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Potter v. Hawaii Newspaper Agency2/19/1999
This case arises from an accident that occurred when the fourteen-year-old claimant-appellant, Shawn Potter, was struck by an automobile while he was riding a moped. Potter was a "newspaper dealer" for the employer-appellee Hawaii Newspaper Agency (the HNA) at the time, pursuant to an "independent contractor agreement." The moped was owned by an HNA employee, Shawn Toyozaki, who was Potter's district manager. Potter subsequently filed a civil lawsuit against the driver of the -1-automobile, Toyozaki, and the HNA. Six months after the lawsuit was filed, the HNA filed a "WC-1 Employer's Report of Industrial Injury" with the Department of Labor and Industrial Relations, alleging that Potter was an HNA employee and "claimant" for workers' compensation benefits. When Potter's parents notified the Director of the Department of Labor and Industrial Relations (the Director) that they did not wish to pursue the claim, the Director denied it, as well as the HNA's subsequent request for reconsideration.
The HNA then appealed the Director's decision to the Labor and Industrial Relations Appeals Board (LIRAB), which ruled that Potter was an HNA employee for purposes of Hawaii Revised Statutes (HRS) ch. 386 (the Workers' Compensation Law). Potter filed an application to reopen the case and/or motion for clarification, alleging that the LIRAB lacked jurisdiction to hear the appeal. When the LIRAB denied Potter's application, the present appeal ensued.
On appeal, Potter argues that the LIRAB: (1) lacked jurisdiction to hear the appeal because (a) no lawful claim for benefits was ever made, inasmuch as HNA was not authorized to file a claim on Potter's behalf, and (b) only an aggrieved party can appeal a decision of the Director, and the HNA was not aggrieved, inasmuch as it was not ordered to pay benefits to Potter; (2) erred as a matter of law when it concluded that (a) Potter was a "claimant" seeking workers' compensation benefits, (b) Potter was an "employee" of the HNA on the date of his injury, (c) the work arrangement between Potter and the HNA constituted a "contract for hire," (d) the "control test" must be applied to determine whether an employer-employee relationship existed, even if the injured worker has not sought workers' compensation benefits, (e) any contract for hire that might have existed between Potter and the HNA was void or voidable, inasmuch as (i) Potter was a minor, and/or (ii) contracts to perform illegal acts are void as a matter of public policy; (3) erred as a matter of law when it issued its order vacating the decision of the Director; and (4) erred as a matter of law when it denied Potter's application to reopen and motion for clarification. Because no lawful claim for benefits was made, we hold that the Director lacked the statutory authority to act in this matter and that the LIRAB had no jurisdiction to hear the HNA's appeal. Accordingly, we reverse the LIRAB's order.
I. BACKGROUND
On November 21, 1992, at approximately 10:20 p.m., Potter was operating a moped on Winam Avenue, in the City and County of Honolulu, when he was struck by an automobile that ran a stop sign at the Herbert Street intersection. He was fourteen years old at the time of the accident. As a result of the accident, Potter suffered severe head injuries, a ruptured spleen, and a fractured femur. Upon his discharge from the Rehabilitation Hospital of the Pacific in May 1993, Potter was confined to a wheelchair and required assistance with activities of daily living. Potter has claimed that he incurred medical expenses exceeding $307,000.00.
The moped Potter was riding when the accident occurred belonged to Toyozaki, who was one of the HNA's district managers. Potter w
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