Watanabe v. Employees' Retirement System.

479 P.3d 126, 148 Haw. 508
CourtHawaii Supreme Court
DecidedJanuary 8, 2021
DocketSCWC-16-0000368
StatusPublished
Cited by1 cases

This text of 479 P.3d 126 (Watanabe v. Employees' Retirement System.) 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
Watanabe v. Employees' Retirement System., 479 P.3d 126, 148 Haw. 508 (haw 2021).

Opinion

***FOR PUBLICATION IN WEST’S HAWAII REPORTS AND PACIFIC REPORTER***

Electronically Filed Supreme Court SCWC-XX-XXXXXXX 08-JAN-2021 08:00 AM Dkt. 22 OP

IN THE SUPREME COURT OF THE STATE OF HAWAIʻI

---o0o---

LANCE M. WATANABE, Petitioner/Appellant-Appellant/Cross-Appellee,

vs.

ADMINISTRATIVE DIRECTOR OF THE COURTS, STATE OF HAWAIʻI, Respondent/Appellee-Appellee/Cross-Appellant.

SCWC-XX-XXXXXXX

CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS (CAAP-XX-XXXXXXX; CIV. NO. 3CC151000052)

JANUARY 8, 2021

RECKTENWALD, C.J., NAKAYAMA, McKENNA, WILSON, AND EDDINS, JJ.

OPINION OF THE COURT BY NAKAYAMA, J.

Petitioner/Appellant-Appellant/Cross-Appellee Lance M.

Watanabe (Watanabe) was employed as a carpenter for the State of

Hawaiʻi (the State) and applied for service-connected disability ***FOR PUBLICATION IN WEST’S HAWAII REPORTS AND PACIFIC REPORTER***

retirement benefits after suffering a back injury. Following

various administrative proceedings, Respondent/Appellee-

Appellee/Cross-Appellant Employees’ Retirement System, State of

Hawaiʻi (ERS) issued a proposed decision on October 11, 2011

denying Watanabe’s application on the merits and notifying

Watanabe that the decision would become final unless Watanabe

filed exceptions within fifteen days. On October 26, 2011, ERS

received a document filed by Watanabe entitled “Petitioner’s

Proposed Decision,” which was a copy of ERS’s own proposed

decision with multiple underscored insertions and a single

“lined out” paragraph. This case centers on whether the

document filed by Watanabe — Petitioner’s Proposed Decision —

constituted exceptions.

Almost two years after Watanabe’s filing, ERS

contacted Watanabe to schedule an exceptions hearing, but

reserved the issue of whether Watanabe’s filing actually

constituted exceptions. Following the hearing, the ERS Board

issued a final decision concluding that Watanabe’s filing did

not constitute exceptions and confirming its denial of his

application.

Watanabe appealed to the Circuit Court of the Third

Circuit (circuit court), arguing both the merits of his

disability claim and that the ERS Board’s proposed decision did 2 ***FOR PUBLICATION IN WEST’S HAWAII REPORTS AND PACIFIC REPORTER***

not automatically become a final decision because Watanabe had

timely filed exceptions. The circuit court affirmed the ERS

Board’s decision without ruling on whether Watanabe’s filing

Watanabe appealed to the Intermediate Court of Appeals

(ICA). The ICA held that Petitioner’s Proposed Decision did not

constitute exceptions and affirmed the circuit court’s decision.

In his application for writ of certiorari, Watanabe

maintains that Petitioner’s Proposed Decision filing constituted

exceptions and that the ICA and ERS misinterpreted the

administrative rule to require a rigid format for exceptions,

thus denying Watanabe a meaningful opportunity to be heard.

To resolve this case, we must consider what level of

formality Hawaiʻi Administrative Rules (HAR) § 6-23-19 requires

for exceptions. Section 6-23-19 specifies that any party may

file exceptions to a proposed decision and request review within

fifteen days. In Hawaii Laborers’ Training Ctr. v. Agsalud, 65

Haw. 257, 259, 650 P.2d 574, 576 (1982), this court held that an

agency’s refusal to consider an appellant’s timely filed

exceptions based on the agency’s rigid interpretation of its own

rule violated Hawaiʻi’s Administrative Procedures Act (APA).

In this case, Watanabe met the minimum requirements

for exceptions because he: (1) filed within fifteen days of the 3 ***FOR PUBLICATION IN WEST’S HAWAII REPORTS AND PACIFIC REPORTER***

agency’s proposed decision; (2) specified his points of

exception by either striking through, or, inserting underscored

text in the agency’s proposed decision; and (3) for several of

the points, cited to exhibits in the record. Having timely

filed his exceptions, Watanabe was entitled to present argument

on his exceptions to the ERS Board and to have the Board

consider the merits of his exceptions.

Accordingly, we vacate the ICA’s August 20, 2019

Judgment on Appeal which affirmed the circuit court’s

April 5, 2016 (1) Decision and Order Affirming the Final

Decision of the ERS Board and Dismissing Appellant Watanabe’s

Appeal; and (2) Final Judgment. We remand this case to the ERS

Board for further proceedings consistent with this opinion.

I. BACKGROUND

On November 24, 2008, Watanabe applied for

service-connected disability retirement benefits for an injury

that occurred on January 25, 2005.

Prior to his application for disability retirement,

Watanabe worked as a Carpenter I for the State for more than ten

years.

A. Administrative Proceedings

By letter dated March 25, 2010, the ERS Board notified

Watanabe that it proposed to deny his application based on its

4 ***FOR PUBLICATION IN WEST’S HAWAII REPORTS AND PACIFIC REPORTER***

determination that Watanabe’s injury was not service-connected.

Watanabe retained counsel and brought a contested case

proceeding to appeal the ERS Board’s preliminary determination.

Following the contested case hearing, an ERS hearing officer

issued a Recommended Decision recommending that the ERS Board

affirm its preliminary decision denying Watanabe’s application

because Watanabe failed to establish that his permanent

incapacity was work-related.

The ERS Board adopted the hearing officer’s

Recommended Decision as its Proposed Decision dated

October 11, 2011 (ERS Board’s Proposed Decision). The ERS Board

mailed a copy of its Proposed Decision to Watanabe’s counsel by

certified mail. Both the ERS Board’s Proposed Decision and

accompanying cover letter informed Watanabe that, under

HAR § 6-23-19,1 parties may file exceptions and request review

1 HAR § 6-23-19 (2009) states:

(a) Within fifteen days after receipt of a copy of the board’s proposed decision, any party may file with the board exceptions to any part thereof and request review by the board. Each exception shall specify the portion of the record and authorities relied on to sustain each point. Eight copies of the exceptions and request for review shall be filed with the board. In addition, a copy of the exceptions and request for review shall be served upon each of the parties who were served with a copy of the proposed decision.

(b) Any party may apply for an extension of time within which to file exceptions to the proposed (continued . . .) 5 ***FOR PUBLICATION IN WEST’S HAWAII REPORTS AND PACIFIC REPORTER***

within fifteen days of receipt. In addition, both documents

advised Watanabe that he could apply for an extension of time to

file exceptions, but that if no exceptions or extension was

received within fifteen days of receipt of the ERS Board’s

Proposed Decision, “the Proposed Decision shall become final.”

Watanabe’s counsel received the ERS Board’s Proposed Decision on

October 17, 2011.

On October 25, 2011, Watanabe’s counsel filed a letter

and document entitled “Petitioner’s Proposed Decision.” The

cover letter sent with Petitioner’s Proposed Decision stated

only:

Dear Sir/Madam:

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479 P.3d 126, 148 Haw. 508, Counsel Stack Legal Research, https://law.counselstack.com/opinion/watanabe-v-employees-retirement-system-haw-2021.