Garcia v. Fernandez ( 2020 )

NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER
Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
04-JUN-2020
07:52 AM
NO. CAAP-XX-XXXXXXX
(Consolidated with CAAP-XX-XXXXXXX)
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI#I
CAAP-XX-XXXXXXX
VIDA GARCIA, Claimant-Appellee,
v.
JANIS FERNANDEZ, dba EXODUS BAIL BOND,
Employer-Appellant,
and
SPECIAL COMPENSATION FUND,
Insurance Carrier-Appellee
CAAP-XX-XXXXXXX
VIDA GARCIA, Claimant-Appellee-Appellee,
v.
JANIS FERNANDEZ, dba EXODUS BAIL BOND,
Employer-Appellee,
and
SPECIAL COMPENSATION FUND,
Insurance Carrier-Appellant
APPEAL FROM THE LABOR AND INDUSTRIAL RELATIONS APPEALS BOARD
(CASE NO. AB 2016-301; DCD NO. 2-15-08619)
SUMMARY DISPOSITION ORDER
(By: Ginoza, Chief Judge, Chan and Hiraoka, JJ.)
Janis Fernandez dba Exodus Bail Bond (Ms. Fernandez),
self-represented, appeals from a March 29, 2018 Decision and
Order (D&O) by the Labor and Industrial Relations Appeals Board
NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER
(LIRAB).1 In relevant part, the LIRAB held that Vida Garcia
(Garcia) sustained a work injury to her right knee on October 1,
2014, while in the employ of Ms. Fernandez, and that Ms.
Fernandez had failed to secure workers' compensation insurance in
accordance with Hawaii Revised Statutes (HRS) § 386-123. The
LIRAB penalized Ms. Fernandez $1,290.00 for failing to secure
workers' compensation insurance, payable to the Special
Compensation Fund (SCF).
SCF appeals from the D&O and the LIRAB's Order Denying
Motion for Reconsideration filed May 18, 2018.2 On July 11,
2018, this court granted SCF's motion to consolidate
CAAP-XX-XXXXXXX and CAAP-XX-XXXXXXX under CAAP-XX-XXXXXXX.
On appeal, Ms. Fernandez argues3 that her husband, Frank
Fernandez (Mr. Fernandez), was the owner of Exodus Bail Bond, and
that the LIRAB erred in determining that she was the owner of
Exodus Bail Bond and Garcia's employer by: (1) failing to take
judicial notice of documents related to proceedings revoking Mr.
Fernandez's insurance producer license and law license, which Ms.
1
This appeal was designated CAAP-XX-XXXXXXX.
2
This appeal was designated CAAP-XX-XXXXXXX.
3
Ms. Fernandez's Opening Brief does not comply with Hawai #i Rules of
Appellate Procedure (HRAP) Rule 28(b) because it fails to: include appropriate
record references; identify where in the record the alleged error occurred and
was objected to or brought to the attention of the agency; and cite the
authorities, statutes, and parts of the record relied on. Violations of HRAP
Rule 28(b) raise the potential for dismissal of the appeal and/or waiver of
issues sought to be raised. Bettencourt v. Bettencourt, 80 Hawai #i 225, 230,
909 P.2d 553, 558 (1995); HRAP Rule 30 ("When the brief of an appellant is
otherwise not in conformity with these rules, the appeal may be
dismissed[.]"); HRAP Rule 28(b)(3), (4), (7). Nonetheless, we address Ms.
Fernandez's points of error to the extent they can be discerned because the
Hawai#i appellate courts have "consistently adhered to the policy of affording
litigants the opportunity 'to have their cases heard on the merits, where
possible.'" Morgan v. Planning Dep't, 104 Hawai #i 173, 180-81, 86 P.3d 982,
989-90 (2004) (quoting O'Connor v. Diocese of Honolulu, 77 Hawai #i 383, 386,
885 P.2d 361, 364 (1994)); see Wagner v. World Botanical Gardens, Inc., 126
Hawai#i 190, 193, 268 P.3d 443, 446 (App. 2011) (stating that in light of an
appellant's status as a self-represented litigant, this court would address
his arguments on appeal to the extent they could be reasonably discerned).
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Fernandez asserts mention Mr. Fernandez and not her in relation
to Exodus Bail Bond; (2) failing to further question Mr.
Fernandez at the hearing about those documents and whether he was
the owner of Exodus Bail Bond; and (3) citing evidence not
produced at the hearing in paragraphs "g"-"n" of the Summary of
the Evidence subsection in the D&O.4
SCF contends on appeal that the LIRAB erred in
determining that Ms. Fernandez was in violation of HRS § 386-123
for the period of October 1, 2014, to February 6, 2015, and
penalizing her in the amount of $1,290.00. SCF argues that
Garcia was employed from January 24, 2014, to February 6, 2015,
and should have been penalized pursuant to HRS § 386-123
according to that period.
Upon careful review of the record and the briefs
submitted by the parties and having given due consideration to
the arguments advanced and the issues raised by the parties, as
well as the relevant statutory and case law, we resolve Ms.
Fernandez's and SCF's points of error as follows.
It is axiomatic that we are "under an obligation to ensure
that we have jurisdiction to hear and determine each case
and to dismiss an appeal on our own motion where we conclude
we lack jurisdiction." BDM, Inc. v. Sageco, Inc., 57 Haw.
73, 73, 549 P.2d 1147, 1148 (1976). "When we perceive a
jurisdictional defect in an appeal, we must, sua sponte,
dismiss that appeal." Familian N[.W.], Inc. v. Cent. Pac.
Boiler & Piping, Ltd., 68 Haw. 368, 369, 714 P.2d 936, 937
(1986).
4
Ms. Fernandez also argued in her Reply Brief that this court should
take into consideration or take judicial notice of the Complaint filed in
Frank M. Fernandez, Frank M. Fernandez dba Exodus Bail Bond and Exodus Bail
Bond L.L.C. v. Eric A. Seitz and Ronald N.W.B. Kim, Civil No. 19-1-0216-02, on
February 7, 2019, in the Circuit Court of the First Circuit (Complaint). The
Complaint does not appear in the record, HRS § 641-2 ("Every appeal shall be
taken on the record, and no new evidence shall be introduced in the
[appellate] court."), and is a matter outside of the scope of the answering
brief, in violation of HRAP Rule 28(d). Further, the Complaint is composed of
mere allegations and does not amount to facts "either (1) generally known
within the territorial jurisdiction of the trial court, or (2) capable of
accurate and ready determination by resort to sources whose accuracy cannot
reasonably be questioned." See Hawaii Rules of Evidence Rule 201. Based on
the foregoing, we decline to consider or judicially notice the assertions
contained in the Complaint.
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Brooks v. Dana Nance & Co., 113 Hawai#i 406, 412, 153 P.3d 1091,
1097 (2007) (original brackets omitted) (quoting Bacon v. Karlin,
68 Haw. 648, 650, 727 P.2d 1127, 1129 (1986)).
As a threshold matter, we address whether Ms. Fernandez
may pursue this appeal as self-represented, and thus whether we
have appellate jurisdiction. We note that exhibits in the record
indicate that both "Exodus Bail Bond, LLC" (the LLC) and the
trade name "Exodus Bail Bond" were apparently in active existence
at the time Garcia worked for "Exodus Bail Bond" and at the time
of the injury at issue. We have previously held in a separate
and unrelated case that Ms. Fernandez, a non-attorney, was not
permitted to file an opening brief on behalf of Exodus Bail Bond,
LLC. State v. Mezurashi, No. CAAP–11–0000638, 2013 WL 2149684,
at *1 n.1 (Haw. App. May 16, 2013) (SDO) (citing Oahu Plumbing &
Sheet Metal, Ltd., 60 Haw. 372, 377, 590 P.2d 570, 573–74 (1979);
and HRS §§ 605–2, 605–14). Here, however, the party in interest
has consistently been named as the sole proprietorship of "Janis
Fernandez, dba Exodus Bail Bond," including in Conclusion of Law
(COL) 1 in the D&O. Furthermore, at the LIRAB hearing, Ms.
Fernandez's attorney and Mr. Fernandez stated that the LLC and
the sole proprietorship doing business under the trade name
Exodus Bail Bond were separate entities and Ms. Fernandez's
attorney stated several times that the issue of concern is
whether Ms. Fernandez was an employer in regards to the sole
proprietorship and not the LLC. Ms. Fernandez may self-represent
the sole proprietorship on appeal. See Cervelli v. Aloha Bed &
Breakfast, 142 Hawai#i 177, 193 n.16, 415 P.3d 919, 935 n.16
(App. 2018) ("In the case of a sole proprietorship, the firm name
and the sole proprietor's name are but two names for one person."
(brackets and citation omitted)); Credit Associates of Maui, Ltd.
v. Carlbom, 98 Hawai#i 462, 465, 50 P.3d 431, 434 (App. 2002)
("[A] sole proprietorship has no legal identity apart from its
owner."); see also United States v. Hagerman, 545 F.3d 579, 581
(7th Cir. 2008) ("A sole proprietorship may litigate pro se
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because it has no legal identity separate from the proprietor[.]"
(citations omitted)); Dutch Vill. Mall v. Pelletti, 256 P.3d
1251, 1254 (Wash. Ct. App. 2011) ("'Unlike a sole proprietorship,
a sole member limited liability company is a distinct legal
entity that is separate from its owner;' such a company may
appear in federal court only through a licensed attorney."
(quoting and citing Lattanzio v. COMTA, 481 F.3d 137, 140 (2d
Cir. 2007)). We thus have jurisdiction to review Ms. Fernandez's
appeal.
The LIRAB's Finding of Fact (FOF) 2 determined that
"Exodus Bail Bond, and Exodus Bail Bonds, LLC . . . all refer to
the entity owned by Ms. Fernandez." HRS § 428-303 (2004)
provides in relevant part that
the debts, obligations, and liabilities of a limited
liability company, whether arising in contract, tort, or
otherwise, are solely the debts, obligations, and
liabilities of the company. A member or manager shall not
be personally liable for any debt, obligation, or liability
of the company solely by reason of being or acting as a
member or a manager.
On the other hand, "a sole proprietorship has no legal identity
apart from its owner." Credit Associates of Maui, Ltd., 98
Hawai#i at 465, 50 P.3d at 434. Here, the evidence relied on by
the LIRAB show that the trade name was registered to Ms.
Fernandez and not the LLC, and they were therefore separate
entities. Thus, the LIRAB decision could not properly be made
against Ms. Fernandez in her personal capacity for the actions or
omissions of the LLC under the circumstances here. Despite FOF
2, we review the merits of the appeal insofar as COL 1 held that
the decision was against "Janis Fernandez dba Exodus Bail Bond"
and not the LLC.
As to the merits of Ms. Fernandez's appeal, we first
conclude that the LIRAB did not err in not taking judicial notice
of three documents (collectively, the Documents): (1) a
Department of Commerce and Consumer Affairs (DCCA) Insurance
Commissioner's Final Order, dated March 16, 2016; (2) a DCCA
Insurance Division Notice of Intent to Impose Fines, Revoke
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License, and Issue Cease and Desist, dated July 28, 2014; and (3)
a Supreme Court of the State of Hawai#i Order of Disbarment in
Office of Disciplinary Counsel v. Frank M. Fernandez, NO.
SCAD-XX-XXXXXXX (Feb. 14, 2013). HRS § 91–10 (2012) sets forth
evidentiary standards for contested cases, such as Ms.
Fernandez's appeal to the LIRAB. HRS § 91–10(4) provides:
Agencies may take notice of judicially recognizable facts.
In addition, they may take notice of generally recognized
technical or scientific facts within their specialized
knowledge; but parties shall be notified either before or
during the hearing, or by reference in preliminary reports
or otherwise, of the material so noticed, and they shall be
afforded an opportunity to contest the facts so noticed[.]
Similarly, Hawaii Administrative Rules (HAR) § 12–47–47 (eff.
1994) provides, in pertinent part:
The [LIRAB] may take official notice of those matters as may
be judicially noticed by the courts of the State. . . . Any
party shall have an opportunity to contest the facts so
noticed, within the time specified by the presiding member.
See also HAR § 12-47-41 (eff. 1994) ("The board shall not be
bound by statutory and common law rules relating to the admission
or rejection of evidence. The board may exercise its own
discretion in these matters, limited only by considerations of
relevancy, materiality, and repetition, by the rules of privilege
recognized by law, and with a view to securing a just, speedy,
and inexpensive determination of the proceedings."). Despite
references during the LIRAB hearing to the proceedings revoking
the insurance producer licenses of Mr. and Ms. Fernandez and
Exodus Bail Bond, LLC, neither Ms. Fernandez nor the other
parties requested that the LIRAB take judicial notice of the
Documents and there is no indication that it was brought to the
LIRAB's attention that the Documents addressed the ownership of
the sole proprietorship doing business under the trade name
Exodus Bail Bond. Under such circumstances, we find no error in
the failure of the LIRAB to judicially notice the Documents sua
sponte. See Paul's Elec. Serv., Inc. v. Befitel, 104 Hawai#i
412, 417, 91 P.3d 494, 499 (2004) ("HRS § 91–14(g)(6) provides
that an agency's exercise of discretion will not be disturbed
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unless '[a]rbitrary, or capricious, or characterized by abuse of
discretion or clearly unwarranted exercise of discretion.'").
The LIRAB did not err in failing to further question
Mr. Fernandez about the Documents and as to whether he owned the
sole proprietorship doing business as Exodus Bail Bond. The
LIRAB rules permit "[a]ny [LIRAB] member [to] question any party
or witness[.]" HAR 12-47-42(c) (eff. 1994). Nonetheless, Ms.
Fernandez had the right to question Mr. Fernandez further as to
those issues, HRS § 91-9(c) (2012) and HAR 12-47-42(b) (eff.
1994), and as the appellant in the LIRAB hearing, maintained the
burden to prove that the Department of Labor and Industrial
Relations, Disability Compensation Division erred in determining
that she was the owner of Exodus Bail Bond and the employer of
Garcia. See HRS § 91-10(5) ("Except as otherwise provided by
law, the party initiating the proceeding shall have the burden of
proof, including the burden of producing evidence as well as the
burden of persuasion. The degree or quantum of proof shall be a
preponderance of the evidence."). The LIRAB rules do not alter
this burden, and thus the LIRAB did not err in failing to further
question Mr. Fernandez about the Documents or on the issue of
ownership of Exodus Bail Bond. See Paul's Elec. Serv., Inc., 104
Hawai#i at 417, 91 P.3d at 499.
Ms. Fernandez's contention that the LIRAB considered
evidence not produced at the hearing in paragraphs "g"-"n" of the
Summary of the Evidence subsection in the D&O, is without merit.
The evidence cited in paragraphs "g"-"n"5 were admitted into
5
Paragraphs "g" through "n" provide:
g. By letter dated June 15, 2015, Anthony Fujii,
Esq., on behalf of Exodus Bail Bonds, responded to the
Department's request for a WC-1. Mr. Fujii stated that
Claimant was never an "employee" of Exodus Bail Bonds, but,
rather, was an independent contractor. The letter did not
include any statement or other indication that Ms. Fernandez
was not the principle of Exodus Bail Bonds.
h. Quentin Lee of the Disability Compensation
Division prepared a November 24, 2015 letter addressed to
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evidence as SCF's Exhibits 1, 2, 3, 4, or otherwise included in
the agency file available to the parties. We note, however, that
the LIRAB appears to have miscited the June 22, 2015 letter from
Anthony Fujii, Esq., in evidence as SCF's Exhibit 1, in paragraph
"g", as being a letter dated "June 15, 2015." Nonetheless, the
description of Anthony Fujii's letter contained in paragraph "g"
is sufficient to discern that the LIRAB intended to reference the
June 22, 2015 letter and there appears to be no other letter from
Anthony Fujii in the record. Therefore, Ms. Fernandez's
substantial rights were not prejudiced and the error was
harmless. See HRS § 91-14(g) (providing that the court "may
reverse or modify the decision and order [of the agency] if the
substantial rights of the petitioners may have been prejudiced").
Janis H Fernandez
dba: Exodus Bail Bond
c/o Anthony Fujii, Esq.
[address]
i. Mr. Lee's November 24, 2015 letter requested a
WC-1.
j. In a memo dated January 4, 2016, the Disability
Compensation Division identified Janis Fernandez as
Claimant's employer.
k. A letter on file with the Department of Commerce
and Consumer Affairs ("DCCA") dated May 10, 2011, states,
"We have no objections and I give my consent to the
registration of the [name Exodus Bail Bond]. I am
authorized to give this consent on behalf of Exodus Bail
Bond, LLC." The letter purports to be signed by Ms.
Fernandez as Manager of "Exodus Bail Bond, LLC." At trial,
Ms. Fernandez testified that she did not sign such letter.
l. A DCCA form, Application for Registration of Trade
Name, identifies Ms. Fernandez as a sole proprietor and the
registrant of the trade name "Exodus Bail Bond."
m. In a DCCA website printout, Ms. Fernandez is
identified as the registrant of the trade name "Exodus Bail
Bond" from May 12, 2011 to May 11, 2016.
n. A May 19, 2016 letter from the State of Hawaii,
Department of Commerce and Consumer Affairs, Insurance
Division confirmed Frank M. Fernandez, Janis Hu Fernandez,
and Exodus Bail Bond, LLC had active "resident producer
licenses" on October 1, 2014.
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We now turn to SCF's appeal, in which SCF contends that
the LIRAB erred in calculating the penalty assessed to Ms.
Fernandez under HRS §§ 386-121 and 386-123, by calculating the
penalty from the date of Garcia's work injury on October 1, 2014,
instead of the date she began working for Ms. Fernandez.6
The interpretation of a statute is a question of law
reviewable de novo. This court's construction of statutes
is guided by the following rules:
When construing a statute, our foremost
obligation is to ascertain and give effect to
the intention of the legislature which is to be
obtained primarily from the language contained
in the statute itself. We must read statutory
language in the context of the entire statute
and construe it in a manner consistent with its
purpose. When there is doubt, doubleness of
meaning, or indistinctiveness or uncertainty of
an expression used in a statute an ambiguity
exists. If the statutory language is ambiguous
or doubt exists as to its meaning, courts may
take legislative history into consideration in
construing a statute.
Kauai Springs, Inc. v. Planning Comm'n of Cty. of Kauai, 133
Hawai#i 141, 163, 324 P.3d 951, 973 (2014) (quotation marks and
citations omitted). Pursuant to HRS § 386-121 (Supp. 2014),7
6
SCF does not contest that Garcia's employment was terminated on
February 6, 2015.
7
HRS § 386-121(a) provides:
§386-121 Security for payment of compensation;
misdemeanor. (a) Employers, except the State, any county
or political subdivision of the State, or other public
entity within the State, shall secure compensation to their
employees in one of the following ways:
(1) By insuring and keeping insured the payment of
compensation with any stock, mutual, reciprocal,
or other insurer authorized to transact the
business of workers' compensation insurance in
the State;
(2) By depositing and maintaining with the state
director of finance security satisfactory to the
director of labor and industrial relations
securing the payment by the employer of
compensation according to the terms of this
chapter;
(3) Upon furnishing satisfactory proof to the
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"[e]mployers, except the State, any county or political
subdivision of the State, or other public entity within the
State, shall secure compensation to their employees[,]" "[b]y
insuring and keeping insured the payment of compensation with any
stock, mutual, reciprocal, or other insurer authorized to
transact the business of workers' compensation insurance in the
director of the employer's solvency and
financial ability to pay the compensation and
benefits herein provided, no insurance or
security shall be required, and the employer
shall make payments directly to the employer's
employees, as they may become entitled to
receive the same under the terms and conditions
of this chapter;
(4) An employer desiring to maintain security for
payment of compensation under this section shall
file an application with the director on a form
provided for this purpose together with the
employer's most current audited annual financial
statement;
(5) Where an applicant for self-insurance is a
subsidiary and the subsidiary cannot submit an
independent current audited annual financial
statement, an indemnity agreement approved as to
form and content by the director shall be
executed by the parent corporation of the
subsidiary and submitted with its application;
(6) Each self-insurance authorization shall be
effective from the date of issuance until
June 30 of each calendar year;
(7) A notice of intention to cancel self-insurance
shall be submitted in writing to the director
within at least thirty days prior to the
effective date of cancellation;
(8) A self-insurance authorization may be revoked by
the director for good cause shown upon
notification in writing to the self-insurer;
(9) By membership in a workers' compensation
self-insurance group with a valid certificate of
approval under section 386-194; or
(10) By membership in a workers' compensation group
insured by a captive insurer under chapter 431,
article 19.
Any person who wilfully misrepresents any fact in
order to obtain the benefits of paragraph (3) shall be
guilty of a misdemeanor.
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State" or using the other enumerated methods. HRS § 386-123
(1993) provides, in relevant part:
If an employer fails to comply with section 386-121, the
employer shall be liable for a penalty of not less than $250
or of $10 for each employee for every day during which such
failure continues, whichever sum is greater, to be recovered
in an action brought by the director in the name of the
State, and the amount so collected shall be paid into the
special compensation fund created by section 386-151. The
director may, however, in the director's discretion, for
good cause shown, remit all or any part of the penalty in
excess of $250, provided the employer in default complies
with section 386-121. With respect to such actions, the
attorney general or any county attorney or public prosecutor
shall prosecute the same if so requested by the director.
(Emphasis added.) The plain language of HRS § 386-121 requires
an employer to "secure compensation to their employees," by
obtaining one of the enumerated forms of workers' compensation
coverage. Thus, coverage should be obtained at the point when
the employee begins providing services for the employer and an
employer-employee relationship is created.8 The purpose of this
requirement is to shield employees from the consequences of work
injuries during the entire period of employment. See Travelers
Ins. Co. v. Hawaii Roofing, Inc., 64 Haw. 380, 385, 641 P.2d
1333, 1337 (1982) ("HRS §§ 386-121 through 128 constitute an
essential component of an independent statutory system of legal
relations designed to shield workers from the consequences of
work injuries. For this part of the law ensures the payment of
compensation to injured workers. The Director has a duty
thereunder of compelling employers who choose insurance as the
means of securing compensation payments to their employees to
maintain insurance coverage at all times." (citation omitted)).
As a result, under HRS § 386-123, the penalty assessed for
violation of HRS § 386-121 is calculated from the time the
8
HRS § 386-1 (1993 and Supp. 2014) defines an "employer," in
pertinent part, as "any person having one or more persons in the person's
employment" and defines "employment," in pertinent part, as "any service
performed by an individual for another person under any contract of hire or
apprenticeship, express or implied, oral or written, whether lawfully or
unlawfully entered into." Further, an "employee" is defined in HRS 386-1 as
"any individual in the employment of another person."
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employer-employee relationship begins, and continues for each
employee for every day during which such failure to maintain
workers' compensation coverage continues.
In this case, in COL 4,9 the LIRAB calculated the penalty
from the date of Garcia's work injury. COL 4 was therefore
wrong. Ihara v. State Dep't of Land & Nat. Res., 141 Hawai#i 36,
41, 404 P.3d 302, 307 (2017) ("[T]the LIRAB's conclusions will be
reviewed de novo, under the right/wrong standard."). The LIRAB
never made a finding as to when Garcia's employment began.
Rather, it only determined that Garcia was an employee of Ms.
Fernandez at the time of her work injury. This case must be
remanded for the LIRAB to make a finding as to when Garcia's
employment began and to further determine the period during which
Ms. Fernandez was in violation of HRS §§ 386-121 and 386-123.10
Based on the foregoing, we vacate COL 4 of the March 29,
2018 Decision and Order and remand the case for further
proceedings consistent with this summary disposition order. The
Decision and Order is affirmed in all other respects.
DATED: Honolulu, Hawai#i, June 4, 2020.
On the briefs:
/s/ Lisa M. Ginoza
Herbert B. K. Lau, Chief Judge
and Frances E. H. Lum,
Deputy Attorneys General,
for Insurance Carrier- /s/ Derrick H. M. Chan
Appellee-Appellant. Associate Judge
Janis Fernandez,
Self-Represented, Employer- /s/ Keith K. Hiraoka
Appellant-Appellee. Associate Judge
Charles H. Brower,
for Claimant-Appellee
9
COL 4 provided: "4. The Board concludes that Employer is liable for
a penalty payable to the [SCF] for failing to secure workers' compensation
insurance in accordance with § 386-123, HRS, in the amount of $1,290.00."
10
In light of our disposition of the D&O, we need not address SCF's
challenge to the LIRAB's Order Denying Motion for Reconsideration.
12