Curtis v. Dorn

L.A‘JV L|BRAF`€Y

FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER

IN THE :NTERMEDIATE COURT OF APPEALS w
1323
oF THE STATE oF HAWAI‘I §
CI
---oOo--- § “Y
~ s
CATHERINE CURTIS, Plaintiff-Appellee, v. ;, §§
JEFF DORN, Defendant;-Appellant 3
co
§§ cr
~J

NO. 28299

APPEAL FROM THE ClRCUIT COURT OF THE FIFTH ClRCUIT
(ClVIL NO. 03-l-0lO3)

JUNE l7, 20lO

NAKAMURA, C.J., RElFURTH AND GlNOZA, JJ.

OPINION OF THE COURT BY REIFURTH, J.

This case involves the partition under chapter 668,

Hawaii Revised Statutes, of improved real property held by an

unmarried couple as tenants in common. Plaintiff-Appellee
(COTIP)

Catherine Curtis (Curtis), the cotenant in possession

since January l994, wishes to purchase the interest held by

Defendant-Appellant Jeff Dorn (Dorn), the cotenant out of

(COTOP), but the parties cannot agree on a purchase

price. On appeal, we hold that a COTOP who was not ousted from
but from whom a COTIP seeks contribution for unpaid

the property,
may be entitled to offset a

maintenance and improvements,
proportionate share of the property's rental value during the

possession

COTIP's occupancy of the property,

Dorn appeals from the November 8, 2006 Second Amended
Judgment filed in the Circuit Court of the Fifth Circuit (circuit
The Second Amended Judgment ordered

'court)F in favor of Curtis.
born to transfer to Curtis his interest in the home that Curtis

and Dorn owned as tenants in common in Kilauea, Hawafi, on the
and directed Curtis to pay

island of Kaudi (Kilauea property),

$5l,132.87 to Dorn.
On appeal, Dorn argues that the circuit court

reversibly erred by not crediting him with the rental value of

The Honorable Kathleen N.A. Watanabe presided.

FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER

the Kilauea property during the period that he was out of
possession. Dorn also challenges several of the circuit court's
amended findings of fact and conclusions of law. l

The circuit court determined that it was precluded as a
matter of law from considering whether Dorn was entitled to an
offset for imputed rental income because Dorn had not been ousted
from the property. We disagree with this legal conclusion.
Thus, remand is appropriate so that the circuit court may apply
the principles of law adopted herein in exercising its
discretion.

For the reasons discussed below, we conclude that a
COTOP who has not been ousted from the property may nevertheless
be entitled to credit for a proportionate share of imputed rental
income as an offset against a COTIP's claim for unpaid
maintenance and improvement contributions. As a result, we

vacate the judgment and remand the case to the circuit court.

I. BACKGROUND

A. The Proceeding

On July 29, 2003, Curtis filed a complaint with the
circuit court requesting a termination of the "joint venture
and/or partnership" entered into by Curtis and Dorn in order to
purchase the Kilauea property, and "a declaratory judgment of the
amount due to [Dorn] from [Curtis], if any, for his share of the
[Kilauea] property." The complaint explains that "[s]ince the
purpose of the venture was to purchase a residence for the
parties, [Curtis] requests that she maintain the residence for
herself and the daughter of the parties and pay [Dorn] the amount

due, if any, for his partnership interest."

B. The Property
On June 28, l993, Curtis and Dorn, who were never

married to one another, entered into a joint venture through
which they purchased, as tenants in common, the Hurricane Iniki-
damaged Kilauea property for $l7l,OOO. The parties made a down
payment of $36,000, of which Curtis contributed $34,000 and Dorn
$2,000. The balance of the purchase price was financed by the

2

FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER

seller.

Curtis, Dorn, and their daughter (Daughter) moved into
the Kilauea property and Curtis and Dorn shared the mortgage
payments, insurance, and real estate taxes equally. The couple's
relationship deteriorated and Dorn moved out in December l993.

In June l994, Curtis and Dorn obtained a $180,000
mortgage loan on the Kilauea property, paid closing costs and the
balance due to the seller of the Kilauea property, and split
equally the remaining $36,000.

In l999, Dorn purchased another residence as "a first
time home buyer" in the Kilauea Estates (Estates property) under
the "Kilauea Estates Home Buyer Loan Program" (Estates loan
program). Although living at the Estates property, Dorn stored
personal items such as generators, surfboards, tools, etc., at
the Kilauea property, and would often return to the house to see
Daughter.

Multiple estimates of the Kilauea property's sale and
rental value were introduced at trial. Appraiser Dennis Nakahara
conducted an in-person appraisal at the request of both parties
and estimated that the property was worth $540,000. Appraiser
Jose Diogo estimated, without entering the residence, that the
Kilauea property was worth approximately $685,000. In a
September 29, 2005 letter, realtor Peter Tegan stated, without
viewing the property, that he would be "comfortable" listing it
for $740,000. He also testified at trial that the property's
current rental value would be between $l,8OO and $2,lOO per
month.Wy Curtis' contractor, Eugene Lopez, testified that the

interior and exterior of the property required extensive repairs.

C. Kilauea Property Investment, Expenses And Revenues
1. Equity
Curtis and Dorn purchased the Kilauea property for
$l7l,OOO, investing $34,000 and $2,000 respectively as a cash

down payment, and leaving them mutually responsible for the

3/ Tegan's rental value testimony was presented "as a lay person" and
not an expert.

FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER

$l35,000 unpaid balance to the seller. As a result, the circuit
court calculated Curtis' equity interest as 59.4%, and Dorn's
equity interest as 40.6%. The amount owing on the mortgage at
the time of trial was $155,l48.38.

2. Contributions To Property

In January l994, the month after Dorn moved out, Curtis
began paying the monthly mortgage payment of $l,258.59. She
continued paying monthly payments for the next ll years and 10
months, for a total of $178,7l9.78. Dorn did not make any
mortgage payments during this period.

In addition to mortgage payments, the circuit court
found that, from 1994 to 2004, Curtis contributed $23,2l9.94
toward home insurance, property taxes, and ongoing home expenses,
whereas Dorn contributed a total of $l,42l.OO during that same
period. Finally, the circuit court found that Curtis and Dorn
had contributed $6,862.00 and $29,476.00, respectively, to "fix
up the property after purchase."

D. Trial

The non-jury trial began on November 2, 2005. Curtis
testified that after Dorn moved out of the Kilauea property, Dorn
did not demand or ask that he be allowed to return to the house
and did not file any "legal proceedings" to obtain possession.
Curtis also testified that the locks on the house had not been
changed, and that Dorn had left voluntarily. Moreover, Dorn
never requested that Curtis pay rent.

Exploring the circumstances surrounding Dorn's
departure, Curtis testified that, over time, she and Dorn "just
didn't get along," and that the relationship had become such that
they "could not reside together in peace and . . . concord."
Nevertheless, Curtis contended that Dorn could have remained at
the Kilauea property in the home‘s third bedroom.

When asked about his relationship with Curtis, Dorn
testified that he and Curtis had "scuff[led] in the street in
front of the house" and that Curtis had once reported him to the
police. Dorn further testified that the relationship had become

strained and bitter, so he "left."

FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER

E. Findings Of Fact And Conclusions of Law

On November 22, 2005, the circuit court issued Findings
of Fact (FOFs) and Conclusions of Law (COLs), and an order
requiring Curtis to pay Dorn $50,882.87 for his interest in the
Kilauea property, and ordering Dorn to transfer his interest in
the property to Curtis upon payment, The circuit court concluded
that Dorn had not been ousted, that Curtis' possession was
amicable, and that Curtis was not accountable to Dorn for the'

reasonable value of Curtis' occupancy.

F. Motion For Reconsideration
On December 2, 2005, Dorn filed a motion for a new
trial or other relief pursuant to HRCP 59 and for amendment of
FOFs and COLs pursuant to HRCP 52. The motion focused on the
court's alleged error in not allowing Dorn an offset of amounts
reflecting the value of Curtis' use and occupation of the Kilauea
property while Dorn was out of possession. The motion also
challenged the court's conclusion that Dorn be credited for
$29,476.00 in rehabilitation expenses despite Dorn's contention
that he had demonstrated entitlement to "about $50,000."
On December l2, 2005, the circuit court issued the

Judgment, the terms of which were consistent with the

November 22, 2005 FOFs and COLs. On December 2l, 2005, the
circuit court issued the Amended Findings of Fact and Conclusions
of Law (Amended FOFs and COLs).y

G. Amended FOFs and COLs; Judgment
The circuit court concluded that the parties were
entitled to a termination of their joint venture, and that Curtis
should have the opportunity to purchase Dorn's interest in the
Kilauea property. The circuit court further concluded that

Curtis was a cotenant and, as such, was not accountable to Dorn

l/ The Amended FOFe end c0Ls differed from the initial F0Fs and c0Le
in three principal respects. First, it included a FOF noting that Dorn does
not seek to be reimbursed or credited for the rental value of Daughter's
occupancy of the property. Second, it deleted a FOF concerning repair
expenses incurred by Curtis. Third, it explained the basis for the court's
calculation of the parties' contribution to repairing the property after
purchase.

FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER

for the reasonable value of her occupancy. Ouster was
unavailable as a theory under which to receive credit for the
value of Curtis' tenancy, the circuit court held, because "[t]he
presumption is that possession is amicable," and "[p]roof of
ouster between tenants in common must be of the most satisfactory
nature and this burden was not met."

The circuit court explained that it would use the
analysis employed by the Nevada Supreme Court in Sack v. Tomlin,
871 P.2d 298 (Nev. l994), to determine the division of equity.
First, the circuit court determined the current equity in the
home by taking the Nakahara appraisal value of $540,000, and
subtracted the amount of $155,148.38 that was owing on the
mortgagey leaving a total of $384,85l.62 in equity.

Second, the circuit court calculated each party's
equity interest by dividing the original mortgage amount by two
(i.e. $l35,000 + 2 or $67,500), then adding to that the amount of
down~payment contributed (i.e. Dorn: $67,500 + $2,000 =

$69,500F; Curtis: $67,500 + $34,000 = $l0l,500), and dividing
that amount by the original purchase price (i.e., Dorn: $69,500 +
$l7l,OOO = 40.6%; Curtis: $lOl,5OO + $l7l,OOO = 59.4%), then

multiplying those percentages by the $384,851.62 of total equityi

in the home. Curtis' share of equity was $228,601.26, and Dorn's
was $l56,l39.73.

Third, the circuit court considered "any claims that
one party may have against the other" (i.e., any difference in
the parties' contributions to the property). The court appears
to start from the implicit assumption that the parties were
equally responsible for contributions to property, and that any
variation from that equality should be addressed as an offset to
the equity share calculated above. The court calculated each
party's contributions to the property, including mortgage
payments, the down payment, insurance, taxes, home expenses, and

money spent on home repairs, and determined that Curtis had

i/ The circuit court's calculation in the Amended FOFs and COLs
reflects Dorn's share as $68,500. The error is inconsequential, however, as
the subsequently derived equity percentage of 40.6% is mathematically correct
(as though the number $69,500 had been used).

6

FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER

contributed $242,901.72, while Dorn had contributed $32,888.00;
leaving Curtis with excess contributions of $210,013.72.

In order to equalize the parties' positions, the
circuit court divided the difference by two and concluded that
Dorn owed Curtis $105,006.86 to balance the contributions. The
court then subtracted that amount from Dorn's equity ($156,139.73
- $105,006.86), and determined that Dorn was entitled to
$51,132.87 for his share of the Kiilauea property.

The circuit court ordered Curtis to pay $5l,132.87 to
Dorn within sixty days, and Dorn to then convey his interest in
the Kilauea property to Curtis. The Second Amended Judgment was

entered on November 8, 2006.

II. STANDARDS OF REVIEW

FOFs and COLs of the Circuit Court

"In this jurisdiction, a trial court's FOFs are subject
to the clearly erroneous standard of review. An FOF is clearly
erroneous when, despite evidence to support the finding, the
appellate court is left with the definite and firm conviction
that a mistake has been committed." Chun v. Bd. of Trs. of the
Employees' Ret. Sys. of the State of HawaiE, 106 Hawafi 416,
430, 106 P.3d 339, 353 (2005) (internal quotation marks,
citations, and ellipses omitted) (quoting Allstate Ins. Co. v.
Ponce, lO5 Hawai‘i 445, 453, 99 P.3d 96, 104 (2004)). "An FOF is
also clearly erroneous when the record lacks substantial evidence
to support the finding, [The HawaFi Supreme Court has] defined
'substantial evidence' as credible evidence which is of
sufficient quality and probative value to enable a person of
reasonable caution to support a conclusion." Leslie v. Estate of
TaVareS, 91 Hawaifi 394, 399, 984 P.2d l220, l225 (l999)
(internal quotation marks and citations omitted) (quoting State
v. KotiS, 91 Hawai‘i 3l9, 328, 984 P.2d 78, 87 (l999)).

COLs, on the other hand, are not binding on an
appellate court and are freely reviewable for correctness under

the right/wrong standard.

[The appellate court1 ordinarily reviews COLs under the
right/wrong standard. Thus, a COL that is supported by the

FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER

trial court's FOFs and that reflects an application of the
correct rule of law will not be overturned. However, a COL
that presents mixed questions of fact and law is reviewed
under the clearly erroneous standard because the court's
conclusions are dependent upon the facts and circumstances
of each individual case.

Chun, 106 Hawai‘i at 430, 106 P.3d at 353 (internal quotation

marks, citations, and brackets omitted) (quoting Ponce, 105

Hawei‘i et 453, 99 P.3<i et 104).

Equitable Relief
"The relief granted by a court in equity is

discretionary and will not be overturned on review unless the
circuit court abused its discretion by issuing a decision that
clearly exceeds the bounds of reason or disregarded rules or
principles of law or practice to the substantial detriment of the
appellant." Aickin v. Ocean View Invs. Co., Inc., 84 Hawafi

447, 453, 935 P.2d 992, 998 (1997) (internal quotation marks,

citation, and brackets omitted).

III. POINTS OF ERROR

Dorn asserts that "[t]he trial court erred in not
finding that a [COTOP] . . . is entitled to rental value of the
[COTIP] when the [COTIP] . . . seeks reimbursement . . . for
expenditures made in maintaining the property."

Furthermore, Dorn challenges the following Amended

FOFS:

6. DORN does not seek to be reimbursed or credited
for the rental value, if any, of [Daughter]'s occupancy of
the property as he acknowledges his parental responsibility.

7. DORN has made no written demand and has filed no
action requesting possession of the property or alleging he
has been denied use of the property. DORN has made no
verbal demand requesting possession of the property or
alleging he has been denied use of the property.

19. D@RN contributed $29,476.00[§/] to fixing up the

§/ FOF 19 included a footnote stating that, "[t]his is the total amount
stipulated to by the parties as reflected in Exhibits D~A and D-B 14, plus % of
the cost of the cabinets, carpet and drywall."

8

FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER

property after purchase and CURTIS contributed $6,862.OO[W]
to fixing up the property after purchase.

26. The Court finds the value of the property to be
$540,000.00, based on the jointly agreed upon, in-person
appraisal by Dennis Nakahara.

Dorn also challenges the following Amended COLs, in

relevant parts

3. CURTIS is a cotenant of the property and is not
accountable to DORN for the reasonable value of her
occupancy.

4. Mere occupation of the property by CURTIS does not
constitute ouster. The presumption is that possession is
amicable, The use by DORN to store property and the
purchase by DORN of another residence in 1999 shows CURTIS's
[sic] possession is with his agreement. Proof of ouster
between tenants in common must be of the most satisfactory
nature and this burden was not met.

5. The division of equity should be based on the percentage
of contributions of the parties toward the purchase price adjusted
by their subsequent contribution. The Court elects to use the
analysis contained in Sack v. Tomlin, 871 P.2d 298 (Nev. 1994).
The Sack court reviewed the case law and found that the equity
should be divided by first determining the respective ownership
interests of the parties, which determines the share of each party
of the net proceeds. Next, any claims that one party may have
against the other should be considered.

(Citations omitted).

Dorn raises two final points of error, contending that
(1) he sought reimbursement or credit for the rental value of the
Kilauea property, but it was denied by the circuit court, and (2)
he contributed approximately $50,000 to the Kilauea property
after it was purchased, not $29,476.00 as determined by the

circuiticourt.
IV. DISCUSSION

Partition is an action in equity, and we review that
action under the abuse of discretion standard. Kjmura v. Kamalo,
l06 Hawafi 50l, 506, lO7 P.3d 430, 435 (2005) (Citing AIG Hawai§
InS. Co., InC. V. Bateman, 82 Hawafi 453, 457, 923 P.2d 395, 399

(1996)). In partition actions, the circuit court has the power,

§/ FOF 19 included a further footnote stating that, "[t]his is the
total amount of CURTIS' contributions based on DORN's testimony."

9

FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER

among other things:

(4) To cause the property to be equitably divided between
the parties according to their respective
proportionate interests therein . .

(7) To exercise any other power pertaining to a circuit
court in a civil action.

Haw. Rev. Stat. § 668-7 (1993).

A. Appellant Claims Entitlement To A Credit Ref1ecting An

Offset For The Rental Value of Appel1ee's Occupancy

The circuit court, citing to Haw. C. & S. Co. v.
Wbikapu S. Co., 9 Haw. 75 (Hawafi Prov. Gov. 1893), concluded
that Curtis was not accountable to Dorn for the reasonable value
of her occupancy.

The majority rule is that, in the absence of an
agreement to pay or ouster by the COTIP, a tenant in common is
not liable, because of such occupancy alone, to a COTOP for rent
or the use and occupation of the premises. See, e.g., De Mello
v. De Mello, 24 Haw. 675, 676 (Hawafi Terr. 1919);ySack v.
Tomlin, 871 P.2d 298, 306 (Nev. 1994). The rule is premised on
the rights of cotenants to occupy the premises as one of the

incidents of a tenancy in common.

As between tenants in common where all are entitled to the
possession, the intent with which possession is taken is
material, for a stranger having no title may enter land and
exercise acts of ownership over it and leave little room to

doubt that he thereby intends to oust the true owner. But a

co-tenant may enter the whole or any part of the common

estate as he has legal right to do, and the presumption of
law is, when nothing more is done, that he intends to do
nothing beyond the assertion of his right.

Haw. C. & S. Co., 9 Haw. at 80.

Dorn contends that an exception from the rule is
warranted because (1) he was "constructively ousted" from the
Kilauea property, and (2) Curtis seeks contribution from Dorn for
funds expended for maintenance or betterment of the property.

1. Appellant was not ousted

Dorn contends that the circuit court erred in not

awarding him the rental value of Curtis' occupancy of the Kilauea

10

FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER

property because he was "constructively ousted."7 Specifically,
Dorn contends that he was constructively ousted from the Kilauea
property because his relationship with Curtis "had become so
strained and bitter that the two could not reside together in
peace and concord[.]" HawaiH has not explicitly adopted or
applied the concept of "constructive ouster," and we determine no
need to do so in light of our analysis. j

The circuit court does not explicitly state that Dorn
was not ousted. We read Amended COLs 3 and 4 together, however,
as implicitly reaching that conclusion, and we hold that the
circuit court did not err in concluding that Dorn was not ousted.

The circuit court is correct that mere occupation of
the property by Curtis does not constitute ouster. HawaiH.law
does not assume that a vacating cotenant has been ousted. In
disputes between cotenants, there is a presumption that the COTIP
"does not occupy the premises adversely to his cotenants but in
common with them." Redfearn v. Kuhia, 53 Haw. 378, 381, 494 P.2d
562, 564 (1972). "This presumption may be overcome only by
conduct of one cotenant which constitutes an ouster or disseisin
of the other cotenants.“ Id.

The Hawafi Supreme Court has defined ouster as the
"wrongful dispossession or exclusion from real property of a
party who is entitled to the possession." Haw. C. & S. Co., 9
Haw. at 80. In discussing ouster in the context of adverse
possession, the Court has held that "ouster must be (1) actual,
meaning a physical dispossession[,] or (2) its equivalent: a
demand for possession by the cotenant out of possession and a
refusal by the cotenant claiming by reason of adverse
possession." Redfearn, 53 Haw. at 381-82, 494 P.2d at 564
(internal quotation marks omitted).

The record clearly shows that Dorn was not physically

dispossessed of the Kilauea property, nor did he make a demand

7 The HawaiH Supreme Court has held that when a COTOP is ousted, he
or she is entitled to "something for the exclusive use and occupation of the
premises" by the COTIP, but even that amount is ultimately a matter of equity.
Nahaolelua V. Kaaahu, 10 Haw. 662, 666-67 (Hawafi Rep. 1897) ("The amount of
the compensation to be allowed for the use and occupation is . . . entirely
uncertain.").

ll

FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER

for possession, much less was there ever a demand for possession
that was refused. To support his claim of ouster, Dorn cites to
cases that recognize "constructive ouster" in the marital
dissolution context. For, example, Dorn cites to Olivas v.
Olivas, 780 P.2d 640 (N.M. Ct. App. 1989), wherein the Court of
Appeals of New Mexico applied the concept of "constructive
ouster" in lieu of "actual ouster," The court explained the
rationale for employing "constructive ouster" in the marital

dissolution context, stating:

Applying the notion of constructive ouster in the
marital context is simply another way of saying that when
the emotions of a divorce make it impossible for spouses to
continue to share the marital residence pending a property
division, the spouse who-often through mutual
agreement-therefore departs the residence may be entitled to
rent from the remaining spouse. .

Common law precedents support the proposition that the
remaining spouse should pay rent to the cotenant when both
cannot be expected to live together on the property. For
example, when it is impractical for all cotenants to occupy
the premises jointly, it is unnecessary that those claiming
rent from the cotenant in possession first demand the right
to move in and occupy the premises.

Id. at 643 (emphasis added). The Olivas court, however,
concluded that the appellant-ex-husband was not ousted, but
rather that he voluntarily left the home. Id. at 644.
HawaFi courts have not recognized the concept of
"constructive ouster," In describing ouster, however, the

Hawai‘i Supreme Court has stated that:

An ouster is the wrongful dispossession or exclusion from
real property of a party who is entitled to the possession.
. There must be stronger evidence to prove that one
tenant has ousted another, than to prove that a person
having no right to the possession has ousted the owner. The
proof of ouster between tenants in common ought to be of the
most satisfactory nature. The law will deem the possession
amicable until the tenant out of possession has in some
method been notified that it has become hostile.
Haw. C. & S. Co., 9 Haw. at 80 (emphasis added). Thus, as the
circuit court correctly noted, proof of ouster must be of a "most

satisfactory nature."

Here, although the circuit court heard testimony from
both Curtis and Dorn that they could no longer reside in peace
and concord, there was also testimony that Dorn could have moved

into the Kilauea property's third bedroom, that at all times Dorn

l2

FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER

had personal possessions stored at the property, that Dorn would
visit the property to see Daughter, and that Dorn bought another
home in 1999 that required him to stay at that property. Thus,
it cannot be said that the circuit court heard evidence of such a
"satisfactory nature" that it would overcome the presumption that
Curtis occupied the Kilauea property in a permissive manner. Id.
Accordingly, the record supports the circuit court's implicit

conclusion that Dorn was not ousted from the Kilauea property.

2. The fact that the COTOP was not ousted does not
preclude a defensive rental offset
The general rule of cotenancy, adopted by the HawaiH
Supreme Court, holds that a COTIP is not obligated for rent toma
COTOP unless there is an ouster or an agreement holding

otherwise:

The prevailing doctrine, which we adopt, is that where one
tenant in common uses and occupies the whole of the common
property without excluding his cotenants and without any
demand from them for possession, and refusal on his part, in
the absence of any agreement to pay rent, he is not liable
to his cotenants for the use and occupation of the common
property, and since the possession of one joint tenant, or
tenant in common, is the possession of all, and all are
equally entitled to the use and enjoyment of the property,
it follows as a general rule that one tenant cannot maintain
an action at law against his cotenant in respect of the
common property unless he has been disseized or ousted
therefrom.

De Mello, 24 Haw. at 676; see Lanigir v. Arden, 450 P.2d 148,
149-50 (Nev. 1969); Williams v. Sinclair Refining Co., 47 P.2d
910, 912 (N.M. 1935) ("[I]t is a well-settled principle of the
common law that the mere occupation by a tenant of the entire
estate does not render him liable to his co-tenant for the use
and occupation of any part of the common property.").

lt is also commonly recognized, however, that a COTOP
may request rental reimbursement as an offset when a COTIP
affirmatively seeks contribution from the COTOP for improvement
or maintenance expenditures made by the COTIP. "When a [COTIP]
seeks contribution for amounts expended in the improvement or
preservation of the property, that claim may be offset by [the
COTOP] by the reasonable rental value of the use of the property
by the [COTIP] to the extent it has exceeded his or her

l3

FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER

proportionate share of ownership." Adkins v. Adkins, 595 So.2d
1032, 1035 (Fla. Dist. Ct. App. 1992); see 20 Am. Jur. 2d
Cotenancy and Joint Ownership §§ 51, 57 (2005).

Many jurisdictions allow COTOPs a defensive offset
against both maintenance-related and improvement-related
contributions in non-ouster cases.W E.g., Esteves v. Esteves,
775 A.2d 163, 165 (N.J. Super. Ct. App. Div. 2001); Lanigir, 450
P.2d et 149~50,~ clark v. Dao'y, 131 s.w.:>,d 332, 390 (Mo. ct. App.
2004); Janik v. Janik, 474 N.E.2d l054, l058 (lnd. Ct. App.
1985); Gilleland v. Meadows, 351 S.W.2d 656, 658 (Tex. Civ. App.
1961); FUndaburk v. Cody, 72 So.2d 710, 718 (Ala. 1954); Henry v.
Steward, 250 S.W.2d 527, 528-30 (Mo. 1952); Winn v. Winn, 269
N.W. 376 (Neb. l936).

Under this apportioned rental offset rule, even though
a COTOP cannot seek the rental value of a cotenant's possession
of the property "at law," see De Mello, 24 Haw. at 676, when a
COTlP invokes equity to obtain improvement-related or
maintenance-related contributions from a cotenant, "the court, as
incidental to the granting of such relief and by way of adjusting
the rights of the parties, may charge the claimant, defensively,
with at least a part of the reasonable value of his occupancy or
use[.]" Hunter v. Schultz, 49 Cal. Rptr. 315, 320 (Cal. Dist.
ct. App. 1966> (quoting 51 A.L.R.z<i 383, 454).2/

We concur with those jurisdictions and hold that a
court in equity, in a partition action not involving ouster or

agreement, has the discretionary authority to allow an

§/ Many courts use the terms "maintenance" and "improvement"
interchangeably or without any apparent regard to their difference, while
others use words such as "betterment" and "preservation." Some jurisdictions
permit offset against improvement expenses, but not maintenance expenses,
while other jurisdictions limit the improvement expenses against which an
offset may be made. Generally speaking, improvement/betterment involves the
material enhancement of the property, while maintenance/preservation involves
basic expenses, such as mortgage payments, insurance, real property taxes and
ordinary wear and tear.

2/ Not all jurisdictions follow this exception. Some jurisdictions
allow no rental value offset under any circumstances. See Kline v. Kline, 581
A.2d 1300, 1310 (Md. Ct. Spec. App. 1990); Yakavonis v. Tilton, 968 P.2d 908
(Wash. Ct. App. 1998). Others allow offsets only against claims for
improvements. See Sack v. Tomlin, 871 P.2d 298 (Nev. 1994); Chance v. Kitchell
659 P.2d 395, 897 (N.M. 1983).

l4

FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER

apportioned defensive rental offset against maintenance-related
and improvement-related contributions, to the extent that the
"reasonable rental value of the use of the property by the COTIP

has exceeded his or her proportionate share of ownership."
Adkins, 595 So. 2d at 1035. "He who seeks equity must do
equity." Adair v. Hustace, 64 Haw. 314, 321, n. 5, 640 P.2d 294,
3007 n. 5 (1982) (internal quotation marks omitted).

The apportioned rental offset exception is the
counterpart of the equity that the court exercises in allowing
the COTIP credit for unreimbursed maintenance and improvement
expenditures, and is not inconsistent with prior Hawafi case
law.iW The analysis focuses on whether one cotenant has a
disproportionate share of the benefits or the burdens. An offset
could be warranted because "if one cotenant enjoys a
disproportionate share of the benefits, the other cotenants must
be compensated[.]" Massey v. Hrostek, 980 A.2d 768, 775 (Vt.
2009) (internal quotation marks omitted); see also Parker v.
Lambert, 206 S.W.3d 1, 5 (Tenn. Ct. App. 2006). The party
seeking the rental offset has the burden of presenting evidence
of the property's rental value. Esteves, 775 A.2d at 165.

We do not decide here whether it was correct for the
circuit court to utilize the down payment amounts to determine
the parties' equity percentages, and then also to include the
same as contributions to be equalized, whether the circuit court
was correct in assuming equal responsibility for each of the

cotenants for the total expenses when the court also concluded

iW In Nahaolelua, a partition action arising in the context of an
ouster, the Hawaid.Supreme Court commented that "compensation for use and
occupation should be allowed only for a period not exceeding . . . the period

for which rents and profits could be recovered at law[.]" 10 Haw. at 666. In
addition, the court held that a tenant in common who has made improvements on
a good faith belief that he was the sole owner, is entitled to an allowance
for the value of the improvements upon partition. Id. at 662.

we do not read the Nahaolelua comment concerning compensation for
use and occupation as extending to non-ouster cases. In an ouster case, the
COTOP is entitled to recover for use and occupation without regard to whether
the COTIP first seeks expense-related contribution. Yakanovis, 968 P.2d at
911. In the non-ouster situation, on the contrary, the COTOP is already
limited to an offset. Similarly, Nahaolelua's holding that a COTOP gets no
part of a COTIP's improvement is limited, we believe, to the case where
improvements have been made on the good faith belief that the COTIP was the
sole owner.

l5

FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER

that the parties' equity percentages were unequal, or whether the
contributions recognized for improvement and expenses were
appropriate. Nor do we consider whether the initial sale price
of the Kilauea property was anything other than $171,000.¥/
Finally, we do not determine whether all of the contributions
should be allocated on the same percentage basis, as the circuit
court did here.

We do not decide these issues because they have not
been raised on appeal. Although Dorn filed a motion for new
trial with the circuit court, neither he nor the Curtis raised
these issues at the time, nor have they raised them on appeal;
thus, they are not properly before this court. Kawamoto v.
Yasutake, 49 Haw. 42, 45, 410 P.2d 976, 978 (1966); Ass'n of
Apartment Owners of Wailea Elua v. Wailea Resort Co., Ltd., 100
HawaiT.97, l07, 58 P.3d 608, 618 (2002).

0ur holding is limited to adopting the principle that a
defensive offset is available in a non-ouster partition case
against maintenance-related and improvement-related contributions
being required of the COTOP. Ultimately, as the HawaiH Supreme
Court has said, "awards should be made according to the
principles above stated only when no injustice would be done
thereby." Nahaolelua, 10 Haw. at 667. lt is the province of the
circuit court to determine if such an offset is equitable under
the circumstances of the case, and, if so, the reasonable rental
value of the COTIP's use of the property, the extent to which
that value has exceeded the COTIP's proportionate share of
ownership, and any other equitable factors that apply in
determining a fair allocation of the property's benefits and
burdens.

In sum, we conclude that the fact that a COTOP has not

been ousted from the property does not preclude the circuit court

ly Amended FOF no. 3 states that the original purchase price of the
Kilauea property was $171,000, while at the beginning of trial, the parties
stipulated that the price was $171,500. The finding, however, has not been
challenged on appeal, and "unchallenged factual findings are deemed to be
binding on appeal . . . [and] an appellate court cannot . . . sua sponte
revisit a finding of fact that neither party has challenged on appeal." Okada
Trucking Co., Ltd. v. Bd. of Water Supply, 97 HawaiU.450, 459, 40 P.3d 73, 82
(2002).

l6

FOR PUBLICATION IN WEST'S HAWAI‘I REPORTS AND PACIFIC REPORTER

from awarding the COTOP a defensive rental offset under the
circumstances outlined above. Because the circuit court applied
a different legal principle, we remand so that the principles set
forth above may be utilized in the exercise of the circuit
court's discretion.

As noted, the circuit court retains significant
discretion in determining whether and to what extent a rental
offset shall be awarded within the legal framework we have
announced. On remand, we direct the circuit court to adopt
findings of fact and conclusions of law addressing whether Dorn
is entitled to offset a share of the rental value during Curtis'
occupancy of the Kilauea property against Curtis' claims for

contribution, and the basis for the amount of any offset awarded.

B. The Circuit Court's Amended FOFs and COLs And The
Remaining Points Of Error On Appeal

Dorn challenges several of the circuit court's Amended
FOFs and COLs, along with two other undifferentiated points of
error. The bulk of these points are subsumed in and addressed in
the discussion above, and the remainder are either unsupported or
made moot by our decision here. As a result, they will not be

addressed separately.

V. CONCLUSION

For the reasons discussed herein, the November 8, 2006
Second Amended Judgment is vacated and the case is remanded to

the circuit court for further proceedings.

on the briefe= gay
Jeff Dorn _
Defendant-Appellant, pro se. C1LJA}n1ULYY\ €3JJvAJke_

Joe P. Moss ;§.\ `
for Plaintiff-Appellee. bbk#é??:S

l7