In Wilson v. AIG, 89 Haw. 45, 968 P.2d 647 (1998), the Hawaii Supreme Court held that an insured was not the real party in interest to challenge its auto insurer's refusal to pay benefits to the insured's medical provider. The issue before the Hawaii Intermediate Court of Appeal was whether the legislature had overruled the Supreme Court 's decision in Wilson. See Kim v. Liberty Mut. Fire Ins .Co., 2010 Haw. App. LEXIS 888 (Haw. Ct. App. Dec. 23, 2010).
After being involved in a motor vehicle accident, Kim had acupuncture therapy administered by his provider, Dr. Chai's Health Center Inc. Liberty Mutual paid for the acupuncture for three and a half months, but then refused to make further payment, deciding such treatment was no longer warranted. Kim requested a administrative hearing before the Insurance Commissioner, seeking review of Liberty Mutual's refusal to pay the bill submitted by the Health Center.
Relying on Wilson, the Insurance Commissioner decided in Liberty Mutual's favor. The circuit court disagreed with the Insurance Commissioner, finding that the legislature's Act 198 effectively overruled Wilson. Act 198, enacted in 2006, amended the no-fault law in Hawaii. The Act's legislative history expressed its intent to overrule Wilson. Further, the Act specifically stated that if there was a dispute between the provider and the insurer regarding payment of a claim, "the provider, insurer, or claimant may submit the dispute to the commissioner, arbitration, or court . . . ."
The ICA agreed with the circuit court that Act 198 rendered Wilson obsolete. Kim therefore qualified as a real party in interest to pursue her administrative action against Liberty Mutual. The case was remanded to the Insurance Commissioner.
For an appellate practitioner's view of the Kim case, see my Damon Key blogging colleague Rebecca Copeland's post here.
