Rand v. Rand

NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
24-SEP-2024
08:14 AM
Dkt. 75 SO

NO. CAAP-XX-XXXXXXX

IN THE INTERMEDIATE COURT OF APPEALS

OF THE STATE OF HAWAI#I

JOEL SHAWN RAND, Plaintiff-Appellant/Cross-Appellee, v.
KEHAULANI MUNOS RAND, now known as KEHAULANI MUNOS,
Defendant-Appellee/Cross-Appellant

APPEAL FROM THE FAMILY COURT OF THE SECOND CIRCUIT
(FC-D NO. 11-1-0371)

SUMMARY DISPOSITION ORDER
(By: Leonard, Acting C.J., and Wadsworth and Nakasone, JJ.)

This appeal arises out of divorce proceedings between
Plaintiff-Appellant/Cross-Appellee Joel Shawn Rand (Joel) and
Defendant-Appellee/Cross-Appellant Kehaulani Munos Rand, now
known as Kehaulani Munos (Kehau). Joel appeals from the
following orders entered by the Family Court of the Second
Circuit (Family Court):1/ (1) the June 22, 2020 "Findings of Fact
and Conclusions of Law" (FOFs/COLs); and (2) the July 22, 2020
"Stipulated Order Re: [Kehau's] Motion for Reconsideration, or to
Alter, Amend and/or Correct Clerical Error in Findings of Fact
and Conclusions of Law and Order Filed 6/22/2020" (the Stipulated
Order).2/
On July 7, 2011, Joel filed a complaint for divorce
against Kehau. After a trial, on June 5, 2012, the Family Court
entered a Divorce Judgment (Judgment), which, among other things,

1/
The Honorable Michelle L. Drewyer presided.
2/
On January 28, 2021, this court entered an order approving the
parties' stipulation to dismiss Kehau's cross-appeal.
NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

granted Joel a divorce, ordered Joel to pay Kehau alimony of
$1,000 per month for a period of one year, and ordered Kehau to
pay Joel an equalization payment in the amount of $45,380.89 "for
the division of the parties['] marital estate." Kehau appealed.
In a summary disposition order, we vacated the Judgment
in part and remanded for proceedings consistent with the order.
See Rand v. Rand, No. CAAP-XX-XXXXXXX, 2016 WL 383158, at *11
(Haw. App. Jan. 29, 2016). As relevant here, we vacated the
Family Court's determination that Kehau must pay a $45,380.89
equalization payment to Joel because: (a) the Family Court
should have valued the parties' marital assets as of the date of
the conclusion of the evidentiary part of trial (DOCOEPOT); and
(b) the Family Court erred by charging the marital estate with
the debts under Joel's Morgan Stanley Smith Barney (MSSB3/)
promissory notes without offsetting those notes with the payments
MSSB had agreed to make under the bonus agreements between Joel
and MSSB. Id. at *6-*7. We also vacated the Family Court's
alimony award, directing that "the issue on remand should be
limited to whether or not $1,000 per month was, as Kehau claims,
insufficient." Id. at *11.
Following a trial on remand, the Family Court issued
the FOFs/COLs, concluding in part that Joel owed Kehau a
remaining equalization payment in the amount of $149,375 (the
Equalization Payment), and additional alimony in the amount of
$23,200. The court also ordered Joel to pay prejudgment interest
to Kehau on the Equalization Payment amount at the rate of 10%
per year from February 21, 2012 (the DOCOEPOT) through June 22,
2020 (the date of entry of the FOFs/COLs).4/
On appeal, Joel contends that the Family Court erred in
concluding that: (1) Kehau was entitled to prejudgment interest
on the Equalization Payment for the period from February 21,
2012, to June 22, 2020; (2) there should be no reduction in the

3/
MSSB was Joel's employer. The parties and the Family Court appear
to have used the names Morgan Stanley Smith Barney, or MSSB, and Morgan
Stanley interchangeably. For convenience, we use the acronym MSSB to refer to
Morgan Stanley Smith Barney and all relevant associated entities.
4/
On July 22, 2020, the Family Court entered the Stipulated Order,
which corrected a clerical error in the FOFs/COLs.

2
NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

Equalization Payment as a result of Joel's final debt payment to
MSSB, and his tax payments on the payments he received from MSSB,
after the divorce; and (3) Kehau was entitled to additional
alimony in the amount of $23,200.00.
After reviewing the record on appeal and the relevant
legal authorities, and giving due consideration to the issues
raised and the arguments advanced by the parties, we resolve
Joel's contentions as follows, and affirm.
(1) Joel contends that the Family Court erroneously
concluded that Kehau was entitled to prejudgment interest on the
Equalization Payment, from February 21, 2012 (the DOCOEPOT).
Relatedly, Joel challenges COLs 29 through 31.
The Family Court invoked HRS §§ 478-2 and 636-165/ in
awarding Kehau prejudgment interest on the Equalization Payment.
The court reasoned:

28. In Roxas v. Marcos, 89 Haw. [] 91, 969 P.2d 1209
(1998), the Hawaii Supreme Court made clear that prejudgment
interest is "compensatory in nature," and that the clear
"implication in this court's oftrepeated characterization of
prejudgment interest as 'compensatory' is that the award is
meant to make the plaintiff whole with respect to delay in
receiving damages to which he or she is entitled. The
foregoing is the functional equivalent of the notion that
prejudgment interest is designed to afford the plaintiff the
approximate investment value of the damage award, which law
presumes the defendant has acquired as a windfall." [Id.] at
155, 969 P.2d at 1273.
29. Although the law presumes that Joel acquired a
windfall from the fact that he did not have to pay the
equalization payment he owes Kehau to her from February 21,
2012 to the present, the likelihood of a windfall in this
case is even stronger, in view of the fact that Joel, who
has held Kehau's equalization payment for the past eight
years, is a professional investment and wealth management
advisor who is regularly engaged in the industry of
financial investing and advisement.

5/
HRS § 478-2 (2008) states, in relevant part: "When there is no
express written contract fixing a different rate of interest, interest shall
be allowed at the rate of ten per cent a year . . . ."

HRS § 636-16 (2016) states:
In awarding interest in civil cases, the judge is
authorized to designate the commencement date to conform
with the circumstances of each case, provided that the
earliest commencement date in cases arising in tort, may be
the date when the injury first occurred and in cases arising
by breach of contract, it may be the date when the breach
first occurred.

3
NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

30. Based on the foregoing, the Court concludes that
an order awarding Kehau prejudgment interest from Joel on
the $149,375 equalization payment owed in this case would be
fair to approximate the investment value of the award, and
to avoid a presumed windfall to Joel arising out of his
holding of such moneys[sic] from the DOCOEPOT to the
present.

31. It is just and equitable in this case, and this
Court hereby concludes that prejudgment interest to Kehau on
the sum of $149,375 at the statutory rate of ten percent per
annum from February 21, 2012 (the DOCOEPOT) through and
including the date of the entry of the Court's instant
Findings of Fact, Conclusions of Law, and Order, is
appropriate in this case.

Joel argues that the Roxas ruling on prejudgment
interest does not apply to "property division matters in divorce
cases[,]" which are decided under marital partnership principles,
and that unlike a contract or tort case, "there is no
consideration of fault and there are no damages or compensation
to either party when the Family Court divides the marital
estate . . . ." Joel also points to FOF 14, in which the Family
Court found that Joel "did not request or cause any significant
delay in the appeal or remand proceedings."
HRS § 636-16 provides that "[i]n awarding interest in
civil cases, the judge is authorized to designate the
commencement date to conform with the circumstances of each case
. . . ." (Emphasis added.) See County of Hawai#i v. C & J Coupe
Family Ltd., 124 Hawai#i 281, 311, 242 P.3d 1136, 1166 (2010)
("HRS § 636–16, which applies in all civil cases, vests a court
with discretion to award prejudgment interest." (emphasis
added)). This divorce case is a civil case. Nothing in the
plain language of HRS § 636-16 limits the discretion of the
family court in a case such as this to award prejudgment
interest, or otherwise requires a damages award as a prerequisite
to a prejudgment interest award.
Similarly, the purpose of prejudgment interest does not
suggest such a limitation on the family court's discretion. See
id. ("[T]he purpose of prejudgment interest, in the context of
HRS § 636–16, is to correct injustice when a judgment is delayed
for a long period of time for any reason, including litigation
delays, . . . and to permit more equitable results and to more
speedily resolve cases[.]" (first quoting County of Hawai#i v. C

4
NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

& J Coupe Family Ltd., 120 Hawai#i 400, 411, 208 P.3d 713, 724
(2009), then Wiegand v. Colbert, 68 Haw. 472, 477, 718 P.2d 1080,
1084 (1986)) (original brackets and internal quotation marks
omitted; emphasis added)); Amfac, Inc. v. Waikiki Beachcomber
Inv. Co., 74 Haw. 85, 137, 839 P.2d 10, 36 (1992) ("The purpose
of [HRS § 636–16] . . . is to allow the court to designate the
commencement date of interest in order to correct injustice when
a judgment is delayed for a long period of time for any reason,
including litigation delays." (quoting Schmidt v. The Bd. of
Dirs. of The Ass'n of Apartment Owners of The Marco Polo
Apartments, 73 Haw. 526, 534, 836 P.2d 479, 483 (1992)) (original
brackets and internal quotation marks omitted; emphasis added));
see also Morris v. Morris, 724 P.2d 527, 530 (Alaska 1986)
(noting that the purposes behind prejudgment interest are
applicable in divorce proceedings and holding that a trial court
may, in its discretion, award prejudgment interest in such
proceedings).
Here, the Family Court awarded Kehau prejudgment
interest on the Equalization Payment from the DOCOEPOT, i.e., the
date used to value the marital property. As Kehau points out,
she was denied this money (and any interest on it) for the eight
years between the parties' divorce and the Family Court's final
property division order. The Family Court reasoned that the
prejudgment interest award "would be fair to approximate the
investment value of the award, and to avoid a presumed windfall
to Joel arising out of his holding of such moneys[sic] from the
DOCOEPOT to the present." See HRS § 636-16 (authorizing the
trial court to designate the commencement date for prejudgment
interest based on "the circumstances of each case"); Morris, 724
P.2d at 530 (ruling that "[u]nder the circumstances of this
case," wife's share of the marital estate became "due" on the
date the trial court chose to value the parties' property). In
these circumstances, we cannot say that the Family court abused
its discretion in awarding prejudgment interest for the period
from February 21, 2012, to June 22, 2020. COLs 29 through 31,
which present mixed determinations of fact and law, are not
clearly erroneous.

5
NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

(2) Joel contends that the Family Court erroneously
concluded that there should be no reduction in the Equalization
Payment as a result of the following payments made by Joel after
the divorce: (a) the final debt payment to MSSB under the MSSB
promissory notes; and (b) tax payments on monies received from
MSSB under the related MSSB bonus and retention agreements.
Relatedly, Joel challenges COLs 21 and 22.
The MSSB promissory notes were part of a bonus
structure in which MSSB paid monies to Joel in lump sums on the
condition that Joel execute the notes in the amount of those
sums. Each year that Joel remained employed with MSSB, he would
pay back a portion of the promissory notes with interest. MSSB
would then pay him back that amount, and Joel would then owe
taxes on the repayment from MSSB.
The Family Court found, and Joel does not dispute,
that: (1) on March 18, 2016, Joel resigned from MSSB to start his
own business with two partners – for reasons unrelated to his
divorce from Kehau; (2) after Joel left MSSB, he stopped
receiving the payments he had been receiving from MSSB under the
bonus and retention agreements, and also had to pay, on an
accelerated basis, the full principal amounts that were due and
owing under the promissory notes; (3) on May 24, 2016, Joel paid
MSSB the sum of $104,316.00, thereby satisfying all of his note
obligations to MSSB, including the two note obligations (under
which Joel still owed $72,767.12 and $3,936.05) incurred during
the parties' marriage; (4) after the parties' divorce, Joel paid
a total of $45,809.52 in income taxes on the payments he received
under the bonus and retention agreements; (5) Joel's decision to
leave MSSB and form his own business was voluntary, and was made
with his business partners; and (6) Joel was aware that
terminating his employment with MSSB would result in some
"financial pain," including the accelerated repayment of the
promissory notes, but decided on balance that the benefits of
this professional move outweighed the burdens.
Based on these findings, the Family Court denied Joel's
request to reduce the Equalization Payment based on his post-
divorce debt and tax payments. The Family Court reasoned in

6
NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

part:

21. [Joel's] claim for a reduction of his
equalization payment owed to [Kehau] to account for
$3,936.05 and $72,767.12 for the MSSB Promissory Note
obligations that became due in 5/2016, and his payment of
income taxes on bonus and retention payments that he
received from 2012 through 2016 is denied.

22. Based on the foregoing, this Court concludes
that Joel owed Kehau an equalization payment in the sum of
$164,375. Against this sum, Joel is entitled to a $15,000
credit representing the amount advanced by Joel to Kehau for
attorney's fees ordered in response to Kehau's motion for
advance of attorney's fees filed herein on 10/20/2017.
Accordingly, the remaining equalization payment owed by Joel
to Kehau is $149,375.

Under Hawai#i case law, the DOCOEPOT is the date on
which marital assets should be valued for property division in a
divorce. See, e.g., LaPeter v. LaPeter, 144 Hawai#i 295, 306,
439 P.3d 247, 258 (App. 2019). Joel cites no authority
supporting what is essentially a request to value certain debts
and assets, i.e., the marital estate's debts under the MSSB
promissory notes and its expected future payments under the MSSB
bonus and retention agreements, based on voluntary actions taken
by one of the divorced parties several years after the DOCOEPOT.
The Family Court did not abuse its discretion in denying Joel's
request to reduce the Equalization Payment to account for the
economic consequences of professional and financial decisions
that Joel voluntarily made for himself (and not Kehau) four years
after the parties' divorce. COLs 21 and 22, which present mixed
determinations of fact and law, are not clearly erroneous.
(3) Joel contends that the Family Court erroneously
concluded that Kehau was entitled to additional alimony in the
amount of $23,200.00. More specifically, he argues that Kehau's
January 18, 2012 Income and Expense Statement included expenses
for her child from a previous relationship whom Joel had no
obligation to support. Relatedly, Joel challenges, COLs 37, 39,
40 and 41.6/

6/
COLs 37, 39, 40 and 41 state:
37. Contrary to Joel's assertion at trial, this
Court concludes that none of the alimony awarded to Kehau in
this case would constitute support of Kehau's child at that
(continued...)

7
NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

The Family Court made extensive, detailed findings
supporting its additional alimony award. Although Joel summarily
challenges FOFs 88, 89.a.iv., 89.b.i., 89d.i., and 89d.ii., he
presents no discernible argument as to why any of them, except
FOF 89.a.iv., is clearly erroneous. "This court is not obliged
to address matters for which the appellant[] ha[s] failed to
present discernible arguments." Hussey v. Say, 139 Hawai#i 181,
191, 384 P.3d 1282, 1292 (2016) (internal quotation marks
omitted) (quoting Exotics Hawai#i-Kona, Inc. v. E.I. Du Pont De
Nemours & Co., 116 Hawai#i 277, 288, 172 P.3d 1021, 1032 (2007));
see HRAP Rule 28(b)(7).
FOF 89.a.iv. states:

Although [Joel] argues that [Kehau's] post-divorce shortfall
of $2,934 per month should be reduced because [Kehau's]
budget includes expenses for her minor child, the evidence
was undisputed that none of [Kehau's] $2,934 shortfall is
attributable to [Kehau's] minor child, since the portion of
[Kehau's] budget that is allocated to the child's expenses
($1,145) is more than offset by the income that [Kehau]
received from the child's child support and social security
income ($1,311).

Joel argues that Kehau's January 18, 2012 Income and
Expense Statement does not support this FOF because "clearly a
portion of the housing expenses ($2,535.00) and transportation

6/
(...continued)
time, since the portion of Kehau's budget that was allocated
to the child's expenses ($1,145) was more than offset by the
income that Kehau received from the child's child support
and social security income ($1,311).
. . . .
39. This Court concludes that Kehau had an unmet need
over and above her income each month in the sum of $2,934
per month, that she was unable to meet her own reasonable
needs, and that Joel was able to meet his own needs (as he
testified at trial) at the standard of living established
during the marriage, as well as meet Kehau's unmet need.
40. Pursuant to the Court's Divorce Decree, Joel paid
$1,000 per month towards Kehau's unmet monthly need of
$2,934 per month, leaving Kehau with a remaining unmet need
in the sum of $1,934 per month.

41. Having reviewed the evidence in this case, and
the statutory factors set forth in HRS Section 580-47(a),
this Court concludes that it is fair and equitable to award
Kehau additional alimony from Joel in the sum of $1,934 per
month times 12 months, for a total additional alimony award
of $23,200 payable from Joel to Kehau.

8
NOT FOR PUBLICATION IN WEST'S HAWAII REPORTS OR THE PACIFIC REPORTER

expenses ($410.00) reported . . . had to be attributable to the
child." He cites no evidence in the record to support this
assertion.
Based on our review of the record, we conclude that FOF
89.a.iv. is not clearly erroneous. We further conclude that COLs
37, 39, 40 and 41, which present mixed determinations of fact and
law, are not clearly erroneous, and the Family Court did not
abuse its discretion in concluding that Kehau was entitled to
additional alimony in the amount of $23,200.00.
For the reasons discussed above, the June 22, 2020
"Findings of Fact and Conclusions of Law" and the July 22, 2020
"Stipulated Order Re: Defendant's Motion for Reconsideration, or
to Alter, Amend and/or Correct Clerical Error in Findings of Fact
and Conclusions of Law and Order Filed 6/22/2020," both entered
by the Family Court of the Second Circuit, are affirmed.

DATED: Honolulu, Hawai#i, September 24, 2024.

On the briefs:
/s/ Katherine G. Leonard
Charles T. Kleintop and Acting Chief Judge
Naoko C. Miyamoto
(Kleintop & Luria, LLP)
for Plaintiff-Appellant/Cross- /s/ Clyde J. Wadsworth
Appellee Associate Judge

Steven J. Kim
(Law Office of Steven J. Kim) /s/ Karen T. Nakasone
for Defendant-Appellee/Cross- Associate Judge
Appellant

9