20, 2000
Docket23219
StatusPublished
Cited by15 cases

This text of 14 P.3d 1043 (Gepaya v. State Farm Mutual Automobile Insurance Co.) 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
Gepaya v. State Farm Mutual Automobile Insurance Co., 14 P.3d 1043, 94 Haw. 362, 2000 Haw. LEXIS 441 (haw 2000).

Opinions

Opinion of the Court by

ACOBA, J.

We hold that the Circuit Court of the First Circuit (the court) committed plain error in a Hawaii Revised Statutes (HRS) § 658-8 proceeding to confirm an arbitration award when it determined a legal question not decided by the arbitrators and modified the arbitration award accordingly. Unless the award was subject to review under the statutory grounds set forth in HRS § 658-9, or § 658-10, or either one of the two judicially recognized exceptions our appellate courts have adopted, the court was mandated to confirm the award according to its terms.

I.

On December 14, 1998, Petitioners-Appellants Sabino Gepaya (Sabino) and Nenita (Nenita) Gepaya (collectively, Petitioners) filed an application for appointment of arbi[363]*363trators pursuant to HRS chapter 658 (1993).1 The application alleged that Nenita and Sabi-no, her husband, were in their vehicle on January 1, 1998, when they were involved in a motor vehicle accident with a vehicle driven by an uninsured motorist. The application further alleged that Petitioners’ insurer, Respondent-Appellee State Farm Mutual Automobile Insurance Co. (Respondent), had made personal injury protection benefit payments of $10,797.14 on behalf of Nenita and $10,647.39 on behalf of Sabino, that Petitioners had requested further compensation under the uninsured motorist coverage provision of their policy with Respondent, that Respondent had failed to make payment under such coverage, that their policy with Respondent provided for arbitration of the matter, and that the court should enforce their policy’s arbitration clause.

On February 19, 1999, the court granted the application and ordered the selection of three arbitrators and the initiation of arbitration proceedings “according to the terms of the contract and based on [HRS cjhapter 658, ‘Arbitration and Awards.’ ”

On January 11, 2000, Petitioners filed a motion to confirm the arbitration award dated October 4, 1999, and for entry of judgment thereon (the motion), pursuant to HRS § 658-8 (1993).2 The memorandum attached to the motion related that pursuant to the February 19,1999 court order, an arbitration hearing was held on September 21, 1999 and an arbitration award was issued on October 4, 1999. In pertinent part, the award stated as follows:

Mrs. Gepaya
Medical Special Damages $10,258.62
General Damages $12,000.00
Mr. Gepaya
Medical Special Damages $ 9,556.26
General Damages $12,000.00
Costs to Mr. & Mrs. Gepaya $ 1,639.01
The possible application of HRS § 431:100-301.5 covered loss deductible is specifically not being addressed in this award.

(Emphasis added.) The parties’ instructions to the arbitrators, if any, are not a part of the record.

In the memorandum in support of the motion, Petitioners stated that Respondent sought to reduce the amount of the awards based on the “covered loss deductible” provision in HRS § 431:100-301.5 (Supp.1997), which became effective on January 1, 1998. HRS § 431:100-301.5 provides as follows:

Covered loss deductible. Whenever a person effects a recovery for bodily injury, whether by suit, arbitration, or settlement, and it is determined that the person is [364]*364entitled to recover damages, the judgment, settlement, or award shall be reduced by $5,000 or the amount of personal injury protection benefits incurred, whichever is greater, up to the maximum limit.

(Emphases added). Relying on Sol v. AIG Hawai'i Ins. Co., 76 Hawai'i 304, 875 P.2d 921 (1994), Petitioners maintained that this statutory provision did not apply to additional insurance coverage obtained at Petitioners’ option, such as uninsured motorist coverage. Petitioners noted that HRS § 431:100-301.5 was amended on July 20, 1998 to read that “[t]he covered loss deductible shall not include benefits paid or incurred under any optional additional coverage [;] ” thus, had the accident taken place after July 20, 1998, the question raised by Respondent would not arise. Petitioners then requested that the court “apply the reasoning of’ Sol, “confirm” the award, and enter judgment “in the amounts stated in the arbitration award.” Additionally, according to the memorandum, Petitioners and Respondent had apparently agreed that the costs awarded in arbitration would be paid in full by Respondent and the amount of the awards not in dispute, i.e., the “general damages”'portions of the arbitration award, would be paid to Petitioners.

Subsequently, partial payment of the awards, as agreed, was purportedly made and in a November 2, 1999 pleading filed by Petitioners, they “acknowledg[ed] that they ha[d] received payment in partial satisfaction of the Arbitration award[ ]” from Respondent. This pleading stated, as to the uhpaid balance of the award, that

[t]he remaining amount is fairly an amount subject to dispute in good faith. Counsel for Petitioners ... and said Petitioners, accept the dispute as to the remaining, as yet unpaid and unsatisfied portion [of the arbitration award], as a “good faith” dispute as to which future clarification or legal decision or agreement will be required, to be initiated by either or both parties.

(Emphasis added).

In its opposition memorandum, Respondent argued that Petitioners’ motion to confirm should be denied “because the covered loss deductible statute in effect at the time of the subject motor vehicle accident on January 1, 1998, namely HRS § 431:100-301.5, allowed for a reduction [in the arbitration award], up to the maximum amount of $10,-000, in the amount of the arbitration award.” Respondent maintained that, “(1) the statutory language of HRS § 431:100-301.5, allowing a reduction for covered loss deductible, is plain and unambiguous and[,] thus, the court cannot alter its plain meaning under Hawaii law, and (2) the subsequent 1988[sic] amendment to HRS § 431:100-301.5 has no retroactive operation under Hawaii law.”

On February 29, 2000, the court in effect adopted Respondent’s position, granting the motion in part and denying it in part, and ordered confirmation of the arbitration award less the covered loss deductible claimed by Respondent:

IT IS HEREBY ORDERED that the

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Gepaya v. State Farm Mutual Automobile Insurance Co.
14 P.3d 1043 (Hawaii Supreme Court, 2000)

Cite This Page — Counsel Stack

Bluebook (online)
14 P.3d 1043, 94 Haw. 362, 2000 Haw. LEXIS 441, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gepaya-v-state-farm-mutual-automobile-insurance-co-haw-2000.