80 Hawai'i 79, Epp v. Epp
| Decision Date | 03 October 1995 |
| Docket Number | No. 15732,15732 |
| Citation | 905 P.2d 54 |
| Parties | 80 Hawai'i 79 Orlando EPP, Plaintiff-Appellant/Cross-Appellee, v. Doris EPP, Defendant-Appellee/Cross-Appellant. |
| Court | Hawaii Court of Appeals |
With respect to marriages, three relevant agreements between marital partners are possible: (1) premarital agreements; (2) marital agreements; and (3) divorce agreements. Prior to the June 6, 1987 amendment of Hawai'i Revised Statutes (HRS) § 572-22, and the July 1, 1987 amendment of HRS ch. 572D (Hawai'i's Uniform Premarital Agreement Act), marital partners could not, by a valid premarital agreement, marital agreement, and/or divorce agreement, inhibit the family court's jurisdictional power/authority, pursuant to HRS § 580-47(a) (1993), to "make such further orders as shall appear just and equitable ... (3) finally dividing and distributing the estate of the parties, real, personal, or mixed, whether community, joint, or separate[.]" Since then, however, all valid and enforceable premarital agreements marital agreements, and/or divorce agreements pertaining to the property division issue, even those entered into prior to June 6, 1987, must be enforced.
When deciding the property division issue, the family court first must determine whether and to what extent one or more valid and enforceable premarital agreements, marital agreements and/or divorce agreements modified the Partnership Model in part or in total and/or excluded some or all of the categorized net market values (NMVs) of the assets and debts of the parties from the Partnership Model. The family court must enforce all valid and enforceable modifications and exclusions. The Partnership Model applies to categorized NMVs of the assets and debts of the parties that are not within the scope of a valid and enforceable modification of, and/or exclusion from, the Partnership Model.
Solely with respect to categorized NMVs to which the Partnership Model applies, the family court must consider the consequences of all valid and enforceable modifications of, and/or exclusions from, the Partnership Model when deciding whether a relevant and valid consideration authorizes deviation from the Partnership Model.
Except to the extent one or more valid and enforceable premarital agreements, marital agreements, and/or divorce agreements have modified the Partnership Model and/or excluded some or all of the categorized NMVs from the Partnership Model, marital partnerships are equal partnerships, and the Partnership Model is the appropriate principle for the family court to apply when exercising its discretion in dividing property in divorce proceedings.
The five categories of net market values (NMVs) apply to Marital Partnership Property. Under the Partnership Model, a spouse's Category 1 and 3 NMVs are that spouse's "partner's contributions" to the Marital Partnership Property that, assuming all relevant and valid considerations are equal, are repaid to the contributing spouse-partner, and all Category 2, 4, and 5 NMVs are Marital Partnership Property that, assuming all relevant and valid considerations are equal, are awarded one-half to each spouse-partner.
When dividing the assets and debts of the parties in a divorce case, the family "court shall take into consideration: the respective merits of the parties, the relative abilities of the parties, the condition in which each party will be left by the divorce, the burdens imposed upon either party for the benefit of the children of the parties, and all other circumstances of the case." HRS § 580-47(a) (1993). Other than the relative circumstances of the parties when they entered into the marital partnership and possible exceptional situations, the above quoted part of HRS § 580-47(a) requires the family court to focus on the present and the future, not the past. Therefore, the following facts are not valid and relevant considerations: (1) each spouse-partner handled all or much of his or her finances and all or many of the improved real properties he or she brought into the marriage without involvement by the other spouse; and (2) other than by the fact of the marital partnership, one spouse-partner was not involved with the improved real properties the other spouse-partner brought into the marriage.
In the absence of (a) a valid and enforceable premarital agreement, marital agreement, and/or divorce agreement requiring such an order, (b) a valid and enforceable legal obligation requiring divorcing marital partner A to pay some form of child support, spousal support, retirement benefits and/or some other payment to divorcing marital partner B after divorcing marital partner A's death, or (c) a compelling reason on the record for such an order, the family court abuses its discretion when it orders divorcing marital partner A to allow divorcing marital partner B, at divorcing marital partner B's expense, to continue to be the beneficiary of insurance payable on the death of divorcing marital partner A.
Paul A. Tomar, Law Office of Bradley A. Coates, Honolulu, for plaintiff-appellant/cross-appellee.
Charles T. Kleintop (Carolyn O. Tavoularis and Patrick Naehu with him on the briefs; Stirling & Kleintop, of counsel), Honolulu, for defendant-appellee/cross-appellant.
Before BURNS, C.J., and WATANABE and ACOBA, JJ.
Plaintiff Orlando Epp (Husband) appeals the family court's August 30, 1991 Decree Granting Divorce and Awarding Child Custody (August 30, 1991 Divorce Decree) and October 9, 1991 "Order Following Hearing on Plaintiff's Motion for Reconsideration Filed July 23, 1991" and "Defendant's Motion for Reconsideration and/or Clarification Filed July 23, 1991" (October 9, 1991 Order). Defendant Doris Epp (Wife) cross-appeals the August 30, 1991 Divorce Decree. We (1) vacate (a) the property division and distribution part of the August 30, 1991 Divorce Decree and (b) the October 9, 1991 Order and (2) remand for further proceedings in accordance with this opinion.
Husband was born in 1920. Wife was born in 1934. Their date of marriage (DOM) was January 19, 1978. There were no children of the marriage.
After thirty-two years of service in the United States Army, Husband retired as a brigadier general in 1974 and, since that time, has been receiving monthly military disability payments based on a forty percent disability and military retirement monthly payments and benefits. Husband testified that, although the disability payments are offset against his retirement payments, the disability payments are nontaxable. In 1979, Husband's military disability/retirement gross cash benefit was $2,900 per month or $34,800 per annum. In 1982, it was $3,789.08 per month or $45,469 per annum.
In the early years of the marriage Wife's taxable income was as follows:
----------------------------------------------------------------
1978 1979 1980 1981
----------------------------------------------------------------
Real Estate Business 10,037 (1,003) 10,363 (1,036)
Capital Gain 18,701 28,924 9,391
Supplemental Gain 1,639 4,818
Rents (12,891) (21,009) (3,546) (8,841)
Other 2,300
Interest 9,446
----------------------------------------------------------------
TOTAL 15,870 10,851 6,817 13,778
----------------------------------------------------------------
Eleven days prior to the DOM, Wife gave her 99-252 'I'ini Way, 'Aiea Heights, property to her daughter Marcelle. When the parties married, Wife owned the following real property:
92-608 Palailai Street, Makakilo
4363 Olaloa Street, Foster Village
98-069 Puahau Place, Pearl Ridge
one-half of 2211 Ala Wai Boulevard, Apartment No. 2103, Waikiki 1
When the parties married, Husband owned 1805 Kumakani Place, Wai'alae Iki.
When the parties married, Wife moved from her 'Aiea Heights residence into Husband's Wai'alae Iki residence. The parties lived there with Wife's two daughters and Husband's two sons. In 1980, Wife gave her 'Aiea Heights Drive property to her daughter Malia. In the latter part of 1978, the parties purchased the 19 Kai Nani Place, Kailua beachfront leasehold property for $287,328 by way of Agreement of Sale (A/S). The A/S did not require any monthly payments. Interest accrued at the rate of nine percent per annum. From the sale of their Category 1 properties (Wife's Palailai Street, Olaloa Street, and Puahau Place, and Husband's Kumakani Place), each of the parties paid the following amounts toward the purchase of the Kai Nani Place property: Wife paid $51,000 on the Kai Nani Place A/S in 1978; Wife paid $82,162 on the Kai Nani Place A/S in 1979; and Husband paid $75,000 on the Kai Nani Place A/S in 1980. The parties purchased the fee of the Kai Nani Place property in 1981 for $106,174 with borrowed money. Toward that debt, Wife paid $22,000 in 1981 and $65,000 in 1982.
Specifically with respect to the Kai Nani Place property, Wife's Exhibit F shows that the parties borrowed $17,000 from the Bank of Hawaii in 1979, refinanced the A/S debt with a City Bank loan of $90,000 in 1980 refinanced the Bank of Hawaii debt with a Fort Shafter Credit Union loan of $20,500 in 1980, refinanced with a Honolulu Mortgage loan of $127,000 in 1985, refinanced with a Honolulu Mortgage loan of $123,850 in 1987, and borrowed $15,000 from the Hickam Federal Credit Union in 1987. On the day of the conclusion of the evidentiary part of the trial (DOCOEPOT), the Kai Nani Place mortgage debt was $120,000.
In 1983, Wife started her Pacific-Hawaii Bed and Breakfast business. This business involved (a) a referral service to client landlords seeking bed and breakfast tenants, (b)...
To continue reading
Request your trial
-
Balogh v. Balogh
...(2006) ("All contracts made between spouses ... not otherwise invalid because of any other law, shall be valid."); Epp v. Epp, 80 Hawai‘i 79, 87, 905 P.2d 54, 62 (App.1995). In addition, spouses may exclude certain assets from the marital partnership entirely, thereby segregating those asse......
-
Chen v. Hoeflinger, 28808.
...voluntarily entered into by the parties with knowledge of the financial situation of the prospective spouse [.]" Epp v. Epp, 80 Hawai‘i 79, 85, 905 P.2d 54, 60 (App.1995) (quoting Lewis v. Lewis, 69 Haw. 497, 500–01, 748 P.2d 1362, 1366 (1988) ). Involuntariness is shown by evidence of "dur......
-
Collins v. Wassell
...of itself, support the family court's ultimate determination that no premarital economic partnership was formed. See, e.g., Epp, 80 Hawai‘i at 93, 905 P.2d at 68 (noting that marital partners' pattern or practice of conducting some or all of their property and financial affairs as if they w......
-
84 Hawai'i 319, Jackson v. Jackson, 16067
...HRS § 425-118(a) (1985)) (quoted in Tougas v. Tougas, 76 Hawai'i 19, 27-28, 868 P.2d 437, 445-446 (1994)). Epp v. Epp, 80 Hawai'i 79, 89, 91-92, 905 P.2d 54, 64, 66-67 (App.1995) (first and fifth alterations Since the family court's considerations (B), (C), (D), (E), (F), (H), and (I) viola......
-
Insuring the knot: the Massachusetts approach to postnuptial agreements.
...ANN. [section] 766.58 (West 2009) (providing for premarital and marital agreements without distinguishing between the two); Epp v. Epp, 905 P.2d 54, 59-61 (Haw. Ct. App. 1995) (using same considerations when assessing validity of prenuptial and postnuptial agreements); Stoner v. Stoner, 819......
-
Premarital and Marital Agreements in Hawaii Divorces
...divorce, instead of HRS § 580-47's equitable factors and the Marital Partnership Model's criteria for MPP. In Epp v. Epp, 80 Haw. 79, 85, 905 P2d 54, 60 (Haw. App. 1995), the Hawaii Intermediate Court of Appeals held that when a premarital or marital agreement setting forth support and prop......
-
Property Division in Hawaii Divorces After Gordon v. Gordon
...agreements exist as options for spouses who want to limit their alimony exposure. Haw. Rev. Stat. § 572-22; Epp v. Epp, 80 Hawaii 79, 905 P.2d 54 (App. 1995). However, only the court can protect the standard of living for the lower earning spouse. See Haw. Rev. Stat. § 580-47(a). Applying t......