Cox v. Cox

• Decision Date: 27 September 2010
• Docket Number: No. 29593.,29593.
• Citation: 310 P.3d 1047,130 Hawai'i 346
• Parties: Bruce E. COX, Plaintiff–Appellee, v. Carlyn D. COX, Defendant–Appellant.
• Court: Hawaii Court of Appeals

130 Hawai'i 346

310 P.3d 1047

Bruce E. COX, Plaintiff–Appellee,

v.Carlyn D. COX, Defendant–Appellant.

No. 29593.

Intermediate Court of Appeals of Hawai‘i.

Sept. 27, 2010.

Appeal from the Family Court of the First Circuit(FC–DivorceNo. 06–1–0096).

Steven L. Hartley, Seth R. Harris(Elsa F.M. McGehee with them on the Opening Brief), (Lockwood & Hartley, ALC), on the briefs, for Defendant–Appellant.

R. Steven Geshell, Associate Judge, on the briefs, for Plaintiff–Appellee.

FOLEY, Presiding Judge, FUJISE and LEONARD, JJ.

MEMORANDUM OPINION

Defendant–AppellantCarlyn D. Cox(Wife) appeals from the Second Amended Decree Granting Absolute Divorce (Second Amended Decree) filed on December 18, 2008 in the Family Court of the First Circuit ¹(family court).The Second Amended Decree dissolved the marriage between Wife and Plaintiff–AppelleeBruce E. Cox(Husband).On appeal Wife contends:

(1) The family court erred in the May 29, 2007 Decision and Order (D & O) where the court stated that in order to make improvements, “Wife ... further encumbered the Virginia Residence with a Second Deed of Trust given to Judy Morris”(Second Deed of Trust); in Finding of Fact (FOF) 22 of the April 17, 2009 Findings of Fact and Conclusions of Law (FOF/COL) where it found that “[i]t was unclear precisely how Wife used the funds she received from the [Second Deed of Trust], whether for improvements to the Virginia Residence or for her attorney's fees in the divorce litigation”; in the May 22, 2008“Order Granting in Part and Denying in Part [Husband's]Motion for Reconsideration and/or Further Hearing Filed February 25, 2008”(May 22, 2008Order); and the Second Amended Decree insofar as they relied on the D & O and FOF 22.

(2) Conclusion of Law (COL) 10, where the family court concluded the Second Deed of Trust “is not a marital debt, but a separate debt of Wife's,” is wrong, and the D & O; May 22, 2008 Order; and Second Amended Decree insofar as these pleadings relied on COL 10 are wrong.

(3) The family court erred in the May 22, 2008 Order and Second Amended Decree by failing to adjust the equalization payment, which was based on the court's erroneous ruling that the Second Deed of Trust was not a marital debt.

(4) The family court erred in FOF 50 by finding that Husband's “Motion for Attorney's Fees and Costs Pursuant to Hawai‘i Family Court[Rules (HFCR) ]Rule 68”(Rule 68 Motion)“was timely filed on January 21, 2008[sic],”² and COL 18 is wrong where it concludes the court had jurisdiction to hear Husband's Rule 68 Motion because after Wife filed a notice of appeal, appellate jurisdiction attached and the family court's authority to issue orders on motions for attorney's fees pursuant to HFCR Rule 68 was removed.

(5) COL 19 is wrong where the family court concluded that “[e]ven if it could be construed that appellate jurisdiction divested the Court of the ability to rule on a timely-filed post trial motion, the Order re [Husband's]Motion for Attorney's Fees, filed February 9, 2009, stayed any ruling on Husband's Rule 68 request pending the appeal,” inasmuch as the court failed to address Wife's separate request for fees based on Husband's bad faith filing of the Rule 68 Motion, which wasted Wife's resources by forcing Wife's counsel to prepare for the hearing and appear in court.

(6) The family court erred in FOF 50 by finding that “Husband's Rule 68 Motion was timely filed on [January 22, 2009],” and COL 18 is wrong where the family court concluded it had jurisdiction to hear the Rule 68 Motion because the Rule 68 Motion was untimely filed under Hawai‘i Rules of Civil Procedure Rule 54(d)(2)(B).

I.BACKGROUND

Husband and Wife married on October 3, 1992.The parties did not have any children.During the marriage, a house in the State of Virginia(the Virginia Residence) was purchased and titled in Husband's name.The parties lived in the Virginia Residence until they experienced marital difficulties and separated in March 2004.At the time of separation, Wife had a Deed of Gift prepared, transferring the Virginia Residence to her name alone.In June 2005, Husband moved to Hawai‘i.Wife continued Residence to live in Virginia.

In September 2005, Wife in her name alone.Two refinanced the Virginia months later, Wife took out a second mortgage on the Virginia Residence for improvements to the home.

Husband filed a Complaint for Divorce on January 11, 2006.The parties submitted their respective Income and Expense and Asset and Debt Statements.

In October 2006, Wife further encumbered the Virginia Residence with the Second Deed of Trust, which was a mortgage loan for $35,000 made to Wife by her friend, Judy A. Morris(Morris).Wife testified at trial that the purpose of this loan was to pay her attorney's fees.

At the January 8, 2007 trial, Husband objected to Wife's testimony regarding the Second Deed of Trust on grounds of the best evidence rule.The family court permitted the testimony.

On May 29, 2007, the family court filed the D & O.In spite of Wife's testimony, the family court found in the D & O that Wife “encumbered the Virginia Residence with a Second Deed of Trust given to [Morris] to make improvements” to the residence.The family court awarded the Virginia Residence to Wife and stated that if Wife wanted credit for the improvements to the residence, she would have to submit a signed and notarized copy of the Second Deed of Trust and an affidavit specifying the improvements.

On June 6, 2007, Wife submitted a copy of the Second Deed of Trust and the Promissory Note Secured by Deed of Trust, but did not submit an affidavit specifying the improvements.

On June 14, 2007, Husband filed a “Motion to Strike As Evidence Documents Filed June 6, 2007 and Motion For Ruling On Objection.”Husband moved the family court to strike the Second Deed of Trust and Promissory Note and to issue a formal ruling on his best evidence rule objection at trial.Wife filed an opposition memorandum.

On August 1, 2007, the family court issued a Decree Granting Absolute Divorce (8/1/07 Divorce Decree), in which the court failed to account for the second mortgage and Second Deed of Trust in the value of the Virginia Residence.On August 9, 2007, Wife filed a “Motion for Reconsideration of the Divorce Decree Filed August 1, 2007.”

On December 17, 2007, the family court issued an “Order Re [Wife's]Motion For Reconsideration Filed August 9, 2007 & [Husband's]Motion to Strike as Evidence Documents Filed June 6, 2007 and Motion for Ruling on Objection”(the 12/17/07Order), in which the court ruled as follows:

1) [Husband's]Motion to Strike as Evidence Documents Filed June 6, 2007 and Motion for Ruling on Objection filed on June 14, 2007 is moot.The Court ruled on these issues at trial.

2) [Wife's]Motion For Reconsideration must be denied because the Court did not act on it within ninety days of its filing on August 9, 2007.However, based on Rule 60(b) of the [HRFC], the Court will correct the mistake in its prior order by omitting the second mortgage to the Virginia Credit Union in the amount of $27,000.00 on the Virginia house.This debt shall be considered a marital debt.

3) On the reserved issue of the Second Deed of Trust to [Morris] as a marital debt, this debt shall not be considered a marital debt, but one separate to Wife.

On February 14, 2008, the family court issued an Amended Divorce Decree.Husband filed a Motion for Reconsideration of the Amended Divorce Decree, and on May 22, 2008, the family court issued an order granting in part and denying in part the motion.

On December 18, 2008, the family court issued the Second Amended Decree, in which the court treated the Second Deed of Trust as Wife's separate debt, and ordered that each party assume his or her own attorney's fees and costs.

Wife timely filed a notice of appeal on January 20, 2009.Two days later, Husband filed the Rule 68 Motion.On January 27, 2009, Wife's attorney filed an affidavit in response to the motion, arguing that

[Husband's attorney] knew, or should have known, that the jurisdictional limitations of the Family Court ended with the filing of the [Notice of Appeal] and that the Family Court could not address the Rule 68 Motion once [Wife] filed the [Notice of Appeal].As such, Wife should be awarded her attorneys' fees and costs for having to respond to the untimely and improper Rule 68 Motion.

Although Husband thereafter withdrew his Rule 68 Motion, the family court held a hearing on the motion, at which hearing Husband orally requested a stay of ruling pending appeal.On February 9, 2009, the family court granted Husband's request for a stay of ruling and preserved Wife's right to request attorney's fees and costs for filing an opposition memorandum to Husband's Rule 68 Motion pending the appellate decision on the case.

On April 17, 2009, the family court issued its FOF/COL.The family court found, among other findings, that

(1) although Wife encumbered the Virginia Residence with a Second Deed of Trust to Morris, it was unclear how Wife spent the $35,000 she received from Morris—whether for home improvements or attorney's fees;

(2) if Wife wanted credit for the Second Deed of Trust, she needed to provide the family court with proof the $35,000 had been used for home improvements; and

(3) Husband's Rule 68 Motion was timely filed.

In the FOF/COL, the family court concluded, inter alia, that

(1) the Virginia Residence was a marital asset, subject to division, with the appropriate offsets or category claims to each party;

(2) the Second Deed of Trust was a separate debt of Wife;

(3)the court had jurisdiction to hear Husband's Rule 68 Motion under Hawaii Rules of Appellate Procedure (HRAP)Rule 4(a)(3); and

(4) even if the court did not have jurisdiction under HRAP 4(a)(3), the court properly stayed any ruling on Husband's Rule 68 Motion pursuant to HFCR 62(d).³

On May 1, 2009, pursuant to HRAP Rule 4(a)(3), Husband filed a motion before this...