Preble v. Board of Trustees

143 P.3d 37, 111 Haw. 498, 2006 Haw. LEXIS 484
CourtHawaii Supreme Court
DecidedSeptember 20, 2006
DocketNos. 26186, 26292
StatusPublished

This text of 143 P.3d 37 (Preble v. Board of Trustees) 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
Preble v. Board of Trustees, 143 P.3d 37, 111 Haw. 498, 2006 Haw. LEXIS 484 (haw 2006).

Opinion

[500]*500Opinion of the Court by

LEVINSON, J.

In these consolidated appeals, the petitioners-appellants-appellants/plaintiffs-appellants Duane Preble and Marion Everson [hereinafter, collectively, “the Appellants”] appeal from: (1) the October 3, 2003 judgment of the circuit court of the first circuit, the Honorable Virginia Lea Crandall presiding, in favor of the respondent-appellee-appellee/de-fendant-appellee Employees’ Retirement System of the State of Hawaii (ERS), the appellee-appellee/defendant-appellee Board of Trustees of the ERS [hereinafter, “the Board”], and the defendant-appellee David Shimabukuro [hereinafter, collectively, “the Appellees”], and (2) the November 18, 2003 judgment of the circuit court of the first circuit, the Honorable Eden Elizabeth Hifo presiding, in favor of the Board and the ERS.

On appeal, the Appellants contend that the circuit court: (1) erred in dismissing No. 26292 on grounds of mootness; and (2) erred in dismissing No. 26186 through misapplication of the primary jurisdiction doctrine and in violation of their right to a hearing.

For the reasons discussed infra in section III.A.2, we vacate the circuit court’s dismissal of Civ. No. 03-1-1659 (No. 26292) and remand with instructions to: (1) remand to the Board for hearing and further factfinding for the limited purpose discussed infra in section III.A.2 and with due regard for the change in the law highlighted therein; and (2) affirm the Board’s July 17, 2003 judgment in other respects. For the reasons discussed infra in section III.B, we affirm the circuit court’s dismissal of Civ. No. 02-1-0832 (No. 26186).

I. BACKGROUND

On August 18, 1998, the Appellants, who are apparently retired University of Hawaii (UH) faculty members, tendered a “complaint” 1 to the Board purporting to be a “class action” against the ERS, alleging that the ERS miscalculated and underpaid certain similarly situated UH professors’ pensions and praying that the Board: (1) certify the proposed class; (2) award the class members their recalculated pensions with interest; and (3) award costs and attorney’s fees. The Appellants endeavored to define the “class” as “all members of [the ERS], except retired public school principals, vice principals and teachers,” who, at the time of retirement, worked less than a twelve-month year but whose monthly salary had been apportioned uniformly throughout the year’ (the “earned summer salary” method of computing retirement allowance, see Chun v. Bd. of Trs. of the ERS, 87 Hawai'i 152, 155 n. 2, 952 P.2d 1215, 1218 n. 2 (1998) (“Chun II”)).

On January 11, 1999, the ERS administrator, Shimabukuro, wrote to the Board “recommend[ing] that [it]: (1) authorize the ERS staff to utilize the new ‘High 3’ [Average Final Compensation (]AFC[)] computation methodology for all employees whose annual salaries are prorated over a 12-month period, and (2) authorize retroactive adjustments to the retirees from August 18, 1996,” which was presumably the same policy change that the Appellants sought.

On February 8, 1999, the Board met in executive session “to consult with legal counsel regarding issues resulting from and relating to Chun v[ ]. [Bd. of Trs. of] ERS 2 and unanimously adopted Shimabukuro’s recommendations. (Emphasis added.)

On February 16, 2001, the Appellants submitted a motion to the Board “for an order directing the [ERS] ... to deduct and pay from the common fund created in the above-[501]*501captioned matter of back retirement benefit increases and the share of investment income earned thereon being moved for herein ... attorney’s fees for the [Appellants]’ attorney.” According to the Appellants, in Chun v. Bd. of Trs. of the ERS, 92 Hawai’i 432, 992 P.2d 127 (2000) (“Chun III”), this court “held that in common fund cases3 such as the instant ease, attorney’s fees are awarded to the [petitioners] and their attorney since they prevailed in this matter and since a common fund, which in this case constitutes the back retirement benefits and investment income that will be paid thereon, is created by reason of said ease.”

On April 3, 2002, the Appellants filed a separate action in the circuit court, captioned as Civil4 No. 02-1-0832. The Appellants prayed for a writ of mandamus “requiring the Appellees] to withhold, as attorney’s fees, a percentage of the back retirement pay that [the class is] entitled to.” (Citing Chun III.) Furthermore, the Appellants alluded to the “futility exception” to the rule of exhaustion of administrative remedies, see, e.g., In re Doe Children, 105 Hawai’i 38, 60, 93 P.3d 1145, 1167 (2004): “It is futile to have ... [the Board] decide th[e] issue of attorney’s fees because such a motion was filed ... over one year ago without [the Board] taldng action on said motion.... ”

On May 21, 2002, the Appellees, in two separate motions, moved to dismiss Civ. No. 02-1-0832 on the grounds that primary jurisdiction over the question of fees rested with the Board and that only this court has jurisdiction to issue a writ of mandamus against a public officer. (Quoting Hawai’i Revised Statutes (HRS) § 88-23 (1993)5 (“The general administration and the responsibility for the proper operation of the retirement system ... are vested in [the Board].... ”); Hawai’i Administrative Rules (HAR) § 6-20-16(b) (1993) (“The presiding officer shall have the following powers and duties: ... (8) To rule on motions....”); Hawai’i Rules of Appellate Procedure (HRAP) Rule 21(b) (“An application for a writ of mandamus directed to a public officer shall be made by filing a petition with the clerk of the supreme court.... [T]he appellate clerk shall ... submit [the petition] to the supreme court for a determination as to whether it will be entertained.”); Chun v. ERS, 73 Haw. 9, 12-14, 828 P.2d 260, 262-63 (1992) (“Chun I ”).) In its own motion, the Board further proposed that “any powers the Board ... may have to award attorney’s fees would be discretionary, not ministerial, and thus not subject to mandamus.”

Without a hearing, the circuit court granted the Appellees’ motions on June 27, 2002 and, by means of its October 3, 2003 judgment, dismissed Civ. No. 02-1-0832 without prejudice.

On September 9, 2002 and June 9, 2003, the Board met in executive session “to consult and discuss with legal counsel regarding ... [the present matter].”

According to the Board’s minutes, on July 14, 2003, it “proceeded with ... [Hawai’i Administrative Procedure Act] proceedings” on the Appellants August 18, 1998 petition. On July 17, 2003, the Board filed its “final order,” finding and concluding in relevant part:

[502]*502FINDINGS OF FACT [(FOFs) ]
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Bluebook (online)
143 P.3d 37, 111 Haw. 498, 2006 Haw. LEXIS 484, Counsel Stack Legal Research, https://law.counselstack.com/opinion/preble-v-board-of-trustees-haw-2006.