Kelly v. METAL-WELD SPECIALTIES, INC.

192 P.3d 613
Hawaii Intermediate Court of Appeals·Decided September 30, 2008·No. 27127, 27208·Published

Opinion

GLEN J. KELLY, Claimant-Appellant,
v.
METAL-WELD SPECIALTIES, INC. and HAWAII EMPLOYERS' MUTUAL INSURANCE COMPANY, Employer/Insurance Carrier-Appellee and
GLEN J. KELLY, Claimant-Appellant,
v.
METAL-WELD SPECIALTIES, INC. and HIH AMERICA INSURANCE COMPANY OF HAWAII, Employer/Insurance Carrier-Appellee and
METAL-WELD SPECIALTIES, INC. and JOHN MULLEN AND COMPANY, Employer/Insurance Carrier-Appellee.

Nos. 27127, 27208

Intermediate Court of Appeals of Hawaii.

September 30, 2008.

On the briefs:

David J. Mikonczyk, for Claimant-Appellant.

Robert C. Kessner, Sylvia K. Higashi, for Employer-Appellee.

METAL WELD SPECIALTIES, INC. and Insurance Carrier-Appellee HAWAII EMPLOYERS' MUTUAL INSURANCE CO.

Brian G.S. Choy Keith M. Yonamine Joaquin V.E. Manibusan, III (Law Offices of Brian G.S. Choy) for Employer-Appellee METAL WELD SPECIALTIES, INC. and Insurance Carrier-Appellee HIH AMERICA INSURANCE COMPANY OF HAWAII (HAWAII INSURANCE GUARANTY ASSOCIATION)

Sidney J.Y. Wong Colette H. Gomoto (Wong & Oshima) for Employer-Appellee METAL WELD SPECIALTIES, INC. and Insurance Carrier-Appellee JOHN MULLEN & COMPANY, INC.

SUMMARY DISPOSITION ORDER

FOLEY, Presiding Judge, NAKAMURA, and LEONARD, JJ.

At all relevant times, Claimant-Appellant Glen J. Kelly (Kelly) was employed as an ironworker by Metal-Weld Specialties, Inc. (Metal-Weld). On December 2, 1999, Kelly sustained a work-related injury to his low back. Metal-Weld's workers' compensation insurance carrier at that time was HIH America Insurance Carrier of Hawaii (HIH). After HIH was declared insolvent, Hawaii Insurance Guaranty Association (HIGA) became the successor insurance carrier.

On July 22, 2002, Kelly complained of back and leg pain while working for Metal-Weld on the Westin Kaanapali resort project. Metal-Weld's workers' compensation insurance carrier at that time was Hawai`i Employers' Mutual Insurance Company (HEMIC). However, pursuant to a wrap-around agreement between the general contractor on the project and the resort owner, Starwood Hotels and Resorts Worldwide, Inc. (Starwood), Starwood provided workers' compensation coverage to Metal-Weld employees working on the project. Starwood provided coverage through AIG Claims Services (AIG), whose claims were adjusted by John Mullen and Company, Inc. (Mullen).

I.

A.

Three different cases were brought before the Director of the Department of Labor and Industrial Relations (the Director). Case No. 7-99-03946 involved a claim by Kelly against Employer/Insurance Carrier-Appellee Metal-Weld and HIH/HIGA (collectively, Metal-Weld/HIH/HIGA) for benefits arising out of the December 2, 1999, injury. Case No. 7-02-03010 involved a claim by Kelly against Employer/Insurance Carrier-Appellee Metal-Weld and Mullen (collectively, Metal-Weld/Mullen) arising out of the alleged aggravation of the December 2, 1999, injury or new injury sustained on July 22, 2002. These two cases were consolidated for decision before the Director and on appeal to the Labor and Industrial Relations Appeals Board (LIRAB). Case No. 7-02-02454 involved a claim by Kelly against Employer/Insurance Carrier-Appellee Metal-Weld and HEMIC (collectively, Metal-Weld/HEMIC) arising out of the same alleged July 22, 2002, work injury.

In Appeal No. 27208 to this court, Kelly appeals from the LIRAB's Decision and Order filed on March 22, 2005. In that decision, the LIRAB concluded that: 1) Kelly sustained a 10% permanent partial disability (PPD) of the whole person as a result of his December 2, 1999, work injury; 2) Kelly sustained a recurrence of his December 2, 1999, injury on July 22, 2002, not an aggravation of that injury or a new injury—meaning that Metal-Weld HIH/HIGA rather than Metal-Weld/Mullen was responsible for the payment of Kelly's post-July 22, 2002, benefits; and 3) Metal-Weld/HIH/HIGA was not entitled to a credit for the benefits it paid to Kelly after July 22, 2002. Metal-Weld/HIH/HIGA did not appeal from the LIRAB's March 22, 2005, decision, but filed opening and reply briefs in support of Kelly's position. See Hawai`i Rules of Appellate Procedure (HRAP) Rule 3(d).

In Appeal No. 27127 to this court, Kelly appeals from the LIRAB's: 1) Decision and Order filed on December 27, 2004; 2) Order Denying Motion for Reconsideration filed on January 14, 2005; 3) Amended Decision and Order Filed January 14, 2005; and Order Granting Motion and Petition for Fees and Costs filed on February 14, 2005. In its December 27, 2004, decision, the LIRAB granted summary judgment in favor of Metal-Weld/HEMIC and stated the following conclusions: 1) Kelly did not sustain an injury on July 22, 2002, for which Metal-Weld/HEMIC was liable; 2) the Director did not err in denying Kelly's request for penalties against Metal-Weld/HEMIC, pursuant to Hawaii Revised Statutes (HRS) § 386-95 (Supp. 2007); 3) Kelly was not entitled to attorney's fees and costs associated with his pursuit of penalties against Metal-Weld/HEMIC; 4) the Director did not err in assessing Kelly with attorney's fees and costs incurred by Metal-Weld/HEMIC in the amount of $2,573.80, pursuant to HRS § 386-93(a) (1993); 5) the Director's assessment of attorney's fees and costs was not procedurally defective; and 6) the Director did not err in determining that Kelly filed two claims against different insurance carriers (HEMIC and Mullen) for the same alleged July 22, 2002, work injury. By Order dated February 14, 2005, the LIRAB also granted Metal-Weld/HEMIC's motion for the assessment of attorney's fees and costs against Kelly, pursuant to HRS § 386-93(a). The LIRAB assessed Kelly with attorney's fees and costs, in the amount of $6,076.95, incurred by Metal-Weld/HEMIC in defending against Kelly's appeal to the LIRAB.

We granted Kelly's motion to consolidate Appeal Nos. 27208 and 27127.

B.

On appeal in No. 27208, Kelly argues that the LIRAB erred in: 1) determining that his alleged July 22, 2002, work injury was a recurrence and a natural progression of his December 2, 1999, injury, and not an aggravation or new injury; 2) limiting its PPD award to 10% of the whole person; and 3) failing "to consolidate and address the unlawful procedures of [Metal-Weld]."

On appeal in No. 27127, Kelly challenges the LIRAB's determination that he acted without reasonable grounds in pursuing his claim for benefits against Metal-Weld/HEMIC for the alleged July 22, 2002, work injury. The LIRAB found that Kelly's claim against Metal-Weld/HEMIC was unreasonable because Kelly was simultaneously pursing a claim against Metal-Weld/Mullen for the same alleged July 22, 2002, work injury and because Metal-Weld/Mullen had conceded that it was responsible for any work-related injury sustained by Kelly on that date. Kelly argues that the LIRAB erred in granting summary judgment for Metal-Weld/HEMIC because: 1) the LIRAB was wrong in concluding that Kelly filed two claims for the same alleged work accident of July 22, 2002; 2) Metal-Weld/HEMIC was the primary insurer and had a statutory duty to provide coverage; 3) cumulative procedural irregularities and misrepresentations resulted in undue prejudice to Kelly; 4) the LIRAB should have consolidated his appeal involving Metal-Weld/HEMIC with his appeal involving Metal-Weld/HIH/HIGA and Metal-Weld/Mullen; and 5) penalties should have been awarded against Metal-Weld for filing a late WC-1 report, pursuant to HRS § 386-95. Kelly further argues that the LIRAB erred in

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Kelly v. METAL-WELD SPECIALTIES, INC., 192 P.3d 613 (hawapp 2008).

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