Court Opinion

ID: 4654702
Source: CourtListenerOpinion
Date Created: 2021-01-26 20:03:19.867548+00
Date Added: 2024-06-11T07:58:49.819948
License: Public Domain

NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

                                                   Electronically Filed
                                                   Intermediate Court of Appeals
                                                   CAAP-XX-XXXXXXX
                                                   26-JAN-2021
                                                   08:02 AM
                                                   Dkt. 60 SO
                            NO. CAAP-XX-XXXXXXX

                  IN THE INTERMEDIATE COURT OF APPEALS

                          OF THE STATE OF HAWAI#I

                         ML, Plaintiff-Appellant,
                                     v.
                          HL, Defendant-Appellee

         APPEAL FROM THE FAMILY COURT OF THE FIRST CIRCUIT
                       (FC-D. NO. 11-1-0899)

                       SUMMARY DISPOSITION ORDER
      (By:    Ginoza, Chief Judge, Hiraoka and Wadsworth, JJ.)

             Plaintiff-Appellant ML (Husband) appeals from the
"Decision and Order After Remand" entered by the Family Court of
the First Circuit1 on December 1, 2016. For the reasons
explained below, we affirm the Decision and Order After Remand in
part; vacate the Decision and Order After Remand in part; and
remand this case to the family court for clarification of the
reimbursement or payment obligations of the parties, and for
entry of an amended property division chart.

                                  BACKGROUND

          Husband filed for a divorce from Defendant-Appellee HL
(Wife) on May 27, 2011. After a trial, a "Decision and Order"
was entered on January 7, 2014. Attached to the Decision and
Order was a property division chart dated January 3, 2014 (2014
Property Division Chart).        An "Amended Decision and Order" was
entered on January 10, 2014.         The 2014 Property Division Chart

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             The Honorable Catherine H. Remigio presided.
  NOT FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER

was attached to the Amended Decision and Order. A divorce decree
was entered on March 4, 2014. The decree required that Husband
pay to Wife an equalization payment of $128,987.87.
          Husband appealed. The family court entered findings of
fact and conclusions of law on August 12, 2014 (2014 Findings &
Conclusions).      The 2014 Property Division Chart was attached to
the 2014 Findings & Conclusions. We temporarily remanded the
case to allow the family court to amend the divorce decree. On
September 15, 2015, the family court entered an order amending
the divorce decree, and amended the findings of fact and con-
clusions of law relating to Husband's child support obligation.
          The case then returned to us and we issued a summary
disposition order, MHL v. HJKL, No. CAAP-XX-XXXXXXX, 2016 WL
806200 (App. Mar. 1, 2016) (SDO) (First SDO).            We noted:

             [Husband] contends that the family court abused its
             discretion by declining to award [him] a Category 3 credit
             for a portion of his Schwab One account. [Husband] contends
             that he deposited a $136,254 gift or inheritance received
             from [his mother]'s revocable trust after [his mother]'s
             death in 2008 into the investment account.

Id. at *5.     We also noted:

             This is generally in line with [Husband's father]'s
             testimony that he believed [Husband] had received around
             $90,000 from [Husband's mother]'s trust, which was deposited
             in [Husband]'s account.

Id. The family court did not award Husband any Category 3 credit
for his inheritance from his mother's trust. We concluded that

             the family court erred in denying [Husband] any Category 3
             credit. While the family court was entitled to exercise its
             discretion in the valuation of the Category 3 claim, it
             should not have awarded [Husband] no credit. On remand, we
             direct the family court to use the available evidence to
             determine a reasonable value for [Husband]'s Category 3
             claim.

Id. at *6 (first underscore in original, second underscore
added). We otherwise affirmed the divorce decree and the order
amending it.

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          On remand the family court issued an order stating, in
relevant part:

          Counsel shall submit memorandum [sic] supporting each
          party's position regarding a reasonable value for
          [Husband]'s Category 3 claim. Exhibits shall be limited to
          evidence available at trial.

Husband submitted a trial exhibit showing the balance of his
mother's investment account to have been around $250,000 when she
died. Husband and his sister were the account beneficiaries;
accordingly, he claimed half of the balance, or $125,000.
Alternatively, he argued, because we had recognized there had
been a $200,000 withdrawal from his mother's account after the
date of her death, "at a minimum [he] should receive a credit of
$100,000[,] which is also consistent to [sic] [his father]'s
testimony that [he] had received around $90,000" after his
mother's death. Husband did not submit evidence showing any
actual deposit into his Schwab One account.
          Wife also submitted a memorandum and exhibits. She
pointed out there were no trial exhibits showing when Husband's
inheritance was deposited into his Schwab One account, or what
the value was at that time. The only evidence was Husband's
father's testimony that about $90,000 was deposited into
Husband's Schwab One account after Husband's mother died. Wife
then argued there should be a $90,000 deviation based upon the
Hawaii Revised Statutes (HRS) § 580-47(a) equitable
considerations.
          The Decision and Order After Remand was entered on
December 1, 2016. The family court found that the amount of
Husband's inheritance was $90,000; recognized equitable con-
siderations justifying a departure from the marital partnership
model; and ordered a deviation of $70,000 in favor of Wife.
          Husband filed this appeal. The family court entered
findings of fact and conclusions of law on January 31, 2017 (2017
Findings & Conclusions).    The family court ordered that Wife
reimburse Husband $20,000 of the "$129,987.87 [sic]" equalization
amount at the rate of no less than $5,000 per calendar year or,
if Husband had not yet paid the equalization amount, the amount

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was adjusted to "$109,987.87 [sic]." The family court did not
amend the 2014 Property Division Chart or attach an amended
property division chart to the 2017 Findings & Conclusions.

                             DISCUSSION

          Husband's statement of the points of error does not
comply with Rule 28(b)(4) of the Hawai#i Rules of Appellate
Procedure. Husband appears to argue that: (1) the family court
disregarded our mandate by applying equitable considerations to
reduce the amount of Husband's Category 3 credit or, even if
equitable considerations were properly recognized, none of them
justified deviation from the marital partnership model of
property division; (2) the family court erred by granting Wife
four years to repay Husband's excess equalization payment; and
(3) Wife's request for attorneys' fees should have been denied
because it was contrary to the family court's previous ruling
that each party pay their own fees.

          1.   The family court did not err by
               recognizing equitable considerations.

          Husband contends that the family court "exceeded the
scope of [the] narrow remand — to determine a reasonable value
for [Husband]'s Category 3 claim — when it deviated from partner-
ship principles based on equitable considerations never addressed
in the original divorce proceedings or listed in the 2014 Find-
ings." "Equitable considerations" justifying a deviation from
marital partnership principles are also referred to as "valid and
relevant considerations" and "valid and relevant circumstances,"
or "VARCs," by Hawai#i courts. Gordon v. Gordon, 135 Hawai#i 340,
349 n.15, 350 P.3d 1008, 1017 n.15 (2015).
          The First SDO recognized that "the family court was
entitled to exercise its discretion in the valuation of the
Category 3 claim," but "it should not have awarded [Husband] no
credit." First SDO, at *6. Our mandate to the family court was
"to use the available evidence to determine a reasonable value
for [Husband]'s Category 3 claim" for the inheritance from his
mother. Id. Category 3 net market values "are to be repaid to

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the contributing spouse absent   equitable considerations justify-
ing a deviation." Gordon, 135    Hawai#i at 349, 350 P.3d at 1017
(underscoring added) (footnote   and citations omitted). To divide
Category 3 property the family   court must: (1) find the facts
necessary for assignment of the relevant net market value (NMV);
(2) identify any equitable considerations justifying deviation
from total repayment to the contributing spouse; (3) decide
whether or not there will be a deviation; and (4) decide the
extent of any deviation.  See id. at 350, 350 P.3d at 1018. To
comply with our mandate the family court was required, after
determining the NMV of Husband's inheritance from his mother, to
identify any equitable considerations justifying a deviation from
the marital partnership principle of crediting Husband with all
of his inheritance, decide whether or not there will be a
deviation and, if so, decide the amount of any deviation.
          Husband contends that Wife waived all equitable
considerations because she did not raise them before the family
court, or with us during Husband's first appeal. We disagree.
The family court considered Husband's interest in his father's
irrevocable trust "as a valid and relevant consideration in
deviating from the Partnership Model[,]" First SDO, at *5 n.7,
and noted the VARC in Part E of the 2014 Property Division Chart.
There was no reason for the family court to consider any
equitable considerations related to Husband's inheritance from
his mother before the last remand because the family court did
not award Husband "any Category 3 credit" for the inheritance.
First SDO, at *5-6.
          Husband also contends that Wife is barred from raising
equitable considerations by the doctrine of res judicata. Res
judicata, or claim preclusion, is a legal doctrine that limits a
party to one opportunity to litigate a claim to prevent incon-
sistent results among multiple suits, and to promote finality and
judicial economy. Bremer v. Weeks, 104 Hawai#i 43, 53, 85 P.3d
150, 160 (2004). Claim preclusion "prohibits a party from
relitigating a previously adjudicated cause of action." Id.
(citation omitted). The party asserting claim preclusion has the
burden of establishing that (1) there was a final judgment on the

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merits, (2) the parties to the action in question are the same or
in privity with the parties in the original suit, and (3) the
claim decided in the original suit is identical with the one
presented in the action in question. Id. at 54, 85 P.3d at 161.
Claim preclusion does not apply here because there was no final
judgment on the merits in a previous suit between Husband and
Wife.

          2.    The family court did not abuse its
                discretion by ordering payment over time.

          Husband contends the family court erred by granting
Wife four years to repay Husband's excess equalization payment.

          [T]he family court possesses wide discretion in making its
          decisions and those decision[s] will not be set aside unless
          there is a manifest abuse of discretion. Thus, we will not
          disturb the family court's decisions on appeal unless the
          family court disregarded rules or principles of law or
          practice to the substantial detriment of a party litigant
          and its decision clearly exceeded the bounds of reason.

Fisher v. Fisher, 111 Hawai#i 41, 46, 137 P.3d 355, 360 (2006)
(citation omitted). On the record before us, and subject to
section 4. of this summary disposition order, we cannot say that
the family court erred by ordering Wife to repay Husband's excess
equalization payment over time.

          3.    The family court did not
                award attorneys' fees to Wife.

          Husband argues that the family court should have denied
Wife's request for attorneys' fees because it was contrary to the
family court's previous ruling that each party pay their own
fees. The Decision and Order After Remand made no mention of
attorneys' fees. The 2017 Findings & Conclusions — entered after
Husband filed his notice of appeal — states:

                30.   Upon the conclusion of this appeal, Wife intends
          to request an award of attorney's [sic] fees as "just and
          equitable" under the criteria of HRS § 580-47, namely: 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, the concealment
          of or failure to disclose income or an asset, and all other
          circumstances of the case.

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The family court did not award attorneys' fees to Wife.             There is
no basis for Husband's appeal on that point.

          4.    The family court erred when it
                calculated Husband's equalization
                credit and/or Wife's reimbursement amount.

          The family court must file, as part of its findings and
conclusions, a property division chart. Gordon, 135 Hawai#i at
351, 350 P.3d at 1019. The Decision and Order After Remand
amended the division of marital partnership property, but the
family court did not amend the 2014 Property Division Chart or
attach an amended property division chart to its 2017 Findings &
Conclusions.
          It also appears that the family court erred when it
calculated the amount of Husband's Category 3 VARC credit, the
amount of Wife's reimbursement obligation, or both. The Decision
and Order After Remand stated, among other things:

          2.    The amount of [Husband]'s Category 3 inheritance
                credit is $90,000.00.[sic]

          . . . .
          7.    [T]he Court finds that there will be a deviation in
                the amount of $70,000.00 in favor of [Wife].

          8.    In the event that [Husband] has already paid [Wife]
                the previously-ordered equalization amount of
                $129,987.87, [sic] [Wife] shall reimburse [Husband]
                $20,000.00 at the rate of no less than $5,000.00 total
                per calendar year (January 1 through December 31),
                beginning January 1, 2017.

(Underscoring in original.)     The 2017 Findings & Conclusions
stated, among other things:

                44.   Based on the totality of the relevant and
          credible evidence that was provided at trial, the Court
          finds that there will be a deviation in the amount of
          $70,000 in favor of Wife.

                45.   In the event that Husband has already paid Wife
          the previously-ordered equalization amount of $129,987.87,
          then Wife shall reimburse Husband $20,000.00 at the rate of
          no less than $5,000.00 total per calendar year (January 1
          through December 31), beginning January 1, 2017. . . .

                45(a). In the event that Husband has not paid Wife the
          previously-ordered equalization amount of $129,987.87, said
          amount is herein adjusted to $109,987.87.

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          The 2014 Property Division Chart shows the equalization
payment amount (Part B, line 4) as $128,987.87, not $129,987.87.
Accordingly, we vacate those portions of the Decision and Order
After Remand and the 2017 Findings & Conclusions that reflect an
incorrect equalization payment amount; and remand this case to
the family court for clarification of the payment or reimburse-
ment obligations of the parties, and for entry of an amended
property division chart.
          DATED: Honolulu, Hawai#i, January 26, 2021.

On the briefs:
                                      /s/ Lisa M. Ginoza
Peter Van Name Esser,                 Chief Judge
for Plaintiff-Appellant.
                                      /s/ Keith K. Hiraoka
Thomas E. Crowley, III,               Associate Judge
for Defendant-Appellee.
                                      /s/ Clyde J. Wadsworth
                                      Associate Judge

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