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Gepaya v. State Farm Mutual Automobile Insurance Co.12/20/2000
MOON, C.J., DISSENTING
We hold that the Circuit Court of the First Circuit (the court) committed plain error in a Hawaii Revised Statutes (HRS) § 658-8 proceeding to confirm an arbitration award when it determined a legal question not decided by the arbitrators and modified the arbitration award accordingly. Unless the award was subject to review under the statutory grounds set forth in HRS § 658-9, or § 658-10, or either one of the two judicially recognized exceptions our appellate courts have adopted, the court was mandated to confirm the award according to its terms.
I.
On December 14, 1998, Petitioners-Appellants Sabino Gepaya (Sabino) and Nenita (Nenita) Gepaya (collectively, Petitioners) filed an application for appointment of arbitrators pursuant to HRS chapter 658 (1993). The application alleged that Nenita and Sabino, her husband, were in their vehicle on January 1, 1998, when they were involved in a motor vehicle accident with a vehicle driven by an uninsured motorist. The application further alleged that Petitioners' insurer, Respondent-Appellee State Farm Mutual Automobile Insurance Co. (Respondent), had made personal injury protection benefit payments of $10,797.14 on behalf of Nenita and $10,647.39 on behalf of Sabino, that Petitioners had requested further compensation under the uninsured motorist coverage provision of their policy with Respondent, that Respondent had failed to make payment under such coverage, that their policy with Respondent provided for arbitration of the matter, and that the court should enforce their policy's arbitration clause.
On February 19, 1999, the court granted the application and ordered the selection of three arbitrators and the initiation of arbitration proceedings "according to the terms of the contract and based on [HRS c]hapter 658, 'Arbitration and Awards.'"
On January 11, 2000, Petitioners filed a motion to confirm the arbitration award dated October 4, 1999, and for entry of judgment thereon (the motion), pursuant to HRS § 658-8 (1993). The memorandum attached to the motion related that pursuant to the February 19, 1999 court order, an arbitration hearing was held on September 21, 1999 and an arbitration award was issued on October 4, 1999. In pertinent part, the award stated as follows:
Mrs. Gepaya
Medical Special Damages $10,258.62
General Damages $12,000.00
Mr. Gepaya
Medical Special Damages $9,556.26
General Damages $12,000.00
Costs to Mr. & Mrs. Gepaya $1,639.01
The possible application of HRS § 431:10C-301.5 covered loss deductible is specifically not being addressed in this award. (Emphasis added.)
The parties' instructions to the arbitrators, if any, are not a part of the record.
In the memorandum in support of the motion, Petitioners stated that Respondent sought to reduce the amount of the awards based on the "covered loss deductible" provision in HRS § 431:10C-301.5 (Supp. 1997), which became effective on January 1, 1998. HRS § 431:10C-301.5 provides as follows:
Covered loss deductible. Whenever a person effects a recovery for bodily injury , whether by suit, arbitration, or settlement, and it is determined that the person is entitled to recover damages, the judgment, settlement, or award shall be reduced by $5,000 or the amount of personal injury protection benefits incurred, whichever is greater, up to the maximum limit. (Emphases added).
Relying on Sol v. AIG Hawaii Ins. Co., 76 Hawaii 304, 875 P.2d 921 (1994), Petitioners maintained that this statutory provision did not apply to additional insurance covera
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