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IN THE SUPREME COURT OF THE STATE OF HAWAI#I ---o0o---

BRUCE K. NAKAMURA, Respondent-Appellant, vs. STATE OF HAWAI#I, UNIVERSITY OF HAWAI#I, Petitioner-Appellee, Self-Insured.

NO. 21978 CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS (CASE NO. AB 96-736 (2-95-415530))

MAY 23, 2002

MOON, C.J., LEVINSON, AND NAKAYAMA, JJ. AND ACOBA, J., CONCURRING IN PART AND DISSENTING IN PART, WITH WHOM RAMIL, J., JOINS

OPINION OF THE COURT BY MOON, C.J. Petitioner-appellee State of Hawai#i, University of Hawai#i (UH), timely petitioned this court for a writ of certiorari to review the memorandum opinion of the Intermediate Court of Appeals (ICA), vacating a decision of the Labor and Industrial Relations Appeals Board (Board) that respondentappellant Bruce K. Nakamura was not entitled to compensation for an alleged stress-related workplace injury. See Nakamura v.

University of Hawai#i, No. 21978 (Haw. Ct. App. Sept. 26, 2000) -1-

(mem.) [hereinafter, ICA opinion].

In its application for a writ

of certiorari, UH asserts that the ICA misinterpreted the nature of the evidence necessary to rebut a claim of compensability. agree. We

Therefore, we reverse the decision of the ICA and affirm

the Board's decision of non-compensability. I. BACKGROUND1 Nakamura was hired by UH to work as a painter's helper in April 1992. Danny Chung. Nakamura initially worked on a crew supervised by Nakamura apparently had trouble working under Chung

and felt he was treated unfairly and discriminated against when he received an unsatisfactory job evaluation and his probation was extended. At his request, Nakamura was transferred to

another work crew, supervised by Ron Yoshioka, sometime in 1993. Nakamura also had difficulties while working under Yoshioka. Nakamura complained that Yoshioka frequently swore and yelled at him, threatened him with bodily harm, taunted and berated him, and, at one time, threatened to shoot him. In or around May

1995, Nakamura was transferred to another supervisor, Henry Sakai.

The background facts are taken from the Board's findings of fact and from the record, which included, inter alia, notes of testimony in an administrative hearing before the Department of Labor and Industrial Relations [hereinafter, Director] and a transcript of testimony before the Board. The background facts are not disputed.

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Nakamura did not have any problems working under Sakai between May 1995 and September 15, 1995. However, sometime

during that period, Nakamura had an unpleasant encounter with Yoshioka, during which Nakamura alleges Yoshioka threatened him. According to other UH employees who testified before the Director and the Board, Yoshioka apparently did, in fact, swear and threaten others, although the other witnesses denied any knowledge of Yoshioka threatening to shoot anyone. Sakai also

testified that Yoshioka had assaulted him in the mid-1980s and that management had not followed up on his oral complaint over the incident. Also, at least one coworker testified that

Nakamura would "do something else" when he was supposed to be working. On September 15, 1995, when Nakamura collected his paycheck, he noticed that the amount of his net pay had been reduced to approximately $185, significantly less than he previously received. Although the record does not disclose

Nakamura's usual net pay, his average gross salary was apparently $1,121.50 for the same time period. The reduction in Nakamura's

net pay was attributable to an Internal Revenue Service (IRS) garnishment of his wages for underpayment of his federal income tax for the years 1985 through 1988. apparently has not returned. -3Nakamura left work and

Three days later, on September 18, 1995, Nakamura informed UH that he sustained a psychiatric stress injury at work on September 15, 1995, due to "long term inhumane treatment" and harassment by management. He claimed that UH's participation in

the garnishment of his wages was the "straw that broke the camel's back." On September 20, Nakamura went to see his

physician because he was "getting stressed out and depressed since September 15" when UH participated in the garnishment of his paycheck. He complained of fatigue, irritability, and He was referred the same

feeling like he wanted to shoot people.

day for emergency consultation with Annette Shimizu, Ph.D. (Dr. Shimizu), to whom he apparently described the source of his stress as "garnishing of check without approval causing stress and depression." At a subsequent appointment with Dr. Shimizu on

September 28, 1995, Nakamura spoke with "pressured speech" and "related [a] detailed [history] of being treated inappropriately" at his UH job and at a former job with the federal government. Nakamura also expressed his belief that the federal government had a "conspiracy" against him. Dr. Shimizu continued to see

Nakamura regularly for at least the next year or so during which period Nakamura discussed his belief that he had been harassed at work prior to September 15. UH denied liability for Nakamura's psychological stress injury and requested a hearing with the Director to determine -4-

whether Nakamura's claim was compensable.

On January 5, 1996,

Nakamura was seen by Danilo Ponce, M.D. (Dr. Ponce), a psychiatrist, for an independent medical evaluation requested by UH. Dr. Ponce's report addressed several specific questions These included:

asked by the Personnel Management Office at UH.

(1) Dr. Ponce's diagnostic impression; (2) whether Nakamura had a pre-existing condition and, if so, the extent to which that condition contributed to his current condition; (3) whether the current condition had stabilized; (4) whether Nakamura could return to work; and (5) whether (and what, if any,) further treatment would improve Nakamura's current condition. At the examination, Nakamura explained his belief that he had been abused, threatened, and "set up to be criticized" since the beginning of his employment with UH and that UH's collusion in the garnishment of his paycheck was the "last straw" that precipitated his injury. Nakamura stated that he was not

willing to return to work unless his wages were no longer garnished and he was assigned to work elsewhere. Dr. Ponce's

report also noted that Nakamura "rant[ed] and rave[d]" that the IRS could not constitutionally garnish his wages without his permission and expressed anger at UH for colluding with the IRS by participating in the garnishment. Dr. Ponce further noted

that Nakamura described delusions involving the United States military using "harp vibrational technology" to control minds. -5-

Based on a review of previous medical records, the history he obtained from Nakamura, and Dr. Ponce's own observation of Nakamura's mental status, Dr. Ponce concluded that Nakamura's diagnosis was paranoid schizophrenia, with interepisode residual symptoms. Dr. Ponce noted that Nakamura had

paranoid symptoms in 1988 while employed at Hickam Air Force Base for which he received treatment with antipsychotic medication until 1989. Dr. Ponce opined that Nakamura's pre-existing

condition did not remit entirely, noting that Nakamura's complaints against his supervisors at UH were similar to workrelated problems he had exhibited during his earlier employment with the federal government and that Nakamura's pre-existing condition was exacerbated by the garnishment of his wages by the IRS.2 Dr. Ponce further recommended that, before Nakamura could

return to work, he should receive antipsychotic medication and therapy to address his ongoing paranoia and hostility. Dr. Ponce

did not expressly state that the exacerbation of Nakamura's illness was unrelated to Nakamura's relationship with his UH supervisors prior to the garnishment of his wages. Prior to the hearing held by the Director, Nakamura filed a "harassment" complaint with UH Campus Security on May 31,

Dr. Ponce wrote that Nakamura's "complaints against the foreman at [UH] were repeats of the troubles he got into at Pearl Harbor Shipyard as well as Hickam Air Force Base and Bellows. He mentions the same pattern of abuse, verbal threats, and being `set up.'"

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1996, approximately eight months after the garnishment of his wages, alleging various incidents of harassment had occurred at work during the 1992-95 period prior to the time of his wage garnishment. An internal UH investigation, which consisted of

interviews of individuals who purportedly witnessed or participated in the harassment, concluded that Nakamura's specific allegations -- including Nakamura's allegations that he was threatened with bodily injury -- were unsubstantiated.3 The Director held a hearing on October 30, 1996 and denied Nakamura's claim for compensation on November 25, 1996. Nakamura appealed to the Board, which set trial for March 13, 1998. At the trial, Dr. Shimizu agreed that Nakamura had some type of pre-existing psychiatric illness that was exacerbated by the IRS garnishment, but also testified that she believed that the UH work environment contributed to Nakamura's inability to work. She disagreed with Dr. Ponce's assessment that Nakamura She acknowledged that

had continuing psychotic symptoms.

Nakamura had been able to work until the garnishment occurred on September 15, 1995.

The report did note, however, that one person acknowledged yelling and swearing at Nakamura "a couple of times" over Nakamura's use of the telephone during work hours, incidents not identified by Nakamura as examples of harassment.

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The Board concluded that the IRS garnishment was the event that triggered Nakamura's inability to work. The Board

acknowledged Nakamura's relationships with his former foremen but noted that he had been able to work until September 15, 1995 and did not seek treatment for stress prior to that time. The Board

credited the testimony of Drs. Ponce and Shimizu as establishing that Nakamura had some type of pre-existing illness and found, based on Dr. Ponce's report, that the pre-existing psychotic illness did not remit entirely. The Board also found that the

pre-existing illness, Dr. Shimizu's initial workers' compensation reports that described the injury as related to the garnishment, and Nakamura's own statement that the garnishment was the "last straw" supported the finding that the IRS garnishment was the event that triggered Nakamura's injury. Consequently, the Board

also concluded that Nakamura did not sustain an injury arising out of and in the course of his employment. appealed. On appeal, assigned to the ICA, Nakamura effectively argued that Dr. Shimizu was more credible than Dr. Ponce and that UH caused his injury by illegally garnishing his wages. previously stated, the ICA vacated the Board's decision. The ICA reasoned that, although Nakamura had a preexisting illness, under Akamine v. Hawaiian Packing and Crating Co., Ltd., 53 Haw. 406, 495 P.2d 1164, reh'g denied, 53 Haw. 592, -8As Nakamura timely

495 P.2d 1164 (1972), a "generalized medical opinion concerning the cause of an injury does not constitute sufficient `substantial evidence' to rebut" the presumption present in Hawai#i workers' compensation law that a claimed injury is compensable. ICA opinion at 27. The ICA concluded that, because

Dr. Ponce's report failed to expressly address whether Nakamura's purported pre-garnishment work environment in any way caused his injury, substantial evidence necessary to rebut the presumption of compensability was lacking. ICA opinion at 28-29. Relying on

Chung v. Animal Clinic, Inc., 63 Haw. 642, 652, 636 P.2d 721, 727 (1981), the ICA further noted that Dr. Shimizu had opined that work stress occurring before the IRS garnishment contributed to Nakamura's post-garnishment inability to work, concluding that, "in cases where the testimony of two doctors directly conflict on the issue of an injury's causal connection to the claimant's employment activity, the legislature has determined that the conflict should be resolved in the claimant's favor." opinion at 29. opinion. II. STANDARD OF REVIEW ICA

We granted certiorari to review the ICA's

Appellate review of the [Board's] decision is governed by Hawai #i Revised Statutes (HRS)

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