80 Hawai'i 274, Markham v. Markham

• Decision Date: 09 January 1996
• Docket Number: No. 17037,17037
• Citation: 80 Hawaii 274,909 P.2d 602
• Parties: 80 Hawai'i 274 Donald T. MARKHAM, Plaintiff-Appellant, v. Iris M. MARKHAM, Defendant-Appellee.
• Court: Hawaii Court of Appeals

Page 602

909 P.2d 602

80 Hawai'i 274

Donald T. MARKHAM, Plaintiff-Appellant, v. Iris M. MARKHAM, Defendant-Appellee.

No. 17037.

Intermediate Court of Appeals of Hawai'i.

Jan. 9, 1996.

Certiorari Denied Jan. 29, 1996.

Syllabus by the Court

In determining the division of marital property, it is well-settled that one spouse's personal conduct or misconduct towards the other spouse is irrelevant. Hawai'i Revised Statutes (HRS) § 580-47 (1993) allows the court to consider the "respective merits of the parties" when determining marital property division. "Respective merits" is pertinent to the division of property and does not refer to the personal conduct of a spouse.

The record is devoid of any evidence demonstrating that the wife's alleged premarital intentions or her extramarital relationship negatively affected the accumulation or preservation of the husband's separate property.

Under HRS § 502-31 (1993), regular system recordation requires that the registrar of the bureau of conveyances record "all instruments presented for recording in the bureau" as directed by statute. In that connection, HRS § 502-31 describes recording as making an entire literal copy of all instruments required to be recorded. The central purpose of recording a conveyance of real property is to give notice to the general public of the conveyance and to preserve the recorded instrument as evidence. The original or a certified copy of a duly recorded instrument would be admissible as evidence.

By definition, recordation in and of itself does not involve transferring, encumbering, wasting or otherwise disposing of any real property. It is plain that recordation merely provides notice of a conveyance to third parties and evidence of the conveyance.

The partnership model is the appropriate law for the family courts to apply when exercising their discretion in determining the division of marital property. The general partnership law dictates that each partner is entitled to repayment of his or her contributions to the partnership property. Absent a legally permissible and binding partnership agreement to the contrary, partners share equally in the profits of their partnership, even though they may have contributed unequally to capital or services.

The husband's stock in Maile, Inc. may be classified as property separately owned by one spouse on the date of marriage. The appreciated value of the stock would represent the increase in the net market value of property separately owned by the owner spouse. Appreciation is equivalent to the profits in a partnership and, therefore, can be divided in a just and equitable manner as the court deems appropriate.

Under the partnership model, absent an agreement to the contrary, each partner is entitled to his or her separately owned property. But HRS § 580-47(a) vests the family court with broad discretion to divide and distribute the estate of the parties "whether community, joint or separate" in a just and equitable manner. This discretion encompasses the authority to award separate property to the non-owning spouse. The court, therefore, was empowered to consider the husband's separate property in making an equalization award to the wife.

Under the partnership model of marriage we have accepted, a final division of marital property can be decreed only when the partnership is dissolved and not after a declaration by either party that the marriage has ended. Hence, the conclusion of the divorce trial is the termination point of the marriage partnership for purposes of property division.

HRS § 580-47 confers broad discretion on the family court in granting an award of attorney's fees to one spouse. An award of litigation expenses is within the sound discretion of the family court, subject only to the standard that it is fair and reasonable.

Stephen T. Hioki, on the briefs, Honolulu, for plaintiff-appellant.

Bruce B. Kim (Kim & Kim, of counsel), on the brief, Honolulu, for defendant-appellee.

Before WATANABE, ACOBA and KIRIMITSU, JJ.

ACOBA, Judge.

Plaintiff-Appellant Donald T. Markham (Husband) appeals from the family court's March 29, 1993 Divorce Decree and associated rulings. For the reasons stated in this opinion, we remand certain aspects of the case.

Husband was born on May 26, 1936 and Defendant-Appellee Iris M. Markham (Wife) was born on April 25, 1951. Husband met Wife in early 1986. Around September of 1986, Wife moved into Husband's residence at 831 Kahena Street (the Kahena property) located in Honolulu, Hawai'i. ¹ Husband's mother, Margaret Shizuko Markham (Mother), had leased the Kahena property on March 6, 1973 from the Estate of Bernice Pauahi Bishop (Bishop Estate).

On December 2, 1987, Mother assigned and transferred the Kahena property to herself, Husband, and Donnette Markham, Husband's daughter from another marriage (Daughter), as joint tenants.

Husband, as a co-mortgagor with Mother, obtained a second mortgage loan on the Kahena property on December 14, 1987. On February 16, 1988, Mother, Husband, and Daughter purchased the Kahena property's fee simple interest from Bishop Estate under an Agreement of Sale. Husband and Mother resided on the Kahena property, maintained it, and made property tax and mortgage payments for the property.

In an Assignment of Lease and Consent dated May 2, 1988 (the Assignment), Mother and Husband purportedly transferred their interests in the Kahena property to Daughter.

In May 1989, Husband applied for and purchased homeowner's insurance in his name as co-owner of the property and paid the insurance premiums.

Husband and Wife were married in Honolulu, Hawai'i on May 26, 1990. Wife assisted in maintaining the Kahena property and contributed to the living expenses of the parties. Wife initially provided care for Mother, and later, paid $500.00 a month for a full-time live-in aide to care for Mother. Wife paid the aide from December 1988 to February 1991, after which time Mother was hospitalized. Wife worked at several jobs.

On April 15, 1991, Wife filed a temporary restraining order (TRO) against one Angel L. Hernandez (Hernandez). The TRO stated that Wife had an extramarital relationship with Hernandez.

Husband and Wife separated on October 16, 1991.

Husband filed a complaint for divorce on November 7, 1991. The couple had no children from their relationship.

The Kahena property was destroyed by a fire in December 1991. Husband claimed reimbursement of $28,000.00 under his homeowners' insurance for damages caused by the fire. In February 1992, Husband, as co- owner with Daughter, signed a contract to rebuild the Kahena house.

On February 24, 1992, the court issued a Stipulated Order for Pre-Decree Relief (the Stipulated Order). The Stipulated Order provided in pertinent part that both parties were "enjoined and restrained" from "transferring, encumbering, wasting or otherwise disposing of any real or personal property."

In May 1992, Husband recorded the Assignment in the Bureau of Conveyances. On September 15, 1992, Wife filed a Motion and Affidavit for Relief After Order or Decree (the September 15, 1992 Motion), alleging that the Assignment filed in May 1992 violated the Stipulated Order. An Order Granting [Wife's] September 15, 1992 Motion was entered on October 15, 1992 (the October 15, 1992 Order), on the ground that Husband violated the prohibition against transferring, encumbering, wasting or otherwise disposing of any real property. The October 15, 1992 Order stated that the Assignment was a nullity for purposes of the divorce proceeding, but the Order was without prejudice to Husband "offering proof, if any, at the time of trial that he own[ed] no interest" in the Kahena property.

In December 1992, Mother died.

At a February 12, 1993 pretrial hearing, the court held that, based on the October 15, 1992 Order, "no evidence regarding the [A]ssignment" would be admitted at the divorce trial. The court also granted Wife's February 10, 1993 Motion in Limine to Bar Evidence of [the] Temporary Restraining Order which contained evidence of Wife's infidelity. Further, the court reserved judgment on Wife's Motion in Limine to Bar [Husband] from Adducing Hearsay Testimony of His Mother's Intent to convey the Kahena property to Daughter.

The divorce trial took place on February 16 and 19, 1993. Husband attempted to introduce evidence through two witnesses that Wife married him only for his money and his portion of the Kahena property. The court struck such evidence on the ground that it was not relevant to a division of the marital estate.

Husband also sought to demonstrate that he had no interest in the Kahena property. He maintained that Daughter owned the Kahena property, and pursuant to a "verbal agreement" between the two of them, she allowed him to live on the property on the condition that he pay for the first mortgage and the leasehold fee conversion. The court allowed Husband to testify that he attempted to remove his name as a titleholder from the Kahena property. However, the court sustained Wife's objection to any reference to the Assignment which was declared "a nullity" by the October 15, 1992 Order. The court allowed Husband's testimony "as to his state of mind ... however relevant or irrelevant that may be." The court, additionally, granted Wife's Motion in Limine to Bar [Husband] from Adducing Hearsay Testimony of His Mother's Intent to convey her interest to Daughter. Daughter, however, was permitted to testify that she owned the Kahena property and was making the second mortgage payments on the home. She also indicated that Husband was paying for the first mortgage loan and the "leasehold conversion."

Husband owned a 25% stock interest in Maile, Inc. (Maile), a company that owned and operated a tuna fishing ship. Wife's witness, David Matsuo Chinaka (Chinaka), a certified public accountant (CPA), testified to the "gross earnings" Maile generated for the period of December 1988 through May 1992....