Brutsch v. Brutsch
Decision Date | 02 March 2017 |
Docket Number | SCWC-12-0000703 |
Citation | 390 P.3d 1260 |
Parties | Karl Robert BRUTSCH, Respondent/Plaintiff-Appellee/Cross-Appellant, v. Celia Kay BRUTSCH, Petitioner/Defendant-Appellant/Cross-Appellee. |
Court | Hawaii Supreme Court |
Peter Van Name Esser and P. Gregory Frey, Honolulu, for petitioner.
Samuel P. King, Jr., Honolulu, for respondent.
This case arises from a contentious divorce proceeding between Celia Kay Brutsch ("Wife") and Karl Robert Brutsch ("Husband"). Wife timely applied for writ of certiorari ("Application") from the Judgment entered by the Intermediate Court of Appeals ("ICA") pursuant to its May 12, 2015 Summary Disposition Order ("SDO"). In relevant part, the ICA vacated in part the Family Court of the First Circuit's ("family court['s]"): (1) "Decree Granting Absolute Divorce and Awarding Child Custody" ("divorce decree") because it denied Husband any Category 3 credit for gifts and inheritance, and (2) "Order Re: Plaintiff's Motion for Reconsideration and for Rule 68 Attorney's Fees Filed February 16, 2012" and "Order Denying Plaintiff's Motion for Reconsideration of Decision Announced March 14, 2012, Filed March 21, 2012."
In her Application, Wife presents two questions:
With respect to the first issue in the Application, we hold that the ICA was correct in ruling that the family court erred in stating that the record was "bereft of any competent or credib[le] evidence that ... monies were actually contributed to the marriage," and therefore remanding this issue for further proceedings, along with other rulings of the family court that are not at issue in the Application. Brutsch v. Brutsch , No. CAAP-12-0000703, at 7, 135 Hawai'i 217, 2015 WL 2226277 (SDO). When the family court addresses the issue of Category 3 credits on remand, however, it must do so in light of this court's rulings regarding Category 3 credits in Hamilton v. Hamilton , 138 Hawai‘i 185, 378 P.3d 901 (2016). In addition, at various points in this litigation, Husband argued differing amounts for Category 3 credits. At oral argument, Husband conceded that the only amounts he claims for Category 3 credits total $ 134,235, consisting of gifts reflected in checks totalling $ 74,235, the $ 40,000 total he received as gifts in $ 10,000 increments, and the $ 20,000 annuity he inherited used to purchase a Jacuzzi for the Maunawili house. Therefore, the family court's review of possible Category 3 credits will be limited to those amounts, totalling $ 134,235. In addition, in determining Category 3 credits, the family court must also address whether Husband already received credit for any of the subject amounts through Wife's pre-trial purchase of Husband's interest in the Maunawili home, as Husband has conceded that Wife bought out his interest in the home.
With respect to the second issue in the Application, this court recently held that Hawai‘i Family Court Rules ("HFCR") Rule 68 does not apply to proceedings governed by Hawai‘i Revised Statutes ("HRS") § 580-47 (Supp. 2011). See Cox v. Cox , 138 Hawai‘i 476, 382 P.3d 288 (2016). This divorce proceeding is governed by HRS § 580-47. We therefore vacate the ICA's ruling vacating the family court's denial of Husband's HFCR Rule 68 motion. In doing so, we further explain why in Cox we held HFCR Rule 68 inapplicable in divorce cases.
A. Factual Background
Husband and Wife (collectively, "the couple") were married in 1991. The couple has a son born in 1996 and a daughter born in 2001. Husband filed for divorce on September 8, 2009.
Although the only issues in the Application concern Husband's alleged Category 3 credits and his HFCR Rule 68 motion, there were many issues addressed by the family court during this contentious divorce and related proceedings. Five days before Husband filed for divorce, Wife filed for and obtained a temporary restraining order. There were pre-decree motions concerning temporary custody, temporary child support, occupancy of the marital residence, wasting of assets, prohibition against abuse, payment of monthly financial obligations, attorney's fees and costs, sharing of marital expenses, and payment of expenses for private school, for psychological evaluations or treatment, and for appointment of custody evaluators. There were also multiple pre-trial motions concerning the same topics.
With respect to child custody, before trial, the family court appointed a Custody Evaluator. After various studies, the Custody Evaluator recommended that Wife be awarded sole legal and physical custody of the minor children.
As Wife had already bought out Husband's interest in the family home before trial, the main issues requiring resolution at the October 3–4, 2011 trial were child custody and some property division matters. According to Husband, child custody was the most hotly contested dispute.
After the trial, the family court rendered its oral ruling on November 2, 2011. In summary, the family court (1) denied mother's request for sole custody of the children and instead maintained joint legal and joint physical custody and the couple's time-sharing schedule; (2) addressed child support and payment of the children's private school and extracurricular expenses; (3) deferred decisions to the couple regarding the children's higher education expenses and how to use their existing education funds; (4) addressed medical and dental insurance and past due amounts; (5) addressed life insurance policy requirements; (6) decided how the couple would claim tax dependencies of their children; (7) determined how the couple's retirement funds would be equalized; (8) ordered that artwork be sold and proceeds evenly split; (9) ordered that all joint accounts be evenly split, and provided that each party was to take his or her own items out of the safety deposit box; (10) decided how joint securities and separately titled stock accounts were to be divided; (11) determined how to divide automobiles and the boat; and (12) awarded Husband all of his family business interest and his Kaneohe Yacht Club membership. Additionally, as noted, the property divided between the parties did not include the couple's family home in Maunawili, as Wife had purchased Husband's interest prior to trial. Finally, the family court also indicated it would award Wife attorney's fees and costs, and eventually awarded Wife $ 21,984.46 in fees and costs.
The court did not address any possible Category 3 credit for Husband or whether Husband should receive attorney's fees pursuant to HFCR Rule 68.2 On February 16, 2012, Husband filed a "Motion for Reconsideration and for Rule 68 Attorney's Fees" ("Motion") based on a September 30, 2010 Rule 68 letter offer.3 The offer was apparently rejected by Wife.
Husband argued that the primary issue in the divorce proceedings was the children's custody, not property division. Accordingly, because Wife did not prevail in her quest for sole custody, Husband's attorney argued that Wife was responsible for Husband's attorney's fees that were incurred after the Rule 68 offer was made for services rendered on the issue of the children's custody, and claimed entitlement to $ 15,500 in attorneys' fees under HFCR Rule 68. The Rule 68 offer letter stated:
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