Collins v. Wassell

• Decision Date: 28 February 2014
• Docket Number: No. SCWC–30070.,SCWC–30070.
• Citation: 133 Hawai'i 34,323 P.3d 1216
• Parties: Colleen P. COLLINS, Petitioner/Plaintiff–Appellant, v. John A. WASSELL, Respondent/Defendant–Appellee.
• Court: Hawaii Supreme Court

133 Hawai'i 34

323 P.3d 1216

Colleen P. COLLINS, Petitioner/Plaintiff–Appellant,

v.John A. WASSELL, Respondent/Defendant–Appellee.

No. SCWC–30070.

Supreme Court of Hawai‘i.

Feb. 28, 2014.

Joy A. San Buenaventura, Hilo, for petitioner.

Andrew S. Iwashita, Hilo, for respondent.

RECKTENWALD, C.J., NAKAYAMA, and McKENNA, JJ., with ACOBA, J., Concurring Separately, and POLLACK, J., Dissenting Separately.

Opinion of the Court by RECKTENWALD, C.J.

In June 2000, Colleen Collins and John Wassell gathered at a park with their friends, families, and a minister, for the apparent purpose of getting married. After the wedding ceremony, the couple began having second thoughts about the marriage because of its financial implications. Specifically, they believed that Collins and her two daughters would be better able to afford college tuition if Collins was listed as a single parent on financial aid applications. Thus, the couple requested that the minister not submit the completed license and certificate of marriage to the State Department of Health. The minister returned the form to Collins and Wassell, and they subsequently wrote to the State Department of Health stating that they were not getting married.

Following a one-week honeymoon, Collins and Wassell began living together. They each maintained individual financial accounts, but also shared a joint bank account. The couple deposited monetary gifts from their wedding into the joint account and they each agreed to deposit funds into the account. Collins made regular monthly deposits to the joint account. Collins also deposited funds from the sale of her separately owned townhouse and a tax refund into the joint account. Funds from the joint account were used to pay off the mortgage on Wassell's separately owned house, and for the couple's shared utility and grocery bills. The couple legally married in January 2005, after Collins no longer needed financial aid to fund her daughters' college educations.

In 2007, Collins filed for divorce against Wassell, and argued that she was entitled to an equalization payment for her contributions during the period of premarital cohabitation. Wassell, however, maintained that an equalization payment was not warranted because he and Collins had agreed that they would each maintain separate financial identities until the time of their legal marriage. The family court agreed with Wassell and determined that the couple did not form a premarital economic partnership within the meaning of Helbush v. Helbush, 108 Hawai‘i 508, 122 P.3d 288 (App.2005).¹ The Intermediate Court of Appeals affirmed the divorce decree entered by the family court, and Collins sought review in this court.

For the reasons set forth below, we now affirm the rule set forth in Helbush, that, in dividing and distributing property of a married couple pursuant to Hawai‘i Revised Statutes (HRS) section 580–47, premarital contributions are a relevant consideration where the parties cohabited and formed a premarital economic partnership. We further hold that the family court clearly erred in concluding that Collins and Wassell did not form a premarital economic partnership. We therefore vacate the judgment of the ICA and the family court's divorce decree and remand to the family court for further proceedings consistent with this opinion. Because our resolution of these two issues is dispositive, we do not consider Collins's arguments that: (1) in the absence of a premarital economic partnership the family court should have nevertheless considered her premarital contributions; and (2) premarital contributions are a valid and relevant consideration warranting deviation from partnership principles.

I. Background

The following factual background is taken from the record on appeal.

A. Family Court Proceedings

On August 8, 2007, Collins filed a complaint for divorce against Wassell, alleging that their marriage was irretrievably broken. In her position statement, Collins stated that she should be awarded an equalization payment for her contributions during the couple's premarital cohabitation:

Cohabitation occurred on June 18, 2000 when [Wassell] moved into [Collins's townhouse]. [Wassell] did not pay [Collins's] mortgage at that time although he was receiving rent from his house. From the time of cohabitation until the date of marriage, the parties had a joint financial relationship where [Collins] paid off the mortgage in the marital house, previously owned by [Wassell] and continued to pay into the joint account from where joint bills were paid. Although[ ] marriage did not occur until 2005 equalization is due [Collins] for the amount of: $74,122.00. [Collins] is further entitled to her prorata rental equity due to [Wassell's] sole use of the marital home during separation.

(Emphasis added).

After Wassell filed an answer, he filed a motion for partial summary judgment, requesting that the family court determine the following: (1) the couple was married on January 19, 2005; (2) the couple agreed after their wedding ceremony on June 19, 2000, that they would not file their marriage license and would not be married; (3) the purpose of the couple not filing their marriage license was to allow Collins to complete financial aid forms as a single parent; and (4) the couple's "arrangement, whereby the partners would cohabitate but keep their finances separate while maintaining their single status ... in lieu of a traditional marriage indefinitely and expressly for [Collins's] personal financial interest" was a valid and enforceable premarital agreement.

Collins filed an opposition to Wassell's motion arguing that pursuant to the ICA's decision in Helbush, she and Wassell had formed a premarital economic partnership after their 2000 wedding ceremony. The family court granted the motion in part, determining that Wassell's and Collins's date of marriage (DOM) was January 19, 2005, but denied the motion as to the remaining issues.

Wassell argued in his position statement the following:

[Collins] argues for deviation from the Partnership Model division based upon DOM [ (]January 19, 2005) valuations. [Collins's] argument is based upon a June 18, 2000 marriage ceremony which she put on for show. Although [Wassell] thought that the marriage was taking place, at the post-ceremony reception [Collins] told [Wassell] that she did not want the marriage for financial reasons. [Collins's] daughters were about to attend prestigious colleges [.] ... [Collins] would need financial aid to pay for the $30,000 plus annual cost. If [Collins] was married the financial aid available would be less. [Collins] wanted to keep their finances separate so she could complete the financial aid forms showing her separate individual income and expenses. [Wassell] agreed not to be married on June 18, 2000 and to keep their finances separate.

It is [Wassell's] position that there was no joint financial relationship from June 18, 2000, as [Collins] contends. It is [Wassell's] position that they loved each other and wanted to live together. When they lived together as gestures of their love they bought each other meals, and shared their living arrangements and helped each other in various ways.

A one-day trial was held on the division of the parties' marital estate. Collins and Wassell were the only two witnesses to testify and they testified in relevant part as follows.

Collins testified that, on June 18, 2000, she and Wassell had a wedding ceremony with their friends, families, and a minister. After the ceremony, the couple signed the marriage license, but neither Collins nor Wassell mailed the marriage license to the State Department of Health because Collins "was afraid that [her] daughters would lose a lot of financial aid that they were receiving for college." Specifically, Collins was concerned that the colleges would consider both her and Wassell's incomes in determining financial aid awards for her daughters if she were married. Wassell told Collins that he thought her daughters should pay their own way through college. Collins did not believe that it was Wassell's responsibility to help pay for her daughters' college educations.

Collins further testified that, following their honeymoon, for a few weeks the couple moved back and forth between Collins's separately owned townhouse and Wassell's separately owned house. Wassell then moved into Collins's townhouse. Wassell moved all of his furniture into the townhouse, but left some appliances in his house. While the couple was living at the townhouse, Wassell did not pay any part of the mortgage nor did he pay rent to Collins. Collins paid for all of the townhouse's utilities. Collins acknowledged that Wassell may have done small things around the townhouse, but testified that he did not make any major repairs. While Wassell was living in Collins's townhouse, he was able to rent out his house.

Collins testified that, even though they were not legally married between June 2000 and January 2005, she and Wassell conducted their finances as if they were married. Specifically, Collins testified that although she and Wassell agreed to maintain their individual bank accounts, they also agreed to contribute to a joint bank account, which would be used to pay for shared living expenses. The monetary gifts the couple received at their wedding ceremony, totaling $1,120, were deposited into this joint account. Collins regularly deposited between $500 and $700 a month into the joint account. Collins also deposited a personal income tax refund totaling $1,043.60 into the joint account. According to Collins, Wassell made a few contributions to the account.

Collins sold the townhouse in 2001, at which point the couple moved into Wassell's house. The money from the sale of Collins's townhouse, totaling $23,020.74, was deposited into the joint account. On the same day that deposit was made, $4,239.59 from the joint account was used to pay off the mortgage on Wassell's house. Funds from the joint account...