Doe v. Roe

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JANE DOE, Plaintiff-Appellant/Cross-Appellee vA 1 an
JoHN R0E, Defendant-Appe11ee/cross-Appe11ant §Y’ rs
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APPEAL FRoM THE FAMILY c0URT oF THE THIRD cIRcUIT
KoNA DIv:sI0N
(Fc~D No.

06-1-OO7K)

MEMORANDUM OPlNlON
(By: Nakamura, Chief Judge, Fujise and Ginoza, JJ.)
Plaintiff~Appellant/Cross-Appellee Jane Doe (Wife)
appeals from the following orders issued by the Family Court of
the Third Circuit

(family court):1 (l) Order Re:
and Miscellaneous Motions,

Divorce Trial

filed February 20, 2007; (2) Order

Denying Plaintiff's Motion for Reconsideration filed March 2,
2007, filed May 24, 2007;
2007.

and (3) Divorce Decree,

filed May 24,
Defendant~Appellee/Cross-Appellant John Roe
cross-appeals from orders

(Husband)
(l) and (3).
The parties were married on February 26,
marriage or DOM).

1994 (date of
Prior to marriage, they had lived together for
about a year. They have two children,2 and were separated in or
about December 2005.

On January 9, 2006, Wife filed a complaint for divorce
in the family court,

asserting that the marriage was

irretrievably broken. A divorce trial was held over the course
of four days, concluding on October 19, 2006 (the date of
completion of evidentiary part of trial or DOCOEPOT).

On February 20, 2007,

R€:

the family court issued its Order
Divorce Trial and Miscellaneous Motions,

which directed
Husband's attorney to prepare a divorce decree consistent with

1 The Honorable Aley K. Auna, Jr. presided.
2
visitation.

The parties reached settlement with regard to child custody and

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that order. On March 2, 2007, Wife filed a motion for
reconsideration. On May 24, 2007, the Divorce Decree, an Order
Denying Plaintiff's Motion for Reconsideration, and an Ex Parte
Motion and Order Correcting Clerical Mistake were filed.

I. Issues on Appeal

On appeal, Wife alleges fourteen points of error and
Husband alleges two. Wife raises the following points of error:

(l) The family court erred in its valuation of
Husband's capital contribution credit for his interest in CLH.3

(2) The family court erred in its determination of the
current value of Husband's 7% interest in PPPI.

(3) Regarding valuation of the parties' interests in a
condominium located in San Francisco, California, the family
court "erroneously found that '[b]ecause of the history of the
parties not using any marital funds for the maintenance and costs
associated with this property, it would be just and equitable to
conclude that Defendant owes half of all of the debt and costs
paid for by Defendant's sister for this property.'"

(4) The family court's application of a "double
discount" to Husband's interest in M Corporation (M Corp.) based
on Husband's "lack of control" over the property and a "lack of
marketability" was not supported by the evidence.

(5) The family court erred in excluding from the
marital estate a $l70,000 receivable due to Husband from his
sister. f

(6) Regarding a grand piano, the family court's order
failed to provide for equalization in the event one party
elected to keep the piano.

(7) The family court erred in its valuation of

Husband's capital contribution credit for PPBGI.

3 Full names of the parties, their relatives, as well as partnerships,
corporations, and companies are not utilized in this Memorandum Opinion in
light of the family court's February 20, 2007 "Order Designating the File as
Confidential."

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(8) The family court erred in awarding Husband a
capital contribution credit of $l16,886 for the contingent asset
of a termination benefit under his CLH employment contract.

(9) The family court erred in awarding Husband a
capital contribution credit for Kamuela property purchased two
days prior to DOM because the parties had created a premarital
economic partnership.

(l0) The family court erred in failing to deviate from
the marital partnership principles.

(l1) There is no factual basis to support the family
court's finding that permanent alimony would not be just and
equitable under the circumstances of the case.

(l2) The family court's determination of Husband's
child support obligation erroneously includes a credit for child
care expense.

(l3) The family court erred in denying Wife's motions
to strike: (a) Husband's closing argument; and (b) Husband's
response to Wife's motion to strike Husband's closing arguments.

(l4) The family court erred in the scope of its order
respecting judicial notice.

Husband's points of error on appeal are as follows:

(l) The family court erred in concluding Husband had a
beneficial ownership interest for divorce property division
purposes in the California condominium.

(2) The family court erred in concluding Husband had a
beneficial ownership interest for divorce property division
purposes in M Corp.

II. Standard of Review

We review a family court's decisions regarding division

of marital property, alimony, and child support under the abuse

of discretion standard.4 "Generally, the family court possesses

4 Hawaii Revised Statutes (HRS) § 580-47 addresses the family court's
authority regarding division of marital property, alimony, and child support

and provides that the court may issue orders "as shall appear just and
(continued...)

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wide discretion in making its decisions and those decisions will
not be set aside unless there is a manifest abuse of discretion."
Fisher v. Fisher, 111 Hawafi 41, 46, 137 P.3d 355, 360 (2006)
(quoting In re Doe, 95 Hawafi 183, 189-90, 20 P.3d 616, 622-23
(200l)).

Under the abuse of discretion standard, we will not
disturb the family court's decision unless: "(1) the family court
disregarded rules or principles of law or practice to the
substantial detriment of a party litigant, (2) the family court
failed to exercise its equitable discretion, or (3) the family
court's decision clearly exceeds the bounds of reason." Wong v.
_v@z,, 37 Hawai‘i 475, 436, 960 P.zd 145, 156 (App. 1993) (quoting
Bennett v. Bennett, 8 Haw. App. 415, 426, 807 P.2d 597, 603
(l99l)).

A family court's findings of fact are reviewed under
the "clearly erroneous" standard, In re Doe, 101 HawaiH_220,
227, 65 P.3d 167, 174 (2003); In re Jane Doe, 84 HawaiH.41, 46,
928 P.2d 883, 888 (1996). Under this standard, a finding of fact
will not be disturbed unless "'(1) the record lacks substantial
evidence to support the finding, or (2) despite substantial
evidence in support of the finding, the appellate court is
nonetheless left with a definite and firm conviction that a
mistake has been made.'" In re Doe, 101 Hawai‘i at 227, 65 P.3d
at 174 (quoting State v. Okumura, 78 Hawafi 383, 392, 894 P.2d
80, 89 (1995)). "Substantial evidence" is defined as "'credible
evidence which is of sufficient quality and probative value to
enable a person of reasonable caution to support a conclusion.'"
In re Doe, 101 HawaiH at 227, 65 P.3d at 174 (quoting In re Jane
Q_@__e_ at 46, 923 P.2d at 338). ‘

A family court's conclusions of law "are reviewed on
appeal de novo, under the right/wrong standard . . . [and]

consequently, are 'not binding upon an appellate court and are

“(...continued)
equitable". HRS § 580~47 (2006).

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freely reviewable for their correctness.'" Fisher, 111 Hawafi
at 46, 137 P.3d at 360 (quoting In re Doe, 95 Hawafi at 190, 20
P.3d at 623). A conclusion of law "that presents mixed questions
of fact and law is reviewed under the clearly erroneous standard
because the court's conclusions are dependent upon the facts and
circumstances of each individual case." Chun v. Bd. of Trs. of
Em'OlO'\/'@€S' Ret. SVS., lO6 Hawai‘i 416, 430, 106 P.3d 339, 353
(2005) (citation omitted); Schiller v. Schiller, 120 HawaiH_283,
288, 205 P.3d 548, 553 (2009).

III. Discussion

A. Wife's Points of Error 1 and 2
y Wife's points of error 1 and 2 address factual
determinations made by the family court. We review these under
the clearly erroneous standard and for each of these points we
conclude there is substantial evidence in the record to support
the family court's determinations.
Valuation of Capital Contribution Credit for Husband's
Interest in CLH - Wife's Point of Error #1

Wife does not contest that Husband owned 834 shares of
CLH on DOM. She contends, however, that the shares should have
been valued pursuant to a stock redemption agreement, which would
have given the shares a DOM value of $923,729 (the percentage of
shares at .5 times annual revenues). Instead, the family court
valued the shares at $2.5 million.

In reaching its decision, the family court relied on
the testimony of several CLH stockholders, including testimony
regarding CLH's repurchase of stock in the 1989-90 time period
(shortly after the redemption agreement was entered) from
stockholder "W", who held a 25% interest in CLH at that time.
Notwithstanding the stock redemption agreement, stockholder W's
shares were repurchased for $3.6 million based on a calculation
closer to 1.5 times annual revenues, for which there was
testimony indicating this was the industry standard. Wife
challenges the family court's reliance on these numbers, alleging

that a majority portion of the $3.6 million was due to a non-

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competition agreement. However, evidence was also presented that
the repurchase was structured this way for tax purposes.

There is also evidence that Husband's financial
statements in 1992 and 1996 listed the value of his CLH stock at
$2.5 million.5 Further, Wife does not challenge the family
court's findings that: there is no evidence CLH ever redeemed its
stock pursuant to the stock redemption agreement; and the stock
redemption agreement was cancelled by mutual agreement of all the

stockholders in 1998.
Current Value of Husband's 7% interest in PPPI - Wife's
Point of Error #2

Husband was one of four stockholders in PPPI, holding a
7% interest. The parties agreed as to the DOM value of Husband's
7% interest, but Wife disputes the family court's determination
that its value on June 30, 2006 (the closest available date to
DOCOEPOT) was $87,769, which is less than the DOM value. Wife's
primary argument is that the family court erred in relying on the
opinion of Husband's expert because the expert's valuation
opinion in this case conflicted with, and is lower than, a prior
valuation of PPPI he had done in August 2002 and upon which two
subsequent stock transactions had relied.

In his report and testimony, Husband's expert addressed
the difference between the two valuations and stated that the
2006 valuation done for this case is significantly less than the
2002 valuation, in part, because the 2002 valuation was based on
predicting PPPI's future income and "the actual results in the
period 2002 to 2006 were significantly less than the results
anticipated in June 2002". we further note that, although Wife
sought to discredit the valuation by Husband's expert, her own
primary witness on this issue did not do a valuation of the PPPI

shares or proffer an expert opinion on their value.

5 Although Wife contends that Husband overvalued many items in these
financial statements, it is properly left to the family court to assess the
evidence and the credibility of the witnesses.

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B. San Francisco Condominium - Husband's Point of Error #1
and Wife's Point of Error #3
The family court held that Husband has a 50% ownership

interest in a condominium located in San Francisco, California
and that it is part of the marital estate. The family court
further held that Husband's sister (Sister), who owns the other
50% interest,6 had paid off a $35,000 mortgage on the property
and had made "improvements" of at least $220,000,7 and because
the parties had not used any marital funds for maintenance and
costs of the property, "it would be just and equitable to
conclude that Defendant owes half of all of the debt and costs
paid for by Defendant's sister for this property." In
calculating the category 2 value to be divided between Husband

and Wife, the family court first deducted out one-half of the

`amount expended by Sister (including expenditures prior to DOM),

resulting in a category 2 value of $59,500.3

Husband contends on appeal that the condominium should
not have been included as a marital asset because although he has
been on title as a 50% owner since 1979 (when the condominium was
purchased by his parents while he was studying in San Francisco),
his parents and siblings always intended for Sister to own the

property, and during their marriage he and Wife did not assert to

5 The family court's uncontested findings are that the condominium was
purchased in 1979, with Husband's father owning 50% and Husband owning 50%.
Husband's father then deeded his interest to Husband's mother, and upon
mother's death, her 50% ownership interest went to Sister. Husband did not
contribute to the purchase of the property and after 1983 he did not pay any
money to maintain the property.

7 The record indicates that this amount consists of: renovating the
bathroom in 1988 (cost of $21,000), remodeling the kitchen in 1989-90 (cost of
$40,000), assessments for exterior remodeling of the building in 1995
($9,000), interior remodeling in 1998 (cost of $16,000), property taxes from
1992-2005 ($24,000), and homeowners association fees ($112,000).

“' The parties agreed that Defendant's 50% ownership interest had a
value of $126,250 at DOM and $314,250 at DOCOEPOT, rendering an increased
value of $188,000. The family court then divided sister‘s expenditure of
$25'7,000 ($35,000 mortgage + $222,0000) in one-half ($257,000 X .05 =
$128,500) and deducted that amount from the increased value ($188,000 -
$].28,500 = $59,500) .

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Sister that Husband had an ownership interest. We view this
point of error as raising a mixed question of fact and law, and
thus review it under the clearly erroneous standard. Qhun, 106
Hawai‘i at 430, 106 P.3d at 353.

Based on our review of the record, there was
substantial evidence to support the family court's determination
that Husband had a beneficial interest in the condominium.
Husband lived at the property for several years while a student
in San Francisco, paid some of the expenses for the property
while he lived there, and has been a 50% title holder since the
property was first purchased. Although Sister, for many years,
has paid for most of the expenses, Husband's title was never
transferred to her or anyone else. Husband thus has a legal
claim to ownership of the property and it was not error for the
family court to conclude he had an interest for purposes of
property division in this divorce proceeding.

Wife contends, in turn, that it was error for the
family court to conclude that Husband "owes half of all of the
debt and costs paid for by [Husband's] sister for this property."
The family court's initial decision, that equity called for
Husband to contribute toward the property given the expenses
incurred by Sister, is committed to the broad discretion of the
family court and we will not disturb that decision.

However, under the abuse of discretion standard, we
believe the family court disregarded rules or principles of law
in properly calculating or assessing the amounts attributable to
Husband's interest as a co-tenant of the condominium. Because
large portions of Sister's expenses for the property were
incurred prior to the DOM, it was error to include those amounts
in calculating the category 2 amount. Rather, category 2 amounts
address "[t]he increase in the NMV of all property whose NMV on
the DOM is included in category 1 and that the owner separately
owns continuously from the DOM to the DOCOEPOT". Tougas v.
Tougas, 76 Hawai‘i 19, 27, 363 P.zd 437, 445 ~-(1994) (emphasis
added) (quoting Malek v. Malek, 7 Haw.App. 377, 380-81 n.1, 768

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P.2d 243, 246-47 n.1 (1989)). To the extent the family court
determines that equity requires taking account of Sister's'
expenses and improvements prior to DOM, that should be calculated
into the initial category 1 amount.9

Second, regarding improvements to the condominium, it
appears the family court based its calculations entirely on the
amounts Sister expended, rather than the value added to the
property due to such improvements. As the family court itself
noted, the appreciation to the overall value of the property was
the basis for equitably requiring Husband to contribute toward
the condominium, and thus the change in value is the key
consideration. See Helbush v. Helbush, 108 Hawafi 508, 517, 122
P.3d 288, 297 (App. 2005) (without supporting evidence, it was
error to conclude that expenditure of $16,695 for home
renovations resulted in a $16,695 increase in net market value to
the house). Moreover, for partition actions involving co-
tenants, improvements made in good faith by one co-tenant are
credited to that co-tenant to the extent of the increased value
of the property, irrespective of the cost. See Nahaolelua v.
Kaaahu, 10 Haw. 662, 1897 WL 1637 (Haw. Rep. 1897); Wallace v.
Daley, 220 Cal. App. 3d 1028 (1990).“ If possible, therefore,
the family court should account for improvements based on their
impact to the value of the property, If the evidence does not
allow the family court to make such a determination, the court
may rely on its broad discretion to determine a just result.

In sum, to the extent possible, the family court should
recalculate the amounts related to the condominium so that:

amounts Sister incurred prior to DOM are accounted for in the

9 Category 1 sets out the "net market value (NMV), plus or minus, of
all property separately owned by one spouse on the date of marriage (DOM)
." Tougas, 76 HaWaFi at 27, 868 P.2d at 445 (emphasis added).

w A1though this is not a partition action, we find it proper to refer
to partition cases because their purpose is akin to what the family court
seeks to do here -- in equity, determine the respective value owed to Husband
for his co-tenant interest in the condominium and the equitable amount he
should contribute to that property. Both Hawaii and California law call for
crediting Sister with the value of improvements, not simply their costs.

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category 1 value; amounts Sister incurred after DGM are
considered in determining the category 2 value; and for the
improvements to the property, they are calculated according to
the change in value to the property and not the cost of the
improvement.“
C. M Corporation - Husband's Point of Error #2 and

Wife's Point of Error #4

M Corporation (M Corp.) was established before DOM by
Husband's parents. Husband and each of his four siblings holds a
20% interest. The principal asset of the corporation is a
residential property in Honolulu.

Husband contends he does not have a beneficial interest
in the corporation for purposes of property division because it
was the wish of his parents that the assets in the corporation be
held in trust for the benefit of future generations of the
family. Notwithstanding this argument, Husband does not contest
that he holds a 20% interest and does not contest the family
court's finding that he showed losses from M Corp. on his yearly

income tax returns and included M Corp. as an asset in one

»financial disclosure statement. There is substantial evidence in

the record to support the family court's ruling and it did not
clearly err in deciding that Husband has a beneficial interest in
M Corp.

Wife, in turn, contends the family court erred by
applying a double discount to the fair market value of Husband's
interest because such finding was not supported by the evidence
and her expert disagreed with Husband's expert that such
discounts were appropriate. The family court considered

testimony from experts on both sides and found testimony by

“ For basic maintenance of the property -- i.e. mortgage payments,
property taxes and homeowners association fees -- it is not error to utilize
the cost amount because these types of payments maintain (rather than
increase) the ownership interest. However, as to improvements -- such as the
interior remodeling in 1998 -- the change in value to the property, as opposed
to costs, is the appropriate consideration. §§§ Nahaolelua, 10 Haw. at 663-
64.

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Husband's expert credible that "lack of control" and "lack of
marketability" adjustments should be utilized. "[I]t is
axiomatic that reconciling conflicting testimony is beyond the
scope of appellate review." Schiller, 120 Hawafi at 288, 205
P.3d at 553 (quoting Onaka v. Onaka, 112 HawaiU.374, 384, 146
P.3d 89, 99 (2006)). Under a clearly erroneous standard of
review, there is substantial evidence in the record to support
the family court's finding that a double discount should be
applied.

D. Exclusion of $170,000 Receivable from the Marital

Estate - Wife's Point of Error #5

Wife contends the family court erred in excluding from
the marital estate a receivable in the amount of $170,000, owed
by Husband's sister (Sister), for a loan made during the marriage
and which was paid back sometime after Husband and Wife
separated. Husband's uncontested testimony is that he used the
funds on expenses for the marital residence,” landscaping,
living expenses and his legal expenses. The family court
concluded "there is no evidence presented that such a receivable
now exists."

Wife does not argue on appeal, and did not assert
below, that Husband wasted these funds during the pending divorce
or was fiscally irresponsible. See Higashi v. Higashi, 106
HawaiU_228, 241, 103 P.3d 388, 401 (App. 2004). Rather, without

citing any authority, she asserts that "[i]n the same way that a.

tax return from marital tax refunds received by one party prior
to [DOCOEPOT] should be credited to both parties, Wife is
entitled to a credit for one-half this $170,000 receivable." We
disagree. The family court's decision was within its broad
discretion and it was not required to include funds as part of

the marital estate which no longer existed.

12 This is the residence where Wife resided after the parties separated
in December 2005 and which was ultimately awarded to Husband by the family
court's February 20, 2007 order.

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E. Grand Piano - Wife's Point of Error #6

The family court ruled that, "[r]egarding the
Grand Piano, if neither party wants it, it shall be sold at the
best possible price and the net proceeds shall be divided
equally."” Wife contends the family court erred in that "no
provision was made for equalization in the event that one party
elected to keep the piano." Husband argues in response that
"[i]mplicitly assumed in the Family Court‘s order is the prospect
of a subsequent agreement between the parties under which one
party will take the piano and pay the other party an agreed sum,
Failing that, the piano would be sold on the open market in a
manner best calculated to get the best price."

While the family court has wide discretion in these
matters, it is error where "the family court fail[s] to exercise
its equitable discretion“. Tougas, 76 Hawafi at 26 n.6, 868
P.2d at 444 n.6 (1994) (quoting Bennett v. Bennett, 8 Haw.App.
415, 416, 807 P.2d 597, 599 (1991)). Here, Wife is correct that
the family court failed to address equalization in the event one
of the parties chooses to keep the piano. On remand, the family
court should therefore exercise its discretion and determine a
proper equalization amount in the event one of the parties agrees
to keep the piano.

F. Capital Contribution Credit For PPBG1 - Wife's Point of

Error 37

Wife contends that the family court erred by awarding
Husband a $144,137 category 1 contribution credit for PPBGI, in
which Husband had owned 100% of the stock, because this value was
not based on evidence in the record. we disagree and, based on
Husband's testimony and other evidence adduced at trial, hold

that there was no clear error.

13 The parties agree that the piano is quite valuable, with Wife
asserting it has a "stipulated value of $70,000" while Husband cites a
September 2006 letter which states the piano "has a current value of
$70,000[,] " and that " [t]he current replacement value of this piano in 2006 is

$116,500.00. "

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G. Capital Contribution Credit for Contingent Termination

Benefit Under CLH Emplovment Contract - Wife's Point of
Error 8

Wife contends it was error for the family court to
award Husband a $116,886 category 1 contribution credit for a
benefit under his employment contract with CLH which would be
triggered upon his termination. Wife argues "the contingency did
not occur to vest the termination benefit of the contract."

In Linson v. Linson, 1 Haw.App. 272, 278, 618 P.2d 748,
751 (1980), the phrase "estate of the parties" as set forth in
HRS § 580-47 was construed broadly, "to facilitate . . . the
court1s ability to reach 'just and equitable' results as mandated
by HRS § 580-47." There, "estate of the parties" was interpreted
to mean "anything of present or prospective value", and thus the
court held that nonvested military retirement benefits were part
of the estate of the parties. lQ4 Here, given the broad
definition of "estate of the parties", it was not error to
include Husband's contingent termination benefit as a category 1
contribution credit.

As raised by Wife, however, if this benefit had a value
at DOM, "it should have a DOCOEPOT value as well." The family
court's orders do_not reflect that the court addressed the
DOCOEPOT value. On remand, the family court should exercise its
discretion to determine the appropriate DOCOEPOT value, if any.

H. Kamuela Propertv - Wife's Point of Error #9

Two days prior to DOM, Husband purchased property in
Kamuela. Wife contends it was error for the family court to
award Husband a capital contribution credit for this property
because the parties had already been living together in a

"premarital economic partnership."

[A] "premarital economic partnership" occurs when, prior to
their subsequent marriage, a man and a woman cohabit and
apply their financial resources as well as their individual
energies and efforts to and for the benefit of each other's
person, assets, and liabilities.

H@ibush, 103 Hawai‘i at 515, 122 P.3d at 295.

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The family court held that "[s]imply cohabitating
together does not automatically transform a relationship into a
premarital economic partnership" and made unchallenged findings
that there was no credible evidence that Wife had contributed
financially toward the purchase of the property, had worked to
enhance its value prior to DOM, or had participated in its upkeep
prior to DOM. Wife may have participated in the selection of the
property, but given this record, we find no clear error in the
family court's ruling.
'I. Failure To Deviate From Marital Partnership PrinciDles
- Wife's Point of Error #10
Wife contends that the family court should have
deviated from the marital partnership model. When deciding the
division of marital partnership property, the Partnership Model

requires the family court to proceed as follows:

(1) find the relevant facts; start at the Partnership Model
Division and (2)(a) decide whether or not the facts present
any valid and relevant considerations authorizing a
deviation from the Partnership Model Division and, if so,

(b) itemize those considerations; if the answer to question
(2)(a) is "yes," exercise its discretion and (3) decide
whether or not there will be a deviation; and, if the answer
to question (3) is "yes," exercise its discretion and

(4) decide the extent of the deviation.

Jackson v. Jackson, 84 HawaFi 319, 332, 933 P.2d 1353, 1366
(App. 1997). Question (2)(a) is a question of law, reviewed
under the right/wrong standard of review, ld4 at 332-33, 933
P.2d at 1366-67. Questions (3) and (4) are discretionary

\ matters, reviewed under the abuse of discretion standard. ld. at

333, 933 P.2d at 1367.

In determining whether one or more valid and relevant
considerations authorize the family court to deviate from
the Partnership Model, the family "court shall take into
consideration: 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) (1993). Other than relative circumstances of the
parties when they entered into the marital partnership and
possible exceptional situations, the above quoted part of
HRS § 580-47(a) requires the family court to focus on the
present and the future, not the past.

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lQL (quoting Epp v. Epp, 80 HawaiU 79, 89, 905 P.2d 54, 64 (App.
l995)).

Based on our review of this issue, the only "valid and
relevant consideration" presented in this case, as a matter of
law, is the tax ramification from the implicit requirement that
Wife will have to sell marital partnership property (part of a
Fidelity stock account) to make the equalization payment ordered
by the family court.“ Because we conclude the sale of marital
partnership property is implicitly ordered, "the family court
must consider the tax ramifications of the sale." Jackson, 84
Hawafi at 334, 933 P.2d at 1368. On remand, the family court
should consider the tax ramifications of Wife selling part of her
Fidelity stock account and "exercise its discretion and
(3) decide whether or not there will be a deviation; and, if the
answer to question (3) is "yes," exercise its discretion and
(4) decide the extent of the deviation." Jackson, 84 HawaFi at
332, 933 P.2d at 1366.

J. Alimonv - Wife's Points of Error #11

Wife contends the family court erred in awarding her
"transitional" alimony and in finding that it would not be just
and equitable to award her with permanent alimony. We review
this under the abuse of discretion standard and the

considerations set forth in HRS §580-47, which state in relevant

part:

In addition to any other relevant factors considered, the
court, in ordering spousal support and maintenance, shall
consider the following factors:

(1) Financial resources of the parties;
(2) Ability of the party seeking support and maintenance
to meet his or her needs independently;

(3) Duration of the marriage;

(4) Standard of living established during the marriage;
(5) Age of the parties;

(6) Physical and emotional condition of the parties;'

“ Total value allocated to Wife is $1,248,988 (of which $1,151,346 is
from a Fidelity account). From this total value, the family court's May 24,
2007 Divorce Decree requires a payment from Wife to Husband of $437,300.
Given the circumstances of the case, this implicitly requires Wife to sell
part of the Fidelity account.

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(7) Usual occupation of the parties during_the marriage;

(8) Vocational skills and employability of the party seeking
support and maintenance;

(9) Needs of the parties;

(10) Custodial and child support responsibilities;

(11) Ability of the party from whom support and maintenance
is sought to meet his or her own needs while meeting
the needs of the party seeking support and
maintenance;

(12) Other factors which measure the financial condition in which
the parties will be left as the result of the action under
which the determination of maintenance is made; and

(13) Probable duration of the need of the party seeking support
and maintenance.

Hawaf1 Rav1aad statutes (HRs) § 530-47(a) (2006).

Further, when ordering a party to "provide for the
support and maintenance of the other party," the trial court is
required to take into consideration: "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 §
530-47(a). 6

Here, the family court found that Wife would be "left
with substantial assets" under the orders of the court, and that
"[u]nder the circumstances of this case, it would not be just and
equitable to award permanent alimony to Plaintiff . . . [rather,]
[t]ransitional alimony would be more appropriate." The court
then ordered Husband to pay alimony to Wife in the amount of
$2,500 per month for a period of two years.

1n making its award, the court considered that:

(1) Husband had the greater earning capacity and had been the
primary financial supporter of the family; (2) Wife had worked on
and off during the years, was relatively young, did not have any
physical limitations, and had the ability to be self-sustaining;
and (3) the parties had a relatively affluent lifestyle. The
court examined the most recent income and expense statement
produced by Wife, which showed no income and $12,760 in expenses,
all of which were paid for by Husband. The court found that Wife

would have $4,400 in monthly expenses after the divorce, as she

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would not have to pay for the mortgage ($5,000), real property
taxes ($260), hired help ($800), or childcare expenses for the
nanny ($2,300). Also, Husband had been paying $3,500 per month
for temporary family support, as well as the expenses for the
marital residence since March 2006.

The trial court properly considered the relevant
factors, and its decision not to award Wife permanent alimony was
not an abuse of discretion,

K. Child Support - Wife's Point of Error #12

Wife next argues that, in determining child support
payments, the trial court erred in giving Husband a child care
credit in the amount of $2,300 for expenses while he worked.
Based on our review of this issue and the record in this case, we
find no clear error.

L. Motions To Strike - Wife's Point of Error #13

'Wife argues that the family court reversibly erred in
denying two motions to strike (Motion to Strike Husband's Closing
Argument and Husband's Response to Wife's Motion to Strike
Husband's Closing Argument).

Rule 103(a) of the Hawaii Rules of Evidence (HRE)
provides that "[e]rror may not be predicated upon a ruling which
admits or excludes evidence unless a substantial right of the
party is affected . . ." HRE Rule 103(a). Moreover, Rule 61 of
the Hawafi Family Court Rules (HFCR) provides:

No error in either the admission or the exclusion of
evidence and no error or defect in any ruling or order or in
anything done or omitted by the court or by any of the
parties is ground . . . for vacating, modifying, or
otherwise disturbing a judgment or order, unless refusal to
take such action appears to the court inconsistent with
substantial justice. The court at every stage of the
proceeding must disregard any error or defect in the
proceeding that does not affect the substantial rights of
the parties.

HFCR Rule 6l.
Based on our review of the arguments asserted and the

record, we are unconvinced that it was error for the family court

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to deny the motions to strike or that Wife's substantial rights
have been affected.
M. Scope of Judicial Notice - Wifefs Point of Error #14
Wife argues that the trial court erred in taking
"judicial notice of all the files, pleadings, and exhibits
considered in all prior hearings in the case." 3
In State v. Kotis, 91 Hawafi 319, 984 P.2d 78 (1999),
the Hawaii Supreme Court discussed the propriety of taking
judicial notice of records in the same or related proceedings.

Of import to the court:

A distinction must be carefully drawn between taking
judicial notice of the existence of documents in the Court
file as opposed to the truth of the facts asserted in those

documents....
[W]hile a Court may take judicial notice of each

document in the Court‘s file[,] it may only take judicial notice
of the truth of facts asserted in documents such as orders,
judgments and findings of fact and conclusions of law because of
the principles of collateral estoppel, res judicata, and the law
of the case.

ld; at 342, 984 P.2d at 101 (quoting Gottsch v. Bank of
StapletOn, 458 N.W.2d 443, 455-56 (l990)).

Wife first raised her concern about the scope of the
judicial notice in her motion for reconsideration filed March 2,
2007. In both her motion for reconsideration and now on appeal,
Wife does not point to any particular records from prior hearings
in this case that raise a concern. Likewise, Wife does not
articulate any harm arising from the family court's decision to
take judicial notice. Moreover, from our review of the family
court's orders, we discern no improper use or reliance on
unsubstantiated facts from records in prior hearings by way of
judicial notice. We therefore conclude the family court did not
err in the manner or scope in which it took judicial notice of
files, pleadings, and exhibits considered in prior hearings in

this case.

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IV. Conclusion
Based on the foregoing, we affirm in part, vacate in

part, and remand for further proceedings consistent with this
opinion.
DATED= Honolulu, Hawai‘i, June 23, 2010.

On the briefs:

Michael S. Zola

for Plaintiff-Appellant/
Cross-Appellee Chief Judge

william C. Darrah

Elizabeth Paek h
for Defendant-Appellee/ éQZ¢~4;Jn§;zt%;§Z%:Y-
Cross-Appellant Associate Judg

.

Associate Ju ge

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