***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
Electronically Filed
Supreme Court
SCWC-10-0000044
11-MAY-2012
10:21 AM
IN THE SUPREME COURT OF THE STATE OF HAWAI#I
---o0o---
JULIANNE NGUYEN BERRY, Respondent/Plaintiff-Appellee,
vs.
WAYNE FOSTER BERRY, Petitioner/Defendant-Appellant.
NO. SCWC-10-0000044
CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
(ICA NO. CAAP-10-0000044; FC-D NO. 06-1-0211)
May 11, 2012
RECKTENWALD, C.J., NAKAYAMA, ACOBA,
DUFFY, AND MCKENNA, JJ.
OPINION OF THE COURT BY ACOBA, J.
We hold that (1) the Family Court of the First Circuit
(the court)1 did not abuse its discretion in denying Petitioner’s
October 9, 2009 Motion to Set Aside Divorce Decree (Motion to Set
Aside) seeking to set aside the November 21, 2008 Decree Granting
Absolute Divorce and Awarding Child Custody (Divorce Decree)
because Petitioner/Defendant-Appellant Wayne Foster Berry
1
The Honorable Linda K.C. Luke presided.
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
(Petitioner) had notice that his failure to appear at a scheduled
settlement conference would result in default, and the court
acknowledged that Petitioner’s motion was for Hawai#i Family
Court Rules (HFCR) Rule 60(b) relief, although Petitioner had
failed to cite HFCR Rule 60(b) in support of the motion; (2)
whether the Divorce Decree exceeded the relief previously
requested by Respondent/Plaintiff-Appellee Julianne Nguyen Berry
(Respondent) in her Complaint and Proposed Decree with respect to
the award of copyrights held in Petitioner’s name (hereinafter,
“the copyrights”) need not be decided; inasmuch as (3) the court
abused its discretion in declining to set aside that part of the
Divorce Decree that transferred Petitioner’s entire ownership
interest in the copyrights to Respondent in violation of federal
law. We thus vacate the August 17, 2011 judgment of the ICA
filed pursuant to its July 28, 2011 Summary Disposition Order
(SDO),2 affirming the September 22, 2010 Order Denying Motion to
Set Aside and the Findings of Fact and Conclusions of Law filed
by the court, in part, insofar as it held the court properly
awarded Respondent the copyrights. We vacate that portion of the
Divorce Decree that awarded Respondent all ownership interest in
the copyrights, and remand to the court for a determination of
the economic interest in the copyrights to which Respondent is
entitled. We affirm the Divorce Decree in all other respects.
2
The SDO was filed by Presiding Judge Daniel R. Foley and Associate
Judges Alexa D.M. Fujise and Lisa M. Ginoza.
2
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
I.
The following essential matters, some verbatim, are
from the record and the submissions of the parties.
A.
Petitioner and Respondent were married on December 24,
1992. On January 20, 2006, Respondent filed a complaint for
divorce (Complaint). On September 25, 2006, the court filed an
Order of Dismissal pursuant to HFCR Rule 41(e)(1) for want of
service.3
On October 5, 2006, Respondent filed an Ex Parte Motion
to Reinstate for Good Cause Complaint for Divorce and Summons
Filed on 1/20/2006 and to Extend Time to Serve Complaint for
Divorce and Summons Filed on 1/20/2006 (Motion to Reinstate
Complaint and Extend Time to Serve). Attached was the affidavit
of Respondent’s counsel, Cheryl Brawley (Brawley),4 in which she
declared (1) that the last known address of Petitioner was an
address on Muolea Place in Honolulu, Hawai#i (Muolea address),
3
HFCR Rule 41(e)(1) (2006) provides as follows:
A diligent effort to effect service shall be made in all
actions, and if no service be made within 6 months after an
action or post-decree motion has been filed then after
notice of not less than 10 days to the filing party at the
last known address, the same may be dismissed. Such a
dismissal may be set aside and the action reinstated by
order of court for good cause shown on motion duly filed in
said action within 30 days after mailing of the order of
dismissal and notice to the last known address of the
parties or parties’ counsel.
(Emphasis added.)
4
Respondent’s appellate counsel, who also argued on Respondent’s
behalf at oral argument in this case, is Carl H. Osaki.
3
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
(2) a certified copy of the Complaint was sent to Process Service
Exclusive, LLC (PSE) to be personally served on Petitioner at
that address, (3) on April 7, 2006, PSE notified Brawley it had
been unable to serve Petitioner, it made nine attempts to serve
Petitioner at the Muolea address, Petitioner no longer lived at
that address, and it attempted to serve Petitioner at the United
States District Court, District of Hawai#i on May 5, 2006, but
was unable to do so, and (4) although PSE was told that
Petitioner no longer resided at the Muolea address, Respondent
reasonably believed that Petitioner continued to reside there.
Respondent sought reinstatement of her Complaint and additional
time to serve Petitioner. The court granted Respondent’s motion
in an order filed on October 5, 2006, which reinstated
Respondent’s Complaint and provided Respondent until January 20,
20075 to serve Petitioner with the Complaint.
On March 6, 2007, Respondent filed a Motion for
Personal Service Without the State and Affidavit (Motion for
Personal Service), seeking an order pursuant to HRS § 580-3(b)6
5
The order actually read “January 20, 2006[.]” It is apparent that
the court meant January 20, 2007, and Petitioner conceded in his Non-Hearing
Motion to Dismiss Expired Complaint for Divorce (Motion to Dismiss) that
January 20, 2006 date was “obviously a typographical error[.]”
6
HRS § 580-3(b) (2006 Repl.) provides with respect to service of
the complaint:
If service by an authorized process server is not feasible
or is inconvenient or if the defendant is without the State,
the court may authorize the service to be made by any other
responsible person, or the court may authorize notice of the
pendency of the action and of a time and place of hearing,
which shall be not less than twenty days after the giving of
personal notice, to be given to the defendant personally by
(continued...)
4
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
and HFCR Rule 4(e)7 authorizing personal service by an officer or
person authorized to effect service of legal process under the
laws of Petitioner’s state of residence, Florida. The motion was
granted on March 14, 2007.8 An Affidavit of Service was filed
with the court on August 31, 2007, indicating that Petitioner had
been personally served with the complaint.
B.
On September 12, 2007, Petitioner filed, pro se, a Non-
Hearing Motion to Dismiss Expired Complaint for Divorce (Motion
6
(...continued)
such person and in such manner as the court shall designate
and the case may be heard and determined at or after the
time specified in the notice.
(Emphasis added.)
7
HFCR Rule 4(e) 2007 provides:
(e) Summons: Other Service. Whenever a statute or an order
of court provides for service upon a party not an inhabitant
of or found within the State of a summons, or of a notice,
or of an order in lieu of summons, service shall be made
under the circumstances and in the manner prescribed by the
statute or order. Whenever a statute or an order of court
requires or permits service by publication of a summons, or
of a notice, or of an order in lieu of summons, any
publication pursuant thereto shall be made under the
circumstances and in the manner prescribed by the statute or
order.
(Emphases added.)
8
In his Application, Petitioner complains that Petitioner’s Motion
for Personal Service was granted by the court nearly three months after the
time for service had expired under the order granting Respondent’s Motion to
Reinstate Complaint and Extend Time for Service without further extension by
the court. Petitioner did not expressly raise any challenge to this in his
Motion to Dismiss. Arguably, Petitioner waived any challenge to service of
process. However, Petitioner did note that Respondent was granted an order to
serve him out of the state after the extension of the time for service had
lapsed. Consequently, the court implicitly rejected any argument challenging
the sufficiency of service by denying Petitioner’s Motion. Moreover, it does
not appear that Petitioner’s due process rights were materially affected
inasmuch as Petitioner was not residing in Hawai#i when Respondent was
attempting to serve him with the Complaint, there is evidence that Respondent
had been attempting to serve Petitioner for months, and Petitioner was
eventually personally served with the Complaint.
5
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
to Dismiss). Petitioner argued (1) lack of subject matter
jurisdiction, (2) lack of personal jurisdiction, (3) improper
venue, (4) insufficiency of process, (5) insufficiency of service
of process, (6) failure to state a claim upon which relief may be
granted, and (7) failure to join a party under Hawai#i Rules of
Civil Procedure (HRCP) Rule 19.
C.
On February 4, 2008, Respondent filed with the court a
Motion to Set and Notice of Motion (Motion to Set), her Position
Statement, by way of a proposed decree, (Proposed Decree), Income
and Expense Statement, and Asset and Debt Statement. In the
Proposed Decree, Petitioner indicated she was seeking, inter
alia, sole legal and physical custody of the minor children of
the parties, child support, expenses for tutoring for the
children, medical and dental insurance coverage for the minor
children, and alimony. With respect to the copyrights,
Respondent indicated that “[Petitioner] shall be awarded his
interest in any copyrights/patents obtained during the marriage
and [Respondent] waives any interest therein, provided that
within 15 days of the effective date of [the] Divorce Decree,
[Petitioner] pays [Respondent] a sum representing her interest in
[the] said property[.]”
The court set the matter for a hearing on March 27,
2008. On March 10, 2008, Petitioner filed, pro se, a Motion to
Strike [Respondent’s] Motion to Set and Notice of Motion for a
6
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
Dismissed and Expired Complaint for Divorce (Motion to Strike).9
In his Motion to Set, Petitioner listed 5500 Military Trail in
Jupiter, Florida (Military address) as his address.
Petitioner did not appear at the March 27, 2008
hearing. The court minutes indicate that the court attempted to
contact Petitioner by telephone, the bailiff left a message for
Petitioner on his answering machine informing him that his case
had been set for 9:00 a.m. that day, it was 10:15 a.m.,
Petitioner’s case was being heard at the moment, and Respondent
should call the court back at the given number. That same day,
the court filed Pretrial Order No. 1 setting forth various
deadlines and court dates for the case, including a settlement
conference date of June 19, 2008 and trial date of July 7, 2008.
The court also filed orders dismissing Petitioner’s Motion to
Dismiss and Motion to Strike for “lack of prosecution.” On April
1, 2008, copies of the foregoing orders were mailed to Petitioner
at his last known address, the Military address.
Petitioner was not present at the June 19, 2008,
settlement conference. On June 23, 2008, the court filed
9
In his motion, Petitioner asserted that he filed a Motion to
Dismiss, neither the court nor Respondent responded to his motion, several
clerks of the court confirmed Respondent’s Complaint was dismissed, Petitioner
received a letter from the court indicating that “no further action will be
taken,” in the case, he received Respondent’s Motion to Set and Notice of
Motion at his home in Florida by mail, several clerks of the court confirmed
again that the Complaint had expired and was still “dismissed,” the clerks
cautioned him that they could not give legal advice but suggested he contact
Respondent’s attorney and ask her to withdraw the Motion to Set, Petitioner
did so by letter, and Respondent’s attorney did not respond. As discussed
herein, the court properly dismissed Petitioner’s Motion to Dismiss for lack
of prosecution for Petitioner’s failure to attend the hearing on the motion.
7
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
Pretrial Order No. 2, continuing trial to the week of October 27,
2008 and settlement conference to September 18, 2008. The order
stated in part, “If [Petitioner] fails to appear at settlement
conference, he shall be defaulted.” (Emphasis added.) A
Statement of Mailing was filed by Brawley on June 25, 2008,
indicating that a copy of Pretrial Order No. 2 was mailed to
Petitioner’s Military address.10
The court minutes indicate that Petitioner was “not
present” at the September 18, 2008 settlement conference. On
November 21, 2008, the court filed the Divorce Decree. The
Divorce Decree does not reflect that the court entered default
against Petitioner. However, the September 18, 2008 court
minutes noted that three calls were made for Petitioner “with no
response[,]” the “court minutes reflect that at last hearing the
court stated that if [Petitioner] fails to appear at the next
court hearing court will enter default against him and the
divorce will be granted[, the] court defaulted [Petitioner],” and
the “divorce is granted[.]”
The Divorce Decree granted a divorce to Respondent and
Respondent was awarded, inter alia, sole custody of the parties’
minor children, child support, alimony, and “any and all interest
in all of [Petitioner’s] rights, title and interest to any
copyrights, patents, or any other intellectual property that he
10
HFCR Rule 5 provides that motions may be served “by mailing it to
the attorney or party at the attorney’s or party’s last known address[.]”
8
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
authored or acquired during the period of the parties’ marriage,
including but not limited to” the “copyrights covered by the 37
copyright registrations filed in the United States Copyright
Office” and “all rights, title, and interest of [Petitioner], in,
to or related to any software covered by or related to the End
User License Agreement.” (Emphases added.)
D.
1.
On October 9, 2009, Petitioner filed, pro se, a Motion
to Set Aside. In his motion, he argued that the Divorce Decree
should be set aside because (1) Brawley committed fraud on the
court by “claim[ing] to have noticed [Petitioner] with her
filings and communications” when “she has not[,]” (2) he was not
served with a copy of the Divorce Decree, (3) the children for
whom he owed child support were not his biological children nor
did he adopt them, and (4) federal law, namely, 17 U.S.C. §
201(e),11 prohibits a state court from involuntarily transferring
his copyrights with the sole exception of transfers made pursuant
11
17 U.S.C. § 201(e) provides:
(e) Involuntary Transfer.-- When an individual author's
ownership of a copyright, or of any of the exclusive rights
under a copyright, has not previously been transferred
voluntarily by that individual author, no action by any
governmental body or other official or organization
purporting to seize, expropriate, transfer, or exercise
rights of ownership with respect to the copyright, or any of
the exclusive rights under a copyright, shall be given
effect under this title, except as provided under title 11.
(Emphases added.)
9
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
to Title 11 of the United States Bankruptcy Code. In addition,
he incorporated by reference his Motion to Dismiss, in which he
re-alleged the defenses previously noted.
2.
A hearing on Petitioner’s Motion to Set Aside was
originally set for January 13, 2010.12 An order was filed on
January 13, 2010, continuing the hearing to February 10, 2010.
The order indicates that Timothy Hogan (Hogan) appeared at the
hearing as counsel for Petitioner. This is the first time
Petitioner appears to have been represented by counsel inasmuch
as all prior filings, including his Motion to Set Aside, were
filed pro se. The order further indicated that Petitioner would
be permitted to appear by telephone and must make arrangements
for such appearance.
On January 27, 2010, Respondent filed a Responsive
Memorandum in Opposition to Petitioner’s Motion to Set Aside,
arguing (1) Brawley did attempt to serve Petitioner with
pertinent documents;13 (2) service was not defective because HRS
12
The court minutes indicate that counsel for both Respondent and
Petitioner were present at the hearing, the hearing was continued to February
10, 2010, and Petitioner was permitted to attend the February hearing by
telephone.
13
As to Petitioner’s first argument, Respondent contended that (a)
several attempts were made to serve Petitioner to no avail, (b) Petitioner was
personally served with the Complaint on August 14, 2007, (c) in Petitioner’s
March 10, 2008 Motion to Strike, he provided the Military address and a copy
of Pretrial Order No. 1 was sent to that address, (d) on April 11, 2008,
Petitioner acknowledged by letter that he received copies of the Motion to Set
and the orders dismissing his Motion to Strike and Motion to Dismiss, (e)
Petitioner stated in that letter that he checks his mail daily, but “‘in
addition to regular mail . . . please email anything you file[;]’” he did not
mention his landlord facing foreclosure or his failure to receive mail at his
(continued...)
10
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
§ 580-3 allows for service of process outside Hawai#i; (3) the
court had jurisdiction over the Complaint pursuant to HRS § 580-
3.514 since both parties were residents of Hawai#i at the time the
Complaint was filed;15 and (4) the court properly entered default
judgment against Petitioner and Petitioner’s attempts to contest
the court’s judgment were “‘[t]oo little, too late.’”
13
(...continued)
home address, (f) on June 5, 2009, Brawley sent a copy of her Settlement
Conference Statement to the facsimile number provided by Petitioner and the
transmission sheet shows that the facsimile was in fact sent, (g) on June 25,
2008, a copy of Pretrial Order No. 2 was mailed to the Military address, which
set forth new dates for the settlement conference and trial, and further
indicated that default judgment would be entered against him if he failed to
appear at the settlement conference.
14
HRS § 580-3.5 (2006 Repl.) provides:
In any proceeding in the family court, the court shall have
the power to render a personal judgment against a party who
is outside of this State and over whom jurisdiction is
acquired by service of process in the manner set forth in
section 580-3(b) or (c), if the party was personally served
with a copy of the summons or order to show cause and
complaint or other pleading upon which the judgment is based
and if the party was a domiciliary of this State (1) at the
time that the cause of action which is the subject of the
proceeding arose, or (2) at the time of the commencement of
the proceeding, or (3) at the time of service.
(Emphases added.) See note 8, supra, for the text of HRS § 580-3(b). HRS §
580-3(c) provides with respect to service of the complaint:
If the defendant is without the circuit, the court may
authorize service by registered or certified mail, with
request for a return receipt and direction to deliver to
addressee only. The return receipt signed by the defendant
shall be prima facie evidence that the defendant accepted
delivery of the complaint and summons on the date set forth
on the receipt. Actual receipt by the defendant of the
complaint and summons sent by registered or certified mail
shall be equivalent to personal service on the defendant by
an authorized process server as of the date of the receipt.
15
Respondent noted that Petitioner “continued to profess his
residency status even until March 29, 2007, when he filed his Complaint and
Demand for Jury Trial in Honolulu District Court” in a non-family court-
related case.
11
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
Respondent failed to respond to Petitioner’s third
argument regarding not having been served with the Divorce Decree
or his fifth argument regarding not being the biological or
adoptive father of the children for whom he owed child support
under the Divorce Decree.
3.
The hearing on Petitioner’s Motion to Set Aside took
place as scheduled on February 10, 2010. Petitioner appeared at
the hearing by telephone. Petitioner argued that the Divorce
Decree should be set aside because Petitioner was never served
with the Divorce Decree, there was “[n]o attempt at all at an
equitable division,” Petitioner had meritorious defenses
regarding child support and alimony, the Divorce Decree exceeded
the relief sought in the Complaint and Proposed Decree, and the
transfer of Petitioner’s copyrights to Respondent violated
federal law.
The court told Petitioner, now represented by counsel,
that it did “not see any reference in [the] October 9, 2009
[Motion to Set Aside] to any specific rule.” The court then
stated that it found “good cause to deny the motion to set aside
the decree[,]” stating, “On the face of the motion I do not
believe [Petitioner] has cited sufficiently to any Family Court
rule or statutory cite that would obligate this court to set
aside the divorce decree.” After pointing out that Petitioner
had failed to cite a court rule, the court noted, “substantively,
12
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
[Petitioner,] you’re arguing for [HFCR Rule] 60B relief.” The
court then ruled, “The court nonetheless is denying the relief
sought[.] . . .”16
4.
The court filed the following Findings of Fact
(findings) and Conclusion of Law (conclusions) regarding
Petitioner’s Motion to Set Aside on September 22, 2010.
FINDINGS OF FACT
1. The parties were married on December 24, 1992, in
Las Vegas, Nevada.
2. [Respondent] became a resident of the State of
Hawai#i in 1975, and [Petitioner] became a resident of the
State of Hawai#i in 1989.
3. On January 20, 2006, [Respondent] filed the
Complaint for Divorce.
4. Numerous attempts were made in an effort to serve
[Petitioner].
5. [Respondent] hired a process server to effectuate
service of process. Nine (9) attempts were made to
effectuate service of process on [Petitioner] at his
16
HFCR Rule 60(b) provides:
(b) Mistakes; Inadvertence; Excusable Neglect; Newly
Discovered Evidence; Fraud. On motion and upon such terms as
are just, the court may relieve a party or a party's legal
representative from any or all of the provisions of a final
judgment, order, or proceeding for the following reasons:
(1) mistake, inadvertence, surprise, or excusable neglect;
(2) newly discovered evidence which by due diligence could
not have been discovered in time to move for a new trial
under Rule 59(b); (3) fraud (whether heretofore denominated
intrinsic or extrinsic), misrepresentation, or other
misconduct of an adverse party; (4) the judgment is void;
(5) the judgment has been satisfied, released, or
discharged, or a prior judgment upon which it is based has
been reversed or otherwise vacated, or it is no longer
equitable that the judgment should have prospective
application; or (6) any other reason justifying relief from
the operation of the judgment. The motion shall be made
within a reasonable time, and for reasons (1), (2), and (3)
not more than one year after the judgment, order, or
proceedings was entered or taken. For reasons (1) and (3)
the averments in the motion shall be made in compliance with
Rule 9(b) of these rules. A motion under this subdivision
(b) does not affect the finality of a judgment or suspend
its operation. This rule does not limit the power of a court
to entertain an independent action to relieve a party from a
judgment, order, or proceeding, or to set aside a judgment
for fraud upon the court.
13
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
residence, located at [the Muolea address].
6. When [Respondent] learned that [Petitioner] was
required to appear at Federal District Court in Honolulu,
she sent a process server to the federal district court.
7. The process server waited for three (3) hours. But
again his efforts failed.
8. On October 5, 2006, [Respondent] filed her first
request to reinstate the matter, and to extend time to serve
[the C]omplaint . . . and summons upon [Petitioner].
9. [Respondent] learned that [Petitioner] relocated
to Florida.
10. On March 14, 2007, [Respondent] filed her Motion
for Personal Service without the State.
11. On August 14, 2007, [Petitioner] was served in
Florida.
12. [Petitioner] filed his Motion to Dismiss . . .(No
hearing was held).
13. On February 6, 2008, [Respondent] filed her
Motion to Set.
14. On March 10, 2008, [Respondent] filed his Motion
to Strike[.]
15. [Petitioner] provided his contact information as:
[Military address], Telephone number [xx], facsimile
transmission number [xx 17].
16. [Petitioner’s Motion to Strike] was set for
hearing on March 27, 2008, before the Honorable R. Mark
Browning.
17. [Petitioner] failed to appear at the hearing,
however, Judge Browning attempted to telephone [Respondent]
at the telephone number he provided.
18. No one answered the telephone, and the court
terminated the call.
19. [Petitioner’s] motion was denied for failure to
prosecute the matter.
20. Pre-trial Order No.1 was issue [sic], which
established all deadlines and set this matter for trial.
21. On April 11, 2008, [Petitioner] communicated with
[Brawley], acknowledging that he received, via mail, copies
of a transmittal, “copy of an Order to Set, copy of an Order
denying [Petitioner]'s motion to dismiss.
22. On June 5, 2009, [Respondent], through her
attorney, faxed an unfilled [sic] copy of her Settlement
Conference Statement to the telephone number provided by
[Petitioner].
23. On June 25, 2008, a copy of Pre-Trial Order No. 2
was mailed to [Petitioner] at his [Military] address he
previously provided.
24. On September 5, 2008, [Petitioner] communicated
with [Brawley], referring to his [Military] address.
25. The parties were divorced on November 21, 2008.
26. Copies of the [Divorce Decree] were mailed, via
certified mail, parcel number 7003050000029036, to
[Petitioner], at his [Military] address.
27. On December 1, 2008, parcel number
7003050000029036 was delivered to [Petitioner’ Military]
address.
17
Petitioner’s contact information is deleted for purposes of
privacy.
14
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
28. [Petitioner] was served with [Respondent]’s
Motion and Affidavit for Post Decree Relief.
29. The hearing on Respondent’s Motion [to Enforce]
was scheduled for February 10, 2010.
30. [Petitioner] filed his Motion to Set Aside on
October 7, 2009.
CONCLUSIONS OF LAW
Based upon the foregoing [findings], the preponderance
of the evidence, notice of the records and files, and
arguments of counsel, the Court hereby enters the following
[conclusions]:
1. The Court had jurisdiction over the parties and
the subject matter herein.
2. The Court had personal jurisdiction over
[Petitioner] when the Complaint for Divorce was filed on
January 20, 2006, because [Petitioner] by his own admission,
continued to reside in Hawai#i until March 29, 2007, when he
filed his Complaint and Demand for Jury Trial in Honolulu
Federal Court [in an unrelated matter].
3. [Petitioner]'s Motion to Set Aside . . . was
denied on March 27, 2008, and [Petitioner] did not file a
motion for reconsideration. Therefore, Judge Browning's
decision denying [Petitioner]’s motion stands[.]
4. [Petitioner] failed to cite to any legal authority
which would have provided a basis for relief.
5. Therefore, [Petitioner]’s Motion [to Set Aside] is
denied.
(Emphases added.)
II.
Petitioner filed a notice of appeal on September 28,
2010.
A.
Petitioner argued in his opening brief that (1) the
Divorce Decree was void because it went beyond the relief
requested in the Complaint and Proposed Decree with respect to
the copyrights, (citing In re Genesys Data Technologies, Inc., 95
Hawai#i 33, 40, 18 P.3d 895, 902 (2001), Bank of Hawai#i v. Shinn,
120 Hawai#i 1, 10, 200 P.3d 370, 379 (2008) and Long v. Long, 101
Hawai#i 400, 69 P.3d 528 (App. 2003)); (2) even if the Divorce
Decree was not void as violative of Petitioner due process
15
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
rights, Petitioner was entitled to relief pursuant to HFCR Rule
60(b), in light of his meritorious defenses;18 (3) the court
abused its discretion in entering default against him for failing
to travel from Florida to Hawai#i, instead of allowing him to
appear by telephone, and (4) the court abused its discretion in
denying his Motion to Set Aside because its sole rationale for
denying his Motion to Set Aside was his failure to cite “the rule
[up]on which his motion was based.”
B.
In its SDO, the ICA noted that both Petitioner’s and
Respondent’s briefs did not conform with the requirements of
Hawai#i Rules of Appellate Procedure (HRAP) Rules 28(b) and
32(a). The ICA noted that under HRAP Rule 28(b)(4), “‘[p]oints
not presented in accordance with this section will be
disregarded, except that the appellate court, at its option, may
notice a plain error not presented.’” Berry, 2011 WL 3250422, at
*1 (quoting HRAP Rule 28(b)(4)). The ICA stated that it
“notice[d] no plain error.” Id.
The ICA nevertheless proceeded to consider the merits
of Petitioner’s arguments, characterizing the arguments raised in
18
Petitioner claimed defenses included that (a) Respondent admitted
in her Complaint that Petitioner was not the father of the children, (b)
Respondent met with attorneys representing the “adjudicated copyright
infringer” of his copyrights possibly resulting in a decrease to the marital
estate, (c) federal law prohibited the court from involuntarily transferring
his copyrights to Respondent, and (d) there is no evidence in the record
establishing a basis for child support, alimony, or property division in light
of the Asset and Debt Statement filed by Petitioner.
16
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
Petitioner’s opening brief as follows: the Divorce Decree (1) is
void under HFCR Rule 60(b)(4); (2) violated due process because
the Complaint and Respondent’s Proposed Decree failed to give him
adequate notice that he would lose his copyrights, be responsible
for all debts, and have no assets;19 and (3) is void because
service of the Divorce Decree and Pretrial Order No. 2 was
inadequate. Although the ICA’s characterization of Petitioner’s
arguments differs from the specific arguments raised in his
opening brief, the ICA appears to have addressed the majority of
the arguments raised by Petitioner.
As to the first argument, the ICA noted that HFCR Rule
60(b)20 permits the court to “‘relieve a party . . . from any or
all of the provisions of a final judgment, order, or proceeding”
if “the judgment is void[.]” Id. n.3. According to the ICA, a
judgment is void only “‘if the court that rendered it lacked
jurisdiction over the subject matter or the parties “‘or
otherwise acted in a manner inconsistent with due process of
law.’” Id. (quoting Citicorp Mortg., Inc. v. Bartolome, 94
Hawai#i 422, 428, 16 P.3d 827, 833 (App.2000) (quoting In re Hana
Ranch Co., 3 Haw. App. 141, 146, 642 P.2d 938, 941 (1982)). The
19
Notwithstanding the ICA’s characterization of Petitioner’s
argument, Petitioner argued only that the Divorce Decree exceeded the relief
sought in the Complaint and Proposed Decree with respect to the copyrights.
20
It should be noted that Petitioner did not expressly argue that
the Divorce Decree was void under HFCR Rule 60(b)(4) to the court or to the
ICA. Instead, as set forth supra, Petitioner contended that the Divorce
Decree was void because the relief went beyond what was asked for in the
Complaint.
17
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
ICA determined that nothing in the record suggested that the
court lacked jurisdiction.21 Id.
With respect to due process, the ICA determined that
although the award of Petitioner’s copyrights to Respondent “was
greater than what was originally proposed,” (1) “‘the family
court has broad discretion to divide and distribute the estate of
the parties in a just and equitable manner[,]” id. at *4 (quoting
Baker v. Bielski, 124 Hawai#i 455, 463, 248 P.3d 221, 229 (App.
2011)), including the power to divide Petitioner’s intellectual
property for purposes of equitable division, id. (citing Teller
v. Teller, 99 Hawai#i 101, 108, 53 P.3d 240, 247 (2002)), and (2)
Petitioner “was notified via multiple documents served on him
that his copyrights, debts, and assets would be considered in the
divorce proceedings” and thus, “received adequate notice
regarding the impact of the proposed divorce on his copyrights,
assets, and debts[.]” Id. Particularly, the ICA noted that the
record indicates that Petitioner was personally served with the
Complaint and served with Respondent’s Proposed Decree by mail
and facsimile.
As to the second argument, the ICA concluded the court
“did not abuse its discretion when it denied [Petitioner]’s
Motion to Set Aside.” Id. The ICA noted that “[i]n his Motion
21
The ICA did not indicate whether it was referring to jurisdiction
over the subject matter or over the parties but the ICA must have been
referring to both inasmuch as it resolved the appeal in Respondent’s favor.
18
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
to Set Aside, [Petitioner] presented arguments regarding custody,
alimony, copyright, etc., the very issues that were part of the
proceedings in which he failed to participate.” Id. at *4.
Finally, as to Petitioner’s third argument, the ICA
determined that “[o]n November 24, 2008, a copy of the Divorce
Decree was mailed to [Petitioner] at the Military address via
certified mail” and “[a] United States Postal Service Track and
Confirm document verified that the document was delivered to the
Military address on December 1, 2008.” Id. at *3.
III.
Petitioner lists the following questions in his
Application:
1. Whether the ICA gravely erred in its conclusion that
the Points of Error were not property [sic] preserved
or alternatively whether it erred when it concluded
that no Plain Error existed to reverse the [court]’s
entry a [sic] default decree of divorce that exceeded
any relief previously requested by the plaintiff that
was, in fact, materially contrary to the requested
relief contrary to established precedent.
2. Whether the ICA gravely erred in its conclusion that
the Points of Error were not property [sic] preserved
or alternatively that the Plain Error existed to
reverse the [court] because a state court lacks the
power to cause the involuntary transfer of a copyright
when federal law preempting state law specifically
prohibits any court from such an act.
3. Whether the ICA gravely erred in its conclusion that
the Points of Error were not property [sic] preserved
or alternatively that the Plain Error existed in
concluding that the [court] had discretion to enter
default as a sanction for a pro se defendant not
traveling from Florida to Hawai#i to attend a
settlement conference when the record showed he had
not received actual notice of the continued conference
let alone the threat to default him if he failed to
come to Hawai#i and refused to set it aside because
the pro se defendant didn’t cite a court rule.
(Emphases added.)
19
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
Respondent filed an Opposition to Petitioner’s
Application on November 25, 2011 (Opposition). As to
Petitioner’s first question, Respondent responds that (1) “the
pleadings served on [Petitioner] put him on notice that the
[court] would make an equitable award of [his] intellectual
property rights that had accrued during the marriage[,]” (2) the
Proposed Decree provided that the ownership of intellectual
property would go to Respondent if Petitioner “did not pay
[Petitioner] her interest in such intellectual property within a
specified time period[,]” and (3) ownership of such intellectual
property was awarded to Respondent since Petitioner failed to
participate in the court proceedings.22
IV.
Initially, Petitioner argues that the ICA erred in
concluding that his brief did not comport with HRAP Rule 28.
Petitioner asserts that in his opening brief, he cited to the
court minutes, which indicated that he was challenging the
court’s denial of his Motion to Set Aside. The portion of the
minutes cited to by Petitioner read: “In reviewing
[Petitioner’s] motion, there is no reference to any rules. . . .
On the face of the motion[,] [Petitioner] has not cited any [rule
22
In the Petitioner’s Response to Respondent’s Opposition (Response)
filed by Petitioner on November 30, 2011, Petitioner contends that although
the court’s denial of his Motion to Set Aside is reviewed for an abuse of
discretion, a court has no discretion to uphold a void judgment. (Citing
Bartolome, 94 Hawai#i at 428, 16 P.3d at 833.) Petitioner reiterates his
belief that the Divorce Decree was void as violative of his due process rights
since it exceeded the relief sought in the Complaint with respect to
copyrights.
20
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
of the HFCR] that would obligate this court to set aside the
Divorce Decree.”23 [RA at 11] Contrary to Petitioner’s
assertion, citation to the court’s minutes is not a citation to a
finding or conclusion, which HRAP Rule 28(b)(4)(C) requires. Id.
(mandating that a point of error include “either a quotation of
the finding or conclusion urged as error or reference to appended
findings and conclusions” where the point of error “involves a
finding or conclusion of the court or agency”) Petitioner’s
citation to the court’s minutes was not included in his “points
of error” but in his “statement of the case.”
The ICA was correct that Petitioner’s brief did not
comply with the requirements of HRAP Rule 28.24 However, this
court may nonetheless consider Petitioner's arguments on the
23
Respondent asserts in her Opposition that (1) this court reviews
the court’s denial of Petitioner’s Motion to Set Aside for an abuse of
discretion, (2) Petitioner delayed the instant proceedings for nearly a year
with “clear knowledge of the [] court proceedings[,]” and (3) thus, there was
sufficient reason for the court to deny the Motion to Set Aside.
24
It appears that Petitioner’s opening brief does cite to the record
in support of the majority of facts and references to the court, but did not
do so for every single fact or reference to the court. Also, Petitioner
concedes that he failed to append relevant documents. The ICA was correct
that Petitioner’s points of error did not expressly allege the error committed
by the court and contained no reference to where in the record the alleged
error occurred or where in the record the alleged error was objected to or
brought to the attention of the court. Finally, while several of his
challenges arguably implicate findings and conclusions of the court,
Petitioner did not cite to specific findings or conclusions in raising his
challenges. Petitioner contends that his citation to the court minutes
indicated that he was challenging the court’s refusal to set aside the Divorce
Decree.
However, HRAP Rule 28(b)(4)(C) requires “a quotation of the
finding or conclusion urged as error or reference to appended findings and
conclusions” in support of each point of error involving a finding or
conclusion. Petitioner’s points of error do not cite to a single finding or
conclusion. The reference to the court’s minutes was in his “statement of
facts,” not his “points of error.”
21
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
merits. See HRAP Rule 28 (“[T]he appellate court, at its option,
may notice a plain error not presented.”)
V.
A.
With respect to the questions raised in Petitioner’s
Application, we first address Petitioner’s third question.
Petitioner asks whether it was an abuse of discretion for the
court to enter default against him “as a sanction” for failing
“to travel from Florida to Hawai#i to attend a settlement
conference when the record showed he had not received actual
notice of the continued conference let alone the threat to
default him if he failed to come to Hawai#i” and in denying his
Motion to Set Aside on the ground that Petitioner failed to “cite
a court rule.” The sole argument presented in connection with
the foregoing question is as follows:
The Opening Brief pointed to the error in the findings
citing to both the record and the text of the minute order
that made it clear that the error was based on the [court’s]
erroneous finding that the Petitioner-Defendant should be
denied relief because as a pro se litigant he failed to cite
to a family court rule.
While the foregoing argument is indiscernible and could
be disregarded, State v. Bui, 104 Hawai#i 462, 464 n.2, 92 P.3d
471, 473 n.2 (2004) (stating that “[i]nasmuch as Defendant
“presents no discernable argument in support of this
contention[,] . . . it is [this court’s] prerogative to disregard
this claim”), Petitioner’s argument is somewhat apparent from the
question itself. The first part of the third question asks
22
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
whether the court abused its discretion when it defaulted
Petitioner for not attending a settlement conference when
Petitioner had not received actual notice of the settlement
conference or the threat to default.
In Rearden Family Trust v. Wisenbaker, 101 Hawai#i 237,
250-51, 65 P.3d 1029, 1042-43 (2003), the trial court entered
default against the defendant, a non-resident, after he failed to
personally appear at a settlement conference, although his
attorney appeared on his behalf. This court viewed “the sanction
of a default judgment [as] a harsh one,]” and concluded that the
court’s denial of the defendant’s motion to set aside as error.
Id. at 254, 65 P.3d at 1046. However, unlike the instant case,
in Rearden, the defendant had made “settlement proposals and did
engage in [settlement conferences] at the behest of the court.”
Id. This court also noted that the plaintiffs settlement
conference statement was untimely and plaintiffs had also failed
to attend two settlement conferences. Id. at 255, 65 P.3d at
1047.
In contrast, Petitioner did not appear at the scheduled
hearings, the first scheduled settlement conference, or the
rescheduled settlement conference on September 18, 2008.
Petitioner did not engage in settlement discussions or file his
own settlement conference statement. Aside from the Motion to
Dismiss and Motion to Strike that were dismissed after Petitioner
failed to appear at the hearings on those motions, Petitioner did
23
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
not defend against Respondent’s filings. Petitioner’s Motion to
Dismiss did not specifically challenge alimony, child support,
and equitable division of the parties’ property. Under these
circumstances, and where Petitioner had notice that the court
would default him in the event he failed to appear at the
rescheduled settlement conference on September 18, 2008, the
court did not abuse its discretion in finding Petitioner in
default. See Bettencourt v. Bettencourt, 80 Hawai#i 225, 232,
909 P.2d 553, 560 (1995) (concluding that “it was not an abuse of
discretion . . . to find appellant in default” where the record
indicated that the appellant’s counsel had been notified of the
rescheduled hearing, although the appellant maintained he had not
received notice).25
Furthermore, this is not a case in which Petitioner did
not have notice that he would be defaulted in the event he failed
to appear at the settlement conference. See Long, 101 Hawai#i at
408, 69 P.3d at 536 (concluding that the trial court abused its
discretion by summarily entering default against the defendant
because “there was no notice to [the defendant] or his attorney
prior to the conference that default was being considered”).
Petitioner may be charged with having notice of the settlement
conference and the threat of default. Pretrial Order No. 2
25
Although Petitioner argues that the court should not have entered
default under the facts of this case, none of the parties question the court’s
authority after prior notice, to enter default for a party’s failure to attend
a scheduled settlement conference. Cf. HFCR Rule 94(c) (vesting the court
with the authority to sanction a pro se party for his or her failure to appear
at any conference set by the court pursuant to HFCR Rule 37(b), which includes
the authority to render a judgment by default as a sanction).
24
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
indicated that “Settlement Conference is scheduled for 9/18/08 at
2:30.” It also stated that, “[i]f [Petitioner] fail[ed] to
appear at [the] settlement conference, he shall be defaulted.”
HFCR Rule 5 provides that as to “orders required by its terms to
be served,” “service upon a party[26] shall be made by delivering
a copy to the . . . party or by mailing it to the . . . party at
the . . . party's last known address or, if no address is known,
by leaving it with the clerk of the court.” (Emphases added.)
The rule additionally provides that “[s]ervice is complete upon
mailing.”
It is apparent from the record, as set forth above,
that Petitioner’s last known address was his Military address. A
Statement of Mailing filed by Brawley indicates that a copy of
Pretrial Order No. 2 was mailed to Petitioner at his Military
Address on June 25, 2008. See finding 23. Petitioner continued
to file documents bearing the Military address even after
Pretrial Order No. 2 was sent to him at that address. On August
6, 2008, Petitioner filed a “First Request for Answers to
Interrogatories” dated June 28, 2008, and listed his address as
the Military address. In addition, Petitioner attached to his
Motion to Set Aside an unfiled letter that he sent to Brawley on
September 5, 2008 regarding the various documents he had received
in the case, and that letter once again referred to the Military
address as his address. Thus, Petitioner may be deemed to have
26
As indicated supra, service was being made on Petitioner because
he was proceeding pro se.
25
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
been served with Pretrial Order No. 2 and provided notice that he
would be defaulted in the event he failed to appear at the
settlement conference. See finding 23.27
B.
The second part of Petitioner’s third question asks
whether the court abused its discretion when it refused to set
aside the Divorce Decree on the ground that Petitioner failed to
cite a court rule. “A court abuses its discretion whenever it
exceeds the bounds of reason or disregards rules or principles of
law or practice to the substantial detriment of a party.” Id. at
253, 65 P.3d at 1045 (ellipsis, internal quotation marks, and
citation omitted).
At the hearing, the court did note that it did “not see
any reference in [the] October 9, 2009 [Motion to Set Aside] to
any specific rule.” In finding “good cause to deny the motion to
set aside the decree[,]” the court stated, “On the face of the
motion I do not believe [Petitioner] has cited sufficiently to
any Family Court rule or statutory cite that would obligate this
court to set aside the divorce decree.” Conclusion 4 also states
“[Petitioner] failed to cite to any legal authority which would
have provided a basis for relief.”
However, the court did not deny his Motion to Set Aside
solely on the ground that he failed to cite a court rule. The
court noted that “substantively,” Petitioner was “arguing for
27
Petitioner did not expressly challenge this finding on appeal.
26
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
[HFCR Rule] 60B relief.” However, the court said, “The court
nonetheless is denying the relief sought[,]” indicating its
ruling on the merits of Petitioner’s HFCR Rule 60(b) claims.
C.
Although not expressly raised in his Application, it
appears the court properly denied Petitioner’s Motion to Set
Aside with respect to alimony, child support, and equitable
division. The court filed the Divorce Decree on November 21,
2008. Petitioner did not file his Motion to Set Aside until
October 9, 2009, which Petitioner maintained at the hearing was
grounded in HFCR Rule 60(b), although he had not cited the rule
in his motion.28 HFCR Rule 60(b) permits the court to relieve a
party from any or all of the provisions of a final judgment,
order, or proceeding for the following reasons:
(1) mistake, inadvertence, surprise, or excusable neglect;
(2) newly discovered evidence which by due diligence could
not have been discovered in time to move for a new trial
under Rule 59(b); (3) fraud (whether heretofore denominated
intrinsic or extrinsic), misrepresentation, or other
misconduct of an adverse party; (4) the judgment is void;
(5) the judgment has been satisfied, released, or
discharged, or a prior judgment upon which it is based has
been reversed or otherwise vacated, or it is no longer
28
It is noted that Petitioner maintained at the hearing on his
Motion to Set Aside that he did not obtain a copy of the Divorce Decree.
However, the record indicates that a copy of the Divorce Decree was sent to
Petitioner at his last known address on November 24, 2008. Petitioner noted
at the hearing that the proof of mailing was not filed with the court until a
year after the Divorce Decree was filed. Respondent contended in response
that she was “not required to send a copy of th[e] decree certified mail to
[Petitioner],” but did so in light of Petitioner’s “history[,]” of apparently
failing to participate in the proceedings. Although the proof of mailing was
not filed at the time of service, it does indicate that Petitioner was served
at his last known address only days after the Divorce Decree was filed. In
addition, as indicated in the findings, see finding 27, a “Track & Confirm”
receipt indicates that the Divorce Decree was delivered to Petitioner on
December 1, 2008. Petitioner did not specifically challenge this finding on
appeal. Moreover, Petitioner apparently obtained the Divorce Decree as
evidenced by this response thereto by way of his Motion to Set Aside.
27
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
equitable that the judgment should have prospective
application; or (6) any other reason justifying relief from
the operation of the judgment.
While Petitioner maintained at the February 10, 2010
hearing on his Motion to Set Aside that he had “meritorious
defenses[,]” Petitioner did not indicate what those defenses
were, except that with respect to child support, he argued that
the children were not his biological children.29 Petitioner did
not indicate at the hearing why he had failed to raise these
defenses previously, or identify which provision of HFCR Rule
60(b) would entitle him to relief.
Additionally, Petitioner did not present any argument
pertaining to these issues in his Application. Thus, Petitioner
may be said to have waived his arguments on these issues with
respect to the court’s denial of his Motion to Set Aside in the
instant writ. See E & J Lounge Operating Co., Inc. v. Liquor
Comm’n of City and County of Honolulu, 118 Hawai#i 320, 347, 189
P.3d 432, 459 (2008) (“[I]nasmuch as the parties did not raise
these issues in their appeal to the ICA and Petitioner did not
raise these issues in its Application, the issues are deemed
waived and need not be considered.”) In any event, as the ICA
noted, the court defaulted Petitioner on these issues after his
repeated failure to appear in this case and these issues were
29
It is noted that notwithstanding Petitioner’s argument regarding
child support, HRS § 584-4(a)(1) states that “[a] man is presumed to be the
natural father of a child” if “[h]e and the child's natural mother are or have
been married to each other and the child is born during the marriage[.]”
Petitioner does not challenge Respondent’s statement in her complaint that she
was pregnant with the minor children (twins) at the time of the parties
marriage, or that the children were born during the parties’ marriage.
28
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
“the very issues that were part of the proceedings in which
[Petitioner] failed to participate.” Berry, 2011 WL 3250422, at
*3. Based on the specific arguments raised in Petitioner’s
Application, the court cannot be said to have abused its
discretion in not setting aside the Divorce Decree inasmuch as
the court found that Petitioner had prior notice of the
settlement conference30 and the possibility of default, and
appears to have considered Petitioner’s arguments in the context
of HFCR Rule 60(b). However, as discussed infra, the court did
abuse its discretion in refusing to set aside that portion of the
Divorce Decree transferring Petitioner’s entire ownership
interest in the copyrights to Respondent.
VI.
In connection with Petitioner’s first question
Petitioner maintains the Divorce Decree violated his due process
rights insofar as he had no notice that the copyrights themselves
would be awarded to Respondent in the final Divorce Decree as
opposed to only an equitable split of proceeds derived from the
copyrights, as reflected in the Proposed Decree. Shinn, 120
Hawai#i at 10, 200 P.3d at 379 (stating that “the purpose of HRCP
Rule 54(c) is to provide a defending party with adequate notice
upon which to make an informed judgment on whether to default or
actively defend the action”) (brackets, internal quotation marks,
and citation omitted)); Genesys Data Technologies, 95 Hawai#i at
30
See finding 23 indicating that Petitioner received Pretrial Order
No. 2 on June 25, 2008.
29
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
40, 18 P.3d at 902 (stating that “a default judgment is not void
for violating HRCP Rule 54(c) unless the violation deprived the
defaulting party of due process by failing to provide notice of
the scope of the claim and a meaningful opportunity to defend
against it”); Long, 101 Hawai#i at 400, 69 P.3d at 528 (stating
that Rule 54(c) requires that “‘[a] judgment by default shall not
be different in kind from or exceed in amount from that which was
prayed for in the demand for judgment’”) (brackets in original)).
He argues that the ICA gravely erred in failing to notice as
plain error that the relief awarded Respondent in Divorce Decree
as to the copyrights “went far beyond the prayer in the
complaint.” Because we conclude in the subsequent section that
the court abused its discretion in refusing to set aside the
award of all of Petitioner’s ownership interest in the copyrights
to Respondent in violation of federal law, we do not discuss this
question.
VII.
In connection with his second question, Petitioner
argues that the Divorce Decree violates federal law.31 In his
31
Article VI, section 2 of the United States Constitution states as
follows:
This Constitution, and the Laws of the United States which
shall be made in Pursuance thereof; and all Treaties made,
or which shall be made, under the Authority of the United
States, shall be the supreme Law of the Land; and the Judges
in every State shall be bound thereby, any Thing in the
Constitution or Laws of any State to the Contrary
notwithstanding.
The Supreme Court has explained that state law is pre-empted where, inter
alia, “that law actually conflicts with federal law[.]” Cipollone v. Liggett
(continued...)
30
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
Motion to Set Aside, Petitioner argued that 17 U.S.C. § 201(e)
prohibited the involuntary transfer under the Divorce Decree of
his entire ownership interest in his copyrights.32 The court did
not specifically address Petitioner’s argument in this regard.
On appeal to the ICA, Petitioner again argued that the court
abused its discretion in failing to set aside the Divorce Decree
because 17 U.S.C. §§ 201(e) and 301(a)33 prohibited the transfer
of his ownership interest in his copyrights. Respondent did not
respond to this argument in her Answering Brief. The ICA,
relying on Teller, 99 Hawai#i at 108, 53 P.3d at 247, concluded
that the court had the power to equitably divide the copyrights,
but did not address whether such transfer was permissible under
federal copyright law.
31
(...continued)
Group, Inc., 505 U.S. 504, 516 (1992). The Divorce Decree purported to
transfer all of Petitioner’s ownership interest in the copyrights, apparently
including those “exclusive rights within the general scope of copyright as
specified by [17 U.S.C. § 106]” that “are governed exclusively by [the
Copyright Act,]” 17 U.S.C. § 301. Under the circumstances presented here,
where federal law directly preempts the application of state law, we conclude
that there are extraordinary circumstances justifying relief under HFCR Rule
60(b)(6). Thus, we address Petitioner’s preemption claim in this case.
32
See page 9 n.13 for text of 17 U.S.C. § 201(e).
33
17 U.S.C. § 301(a) states as follows:
(a) On and after January 1, 1978, all legal or equitable
rights that are equivalent to any of the exclusive rights
within the general scope of copyright as specified by
section 106 in works of authorship that are fixed in a
tangible medium of expression and come within the subject
matter of copyright as specified by sections 102 and 103,
whether created before or after that date and whether
published or unpublished, are governed exclusively by this
title. Thereafter, no person is entitled to any such right
or equivalent right in any such work under the common law or
statutes of any State.
(Emphases added.)
31
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
In his Application, Petitioner argued that the ICA
erred in relying on Teller inasmuch as the transfer of copyrights
is preempted by federal law. In her Opposition, Respondent did
not make any arguments regarding federal copyright law and
instead, urged that the transfer of the copyrights to her was
permitted by Teller, 99 Haw. at 108, 53 P.3d at 247. On January
24, 2012, this court ordered supplemental briefing on the
applicability of federal copyright law.
In their supplemental briefs, the parties rely
primarily on two cases: Rodrigue, 218 F.3d at 432 and In re
Marriage of Worth, 195 Cal. App. 3d 768 (Cal. Ct. App 1987).
Petitioner reads Rodrigue as holding that “the rights to money
derived from a copyright [are] subject to equitable division but
the exclusive rights of ownership remain the unassailable
province of the author.” According to Petitioner, Worth “held in
line with Rodrigue . . . that the wealth generated from an
infringement action, not the copyright ownership and rights of
ownership bound up in Section 106 [is] community property.”34
34
17 U.S.C. § 106 states as follows:
Subject to sections 107 through 122, the owner of copyright
under this title has the exclusive rights to do and to
authorize any of the following:
(1) to reproduce the copyrighted work in copies or
phonorecords;
(2) to prepare derivative works based upon the
copyrighted work;
(3) to distribute copies or phonorecords of the
copyrighted work to the public by sale or other
transfer of ownership, or by rental, lease, or
(continued...)
32
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
Respondent, on the other hand, maintains that
“copyrights acquired during marriage are community property
subject to California’s marital property laws.” In addition,
Respondent asserts Worth held the Copyright Act does not preempt
state marital property law because a copyright vests initially in
the authoring spouse, but does not preclude acquisition of a
community property interest by a spouse. Moreover, Respondent
points to Worth’s conclusion that 17 U.S.C. § 301 “‘reveals an
intent by Congress to supercede only state copyright laws.’”
(Quoting Worth, 195 Cal. App. 3d at 777-778.) (Emphasis in
original.) According to Respondent, consistent with Worth,
Rodrigue held state marital laws apply to the copyrights.
B.
Teller, relied upon the ICA, does not address the issue
presented in this case. In Teller, this court did “hold that
intellectual property is capable of division for purposes of
equitable distribution.” 99 Hawai#i at 108, 53 P.3d at 247. But
34
(...continued)
lending;
(4) in the case of literary, musical, dramatic, and
choreographic works, pantomimes, and motion pictures
and other audiovisual works, to perform the
copyrighted work publicly;
(5) in the case of literary, musical, dramatic, and
choreographic works, pantomimes, and pictorial,
graphic, or sculptural works, including the individual
images of a motion picture or other audiovisual work,
to display the copyrighted work publicly; and
(6) in the case of sound recordings, to perform the
copyrighted work publicly by means of a digital audio
transmission.
33
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
Teller involved patents and not copyrights. This court stated
that “[b]ecause the United States Supreme Court has determined
that Federal case law does not preempt the states’ right to
impose regulation on patents, we do not address federal
preemption.” 99 Hawai#i at 111, 53 P.3d at 250 (citing Kewanee
Oil Co. v. Bicron Corp., 416 U.S. 470 (1974)). Teller observed
that the Supreme Court had declared that “‘[t]he only limitation
on the States is that in regulating the area of patents and
copyrights they do not conflict with the operation of the laws in
this area passed by Congress.’” Id. (quoting Kewanee Oil, 416
U.S. at 479). Teller cited Rodrigue as recognizing that federal
copyright law does not preempt state law in its entirety. See
id. (citing Rodrigue, 218 F.3d at 439). But, Teller did not
address the extent to which federal copyright law preempts state
law regarding equitable division.
C.
In Worth, the California Court of Appeal considered the
“issue [of] whether the marital community has an interest in a
copyright.” Id. at 771. The California Court of Appeal rejected
the husband’s argument that because a copyright “vests initially”
in the author or authors of the work under 17 U.S.C. § 201(a),35
the copyright belonged solely to him as the author of the work.
Worth began its analysis with the general proposition that “all
35
17 U.S.C. § 201(a) states that “[c]opyright in a work protected
under this title vests initially in the author or authors of the work. The
authors of a joint work are coowners of copyright in the work.”
34
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
property acquired during marriage is community property.” Id. at
773. According to Worth, then, there is “little doubt that any
artistic work created during the marriage constitutes community
property.” Id. Because the books at issue were written and
published during the parties’ marriage, Worth held the “literary
works constituted community property.” Id.
It was noted by Worth, that the husband agreed that the
wife was entitled to one-half interest in the royalties derived
from the copyrighted works. Id. at 774. Worth construed such
concession as reflecting the husband’s acknowledgment that the
books were considered community property. Id. Hence, Worth
concluded that if the artistic work is community property, “it
must follow that the copyright itself obtains the same status.”
Id.
Addressing the various provisions of the Copyright Act,
Worth noted that 17 U.S.C. § 201 “provides for the transfer of a
copyright by contract, will ‘or by operation of law.’”36 Id.
According to Worth, however, although a copyright “‘vests
initially’ in the authoring spouse[,]’” 17 U.S.C. § 201, “the
copyright is automatically transferred to both spouses by
operation of the California law of community property.” Id.
Next, Worth considered whether California’s community
property laws were preempted by the Copyright Act. Id. at 776.
36
17 U.S.C. § 201(d)(1) states that “[t]he ownership of a copyright
may be transferred in whole or in part by any means of conveyance or by
operation of law, and may be bequeathed by will or pass as personal property
by the applicable laws of intestate succession.”
35
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
In Worth, the husband relied on Hisquierdo v. Hisquierdo, 439
U.S. 572 (1979), in support of his preemption argument. In
Hisquierdo, the Supreme Court considered whether retirement
benefits under the Railroad Retirement Act that had not yet
vested could be awarded to the wife upon dissolution of the
marriage. Id. at 573. The Supreme Court held that California
community property law was preempted by the Railroad Retirement
Act which vested ownership in the retired worker alone. Id. at
590; see also McCarty v. McCarty, 453 U.S. 210, 224 (1981)
(determining that military retirement pay not subject to state
community property laws); Free v. Bland, 369 U.S. 663, 668-669
(1962) (determining that U.S. Savings Bonds standing in the name
of husband “or” wife not subject to state community property
laws); Wissner v. Wissner, 338 U.S. 655, 658 (1950) (determining
that a National Service Life Insurance policy was not subject to
state community property laws, and that proceeds belong to the
named beneficiary).37
Worth distinguished the foregoing cases from the case
before it, reasoning that in those cases, the benefit at issue
“was expressly defined by Congress to be the separate property of
the designated recipient.” 195 Cal. App. 3d at 777. In contrast
to those cases, Worth asserted, “the Copyright Act expressly
provides for co-ownership as well as transfer of all or part of a
copyright.” Id. In addition, Worth declared that although under
37
These cases were cited in Hisquierdo. See 439 U.S. 572.
36
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
17 U.S.C. 201(a), a copyright “‘vests initially in the
author[,]’” “nothing in the Copyright Act precludes the
acquisition of a community property interest by a spouse[.]” Id.
(emphasis in original).
The husband’s argument that California’s community
property laws were preempted by 17 U.S.C. § 301, was also
rejected by Worth. Worth explained that state law is preempted
“only if the rights granted under state law are ‘equivalent to
any of the exclusive rights within the general scope of copyright
as specified by [17 U.S.C. §] 106[,]’” and because the rights of
ownership and division of marital property are in no way
equivalent to the rights within the scope of the Copyright Act,
California community property law is not preempted. Id. at 777-
78.
In accordance with the foregoing, Worth concluded that
the husband’s copyrights in the books “constituted divisible
community assets.” Id. at 778. Consequently, “husband and wife
remain[ed] as co-owners of an undivided interest in the
copyrights[,]” and “both parties [were] entitled to share equally
in any of the proceeds directly or indirectly related to the
pending federal lawsuit for copyright infringement.” Id.
In Rodrigue, decided thirteen years after Worth, the
Fifth Circuit Court of Appeals similarly addressed whether the
copyrighted works of the husband were community property. The
couple in that case, George and Veronica, were married and
37
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
divorced in Louisiana. 218 F.3d at 433. During the marriage,
George obtained certificates of copyright for several of his
paintings. Id. Under Louisiana law, the parties’ marriage
effected a “legal regime” of matrimonial property, establishing
between them a community of acquets38 and gains, referred to as
the “community” and upon divorce, each spouse owned an undivided
one-half interest in the community property and its fruits and
products until partition. Id. at 433-34.
Upon dissolution of George and Veronica’s marriage,
George’s former business associate filed an action in federal
court seeking a declaration that George was the sole owner of
intellectual property rights in the paintings. Id. at 434.
George contended that the Copyright Act preempted state community
property law, preventing his copyrighted works from becoming
community property, thereby exempting his copyrights from
division and partition in divorce. Id. at 435.
Preliminarily, the Rodrigue court noted that 17 U.S.C.
201(a) specifies that “[c]opyright in a work protected under this
title vests initially in the author or authors of the work.” Id.
The Fifth Circuit stated that in contrast, Louisiana community
property law declares that all “‘property acquired during the
existence of the legal regime through the effort, skill, or
38
“Acquet” is defined as “[p]roperty acquired by purchase, gift, or
any means other than inheritance. The term is most commonly used to denote a
marital acquisition that is presumed to be community property.” Black’s Law
Dictionary 26 (9th ed. 2009).
38
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
industry of either spouse’ is community property.” Id. George
maintained that state law was preempted.
Rodrigue stated, “We do not disagree with George's
general premise; we do disagree, though, with his expansive view
of the scope of the conflict between copyright law and community
property law, and thus with the extent of the preemptive effect
of such conflict.” Id. at 435. Rodrigue held “that an
author-spouse in whom a copyright vests maintains exclusive
managerial control of the copyright but that the economic
benefits of the copyrighted work belong to the community while it
exists and to the former spouses in indivision[39] thereafter[,]”
noting that such position “is consistent with both federal
copyright law and Louisiana community property law and is
reconcilable under both.” Id.
The Fifth Circuit began by analyzing the scope of 17
U.S.C. § 201(a), which, to reiterate, provides that a
“[c]opyright in a work protected under this title vests initially
in the author or authors of the work.” See id. (emphasis added).
Rodrigue construed § 201(a) as pertaining only to a “copyright,”
the owner of which has “the exclusive rights of reproduction,
adaptation, publication, performance, and display.” Id. (citing
17 U.S.C. 106). According to Rodrigue, “none of these rights
either expressly or implicitly include the exclusive right to
enjoy income or any of the other economic benefits produced by or
39
“Indivision” is defined as “undivided ownership in property.”
Black’s Law Dictionary 1594 (8 th ed. 2004)
39
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
derived from copyrights.” Id. Rodrigue further observed that
the copyright “vests” in the author under § 201(a), but “never
uses the words ‘own’ or ‘ownership,’ and the Act does not speak
of ownership per se or globally, but only in the sense of the
five exclusive attributes listed in [17 U.S.C.] § 106.” Id. at
435-36.
Rodrigue determined that the Copyright Act’s “inclusion
of only five express attributes of ownership while omitting,
inter alia, the attribute of enjoyment of economic benefits, and
Congress’s reference to immediate vesting of the copyright, and
not to vesting of ownership,” suggested that the “‘vesting’ of
the copyright and its five (and five only) statutorily delineated
attributes in one spouse does not preclude classification of
other attributes of ownership of a copyright as community
property.” Id. at 436. Further, Rodrigue noted that although
the copyright vests “initially” in the author, the statute does
not speak of a “permanent-vesting[.]” Id. (emphasis omitted).
Thus, according to Rodrigue, the Copyright Act “explicitly allows
for subsequent vesting in non-authors, either jointly with the
author or subsequent to him by virtue of transfer of all or
lesser portions of the copyright.” Id. The Fifth Circuit
ultimately concluded that 17 U.S.C. 201(a), which provides that
five specific rights “vests initially” in the author, did not
“ineluctably conflict” with any provision of Louisiana
matrimonial law that would recognize that Veronica does have an
40
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
economic interest in the George’s copyrights. Id. Rodrigue
likened that economic benefits flowing from copyrights to
“paychecks [and] partnership interests[.]” Id. at 439.40
Directly addressing preemption, the Rodrigue court held
that the Copyright Act does not mandate “monolithic preemption of
Louisiana property law in toto” inasmuch as 17 U.S.C. § 301(a)
“states that ‘all legal or equitable rights that are equivalent
to any of the exclusive rights within the general scope of
copyright . . . are governed exclusively by this title.’” Id. at
439 (ellipsis in original). According to Rodrigue, 17 U.S.C. §
301(b) expresses that “nothing in § 301(a) ‘annuls or limits any
rights or remedies under the common law or statutes of any State
with respect to . . . activities violating legal or equitable
rights that are not equivalent to any of the exclusive rights
within the general scope of copyright as specified by section
106.’” Id. (ellipsis in original). In sum, Rodrigue held that
the “only ownership rights . . . grant[ed] exclusively to the
author [under 17 U.S.C. § 106] are the rights to (1) reproduce,
40
Rodrigue acknowledged that Louisiana law governing marital
property provides for “‘equal management’ of property belonging to the
community” such that, generally, “[e]ach spouse, acting alone, has the right
to manage, control, or dispose of community property.” Id. at 438. Rodrigue
stated that “[i]f this general principle were to be applied across the board
to copyrights created by one spouse in community, however, an irreconcilable
conflict with the author-spouse's five exclusive § 106 rights of reproduction,
adaptation, publication, performance, and display would result.” Id.
Rodrigue determined that copyrights came within the exception to the general
rule provided for in the Louisiana code under which the spouse in whose name
“‘moveables [have been] issued or registered’” “has exclusive management
rights (the combination of usus and abusus) but preserves for the spouses
jointly the right to enjoy the benefits (the fructus) of such property.” 218
F.3d at 438-39.
41
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
(2) prepare derivative works, (3) distribute copies, (4) perform,
and (5) display the work[,]” “[a]mong the entire ‘bundle’ of
rights comprising full ownership of property generally, the
preemptive effect of federal copyright law extends only to this
explicitly-enumerated, lesser-included quintet.” Id. Because
nothing in the Copyright Act governs “the right to enjoy the
earnings and profits of the copyright[,]” Rodrigue concluded that
the Copyright Act does not “prevent non-preempted rights from
being enjoyed by the community[.]” Id.
VIII.
Worth’s analysis is somewhat problematic. Worth
acknowledged that under 17 U.S.C. § 201 a copyright “‘vests
initially’ in the author[.]’” 195 Cal. App.3d at 777 (emphasis
omitted). But, according to Worth, “the copyright is
automatically transferred to both spouses by operation of the
California law of community property.” Id. at 774. Worth’s
analysis in terms of “initial vesting” and immediate divestment
would seem contradictory. The term “vests” connotes something
more than momentary ownership. See Black’s Law Dictionary at
1594 (defining “vest” as “confer[ring] ownership of (property)
upon a person[;]” “invest[ing] (a person) with the full title to
property[;]” “giv[ing] (a person) an immediate, fixed right of
present or future enjoyment.” (Emphasis added.)
Moreover, Worth did not address 17 U.S.C. § 201(e),
which to reiterate, invalidates any “action by any governmental
42
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
body or other official or organization purporting to seize,
expropriate, transfer, or exercise rights of ownership with
respect to the copyright, or any of the exclusive rights under a
copyright,” “except as provided under title 11” (regarding
bankruptcy proceedings), “[w]hen an individual author’s ownership
of a copyright, or of any of the exclusive rights under a
copyright, has not previously been transferred voluntarily by
that individual author[.]” (Emphasis added.) As pointed out in
1 Nimmer on Copyrights § 6A.03[C][2][b], “[a]t first blush, [17
U.S.C. § 201(e)] would seem to bar any transfers by operation of
law, thus rendering [17 U.S.C. § 201(d), allowing for such
transfers] meaningless.” However, Nimmer on Copyrights states
that “the two subsections can be reconciled” by reading 17 U.S.C.
§ 201(e) as precluding transfers by operation of law only if the
author’s ownership of a copyright has not previously been
voluntarily transferred. Because § 201(d) governing transfers of
copyrights by operation of law “underpins Worth’s analysis,” 1
Nimmer on Copyrights § 6A.03[C][2][b], and § 201(e) would
preclude such transfers unless ownership of the copyright has
previously been voluntarily transferred, Worth’s holding can only
be reconciled with the Copyright Act by concluding that the
authoring spouse implicitly consented to transfer of his or her
copyright to his or her spouse, see id. at § 6A.03[C][3] (noting
that “[a]bsent such consent, Worth’s holding cannot comply with
the Copyright Act, and hence would clearly be pre-empted”).
43
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
Even if this court were to adopt Worth’s rationale,
Worth did not set forth with precision, the scope of each
spouse’s ownership interest upon divorce. See id. (noting that
“Worth raised none of the vexing issues of how transfers of
copyrighted works should be treated in the context of a marital
community”). For example, Worth did not address whether the non-
authoring spouse, by virtue of his or her ownership interest in
the copyright, has the rights set forth in 17 U.S.C. § 106
(reproduction, adaptation, publication, performance, and
display). But, dividing those rights equally between spouses
upon divorce would impinge on the author’s ability to exploit his
or her copyright and undermine the purpose of the Copyright Act
of encouraging authorship. Id. at § 6A.04; see also Rodrigue,
218 F.3d at 442 (noting “the federal interest in encouraging
authorship and exploitation of copyright”).
Nimmer states that, for example, treating spouses as
“traditional co-owners . . . transmuting every transfer and
exclusive license granted by a married [author] into a mere
partial grant, subject to rival grants of title emanating from
the erstwhile spouse” would be a “a prescription for the worst
disorder.” 1 Nimmer on Copyrights § 6A.04. Thus, to preserve
Worth’s rationale, Nimmer on Copyright suggests
“[c]onstitutionally, . . . the courts must invoke a presumption,
at least sub silentio, that the author-spouse consents to”
“sharing author status.” Id. To avoid problems raised by
44
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
“traditional co-ownership,” Nimmer advocates “adding to that
presumption a complementary presumption” that the “nonauthor-
spouse[] consent[s] to ceding full authority over disposition of
the copyright to the author-spouse.” Id.
It would seem apparent that preservation of Worth’s
rationale requires legal gymnastics. In light of 17 U.S.C. §
301(e), which prohibits involuntary transfers of copyrights, to
hold that part “ownership of a copyright . . . transfer[s]” to
the nonauthoring-spouse by “operation of [Hawai#i marital
property] law” under 17 U.S.C. § 201(d) requires this court to
create a legal presumption that the authoring-spouse consented to
sharing his or her ownership by virtue of marriage. 1 Nimmer on
Copyrights § 6A.04. But, then, a second legal presumption that
the nonauthoring-spouse consents to the authoring-spouse
maintaining exclusive control over all of the exclusive rights
delineated in 17 U.S.C. § 106 would also need to be created to
avoid the risk of circumventing the very purpose of the Copyright
Act. We decline to adopt this approach.
On the other hand, Rodrigue offers a means of
reconciling marital property law with the Copyright Act. See id.
at § 6A.05 (noting that instead of “finding state laws here
threatening to federal uniformity, [Rodrigue] found a way to
harmonize the two”). As Rodrigue observes, only “legal or
equitable rights that are equivalent to any of the exclusive
rights within the general scope of copyright as specified by
45
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
section 106 . . . are governed exclusively by the [Copyright
Act].” 17 U.S.C. § 301(a). Thus, state law would be preempted
only to the extent it provides for legal or equitable rights
within the scope of the exclusive rights under 17 U.S.C. § 106
(rights to reproduce, adapt, distribute, perform, and display
copyrighted works). See Rodrigue, 218 F.3d at 439 (“Among the
entire ‘bundle’ of rights comprising full ownership of property
generally, the preemptive effect of federal copyright law extends
only to this explicitly-enumerated, lesser-included quintet.”)
Pursuant to HRS § 580-47, the court has the discretion
to divide and distribute “the estate of the parties, real,
personal, or mixed, whether community, joint, or separate[.]”
This court has held that intellectual property is a martial asset
that is subject to equitable division upon divorce. See Teller,
99 Hawai#i at 107-108, 53 P.3d at 246-47. With respect to the
equitable division of ownership interests in a copyright, instead
of creating the legal presumptions required to uphold Worth’s
approach, we adopt the approach taken by Rodrigue that any
distribution by the court must result in the authoring-spouse
retaining the exclusive rights set forth under 17 U.S.C. § 106,
but that the non-authoring spouse is entitled to an economic
interest in the copyrights.
Although 17 U.S.C. § 301(e) prohibits the involuntary
transfer of an author’s ownership of a copyright, the Copyright
Act preempts state law only to the extent state law governs
46
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
“legal or equitable rights that are equivalent to any of the
exclusive rights within the general scope of copyright as
specified by section 106.” 17 U.S.C. § 301; see also Rodrigue,
218 F.3d at 440 (noting that 17 U.S.C. § 301 specifies a “limited
preemption which trumps only those common law or state law rights
that are equivalent to federal copyright”) (emphasis in
original). Because such a holding would not touch upon those
exclusive rights under § 106, state law would not be preempted.
Rodrigue, 218 F.3d at 338 (“[W]e conclude that federal copyright
law does not conflict with, and therefore does not preempt,
Louisiana community property law to the extent of denying the
entitlement of the non-author spouse (Veronica) to an undivided
one-half interest in the economic benefits of the copyrighted
works created by the author (George)[.]”)
Moreover, the Rodrigue approach comports with the
partnership model for dividing assets in divorce proceedings,
under which “‘partners share equally in the profits of their
partnership, even though they may have contributed unequally to
capital or services.’” Cox v. Cox, 250 P.3d 775, 782 (2011)
(quoting Tougas v. Tougas, 76 Hawai#i 19, 27, 868 P.2d 437, 445
(1994)). As pointed out by Rodrigue, allowing the nonauthoring-
spouse to share in the proceeds derived from the authoring-
spouse’s copyright is similar to other examples where one spouse
retains exclusive management over a particular assert, but
spouses share in the benefits derived therefrom. Rodrigue
47
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
explained:
A paycheck issued by the employer in the name of the
employee-spouse alone can be cashed, deposited, or otherwise
negotiated only by that spouse; yet, the proceeds of the
paycheck, representing earnings of one spouse in community,
belong to the community. Likewise, a motor vehicle purchased
with community funds but titled in the name of one spouse
alone can be sold, leased, or encumbered only by the named
spouse; yet the proceeds of any such disposition belong to
the community. And when, during the existence of the
community, one spouse joins an existing partnership or joins
in the formation of a new one, the partner-spouse has the
exclusive right to participate in the partnership and to
manage, alienate, or encumber that interest; yet the
economic benefits-and liabilities-flowing from the
partnership belong to the community.
218 F.3d at 438 (footnotes omitted). Some courts, including in
In re Matter of Marriage of Monslow, 912 P.2d 735 (Kan. 1996),
relied upon by this court in Teller, have endorsed the award of
the entire ownership interest to the spouse with the right to
control and manage the intellectual property, while subjecting
“future income generated by the interest to a . . . lien in favor
of [the other spouse].”
In sum, the court abused its discretion in refusing to
set aside that portion of the Divorce Decree that transferred
enitrely Petitioner’s copyrights to Respondent, in violation of
federal law. The Divorce Decree purported to transfer all of
Petitioner’s interest in his copyrights, including those five
attributes of ownership exclusively governed by the Copyright
Act. Hence, to uphold the Divorce Decree would be to ignore a
violation of federal law. The ICA thus gravely erred in failing
to notice this error as plain error.
IX.
In conclusion, the court abused its discretion in
48
***FOR PUBLICATION IN WEST’S HAWAI#I REPORTS AND PACIFIC REPORTER***
failing to set aside that portion of the Divorce Decree awarding
Respondent the entire ownership interest in the copyrights. The
ICA gravely erred in failing to notice the court’s error for
plain error. We thus vacate the August 17, 2011 judgment of the
ICA filed pursuant to its July 28, 2011 SDO, affirming the
September 22, 2010 Order Denying Motion to Set Aside and the
Findings of Fact and Conclusions of Law filed by the court, and
remand to the court for a determination of the economic interest
in the copyrights to which Respondent is entitled. The Divorce
Decree is affirmed in all other respects.
Timothy J. Hogan, /s/ Mark E. Recktenwald
for petitioner
/s/ Paula A. Nakayama
Carl H. Osaki,
for respondent /s/ Simeon R. Acoba, Jr.
/s/ James E. Duffy, Jr.
/s/ Sabrina S. McKenna
49