Kakinami v. Kakinami

***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***

Electronically Filed
Supreme Court
SCWC-29340
16-MAY-2012
08:02 AM

IN THE SUPREME COURT OF THE STATE OF HAWAI#I

---o0o---

BONNIE MACLEOD KAKINAMI, Respondent/Plaintiff-Appellee,

vs.

AARON K.H. KAKINAMI, Petitioner/Defendant-Appellant.

NO. SCWC-29340

CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
(ICA NO. 29340; FC-D NO. 06-1-0040)

MAY 16, 2012

RECKTENWALD, C.J., NAKAYAMA, AND DUFFY, JJ.;
WITH ACOBA, J., CONCURRING AND DISSENTING
SEPARATELY, WITH WHOM MCKENNA, J., JOINS

OPINION OF THE COURT BY RECKTENWALD, C.J.

Aaron Kakinami challenges the Family Court of the Fifth

Circuit’s Supplemental Divorce Decree, on the ground that the

family court erred in not awarding him a share of Bonnie

Kakinami’s Marital Separate Property.1 Aaron also argues that

the family court improperly modified the Supplemental Divorce

Decree after he filed his Notice of Appeal by compelling him to

pay Bonnie a net share of her interest in the marital residence

1
The Honorable Calvin K. Murashige presided.
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by a certain date.

Briefly stated, Aaron and Bonnie were married in 1980.

In 2006 Bonnie filed a complaint for divorce, alleging the

marriage was irretrievably broken. The family court subsequently

filed a Decree Granting Absolute Divorce, but reserving property

division. A one-day trial was later held on the division of the

parties’ marital estate. At trial, Bonnie argued that a gift and

several inheritances that she received during the marriage were

Marital Separate Property, and thus, excluded from the marital

estate and not subject to division. Aaron argued that the gift

and inheritances were Marital Partnership Property and subject to

division. On October 7, 2008, the family court filed a

Supplemental Divorce Decree, in which it classified the gift and

inheritances that Bonnie received during the marriage as Marital

Separate Property and awarded Bonnie one hundred percent of that

property.

On October 10, 2008, Aaron filed a notice of appeal,

appealing from, inter alia, the family court’s October 7, 2008

Supplemental Divorce Decree. While Aaron’s appeal was pending,

Bonnie filed a Motion for Order Compelling Aaron to List the

Marital Residence for Sale. On February 3, 2009, the family

court filed its order compelling Aaron to pay Bonnie her net

share of the marital residence by February 27, 2009.

On appeal to the ICA, Aaron argued, inter alia, that

the family court erred in awarding Bonnie one hundred percent of

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the gift and inheritances as Marital Separate Property. Aaron

also argued that the family court’s order compelling Aaron to pay

Bonnie her share of the marital residence improperly modified the

property distribution ordered in the Supplemental Divorce Decree,

because Aaron’s notice of appeal allegedly divested the family

court of jurisdiction. The ICA affirmed. Kakinami v. Kakinami,

No. 29340, 2011 WL 1836718, at *4 (Haw. Ct. App. May 11, 2011)

(SDO). With regard to Bonnie’s gift and inheritance-funded

accounts, the ICA, citing Schiller v. Schiller, 120 Hawai#i 283,

205 P.3d 548 (App. 2009), noted that the family court has the

“authority to award Marital Separate Property to a non-owning

spouse[,]” Kakinami, 2011 WL 1836718, at *2, but held that the

family court did not abuse its discretion by failing to do so in

this case. Id. The ICA further held that the family court had

jurisdiction to enter the order compelling Aaron to pay Bonnie

her share of the marital residence because the order enforced,

rather than modified, the Supplemental Divorce Decree. Id. at

*4.

In his application, Aaron raises the following

questions:
A. Did the [ICA] commit grave error when it affirmed
the [family] court’s conclusion of law, that no
“Marital Separate Property” or appreciation on that
property can ever be awarded to a non-owning spouse[?]

B. Did the [ICA] commit grave error when it affirmed
post-decree orders issued by the family court, without
jurisdiction, which modified property division in the
absence of a timely motion under [Hawai#i Family Court
Rules (HFCR)] Rule 59?

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We hold that the ICA erred in stating that the family

court has the “authority to award Marital Separate Property to a

non-owning spouse” under Schiller. Kakinami, 2011 WL 1836718, at

*2. As explained further below, we hold that Marital Separate

Property remains non-divisible under the framework first set

forth in Hussey v. Hussey, 77 Hawai#i 202, 881 P.2d 1270 (App.

1994), overruled on other grounds by State v. Gonsales, 91

Hawai#i 446, 984 P.2d 1272 (App. 1999). That framework is

consistent with partnership principles adopted by this court, and

provides parties a practical means of segregating a specific type

of asset acquired during the marriage, while still permitting the

family court to divide the parties’ estate in a “just and

equitable” manner pursuant to Hawai#i Revised Statutes (HRS)

§ 580-47.

We further hold that the family court did not abuse its

discretion when it adhered to the Partnership Model of property

division in dividing the parties’ Marital Partnership Property,

because the existence of an inheritance, without more, does not

mandate deviation. We also hold that the family court had

jurisdiction when it issued its February 3, 2009 post-decree

order because the order enforced a preexisting obligation.

Accordingly, we affirm the judgment of the ICA.

I. Background

The following factual background is taken from the

record on appeal.

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Aaron and Bonnie were married on June 14, 1980. On

March 9, 2006, Bonnie filed a complaint for divorce, alleging the

marriage was irretrievably broken.2 In his answer, Aaron agreed

that the marriage was irretrievably broken. The divorce involved

the division of the parties’ nearly two million dollar estate.

A. Bifurcated Divorce Decree

On September 27, 2007, the family court granted

Bonnie’s request to bifurcate the divorce proceeding.

Thereafter, the family court filed a Decree Granting Absolute

Divorce (Bifurcated Divorce Decree) on October 1, 2007.3

Although the primary purpose of the decree was to dissolve the

marriage and reserve the division of property and debts for

trial, the family court awarded certain assets. The decree,

inter alia, awarded the marital residence to Aaron, provided that

he buy out Bonnie’s one-half interest. The decree stated in

pertinent part, “[Aaron] shall forthwith deposit in escrow an

amount that equals one-half of the fair market value of the

marital residence minus one-half the current mortgage debt.”

2
The family court, sua sponte, entered a pretrial order against
waste or transfer of property other than for usual and ordinary living
expenses on March 10, 2006.

3
On January 25, 2008, Aaron appealed the family court’s bifurcation
order and the Bifurcated Divorce Decree. On February 28, 2011, the ICA
affirmed the family court’s bifurcation order in Kakinami v. Kakinami, No.
28977, 2011 WL 682262, at *1 (Haw. Ct. App. Feb. 28, 2011). On June 27, 2011,
Aaron filed an application for certiorari from the ICA decision in that
appeal. After granting certiorari, this court concluded that “the ICA was
correct to affirm the family court’s entry of the October 1, 2007 decree
granting absolute divorce.” Kakinami v. Kakinami, 125 Hawai#i 308, 317, 260
P.3d 1126, 1135 (2011).

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B. Trial on Division of Marital Estate

After extensive discovery by both parties, a one-day

trial was held on July 25, 2008 on the division of the parties’

marital estate. The parties testified in relevant part as

follows.

1. Bonnie’s Testimony

Bonnie, a 59-year old teacher, testified that she

received a gift and several inheritances from two family members

during the course of her marriage. Specifically, Bonnie

testified that in 1992, she received a $10,000 gift from her

stepmother, Violet McLeod, and placed it in a newly-opened

account at Owens Mortgage Investment (Owens account). Bonnie

placed Aaron’s name on the Owens account when it was opened, but

testified that she did not intend to make a gift of that money to

Aaron. That same year, Bonnie also received a $50,000

inheritance from her aunt’s estate, which she put in the Owens

account. Bonnie indicated that the 1992 gift and inheritance

were intended for her, and not for both her and Aaron. Bonnie

testified that in 1995, she removed Aaron’s name from the Owens

account. Bonnie further testified that while Aaron’s name was on

the account between 1992-1995, Aaron did not contribute any funds

to that account, nor did he do so at any other time. Bonnie

recalled that after 1995, she withdrew money from the Owens

account to pay for education and household expenses.

Bonnie testified that after 1995, she received an

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inheritance from her stepmother that was distributed to her in

approximately the following amounts: $33,334, $308,000, $500,000,

and $3,333. Bonnie testified that these monies were placed in

either the Owens account or a Smith Barney account. Bonnie

further testified that neither she nor Aaron have ever

contributed any additional money to these accounts; she had other

people managing these accounts; and Aaron knew that the money in

these accounts was Bonnie’s.

Bonnie testified that during the divorce proceedings,

she made some withdrawals from her accounts to pay for “regular

living expenses[,]” “attorneys’ fees[,]” and a number of trips.

Bonnie indicated that during her marriage, it was “usual and

customary” for her to take trips and to pay for her children’s

travel expenses.

2. Aaron’s Testimony

Aaron, a 56-year old attorney, testified that sometime

in 2001, his law practice began to decline and he suffered from

health issues. Aaron was aware that in 2002, Bonnie inherited

money, but he indicated that Bonnie did not express to him

verbally or in writing that she intended that the money be kept

her sole property, that the money was not to be used for marital

purposes, or that the money was not to be managed or touched

during the marriage. Aaron then testified about how he believed

the money in the parties’ accounts should be divided in light of

his characterization of each asset. With regard to Bonnie’s

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“inherited money accounts,” Aaron testified that Bonnie would get

her basis back, but the appreciation, had there been any, would

be split fifty-fifty.

Aaron also testified about withdrawals that Bonnie made

from her inheritance-funded accounts during the divorce

proceedings, which Aaron claimed were in contemplation of

divorce. According to Aaron, these withdrawals roughly amounted

to $400,000. Aaron testified that Bonnie “should be credited

with having received [$]400,000.” When Aaron attempted to point

to his medical condition as a basis for equalization payments,

Bonnie’s counsel objected, stating, “If he was going to put his

condition in evidence, [she] should have been permitted to get

his medical records.” The family court sustained the objection.

At the court’s direction, the parties submitted their

closing arguments in writing. The parties’ closing arguments

centered around the following main issues: (1) whether Bonnie’s

gift and inheritances were Marital Separate Property or Marital

Partnership Property;4 (2) whether the Marital Partnership

4
Under Hussey, marital property is divided into three categories:
(1) Premarital Separate Property; (2) Marital Separate Property; and (3)
Marital Partnership Property. 77 Hawai#i at 206-07, 881 P.2d at 1274-75.
Upon marriage, Premarital Separate Property becomes either Marital Separate
Property or Marital Partnership Property. Id. at 206, 881 P.2d at 1275.
Marital Separate Property includes: (1) property covered by a valid premarital
agreement; (2) property covered by a valid contract; and (3) property that was
(a) acquired through gifts and inheritances during the marriage; (b) expressly
classified as separate property; and (c) maintained and funded through non-
partnership assets or efforts. Id. at 206-07, 881 P.2d at 1274-75.
Additionally, under Hussey, Marital Separate Property is not subject to
division. Id. at 207, 881 P.2d at 1275. Furthermore, any property that does
not fit within one of the three types of Marital Separate Property is Marital
Partnership Property that is divided pursuant to the Partnership Model. Id.
(continued...)

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Property should be awarded one-half to each spouse; (3) whether

there were any valid and relevant circumstances (VARCs) for

equitable deviation; and (4) whether Aaron’s pretrial motions

regarding Bonnie’s alleged violation of the pretrial order

against waste should be granted.

In his closing arguments, Aaron argued that: (1) the

marital estate was entirely comprised of Marital Partnership

Property; and (2) Bonnie was “fiscally irresponsible” during the

divorce and improperly made “withdrawals in contemplation of

divorce.” With regard to the division of the marital estate,

Aaron specifically argued that Bonnie’s inheritance-funded

accounts were Marital Partnership Property, not Marital Separate

Property, because they were not “expressly classified” as

Bonnie’s separate property or “maintained by [themselves]” as

required under Hussey. Additionally, Aaron argued that Bonnie

exhibited fiscal irresponsibility and violated the pretrial order

when she made sizable withdrawals from her inheritance-funded

accounts during the divorce proceedings. Accordingly, Aaron

contended that Bonnie should be equitably charged with having

received the dollar value of the reduction.

In her closing arguments, Bonnie maintained that: (1)

4
(...continued)
Under the Partnership Model, absent valid and relevant considerations
(VARCs), each partner is generally awarded his or her capital contribution,
while the appreciation is split fifty-fifty. See Jackson v. Jackson, 84
Hawai#i 319, 332, 933 P.2d 1353, 1366 (1997). VARCs permit the family court
to equitably deviate from the Partnership Model in dividing the parties’
Marital Partnership Property. See Jackson, 84 Hawai#i at 332-33, 933 P.2d
1366-67.

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her inheritance-funded accounts were Marital Separate Property

under Hussey; (2) the Marital Partnership Property should be

awarded one-half to each spouse pursuant to the Partnership

Model; (3) equitable deviation from the Partnership Model was not

warranted because Aaron is a licensed attorney with marketable

skills; and (4) the family court should deny Aaron’s motions

because Bonnie’s expenditures were justified by the high cost of

litigation and her necessary travel expenses.

C. Supplemental Divorce Decree

On October 7, 2008, the family court filed a

Supplemental Divorce Decree Re Division of Assets and Debts After

Entry of Bifurcated Divorce Judgment (Supplemental Divorce

Decree), in which the court divided Aaron and Bonnie’s property

into Marital Partnership Property and Marital Separate Property

and distributed the assets accordingly. The court concluded,

inter alia, that the following assets were Marital Partnership

Property: (1) the marital residence; and (2) the $10,000 gift and

$50,000 inheritance that Bonnie received in 1992. With regard to

these assets, the court stated in pertinent part:
1. Marital residence. The divorce decree entered on
October 1, 2007 awarded the marital residence at
Malino Road, Kauai, Hawaii to [Aaron] as his sole and
separate property. The parties were each awarded one-
half of the equity in the marital residence. The
mortgage on the marital residence is $57,163. The
total equity in the marital residence as of June 30,
2008 was $477,836. Each party is therefore entitled
to $238,918 as his/her share of the equity in the
home. [Aaron] is permitted to offset [Bonnie’s] share
of the equity in the Malino Road property with the
share of the marital partnership property to which he
is entitled. Should [Aaron] decide to sell the Malino

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Road property, he shall be solely responsible for the
costs of sale. [Bonnie] shall timely execute all
documents necessary to effect the property division.

2. OMIF account number 01-2999. The $10,000 gift and
$50,000 inheritance which [Bonnie] received in 1992
are marital partnership assets. The $33,334 received
by [Bonnie] in 2002 and deposited in OMIF account #01-
2999 account [sic] is separate marital property as
further described below in paragraph B(6). This
account’s value on June 30, 2008 was $167,102.
[Bonnie] is awarded $60,000 as her category 3 marital
partnership property. The appreciation on the $60,000
is category 4 marital partnership property and said
appreciation is awarded ½ to each party. The
appreciation on the $60,000 is $58,810. [Bonnie] and
[Aaron] are each entitled to ½ of $58,810 or $29,405.
Therefore [Bonnie] is awarded $60,000 plus $29,405 and
[Aaron] is awarded $29,405.

The family court further concluded that the following

gift and inheritances received by Bonnie in 2002 constituted

Marital Separate Property and awarded her “one hundred percent”,

“along with any appreciation therein”:
1. Gift of $33,334 from Violet McLeod[.]
2. Central Coast Paytel partnership from Violet
McLeod valued at $3,333[.]
3. Violet McLeod’s IRA account in OMIF ([Bonnie] as
beneficiary) presently valued at $152,588[.]
4. Smith Barney account # 574-6B632 Traditional
Inherited IRA “Bonnie Kakinami CGM IRA Beneficiary
Custodian”, valued at $137,946.08[.]
5. All assets, account numbers 104 045881 and 104
045882 titled in [Bonnie’s] individual name managed by
Morgan Stanley presently valued at $483,255.
6. OMIF account number 01-2999. The balance of
account number 01-2999 after deduction of [Bonnie’s]
$60,000 capital contribution plus $58,810 appreciation
on that amount (total $118,810, pursuant to paragraph
A(2) above) is marital separate property. [Bonnie] is
awarded the balance of this account.

The family court also indicated that it “shall have

continuing jurisdiction over the parties and their property to

enforce and implement the provisions of this decree.”

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C. Motion for Order Compelling Aaron to List the Marital
Residence for Sale

On October 10, 2008, Aaron filed a notice of appeal,5

appealing from, inter alia, the family court’s October 7, 2008

Supplemental Divorce Decree.

On December 1, 2008, while Aaron’s appeal was pending,

Bonnie filed a Motion for Order Compelling Aaron to List the

Marital Residence for Sale. In her motion, Bonnie requested that

the court order Aaron to immediately: (1) list the marital

residence for sale; (2) pay Bonnie $243,982, Bonnie’s share of

the marital residence; or (3) offset Bonnie’s share of the

marital residence against Aaron’s other awards and pay her

$83,715 equalization payment. Aaron opposed the motion,

primarily arguing that his appeal from the Supplemental Divorce

Decree divested the family court of jurisdiction to hear Bonnie’s

motion to compel.

On December 12, 2008, the family court held a hearing

on the motion. The family court orally ruled that Aaron was to

pay Bonnie her share of the equity in the marital residence,

after accounting for offsets in the division of the other Marital

Partnership Property, on or before February 27, 2009. On

5
During the course of the proceedings, Aaron filed a number of
appeals to the ICA from various family court orders. A number of appeals were
consolidated into this appeal. While the ICA did not address every issue that
Aaron raised, the only orders that Aaron appears to challenge further are the
family court’s February 3, 2009 order on Bonnie’s Motion to Compel Defendant
to List Marital Residence for Sale, and its February 25, 2009 order denying
Aaron’s Motion to Compel Compliance with Qualified Domestic Relations Orders
(QDROs). Accordingly, Aaron’s challenges to other family court orders are not
discussed further.

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February 3, 2009, the family court filed its Order on Plaintiff’s

Motion to Compel Defendant to List Marital Residence for Sale.

The order stated, inter alia, that Aaron was “not required to

list the marital residence [] for sale[,]” but imposed a

deadline, February 27, 2009, by which time Aaron was to pay

Bonnie the net share of her interest in the marital residence

after the appropriate set-off, which amounted to $83,715. Aaron

also appealed from this order on February 24, 2009. Aaron

requested findings for this order, but without explanation, the

family court apparently did not provide any.

On April 6, 2009, the family court issued the following

relevant findings of fact (FOF) and conclusions of law (COL)

related to the October 7, 2008 Supplemental Divorce Decree:
Findings of Fact

. . . .
14. At the August 27, 2007 hearing the [c]ourt made
an award of certain assets of the parties, including
an award of the Marital Residence to [Aaron]. . . .
15. The court ordered that [Aaron] deposit [Bonnie’s]
share of the equity in the residence by December 1,
2007.
16. The court reserved further issues of division of
property and division of debt for trial, set for
December 7, 2007.
. . . .
20. By January 18, 2008 [Aaron] had not deposited
[Bonnie’s] share of the equity in the Marital
Residence as ordered at the August 27, 2007 hearing,
and [Bonnie] moved for enforcement of the order.
21. [Bonnie’s] motion was denied, and the matter of
payment by [Aaron] of her share of the marital
residence was left as an issue for the trial.
. . . .
33. The court finds that [Bonnie] did not withdraw
marital funds in contemplation of divorce.
34. The parties were married on June 14, 1980 and
separated in September, 2006.
. . . .
36. [Bonnie] is 60 years old.
37. [Bonnie] is an elementary school teacher on the

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island of Kauai, and has been a teacher since 1987.
38. [Aaron] is 56 years old. [Aaron] is an attorney
who has been licensed to practice law in the state of
Hawaii since 1979. In 2005, for the second time in
his career, [Aaron] opened a private practice as a
sole practitioner.
39. At DOCOEPOT [Aaron] maintained an active law
practice on the island of Kauai. [Aaron] retained
staff, has and timely pays all of his monthly expenses
connected with his law practice.
. . . .
43. The parties purchased a home (“Marital Residence”
or “Malino Road”) in 1987. Neither party made a
capital contribution claim as to the marital
residence.
44. During pre-trial proceedings[,] [Bonnie] moved
the court for an order allowing her to purchase the
Marital Residence. . . .
45. [Aaron] objected to [Bonnie’s] motion and
requested leave to buy out [Bonnie’s] ½ interest.
[Aaron] submitted proof that, with the assistance of
his parents, he would qualify for a refinance of the
loan so as to be able to purchase [Bonnie’s] ½
interest.
46. The court ordered the house sold and the equity
divided equally between the parties.
47. Since [Aaron] wished to purchase the Marital
Residence, [Bonnie] filed a motion for reconsideration
(April 18, 2007) of the court’s order that the house
be sold. Instead of selling the Marital Residence and
incurring the costs of sale, such as broker’s fees,
[Bonnie] was willing to sell her ½ interest in the
residence to [Aaron], provided the [c]ourt lifted the
pretrial order to allow her to purchase a new home.
48. The court granted [Bonnie’s] motion for
reconsideration[.] . . .
49. [Aaron] was awarded the Marital Residence,
subject to his placing in escrow by December 1, 2007,
[Bonnie’s] ½ share of the equity in the Marital
Residence (DOCOEPOT total equity $477,836)[.]
50. [Aaron] did not place [Bonnie’s] share of the
equity in an escrow account as ordered.
51. Before trial and at DOCOEPOT [Aaron] informed the
court that he was not financially able to purchase
[Bonnie’s] ½ interest in the marital estate.
. . . .
56. In 1992 [Bonnie] received a $10,000 gift from her
stepmother, Violet McCleod, and a $50,000 inheritance
from her aunt Esther Dominguez.
57. The total of the gifts, $60,000, was deposited in
a jointly opened and jointly titled Owens Mortgage
(OMIF) account #01-2999.
58. The $60,000 principal remained jointly titled
from 1992 to 1995. No marital property or income was
used to fund this account from inception through
DOCOEPOT.
59. In 1995 by agreement of both parties, [Aaron] was
removed from title on the OMIF #01-2999 account and
[Bonnie] became the sole titleholder.
60. In 2002, [Bonnie] received an inheritance of

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$33,334 from her Stepmother. [Bonnie] deposited that
amount in the OMIF #01-2999 account, titled in her
sole name. (DOCOEPOT value $167,102)
61. [Bonnie] expressly classified the $33,334
inheritance as her sole separate property.
62. [Aaron] testified that he was not entitled to the
$33,334 inheritance.
63. No marital income or property was used to fund
the #OMIF [sic] account #01-2999.
64. In 2002, [Bonnie] received other inherited funds
in the following amounts:
a) $5,500 in CalPlans Limited Partnership
b) $3,333 Central Coast Paytel Limited
Partnership
c) $308,116 cash
d) $539,000 cash
. . . .
68. In 2002 [Bonnie] deposited her $33,334
inheritance in OMIF account #01-2999 then titled
solely in her name.
. . . .
76. The Smith Barney accounts, and subsequently the
Morgan Stanley accounts were maintained by sources
other than either one of the parties.
77. Other than the initial gifts of $10,000 and
$50,000 received by [Bonnie] and placed in a joint
account with [Aaron] from 1992 to 1995, and the
Calplans River Vineyard inheritance which was gifted
one-half to [Aaron], [Bonnie] expressly classified the
inherited assets deposited in Smith Barney as her
separate property.
. . . .
80. [Bonnie] used a portion of her inherited funds to
pay for the parties’ sons’ post high school
educational expenses and a repair on the Marital
Residence.
. . . .
83. [Bonnie’s] inheritances were maintained by
themselves with the assistance of [Bonnie’s]
investment advisor.
84. No marital partnership property was used to
maintain the inheritance-funded accounts.
. . . .
103. [Bonnie] expended certain funds during the
divorce proceedings.
104. The funds were used to pay the usual customary
household and living expenses[.]
. . . .
Conclusions of Law
. . . .
2. The $10,000 and $50,000 gifts to [Bonnie] during
the marriage are Category 3 marital partnership
property which are returned to [Bonnie] as her sole
and separate property.
3. The appreciation on the $10,000 and $50,000 gifts
is Category 4 property, which, absent valid or
relevant considerations is awarded ½ to each party.
4. There are no valid and relevant considerations
sufficient for the court to deviate from the division
of the $60,000 inheritance.

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5. [Aaron] is entitled to receive one half of the
appreciation on the $60,000 gift to June 30, 2008.
6. [Bonnie] had the burden of proof by a
preponderance of the evidence that certain property
acquired during the marriage was marital separate
property.
7. Marital Separate Property (MSP) is that property
[was] (a) acquired by Plaintiff during the marriage by
gift or inheritance, b) expressly classified by the
Plaintiff-owner as her separate property, and c) after
acquisition, was maintained by [itself] and/or sources
other than one or both of the spouses and funded by
sources other than marital partnership income or
property. [Hussey, 77 Hawai#i at 207, 881 P.2d at
1275].
8. [Bonnie] met her burden of proof by a
preponderance of the evidence that the following
assets are MSP:
$33,334 inheritance from Stepmother
$308,116 inheritance from Stepmother (partially
used to fund [Bonnie’s] OMIF IRA account)
$539,000 inheritance from Stepmother
$3,333 inheritance from Stepmother
9. [Aaron] presented no credible evidence that other
than the $60,000 gifts and their appreciation,
received in 1992 and the CalPlans Limited Partnership
received in 2002 [Bonnie’s] inherited assets were
Marital Partnership Property (MPP).
10. MSP is awarded 100% to the owner-spouse and 0% to
the non-owner spouse.
11. [Bonnie] is therefore entitled to receive as her
sole and separate property, those assets described in
paragraph 8 immediately above, and an appreciation
thereon.
12. [Bonnie] is also entitled to her $60,000 capital
contribution to the OMIF #-1-2999 account as Category
3 of MPP. Any appreciation on her $60,000 capital
contribution is Category 4. [Aaron] is entitled to
one-half the appreciation of [Bonnie’s] $60,000.
13. The Calplans River Limited Partnership is awarded
to [Bonnie] as her sole and separate property subject
to her buyout of [Aaron’s] ½ interest.
14. The parties’ retirement assets are marital
partnership property and each party shall receive
his/her respective shares as follows:
a) [Bonnie’s] ERS State of Hawaii-per the
[Linson v. Linson, 1 Haw. App. 272, 618 P.2d
748 (App. 1980)] formula.
b) [Bonnie’s] ING/State of Hawaii Island Savings
Plan, per the Linson formula
c) [Aaron’s] ING/State of Hawaii Island Savings
Plan, per the Linson formula
d) [Bonnie’s] AXA annuity ½ to each party
e) [Bonnie’s] ING Reliastar annuity, ½ to each
party
f) [Aaron’s] KCFCU IRA, ½ to each party
. . . .
17. [Aaron] shall forthwith refinance the debt on the
Marital Residence or forthwith list it for sale.
[Bonnie’s] sole obligation regarding the Malino Road

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property is to timely execute necessary documents to
effect the property division.

D. ICA Appeal

In his Opening Brief filed on May 11, 2009, Aaron

argued that the family court erred in: (1) awarding Bonnie the

2002 inheritance funded-accounts as Marital Separate Property;

(2) failing to find that Bonnie dissipated marital assets after

the court’s pretrial order prohibited such conduct;6 and (3)

entering an order purportedly modifying property distribution

after Aaron’s Notice of Appeal allegedly divested the family

court of jurisdiction. As a preliminary matter, Aaron cast doubt

on the Marital Separate Property concept, alleging that Hussey

“cite[d] no precedent for this exception” to the family court’s

authority to equitably divide all property, and arguing that the

exception has not been “applied” in any subsequent published

opinion and this court “has never reviewed or adopted this

exception to the Partnership Model.” Aaron then argued that

Bonnie’s investment accounts were not Marital Separate Property

because Bonnie failed to expressly classify them as such during

the marriage and actively managed and controlled the accounts.

Aaron further argued that Bonnie dissipated over $400,000 in

marital assets. Finally, Aaron argued that his notice of appeal

divested the family court of jurisdiction to modify the

Supplemental Divorce Decree and thus the family court abused its

6
This issue is not raised in Aaron’s application.

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discretion in entering its post-decree order compelling Aaron to

pay Bonnie.

In her Answering Brief, Bonnie argued, inter alia, that

the family court did not err in: (1) deciding that most of the

assets that Bonnie received by gift or inheritance were Marital

Separate Property and awarding those assets to Bonnie; (2)

rejecting Aaron’s contention that Bonnie “wasted” Marital

Partnership Property during the divorce proceedings; and (3)

entering the post-decree order.

In his Reply Brief, Aaron cited Schiller for the

proposition that the family court may award Marital Separate

Property to the non-owning spouse. Aaron asserted that Hussey

was overruled in Schiller and that the “[Marital Separate

Property] concept no longer serves any useful purpose in property

distribution[.]”

In its SDO, the ICA held, inter alia, that the family

court did not abuse its discretion in awarding all of Bonnie’s

Marital Separate Property to her or following the Marital

Partnership model. Kakinami, 2011 WL 1836718, at *2. The ICA

further held that the family court did not err in failing to find

that Bonnie dissipated marital assets. Id. at *3. The ICA also

held that the family court had jurisdiction to issue the

February 3, 2009 post-decree order. Id. at *4. Citing Schiller,

120 Hawai#i at 310-12, 205 P.3d at 575-77, the ICA acknowledged

the family court’s “authority to award Marital Separate Property

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to a non-owning spouse[,]” but held that the family court did not

abuse its discretion by failing to do so in this case. Id. at

*2. As for the allegation of dissipation, the ICA held that the

family court’s finding that Bonnie expended funds for “ordinary

and customary living expenses was supported by substantial

evidence.” Id. at *2-3. Lastly, the ICA held that the family

court did not modify the Supplemental Divorce Decree by imposing

a deadline for Aaron to buy out Bonnie’s share of the equity in

the marital residence. Id. at *3. Rather, the ICA determined

that the family court merely enforced a pre-existing obligation

that had been set forth in the Bifurcated Divorce Decree and the

Supplemental Decree. Id. Accordingly, the ICA affirmed, inter

alia, the family court’s October 7, 2008 Supplemental Divorce

Decree and the February 3, 2009 Order on Plaintiff’s Motion to

Compel Defendant to List Marital Residence for Sale. Id. at *4.

The ICA entered its judgment on July 19, 2011.

On October 18, 2011, Aaron filed the instant

application.7 On November 2, 2011, Bonnie timely filed a

response to Aaron’s application, and Aaron timely filed a reply.

II. Standards of Review

A. Family Court Decisions

7
Aaron simultaneously filed a motion for leave to file the
application late based on a “system error” that prevented him from filing on
time. Aaron’s counsel attached as an exhibit a printout reflecting this
“system error.” This court granted the motion in an order noting that Aaron’s
counsel was “prevented from timely filing by a ‘technical failure’ in the
Judiciary Electronic Filing and Service System.” (Citing Hawai#i Electronic
Filing and Service Rules Rule 10 (2010)).

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Generally, the family court possesses wide discretion
in making its decisions and those decisions will not
be set aside unless there is a manifest abuse of
discretion. Thus, we will not disturb the family
court’s decision 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)

(quoting In re Doe, 95 Hawai#i 183, 189-90, 20 P.3d 616, 622-23

(2001)).

B. Family Court’s Findings of Fact and Conclusions of Law

The family court’s FOFs are reviewed on appeal under
the “clearly erroneous” standard. A FOF is clearly
erroneous when (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.
“Substantial evidence” is credible evidence which is
of sufficient quality and probative value to enable a
person of reasonable caution to support a conclusion.

On the other hand, the family court’s COLs are
reviewed on appeal de novo, under the right/wrong
standard. COLs, consequently, are []not binding upon
an appellate court and are freely reviewable for their
correctness.

Id. (quoting In re Doe, 95 Hawai#i at 190, 20 P.3d at 623).

C. Subject Matter Jurisdiction

“Whether a court possesses subject matter jurisdiction

is a question of law reviewable de novo.” In re Doe, 96 Hawai#i

272, 283, 30 P.3d 878, 889 (2001).

III. Discussion

A. An overview of Hawaii’s property division scheme

Aaron contends that the ICA gravely erred when it

“affirmed the [family] court’s conclusion of law, that no

‘Marital Separate Property’ or appreciation on that property can

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ever be awarded to a non-owning spouse.” In Hawai#i, “[t]here is

no fixed rule for determining the amount of property to be

awarded each spouse in a divorce action other than as set forth

HRS § 580-47.” Tougas v. Tougas, 76 Hawai#i 19, 26, 868 P.2d

437, 444 (1994) (citation and ellipses omitted). HRS § 580-47(a)

(2006) confers upon the family court wide discretion in dividing

marital property and provides that upon granting a divorce, the

family court may “make any further orders as shall appear just

and equitable”:
. . . (3) finally dividing and distributing the estate
of the parties, real, personal, or mixed, whether
community, joint, or separate; and (4) allocating, as
between the parties, the responsibility for the
payment of the debts of the parties whether community,
joint, or separate, and the attorney’s fees, costs,
and expenses incurred by each party by reason of the
divorce. In making these further orders, the 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); see Tougas, 76 Hawai#i at 26, 868 P.2d at 444.

In addition to HRS § 580-47, Hawai#i case law has

created a framework based on partnership principles that provides

further guidance for family courts to use in dividing property

upon divorce. Because Aaron’s and Bonnie’s arguments on appeal

relate to this evolving body of case law, a review of the

relevant case law follows.

In Gussin v. Gussin, 73 Haw. 470, 473, 836 P.2d 484,

486 (1992), this court examined, inter alia, “the ICA’s mandate

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that family courts’ division and distribution of the estates of

parties in divorce proceedings must commence at ‘uniform starting

points’ (USPs).” The UPSs directed the family court to presume

certain percentage splits for categories of property that

previously had been established in Malek v. Malek, 7 Haw. App.

377, 380-81 n.1, 768 P.2d 243, 246 n.1 (1989). Gussin, 73 Haw.

at 474-75, 836 P.2d at 487. This court rejected the concept of

USPs, finding them to be “rebuttable presumptions” that

“restrict[ed] the family courts’ discretion in the equitable

division and distribution of parties’ estates.” Id. at 486, P.2d

at 492. This court concluded that “the ‘partnership model of

marriage’ provides the necessary guidance to the family courts in

exercising their discretion and to facilitate appellate review.”

Id. (emphasis added) (footnote omitted). Accordingly, this court

held that “USPs, as mandated by the ICA, are violative of HRS

§ 580-47 because they restrict the family courts’ discretion in

the equitable division and distribution of parties’ estates.”

Id.

In Tougas, this court again endorsed the “partnership

model” as the “appropriate law for the family courts to apply

when exercising their discretion in the adjudication of property

division in divorce proceedings.” 76 Hawai#i at 28, 868 P.2d at

446. While recognizing that “[t]here is no fixed rule regarding

property division other than what is provided in HRS § 580-47,”

id. at 26, 868 P.2d at 444, this court noted that the family

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court can utilize the following five categories of net market

values (NMVs) as guidance in divorce cases:
Category 1. The net market value (NMV), plus or
minus, of all property separately owned by one spouse
on the date of marriage (DOM) but excluding the NMV
attributable to property that is subsequently legally
gifted by the owner to the other spouse, to both
spouses, or to a third party.

Category 2. The 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 [date of the conclusion of the
evidentiary part of the trial]

Category 3. The date-of-acquisition NMV, plus or
minus, of property separately acquired by gift or
inheritance during the marriage but excluding the NMV
attributable to property that is subsequently legally
gifted by the owner to the other spouse, to both
spouse, or to a third party.

Category 4. The increase in the NMV of all property
whose NMV 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 DOCOEPOT.

Category 5. The difference between the NMVs, plus or
minus, of all property owned by one or both of the
spouses on the DOCOEPOT minus the NMVs, plus or minus,
includable in categories 1, 2, 3, and 4.

Id. at 27, 868 P.2d at 445 (citation omitted).

This court further indicated that the NMVs in

Categories 1 and 3 are the parties’ “capital contributions,” and

pursuant to general partnership law, they are returned to each

spouse. Id. (citation omitted). Categories 2 and 4 are the

“during-the marriage increase in NMVs of the Categories 1 and 3

Properties owned at DOCOEPOT[,]” which similar to partnership

profits, are generally to be shared equally. Id. at 27-28, 868

P.2d at 445-46 (citation omitted). In sum, this court stated,

“if there is no agreement between the husband and wife defining

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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.” Id. at 28, 868 P.2d at 446 (quotation marks and

citation omitted).

This court then considered whether the family court

abused its discretion when it deviated from equal division of a

joint business that the parties, Carol Tougas (Carol) and Raymond

Tougas (Raymond), owned. Id. at 32, 868 P.2d at 450. Carol’s

parents had created a partnership as part of their estate plan to

provide exclusively for their three children, and had each of

their children’s spouses sign consent forms, which acknowledged

that the partnership was “separate property, inaccessible during

a divorce action.” Id. at 23, 868 P.2d at 441. A second

partnership was formed, but no consent forms were signed. Id.

Following trial, the family court determined, inter alia, that

Raymond was not entitled to any share of Carol’s interest in the

two partnerships formed by her parents, but awarded Raymond

seventy-five percent of the business that he and Carol operated.

Id. at 25, 868 P.2d at 443.

On appeal, Carol argued, inter alia, that she should

have been awarded fifty percent of the business she operated with

Raymond because she and Raymond had “contributed as equal

partners to the formation and operation of [the business].” Id.

at 32, 868 P.2d at 450. In response to this argument, this court

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stated:
[T]he [family] court’s actions in distributing the
estate are discretionary, based on what the court
deems to be just and equitable under the
circumstances. Moreover, because the applicable
statute, HRS § 580-47, allows the court to consider
the condition of the parties after the divorce,
separate property holdings may properly factor into
the court’s consideration. This does not mean,
however, that [Carol’s] partnership interests should
offset [Raymond’s] interest in the marital estate.
The validation of the spousal consent agreement, which
operates as a waiver by [Raymond] of all rights to the
partnerships, conclusively establishes the contrary.
The court may, nevertheless, alter alimony, child
support, and, as in this case, the ultimate
distribution of the marital estate based on the
respective separate conditions of the spouses.

Id.

Accordingly, this court upheld the family court’s

deviation from the equal division of the Tougases’ joint

property. Id.

In Hussey, the ICA followed the marital partnership

concept, but noted that “Tougas used the terms ‘marital estate,’

‘marital properties,’ ‘separate properties,’ and ‘joint

property.’” 77 Hawai#i at 206, 881 P.2d at 1274. Seeking

“clarity and precision . . . in the context of the Partnership

Model,” the ICA recognized three classifications of property,

which included in relevant part:

Premarital Separate Property. This was the property
owned by each spouse immediately prior to their
marriage or cohabitation that was concluded by their
marriage. Upon marriage, this property became either
Marital Separate Property or Marital Partnership Property.

Marital Separate Property. This is the following
property owned by one or both of the spouses at the
time of the divorce:

a. All property that was excluded from the
marital partnership by an agreement in

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conformity with the Hawai#i Uniform Premarital
Agreement Act (HUPAA), HRS chapter 572D (Supp.
1992)[;]
. . . .

b. All property that was excluded from the
marital partnership by a valid contract[;] and

c. All property that (1) was acquired by the
spouse-owner during the marriage by gift or
inheritance, (2) was expressly classified by the
donee/heir-spouse-owner as his or her separate
property, and (3) after acquisition, was
maintained by itself and/or sources other than
one or both of the spouses and funded by sources
other than marital partnership income or property.

Marital Partnership Property. All property that is not
Marital Separate Property.

Id. at 206-07, 881 P.2d at 1274-75.

With regard to the distribution of Marital Separate

Property and Marital Partnership Property, the ICA further noted

in Hussey that
although Marital Separate Property cannot be used by
the family court to “offset,” [Tougas, 76 Hawai#i at
32], 868 P.2d at 450, the award of Marital Partnership
Property to the other spouse, it can be used by the
family court to “alter . . . the ultimate distribution
of [Marital Partnership Property] based on the
respective separate conditions of the spouses.” [Id.]
In other words, Marital Separate Property is property
that has been validly excluded from the marital
partnership. Although the family court may allow
Marital Separate Property to reasonably influence the
division and distribution of Marital Partnership
Property, it cannot award any Marital Separate
Property to the non-owner spouse. Consequently, the
five categories of [net market values] listed in
Tougas, 76 Hawai#i at 27, 868 P.2d at 445, apply only
to Marital Partnership Property, not to Marital
Separate Property .

Id. at 207, 881 P.2d at 1275 (emphasis added).

Shortly after Hussey, the ICA decided Markham v.

Markham, 80 Hawai#i 274, 909 P.2d 602 (App. 1996). At issue in

Markham was whether the family court abused its discretion in

awarding the wife an equalization award based on the entire value

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of a husband’s stock in a company called “Maile,” which the

husband owned. 80 Hawai#i at 286, 909 P.2d at 614. The ICA

classified the husband’s stock in Maile as Category 1 “property

separately owned by one spouse on the date of marriage.” Id.

The ICA indicated that the “appreciated value of said stock would

fall into Category 2 as ‘[t]he increase’ in the net market value

of property which the owner separately owned from the date of

marriage to the date of the trial’s conclusion.” Id.

Recognizing that HRS § 580-47 vests broad discretion in the

family court to divide and distribute “separate” property in a

“just and equitable manner,” the ICA held that “[t]his discretion

encompasses the authority to award separate property to the non-

owning spouse.” Id. (citation omitted).

In Schiller, a 2009 decision, the ICA examined a

purported conflict between Markham and Hussey. 120 Hawai#i at

310, 205 P.3d at 575. In Schiller, the husband argued that his

interest in a company called Garnet was Marital Separate

Property, not subject to equitable distribution under Hussey.

Id. at 309, 205 P.3d at 574. The husband testified, inter alia,

that his interest in Garnet was property acquired during the

marriage by “gift”; he characterized Garnet as his “sole and

separate property” during the marriage; and he asserted that he

had not made any payments for Garnet and was not involved with

its management. Id. at 310, 205 P.3d at 575. The ICA concluded

that the husband’s interest in Garnet was “a gift-hence [the

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husband’s] separate property.” Id. However, the ICA determined

that “there is a contradiction in the case law in this

jurisdiction regarding whether a family court can award separate

property to a non-owner spouse.” Id. The ICA contrasted

Markham, which held that the family court’s “discretion

encompasses the authority to award separate property to the non-

owning spouse,” Schiller, 120 Hawai#i at 310, 205 P.3d at 575

(quoting Markham, 80 Hawai#i at 286, 909 P.2d at 614), with

Hussey, which held that the family court “cannot award any

Marital Separate Property to the non-owner spouse[.]” Id. at

310-11, 205 P.3d at 575-76 (quoting Hussey, 77 Hawai#i at 207,

881 P.2d at 1275). The ICA determined that “in Hussey, this

court’s paraphrasing of the holding in Tougas was inaccurate and

that Markham controls this case.” Schiller, 120 Hawai#i at 311,

205 P.3d at 576. Accordingly, the ICA held in Schiller that

under the holding of Markham, “the family court may ‘award

separate property to the non-owning spouse.’” 120 Hawai#i at

312, 205 P.3d at 577 (citation omitted).

B. The family court correctly concluded that Marital Separate
Property cannot be awarded to the non-owner spouse

In his application, Aaron does not challenge the

classification of the gift and certain inheritances that Bonnie

received as Marital Separate Property, but rather the family

court’s alleged lack of authority to award Aaron a portion of

this category of property. Aaron argues that the family court

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erroneously concluded, as a matter of law, “[Bonnie] is therefore

entitled to receive as her sole and separate property those

assets described in [COL] 8 [as Marital Separate Property], and

any appreciation thereon.” Aaron points out that during the

pendency of this appeal, the ICA issued Schiller, in which the

ICA stated that “the family court may award separate property to

the non-owning spouse.” 120 Hawai#i at 312, 205 P.3d at 577

(quotation marks and citation omitted). Aaron argues that the

ICA in this case properly recognized that Schiller allows the

family court “to award Marital Separate Property to a non-owning

spouse,” but erred when it nevertheless concluded that “the

family court did not abuse [its] discretion by failing to []

award part of Bonnie’s Marital Separate Property to Aaron[.]”

Aaron contends that the family court in fact did not exercise any

discretion in considering whether it was equitable to award Aaron

some of Bonnie’s Marital Separate Property, but rather “merely

concluded, citing Hussey, that since [Bonnie’s inheritances] were

[Marital Separate Property], all must go to Bonnie.”

Accordingly, Aaron alleges that the ICA committed “grave error”

in affirming the family court’s division because the family court

never exercised any discretion.

At the outset, Bonnie argues that Aaron’s argument

should be deemed waived, because Aaron failed to argue it before

the family court. Although a review of the record arguably

supports Bonnie’s contention, the ICA cited Schiller for the

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proposition that Marital Separate Property may be awarded to the

non-owner spouse, which is inconsistent with the ICA’s language

in a post-Schiller case, Baker v. Bielski, 124 Hawai#i 455, 460,

248 P.3d 221, 226 (App. 2011) (“Although the family court may

allow Marital Separate Property to reasonably influence the

division and distribution of Marital Partnership Property, it

cannot award any Marital Separate Property to the non-owner

spouse.”) (emphasis added) (citation omitted). To resolve this

inconsistency in recent ICA decisions, we examine the issue of

whether Marital Separate Property can be awarded to the non-owner

spouse. Moreover, although this issue may arguably be deemed

waived, we may affirm the orders of the family court on any

ground appearing in the record. Fujimoto v. Au, 95 Hawai#i 116,

169, 19 P.3d 699, 752 (2001) (“[W]e may affirm a judgment of the

lower court on any ground in the record that supports

affirmance.”). Accordingly, we consider Aaron’s contentions on

the merits.

As discussed supra, in Schiller, the ICA examined a

purported conflict between Markham and Hussey and ultimately held

that “[u]nder the holding in Markham, 80 Hawai#i at 286, 909 P.2d

at 614, the family court may ‘award separate property to the non-

owning spouse.’” 120 Hawai#i at 312, 205 P.3d at 577. The ICA’s

holding in Schiller, however, was premised on an incorrect

analysis when it noted a conflict between Hussey and Markham.

120 Hawai#i at 310, 205 P.3d at 575. The property at issue in

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Markham, which was the husband’s stock in a company, was not

categorized by either party or the family court as Marital

Separate Property. 80 Hawai#i at 286, 909 P.2d at 614. Indeed,

the husband in Markham did not argue that he excluded the

property from the marital partnership through a premarital

agreement, valid contract, or explicit segregation that met the

stringent three-part test in Hussey. Id. Accordingly, the stock

was Marital Partnership Property subject to division pursuant to

the Partnership Model.8 See Hussey, 77 Hawai#i at 207, 881 P.2d

at 1275 (defining Marital Partnership Property as “[a]ll property

that is not Marital Separate Property” and indicating that “the

five categories of NMVs listed in [Tougas] apply only to Marital

Partnership Property”). Stated differently, the stock was

“separately owned” Category 1 property, which is a type of

Marital Partnership Property.

Because Markham did not involve Marital Separate

8
Under the Partnership Model, the ICA in Markham classified the
husband’s stock under Category 1 as “property separately owned by one spouse
on the date of marriage.” 80 Hawai#i at 286, 909 P.2d at 614. The ICA then
indicated that the “appreciated value of the said stock would fall in Category
2 as the ‘[t]he increase’ in the net market value of property which the owner
separately owned from the date of marriage to the date of the trial’s
conclusion.” Id. (citation omitted). As the ICA observed, under the
Partnership Model, “absent an agreement to the contrary, each partner is
entitled to his or her separately owned property.” Id. The amount of
appreciation in the stock, if any, was unclear, and accordingly, the family
court determined that the wife was “entitled to 1/11 of the value of said
stock[.]” Id. Thus, the issue before the court was “whether the court had
the discretion to [] award [the wife] an equalization payment based on the
entire value of [the husband’s] stock.” Id. (emphasis added). The ICA held
that HRS § 580-47(a) vests the family court with “broad discretion,” which
“encompasses the authority to award separate property to the non-owning
spouse.” Id. (quotation marks and citation omitted). However, this “separate
property” reference did not necessarily conflict with Hussey because under the
facts of the case, it referred to “separately owned” Category 1 property. See
Markham, 80 Hawai#i at 286, 909 P.2d at 614.

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Property, but rather “separately owned” Category 1 property,

which Hussey views as Marital Partnership Property, “a

contradiction in the case law” did not exist. Schiller, 120

Hawai#i at 310, 205 P.3d at 575. Thus, the ICA’s reliance in

Schiller on a purported conflict between Markham and Hussey is

misplaced. Accordingly, the framework established in Hussey,

which distinguishes non-divisible Marital Separate Property from

Marital Partnership Property, remains valid.9

To be clear, the family court is still vested with the

discretion and authority to award separate property to the non-

owning spouse. See Hussey, 77 Hawai#i at 207, 881 P.2d at 1275

(indicating that all property that is not Marital Separate

Property is Marital Partnership Property subject to division);

Cassiday v. Cassiday, 68 Haw. 383, 386, 716 P.2d 1133, 1136

(1986) (stating that the trial court is vested with the

discretion and authority to award separate property to the non-

owning spouse). For example, if a party receives a gift or

inheritance during the marriage, but the party does not expressly

classify that gift or inheritance as separate property, or uses

marital assets or efforts to maintain that gift or inheritance,

9
We emphasize that this third category of Marital Separate Property
is distinct from “separate property.” Respectfully, the dissent appears to
overlook this distinction by interchanging “Marital Separate Property” and
“separate property” in responding to points made in this opinion. See
dissenting opinion at 34-35. To clarify, Marital Separate Property is a
narrow category of “separate property” that, in our view, provides a practical
means of segregating certain property from the marital estate, the segregation
of which can influence the equitable distribution of the parties’ other
assets.

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then the gift or inheritance would be subject to division as

Marital Partnership Property.10

Moreover, the framework set forth in Hussey is

consistent with HRS § 580-47. HRS § 580-47 directs the family

court to “finally divid[e] and distribut[e] the estate of the

parties, real, personal, or mixed, whether community, joint or

separate” in a “just and equitable” way.11 In light of this

court’s adoption of the partnership model, it does not appear

that excluding certain categories of property from the marital

partnership at the outset is at odds with the statute or this

court’s prior cases.12

Marital Separate Property is property that has been

excluded from the marital partnership, and thus, not subject to

10
Respectfully, this court’s holding is consistent with Cassiday,
because the facts of Cassiday are distinguishable. Dissenting Opinion at 18-
20, 20-21 n.7. Specifically, the facts of Cassiday did not indicate that the
husband expressly told his spouse that the subject properties would be
excluded from the marital estate and be classified as separate property. See
id. at 386, 716 P.2d at 1136. Thus, under the Hussey framework, the husband’s
separate properties in Cassiday would be subject to division.

11
The legislative history of the predecessor statute to HRS § 580-47
indicates that the equitable distribution scheme was intended to “confer upon
the Judge who grants a final decree of divorce the power to make property
settlements between the parties of all property, real, personal or mixed,
whether held as community, joint or separate property.” S. Stand. Comm. Rep.
No. 595, in 1955 Senate Journal, at 632. This is the consistent with the
plain language of HRS § 580-47. We agree with the dissent that this indicates
the family court has the authority to divide the separate property of the
parties pursuant to HRS § 580-47. Dissenting opinion at 16. Contrary to the
dissent’s holding, we believe that Marital Separate Property may be excluded
consistent with this scheme.

12
Citing Jaylo v. Jaylo, 125 Hawai#i 369, 375, 262 P.3d 245, 251
(2011), the dissent contends that to the extent that Hussey conflicts with HRS
§ 580-47, the statute must control. Dissenting opinion at 27. As discussed
infra, we do not believe there is a conflict between the Hussey framework and
HRS § 580-47 because the family court still maintains discretion to divide the
parties’ estate in a “just and equitable” manner, with the limitations
described herein.

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division. Put another way, upon dissolution of the marital

partnership, property properly classified as Marital Separate

Property remains with the owner of that property. There are

three methods of segregating property as Marital Separate

Property. The first two methods, which involve either a

premarital agreement or valid contract, are recognized by

statute.13 See HRS Chapter 572D; HRS § 572-22. The third

method, covering gifts and inheritances acquired during the

marriage, requires that the asset was: (1) “expressly classified”

as separate property; (2) “maintained by itself and/or sources

other than one or both of the spouses”; and (3) “funded by

sources other than marital partnership income or property.”

Hussey, 77 Hawai#i at 207, 881 P.2d at 1275. Although not

expressly recognized by statute, this third method is consistent

with the Partnership Model of property division that was adopted

by our prior cases, because it recognizes that in any

partnership, certain assets will not be used for or contribute to

the partnership. Furthermore, this third method provides a

practical means of segregating assets where written contracts to

exclude this type of property may be inappropriate or unfeasible.

The exception recognized in Hussey for certain kinds of

gifts and inheritances acquired during a marriage is quite

13
The legislature has essentially approved of excluding these two
categories of Marital Separate Property, from the marital estate. See Uniform
Premarital Agreement Act, HRS Chapter 572D; HRS § 572-22. Accordingly, these
categories of property are not discussed further.

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narrow. 77 Hawai#i at 207, 881 P.2d at 1275. The burden is on

the owner-spouse to prove that the aforementioned factors were

satisfied. Id. Furthermore, although Marital Separate Property

cannot be awarded to the non-owner spouse under Hussey, it can

influence the division of Marital Partnership Property. Id.

Thus, the family court still retains broad discretion to divide

property in a “just and equitable” manner. HRS § 580-47. In

sum, we view this framework as being consistent with the statute

and partnership model, while promoting predictability, and

offering a practical mechanism for parties to exclude certain

gifts and inheritances acquired during the marriage.

C. The family court did not abuse its discretion in not
deviating from the Partnership Model

Aaron further argues that the ICA erred when it

declared that the family court did not abuse its discretion by

failing to award Aaron more than one-half of the parties’ Marital

Partnership Property in light of Bonnie’s Marital Separate

Property. As a threshold matter, it should be noted that Aaron

did not include this issue in his statement of questions

presented, and accordingly, it should be disregarded. See

Hawai#i Rules of Appellate Procedure (HRAP) Rule 40.1(d)(1) (“The

application for a writ of certiorari . . . shall contain

. . . [a] short and concise statement of the questions presented

for decision, set forth in the most general terms possible. . . .

Questions not presented according to this paragraph will be

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disregarded.”) (Emphasis added). In any event, his argument

lacks merit.

Aaron argues that Hussey permits deviation from the

Marital Partnership Model, and that the family court abused its

discretion by failing to consider whether deviation was

appropriate in this case. Aaron correctly points out that in

Hussey, the ICA stated, “[a]lthough Marital Separate Property

cannot be used by the family court to offset . . . the award of

Marital Partnership Property to the other spouse, it can be used

by the family court to alter the ultimate distribution of Marital

Partnership Property based on the respective conditions of the

spouses.” 77 Hawai#i at 207, 881 P.2d at 1275 (internal

citations, quotation marks, ellipses, and brackets omitted). As

the ICA correctly observed, however, “[t]he mere existence of

such an inheritance does not, without more, mandate deviation

from the Marital Partnership Model.” Kakinami, 2011 WL 1836718,

at *2 (emphasis in original); see Tougas, 76 Hawai#i at 32, 868

P.2d at 450 (noting that the court “may” alter “the ultimate

distribution of the marital estate based on the respective

separate conditions of the spouses”) (emphasis added).

As the ICA noted, Aaron did not point to anywhere in

the record where he argued that Bonnie’s Marital Separate

Property should be a VARC that justified equitable deviation.

Kakinami, 2011 WL 1836718, at *2 n.3. Rather, Aaron argued that

Bonnie’s inheritance funds should be treated as Marital

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Partnership Property, and that Bonnie’s alleged “withdrawals in

contemplation of divorce or fiscal irresponsibility” should be a

VARC. The family court found, and Aaron does not further dispute

in his application, that Bonnie did not withdraw funds in

contemplation of divorce, but rather used the funds “to pay the

usual and customary household and living expenses[.]”

Accordingly, the ICA did not err in holding that the family court

did not abuse its discretion when it failed to award Aaron more

than half of the Marital Partnership Property.

D. The ICA did not err in concluding that the post-decree order
acted to enforce, not modify, the supplemental divorce
decree

Aaron argues that the family court’s February 3, 2009

post-decree order was improper because: (1) there was no motion

for reconsideration under Hawai#i Family Court Rules (HFCR) Rule

59; (2) the family court did not have jurisdiction to modify the

Supplemental Divorce Decree after Aaron appealed; and (3) there

was no reason for Bonnie’s demand. Aaron argues that absent a

timely HFCR Rule 59 motion, it was impermissible for the family

court to modify the Supplemental Divorce Decree by ordering Aaron

to pay an equalization payment to Bonnie within a specified time,

i.e., by February 27, 2009. Aaron further argues that the ICA

erred when it held that the decree “merely enforced an obligation

that had been set forth in both the Bifurcated Divorce Decree and

the Supplemental Decree” because the decree involved a

modification, not enforcement.

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In the instant case, both parties concede that once a

party files a notice of appeal, the lower court is generally

divested of jurisdiction to proceed further on the matter.

Lowther v. Lowther, 99 Hawai#i 569, 578, 57 P.3d 494, 503 (App.

2002). As the ICA recognized, however, the family court retains

jurisdiction to enforce its own judgments and decrees. Richter

v. Richter, 108 Hawai#i 504, 506-07, 122 P.3d 284, 286-87 (App.

2005). Accordingly, the issue presented before this court is

whether the post-decree order enforced the family court’s prior

order, which would be permissible, or modified the family court’s

prior order, which would be impermissible.

In Richter, the ICA was presented with a similar issue

that essentially involved determining whether a post-decree

motion was an enforcement action or a modification action. 108

Hawai#i 504, 122 P.3d 284. The wife filed a post-decree motion

seeking an order compelling the division of certain assets after

more than a year had elapsed since entry of the divorce decree.

Id. at 505-06, 122 P.3d at 285-86. The husband contended that

pursuant to HRS § 580-56(d), the family court no longer had

jurisdiction because the post-decree motion was filed after the

one-year time limit specified in HRS § 580-56(d).14 Id. at 506-

14
This court recently held in Riethbrock v. Lange, No. SCWC-28289
(Haw. Mar. 16, 2012), that HRS § 580-56(d) did not limit the family court’s
jurisdiction to divide the property at issue in that case. In so holding,
this court overruled Boulton v. Boulton, 69 Haw. 1, 730 P.2d 338 (1986), which
held that HRS § 580-56(d) divested the family court of jurisdiction to divide
a former spouse’s “personal estate” one year after the filing of a divorce
decree reserving property division. Id. at 5, 730 P.2d at 340. However,
(continued...)

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07, 122 P.3d at 286-87. The ICA held that the family court

retained jurisdiction to enforce the divorce decree

notwithstanding HRS § 580-56(d) because the post-decree motion

sought enforcement, rather than modification of the divorce

decree. Id.

A review of the record in the instant case supports the

ICA’s conclusion that the imposition of the February 27, 2009

deadline in the family court’s order merely enforced an

obligation that had been previously set forth in the Bifurcated

Divorce Decree and Supplemental Divorce Decree. The Bifurcated

Divorce Decree awarded the marital residence to Aaron, provided

that Aaron “buy out” Bonnie’s “one-half interest.” The decree

ordered Aaron to immediately “deposit in escrow an amount that

equals one-half of the fair market value of the marital residence

minus one-half the current mortgage debt.”

After the family court entered the Bifurcated Divorce

Decree, Aaron advised the court that he could not buy out

Bonnie’s one-half share despite his previous representation that

he could. In the Supplemental Divorce Decree, the family court

recognized that per the Bifurcated Divorce Decree, each of the

parties was “awarded one-half of the equity in the marital

residence.” The family court determined that “[e]ach party is

14
(...continued)
Riethbrock does not affect the holding in Richter that the family court
retains jurisdiction to enforce its decree. See Richter, 108 Hawai#i at 506-
07, 122 P.3d 284 at 286-87.

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therefore entitled to $238,918 as his/her share of the equity in

the home.” Having previously awarded the marital residence to

Aaron subject to a buy out of Bonnie’s one-half share, but now

aware that Aaron could not afford the buyout, the family court

provided Aaron with the following options: (1) offset Bonnie’s

share of the equity in the marital residence with his share of

the marital partnership property; or (2) sell the marital

residence. The family court also indicated in the Supplemental

Divorce Decree that it retained “continuing jurisdiction over the

parties and their property to enforce and implement the

provisions of this decree.”

After the Supplemental Divorce Decree was entered,

Aaron did not take any action, and Bonnie did not receive her

share of the marital residence to which she was entitled. While

it is true that Aaron’s notice of appeal divested the family

court of its jurisdiction to modify the Supplemental Decree, the

family court retained jurisdiction to enforce its previous

orders. See Richter, 108 Hawai#i at 506-07, 122 P.3d at 286-87.

In the instant case, the family court ordered, in pertinent part:
[Aaron] shall pay to [Bonnie] her net share of her
interest in the [marital residence] and her interest
in [Aaron’s] other deposit/retirement accounts after
[Aaron’s] interest in [Bonnie’s] retirement accounts,
deposit accounts and in Caplans have been set-off,
with payment to be made by February 27, 2009 or the
establishment of an escrow account by February 27,
2009 to effect such payment to [Bonnie] no later than
March 27, 2009[.]

Aaron argues that the Supplemental Divorce Decree did

not require Aaron to take any action with regard to the marital

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residence by a certain date, and thus, the February 27, 2009

deadline that appeared in the family court’s February 3, 2009

order modified the Supplemental Divorce Decree. Aaron’s argument

is unpersuasive.15 Aaron’s argument ignores the clear intent of

the Supplemental Divorce Decree. The family court provided Aaron

with three options. When Aaron informed the court he would be

unable to exercise his preferred option (i.e., buyout), and did

not act to exercise any of the other options, it was within the

court’s authority to compel Aaron to fulfill his obligation under

the Supplemental Decree, which was to pay Bonnie one-half of the

value of the marital residence. Accordingly, the ICA did not err

in holding that the family court had jurisdiction to issue the

February 3, 2009 post-decree order.16

15
Additionally, Aaron points to reasons why he did not sell the
house after the family court entered the Supplemental Divorce Decree,
including a turn in the real estate market and Bonnie’s lack of immediate need
for her share. These arguments are unpersuasive because the family court did
not order Aaron to sell the house, and Bonnie’s need for her share of the
equity in the marital residence is irrelevant to the legal issue before this
court.

16
Aaron also asks this court to vacate the family court’s
February 25, 2009 post-decree order that denied Aaron’s Motion to Compel
Compliance with QDRO(s). Aaron provides no argument regarding this issue.
Moreover, this issue was not included in his points of error to the ICA, and
was not addressed by the ICA in its SDO. Because Aaron did not preserve this
issue at the ICA or present any discernible argument on this point, this issue
is deemed waived and will not be addressed further here. See Bitney v.
Honolulu Police Dep’t, 96 Hawai#i 243, 251, 30 P.3d 257, 265 (2001) (“The
general rule provides that issues not properly raised on appeal will be deemed
to be waived.”) (citation, brackets, and internal quotation marks omitted);
HRAP Rule 28(b)(4) (requiring that an opening brief contain a “concise
statement of the points of error” and providing that “[p]oints not provided in
accordance with this section will be disregarded”); HRAP Rule 40.1(d)
(requiring that an application for certiorari contain “[a] brief argument with
supporting authorities”); In re Guardianship of Carlsmith, 113 Hawai#i 236,
277, 151 P.3d 717, 727 (2007) (noting that this court may “disregard a
particular contention if the appellant makes no discernible argument in
support of that position”) (internal quotation marks and brackets omitted).

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IV. Conclusion

Based on the foregoing, we hold that the family court

did not abuse its discretion when it adhered to the Partnership

Model of property division in the instant case, and awarded the

gift and inheritances at issue to Bonnie. We also hold that the

family court had jurisdiction to issue its February 3, 2009 post-

decree order. Accordingly, we affirm the judgment of the ICA.

Peter Van Name Esser for /s/ Mark E. Recktenwald
petitioner
/s/ Paula A. Nakayama
Robert M. Harris for
respondent /s/ James E. Duffy, Jr.

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