Jacoby v. Jacoby
134 Haw. 431
| Haw. App. | 2014Background
- Parties: Bennett (defendant-appellant) and Nicoleta Jacoby (plaintiff-appellee); married DOM June 12, 1993; two minor children. Trial concluded Nov 27, 2009; Divorce Decree entered July 5, 2011; appeal and cross-appeal filed.
- Pre‑marital facts: Court found a premarital economic partnership (PEP) beginning June 1992 during cohabitation before marriage; Bennett was still legally married to a prior wife at that time but separated.
- Major assets/disputes: valuation of Bennett’s periodontal endoscope intellectual property (IP); substantial investment accounts; disability benefits (tax‑free monthly payments) and royalty income.
- Financial outcome below: Family Court awarded Nicoleta the marital residence, divided accounts (but waived an equalization payment), ordered Bennett to pay permanent alimony $4,000/month and child support $2,069/month, required Bennett to maintain $1.5M life insurance naming Nicoleta beneficiary, and ordered Bennett to pay increased medical insurance premiums.
- Procedural/post‑decree: Family Court granted Nicoleta’s enforcement motion to require Bennett to pay the higher replacement Kaiser premium and ordered interest on a post‑decree property distribution payment.
Issues
| Issue | Nicoleta’s Position | Bennett’s Position | Held |
|---|---|---|---|
| Formation of premarital economic partnership (PEP) | PEP formed in June 1992; premarital cohabitation and shared finances support finding | PEP could not be found while Bennett remained married to prior wife; marital status precludes PEP effect on property | Court affirmed PEP finding: prior marriage not dispositive; substantial evidence supported PEP despite overlap with prior marriage |
| Valuation of IP (periodontal endoscope) | Tregillis’ income‑approach valuation (~$101,000) is correct | Kuba’s higher valuation (~$4.65M) is correct; rely on relief‑from‑royalty/market inputs | Court accepted trial court’s credibility choice of Tregillis; use of income approach was appropriate; no clear error |
| Spousal support amount ($4,000/mo) | Needed due to medical limitations, low earning capacity, standard of living, long marriage | Overstated; court misallocated investment income entirely to Bennett when accounts were split | Award upheld generally, but reversed insofar as court erred by attributing all investment income to Bennett; spousal award must be recalculated on remand |
| Child support calculation ($2,069/mo) | CSG worksheet used including disability payments as gross income | Court miscalculated Monthly Gross Income by not allocating income from divided accounts to Nicoleta | Child support reversed: court erred in calculating both parents’ monthly gross incomes (investment income misallocated); remand for recalculation under CSG |
| Waiver of equalization payment (~$588,677) / deviation from Partnership Model | Deviation justified by VARCs (Nicoleta’s health, low work capacity; Bennett’s income, disability increases) | Deviation improperly denied Bennett his capital contribution credit; excessive deviation | Affirmed: sufficient valid and relevant considerations (VARCs) existed to deviate and waive equalization payment |
| Life insurance security (order to maintain $1.5M) | Life insurance reasonably secures support obligations | $1.5M is excessive relative to support obligations; estate should not be liable for full policy if not maintained | Vacated: ordering $1.5M to secure obligations that terminate on death and likely exceed accrued obligations was an abuse of discretion; remand to set reasonable security amount/method |
| Post‑decree enforcement — increased medical premiums & interest | Enforcement of Divorce Decree obligation to pay wife’s health premium or reasonable equivalent and interest on judgment | Lacked jurisdiction during appeal; premium chosen not reasonable equivalent; child support should have been adjusted | Enforcement order upheld: court had jurisdiction to enforce; chosen Kaiser Plan was reasonable equivalent; ordering interest on the money judgment was proper (Divorce Decree is a judgment) |
| Cohabitation clause terminating alimony | Termination on cohabitation appropriate to reflect potential economic benefit | Clause improperly terminates alimony outright on cohabitation; could leave no ability to show continued need | Vacated in part: blanket termination on cohabitation is an abuse of discretion; remand to consider a more flexible reduction/termination mechanism permitting inquiry into economic benefit/continued need |
| Disability payments: income vs. divisible asset | Disability payments included in income for support; not a divisible marital asset | Future disability benefits are a divisible marital asset to be split | Held: Future disability payments are replacement income (not marital property) and are not divisible as a Category 5 marital asset; they remain income for support purposes |
Key Cases Cited
- Teller v. Teller, [citation="99 Hawai'i 101, 53 P.3d 240"] (2002) (fair‑market valuation of IP appropriate where sale/market data exist; other methods may be used when FMV unavailable)
- Collins v. Wassell, [citation="133 Hawai'i 34, 323 P.3d 1216"] (2014) (Premarital Economic Partnership and Partnership Model division framework)
- Kakinami v. Kakinami, [citation="125 Hawai'i 308, 260 P.3d 1126"] (2011) (family court discretion in support/security and enforcement; post‑judgment enforcement jurisdiction)
- Booth v. Booth, [citation="90 Hawai'i 413, 978 P.2d 851"] (1999) (appellate courts defer to trial court credibility and weight of evidence in family cases)
- Perez v. Perez, [citation="107 Hawai'i 85, 110 P.3d 409"] (App. 2005) (disability pay treated as income, not divisible property)
- Schiller v. Schiller, [citation="120 Hawai'i 283, 205 P.3d 548"] (App. 2009) (VARCs and deviation from Partnership Model supported where payee’s health and earning prospects are limited)
- Amii v. Amii, 5 Haw. App. 385, 695 P.2d 1194 (1985) (court may include cohabitation‑based termination in decree but otherwise cohabitation generally does not alter support absent decree language)