Cassiday v. Cassiday, 9598

• Decision Date: 18 March 1986
• Docket Number: No. 9598,9598
• Parties: Barbara D. CASSIDAY, Respondent-Appellant, v. Benjamin B. CASSIDAY, Petitioner-Appellee.
• Court: Hawaii Supreme Court

Page 1133

716 P.2d 1133

68 Haw. 383

Barbara D. CASSIDAY, Respondent-Appellant, v. Benjamin B. CASSIDAY, Petitioner-Appellee.

No. 9598.

Supreme Court of Hawai'i.

March 18, 1986.

Syllabus by the Court

1. The during-marriage appreciation of separate property is a marital asset subject to division at the time of divorce.

2. Hawaii Revised Statutes § 580-47 gives the family court the discretion to divide marital property according to what is just and equitable, and judges should not be bound by any rule that automatically presumes a fifty-fifty split.

3. When dividing the appreciation of separate property, a trial court abuses its discretion when it fails to consider the extent to which the marriage in and of itself contributed to the accumulation and preservation of that property.

4. The trial court may award up to half of the during-marriage appreciation of separate property to the non-owning spouse if, under the totality of the circumstances, it is just and equitable to do so.

5. After weighing the equities, a trial court may award a non-owning spouse less than fifty percent of the appreciation of separate property without abusing its discretion.

6. A trial court's failure to award even a small percentage of the appreciation of separate properties does not necessarily constitute an abuse of discretion.

7. In computing the date-of-marriage net value of separate property and the subsequent appreciation of these property, it is within the sound discretion of the trial court to adjust for inflation.

Wallace S. Fujiyama (Fujiyama, Duffy & Fujiyama, of counsel), Daniel S. Ukishima, Jay T. Suemori (Ukishima & Matsubara, of counsel), Honolulu, for the writ and on brief, for petitioner-appellee.

Charles R. Kozak on the answer and Charles R. Kozak and Charles S. Gerdes, Honolulu, on brief, for respondent-appellant.

Before LUM, C.J., and NAKAMURA, PADGETT, HAYASHI and WAKATSUKI, JJ.

LUM, Chief Justice.

Respondent-Appellant Barbara D. Cassiday (Wife) appealed from a decree of divorce that awarded her a smaller share of the marital estate and less spousal support than she initially had sought. She contended that the family court abused its discretion when it failed to award her one-half of all the during-marriage appreciation of non-personal property owned by her husband, Petitioner-Appellee Benjamin B. Cassiday (Husband). The Intermediate Court of Appeals agreed and reversed.

We granted certiorari to review the general rule articulated by the intermediate court that it is equitable to award each party half of the during-marriage real appreciation of property separately owned at the time of the marriage or subsequently received through gifts or inheritance and still separately owned at divorce (hereinafter referred to as "separate properties", even though they are part of the marital estate).

We agree that the trial court abused its discretion in failing to award Wife a share of the during-marriage appreciation of Husband's separate properties. However, we decline to adopt the general rule that it is equitable to award her half of that appreciation. ¹

I.

We adopt the comprehensive statement of facts set forth by the intermediate court. Briefly, the pertinent facts are as follows:

On December 27, 1979, after thirty years of marriage, Wife filed a complaint for divorce from Husband, a retired brigadier general in the United States Air Force. ²

At the time of their 1949 marriage, Husband was an Air Force major who owned several parcels of real property along Kalanianaole Highway. ^{3 3} These parcels had tax assessed values ranging from approximately $6,500 to approximately $13,700. ⁴ Husband maintained these properties in his own name throughout the marriage and apparently used only his non-marital assets to pay the obligations on them. Except for her participation in the refurbishing of the house at 5699 Kalanianaole Highway, the trial court found that Wife did not directly contribute to the maintenance or financing of these separate properties.

During the marriage, Husband acquired several additional properties through gifts from his mother and inheritance. Among the gifts were a 25% interest in property at 5621 Kalanianaole Highway ⁵ and 25% interest in Hawaii Loa Ridge. Husband sold the Hawaii Loa interest and invested in several limited partnerships and neighbor island properties. ⁶

At the time of the divorce, Husband's separate properties had increased substantially in value. For example, Wife claimed that the property at 5699 Kalanianaole Highway had a net value at divorce of $727,500 and the property at 5691 Kalanianaole Highway had a net value of $444,000.

Except for the family residence and an Aspen, Colorado condominium used for "family purposes," ⁷ the trial court awarded all of the separate properties to Husband.

From this award, Wife appealed and the intermediate court reversed.

II.

Husband contends that because his separate properties were acquired through family gifts or inheritance; were separately maintained with non-marital assets and without any contribution of time, effort or money from wife; and were still separately owned at the time of divorce, the trial court did not abuse its discretion in awarding these properties exclusively to him. We disagree.

Hawaii Revised Statutes (HRS) § 580-47(a)(3) (Supp.1984) vests in the trial court the discretion to divide all of the property of the parties, whether community, joint or separate according to what is "just and equitable." ⁸ Sheedy v. Sheedy, 1 Haw.App. 595, 623 P.2d 95 (1981); Brown v. Brown, 1 Haw.App. 533, 621 P.2d 984 (1981). This includes the discretion to award separate property to the non-owning spouse. Takara v. Takara, 4 Haw.App. 68, 660 P.2d 529 (1983); Takaki v. Takaki, 3 Haw.App. 189, 647 P.2d 726 (1982).

In Takara, the intermediate court held specifically that the appreciation of property separately owned at the time of marriage or acquired during the marriage by gift or investment and still separately owned at the time of divorce was a marital asset subject to division after consideration of all the relevant circumstances of the case. Id. 4 Haw.App. at 71, 660 P.2d at 532.

In Ahlo v. Ahlo, 1 Haw.App. 324, 619 P.2d 112 (1980), that court recognized that the source of the asset is but one of the "circumstances of the case," as is a spouse's positive or negative effect on the accumulation or preservation of the separate property of the spouse. Horst v. Horst, 1 Haw.App. 617, 623 P.2d 1265 (1981). At the same time, this court has long recognized that undue emphasis on any particular factor is an abuse of discretion. Carson v. Carson, 50 Haw. 182, 436 P.2d 7 (1967).

These decisions are consistent with the time honored proposition that marriage is a partnership to which both partners bring their financial resources as well as their individual energies and efforts. ⁹ That one partner brings to the marriage substantially greater assets than the other does not make this any less the case.

On the facts before us, we agree that the trial court abused its discretion by placing undue emphasis on the source of the asset and on Wife's lack of direct participation in the financing and maintenance of these assets. While these factors are important and must be considered on remand, we find that the trial court failed to take into account the extent to which the marriage in and of itself affected the accumulation or preservation of Husband's separate properties.

We particularly note that this was a marriage of some thirty years during which Husband was able to rise from the rank of major to that of brigadier general. Wife had no career of her own. The record shows that for many years she performed the social obligations of a high ranking officer's wife, followed Husband to various overseas duty stations and raised their two surviving children.

We further note that Husband's high rank and successful military career provided the marital unit with financial well being such that it was unnecessary for him to deplete his own separate properties. On the contrary, the clear record before us shows that these properties flourished during the marriage. To the extent that Wife contributed to the advancement of Husband's military career and thus made it unnecessary for him to draw upon his own resources, the trial court abused its discretion by not allowing her to share in those assets she helped to preserve.

III.

Having decided that Wife is entitled to share in the appreciation of Husband's separate properties, we now consider whether she is entitled to half of that appreciation. The intermediate court concluded that she is. It held that:

As a general rule, it is equitable to award each divorcing party one-half of the after acquisition but during marriage real increase in the net value of property separately owned at the [time of marriage] or acquired during the marriage by gift or inheritance and still separately owned at the [time of divorce].

The effect of such a rule is to create a rebuttable presumption that separate property should be evenly divided. However, we do not agree that judges should be bound by any rule that automatically presumes a fifty-fifty split, and we therefore decline to follow this one.

Again we must note that HRS § 580-47 gives to the family court the discretion to divide marital property according to what is just and equitable. Au-Hoy v. Au-Hoy, 60 Haw. 354, 590 P.2d 80 (1979). The legislature recognized, as do we, that each divorce must turn on its own facts. An equal division of the marital estate may be wholly equitable in one circumstance and grossly unfair in another. This is no less true when the asset being divided is separate property. For this reason, we have in the past declined to adopt fixed rules for determining the amount of property to be awarded to each spouse in a divorce action, other than as set forth in HRS § 580-47, and we decline to do so again today. See Au-Hoy, 60 Haw. at 357,...