Jacoby v. Jacoby

• Decision Date: 27 October 2021
• Docket Number: SCWC-17-0000451
• Citation: 498 P.3d 689,150 Hawai‘i 158
• Parties: Nicoleta JACOBY, Petitioner/Plaintiff-Appellee, v. Bennett JACOBY, Respondent/Defendant-Appellant.
• Court: Hawaii Supreme Court

150 Hawai‘i 158

498 P.3d 689

Nicoleta JACOBY, Petitioner/Plaintiff-Appellee,

v.Bennett JACOBY, Respondent/Defendant-Appellant.

SCWC-17-0000451

Supreme Court of Hawai‘i.

OCTOBER 27, 2021

Charles T. Kleintop and Naoko C. Miyamoto, Honolulu, for petitioner

Michael S. Zola, Kailua-Kona, for respondent

RECKTENWALD, C.J., NAKAYAMA, McKENNA, WILSON, AND EDDINS, JJ.

OPINION OF THE COURT BY McKENNA, J.

I. Introduction

This consolidated appeal arises from the rulings of the Family Court of the Third Circuit ("family court") on remand from a published opinion of the Intermediate Court of Appeals ("ICA").¹

The family court entered a divorce decree on July 5, 2011, after a November 2009 divorce trial between petitioner Nicoleta Jacoby ("Nicoleta") and respondent Bennett Jacoby ("Bennett").² In relevant part, the family court awarded Nicoleta indeterminate spousal support of $4,000 per month. The family court calculated the spousal support award partly based on a finding that Bennett's total gross monthly income was $29,402, which included $9,064 in investment income. The family court had, however, also awarded half of the assets generating the subject investment income to Nicoleta as part of the property division.

In a 2014 published opinion, the ICA affirmed in part and vacated in part the July 5, 2011 divorce decree and remanded several issues, which included the issue of spousal support, to the family court for further proceedings. Jacoby v. Jacoby (Jacoby I ), 134 Hawai‘i 431, 341 P.3d 1231 (App. 2014), as corrected (Mar. 24, 2015).³ In relevant part, the ICA concluded that the family court erroneously included the entire investment income in Bennett's income instead of allocating half to Nicoleta because the family court had awarded half of the assets generating the income to Nicoleta.

On remand, the family court recalculated the income of the parties; Nicoleta's monthly income was recalculated as $4,532, half of $9,064, and Bennett's monthly income was recalculated as $24,870. The family court also reaffirmed Nicoleta's reasonable monthly expenses as $6,237. The family court concluded, however, that "it would be just and equitable to continue the award of permanent spousal support of $4,000 per month." Nicoleta's resulting total monthly income from the investment income and spousal support was $8,532, exceeding her $6,237 monthly reasonable expenses.

Bennett appealed, arguing in relevant part that the family court abused its discretion and erred as a matter of law in awarding spousal support to Nicoleta that exceeded her $6,237 monthly reasonable expenses.

In its April 20, 2021 summary disposition order ("SDO"), the ICA ruled in favor of Bennett. See Jacoby v. Jacoby (Jacoby II ), Nos. CAAP-17-0000451 and CAAP-19-0000664, 2021 WL 1554197 (App. Apr. 20, 2021) (SDO). The ICA did so, however, on the basis that in Jacoby I, it had remanded for the family court to redetermine spousal support in light of the corrected income assumptions for investment income. The ICA ruled the family court therefore erred by engaging in a new just and equitable determination on remand, as it was not a part of the remand order in Jacoby I.

On certiorari, Nicoleta argues the ICA erred by ruling the family court was precluded on remand from engaging in a new just and equitable determination for spousal support.

We hold the ICA erred by setting aside the amended spousal support award order on the basis that the family court was prohibited from doing so on remand because Hawai‘i Revised Statutes ("HRS") § 580-47(a) (2006 & Supp. 2011) provides family courts with continuing jurisdiction to address issues of spousal support. We also hold, however, that the family court erred, on remand, by maintaining spousal support at $4,000 a month because it awarded more spousal support than it determined was required to satisfy Nicoleta's demonstrated needs. We also hold, however, that the family court abused its discretion by not holding a hearing on remand to determine whether the spousal support amount should have been amended because Nicoleta showed good cause for a redetermination.

Hence, we vacate in part and affirm in part the ICA's May 24, 2021 judgment on appeal, and we remand this case to the family court for further proceedings consistent with this opinion.

II. Background⁴

A. Factual background

Nicoleta was born in Romania in 1969. She suffered various medical ailments in her youth. In November 1990, Nicoleta moved to the United States. Nicoleta met Bennett, a periodontist, in California in May 1992 and they married on June 12, 1993. Nicoleta worked at Bennett's periodontal clinic for some time without pay. Their son was born in June 1995 and their daughter in January 1997.

Nicoleta continued to suffer from numerous medical ailments throughout her life, which impacted her employability. She was diagnosed with multiple sclerosis

("MS") in late 1997. The Jacobys moved to Hawai‘i in May 1998 and they purchased a house in August 1998. Nicoleta continued to have MS flare-ups, for which she consulted specialists in Hawai‘i and California. By the time of trial, she had also developed optic neuritis, brain hemorrhaging, carpal tunnel syndrome, and left shoulder problems.

Thus, for the majority of the marriage, Bennett provided sole financial support for the family. His income included funds from a periodontal endoscope he developed and had patented in 1993. Bennett developed myofascial pain dysfunction syndrome

after a 1996 surfing accident and began receiving disability benefits. He was able, however, to continue working part-time as a periodontist.

B. Procedural background

1. Pre-Jacoby I proceedings

On December 9, 2008, Nicoleta filed for divorce. The divorce trial was held on November 12, 13, 19, and 27, 2009.

On April 14, 2011, the family court filed its findings of fact and conclusions of law ("divorce trial order"). In relevant part, the family court found (1) Nicoleta suffered numerous medical ailments; (2) Nicoleta was "medically unable to pursue any gainful employment as a result of the multiple and serious chronic medical conditions from which she has suffered since the age of 16 years"; (3) Nicoleta's $3,327 household and transportation expenses, excluding her automobile loan payments, and her $2,910 personal monthly expenses, including medical and dental, for a total of $6,237 in monthly expenses, were reasonable; (4) Bennett's total gross monthly income was $29,402, which included: (a) $16,343 per month from partial, tax free disability payments; (b) $9,064 per month from the investment income; (c) $1,267 per month from royalty income; and (d) $2,728 per month from his part-time periodontist work; (5) Bennett, for the majority of the sixteen-year marriage, was the sole financial support for the family and had the greater earning capacity; and (6) the parties had a high standard of living.

The family court concluded "it would be just and equitable to award [Nicoleta] permanent spousal support of $4,000 per month" that would "terminate upon the death of either party or upon the remarriage or cohabitation of [Nicoleta]." The family court calculated the spousal support award based, inter alia, on its finding that Bennett's total gross monthly income before deductions for support awards and medical premiums was $29,402, which included the entire investment income.⁵

On July 5, 2011, the family court filed its Decree Granting Absolute Divorce and Awarding Child Custody ("divorce decree"), which dissolved the parties’ marriage and incorporated the divorce trial order. On August 3, 2011, Bennett appealed the divorce trial order and divorce decree to the ICA, arguing in relevant part that the family court erred by awarding Nicoleta $4,000 monthly spousal support. On August 17, 2011, Nicoleta cross-appealed from the divorce decree.

2. Jacoby I

In a 2014 published opinion, the ICA ruled in relevant part that the family court did not err by awarding Nicoleta permanent spousal support, and that Bennett did not meet his burden on appeal to demonstrate the family court erred in determining the amount of Nicoleta's reasonable monthly expenses. Jacoby I, 134 Hawai‘i at 446, 341 P.3d at 1246. The ICA noted the family court had found (1) Nicoleta suffered from numerous ailments since the age of sixteen, citing to the family court's findings in its divorce trial order; (2) as a result of these ailments, Nicoleta was "medically unable to pursue any gainful employment"; and (3) Bennett had been the sole financial support for the family for the majority of the parties’ sixteen-year marriage. Id.

The ICA concluded:

However, as Bennett argues, the Family Court included the entire amount of the Investment Income ($9,064) as part of Bennett's income and none of it as part of Nicoleta's income, even though the Family Court awarded 50% of the Accounts, the underlying assets generating this Investment Income, to Nicoleta. The Family Court clearly erred in this regard and, therefore, utilized erroneous income assumptions for both parties when it determined that Nicoleta was entitled to $4,000 per month in spousal support.

....

The Family Court's findings show that it carefully considered all of the factors provided in HRS § 580–47(a) when it determined that Nicoleta was entitled to spousal support. However, the Family Court abused its discretion in ordering Bennett to pay $4,000 per month in spousal support to Nicoleta based on the erroneous allocation of the Investment Income generated by the parties’ Accounts, which were divided equally between them.

Id.

The ICA remanded to the family court for further proceedings consistent with its opinion. 134 Hawai‘i at 458, 341 P.3d at 1258. No certiorari application was filed.

3. Family court proceedings on remand

On May 14, 2015, Nicoleta filed a memorandum to request an evidentiary hearing on, inter alia, the spousal support issue. She asserted that the spousal support issue could not be resolved "by just some recalculations based on the ICA's...