Opinion ID: 2805792
Heading Depth: 3
Heading Rank: 1

Heading: Partnership Principles

Text: Under HRS § 580-47 (2006), 8 the family court has wide discretion to divide marital partnership property according to what is “just and equitable” based on the facts and circumstances of each case. Tougas, 76 Hawaii at 26, 868 P.2d at 444. Hawaiʻi case law follows a framework based on partnership principles that provides guidance for family courts in dividing marital partnership property. Kakinami, 127 Hawaii at 137, 276 P.3d at 706; see also Tougas, 76 Hawaiʻi at 28, 868 P.2d at 446 (“The partnership model is the appropriate law for the family courts to apply when exercising their discretion in the adjudication of property division in divorce proceedings.”); 8 HRS § 580-47 provides that upon granting a divorce, the family court may “make any further orders as shall appear just and equitable . . . finally dividing and distributing the estate of the parties, real, personal, or mixed, whether community, joint, or separate.” In making these orders, the family court shall consider “the respective merits of the parties, the relative abilities of the parties, the condition in which each party will be left by the divorce, the burdens imposed upon either party for the benefit of the children of the parties, and all other circumstances of the case.” HRS § 580-47(a) (2006). HRS § 580-47(a) was amended in 2011 to also require the consideration of “the concealment of or failure to disclose income or an asset, or violation of a restraining order.” See HRS § 580-47(a) (Supp. 2011). 16 FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER Gussin, 73 Hawaii at 471, 836 P.2d at 486 (noting that the partnership model of marriage “provides the necessary guidance to the family courts in exercising their discretion and to facilitate appellate review”). The partnership model distinguishes between marital partnership property that is brought into the marriage and marital partnership property that is acquired during the marriage. 9 Accordingly, Hawaiʻi courts assign values to marital partnership property using five categories designed to assist courts in determining the equitable division and distribution of property between spouses: Category 1 includes the net market value of property separately owned by a spouse on the date of marriage; 10 Category 2 includes the increase in the net market value of Category 1 property during the marriage; 11 9 Marital separate property is not discussed in this opinion. 10 See Tougas, 76 Hawaiʻi at 27, 868 P.2d at 445 (“The net market value “plus or minus, of all property separately owned by one spouse on the date of marriage . . . but excluding the [net market value] attributable to property that is subsequently legally gifted by the owner to the other spouse, to both spouses, or to a third party.”). 11 See id. (describing Category 2 as the increase in the net market value of all property whose net market value on the date of marriage “is included in category 1 and that the owner separately owns continuously from the” date of marriage to the date of the conclusion of the evidentiary part of the trial). 17 FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER Category 3 includes the net market value of property separately acquired by gift or inheritance during the marriage; 12 Category 4 includes the increase in the net market value of Category 3 property during the marriage; 13 and Category 5 includes the net market value of the remaining marital estate at the conclusion of the evidentiary part of the trial. 14 See Tougas, 76 Hawaiʻi at 26, 868 P.2d at 444. Each partner’s individual contributions to the marriage, i.e., the values of Category 1 and Category 3, are to be repaid to the contributing spouse absent equitable considerations 15 justifying a deviation. See Tougas, 76 Hawaiʻi at 26, 868 P.2d at 444; see also Helbush v. Helbush, 108 Hawaiʻi 508, 512-13, 122 P.3d 288, 292-93 (App. 2005); Wong v. Wong, 87 12 See id. (describing Category 3 as the date-of-acquisition net market value, “plus or minus, of property separately acquired by gift or inheritance during the marriage but excluding the [net market value] attributable to property that is subsequently legally gifted by the owner to the other spouse, to both spouses, or to a third party”). 13 See id. (describing Category 4 as the increase in the net market value of all property whose net market value “on the date of acquisition during the marriage is included in category 3 and that the owner separately owns continuously from the date of acquisition to the” date of the conclusion of the evidentiary part of the trial). 14 See id. (describing Category 5 as the difference between the net market values, “plus or minus, of all property owned by one or both of the spouses on the [date of the conclusion of the evidentiary part of the trial] minus the [net market values], plus or minus, includable in categories 1, 2, 3, and 4”). 15 Hawaiʻi courts frequently refer to “valid and relevant considerations” and “valid and relevant circumstances” when discussing deviation from partnership principles. We also use the term “equitable considerations” in this opinion. 18 FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER Hawaiʻi 475, 483, 960 P.2d 145, 153 (App. 1998). Absent equitable considerations justifying a different result, the increase in the value of each partner’s individual contributions to the marriage, i.e., the values of Category 2 and Category 4, are divided equally between the parties. See Tougas, 76 Hawaiʻi at 26, 868 P.2d at 445. The value of Category 5, which is the net profit or loss of the marital partnership after deducting the other four categories, is to be divided equally unless equitable considerations merit deviation. Id.; see also Helbush, 108 Hawaiʻi at 513, 122 P.3d at 293 (“[I]f there is no agreement between the husband and wife defining the respective property interests, partnership principles dictate an equal division of the marital estate ‘where the only facts proved are the marriage itself and the existence of jointly owned property.’” (quoting Gussin, 73 Haw. at 482, 836 P.2d at 491)). In other words, the values of Category 2, Category 4, and Category 5 are awarded one-half to each spouse absent equitable considerations justifying deviation from a 50/50 distribution. Jackson, 84 Hawaiʻi at 332, 933 P.2d at 1366. The partnership model requires the family court to first find all of the facts necessary for categorization of the properties and assignment of the relevant net market values. Id. at 332, 933 P.2d at 1367. Second, the court must identify any equitable considerations justifying deviation from an equal 19 FOR PUBLICATION IN WEST’S HAWAIʻI REPORTS AND PACIFIC REPORTER distribution. Id. Third, the court must “decide whether or not there will be a deviation,” and in its fourth step, the court decides the extent of any deviation. Id.