Brutsch v. Brutsch.
139 Haw. 373
| Haw. | 2017Background
- Karl (Husband) and Celia (Wife) Brutsch divorced after a contested proceeding; the family court issued an oral ruling (Nov. 2, 2011) and a written decree (Apr. 2, 2012).
- Husband claimed Category 3 credits (separate property: gifts/inheritance) totaling $134,235 (comprised of $74,235 in estate checks, $40,000 in prior $10,000 gifts, and a $20,000 annuity used for a Jacuzzi) and sought HFCR Rule 68 attorney’s fees based on a pretrial Rule 68 offer.
- The family court denied Husband any Category 3 credit, finding the record "bereft of any competent or credible evidence" that the funds were contributed to the marriage, and denied Husband Rule 68 fees.
- The Intermediate Court of Appeals (ICA) vacated the family court’s denial of Category 3 credit and vacated the denial of Rule 68 fees (ordering remand to evaluate Rule 68), but otherwise affirmed the decree and the award of $21,984.46 in attorney’s fees to Wife.
- The Hawaiʻi Supreme Court granted certiorari to decide (1) whether the ICA erred in reversing the family court on Category 3 credits, and (2) whether HFCR Rule 68 applies to divorce proceedings governed by HRS § 580‑47.
- The Supreme Court: (a) affirmed the ICA that the family court erred to the extent it said there was no competent evidence and remanded Category 3 credits for reconsideration under Hamilton, limiting Husband’s claim to $134,235 and requiring the court to account for Wife’s pre‑trial buyout of Husband’s Maunawili interest; (b) held HFCR Rule 68 does not apply to proceedings governed by HRS § 580‑47 and therefore vacated the ICA’s remand on Rule 68 fees.
Issues
| Issue | Plaintiff's Argument (Husband) | Defendant's Argument (Wife) | Held |
|---|---|---|---|
| Whether Husband proved entitlement to Category 3 credits for gifts/inheritance | Husband: inheritance/gifts (checks, $40k gifts, $20k annuity) funded marital expenses and should be credited ($134,235) | Wife: Husband failed to consistently document amounts, trace funds to marital expenditures, or rebut presumption gifts were to the partnership; trial court’s credibility finding should stand | Court: ICA correct that trial court erred to the extent it said record lacked any competent evidence; remand to family court to apply Hamilton guidance, limited to $134,235 and to consider Wife’s pretrial buyout credit |
| Whether HFCR Rule 68 permits award of attorney’s fees in divorce governed by HRS § 580‑47 | Husband: Rule 68 offer triggered entitlement to fees if judgment was not more favorable than offer | Wife: Rule 68 should not override statutory standard for just and equitable fee awards under HRS § 580‑47 | Court: HFCR Rule 68 is inapplicable to proceedings governed by HRS § 580‑47 (per Cox); ICA’s remand on Rule 68 vacated; family court’s denial of Rule 68 fees stands |
Key Cases Cited
- Hamilton v. Hamilton, [citation="138 Hawai'i 185, 378 P.3d 901"] (Haw. 2016) (governs analysis of Category 3 credits for gifts/inheritance in divorce property division)
- Cox v. Cox, [citation="138 Hawai'i 476, 382 P.3d 288"] (Haw. 2016) (HFCR Rule 68 is inapplicable to proceedings governed by HRS § 580‑47; rule conflicts with statute and may coerce custody decisions)
- Owens v. Owens, [citation="104 Hawai'i 292, 88 P.3d 664"] (Haw. App. 2004) (discussed issue‑by‑issue application of Rule 68 offers under prior rule language)