CRAWFORD v. FINANCIAL PLAZA CONTRACTORS, 64 Haw. 415 (1982)

643 P.2d 48

NO. 7349Supreme Court of Hawaii.
March 25, 1982

APPEAL FROM THE LABOR AND INDUSTRIAL RELATIONS APPEALS BOARD.

RICHARDSON, C.J., LUM, NAKAMURA, JJ., AND RETIRED JUSTICES OGATA AND MENOR ASSIGNED BY REASON OF VACANCIES.

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OPINION OF THE COURT BY RICHARDSON, C.J.

The question on appeal is whether HRS § 386-33 (1976) (“section 33”),[1] a part of our workers’ compensation statute, provides for the apportionment between an employer and the state special compensation fund of responsibility for payment of death benefits to a deceased employee’s dependents where the employee’s death results from a combination of work-related injury and disability

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preexisting employment. The Labor and Industrial Relations Appeals Board held that section 33 did not so provide. In light of the clear legislative intent in enacting the section to encourage the employment of disabled persons, we reverse.

I.
In 1963, Fred Crawford was diagnosed as suffering from arteriosclerotic heart disease. In April 1968, he was hired as a hoist operator by Financial Plaza Contractors (“FPC”). In July 1968, while on the job, he suffered a severe heart attack, and died en route to the hospital. Following an autopsy, the medical examiner concluded that the cause of death was “[a]cute cardiac failure due to anterior coronary occlusion due to severe coronary arteriosclerosis.”

Subsequently, Crawford’s widow filed with the State Department of Labor and Industrial Relations (“DLIR”) a dependents’ claim for compensation on behalf of herself and a minor son. Mrs. Crawford alleged that her husband’s death resulted from a “[h]eart attack caused by stresses of employment.”[2] In February 1973, DLIR denied Mrs. Crawford’s claim on the basis that Crawford’s fatal heart attack resulted not from the stresses of employment but from the natural progression of arteriosclerosis.

Mrs. Crawford appealed DLIR’s determination to the Labor and Industrial Relations Appeals Board (“Board”). Prior to the Board’s decision, Mrs. Crawford and FPC reached a partial settlement, more fully discussed in n. 12, infra, which determined the extent of FPC’s liability to Mrs. Crawford. However, the settlement agreement, which was subsequently approved by the Board, reserved for the Board’s consideration the question whether section 33 provided for the allocation to the special compensation fund (“SCF”) of partial responsibility for payment of whatever death benefits were due Mrs. Crawford.

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The Board held a further hearing on the question of the applicability of section 33. At that hearing, all parties including the SCF stipulated that Fred Crawford’s death was work-related such that his dependents were entitled to whatever death benefits the statute provided. But Mrs. Crawford, joined by FPC, argued that such benefits should be apportioned between the latter and the SCF. In turn, the SCF argued that section 33 provided for payment apportionment between an employer and the SCF only of disability benefits to an employee, not of death benefits to a deceased employee’s dependents.

On November 28, 1978, the Board filed its decision. Citing its previous decision in Dependents of Albert A. Keanini v. Boecon Hood, 77-1 Hawaii Legal Rptr. 337 (L.I.R. App. Bd. Jan. 20, 1977), the Board concluded that “the SCF is not responsible for death benefits payable under Section 386-33, HRS.”[3] It reasoned as follows:

In upholding Keanini, the Board recently stated the following in Survivors of James Kamaka v. Maui Land Pineapple Co., Case No. AB 77-310(M) (November 1, 1978):
“The language of Section 386-33, HRS, and its legislative history clearly indicate that the Legislature did not intend to provide for Special Compensation Fund contribution in death cases to achieve the laudible [sic] objectives of the relevant statutory provision.”
The Board added that it “firmly believes that the issue is properly one for the Legislature to resolve.”

Shortly thereafter, Mrs. Crawford appealed the Board’s decision to this court.[4] [5]

II.
Our workers’ compensation law was initially enacted in 1915. Act 221, 1915 Haw. Sess. Laws. In one of our first cases interpreting the statute, we noted that “[t]he administration of these laws necessitates

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an appreciation of the legislative purpose to abolish the common law system relating to injuries to employees as inadequate to meet modern conditions and substitute therefor a system . . . recognizing every personal loss to an employee, which is not self inflicted, as an element of the cost of production to be . . . finally borne by the community in general.” Silva v. Kaiwiki Mill Co., 24 Haw. 324, 330 (1918). More recently, we noted that “[w]orkmen’s compensation laws were enacted as a humanitarian measure, to create legal liability without relation to fault Silva . . . [ id.] They represent a socially enforced bargain: the employee giving up his right to recover common law damages from the employer in exchange for the certainty of a statutory award for all work-connected injuries.” Evanson v. University of Hawaii, 52 Haw. 595, 598, 483 P.2d 187, 190 (1971).

Though the statute has been amended often, see generally S. Riesenfeld, Study of the Workmen’s Compensation Law in Hawaii,
Legislative Reference Bureau, Report No. 1 (1963), at 7-16,[6]
the nature and types of such statutory awards for which an employee or his dependents are eligible has not been altered significantly. Prof. Riesenfeld gave the following description of the benefit structure of compensation statutes generally, which description accurately depicts that of our own law:

(a) to restore the injured worker, to the greatest possible extent, physiologically and as a productive member of society; and
(b) to compensate him or his family adequately for the losses consequent upon his personal injury or death.
Accordingly, the statutes provide for medical and allied restorative benefits needed to perform the first goal and for income and indemnity benefits
designed to accomplish the second objective.

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Income and indemnity benefits are either disability benefits or death benefits, depending on the effect of the compensable event. The disability for which income and indemnity benefits are payable may vary in extent and duration. Traditionally four categories of disability are differentiated, classified as permanent total disability, permanent partial disability, temporary total disability, and temporary partial disability.

Id. at 28. He also accurately noted that under our statute it is the employer who is primarily responsible for making the required compensation payments to employees or their dependents Id. at 52.

Against this backdrop, we turn to the consideration of section 33. We note initially that the question we consider is purely one of statutory construction.[7] And in construing the section, the SCF urges that we look only to its “literal” meaning, without resorting to any aid in attempting to implement that which the Legislature wanted to implement other than the language of the statute itself.

Were we to construe this section in such a vacuum, we might find the SCF’s interpretation of section 33 persuasive. But we have rejected an approach to statutory construction which limits us to the words of a statute, no matter how clear they may appear upon perfunctory review. In Black Construction Corporation v. Agsalud, 64 Haw. 274, 639 P.2d 1088 (1982), for example, we stated as follows:

“Our primary duty [in interpreting and applying statutes] is to ascertain the intention of the legislature and to implement that intention to the fullest degree.” Keller v. Thompson, 56 Haw. 183, 189, 532 P.2d 664, 669 (1975).
. . . “[W]hen aid to construction of the meaning of words, as used in the statute, is available, there certainly can be no `rule of law’ which forbids its use, however clear the words may appear on `superficial examination.'” United States v. American Trucking Associations, 310 U.S. 534, 543-44 (1940) (footnotes omitted); Train v. Colorado Public Interest Research Group, 426 U.S. 1, 10 (1976). And when there is a plethora of material evidencing legislative purpose and intent, there is no reason for a court to

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seek refuge in “strict construction,” “plain meaning,” or “the popular sense of the words.”

(Emphasis added). Still more recently, we said:

Where the letter of the law has produced a harsh result contrary to its intendment, we have not hesitated to eschew a strict interpretation and to seek meaning from its policy. Hawaii Carpenters’ Trust Funds v. Aloe Development Corp., 63 Haw. 566, 574, 633 P.2d 1106, 1111 (1981). For the Supreme Court teaches us:
The policy as well as the letter of the law is a guide to decision. Resort to the policy of a law may be had to ameliorate its seeming harshness or to qualify its apparent absolutes as Holy Trinity Church v. United States, 143 U.S. 457 illustrates. The process of interpretation also misses its high function if a strict reading of a law results in the emasculation or deletion of a provision which a less literal reading would be preserve.

Markham v. Cabell, 326 U.S. 404, 409 (1945).

Montalvo v. Chang, 64 Haw. 345, 641 P.2d 1321 (1982) (footnote omitted).

We therefore have no hesitation in turning to sources other than the language of the statute itself to ascertain and implement the legislature’s intent in enacting section 33. And in considering such sources, we note that since Re Ichijiro Ikoma, 23 Haw. 291, 295, 296 (1916), the first case in which this court addressed Hawaii’s then-new workers’ compensation statute, we have considered questions of construing that law with firm recognition of the humanitarian purpose for which it was enacted.

Section 33 was first enacted in 1937. Act 66, 1937 Haw. Sess. Laws, codified at RLH § 4417.5 (1945). Essentially, it provided that if an employee who had previously lost a hand or foot or eye subsequently sustained a second, work-related injury in which the other hand or foot or eye was lost, the employer at the time of the second injury would not be liable to the employee for compensation for the permanent total disability resulting from the combination of the first and second injuries, e.g., the loss of both eyes. Instead, the employer’s compensation liability would be limited to the permanent partial disability which the employee would have suffered had the second injury, e.g., the loss of one eye, been the sole injury. The difference

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between the employer’s limited liability for the second injury and the total amount to which the employee was entitled because of his permanent total disability resulting from the combination of injuries was to be the responsibility of the special compensation fund created under the same act. The Legislature described the intent of the section as follows:

The purpose of the bill is three-fold. It will provide (1) a better chance for employment to persons who unfortunately have already lost an eye, foot or hand; (2) it will tend to remove or lessen the discrimination engaged in by certain employers in employing only persons with no dependents; and (3) employers will be required to pay compensation only for the loss actually sustained in their employment.
The bill accomplishes all these things without lessening the amount of compensation that the claimant receives under existing conditions.

S. Stand. Comm. Rep. No. 43, 19th Hawaii Terr. Leg. (1937) reprinted in Senate Journal 292, 293 (1937). Accord: H. Stand. Comm. Rep. No. 276, 19th Hawaii Terr. Leg. (1937) reprinted in House Journal 1354, 1355 (1937).

The section was amended in 1953 to expand its apportionment principle to include not just losses of eyes, feet and hands, but every case in which an employee received a second work-related injury which in itself would cause permanent partial disability, but which, in combination with a prior injury, resulted in permanent total disability. Act 98, 1953 Haw. Sess. Laws codified at RLH § 97-27 (1955). The relevant legislative history provided as follows:

The purpose of this bill is to enlarge the scope of the second injury fund by providing that permanent total disability resulting from any type of second injury may be compensated out of such fund after expiration of payment by the employer for such second injury. Under the present law only the loss of a hand, foot or eye following the previous loss of the other such member is compensable out of the fund. There have been only two cases of this kind in the thirteen years of the fund’s existence.
The Committee believes that increasing the effectiveness of the second injury fund may encourage the hiring of handicapped workers.

H. Stand. Comm. Rep. No. 457, 27th Hawaii Terr. Leg. (1953),

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reprinted in House Journal 639 (1953) (emphasis added) Accord: S. Stand. Comm. Rep. No. 407, 27th Hawaii Terr. Leg. (1953), reprinted in Senate Journal 605 (1953); S. Riesenfeld Study of the Workmen’s Compensation Law in Hawaii, supra at 13.

The section has not been substantively altered since 1953. The language was changed somewhat in the 1963 revision, but these were “slight changes . . . made to clarify the applicable rules.” S. Stand. Comm. Rep. No. 334, 2d Hawaii Leg., 1st Sess. (1963) reprinted in Senate Journal 788, 791 (1963).

The Legislature’s intent in enacting section 33 is clear: it wanted to encourage the hiring of persons already handicapped by preexisting permanent partial disabilities. The mechanism by which such encouragement was to be accomplished was to limit the liability of an employer of a previously handicapped worker who suffered a subsequent work-related injury to compensation for the subsequent injury alone. In this way, employers would not discriminate against previously disabled job applicants because of a fear that if such applicants were hired and subsequently suffered second work-related injuries, the employers would be responsible for the total injury. Instead, all job applicants effectively started healthy from the employer’s perspective.[8]

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With this intent in mind, we reach the question on appeal: where an employer hires a previously partially disabled worker and that worker subsequently suffers a second work-related injury which, in combination with the preexisting disability, proves fatal to the worker, is the employer liable for payment of all death benefits to which the statute entitles the deceased employee’s dependents, or does section 33 provide for apportionment between the SCF and the employer in accordance with the respective contribution of each injury to death? This question may, we believe, be answered by posing the following rhetorical question: if, all other factors being equal, an employer was required to pay total death benefits to the dependents of an employee whose death was work-related, would he hire a healthy worker or a worker with a preexisting permanent partial disability which, combined with a subsequent work-related injury not in itself fatal, might result in the worker’s death?

The fact that in such a situation the prudent employer so clearly would hire the healthy worker leads us to conclude that to interpret section 33 as inapplicable to death benefits would be to foster the very discrimination against handicapped workers that the section was designed to alleviate. We therefore hold that section 33 is applicable to death benefits. Where an employee with a permanent partial disability which preexists employment dies as a result of a combination of that preexisting disability and a subsequent work-related injury, the DLIR should determine the relative contributions of the two injuries to the cause of death.[9] The employer will bear responsibility for the amount of total death benefits commensurate

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with the contribution of the second injury. The remaining death benefits are the responsibility of the special compensation fund.[10] [11]

III.
The decision of the Labor and Industrial Relations Appeals Board is reversed. The case is remanded to the Board for a determination of the relative contributions of the preexisting disability, arteriosclerosis, and the subsequent work-related injury, cardiac failure, to Fred Crawford’s death. The SCF will be responsible for the portion of the total death benefits payable to Crawford’s dependents which is proportionate to the relative contribution of the preexisting disability to death. FPC will be responsible for that portion attributable to cardiac failure, up to and including the $22,000 maximum settled upon between FPC and Mrs. Crawford.[12]

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If FPC’s payments to Mrs. Crawford have included amounts for which the SCF is determined to have been responsible, FPC is entitled to reimbursement of such amounts from the SCF.

Yvonne R. Shinmura (Steven Guttman and Elton John Bain with her on the briefs) (Guttman Bain of counsel) for claimant-appellant.

Grant Kidani for employer, insurance carrier-appellee.

Kumu B. Vasconcellos and Noralynne K. Pinao (Molly Jo Campbell on the brief), Deputy Attorneys General, for Special Compensation Fund, appellee.

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