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Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
06-DEC-2023
08:06 AM
Dkt. 86 SO
NO. CAAP-XX-XXXXXXX
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI‘I
SI, Plaintiff-Appellee, v.
KI, Defendant-Appellant.
APPEAL FROM THE FAMILY COURT OF THE THIRD CIRCUIT
(CASE NO. 3DV13-1-000147)
SUMMARY DISPOSTION ORDER
(By: Leonard, Presiding Judge, Nakasone and McCullen, JJ.)
Defendant-Appellant KI (Husband), appeals from the
Family Court of the Third Circuit's 1 August 21, 2018 "Decree
Granting Absolute Divorce" to Plaintiff-Appellee SI (Wife). 2
On appeal, Husband raises six points of error
challenging the family court's division of the marital estate in
1 The Honorable Dakota K.M. Frenz presided.
2 Attorney Brian J. De Lima (De Lima) represented Wife in this appeal.
Pursuant to Hawaiʻi Rules of Evidence Rule 201, we take judicial notice of
Case No. SCAD-XX-XXXXXXX, that De Lima passed away in 2022, and that attorney
Robert J. Crudele was appointed trustee over De Lima's legal practice.
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its April 20, 2018 "Amended Findings of Fact, Amended
Conclusions of Law, and Amended Decision of the Court" (Amended
Decision) and the attached Property Division Chart.
Upon careful review of the record and the briefs
submitted by the parties and having given due consideration to
the issues raised and the arguments advanced, we resolve
Husband's points of error as discussed below.
(1) Husband's first two points of error concern the
$25,505.00 and the $83,576.90 listed as Wife's capital
contributions on the Property Division Chart.
(a) The $25,505.00
In addition to claiming that Wife hid this money,
Husband contends that "[t]he evidence presented at trial does
not support a legal or factual conclusion the $25,505.00 was a
capital contribution," because there was no evidence linking
that money to Wife's parents.
All property that is not Marital Separate Property is
Marital Partnership Property subject to equitable division under
the partnership model. See Hussey v. Hussey, 77 Hawai‘i 202,
207, 881 P.2d 1270, 1275 (App. 1994). 3 Once Marital Separate
Property has been identified and segregated, the family court
must then "find all of the facts necessary for categorization of
3 Overruled on other grounds by State v. Gonsales, 91 Hawai‘i 446, 984
P.2d 1272 (App. 1999).
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the properties and assignment of the relevant net market values"
for Marital Partnership Property. Hamilton v. Hamilton, 138
Hawai‘i 185, 201, 378 P.3d 901, 917 (2016) (citations omitted).
Here, the family court made conflicting findings.
First, the family court found that it was "unclear where [the
$25,505.00] originated from as [Wife's] income can be accounted
for and thus was not the source" and that "[t]he trial record
and exhibits admitted do not establish a clear record of the
source of said cash[.]" But, the family court then found "that
this cash was additional gifts to [Wife] from her parents" based
on Wife's parents' past generosity to Wife.
There was substantial evidence in the record to
support the finding that Wife's parents were very generous with
their daughter, including copies of checks written by Wife's
mother to Wife. There is nothing, however, that shows the
$25,505.00 specifically came from Wife's parents or any other
source.
Relying solely on previous gifts from Wife's parents,
without more, the family court's finding that the money came
from Wife's parents was clearly erroneous. See LC v. MG, 143
Hawaiʻi 302, 310, 430 P.3d 400, 408 (2018) (reviewing findings of
fact under the clearly erroneous standard, and a finding is
clearly erroneous if "the record lacks substantial evidence to
support the finding") (citation omitted). Thus, the family
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court abused its discretion in categorizing the $25,505.00 as
Wife's capital contribution. See Brutsch v. Brutsch, 139 Hawaiʻi
373, 381, 390 P.3d 1260, 1268 (2017) (explaining that "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") (citations omitted).
(b) The $83,576.90
Husband contends the family court erred in failing "to
find that [Wife's] parents' gifts were to both spouses to allow
them to build their house." (Emphasis omitted.) Husband
further argues "the [c]ourt erred by failing to recognize that
Wife essentially gifted over the monies received from parents to
Husband when the residence was built and both spouses acquired
the residence ownership as tenants by the entireties."
(Emphasis omitted.)
In this jurisdiction, "marriage is a partnership to
which both parties bring their financial resources as well as
their individual energies and efforts." Hamilton, 138 Hawai‘i at
200, 378 P.3d at 916 (citation, internal quotation marks, and
brackets omitted).
The family court found that Wife's parents gifted
$83,576.90 to Wife, and that the money "was not a loan" because
Wife's parents were "simply giving money to their daughter to
help in a way most parents, who are finally [sic] able to do so,
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would do." There was substantial evidence in the record to
support the court's finding that the $83,576.90 was a gift to
Wife from her parents.
Wife's mother testified that the checks covering the
Haihai Street expenses were made out to Wife, and that she never
required Wife to sign a note. Wife provided a summary of the
Haihai Street home expenses for which Wife's parents paid.
Additionally, the record contains photocopies of several
documents that corroborate Wife's summary, including
(1) $30,000.00 for the Honsador bond deposit; (2) $20,000.00
placed in escrow for the conversion from a construction loan to
a First Hawaiian Bank (FHB) mortgage; (3) $3,500.00 for the
installation of a water meter; (4) $8,000.00 in closing costs;
(5) $22,000.00 paid in 5 separate checks for the Haihai Street
driveway project; and (6) $76.90 in materials from Home Depot.
All together, these dollar amounts total $83,576.90.
Husband does not cite any evidence in the record
demonstrating that Wife's parents intended this money to be a
gift to Husband and Wife as a couple. Wong v. Wong, 87 Hawai‘i
475, 482, 960 P.2d 145, 152 (App. 1998) (explaining that a gift
requires "(1) donative intent, (2) delivery, and
(3) acceptance") (citation omitted). Similarly, Husband makes
no showing that the $83,576.90 was delivered to him or to the
parties as a couple.
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Husband also claims that Wife gifted these funds to
him when she filed the Deed to the Haihai Street residence, and
the parties moved onto the property. Husband cites Gussin v.
Gussin, 73 Haw. 470, 487 n.8, 836 P.2d 484, 493 n.8 (1992), for
the proposition that "[m]ost courts accept that separate
property can be transmuted into marital property if the owning
spouse designates joint title . . . ." However, the doctrine of
transmutation was rejected in this jurisdiction. Wong, 87
Hawai‘i at 482, 960 P.2d at 152 (explaining that "in divorce
cases involving the application of the Partnership Model, the
transmutation rule does not apply").
In sum, the family court did not abuse its discretion
in categorizing the $83,576.90 as Wife's capital contribution.
See Brutsch, 139 Hawaiʻi at 381, 390 P.3d at 1268 (applying the
abuse of discretion standard of review).
(2) Husband's third and fourth points of error allege
"the [family court] abused its discretion by failing to apply
and allocate marital partnership principles to . . . joint
property under the law to divide the property."
(a) Wife's Tax Refunds
Husband alleges he was "entitled to a fifty percent
credit for the [tax refunds Wife] did not share" because she
"admitted she took all of the tax refunds 2013 to 2015 and did
not divide them with" him.
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"When divorcing parties file a joint return during the
pendency of divorce proceedings, it is generally considered that
a tax refund generated on the return is marital property and
belongs equally to the parties." Leon Gabinet, Tax Aspects of
Marital Dissolution § 9:27 (2d ed. 2023). The family court may
deviate from the partnership model where the facts "present any
valid and relevant considerations authorizing a deviation."
See Jackson v. Jackson, 84 Hawaiʻi 319, 332, 933 P.2d 1353, 1366
(App. 1997).
Here, Wife did not file joint tax returns for 2013,
2014, and 2015 while the divorce was pending:
[Wife] testified, credibly, that [Husband] failed to
respond to her requests for necessary documents to file
joint tax returns. [Husband] throughout this case has not
responded or provided requested documents that related to
his income. As such, [Wife] filed Married Filing
Separately since 2013. [Husband] testified that he has yet
to file his 2015-2017 income taxes nor was he sure if he
had filed an extension for said years.
The record contains substantial evidence indicating
that Wife filed a separate tax return and maintained primary
physical custody of the children for 2013 through 2015. The
record also shows Wife furnished over half of the cost of
maintaining the household where the children lived, while
Husband failed to maintain the children's health insurance,
causing Wife to pay out of pocket for the children's medical and
health care on multiple occasions while the divorce was pending.
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Husband also failed to pay child support and his half of the
Haihai Street mortgage as ordered by the family court.
Because Wife filed separately and the evidence in the
record justified a deviation from the partnership model, the
family court did not abuse its discretion by denying Husband's
claim for half of Wife's tax returns. See Brutsch, 139 Hawaiʻi
at 381, 390 P.3d at 1268 (applying the abuse of discretion
standard of review).
(b) Savings Bonds
Regarding $4,589.12 in savings bonds, Husband contends
the family court erred "by failing to credit [him] for fifty
percent of the value of the savings bonds cashed out and kept by
Wife." (Formatting altered.)
The family court denied Husband's claim for a fifty
percent credit of the $4,589.12 in savings bonds finding that
Wife "testified, credibly, that the Savings Bonds were cashed
out and used for their daughter's baby luau party and that
[Husband] knew and approved of said use of the savings bonds."
At trial, Wife testified that she cashed the savings bonds for
her daughter's first birthday party, paying "all kinds" of bills
such as the "produce company," the entertainers, the food, and
"the cake lady."
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"[A]n appellate court will not pass upon issues
dependent upon credibility of witnesses and the weight of the
evidence[.]" Booth v. Booth, 90 Hawai‘i 413, 416, 978 P.2d 851,
854 (1999) (citation and internal quotation marks omitted).
Because the family court found that Wife testified credibly as
to the use of the savings bonds, we cannot say the family court
abused its discretion by denying Husband credit for half of the
$4,589.12. See Brutsch, 139 Hawaiʻi at 381, 390 P.3d at 1268
(applying the abuse of discretion standard of review).
(3) Husband's fifth and sixth points of error allege
that Wife drained her CU Hawai‘i account and their joint FHB
account, and that he was entitled to credit for half the money
that was removed from these accounts.
(a) CU Hawai‘i Account
Regarding $13,675.00, Husband claims Wife "drained the
credit union savings accounts over about a two year period" and
that "[t]here was no evidence presented that the money was used
for living expenses" because "[t]here was no proof of payment of
bills by the credit union monies."
As a general rule, charging of waste of marital assets
to a divorcing party is applicable "when, during the time of the
divorce, a party's action or inaction caused a reduction of the
dollar value of the marital estate under such circumstances that
he or she equitably should be charged with having received the
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dollar value of the reduction." Chen v. Hoeflinger, 127 Hawai‘i
346, 358, 279 P.3d 11, 23 (App. 2012) (citation omitted).
Finding Wife's testimony credible, the family court
denied Husband's request for a fifty percent credit of the
$13,675.00:
[Husband's] claim for a fifty percent credit of the
$13,675.00 is denied. [Husband's] counsel concedes that
this is likely monies from [Wife's] account with her
mother. Regardless of its origin, [Wife] testified
credibly that this money was used to pay everyday living
expenses, especially given [Husband's] failure to pay his
share of the Haihai Street mortgage, court ordered child
support, and [Wife] and the children's health insurance.
Money was deposited and withdrawn to pay bills and expenses
for a period just under two years following separation.
Both Wife's testimony and the evidence admitted at
trial (including Wife's CU Hawai‘i account statements that
reflect several cash payments for the Haihai Street mortgage,
the parties' joint credit card bill, and several other expenses)
indicate that the money removed from the CU Hawai‘i account was
used to pay living expenses. The record also indicates that
Wife was paying for some of the children's medical expenses out
of pocket.
Husband does not present evidence on this point beyond
his claim that Wife's testimony conflicted with his own. The
family court found Wife's testimony credible. Again, we "will
not pass upon issues dependent upon credibility of witnesses and
the weight of the evidence." Booth, 90 Hawai‘i at 416, 978 P.2d
at 854 (citation and internal quotation marks omitted).
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The family court did not abuse its discretion by
denying Husband's claim for a fifty percent credit of the
$13,675.00. See Brutsch, 139 Hawaiʻi at 381, 390 P.3d at 1268
(applying the abuse of discretion standard of review).
(b) First Hawaiian Bank Account
Husband's final point of error asserts that Wife
"drained the [FHB] accounts nine days after separation," and
that he "is entitled to a fifty percent credit for the monies
she did not share."
"It is fundamental to recognize that marital waste is
only a chargeable deduction if it occurs during the divorce[.]"
Gordon v. Gordon, 135 Hawai‘i 340, 354, 350 P.3d 1008, 1022
(2015). Moreover, the "family court is not required to presume
specific percentage splits in the division of each category of
property[,]" although it must "exercise its discretion within
the framework provided by our law." Id. at 352, 350 P.3d at
1020.
Here, the family court found that the date of
separation was February 16, 2013. The family court denied
Husband's claim for a fifty percent credit of $15,123.00
withdrawn from the FHB account:
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[Husband's] claim for a fifty percent credit toward
[Wife's] alleged draining of the First Hawaiian Bank
Account in the amount of $15,123 is denied. This was not
money jointly held in the account and then immediately
withdrawn upon separation as alleged by [Husband].
[Husband's] Exhibit CC shows a deposit for $15,123 on
May 14, 2013, and then an immediate withdrawal of the same
amount also on May 14, 2013. There is insufficient
evidence to deduce whether that was marital income/money or
[Wife's] parent's financial assistance.
Wife testified that the $15,123.00 deposit came from
the savings bonds she cashed out and that "the money was
withdrawn to pay for some of . . . the baby's party
obligations." The FHB statement shows there was a deposit for
$15,123.00 on May 14, 2013, and a withdrawal for the same amount
on the same day.
Because the $15,123.00 deposit was made after the
parties separated, the family court's finding that there was
insufficient evidence to determine it was marital property was
not clearly erroneous. Thus, we cannot say that the family
court abused its discretion by denying Husband's claim for half
of the $15,123.00. See Brutsch, 139 Hawaiʻi at 381, 390 P.3d at
1268 (applying the abuse of discretion standard of review).
Based on the foregoing, we vacate the family court's
Amended Decision as to the determination that $25,505.00 was
Wife's capital contribution, and remand this case for further
proceedings consistent with this summary disposition order.
Additionally, IT IS ORDERED that the appellate clerk
shall mail a copy of this summary disposition order to Robert J.
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Crudele at his mailing address on record with the Hawaiʻi State
Bar Association, and to Wife at her mailing address on record.
DATED: Honolulu, Hawaiʻi, December 6, 2023.
On the briefs: /s/ Katherine G. Leonard
Presiding Judge
Douglas L. Halsted,
for Defendant-Appellant. /s/ Karen T. Nakasone
Associate Judge
Brian J. De Lima,
for Plaintiff-Appellee. /s/ Sonja M.P. McCullen
Associate Judge
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