Nakamoto v. Kawauchi. ( 2018 )

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Electronically Filed
Supreme Court
SCWC-13-0004947
08-MAY-2018
08:06 AM
IN THE SUPREME COURT OF THE STATE OF HAWAI#I
---o0o---
PATRICIA NAKAMOTO, Petitioner/Plaintiff-Appellant,
vs.
JAMAE KAWAUCHI, in her individual and official capacity
as County Clerk, DOMINIC YAGONG, in his individual and official
capacity as Chairman, Hawai#i County Council, County of Hawai#i,
CORPORATE SPECIALIZED INTELLIGENCE AND INVESTIGATIONS LLC,
Respondents/Defendants-Appellees.
(CIVIL NO. 12-1-0466)
--------------------------------------------------------
SHYLA A. AYAU, Petitioner/Plaintiff-Appellant,
vs.
JAMAE KAWAUCHI, in her individual and official capacity
as County Clerk, DOMINIC YAGONG, in his individual and official
capacity as Chairman, Hawai#i County Council, County of Hawai#i,
CORPORATE SPECIALIZED INTELLIGENCE AND INVESTIGATIONS LLC,
Respondents/Defendants-Appellee.
(CIVIL NO. 12-1-0467)
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SCWC-13-0004947
CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
(CAAP-13-0004947)
MAY 8, 2018
RECKTENWALD, C.J., NAKAYAMA, McKENNA, POLLACK, AND WILSON, JJ.
OPINION OF THE COURT BY RECKTENWALD, C.J.
I. Introduction
This case concerns common law tort claims in the
employment context. Petitioners Patricia Nakamoto and Shyla M.
Ayau (collectively, “Petitioners”) were employees of the County
of Hawai#i (the County), whose employment was terminated
following an investigation into alleged employee misconduct,
including the use of a County Elections Office warehouse for
private business purposes and to hold parties at which alcohol
was consumed. An article was published in a local newspaper
about the terminations, which quoted County officials,
Respondents Jamae Kawauchi (Kawauchi) and Dominic Yagong
(Yagong), as making various statements about the terminations.
Petitioners brought the present action against the
County, Kawauchi and Yagong in both their official and individual
capacities, and Corporate Specialized Investigations and
Intelligence Services, LLC (CSII), a licensed private
investigation company which the County hired to conduct the
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investigation. Petitioners alleged that the defendants had
caused defamatory statements about them to be published in the
local newspaper, and that the investigation had been conducted
negligently.
The circuit court granted the County’s motion to
dismiss, finding that Petitioners’ claims were barred by the
Workers’ Compensation Law (WCL) because Petitioners’ alleged
injury to their reputations arose through the course and scope of
their employment.1 The circuit court also granted summary
judgment in favor of Kawauchi and Yagong, finding that
Petitioners had failed to adduce evidence raising a genuine issue
of material fact that Kawauchi and Yagong had made false
statements about them. Finally, the circuit court granted
summary judgment in favor of CSII, finding that as a third-party
investigator, it had no duty towards Petitioners.
Petitioners appealed to the Intermediate Court of
Appeals (ICA), which affirmed the circuit court in all respects,
except that it held that the circuit court erred in holding that
allegedly defamatory statements made after termination were
barred by the WCL. However, the ICA did not vacate the circuit
court’s grant of the motion to dismiss, because it held as a
matter of law that Kawauchi’s and Yagong’s alleged defamatory
1
The Honorable Elizabeth A. Strance presided.
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statements were true.
On certiorari, Petitioners raise several issues. They
argue that the ICA erred in holding that the WCL exclusivity
provision covers reputational injuries. Petitioners also argue
that the ICA erred in holding that Kawauchi’s and Yagong’s
statements were true as a matter of law. Finally, Petitioners
argue that the ICA erred in holding that CSII did not owe a duty
to Petitioners to conduct an objective investigation.
First, based on the language and purpose of the
statute, we hold that the WCL’s bar on claims for injuries
incurred in the course of employment does not extend to injuries
to a person’s reputation. Accordingly, employees may bring
defamation and false light claims against their employers.
Second, we affirm summary judgment in favor of
Kawauchi, but vacate summary judgment in favor of Yagong in his
individual capacity, because we conclude that whether Yagong’s
allegedly defamatory statements were true involves a disputed
question of material fact. Accordingly, we also vacate the
circuit court’s dismissal of Petitioners’ defamation and false
light claims against the County and Yagong in his official
capacity, as Petitioners can assert those claims based on our
holding that those claims are not barred by the WCL.
Finally, we conclude that CSII owed a legal duty of
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care to Petitioners, because we hold that licensed private
investigators owe a duty of care to the subjects of their
investigations. We vacate and remand for a determination of
whether CSII breached that duty.
II. Background
A. Circuit Court Proceedings
Nakamoto and Ayau filed separate complaints in circuit
court. Both complaints named as defendants Kawauchi and Yagong
in their official and individual capacities, the County, CSII,
and Doe individuals and entities.
1. Allegations in the Complaints
Taken together, the complaints give the following
account of the termination of Petitioners’ employment at the
County. Nakamoto began her employment at the County of Hawai#i
Elections Division in 1982, and her title was Election Programs
Administrator when she was fired. Ayau was hired as a full-time
elections clerk in 2005, and at the time her employment was
terminated, her title was Senior Elections Clerk.
In July 2011, Kawauchi, who was the County Clerk, and
Yagong, who was the County Council Chairman, inspected a
privately-owned warehouse in Hilo that had been leased to the
County to store equipment for the Office of Elections. There
they “observed items that they concluded were violations of
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County policies”; they subsequently “identified and targeted”
Petitioners and other County employees “to be terminated.”
Kawauchi and Yagong hired CSII to investigate the apparent
violations of County policy, and they “pre-determined a
particular course of action” against Petitioners and other County
employees.
CSII conducted its investigation, and in September
2011, it submitted an “Investigative Report,” which Petitioners
attached as an exhibit to their respective complaints. The
report indicated that a County employee, Glen Shikuma, had
operated a private sign-making business from the warehouse. The
report also found that “on more than one occasion alcoholic
beverages have been consumed” by employees at the warehouse, and
that a “‘year-end get-together’ when alcoholic beverages were
being consumed” was held at the warehouse. The report indicated
that Petitioners admitted to attending year-end parties at the
warehouse, but denied knowledge of Shikuma’s unauthorized
business activities.
Kawauchi held pre-termination hearings for both
Petitioners. The complaint alleged that during the hearing,
Nakamoto’s union representative asked Kawauchi for copies of the
County’s policies that Nakamoto had allegedly violated, and
Kawauchi replied that “she did not know what the policies were
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and that she would look them up and send them to” Nakamoto and
her union representative.
On January 9, 2012, Kawauchi sent Ayau a termination
letter which “falsely accused” her of misconduct, including
violating the County alcohol policy. Kawauchi sent Nakamoto a
notice of termination, postmarked January 10, 2012. The notice
accused Nakamoto of violating the County alcohol policy,
conducting personal or other business unrelated to County
business at the elections warehouse, dereliction of duties as the
election program administrator, and storing confidential
elections information unsecuredly.
On January 12, 2012, two to three days after Kawauchi
sent Petitioners their notices of termination, the Hawai#i
Tribune Herald newspaper published an article entitled, “County
elections workers fired,” detailing the termination of
Petitioners and other County employees in connection with the
alleged misconduct at the warehouse. The complaints recounted
the following excerpts from the article:
The infractions dealt with “violations of county
policy,” the Hamakua councilman [Yagong] said
Wednesday.
. . .
The investigation started with Shikuma, who is accused
of running a sign printing business out of the
elections warehouse and also storing alcohol there.
. . .
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One source said he’s seen Shikuma storing alcohol
bottles in the warehouse and also attending a year-end
party, complete with alcohol, held in the parking lot.
Petitioners asserted that Nakamoto received permission
to hold end-of-year potlucks at the elections warehouse. They
excerpted from, and attached to their complaint, written
statements from former Hawai#i County Clerks Kenneth Goodenow and
Casey Leigh. In his statement, Goodenow asserted that he had
authorized the holding of a post-election potluck in 2010, and
that he was not questioned by an investigator about the event or
Petitioners’ terminations. In her statement, Leigh stated that
the post-election potluck was held only in the parking lot of the
elections warehouse, that she did not object to the party, and
that “the private investigator who looked into the allegations of
wrongdoing against election staff members never contacted me,
even though both the County Clerk and Council Chair Yagong were
aware that I had been the Clerk during the period of the
allegations against Ms. Nakamoto.”
Petitioners concluded that Kawauchi, Yagong, and CSII
“leaked false and misleading information to the media concerning
[Petitioners’] termination.”
Nakamoto grieved her dismissal, and on June 21, 2012,
the County rescinded the dismissal and agreed to her
reinstatement subject to a ten-day suspension. Ayau resumed her
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employment on September 4, 2012, and the County agreed to her
transfer to the County of Kaua#i.2
The complaints list five counts against all defendants:
I) defamation per se; II) defamation per quod; III) false light;
IV) negligent investigation; and V) negligent infliction of
emotional distress (NIED).
2. Circuit Court Proceedings
a. The County, and Kawauchi and Yagong in Their
Official Capacities
The County3 filed motions to dismiss both complaints,
arguing that Petitioners’ claims were barred by the WCL’s
exclusivity provision4 because their claims arose through the
course and scope of their employment. The County also argued
2
While Ayau’s complaint does not allege that she grieved her
dismissal, other materials in the record indicate that she grieved her
dismissal.
3
Specifically, the motions were filed on behalf of the County, and
Kawauchi and Yagong in their official capacities. All subsequent submissions
by the County likewise included Kawauchi and Yagong in their official
capacities.
4
HRS § 386-5 (1993) provides:
The rights and remedies herein granted to an employee
or the employee’s dependents on account of a work
injury suffered by the employee shall exclude all
other liability of the employer to the employee, the
employee’s legal representative, spouse, dependents,
next of kin, or anyone else entitled to recover
damages from the employer, at common law or otherwise,
on account of the injury, except for sexual harassment
or sexual assault and infliction of emotional distress
or invasion of privacy related thereto, in which case
a civil action may also be brought.
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that the claims against Kawauchi and Yagong in their official
capacities “are merely duplicative of the claims against the
County and must be dismissed.” The circuit court granted the
County’s motions on all five of Petitioners’ claims, agreeing
with the County that the claims were barred by the WCL’s
exclusivity provision.
b. Kawauchi and Yagong in Their Individual Capacities
Kawauchi and Yagong, in their individual capacities,
filed motions to dismiss Petitioners’ complaints. In their
opposition, Petitioners requested that the court convert the
motions to dismiss into a motion for summary judgment. The
circuit court granted that request, and provided that the parties
could supplement their motion and opposition. The parties
provided supplemental summary judgment briefing.
In their motions, Kawauchi and Yagong argued that
Petitioners’ claims were barred by the WCL because their claims
against Kawauchi and Yagong in their individual capacities were
identical to those in their official capacities, and Petitioners
failed to meet the Iddings v. Mee-Lee, 82 Hawai#i 1, 919 P.2d 263
(1996) pleading standard for willful and wanton conduct under HRS
§ 386-8.5
5
HRS § 386–8 extends immunity from suit to an injured worker’s
co-employees, unless the co-employees’ conduct was willful or wanton.
(continued...)
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Kawauchi and Yagong also argued that Petitioners failed
to allege which statements made by Kawauchi and Yagong were
false. They argued that Nakamoto’s complaint acknowledges that
Nakamoto “was relieved of her duties due to her violation of the
County’s zero tolerance alcohol policy.” Kawauchi and Yagong
argued that the results of CSII’s investigation were undisputed
facts. Kawauchi and Yagong included declarations explaining that
they had relied on information contained in CSII’s investigative
reports in deciding to terminate Petitioners. They argued that
CSII reported that Nakamoto admitted that she was present at an
elections warehouse party, and that Elton Nakagawa stated that he
witnessed Nakamoto drinking alcohol. The CSII reports attached
as exhibits stated that CSII had interviewed Ayau, and that Ayau
admitted that she had consumed alcoholic beverages at the
elections warehouse. CSII’s reports also included transcripts of
employee interviews, including that of Nakamoto, in which she
admitted that she was present at an elections warehouse gathering
5
(...continued)
Iddings, 82 Hawai#i 6, 919 P.2d at 268. This court in Iddings held that
conduct is willful and wanton when it is:
(1) motivated by an actual intent to cause injury; or
(2) committed in circumstances indicating that the
injuring employee (a) has knowledge of the peril to be
apprehended, (b) has knowledge that the injury is a
probable, as opposed to a possible, result of the
danger, and (c) consciously fails to avoid the peril.
Id. at 12, 919 P.2d at 274.
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during which others had consumed alcohol, and that of Nakagawa,
who stated that he saw Nakamoto drinking alcohol.
Kawauchi and Yagong argued that it was an undisputed
fact that they terminated Petitioners in order “to perform their
official duties and enforce County policy,” and that the
terminations were based solely upon “evidence they each observed
and the findings and results contained in the CSII Investigative
Reports.” They argued that it was an undisputed fact that,
“[n]otwithstanding these findings . . . without ever seeking (or
gaining) the approval of either Kawauchi or Yagong,” the County
agreed to reinstate Petitioners’ employment.
Petitioners argued in opposition that Kawauchi and
Yagong made false statements concerning the basis of Nakamoto’s
and Ayau’s terminations. They argued that they did not commit
the underlying violations, as evidenced by the fact that their
terminations were reversed. Petitioners argued that Kawauchi and
Yagong acted against County instructions in terminating
Petitioners. They quoted an excerpt from, and attached as an
exhibit to their opposition, the deposition of the County’s
Director of Human Resources, Ronald Takahashi, who stated that,
in approximately July or September of 2011, before Petitioners
were terminated, he met with Kawauchi and Yagong regarding the
results of CSII’s investigation, and told them that there was not
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enough evidence from CSII’s investigation to terminate Nakamoto.
Petitioners also attached as an exhibit a letter from
Nicholas Hermes, a County Human Resources Manager, to Kawauchi
regarding Petitioners’ grievances. Hermes stated that he was
“tremendously disappointed” with the Office of the County Clerk’s
“inaction toward routine processing” of the grievances and that
it was clear that the grievance delay was due to the Office of
the County Clerk’s “lack of assertiveness and suspected willful
stalling.” Petitioners also argued that, contrary to Kawauchi’s
and Yagong’s assertion, it was a disputed fact that the results
of CSII’s investigation were accurate, contending that defendants
intentionally chose not to interview certain witnesses, including
Kevin Akiyama, owner of the elections warehouse, and former
County Clerks Goodenow and Leigh.
Kawauchi and Yagong argued in reply, inter alia, that
because the County Clerk appoints its staff, the County Clerk was
not under a duty to act based upon Takahashi’s opinion. Kawauchi
and Yagong argued further that Takahashi had admitted publicly
that he had a conflict of interest regarding the investigation of
Shikuma, and attached as support exhibits newspaper articles
discussing that issue.
The court filed an order granting Kawauchi’s and
Yagong’s motion for summary judgment, finding that Petitioners
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had failed to present evidence that Kawauchi and Yagong had
engaged in “willful and wanton” conduct that would put
Petitioners’ claims beyond the scope of the WCL’s exclusivity
provision. The court also found that Petitioners had not
presented evidence of false or defamatory statements attributable
to Yagong and Kawauchi.
The circuit court subsequently sua sponte amended its
order granting summary judgment in favor of Kawauchi and Yagong
individually, stating that its original order “went beyond the
limited scope of its intention and arguably contains findings
which invade the province of a workers compensation hearings
officer.” The court held that while there was conflicting
evidence regarding the manner in which the investigation into
Petitioners’ alleged misconduct was handled, there was an absence
of evidence that Kawauchi and Yagong made false statements about
Petitioners. The court concluded that, as such, Kawauchi and
Yagong had demonstrated that Petitioners would be unable to carry
their burden of proof at trial.
c. CSII
CSII filed a motion for summary judgment, arguing,
inter alia, that “there are no defamatory statements attributable
to CSII” in Petitioners’ complaints, and that CSII did not owe a
duty to Petitioners. CSII argued that there was no special
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relationship between Petitioners and CSII such that a duty would
arise from their relationship. CSII also argued, even if it did
owe a duty, that it did not breach a duty because CSII
interviewed County employees designated by a County Human
Resources manager as employees in the elections division, advised
the employees that they were being interviewed in connection with
activities at the warehouse, and obtained permission from the
employees and their union representative to record the
interviews.
In their opposition, Petitioners argued that CSII owed
a duty of reasonable care to Petitioners to conduct an impartial
investigation, because, as public sector employees, Petitioners
could only be terminated for just cause. They argued that a just
cause termination requires a fair and objective investigation
into the employee’s alleged misconduct. Petitioners also argued
that the owner of CSII, Kevin Antony, is a professional private
detective licensed by the State of Hawai#i and, “[a]s such, CSII
is held to a higher standard of care, and before releasing the
information of its reports to its clients, should have considered
the accuracy of the data collected due to the risk associated
with releasing information that later proves to be unreliable.”
Petitioners argued that CSII’s investigation was
negligent because CSII offered a narrow selection of negative
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evidence procured through a biased process, while suppressing
broad categories of favorable and exculpatory evidence.
Petitioners argued that CSII failed to properly interview or, in
some cases, interview at all, critical witnesses, including
former County clerks, Goodenow and Leigh.
The circuit court filed an order granting CSII’s motion
for summary judgment. As to the defamation and false light
claims, it found that Petitioners “failed to present any
admissible evidence to demonstrate that any defamatory statement
was published by CSII that was unprivileged and concerned
[Petitioners].” As to the negligent investigation claim, the
court held that CSII owed no duty to Petitioners.
On October 3, 2013, the circuit court entered Judgment
in favor of all defendants.
B. ICA Proceedings
Petitioners appealed, challenging the circuit court’s
holdings as to their defamation, false light, and negligent
investigation claims. Regarding their defamation and false light
claims, Petitioners argued that their claims were “not a
‘personal injury’ as defined by HRS [§] 386-3,”6 asserting that
6
HRS § 386-3 (Supp. 1998) provides, in relevant part (emphasis
added):
(a) If an employee suffers personal injury either by
(continued...)
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the majority of jurisdictions recognize that defamation does not
fall within workers’ compensation exclusivity. Petitioners also
contended that their injuries resulting from the alleged post-
termination defamation did not arise out of their employment, and
thus were not covered by the WCL’s exclusivity provision.
As to their negligent investigation claim, Petitioners
argued that CSII was negligent in its investigation, having
“failed or ignored to interview or properly interview critical
witnesses.” Petitioners asserted that CSII “owed a duty of
reasonable care to [Petitioners] to conduct an impartial
investigation,” and that its failure to do so constituted a
“reckless disregard” that caused their injuries.
The ICA affirmed the circuit court’s judgment.
Regarding Petitioners’ defamation and false light claims, the ICA
agreed with the circuit court’s conclusion that such claims are
generally within the WCL’s exclusivity provision. The ICA relied
on its decision in Yang v. Abercrombie & Fitch Stores, 128
Hawai#i 173, 284 P.3d 946(App. 2012), which held that intentional
tort claims, including defamation, were barred by the WCL.
6
(...continued)
accident arising out of and in the course of the
employment or by disease proximately caused by or
resulting from the nature of the employment, the
employee’s employer or the special compensation fund
shall pay compensation to the employee or the
employee’s dependents as provided in this chapter.
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However, the ICA determined that any defamatory statement made
after Petitioners’ termination would not be barred by the WCL, as
the statements would not meet “an essential prerequisite for
coverage under the WCL–-the existence of an employer-employee
relationship.” Accordingly, the ICA concluded that the circuit
court erred in ruling that the WCL bars Petitioners’ defamation
and false light claims to the extent those claims are based on
statements made after the termination of their employment.
As to the grant of summary judgment in favor of
Kawauchi and Yagong, the ICA found that there was no genuine
issue of material fact as to the claims against Kawauchi and
Yagong. The ICA noted that “truth is an absolute defense” to
defamation claims, and that a false light claim arising from the
same statement as a defamation claim must be dismissed if the
defamation claim is dismissed. The ICA determined that Kawauchi
and Yagong had submitted undisputed evidence demonstrating that
the allegedly defamatory statements published in the January 12,
2012 Hawai#i Tribune Herald article were true. Accordingly, the
ICA concluded that the circuit court properly granted summary
judgment in favor of Kawauchi and Yagong as individuals.
Having held that the circuit court properly granted
summary judgment in favor of Kawauchi and Yagong as individuals,
the ICA determined that the law of the case doctrine barred
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Petitioners from reasserting their claims against the County and
against Kawauchi and Yagong in their official capacity. The ICA
explained that Petitioners asserted identical allegations against
Kawauchi and Yagong whether in their individual or official
capacities, and that the claims against the County were for
respondeat superior liability related to Kawauchi’s and Yagong’s
alleged conduct. Accordingly, although the post-termination
claims were not barred by the WCL exclusivity provision, further
litigation was precluded because Kawauchi’s and Yagong’s
statements were true.
Regarding the circuit court’s grant of summary judgment
in favor of CSII, the ICA found that CSII owed no duty to
Petitioners. The ICA reasoned that “[Petitioners] did not submit
any evidence to suggest that CSII realized or should have
realized that its investigation posed an unreasonable risk of
harm to [Petitioners] through the negligent or reckless conduct
of Kawauchi, Yagong, or any other third party.” Accordingly, the
ICA concluded that summary judgment in favor of CSII was properly
granted.
Based on the foregoing, the ICA affirmed the circuit
court’s judgment as to all defendants.
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III. Standards of Review
A. Motion to Dismiss
A trial court’s ruling on a motion to dismiss is
reviewed de novo. The court must accept plaintiff’s
allegations as true and view them in the light most
favorable to the plaintiff; dismissal is proper only
if it appears beyond doubt that the plaintiff can
prove no set of facts in support of his or her claim
that would entitle him or her to relief.
Wong v. Cayetano, 111 Hawai#i 462, 476, 143 P.3d 1, 15 (2006)
(internal quotation marks and citations omitted).
B. Summary Judgment
[An appellate court] reviews the circuit court’s grant
of summary judgment de novo. Price v. AIG Hawai#i
Ins. Co., 107 Hawai#i 106, 110, 111 P.3d 1, 5 (2005).
Summary judgment is appropriate “if the pleadings,
depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if
any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to
a judgment as a matter of law.” HRCP Rule 56(c).
Gillan v. Gov’t Emps. Ins. Co., 119 Hawai#i 109, 114, 194 P.3d
1071, 1076 (2008).
C. Statutory Interpretation
Questions of statutory interpretation are questions of
law to be reviewed de novo under the right/wrong
standard.
Our statutory construction is guided by the following
well established principles:
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. And
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
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expression used in a statute, an ambiguity
exists.
In construing an ambiguous statute, the meaning
of the ambiguous words may be sought by
examining the context, with which the ambiguous
words, phrases, and sentences may be compared,
in order to ascertain their true meaning.
Moreover, the courts may resort to extrinsic
aids in determining legislative intent. One
avenue is the use of legislative history as an
interpretive tool.
The appellate court may also consider the reason
and spirit of the law, and the cause which
induced the legislature to enact it to discover
its true meaning.
Lingle v. Hawai#i Gov’t Emp. Ass’n, AFSCME, Local 152, AFL-CIO,
107 Hawai#i 178, 183, 111 P.3d 587, 592 (2005) (internal
quotation marks, brackets and ellipses omitted) (quoting Guth v.
Freeland, 96 Hawai#i 147, 149-50, 28 P.3d 982, 984-85 (2001)).
IV. Discussion
Petitioners present three questions to this court in
their application for writ of certiorari:
A. Did the ICA commit grave error by extending
workers’ compensation exclusivity to injuries
involving a person’s reputation?
B. Did the ICA commit grave error by determining the
"truth" of disputed facts which was a question for the
jury?
C. Did the ICA commit grave error by holding that no
duty exists to conduct an objective investigation in
support of employee discipline for public sector
employees?
Regarding Petitioners’ first question, we hold that the
WCL’s bar on claims for injuries incurred in the course of
employment does not extend to injuries to a person’s reputation,
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and accordingly, to defamation and false light claims. The
purpose of the WCL is to compensate employees for work-related
physical and mental injuries. The purpose of defamation and
false light actions is to compensate plaintiffs for harm to their
reputation. The WCL does not provide compensation for harm to
reputation. Given the differing purposes, and the lack of a
remedy in the WCL, we hold that employees may bring defamation
claims against their employers. We overrule the ICA’s decision
in Yang v. Abercrombie & Fitch Stores, 128 Hawai#i 173, 284 P.3d
946 (App. 2012), to the extent it held otherwise.
Regarding Petitioners’ second question, we address the
grant of summary judgment in favor of Kawauchi and Yagong in
their individual capacities. We affirm summary judgment in favor
of Kawauchi, but conclude that summary judgment was improperly
granted as to Yagong, as there exists a disputed fact whether
Yagong’s allegedly defamatory statements were true.
Finally, regarding Petitioners’ third question, we hold
that CSII owed a legal duty of care to Petitioners in conducting
its investigation. Kevin Antony is a private investigator
licensed pursuant to statute and regulations. We hold, based on
the statute and regulations, that licensed private investigators
owe a duty of care to the subjects of their investigations.
Because our holding is based on CSII’s role as a licensed private
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investigator, we do not address Petitioners’ argument that they
are owed a duty because they are public sector employees.
A. Claims for Reputational Injuries, and, Accordingly, for
Defamation and False Light, are Beyond the Scope of the
WCL’s Exclusivity Provision.
Whether the WCL’s exclusivity provision bars claims for
defamation and false light is a question of first impression
before this court. When construing a statute, our foremost
obligation is to “give effect to the intention of the
legislature, which is to be obtained primarily from the language
contained in the statute itself. And we must read statutory
language in the context of the entire statute and construe it in
a manner consistent with its purpose.” Morgan v. Planning Dep’t,
Cty. of Kauai, 104 Hawai#i 173, 179, 86 P.3d 982, 988 (2004). As
set forth below, the language and purpose of the WCL lead us to
conclude that the legislature did not intend for the WCL
exclusivity provision to extend to defamation and false light
claims.
In determining whether defamation and false light
claims are barred by the WCL, we start with the statute’s plain
language. See id. The WCL exclusivity provision, HRS § 386-5,
provides:
The rights and remedies herein granted to an employee
or the employee’s dependents on account of a work
injury suffered by the employee shall exclude all
other liability of the employer to the employee . . .
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at common law or otherwise, on account of the injury,
except for sexual harassment or sexual assault and
infliction of emotional distress or invasion of
privacy related thereto, in which case a civil action
may also be brought.
(Emphasis added.)
The WCL defines a “work injury” as “a personal injury
suffered under the conditions specified in section 386-3.” HRS
§ 386-1 (1993). HRS § 386-3, titled “Injuries covered,”
provides, in relevant part:
(a) If an employee suffers personal injury either by
accident arising out of and in the course of the
employment or by disease proximately caused by or
resulting from the nature of the employment, the
employee’s employer or the special compensation fund
shall pay compensation to the employee or the
employee’s dependents as provided in this chapter.
Accident arising out of and in the course of the
employment includes the wilful act of a third person
directed against an employee because of the employee’s
employment.
(Emphasis added.)
Assuming the word “personal” is not superfluous, the
term “personal injury” does not extend to all legally cognizable
injuries that might arise in the course of employment. See
Camara v. Agsalud, 67 Haw. 212, 215, 685 P.2d 794, 797 (1984)
(“It is a cardinal rule of statutory construction that courts are
bound, if rational and practicable, to give effect to all parts
of a statute[.]”). In other words, the WCL does not provide a
remedy for injuries that are not “personal.” By extension, it
does not bar actions in tort that seek to redress non-personal
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injuries. Whether defamation and false light claims are barred
by the WCL thus depends on whether the harm inflicted is a
“personal injury” under the WCL.
The plain language of HRS § 386-3 itself provides
little guidance as to the definition of a personal injury.
However, reading HRS § 386-3 “in the context of the entire
statute and constru[ing] it in a manner consistent with its
purpose” we hold that the harm inflicted by the torts of
defamation and false light is not a “personal injury” under the
WCL. See Morgan, 104 Hawai#i at 179, 86 P.3d at 988.
The purpose of the WCL (codified in HRS Chapter 386),
is to provide compensation to employees for work-related personal
injuries. Iddings, 82 Hawai#i at 8, 919 P.2d at 270. While HRS
Chapter 386 does not define “personal injury,” the chapter
contemplates compensation for physical and mental injuries. The
“underlying premise of the system” is “to enable the injured
worker to receive timely and the most effective medical treatment
and rehabilitation.” H. Stand. Comm. Rep. No. 575, in 1995 House
Journal, at 1242. As the ICA noted in Omori v. Jowa Hawai#i Co.:
[W]orkers’ compensation “is a branch of social
insurance for workers aimed at protection against the
consequences of work injuries.” S. Riesenfeld, Study
of the Workmen’s Compensation Law in Hawaii,
Legislative Reference Bureau, Report No. 1 (1963), iii
(emphasis added). Professor Stefan Riesenfeld, the
architect of the majority of the 1963 revisions to the
Hawai#i Workers’ Compensation Law, see Hse. Stand.
Comm. Rep. No. 889, in 1963 House Journal, at 822;
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Sen. Stand. Comm. Rep. No. 334, in 1963 Senate
Journal, at 788, identified the following three goals
of workers’ compensation:
(1) medical restoration and physiological
rehabilitation [of the worker] as far as
possible; (2) return of the permanently disabled
worker to some gainful employment whenever
possible, even where new skills must be
developed; (3) provision of substantial relief
for the economic and other losses incurred.
91 Hawai#i 157, 160–61, 981 P.2d 714, 717–18 (App. 1999), aff’d
as modified, 91 Hawai#i 146, 981 P.2d 703 (1999).
Consistent with its purpose, the WCL’s compensation
structure provides payment for medical and vocational
rehabilitation benefits, and income and indemnity benefits for
total and partial disability and death caused by work injury.
HRS §§ 386-21 to –57. The WCL provides that “[i]mmediately after
a work injury . . . the employer shall furnish to the employee
all medical care, services, and supplies as the nature of the
injury requires.” HRS § 386-21(a). In the case of certain
injuries, such as the loss of a limb, the disability is deemed
permanent, and the employer is required to pay the employee a
weekly benefit. HRS § 386-31.
In contrast to the type of “personal injury”
contemplated by the WCL, defamation and false light claims
address altogether different types of harm. The tort of
defamation has four elements:
(a) a false and defamatory statement concerning another;
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(b) an unprivileged publication to a third party;
(c) fault amounting at least to negligence on the part
of the publisher [actual malice where the plaintiff is
a public figure]; and
(d) either actionability of the statement irrespective
of special harm or the existence of special harm
caused by the publication.
Beamer v. Nishiki, 66 Haw. 572, 578–79, 670 P.2d 1264, 1271
(1983) (quoting Restatement (Second) of Torts § 588 (1977)).
We address these elements to determine the type of harm
for which the defamation and false light causes of action
compensate.7 As to the first element, “[a] communication is
defamatory when it tends to harm the reputation of another as to
lower him in the estimation of the community[.]” Fernandes v.
Tenbruggencate, 65 Haw. 226, 228, 649 P.2d 1144, 1147 (1982)
7
The tort of false light substantially overlaps with defamation,
and “where a false-light claim is based on the same statements as a defamation
claim, the false-light claim must be dismissed if the defamation claim is
dismissed.” Wilson v. Freitas, 121 Hawai#i 120, 130, 214 P.3d 1110, 1120
(App. 2009) (citing Gold v. Harrison, 88 Hawai#i 94, 103, 962 P.2d 353, 362
(1998)). The false light tort is defined as:
One who gives publicity to a matter concerning another
that places the other before the public in a false
light is subject to liability to the other for
invasion of his privacy, if
(a) the false light in which the other was placed
would be highly offensive to a reasonable person, and
(b) the actor had knowledge of or acted in reckless
disregard as to the falsity of the publicized matter
and the false light in which the other would be
placed.
Wilson, 121 Hawai#i at 130, 214 P.3d at 1120 (quoting Restatement (Second) of
Torts § 652E (1977)).
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(quotation marks and citations omitted). As to the fourth
element, special harm is the loss of something having at least
indirect pecuniary value, such as the loss of society,
companionship and association. Restatement (Second) of Torts
§ 575 (1977). A statement is actionable irrespective of special
harm if the communication is libel. In that case, no further
proof of injury or loss is required to recover general damages.
Id. § 569. General damages includes compensation for “impairment
of reputation and standing in the community,” and “personal
humiliation, and mental anguish and suffering.” Id. § 621.
Thus, the interest protected by defamation actions is
that of reputation. Gonsalves, 100 Hawai#i at 171, 58 P.3d at
1218. “In defamation actions general damages are imposed for the
purpose of compensating the plaintiff for the harm that the
publication has caused to his reputation.” Restatement (Second)
of Torts § 621 (1977).
In comparing the physical and mental injuries clearly
contemplated by the legislature in providing compensation for
“personal injury” in Chapter HRS 386, and the purpose of
compensation in defamation actions–-to compensate for harm to
reputation--we conclude that defamation and false light do not
inflict a “personal injury” under HRS § 386-3. Nowhere in HRS
Chapter 386 is there any provision for compensation for harm to
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reputation. Defining “personal injury” under HRS § 386-3 as
including injury for which HRS Chapter 386 provides no remedy is
inconsistent with the WCL’s purpose to provide compensation for
work-related injuries. See Nassa v. Hook-SupeRx, Inc., 790 A.2d
368, 372 (R.I. 2002) (“the scope of the exclusive-remedy doctrine
as embodied in workers’ compensation law depends upon whether the
alleged work-related injury is one for which the applicable
workers’ compensation statute provides a compensation remedy.”).
Interpreting the WCL to bar claims for defamation would produce
an absurd result because employees would have no way in which to
recover for reputational harm--they would not recover damages in
tort, nor would they receive compensation for the harm to their
reputation from the WCL. Such a result is manifestly
inconsistent with the WCL’s purpose to compensate employees for
work-related injuries.
Based on the foregoing, we hold that harm to reputation
is not a “personal injury” under HRS § 386-3.8 Because the
8
The County argues that this court has previously defined “personal
injury” to include reputational harm in TMJ Hawai#i, Inc. v. Nippon Trust
Bank, 113 Hawai#i 373, 153 P.3d 444 (2007). However, in TMJ Hawai#i, we
defined personal injury in a different context: the assignability of tort
claims. Id. at 374-75, 153 P.3d at 445-46. There, we explained that “tort
claims that are ‘personal’ in nature are not assignable.” Id. at 381, 153
P.3d at 452. We compared malpractice, breach of fiduciary duty, and fraud
claims to “personal” tort claims and held:
These allegations consist of direct and quantifiable
economic injuries to the estate or property of
Ishimura Building, as opposed to physical, mental, or
(continued...)
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purpose of defamation actions is to provide compensation for harm
to reputation, and because a reputational injury is not a
“personal injury,” we hold that the torts of defamation and false
light are beyond the ambit of the WCL’s exclusivity provision.
The fact that damages for mental anguish and suffering
may also be recovered in a defamation action does not change our
conclusion. We are persuaded by the reasoning of the Supreme
Judicial Court of Massachusetts, which, in holding that
defamation claims were not barred by workers’ compensation,
noted:
The [workers’ compensation] act has been interpreted
to encompass physical and mental injuries arising out
of employment, whereas the gist of an action for
defamation is injury to reputation, irrespective of
any physical or mental harm. We recognize the
conceptual problem inherent in the employee’s
including physical and mental injury as elements of
damage in the defamation claim. However, we feel that
to block the main thrust of this action because of
peripheral items of damages, when a compensation claim
8
(...continued)
reputational harm. Given the non-personal nature of
the injuries alleged, we are compelled to conclude
that the professional malpractice, breach of fiduciary
duty, and fraud claims presented in the present case
are assignable.
Id. at 384, 153 P.3d at 455 (emphasis added).
TMJ Hawai#i thus categorizes torts that redress reputational harm
as “personal” claims for the purposes of analyzing whether they are
assignable. However, a word’s meaning can vary depending on context, and our
observation that reputational harm is a “personal” injury for the purposes of
determining whether a claim is assignable does not compel the conclusion that
defamation is a “personal injury” within the context of the WCL. Again, to
interpret “personal injury” to include reputational harm is counter to the
“spirit of the law, and the cause which induced the legislature to enact it”
because HRS Chapter 386 provides no compensation for reputational harm. See
Gurrobat v. HTH Corp., 135 Hawai#i 128, 133, 346 P.3d 197, 202 (2015).
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could not purport to give relief for the main wrong of
injury to reputation, would be incongruous, and
outside the obvious intent of the exclusiveness
clause.
Foley v. Polaroid Corp., 381 Mass. 545, 551-52, 413 N.E.2d 711,
715 (1980)(citations omitted).
Our holding is consistent with the weight of authority
from other jurisdictions. See, e.g., Nassa, 790 A.2d at 371
(“the prevalent view throughout the nation . . . is that the
exclusive-remedy provisions of workers’ compensation laws do not
bar employment-related defamation claims.”); Tracy Bateman
Farell, Defamation, 82 Am. Jur. 2d Workers’ Compensation § 73
(“Defamation actions generally are not barred by the exclusive
remedy provision of workers’ compensation statutes. The
rationale for this exception is that an injury to an employee’s
reputation is not the kind of injury contemplated by a workers’
compensation act[.]”)
Decisions contrary to the majority view frequently
involve the broad application of an exclusivity provision to an
employee who alleged multiple causes of action for intentional
torts, without considering whether harm to one’s reputation is
properly considered a “personal injury.” See, e.g., Becker v.
Automatic Garage Door Co., 456 N.W.2d 888 (Wis. Ct. App. 1990);
Thompson v. Maimonides Med. Ctr., 86 A.D.2d 867 (N.Y. App. Div.
1982).
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The ICA’s decision in Yang similarly broadly applied
the WCL exclusivity provision to an employee who alleged multiple
intentional tort causes of action, without specifically
considering whether reputational harm is a “personal injury.”
Yang, 128 Hawai#i at 183, 284 P.3d at 956. There, a clothing
store employee alleged that she was wrongfully accused of
stealing money and filed a complaint which included counts for,
inter alia, false imprisonment, harassment, wrongful termination,
intentional infliction of emotional distress, and defamation.
Id. at 174-75, 284 P.3d at 947-48. The circuit court held that
injuries caused by the intentional actions of the employer were
not covered under the WCL. Id. at 175-76, 284 P.3d at 948-49.
The ICA vacated the circuit court’s decision, holding that HRS
§ 386-5 barred all of Yang’s intentional tort claims. Id. at
183, 284 P.3d at 956.
Yang stands for the proposition that the WCL’s
exclusivity provision encompasses intentional torts, including
defamation, unless otherwise provided for by the legislature.
Id. However, the ICA did not explicitly consider the application
of the exclusivity provision to reputational injuries. The ICA
failed to recognize that by barring defamation claims, it left
employees without a remedy for harm to their reputation caused by
their employers–-a result inconsistent with the purpose of the
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WCL. Because we conclude that the legislature did not intend to
include reputational injuries in the definition of “personal
injury” in HRS § 386-3, we overrule Yang to the extent it held
that defamation claims were barred by the WCL.
In conclusion, reputational harm is not a “personal
injury” under HRS § 386-3. Because the purpose of defamation and
false light claims is to provide compensation for reputational
harm, defamation and false light claims are not covered by the
WCL exclusivity provision, HRS § 386-5.
B. Summary Judgment as to the Truth of Yagong’s and Kawauchi’s
Statements
Having held that Petitioners’ claims were not barred by
the WCL, we turn to whether there was a disputed question of
material fact as to the truth of the allegedly defamatory
statements. The circuit court granted summary judgment in favor
of Kawauchi and Yagong based on its finding that there was an
absence of evidence that they made false statements, and the ICA
affirmed. Petitioners argue that the ICA erred in affirming
summary judgment. We conclude that Yagong did not meet his
burden to establish that there was no dispute of material fact
that his statements were true, and accordingly, vacate summary
judgment in his favor. However, we affirm the entry of summary
judgment in favor of Kawauchi.
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“The burden is on the party moving for summary judgment
(moving party) to show the absence of any genuine issue as to all
material facts.” Ralston v. Yim, 129 Hawai#i 46, 56, 292 P.3d
1276, 1286 (2013). “In other words, summary judgment is
appropriate if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue of
material fact and the moving party is entitled to a judgment as a
matter of law.” Kawashima v. State, 140 Hawai#i 139, 148, 398
P.3d 728, 737 (2017). The court must “view all of the evidence
and inferences drawn therefrom in the light most favorable to the
party opposing the motion.” Ralston, 129 Hawai#i at 56, 292 P.3d
at 1286.
Petitioners’ defamation and false light claims against
Kawauchi and Yagong are based on the January 12, 2012, Hawai#i
Tribune Herald article entitled, “County elections workers
fired.9” The article stated, in relevant part:
9
In their complaint, Petitioners also identify statements made by
an anonymous blogger with the pseudonym “Taxedtodeath,” and contended that
Kawauchi and Yagong “leaked false and misleading information to the media”
because the blogger “specifically referred to details only contained in
Defendant CSII’s investigation which had not been released to the public.”
However, Petitioners do not mention the anonymous blogger, and identify only
the statements in the January 12, 2012 article as forming the basis of their
defamation claim, in their opposition to Kawauchi and Yagong’s motion for
summary judgment. Because we find that there is a disputed question of
material fact as to the truth of the statements in the January 12, 2012
article, we do not address Petitioners’ allegations regarding the blogger’s
statements.
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Hawaii County has fired four elections workers,
including the program administrator, following an
investigation into alcohol storage and private
business activities allegedly conducted at a Hilo
elections warehouse.
“They have received termination notices already,”
County Council Chairman Dominic Yagong said of three
letters dated Friday
A separate notice had been sent earlier to another
employee, whose termination appeal is now at the
arbitration level, he said.
The infractions dealt with “violations of county
policy,” the Hamakua councilman said Wednesday.
“I don’t want to go into details and jeopardize the
process,” Yagong said when asked for specific reasons
for the discharges.
Last July 7, Yagong and County Clerk Jamae Kawauchi
visited the roughly 2,000-square-foot warehouse the
county rents at Makaala St. Concerned with what he
saw, Yagong ordered the locks changed that night and
that an independent investigation be conducted.
“The warehouse remains closed as the Police Department
is continuing its investigation,” Yagong said
Wednesday.
However, it’s still being used as a storage facility
for election ballot boxes, he said.
“The final decision (to terminate the employees) is
made by the county clerk, but I was involved in the
decision-making process,” Yagong said.
Kawauchi confirmed four employees have “separated”
from the county, but she couldn’t divulge why.
However, she identified the employees as: Pat
Nakamoto, a longtime elections program administrator;
Glen Shikuma, warehouse manager; Shyla Ayau; and Elton
Nakagawa.
(Emphases added).
Viewing the evidence in the light most favorable to
Petitioners, we find that Yagong did not demonstrate an absence
of any genuine issue as to all material facts, namely, whether
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the statements attributed to him in the January 12, 2012 Hawai#i
Tribune Herald article were true. Ralston, 129 Hawai#i at 56,
292 P.3d at 1286. Although truth is an absolute defense to
defamation claims, this court has held that “substantial truth”
is a matter for the jury to decide. Kohn v. W. Hawai#i Today,
Inc., 65 Haw. 584, 590, 656 P.2d 79, 84 (1982) (“The question, a
factual one, is whether there is a substantial difference between
the allegedly libelous statement and the truth; or stated
differently, whether the statement produces a different effect
upon the reader than that which would be produced by the literal
truth of the matter.”).10
A reasonable juror could find that Yagong’s statements
indicated that all of the terminated employees in fact violated
County policy relating to alcohol at the warehouse and were
involved in conducting private business activities out of the
warehouse. The article states, “Hawai#i County has fired four
election workers . . . following an investigation into alcohol
storage and private business activities allegedly conducted at a
10
In Kohn, the defendant newspaper published an article mentioning
plaintiff as one of several businesses at which dangerous drugs, including
heroin, cocaine, hashish, and morphine, were confiscated. Id. at 585, 656
P.2d at 80. The plaintiff sued for defamation because the police had
confiscated only marijuana from the plaintiff. Id. This court affirmed the
trial court’s denial of defendant’s motion for summary judgment, holding, “A
jury is especially suited to make the factual determination of whether the
average reader would have been affected by the article in a far different
manner than if the article had been accurately written.” Id. at 590, 656 P.2d
at 84.
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Hilo elections warehouse.” The article quotes Yagong as stating
that the employees “have received termination notices” and that
the infractions dealt with “violations of county policy.”11
Although there is no dispute of fact that Kawauchi sent
Petitioners termination letters a few days before the article was
published, we conclude that there is a dispute of material fact
as to whether Petitioners committed violations of County policy.
As Petitioners argue, despite the alleged violations of County
policy, Petitioners were reinstated. Moreover, the County’s
Human Resources Director testified that he told Kawauchi and
Yagong that there was not enough evidence in CSII’s reports to
terminate Nakamoto.12 Further, although the article implied that
Petitioners were involved in private business activities at the
warehouse, Kawauchi and Yagong have not pointed to any evidence
that Petitioners themselves conducted such activities at the
11
Although it was the newspaper who printed Yagong’s and Kawauchi’s
statements, and thus the newspaper’s wording of the article might contribute
to the effect of Yagong’s and Kawauchi’s statements on the reader, Yagong is
directly quoted as saying that the infractions “dealt with violations of
County policy.” In his deposition, Yagong confirmed that he interviewed with
Jason Armstrong for the January 12, 2012 Hawai#i Tribune Herald article.
Yagong testified that he did not recall whether Jason Armstrong sent him a
preview of the article before it was published.
12
Although Kawauchi and Yagong argued they did not have a duty to
act based on the Human Resources Director’s opinion, we conclude that
Takahashi’s opinion, together with the fact of reinstatement, raises a
question of fact as to whether Petitioners violated County policy. As to
Kawauchi and Yagong’s argument that Takahashi had a conflict of interest
regarding the investigation, Kawauchi and Yagong cited only a newspaper
article; they did not ask Takahashi about any such conflict during his
deposition. Further, the alleged conflict was only as to Shikuma, not as to
Petitioners.
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warehouse. Finally, although Kawauchi and Yagong argued that
they relied on information in CSII’s reports in deciding to
terminate Petitioners, Petitioners disputed the reliability of
the results of the investigation, contending that CSII did not
interview critical witnesses, including, inter alia, Akiyama, the
owner of the elections warehouse, and former County Clerks
Goodenow and Leigh.
Based on the foregoing, we conclude that Petitioners
raised a genuine issue of material fact, and that accordingly the
circuit court erred in granting summary judgment in favor of
Yagong on the defamation and false light claims.13 We therefore
vacate the circuit court’s judgment in favor of Yagong, and
remand for further proceedings. However, we affirm the grant of
summary judgment in favor of Kawauchi. Kawauchi was quoted in
the January 12, 2012 article as saying that four individuals,
including Petitioners, had “separated” from the County, but
declined to give additional details. Kawauchi’s statement was
limited to confirming a fact that was objectively correct and did
not itself imply misconduct. It is undisputed that Kawauchi’s
statement was true, and she is accordingly entitled to summary
13
Petitioners did not raise their negligent investigation claims or
negligent infliction of emotional distress claims against Kawauchi and Yagong
in their individual capacities in the ICA. Accordingly, these claims are
waived, and we do not address them.
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judgment.
Because we vacate the circuit court’s grant of summary
judgment in favor of Yagong in his individual capacity, we also
vacate the circuit court’s dismissal of Petitioners’ claims
against the County and Yagong in his official capacity. The ICA
affirmed the circuit court’s grant of summary judgment in favor
of Kawauchi and Yagong, holding that the undisputed facts
established that Kawauchi and Yagong did not make false
statements. The ICA determined that, although post-employment
defamation claims were not barred by the WCL, the law of the case
doctrine barred Petitioners from reasserting their defamation and
false light claims against the County and against Kawauchi and
Yagong in their official capacity, because the claims were based
on the same statements. Since we are vacating the grant of
summary judgment as to Yagong in his individual capacity, the law
of the case doctrine would not apply. Accordingly, Petitioners
may reassert their defamation and false light claims against the
County and Yagong in his official capacity, based on our holding
that the claims were not barred by the WCL. We therefore vacate
the circuit court’s grant of the County’s motion to those claims,
and remand for further proceedings.14
14
Petitioners did not raise their negligent investigation claims or
negligent infliction of emotional distress claims against the County or
(continued...)
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C. Licensed Private Investigators Owe a Duty of Care to the
Subject of Their Investigations.
Petitioners argue that the ICA erred in concluding that
CSII owed no legal duty to Petitioners that would support their
negligent investigation claim against CSII. CSII argues that it
did not owe a legal duty to Petitioners because it was not their
employer, and it was not responsible for decisions relating to
their employment.
A negligent investigation claim is a common law tort
action for negligence. One element of such an action is “[a]
duty or obligation, recognized by the law, requiring the
defendant to conform to a certain standard of conduct, for the
protection of others against unreasonable risks.” Tseu ex rel.
Hobbs v. Jeyte, 88 Hawai#i 85, 91, 962 P.2d 344, 350 (1998).
“[A] duty of care may be established by statute if a
‘legislative enactment [ ] lays down requirements of conduct, and
provides expressly or by implication that a violation shall
entail civil liability in tort.’” Arquette v. State, 128 Hawai#i
423, 443, 290 P.3d 493, 513 (2012) (citing Lee v. Corregedore, 83
Hawai#i 154, 172, 925 P.2d 324, 342 (1996)). We hold, based on
our precedent and case law from other jurisdictions, that a
14
(...continued)
Kawauchi and Yagong in their official capacities in the ICA. Accordingly,
those claims are waived, and we do not address them.
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statute and regulation pertaining to CSII’s status as a licensed
private investigator create a legal duty of care owed by CSII to
the subjects of its investigations.15
In Arquette, a plaintiff subject to an investigation by
the Office of Consumer Protection (OCP) brought a negligent
investigation claim against OCP, arguing that HRS § 487-116
created a duty of care in OCP to the subjects of its
investigations. In considering the plaintiff’s contention, this
court relied on its previous decision in Corregedore, which held:
Duty in a negligence action may be defined by common
law or by statute. . . . “[w]hen a statute provides
that under certain circumstances particular acts shall
or shall not be done, it may be interpreted as fixing
a standard ... from which it is negligence to
deviate.” William L. Prosser, Prosser & Keeton on the
Law of Torts § 36 at 220 (5th ed. 1984) (footnote
omitted). Thus, the key words are that the statute
must specify or imply standards or “requirements of
conduct” that will create civil liability.
. . . .
15
Because we hold that CSII owed a duty as a licensed private
investigator, we do not address Petitioners’ argument that various public
employment statutes created a legal duty of care.
16
HRS § 487-1 (1984) provides:
The public health, welfare and interest require a
strong and effective consumer protection program to
protect the interests of both the consumer public and
the legitimate business person. Toward this end, a
permanent office of consumer protection is created to
coordinate the services offered to the consumer by
various state and county agencies, together with
private organizations, and to aid in the development
of preventive and remedial programs affecting the
interest of the consumer public.
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If a statute “contains no express provision that its
violation shall result in tort liability, and no
implication to that effect, the court may, and in
certain types of cases customarily will, adopt the
requirements of the enactment as the standard of
conduct necessary to avoid liability for negligence.”
Restatement (Second) of Torts § 285 comment c (1965).
Courts may adopt the requirements of a statute as the
standard of care when the purpose of the statute is to
“protect a class of persons which includes the one
whose interest is invaded[.]” Restatement (Second) of
Torts § 286(a) (1965).
83 Hawai#i at 172-73, 925 P.2d at 342-43 (emphasis added).
We held in Arquette that HRS § 487-1 did not create a
duty of care. 128 Hawai#i at 443, 290 P.3d at 513. HRS § 487-1
creates a permanent office of consumer protection to coordinate
services and programs affecting the consumer public. We held
that the statute did not obligate government officials to “act in
a certain manner or in accordance with any particular standard or
proscribe any conduct,” and, accordingly, did not create or
indicate a duty of care which could form the basis of the
plaintiff’s negligence action. Arquette, 128 Hawai#i at 443, 290
P.3d at 513.
Similarly, in Corregedore, we held that HRS Chapter
363, “Veterans Rights and Benefits,” did not create a statutory
duty of care on the part of Veterans’ Services Counselors. 83
Hawai#i at 173, 925 P.2d at 343. The statutes required that the
Office of Veterans’ Services, inter alia, maintain and supervise
a center for veterans, their families and dependents providing
information and referral for services, assistance, or benefits;
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cooperate with other agencies in the community to coordinate
available services; and assemble, analyze, compile, and
disseminate factual up-to-date information with respect to
available benefits. Id. We held that the statute did not
proscribe conduct nor specify standards of conduct for Veterans’
Services Counselors, nor could such standards of conduct be
inferred from the chapter’s language. Id.
Cases outside Hawai#i, applying the principle that
statutes may create a duty of care, have held that a licensed
private investigator owes a duty to the subjects of its
investigations, based on the state’s licensing statute. See Cruz
v. Viewpoint CRM, Inc., No. CV-126014149, 2013 WL 593886, at *12
(Conn. Super. Ct. Jan. 16, 2013); Devlin v. Greiner, 147 N.J.
Super. 446, 466, 371 A.2d 380, 391 (Law. Div. 1977).
In Devlin, a husband hired a licensed detective to
investigate whether his wife was having an affair with plaintiff,
Devlin. 147 N.J. Super. at 452, 371 A.2d at 383. The
investigator reported on the affair, and the husband filed for
divorce. Id. Devlin and the wife sued the investigator based
on, inter alia, a claim of negligence. Id. The investigator
argued that he owed no duty to plaintiffs. Id. at 465, 371 A.2d
at 391. The court disagreed, holding:
Defendant clearly had a duty to those he observed to
report accurately on their activities. He is a
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private detective, licensed under N.J.S.A. 45:19-12.
It is his business, among other things, to supply his
clients with information or factual data concerning
the activities of others. Where the information
gathered by him is of a delicate or sensitive nature,
his duty to report that information accurately should
extend not only to the person who hired him, but also
to the subjects of his surveillance-people whose lives
may be materially affected by the accuracy of his
reports.
. . . .
This duty to report information accurately springs
from a second source, in addition to the traditional
principles of negligence. In procuring a license to
be a private detective, defendant holds himself out to
be a person of good character, competency and
integrity. N.J.S.A. 45:19-12; Schulman v. Kelly, 54
N.J. 364, 255 A.2d 250 (1969). The requirements of
the statute evince a legislative recognition of the
potential for abuse inherent in defendant’s business.
The Legislature thus exercised control, in the
societal interest, over the people upon whom it
conferred the powers enumerated in N.J.S.A. 45:19-9.
The entire tenor of licensing statute indicates that
its aim is to impose a standard of competent
professionalism upon licensed private detectives.
Id. at 466-67, 371 A.2d at 391.
In Cruz, a licensed surveillance company hired by an
apartment complex reported that the employee of a janitorial
company contracted by the apartment complex had used drugs, and
the janitorial company terminated its employee. Cruz, 2013 WL
593886 at *1. The court held that the surveillance company owed
a duty to the terminated janitorial employee:
by obtaining the statutorily mandated professional
license, a defendant holds itself and its
investigators out to the public as possessing the good
character, competency and integrity to properly
conduct its investigative activities, including
surveillance, and to submit true and accurate reports
of those activities. This court finds that this
legislatively imposed duty, obligating the defendant
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to report its observations accurately, should not only
inure to the benefit of the one who hired the
defendant but should extend to persons, such as the
plaintiffs, who were made subjects of the surveillance
and whose lives were materially and adversely affected
by the defendant’s allegedly false report of their
activities.
Id. at *12.
The court’s holding was based on Connecticut’s statute
for application for a license as a private detective, which
provides, “[u]pon being satisfied, after investigation, of the
good character, competency and integrity of the applicant, or, if
the applicant is an association or partnership, of the individual
members thereof . . . the conimissioner [sic] [of Public Safety]
may grant a license to conduct such private detective
business[.]” Id. at *11 (quoting Conn. Gen. Stat. Ann.
§ 29-155).
Hawai#i has a private investigator licensing statute
similar to that of Connecticut. Under HRS § 463-1 (Supp. 2010),
“‘Detective’, ‘private detective’, or ‘investigator’ means a
licensed person qualified to obtain information and evidence not
readily or publicly accessible.” Pursuant to HRS § 463-6 (Supp.
2004):
(a) The board [of private detectives and guards] may
grant a private detective license to any suitable
individual, or a detective agency license to any
suitable firm making written application therefor.
The applicant, if an individual, or the principal
detective of a firm shall:
. . .
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(6) Possess a history of honesty, truthfulness,
financial integrity, and fair dealing.
Further, Hawai#i Administrative Rules (HAR) § 16-97-46
provides that a license may be terminated for, inter alia,
“misrepresenting a material fact, on any investigative,
surveillance, or security report[.]”
We hold that the statute and regulation governing
licensing for private investigators, HRS § 463-6 and HAR
§ 16-97-46, create a duty of care owed by the licensed
investigator to the subjects of its investigation. By requiring
that the licensed investigator possess a history of “honesty,”
“integrity,” and “fair dealing” and providing for termination of
a license for the misrepresentation of a fact, HRS § 463-6 and
HAR § 16-97-46 “imply standards or requirements of conduct that
will create civil liability.” See Corregedore, 83 Hawai#i at
172, 925 P.2d at 342 (citations omitted). Even if the statute
did not imply a standard which would create liability, we choose
to “adopt the requirements of [the] statute as the standard of
care [because] the purpose of the statute is to protect a class
of persons which includes the one whose interest is invaded.”
See id. at 173, 925 P.2d at 343. The “requirements of the
statute [and regulation] evince a legislative recognition of the
potential for abuse inherent” in an investigator’s business and
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the “tenor of licensing statute indicates that its aim is to
impose a standard of competent professionalism upon licensed
private detectives.” See Devlin, 147 N.J. Super. at 467, 371
A.2d at 391. The private investigator’s “legislatively imposed
duty, obligating [CSII] to report its observations accurately,
. . . should extend to persons, such as [Petitioners], who were
made subjects of the surveillance and whose lives were materially
and adversely affected by the defendant’s allegedly false report
of their activities.” See Cruz, 2013 WL 5993886 at *12.
Kevin D. Antony, owner of CSII, is a licensed private
investigator. Accordingly, CSII owed a duty of care to
Petitioners to conduct an investigation honestly, truthfully,
with fair dealing, and to report the results of the investigation
accurately, without misrepresenting any facts. See HRS § 463-6;
HAR § 16-97-46. We therefore vacate the circuit court’s grant of
summary judgment in favor of CSII on the negligent investigation
claim, and remand for a determination as to whether CSII breached
its duty of care.17
V. Conclusion
For the foregoing reasons, we conclude that the circuit
court erred in dismissing Petitioners’ claims against the County,
17
As to CSII, Petitioners raised only the negligent investigation
claim in the ICA and before this court. Accordingly, their other claims
against CSII are waived before this court, and we do not address them.
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erred in granting summary judgment in favor of Yagong, and erred
in granting summary judgment in favor of CSII. We therefore
vacate the ICA’s May 9, 2017 judgment, the circuit court’s
October 3, 2013 judgment as to all defendants except Kawauchi,
the circuit court’s March 8, 2013 order granting the County’s
motion to dismiss, the circuit court’s June 25, 2013 sua sponte
amended order granting summary judgment in favor of Yagong, and
the circuit court’s June 4, 2013 order granting summary judgment
in favor of CSII, and remand the case for further proceedings
consistent with this opinion.
Ted H.S. Hong /s/ Mark E. Recktenwald
for petitioner
/s/ Paula A. Nakayama
Laureen L. Martin
for respondents County of /s/ Sabrina S. McKenna
Hawai#i, and Jamae Kawauchi
and Dominic Yagong, in their /s/ Richard W. Pollack
official capacities
/s/ Michael D. Wilson
Jill D. Rasnov
for respondents Jamae Kawauchi
and Dominic Yagong, in their
individual capacities
Jodie D. Roeca
for respondent Corporate
Specialized Intelligence and
Investigations, LLC
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