§26-35.5  Members of boards and commissions;immunity from or indemnification for civil liability; defense of members.  (a) For purposes of this section, "member" means any person who isappointed, in accordance with the law, to serve on a temporary or permanentstate board, including members of the local school board of any charter schoolestablished under chapter 302B, council, authority, committee, or commission,established by law or elected to the board of education, or the board oftrustees of the employees' retirement system under section 88-24, or thecorporation board of the Hawaii health systems corporation under section 323F-3and its regional system boards under section 323F-3.5; provided that"member" shall not include any person elected to serve on a board orcommission in accordance with chapter 11 other than a person elected to serveon the board of education.

(b)  Notwithstanding any law to the contrary,no member shall be liable in any civil action founded upon a statute or thecase law of this State, for damage, injury, or loss caused by or resulting fromthe member's performing or failing to perform any duty which is required orauthorized to be performed by a person holding the position to which the memberwas appointed, unless the member acted with a malicious or improper purpose,except when the plaintiff in a civil action is the State.

(c)  Except as provided in subsections (d) and(f), the State shall indemnify a member from liability by paying any judgmentin, or settlement or compromise of, any civil action arising under federal law,the law of another state, or the law of a foreign jurisdiction, including feesand costs incurred, unless the loss, injury, or damage for which the judgmentor settlement amount is required to be paid:

(1)  Is fully covered by a policy of insurance forcivil liability purchased by the State;

(2)  Is caused by or is the result of the member'sperforming an act authorized or required to be performed by a person holdingthe position to which the member was appointed so as to effect a malicious orimproper purpose;

(3)  Is caused by or is the result of the member'sfailure to perform an act required or authorized to be performed by a personholding the position to which the member was appointed so as to effect amalicious or improper purpose.

(d)  The State shall not indemnify a member whowould otherwise be entitled to indemnification under subsection (c), if themember fails to cooperate fully in the defense of the civil action which ismade available to the member under subsection (e).  The State shall notindemnify a member for any portion of a judgment that represents punitive orexemplary damages.  The State shall not indemnify a member for any portion of asettlement which is deemed unreasonable by the legislature.

(e)  The attorney general, or in the case ofthe board of regents of the University of Hawaii, its university generalcounsel, or in the case of the board of directors of the Hawaii health systemscorporation under section 323F-3 or its regional system boards under [section]323F-3.5, the attorneys retained by the board of directors of the Hawaii healthsystems corporation or its regional system boards under section 323F-9, shallrepresent and defend a member in any civil action for which immunity isconferred under subsection (b), or when the attorney general, or, if the actioninvolves a member of the board of regents, the university general counsel, or,if the action involves a member of the board of directors of the Hawaii healthsystems corporation or its regional system boards, the attorneys retained bythe board of directors of the Hawaii health systems corporation or its regionalsystem boards, determines that indemnification is available to the member undersubsection (c), and the member against whom the action is brought has submitteda written request for representation and has provided the attorney general, theuniversity general counsel in the case of an action involving a member of theboard of regents, or the attorneys retained by the board of directors of theHawaii health systems corporation or its regional system boards in the case ofan action involving a member of the board of directors of the Hawaii healthsystems corporation or its regional system boards with all process or complaintserved upon the member within a reasonable period of time, but not more thanfive days after being served with the process or complaint.  The attorneygeneral, the university general counsel, or an attorney retained by the boardof directors of the Hawaii health systems corporation or its regional systemboards may terminate the representation and defense of the member at any timeif, after representation and defense is accepted, the attorney general, theuniversity general counsel, or an attorney retained by the board of directorsof the Hawaii health systems corporation or one of its regional system boardsdetermines that indemnification would not be available to the member undersubsection (c).

(f)  A member may retain counsel of themember's own choice at the member's own expense.  If the member chooses toretain counsel at the member's own expense, the State shall not indemnify themember even though the member would have been entitled to indemnification undersubsection (c).  The attorney general, or the university general counsel in thecase of a member of the board of regents, may enter an appearance in any actionin which the member is represented by counsel of the member's own choice, eventhough no request for the appearance has been made by the member.

(g)  Nothing in this section precludes a memberfrom compromising or settling any claim against the member at the member's ownexpense.  If such a settlement or compromise is effected, however, the membershall be deemed to have waived any claims which the member might have madeunder this section unless the provisions of subsection (i) apply.

(h)  If the attorney general, or the universitygeneral counsel in the case of a member of the board of regents, deniesrepresentation to the member under subsection (e) and the member proceeds tojudgment in the action for which representation was denied, the member maycommence an action against the State or the University of Hawaii in the case ofa member of the board of regents, in the circuit court to recover reasonablecosts and fees incurred by the member in defending against that action,including attorney's fees, court costs, investigative costs, and expert witnessfees.  The State or the University of Hawaii in the case of a member of the boardof regents, shall pay the judgment or reimburse the member if the member hassatisfied the judgment in an action for which representation was denied;provided the member was found not liable in that action or the memberestablishes by a preponderance of the evidence that the member is entitled toindemnification under subsection (c).  A finding of negligence against themember in the civil action for which representation was denied shall not bebinding upon the circuit court in any action brought under this subsection. The member shall commence any action under this subsection no later than twoyears after entry of judgment in the action for which the member was deniedrepresentation if no appeal is filed, or two years after the conclusion of thefinal appeal from that judgment if an appeal is filed.

(i)  If the attorney general, or the universitygeneral counsel in the case of a member of the board of regents, deniesrepresentation to the member under subsection (e) and the member negotiates acompromise or settlement without an entry of judgment in the action for whichrepresentation was denied, the member may seek to introduce a bill in thelegislature to secure an appropriation to reimburse the member for the amountof the settlement or that portion which constitutes a reasonable settlement,and for reasonable costs and fees incurred by the member in defending againstthat action, including attorney's fees, court costs, investigative costs, andexpert witness fees.

(j)  Any moneys which the State is required topay to a member under this section shall be paid from an appropriation made bythe legislature at the next session after the requirement to pay inures to themember.  The appropriation shall be sufficient to include any postjudgmentinterest which the member was required to pay if the member has personallysatisfied the judgment, or at the rate specified in section 478-3 for theperiod from the entry of judgment for which indemnification is available untilthe appropriation is enacted if the judgment was not satisfied.  Any billnecessary to effect a payment required by subsections (h) and (i) shall besubmitted by the member to a legislator; all other bills necessary to effectpayments required by this section shall be initiated by the attorney general.

(k)  This section shall not be construed aseliminating, waiving, reducing, or limiting any defense, immunity, orjurisdictional bar conferred upon or available to a member or the State by anyother statute or by case law. [L 1984, c 152, §1; am L 1985, c 218, §1; am L1987, c 283, §2; am L 2000, c 187, §2; am L 2001, c 54, §2 and c 243, §3; am L2002, c 2, §3; am L 2006, c 298, §6; am L 2007, c 290, §4]

 

Attorney General Opinions

 

  Trustee of travel agency recovery fund is a"member".  Att. Gen. Op. 85-14.

 

Case Notes

 

  The Hawaii employer-union health benefits trust fund board isan arm of the State entitled to assert the defense of sovereign immunity.  115H. 126, 165 P.3d 1027.

  The Hawaii employer-union health benefits trust fund trusteesare "members" of a "state board" for purposes of thissection, and thus, are entitled to immunity from civil suit, unless they actedwith malicious intent or an improper purpose; where plaintiffs did not provideany evidence that any of the trustees' actions were motivated by ill will or anintention to commit, or a reckless disregard of committing, a wrongful actagainst the employee-beneficiaries, plaintiffs failed to carry their burden ofdemonstrating "specific facts that present a genuine issue worthy oftrial".  115 H. 126, 165 P.3d 1027.