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Hough v. Pacific Insurance Co.11/26/1996
s the duty of good faith and fair dealing by refusing to pay benefits for a compensable claim until ordered to do so by the Industrial Accident Board. Even if these provisions addressed such misconduct, the Act does not contemplate that the failure of a carrier to act in good faith or the carrier's intentional tort can be meaningfully redressed by the mere addition of 12% or 15% to the past due compensation. Such nominal penalties are of questionable value as an incentive for the carrier to act reasonably in processing an employee's claim.
Id. at 214-15 (citations omitted). Similarly, of the penalty provisions cited by Pacific, only HRS § 386-92 provides for penalties payable directly to the claimant and only, until its amendment by the 1995 legislature, in the amount of ten percent of the compensation. Although we recognize that a number of other courts have taken a contrary position regarding the significance of administrative penalties, "we are not persuaded by the contrary view because[,] although administrative fines may have some deterrent effect . . ., they do not purport to address the plight of the injured worker who may suffer great deprivation as a result of the tortious denial or delay of his or her benefits." Falline v. GNLV Corp., 107 Nev. 1004, 823 P.2d 888, 894 (Nev. 1991).
The placement of the penalty provision in Part III of the Act, entitled "Administration," suggests a legislative intent to provide "teeth" to the DLIR's administration of the Act rather than to create an exclusive remedy for tortious conduct on the part of the insurer. Moreover, the arbitrary amount of the penalty, ten percent of the compensation owed, does not bear any particularized relationship to the injury suffered as a result of the insurer's acts. We will not presume, in the absence of any indication in the language of the statute or its legislative history, that the legislature intended administrative fines to be the exclusive remedy for workers injured by a workers' compensation insurer's tortious delay or failure to pay benefits. We agree with the court in Falline that, "if the Legislature sees fit to declare the statutory scheme of fines an exclusive remedy to aggrieved workers whose claims are denied or delayed as a result of negligence or bad faith, the Legislature may enact legislation to that end." Falline, 823 P.2d at 893.
Because we determine that: (1) the exclusive remedy provisions of HRS § 386-5 do not bar judicial remedies for non-work injuries; (2) HRS § 386-73 does not deprive the circuit court of subject matter jurisdiction over common law tort claims not based on the original work injury ; and (3) the administrative penalties authorized by HRS §§ 386-31(b) and -92 were not intended to provide an injured workers' exclusive remedy for injuries resulting from an insurer's tortious delay or termination of benefits, we hold that an employee seeking workers' compensation benefits is not precluded by these statutory provisions from pursuing a judicial remedy for torts allegedly perpetrated by his or her employer's workers' compensation insurance carrier subsequent and unrelated to the work injury . Accordingly, we vacate the circuit court's grant of summary judgment in favor of Pacific and against the Houghs on these bases.
B. Hough May Bring an Action Based Upon Breach of Contract and Bad Faith, But Summary Judgment Was Properly Granted With Respect to Count VI Alleging Breach of Fiduciary Duty.
In addition to the torts of intentional and negligent infliction of emotional distress, conversion, and loss of consortium, Hough alleges, in Count VIII of the first amended compla
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