Nakasone v. Nakasone

• Decision Date: 30 July 2003
• Docket Number: No. 23460.,23460.
• Citation: 73 P.3d 715,102 Haw. 177
• Parties: Carmen T. NAKASONE, Respondent/Plaintiff-Appellee, v. Gerald NAKASONE, Petitioner/Defendant-Appellant.
• Court: Hawaii Supreme Court

73 P.3d 715

102 Haw. 177

Carmen T. NAKASONE, Respondent/Plaintiff-Appellee, v. Gerald NAKASONE, Petitioner/Defendant-Appellant.

No. 23460.

Supreme Court of Hawai`i.

July 30, 2003.

Kurt Bosshard, Lihue, for petitioner/defendant-appellant, on the writ.

MOON, C.J., LEVINSON, NAKAYAMA, and ACOBA, JJ., and Circuit Judge PERKINS, Assigned by Reason of Vacancy.

Opinion of the Court by ACOBA, J.

We hold that matters in an offer of settlement made pursuant to Hawai`i Family Court Rules (HFCR) Rule 68, which are initially rejected but later settled by agreement before trial, are not subject to an award of attorney's fees and costs under Rule 68. We granted certiorari to review the decision of the Intermediate Court of Appeals<sup>1</sup> (ICA) in Nakasone v. Nakasone, 102 Hawai`i 108, 73 P.3d 62 (App. 2002), which held to the contrary.²

I.

On November 24, 1998, Petitioner/Defendant-Appellant Gerald Nakasone (Petitioner) made a HFCR Rule 68 offer to Respondent/Plaintiff-Appellee Carmen T. Nakasone (Respondent) as to certain terms of the divorce decree to be entered between them. On December 3, 1998, Respondent responded by disagreeing with parts of the offer and effectively rejected it. On March 2, 1999, the fifth circuit family court (the court)³ accepted a stipulation by Petitioner and Respondent as to certain issues, which effectively mirrored some of the terms in the November 24 offer. However, certain parts of the offer were not accepted and the issues involved were ultimately tried by the court. On September 9, 1999, the court filed its findings, conclusions and decree granting the divorce and awarding child custody. On September 17, 1999, Petitioner moved for attorney's fees and costs in the amount of $19,488.36. On January 27, 2000, the court entered an order awarding attorney's fees in the amount of $5,000.00. In its findings to the order, the court determined which issues had been settled by stipulation, which had been tried, and the disposition of those issues tried.

In his appeal considered by the ICA, Petitioner maintained that he should be awarded $19,488.36 in attorney's fees and costs he reasonably incurred after a November 24, 1998 offer made pursuant to HFCR Rule 68, instead of the $5,000,00 awarded by the court. Petitioner did not contest any of the findings of fact contained in the January 27, 2000 court order granting Petitioner's request for attorney's fees in part and denying the request of Respondent for attorney's fees. However, he contested conclusions of law nos. 6, 7, 8 and 12 and paragraph 2 of the order.⁴ The court's conclusions concerned HFCR Rule 68, which permits the court to award attorney's fees and costs to the offeror of a Rule 68 offer that is more favorable than the terms of the ultimate decree or order. In its conclusions, the court determined that attorney's fees would not be awarded, however, as to those parts of the offer that were initially rejected by Respondent but later settled without trial. The aforesaid conclusions and paragraph of the order state as follows:

II. CONCLUSIONS OF LAW

....

2. If the requirements under HFCR Rule 68 are met, then the [c]ourt shall make an award of resonable attorney's fees and costs unless the [c]ourt specifically determines that such an award would be inequitable considering the provisions of HRS [§ ] 580-47.

.....

6. The reference in HFCR Rule 68 to the equitability provisions in HRS [§ ] 580-47 gives the [f]amily [c]ourt the discretion, in the light of the consideration stated in HRS [§ ] 580-47, to award such attorney's fees and costs as shall appear just and equitable.

7. The [c]ourt concludes that where one party makes a HFCR Rule 68 offer which is rejected by the other party, but where they subsequently enter into a settlement agreement resolving some of the issues contained in the Rule 68 offer, and where no provision is made in the settlement agreement for an award of attorney's fees, then those Rule 68 issues which are resolved shall not be subject to a further award of attorney's fees under HFCR Rule 68.

8. As a result, the [c]ourt concludes that the matters raised in [Petitioner's o]ffer which were rejected by [Respondent] in [Respondent's r]esponse, but were later settled pursuant to the Stipulation, are not subject to a further award of attorney's fees or costs.

....

12. On the basis of HFCR Rule 68, and taking into consideration the factors set forth in HRS [§ ] 580-47, and giving consideration to all of the circumstances of this case, the [c]ourt concludes that it would be just and equitable to order [Respondent] to pay a portion of [Petitioner's] costs and attorney's fees in the amount of FIVE THOUSAND AND NO/100 DOLLARS ($5,000.00).

....

III. ORDER

.....

2. [Petitioner's] request for attorney's fees and costs is granted in part and [Respondent] is ordered to pay for a portion of [Petitioner's] attorney's fees the sum of FIVE THOUSAND AND NO/100 DOLLARS ($5,000.00).

(Emphases added.)

On appeal, the ICA vacated the January 27, 2000 order and the May 15, 2000 order denying reconsideration and remanded the case. Because the divorce proceedings were filed in 1998, the 1999 version of HFCR Rule 68 applied. The ICA "conclude[d] that there is no substantive difference between HFCR Rule 68 (1999) and HFCR Rule 68 (2000)[ ]... [and] appl[ied] HFCR Rule 68 (2000)." 102 Hawai`i at 111, 73 P.3d at 65. We agree with respect to the issue relevant to this case. As set forth by the ICA,

HFCR Rule 68 was amended effective January 1, 2000. With the additions bolded and deletions bracketed, HFCR Rule 68 (2000) states as follows:

At any time more than 20 days before any contested hearing held pursuant to HRS sections 571-11 to 14 (excluding law violations and criminal matters) is scheduled to begin, [either] any party may serve upon the adverse party an offer to allow a [decree or order] judgment to be entered to the effect specified in the offer. Such offer may be made as to all or some of the issues, such as custody and visitation. Such offer shall not be filed with the court, unless it is accepted. If within 10 days after service of the offer the adverse party serves written notice that the offer is accepted, [either] any party may then file the offer and notice of acceptance together with proof of service thereof and thereupon the court shall treat [the matter as an uncontested proceeding and schedule an appropriate hearing, if necessary]those issues as uncontested.An offer not accepted shall be deemed withdrawn and evidence thereof is not admissible, except in a proceeding to determine costs and attorney's fees. If the [decree or order]judgment in its entiretyfinally contained by the offeree is patently not more favorable [as a whole] than the offer, the offeree must pay the costs, including reasonable attorney's fees incurred after the making of the offer, unless the court shall specifically determine that such would be inequitable in accordance with the provisions of HRS section 580-47, [as amended. The fact that an offer is made but not accepted does not preclude a subsequent offer] or other applicable statutes, as amended.

102 Hawai`i at 109, 73 P.3d at 63 (boldfaced font in original) (emphases added).

The ICA posited that "an HFCR Rule 68 offer may be made to completely settle one or more of the following issues: (1) dissolution of marriage; (2)(a) child custody (legal and physical) and visitation; (2)(b) child support and education; (3) spousal support; and/or (4) division and distribution of all of the joint and separate property and debts of the parties[,]" id. at 117-118, 73 P.3d at 71-72 (footnote omitted), and that Petitioner had "made offers regarding issues (2)(a), (2)(b), and (4)." Id.

After reviewing Petitioner's Rule 68 offer, the ICA held that, "[w]ith respect to issue (4), ... [Petitioner's o]ffer was insufficient for purposes of HFCR Rule 68 because it pertained to the division and distribution of some but not all of the joint or separate real and personal property and debts." Id. In arriving at this conclusion, the ICA indicated that Petitioner "offered that [Respondent] `can have all of the personal property and household effects at the marital residence' and that the 1996 pipe horse trailer, the fishing rods/reels, the horse, the animal trophies, the 1998 trash trailer and the 1995 Jeep Cherokee were located at the marital residence[, but that h]is silence as to the 1989 Ford 350 and the guns indicates that they were not at the marital residence and[, thus,] were not covered by his offer." Id. at 118, 73 P.3d at 72. The ICA then disagreed with conclusion nos. 7 and 8, see supra, on the ground that settlement of a previously rejected offer or portion thereof did not preclude an award of attorney's fees under HRCR Rule 68:

The family court erroneously imposes the burden of settling the question of attorney fees and costs on the HFCR Rule 68 offeror who settled whereas that burden should be imposed on the HFCR Rule 68 offeree who settled after previously rejecting the HFCR Rule 68 offer. With respect to HFCR Rule 68, the fact that the decree or order resulted from a post-offer stipulation rather than a contested trial is not relevant or material.

Id. at 118, 73 P.3d at 72.

As to issues 2(a) and 2(b) that it posited, the ICA apparently held that: (1) the question remaining was "whether the entirety of those parts of the judgment resolving issues 2(a) and 2(b) `is patently not more favorable to [Respondent] than the offer' pertaining to issues 2(a) and 2(b)[,]" id. at 118-119, 73 P.3d at 72-73 (brackets omitted), and that the court must decide that question on remand; and (2) as to issues 2(a) and 2(b), if the court did not award attorney's fees and costs as requested because "it would be inequitable in accordance with the provisions of HRS § 580-47 to order the party to pay more than $5,000[,]" it must, "pursuant to HFCR Rule 68, specifically determine[] that it would be inequitable ... [and] state its...