Myers v. Myers

• Decision Date: 25 November 1988
• Docket Number: No. 12380,12380
• Citation: 70 Haw. 143,764 P.2d 1237
• Parties: , 57 USLW 2391 Virginia Gail MYERS, Petitioner-Appellant, v. Jack Eugene MYERS, Respondent-Appellee.
• Court: Hawaii Supreme Court

Page 1237

764 P.2d 1237

70 Haw. 143, 57 USLW 2391

Virginia Gail MYERS, Petitioner-Appellant, v. Jack Eugene MYERS, Respondent-Appellee.

No. 12380.

Supreme Court of Hawai'i.

Nov. 25, 1988.

Reconsideration Denied Dec. 8, 1988.

Syllabus by the Court

1. There is no fixed rule for determining the amount of property to be awarded each spouse in a divorce action other than as set forth in Hawaii Revised Statutes (HRS) § 580-47. HRS § 580-47 gives the family court discretion to divide marital property according to what is just and equitable, and this includes the discretion to award separate property to the non-owning spouse.

2. When the directive to the court is to do what is just and equitable in the circumstances, each case must be decided upon its own facts and circumstances. This does not mean the court may do whatever pleases it. A grant of discretion means instead that the court has a range of choice and its decision will not be disturbed as long as it stays within that range and is not influenced by any mistake of law. This court has therefore avoided, where possible, the adoption of general rules governing the division of marital assets.

3. Rule 2 of the Rules of the Intermediate Court of Appeals provides the supreme court may order that a published opinion of the ICA be changed to a memorandum opinion. When "depublication" occurs the opinion can no longer be cited as authority, save in limited situations.

4. A presumption that a legal-owner spouse is entitled to the appreciation in marital assets between the final separation of the parties in contemplation of divorce and the conclusion of the evidentiary part of the divorce trial cannot be squared with the mandate of HRS § 580-47 to look beyond the mere form of title in dividing the estate of the parties.

5. Appreciation unrelated to the activities of either spouse, i.e. passive appreciation, is a factor to be taken into consideration in dividing marital assets. But it may or may not be just and equitable in the circumstances to award part of the appreciation to the non-owning spouse.

6. Family court judges should not be bound by a rule that automatically presumes a legal-owner spouse is entitled to the appreciation in marital assets between the date of final separation in contemplation of divorce and the conclusion of the evidentiary part of a divorce trial.

7. Our divorce and separation laws do not contemplate any final division of property other than where the person is divorced a vinculo matrimonii.

8. Marriage is a partnership to which both parties bring their financial resources as well as their individual energies and efforts. That one partner brings to the marriage substantially greater resources than the other does not make this any less the case.

9. A presumption that the non-owning spouse is not entitled to any part of the appreciation in property legally owned by the other after a declaration by either that the marriage has ended is inconsistent with the partnership model of marriage and the rule that a final division of marital property can be decreed only when the partnership is dissolved.

Robert S. Kaufman (Fain, Kaufman & Young, of counsel, with him on the writ and brief, Lance S. Spiegel, Fain, Kaufman & Young, P.C., Beverly Hills, Cal., of counsel, and James E. Duffy, Jr., Fujiyama, Duffy & Fujiyama, Honolulu, of counsel), for petitioner-appellant.

Daniel S. Ukishima, Honolulu (Craig G.H. Yim, with him on the brief), for respondent-appellee.

Before LUM, C.J., NAKAMURA, HAYASHI and WAKATSUKI, JJ., and CHUN, Circuit Judge in place of PADGETT, J., recused.

NAKAMURA, Justice.

The Family Court of the First Circuit awarded Virginia Gail Myers a decree of divorce from Jack Eugene Myers on May 8, 1987; the decree also divided and distributed the estate of the parties. Mrs. Myers appealed, averring the family court "erred in its distribution of the property of the parties[.]" The Intermediate Court of Appeals agreed that the family court abused its discretion in determining the value of her husband's pension plan but affirmed the property division in all other respects. We granted her application for certiorari because other aspects of the family court's final division and distribution of the estate of the parties did not appear to be just and equitable, as mandated by Hawaii Revised Statutes (HRS) § 580-47. A review of the record confirms that the family court's treatment of the post-separation appreciation of property acquired with marital assets but held in the husband's name, following a rule enunciated by the Intermediate Court of Appeals in Woodworth v. Woodworth, 7 Haw.App. 11, 740 P.2d 36 (1987), is inconsistent with HRS § 580-47. We therefore overrule Woodworth v. Woodworth as precedent to the extent it is inconsistent with this opinion, vacate the portions of the decree covering the Kaiser Option and the Revere Copper investment, and remand the case for further proceedings not inconsistent with this opinion.

I.

A.

The parties were married on December 12, 1969, physically separated on June 19, 1984, and divorced on May 8, 1987. No children were born of the marriage. The record on appeal indicates the parties discussed divorce and its legal consequences on numerous occasions prior to their separation.

In December of 1982, they reached an agreement whereby Mrs. Myers was to receive one-third of the marital assets and Mr. Myers was to receive the remaining two-thirds and be responsible for liabilities other than the first mortgage on the marital residence, which Mrs. Myers was to receive. The oral agreement was refined and reduced to writing thereafter by the lawyers retained by the parties, and the Agreement in Contemplation of Divorce was executed on October 11, 1983. ¹ In accord with its terms, Mr. Myers then conveyed his interest in the marital residence to Mrs. Myers and removed the encumbrance of the second mortgage on the property he also made a lump sum payment of $1,008,222.00 to Mrs. Myers.

Mrs. Myers filed her complaint for divorce on July 24, 1984. Though the parties initially contemplated that there would be no contest of the action, Mr. Myers filed his Cross-Complaint for Divorce on March 7, 1985. And when the case was finally heard in October of 1986, a primary dispute to be resolved by the family court was the validity and effect of the Agreement in Contemplation of Divorce. The court concluded the agreement was valid; it nevertheless "refuse[d] to allow the Agreement to control the division and distribution of the parties' assets."

For purposes of valuing the assets subject to division, "in view of the fact that almost all of the financial documents that were offered into evidence [were dated] June 30, 1984 ..., the [c]ourt [concluded] it [was] reasonable [to] use [that date rather than the date of separation, June 19, 1984]." Among the assets valued and divided by the family court were the husband's interest in an Option Agreement and Right of First Refusal for the purchase of the real property on which the Kaiser Hospital formerly stood (the Kaiser Option) and his interest in a limited partnership holding Revere Copper stock (the Revere Copper investment).

Mr. Myers acquired a 50% interest in the Kaiser Option from Bruce Stark on September 2, 1982 and entered into an agreement to purchase the remaining 50% interest from Stark on January 19, 1984. Mr. Myers found it necessary thereafter to file suit against Kaiser Hospital to enforce the option to buy its property. The suit was settled on May 4, 1984, and the validity of the option, as well as the price of the real property, was established. He commenced his efforts to obtain the necessary governmental approvals and permits to develop the property in October of 1984 and succeeded more than a year later in December of 1985. He sold the Kaiser Option for approximately $12,000,000.00 in April of 1986.

The interest in the Revere Copper investment was acquired by Mr. Myers in 1983, and the transaction involved an outlay of $725,000.00 on his part. He "had no intention of sharing any portion of this investment with [Mrs. Myers since the acquisition followed the execution of the Agreement in Contemplation of Divorce and] he believed the funds used to purchase the investment were his own separate funds." The family court found the investment was worth $1,380,410.00 as of June 30, 1984.

The court ruled Mrs. Myers was "entitled to one-half ( 1/2) the value of the [Kaiser] Option as of June 30, 1984[,]" and "one-half ( 1/2) ... of the value of the [Revere] stock[ ]" as of that date. She appealed from "the part of the May 8, 1987 Divorce Decree relating to the division and distribution of property and debts." The appeal was assigned to the Intermediate Court of Appeals for disposition.

B.

Mrs. Myers sought to overturn the property division on grounds that the family court "improperly valued and apportioned the Kaiser Option and Revere Copper Investment[ ]" and "erred as a matter of law by concluding that Husband's pension is subject to deferred taxes." The Intermediate Court agreed "that the family court abused its discretion when it reduced the value of Husband's $946,000 pension plan account by $560,000 on account of the taxes that Husband would have been obligated to pay if he had withdrawn the funds in his pension plan account on June 30, 1984." The appellate court, however, found no reason to disturb the valuation and apportionment of the Kaiser Option and the Revere Copper investment, deeming these actions consistent with its decision in Woodworth v. Woodworth, 7 Haw.App. 11, 740 P.2d 36 (1987).

II.

Mrs. Myers now urges us to review and modify the part of the intermediate court's decision in Woodworth v. Woodworth, supra, "establishing legal ownership as the uniform starting point for the distribution of post-separation appreciation of assets acquired during marriage by and from the investment of marital assets, labor and capital of the...