NOT FOR PUBLICATION IN WEST'S HAWAIʻI REPORTS AND PACIFIC REPORTER
Electronically Filed
Intermediate Court of Appeals
CAAP-XX-XXXXXXX
30-NOV-2022
02:08 PM
Dkt. 70 MO
NO. CAAP-XX-XXXXXXX
IN THE INTERMEDIATE COURT OF APPEALS
OF THE STATE OF HAWAI‘I
JK, Plaintiff-Appellee, v.
DK, Defendant-Appellant.
APPEAL FROM THE FAMILY COURT OF THE SECOND CIRCUIT
(FC-D NO. 16-1-0408)
MEMORANDUM OPINION
(By: Ginoza, Chief Judge, and McCullen, J.,
with Nakasone, J., dissenting)
Defendant-Appellant DK appeals from the Family Court
of the Second Circuit's (1) September 5, 2018 "Order Denying
Defendant [DK's] Motion to Set Aside Entry of Default and
Default Judgment filed June 29, 2018" and (2) October 1, 2018
"Order Denying [DK's] September 17, 2018 Motion to Reconsider
the September 5, 2018 Order Denying [DK's] Motion to Set Aside
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Entry of [June 26, 2017] Default and [July 24, 2017] Default
Judgment." 1 (Some brackets in original.)
I. BACKGROUND
DK and Plaintiff-Appellee JK were married in 1995 and
had two children together, born in 1997 and 2000. After twenty-
one years of marriage, JK filed a Complaint for Divorce
(Complaint) on October 20, 2016. In the Complaint, JK indicated
that he was a musician, both self-employed and employed at "U.H.
Maui College" and DK was "Owner/Employee" of Edible Hawaiian
Islands Magazine. He stated that the marriage was irretrievably
broken, and sought just and equitable division of assets and
debts, joint legal and physical custody of their minor child,
and no spousal support.
Represented by counsel, DK answered the Complaint,
challenging JK's position on joint physical custody and no
spousal support.
A. First Request For Financial Documents
On January 24, 2017, JK served on DK his "First
Request for Production of Documents," which requested financial
information including information related to her business,
Edible Hawaiian Islands Magazine. The deadline for her response
was February 23, 2017, but DK did not respond. JK's counsel
1 The Honorable Adrianne N. Heely presided over the motions to set
aside and reconsider. The Honorable Lloyd A. Poleman presided over the
divorce proceedings.
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phoned DK's counsel regarding the status of the past-due
financial information, and DK's counsel stated "simply that she
was withdrawing as [DK's] attorney."
B. Motion To Withdraw As DK's Counsel
Six days after the deadline to respond, DK's counsel
moved to withdraw as counsel, declaring that DK "has not
complied with the terms of our Retainer Agreement and several
subsequent discussions regarding communication with Counsel and
complying with deadlines." (Emphasis added.) DK's counsel
served the motion to DK's P.O. Box 849 address. JK did not
oppose the motion to withdraw as counsel but requested that DK
provide "her mailing and physical address" and apprise them of
any changes to that information.
On March 9, 2017, the parties, including DK, were
present for the hearing on the motion to withdraw, which was
granted. DK provided her mailing address as the P.O. Box 849
address.
C. Second Request For Financial Information
On March 18, 2017, JK's counsel called DK regarding
the request for financial information, and DK "indicated she
would have to consult with her accountant" and would call back
on March 20, 2017. With no response from DK, JK's attorney
emailed on April 6, 2017 informing DK that if her response to
the request for financial information was not provided by
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April 11, 2017, they "will have no alternative but to file a
motion to compel" and that "[n]ormally a [] motion to compel
will include a request for attorney's fees and costs."
The day after the deadline to respond, on April 12,
2017, DK emailed JK's attorney indicating that the tax firm she
hired informed her on April 8, 2017 that it could not represent
either DK or JK because the "firm made an error and should of
[sic] not taken [JK] on as a client" and she needs to find a new
CPA. DK also indicated that she was "still looking for a new
attorney" and the attorneys on Maui "declined to represent [her]
due to conflict of interest. So [she has] moved [her] search to
[O‘ahu]."
D. Motion To Compel Discovery And May 31, 2017 Hearing
On May 4, 2017, JK moved to compel DK to respond to
the request for financial documents, and for attorney's fees and
costs related to the motion to compel. Attached to the motion
was correspondence between JK's attorney and DK, and JK's first
request for production of documents. The notice was served to
the P.O. Box 849 address on May 2, 2017, and stated that the
hearing was scheduled for May 31, 2017 at 10:00 a.m.
On May 31, 2017, three calls for DK were made, and
there was no response. The family court granted JK's motion to
compel and for attorneys' fees and costs "due to [DK's] failure
to appear," and stated, "[DK] is defaulted." The family court
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ordered DK to respond to discovery no later than June 13, 2017,
with a hearing scheduled for June 27, 2017, and noted that "if
[DK] fails to respond and fails to appear on June 27, 2017 at
1:30 p.m., the court may grant the proposed divorce decree that
will be attached to the court order." (Formatting altered.)
However, that order was not served in a timely manner,
resulting in a motion to extend these June 2017 dates.
E. Documents Served On June 27, 2017
1. First set of documents, filed June 26, 2017
a. JK's motion to extend deadlines (page 1) 2
On June 26, 2017, JK filed an "Ex Parte Motion to
Extend Deadlines and to Continue Status Hearing" (Motion to
Extend Deadlines) moving the family court "for an order
extending the deadlines in this matter and continuing the status
hearing currently set for June 27, 2017 at 1:30 p.m. in
Courtroom 3A." (Formatting altered and emphasis added.) The
motion explains that "[t]he grounds for this Motion are that
[DK] has not been served with the Order relating to the Motion
to Compel Discovery filed May 5, 2017 and heard on May 31,
2017." (Emphasis added.)
2 Pages 2 and 9 concern attorneys' fees and costs, and is not relevant
to this appeal, except that implicit in the award of fees and costs is the
finding that DK's failure to appear was not justified. Aloha Unlimited, Inc.
v. Coughlin, 79 Hawai‘i 527, 534, 904 P.2d 541, 548 (App. 1995) (explaining
that "[i]mplicit in . . . awarding fees and costs is the finding that Aloha's
failure to timely appear for the deposition was not justified").
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b. Counsel's declaration (pages 3-4)
In her declaration attached to the motion, JK's
counsel explained that DK failed to appear at the May 31, 2017
hearing, and default was entered against her.
The declaration also reiterated the June 2017
deadlines: (1) DK was ordered to respond to discovery requests
no later than June 13, 2017; (2) the family court set further
hearing for June 27, 2017, and "the Court may grant a proposed
Divorce Decree"; and (3) a status update was due by June 20,
2017.
JK's counsel then explained that she "drafted the
Order of the hearing held May 31, 2017, but has not provided a
copy to" DK. Thus, she "is requesting this Honorable Court to
extend the deadlines imposed on [DK] and to continue the current
status hearing to a later date."
c. "Ex Parte Order" (pages 5-6)
Following the Motion to Extend Deadlines and the
counsel's declaration was the "Ex Parte Order" that granted JK's
Motion to Extend Deadlines and set forth new dates:
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Record on Appeal, docket 11, pages 74-75
As shown in Paragraph Number 2 above, the order states that
"[t]he Status Hearing currently set for June 27, 2017 at 1:30
p.m. is hereby continued to be heard before the Honorable
Presiding Judge of the Family Court, Second Circuit, State of
Hawaii, on "Jul 20 2017" at 10:00 a.m. . . ." (Emphasis added.)
As shown in Paragraph Number 3, the deadline to respond to the
request for financial information was July 10, 2017.
The July 10th dates are handwritten in blue ink, and
the July 20th date is stamped. And as shown in Paragraph
Number 6, the order stated that should DK fail to appear at the
hearing or respond to the discovery request, the court may grant
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the "proposed Divorce Decree submitted and filed by Plaintiff."
This order was dated June 26, 2017 and signed by the judge.
2. Second set of documents, filed June 26, 2017
a. Order of hearing held May 31, 2017 (pages 7-8)
The second set of documents started with the "Order of
the Hearing Held May 31, 2017 on Plaintiff's Motion to Compel
Discovery and For Attorney's Fees and Costs Filed May 4, 2017,"
which showed that three calls were made at the hearing on
May 31, 2017, but DK failed to appear. This order then found DK
"is hereby in default for her failure to appear herein."
This order also set forth the following June 2017
dates: (1) the response to the discovery request was due by
June 13, 2017; (2) status update, "which shall consist of a
proposed Divorce Decree," was due by June 20, 2017; and (3) the
hearing was set for June 27, 2017, and "the Court may grant a
proposed Divorce Decree submitted to the Court by Plaintiff
which is attached as Exhibit 'B.'"
This order was signed by the judge, filed on June 26,
2017, and served on June 27, 2017.
b. Exhibit B - "Judgment Granting Divorce And
Awarding Child Custody" (pages 10-19)
Exhibit B, JK's proposed "Judgment Granting Divorce
and Awarding Child Custody" (Proposed Judgment), addressed the
terms of the divorce, including division of property. The
Proposed Judgment indicated that the "parties have no joint
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credit union accounts, bank and savings accounts and security
accounts" and set forth that "[e]ach party is awarded any and
all credit union accounts, bank and savings accounts and
security accounts presently in his or her own name as their sole
and separate property."
For DK's business, the Proposed Judgment set forth
that DK "shall be awarded any and all businesses in her name,
including, but not limited to, the magazine called Edible
Hawaiian Islands, as her sole and separate property and shall be
solely responsible for any and all debts and tax consequences
relating to her business or businesses."
For the real property, the Proposed Judgment set forth
that JK "shall be awarded the real property . . . as his sole
and separate property and he shall be solely responsible for any
and all debts, expenses and costs relating to said property."
3. Certificate of service, filed June 27, 2017 (page 20)
The certificate of service certified that "the Ex
Parte Motion to Extend Deadlines and to Continue Status hearing;
Exhibit 'A'; Declaration of Counsel; Ex Parte Order filed
June 26, 2017" and "the Order of the Hearing Held May 31, 2017
on Plaintiff's Motion to Compel Discovery and for Attorney's
Fees and Costs filed May 4, 2017; Exhibits 'A' and 'B' filed
June 26, 2017" were served on DK. The address on the
certificate of service was the P.O. Box 849 address DK provided
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to the family court, and the certificate of service was dated
for, and filed on, June 27, 2017.
F. July 20, 2017 Hearing
At the July 20, 2017 further hearing on the motion to
compel, three calls were made for DK and there was no response.
Before proceeding, the family court reexamined the documents
served on DK:
[Family Court:] The time is now 10:33. This was
scheduled for hearing at 10:30.
There is an order of the hearing held on May 31st on
plaintiff's motion to compel discovery and for attorney's
fees and costs that was filed (inaudible) 4th.
Attached to it [as] Exhibit A was the form or the
method for attorney's fees by declaration to be presented
to the Court. And attached as Exhibit B was the
plaintiff's proposed judgment granting divorce and awarded
-- awarding child custody.
Here is the certificate of service indicating that
that order was served with those two attached exhibits on
[DK] on June 26, 2017.
[JK's Counsel:] She's served on the 27th.
[Family Court:] And the prior order did provide that
if she failed to appear today that the Court specifically
said it would be -- if defendant fails -- failed to appear
-- respond to the discovery request, and fails to appear at
the hearing of June 27th, 2017, the Court may grant
proposed divorce decree submitted to the Court.
[JK's Counsel:] And we filed that with the Court on
the 26th and attached the order for hearing on May 31st.
[Family Court:] So, but today's the -- what happened
to the June 27th hearing? That was stricken and
rescheduled?
[JK's Counsel:] Got continued because she was not
served with the order and didn't have time to respond.
[Family Court:] Did she get notice of today's
hearing?
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[JK's Counsel:] Yes. On June 27th we -- we sent --
we filed a certificate of service saying on the certificate
of service she got a copy of the order and the ex parte
motion to extend the deadlines and to continue.
[Family Court:] (Inaudible) status hearing. Ah, the
ex parte motion to extend deadlines and continue the status
hearing, I just want to look at that.
[JK's Counsel:] And that was filed on June 26th.
[Family Court:] Thank you. And the ex parte order
sets new deadlines. Defendant to respond to discovery
request on or before July 10th. And setting the status
hearing on today's date, July 20th, at 10:00 a.m.
And that ex parte order further provides that if
defendant fails to appear at the status hearing mentioned
above or fails to respond to the discovery request by the
deadlines stated herein, the Court may grant the proposed
divorce decree submitted and filed by plaintiff.
. . . .
[JK's Counsel:] -- we filed it on June 26th with the
order.
[Family Court:] And has there been any communication
from the defendant?
[JK's Counsel:] Nothing, your Honor. I know that
she -- although she's been in communication with my client
about other things, a bill, she has not discussed the
discovery or this divorce case with him.
[Family Court:] So a default is entered against
[DK].
Would you like your client sworn in today regarding
jurisdiction or do you want to submit it by affidavit?
After hearing JK's testimony, the family court
determined it had jurisdiction over this matter, and found that
the marriage was irretrievably broken. The family court then
noted that it "previously entered default against [DK] for
having failed to appear today and to -- and failing to comply
with discovery requests." The family court "grant[ed] the
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decree of divorce that was filed as a proposed decree on
June 26th, 2017."
The family court then turned to the division of
assets. Regarding the real property, JK's Counsel explained
that JK "owned the house prior to the marriage. And so his
wife's interest would be any equity, increase in the equity."
JK's Counsel also explained that DK "owns a business which my
client has indicated that has substantial cash flow. Um,
probably 100,000 a year in cash flow. Right? After -- after
her expenses are paid. Maybe before taxes." She estimated,
"the value of her -- as close as I could estimate, the value of
her business, um, would be equal to or close to the increase in
the value of the house that he owned -- or owns." "And so for
that reason, we drafted the divorce decree the way we drafted
it."
The family court then questioned JK under oath about
the division of real property and whether it was reasonably
fair:
[Family Court:] So -- so let me ask you. Do you
think that how everything is divided up in the divorce
decree, is it reasonably fair?
[JK:] I -- I do. I mean I understand that [DK] is
entitled to half the increase in equity of the house. And
we had an informal agreement when we were married that she
had no interest in the property. Although I offered her,
you know, sharing the title. And I paid for everything
with the house for the en -- our entire marriage. All
taxes, all mortgage, all repairs and maintenance.
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[Family Court:] Is -- is the value of her business,
in your opinion, reasonably close to the value of the
increase in equity, if divided by two, during the marriage?
[JK:] I think it's close. But I --
[Family Court:] All right. I'm satisfied.
[JK's Counsel:] Your Honor, there is one, um error I
think I made that is manifestly unjust to [DK]. And that
is in the proposed decree I have a paragraph in there that
says undisclosed assets and if she doesn't disclose --
anybody failed to disclose it, so that the other party
would be awarded it.
Since we're going by default and she hasn't disclosed
anything that -- that would ostensibly mean he gets
everything that she owns. And I don't think that that's
fair to her.
So I'd like to delete that paragraph.
[Family Court:] Okay. You'll strike that paragraph.
As well as there's a paragraph that states that this decree
is by agreement.
On July 24, 2017, the "Judgment Granting Divorce and
Awarding Child Custody" was entered, finding that DK failed to
appear and "default is entered against her." The family court
awarded JK the real property and DK "any and all businesses in
her name, including, but not limited to, the magazine called
Edible Hawaiian Islands, as her sole and separate property[.]"
The family court also retained "jurisdiction over the
parties and their property to enforce and implement the
provisions of this Judgment" and "enforcement jurisdiction of
all of the above issues until the parties have complied fully
with the terms and conditions as set forth herein."
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Based on the July 25, 2017 Certificate of Service, two
certified copies of the judgment were served on DK at the P.O.
Box 849 address she provided to the court.
G. DK's Motion To Set Aside
1. Motion to set aside
Almost one year later, on June 29, 2018, DK filed her
"Motion to Set Aside Entry of Default and Default Judgment"
(Motion to Set Aside). DK based this motion on Hawai‘i Rules of
Civil Procedure (HRCP) Rules "60(b)(1) (mistake, inadvertence,
surprise, or excusable neglect)" and "60(b)(3) (fraud,
misrepresentation, or other misconduct of an adverse party)."
Attached to her Motion to Set Aside was DK's
declaration, where she stated that the "hearing was continued by
[JK's] attorney Ex Parte -- i.e., without notice to me." She
also stated that "[t]o add to the confusion, when [JK's]
attorney finally did serve the May 31 order, she did so at the
same time as an Ex Parte Order filed June 26, 2017 with the
result that, at a time when I was unrepresented, I was served
simultaneously with confusing and conflicting notices."
Also attached to DK's Motion to Set Aside were the
following exhibits:
A. the June 26, 2017 Motion to Extend Deadlines;
B. the June 27, 2017 Certificate of Service;
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C. DK's Income and Expense Statement dated June 27,
2018, showing her job title as "Editor, Sales,"
her employer as "Edible Hawaiian Islands" with
the P.O. Box 849 address, and a gross pay of
$4,166 per month, a net pay of $4,166 per month,
and take home pay of $4,166 per month; and
showing housing and transportation expenses;
D. DK's Asset and Debt Statement dated June 27,
2018, showing two checking accounts, a cemetery
plot, and four debts totaling $12,900;
E. correspondence from Harold Berman, J.D. (Berman),
dated April 18, 2017 regarding withdrawal of
services from both DK and JK;
F. correspondence to JK's Counsel dated April 12,
2017 regarding finding a new accountant and new
counsel; and
G. correspondence to JK's Counsel dated April 28,
2017 regarding difficulty finding new counsel.
2. JK's Memorandum in Opposition
On July 13, 2018, JK opposed DK's Motion to Set Aside.
In the declaration attached to his opposition, JK stated that DK
has several businesses he is aware of, namely, Edible Hawaiian
Islands Magazine, Edible Events, Duka Inc., and Kupu Maui; and
he understood from DK that the magazine was making a $90,000
profit under previous ownership and the magazine was appraised
at $90,000. JK stated that checks he sent to her, and she
cashed, were sent to the same P.O. Box 849 address as the court
filings, and this is also the address she received checks from
her advertisers. JK attached twenty-eight exhibits with his
response.
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3. DK's Memorandum in Reply
On July 25, 2018, DK replied to JK's opposition,
raising for the first time Hawai‘i Family Court Rules (HFCR)
Rule 60(b)(4) (judgment void).
Attached to the reply were declarations from DK and
her attorney. DK's declaration included statements that
"conflicting notices, which I received in the same envelope,
were confusing to me and I did not have an attorney to help me
figure out how to interpret them" and "the only active business
I own, [is] Edible Hawaiian Islands Magazine." Also attached
were the following exhibits:
A. a revised Asset and Debt Statement dated July 25,
2018, which now included Edible Hawaiian Islands
Magazine valued at $60,000 and debt owed against
the magazine at $34,000; and
B. an Edward Jones document dated July 24, 2018,
stating, "No Holdings found for this client[.]"
4. JK's Responsive Memorandum
On August 1, 2018, JK filed a responsive memorandum
and declaration with the following exhibits:
A. screen shot and email regarding taxes; and
B. a letter from DK in Edible Hawaiian Islands
Magazine announcing the launch of a new business,
Lawelawe Hawaii, published "Summer 2018[.]" 3
3 Of note, the Edible Hawaiian Islands publication lists the P.O.
Box 849 address as the magazine's address.
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In a supplemental declaration filed the next day, JK
stated, "I did not realize the scope of how much money I forgave
that [DK] had taken from my Seaside Recording checking account
and credit card and diverted it to her own business expenses.
This would surely be in the six-figure range." JK also declared
that "[i]f the default was set aside it could require me to re-
negotiate finances and property with [DK]."
5. Hearing and order
On August 6, 2018, a hearing was held on DK's Motion
to Set Aside Default. According to the court minutes, the
hearing lasted one hour and twenty-three minutes, from
10:14 a.m. to 11:37 a.m. 4
The family court entered an order denying DK's motion
on September 5, 2018, determining that: (1) as related to HFCR
Rule 60(b)(3), there was "no evidence of intrinsic fraud or
judgment procured by fraud in this matter;" (2) as related to
HFCR Rule 60(b)(4), there was "no due process violation [that]
occurred in this matter;" and (3) "the sanction of default was
within the sound discretion of the Court."
4 DK, however, did not provide this court with the transcripts for this
proceeding. It is DK's burden to show error by reference to the record, and
DK is responsible for providing the transcript of relevant oral proceedings.
Hawai‘i Rules of Appellate Procedure (HRAP) Rule 10(b)(1)(A).
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H. DK's Motion To Reconsider
1. Motion to reconsider
Twelve days later, on September 17, 2018, DK timely
moved the court to reconsider its order denying the Motion to
Set Aside (Motion for Reconsideration) pursuant to HFCR
Rule 59(e). For the first time, DK cites to HFCR Rule 60(b)(6).
A declaration by Michael Thoemke was attached,
appraising JK's home at $679,000 as of July 24, 2017, and
represented that the "average for the four homes in this
neighborhood in 1997 was $222,250 and in 2017 it was $699,500."
DK provided a declaration. And the following exhibits were
attached:
A. transcripts of proceedings held on July 20, 2017;
B. Appraisal report dated September 13, 2018;
C. Real Property Values Chart dated September 13,
2018;
D. spreadsheet page of real properties dated
September 13, 2018;
E. spreadsheet page of real properties dated
September 13, 2018;
F. various correspondence related to appraiser;
G. correspondence dated January 31, 2013 regarding
assignment of rights to Edible Hawaiian Islands
for $60,000 (without previous owner's signature);
and
H. American Web invoices (one not intelligible).
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2. JK's Memorandum in Opposition
In opposition, JK argued that DK "has not brought to
this court's attention any new evidence or arguments which could
not have been presented at the August 6, 2018 hearing on her"
Motion to Set Aside.
3. DK's Supplemental Declaration
On September 27, 2018, DK provided a supplemental
declaration to, among other things, "inform the Court of the
psychological aspects of what [she] was going through in the
spring and early summer of 2017 when [she] missed deadlines and
court dates." DK also stated, "the increase in value of the
house is $436,000, the increase in equity as a result of paying
off the mortgage during our marriage is about $70,000, and the
value of my business is at best the purchase price of $60,000
minus the debt accumulated by the business since purchase
($34,000) which comes out to only $26,000." (Emphasis added.)
She also declared, "I have never taken a salary from Edible
Hawaiian Islands, LLC -- only the draws shown on my Schedule C
returns, which was less than $25,000 per year for those three
years." The following exhibits were attached:
I. 2015 Joint U.S. Individual Tax Return (prepared
by Deborah Daniels);
J. 2016 Schedule C;
K. 2017 Schedule C;
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L. photos and correspondence related to sale of
artwork; and
M. correspondence to DK dated March 6, 2018
regarding advertisement for a one-bedroom
apartment.
4. Order Denying Motion to Reconsider
On October 1, 2018, the family court denied DK's
Motion to Reconsider, resolving the issue of HFCR Rule 60(b)(1)
by finding that DK "has not met the burden of establishing that
mistake, inadvertence, surprise, excusable neglect, or newly
discovered evidence had occurred, pursuant to H.F.C.R.
Rule 59(e) and/or 60(b), justifying the setting aside of the"
Order Denying Motion to Set Aside. The family court also found
that DK "has not brought to this court's attention any new
evidence or arguments which could not have been presented at the
August 6, 2018 hearing on [DK's] Motion to Set Aside . . . ."
The family court noted that,
subject to the limitations in [Hawaii Revised Statutes
(HRS)] § 580-56 and pursuant to Section 25, of the
[Judgment Granting Divorce and Awarding Child Custody]
filed July 21, 2017, should either party, Plaintiff and/or
Defendant file a Motion for Relief (i.e., Motion for Post
Decree Relief or a Motion to Enforce Decree), a hearing may
be set to give both parties an opportunity to be heard,
should they seek to address the issues within the Divorce
Decree, including but not limited to, the non-compliance of
any part of the Decree."
DK filed a timely notice of appeal.
II. DISCUSSION
On appeal, DK asserts that the family court erred when
it failed to set aside the default judgment, pursuant to HFCR
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Rule 60(b). To that end, DK raises seven points of error to
this court.
HFCR Rule 60(b) provides for relief from a judgment or
order, in pertinent part, as follows:
On motion and upon such terms as are just, the court may
relieve a party or a party's legal representative from any
or all of the provisions of a final judgment, order, or
proceeding for the following reasons:
(1) mistake, inadvertence, surprise, or excusable
neglect;
(2) newly discovered evidence which by due diligence
could not have been discovered in time to move for a
new trial under Rule 59(b) of these Rules or to
reconsider, alter, or amend under Rule 59(e);
(3) fraud (whether heretofore denominated intrinsic or
extrinsic), misrepresentation, or other misconduct
of an adverse party;
(4) the judgment is void;
(5) the judgment has been satisfied, released, or
discharged, or a prior judgment upon which it is
based has been reversed or otherwise vacated, or it
is no longer equitable that the judgment should have
prospective application; or
(6) any other reason justifying relief from the
operation of the judgment.
(Formatting altered.) The standard of review for HFCR
Rule 60(b)(4) is de novo. Cvitanovich-Dubie v. Dubie, 125
Hawai‘i 128, 139, 254 P.3d 439, 450 (2011).
As for HFCR Rule 60(b)(6), the Hawai‘i Supreme Court
explained that the standard of review is the abuse of discretion
standard, and "[s]ince Rule 60(b)(6) relief is contrary to the
general rule favoring finality of actions, the court must
carefully weigh all of the conflicting considerations inherent
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in such applications." Id. (citation omitted). The abuse of
discretion standard also applies with regard to HFCR
Rules 60(b)(1) and (b)(3). Ledcor-U.S. Pacific Constr. LLC v.
Joslin, 134 Hawai‘i 179,
339 P.3d 533, CAAP-XX-XXXXXXX,
2014 WL
5905077 at *3 (App. Nov. 13, 2014) (mem.) (regarding HRCP
Rules 60(b)(1) and (6)); Plauche v. Plauche, 129 Hawai‘i 29,
292
P.3d 233, CAAP-XX-XXXXXXX,
2013 WL 275551 at *1 (App. Jan. 24,
2013) (SDO) (regarding HFCR Rules 60(b)(3) and (6)).
"Once the court has made a determination to grant or
deny relief, the exercise of its discretion will not be set
aside unless the appellate court is persuaded that, under the
circumstances of the case, the court abused its discretion" and
"an abuse of discretion occurs where the trial court has clearly
exceeded the bounds of reason or disregarded rules or principles
of law or practice to the substantial detriment of a party
litigant." Id. at 139-40, 254 P.3d at 450-51 (citation
omitted).
A. HFCR Rule 60(b)(4) - Void Judgment
In her first two points of error, DK contends that the
judgment is void, citing to HFCR Rule 60(b)(4). Notably, this
argument was not raised in DK's Motion to Set Aside Default and,
instead, was raised for the first time in her July 25, 2018
reply to JK's memo in opposition to her Motion to Set Aside
Default. However, "[a] reply must respond only to arguments
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raised in the opposition," and JK's memorandum in opposition did
not address HFCR Rule 60(b)(4). Rules of the Circuit Court of
the State of Hawai‘i (RCCH) Rule 7(b). Thus, DK violated RCCH
Rule 7(b) by raising HFCR Rule 60(b)(4) in her reply.
Exercising our discretion, we nonetheless address DK's
HFCR Rule 60(b)(4) claims that the judgment here is void. "It
has been noted that a judgment is void only if the court that
rendered it lacked jurisdiction of either the subject matter or
the parties or otherwise acted in a manner inconsistent with due
process of the law." In re Hana Ranch Co., 3 Haw. App. 141,
146,
642 P.2d 938, 941 (1982).
1. HFCR Rule 10(c)
DK first contends that the family court's "failure to
require [JK] to attach the required financial disclosures before
granting monetary relief renders the judgment void as a matter
of law pursuant to HFCR, Rule 60(b)(4)." DK specifically
challenges the family court's finding that "no due process
violation occurred in this matter" and relies on HFCR Rule
10(c).
HFCR Rule 10(c) provides that
Any motion seeking an order for or modification of
financial or monetary relief of any kind, except for an
award of attorney's fees in enforcement proceedings, shall
have attached, typewritten, unless otherwise permitted by
the court for good cause shown, income and expense and
asset and debt statements on the form provided by the court
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or equivalent forms, executed by the movant and duly
notarized or executed under penalty of perjury.
(Emphasis added.)
In his Motion to Compel, JK moved for an order
"compelling [DK] to respond to [JK's] First Request for
Production of Documents submitted on January 24, 2017[,]" and
"awarding [him] his reasonable attorney's fees and costs to for
[sic] having to file this motion." Aside from attorney's fees
that are exempt, this motion did not seek "an order for or
modification of financial or monetary relief of any kind" to
require JK to attach "income and expense and asset and debt
statements" to his motion to compel. HFCR Rule 10(c).
To the extent the July 20, 2017 hearing is construed
as addressing an HFCR Rule 10(c) motion, the family court had
before it the complaint for divorce, JK's Counsel's
representations, and JK's testimony. JK's Counsel explained
that JK owned the property prior to the marriage and so DK's
interest would be the increase in value. JK's Counsel also
represented that the cash flow in DK's business was probably
$100,000 a year after expenses, but was unclear if it was before
taxes. She estimated that the value of DK's business would be
close to the increase in the value of the property.
The family court asked JK, "is the value of her
business, in your opinion, reasonably close to the value of the
increase in equity, if divided by two, during the marriage?" JK
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testified, "I think it's close." This testimony, however, would
not satisfy the "income and expense and asset and debt
statements" required by HFCR Rule 10(c).
In determining whether failure to provide "income and
expense and asset and debt statements" render the Decree void
under HRAP Rule 60(b)(4), we look at whether the family court or
the parties "acted in a manner inconsistent with due process of
the law." Cvitanovich-Dubie, 125 Hawai‘i at 141, 254 P.3d at 452
(citation omitted). And "in the sound interest of finality, the
concept of a void judgment must be narrowly restricted."
Id.
(citation and internal quotation marks omitted).
"At its core, procedural due process of law requires
notice and an opportunity to be heard at a meaningful time and
in a meaningful manner before governmental deprivation of a
significant liberty [or property] interest." State v. Bani, 97
Hawai‘i 285, 293, 36 P.3d 1255, 1263 (2001) (citations omitted).
"An elementary and fundamental requirement of due process in any
proceeding which is to be accorded finality is notice
reasonabl[y] calculated, under all the circumstances, to apprise
interested parties of the pendency of the action and afford them
an opportunity to present their objections." Calasa v.
Greenwell,
2 Haw. App. 395, 399,
633 P.2d 553, 556 (1981)
(citation omitted).
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"The notice must be of such nature as reasonably to
convey the required information, . . . and it must afford a
reasonable time for those interested to make their appearance[.]
But if with due regard to the practicalities of the case these
conditions are reasonably met, the constitutional requirements
are satisfied." Id. "[D]ue process is flexible and calls for
procedural protections as the particular situation demands."
Korean Buddhist Dae Won Sa Temple of Hawaii v. Sullivan, 87
Hawai‘i 217, 243,
953 P.2d 1315, 1341 (1998) (citations omitted).
In reviewing this particular situation, DK had five
opportunities to produce information related to her finances:
(1) the February 23, 2017 deadline by JK (and while represented
by counsel); (2) the April 11, 2017 second deadline by JK;
(3) the May 31, 2017 hearing on JK's Motion to Compel; (4) the
July 10, 2017 family court deadline; and (5) the July 20, 2017
hearing.
After missing the February 24, 2017 deadline, DK's
attorney withdrew, in part because DK failed to meet deadlines.
The day after missing the April 11, 2017 deadline, DK contacted
JK's attorney indicating that she was looking for a new CPA and
attorney. On May 2, 2017, DK was provided notice of the May 31,
2017 hearing, for which she failed to appear. At that point, DK
missed two deadlines to provide her financial information and
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failed to appear at the hearing on the motion to compel
production of her financial information.
Due to DK's failure to appear at the May 31, 2017
hearing, the family court ordered further deadlines for June 13
and 20, 2017 and a hearing for June 27, 2017. But, because that
order was not served upon DK in a timely manner, those June 2017
dates were continued to July 2017, and DK was served with these
documents on June 27, 2017.
In addition to the explanation that the June 2017
dates were continued to July 2017, there should have been no
confusion about the inapplicability of the June 2017 dates
because the documents served on June 27, 2017 would have been
delivered to the P.O. Box 849 address after the June 2017 dates
had passed. It was only possible for DK to comply with the July
2017 dates.
DK was also served with a copy of JK's Proposed
Judgment, which included a provision that JK would be awarded
the Property and a provision that DK would be awarded her
businesses. DK was cautioned that if she failed to appear, the
family court may accept the "proposed Divorce Decree submitted
and filed by Plaintiff," and the only proposal submitted and
filed by JK was the Proposed Judgment. Service was made on
June 27, 2017 to the P.O. Box 849 mailing address that DK
provided to the court.
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Although not a model of clarity, when read in its
entirety, and in context with the date of service, the documents
served upon DK on June 27, 2017 informed her of when (July 20,
2017 at 10:00 a.m.) and where (Courtroom 3A) to appear. These
documents also conveyed the possible consequence (accepting the
proposal filed by JK) should DK fail to appear or fail to
provide her financial information.
In other words, under the circumstances in this case,
DK was afforded adequate notice to apprise her of the pending
action, and proceeding without an HFCR Rule 10(c) statement by
JK did not violate due process. Accordingly, the family court's
finding of "no due process violation" was not erroneous.
Only after DK disregarded three deadlines to provide
financial information and missed two hearings did the family
court accept the only proposition on the table, JK's Proposed
Judgment. Moreover, requiring JK to provide "income and expense
and asset and debt statements" for HFCR Rule 10(c) purposes
during the July 20, 2017 hearing would have been futile for
dividing the property if the family court did not have DK's
financial information with which to compare it.
Thus, the family court's denial of DK's motion to set
aside the judgment as void for failing to comply with HFCR
Rule 10(c) was not wrong.
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2. HFCR Rule 37
DK next contends that HFCR Rule 55 "is not a
permissible sanction for failure to comply with a discovery
order under HFCR Rule 37" (formatting altered). DK argues that
"[b]ecause default was entered against [her] as an impermissible
sanction for a discovery order - and not for any failure to file
an answer - the Family Court's entry of default on June 26, 2017
[] was void pursuant to HFCR, Rule 60(b)(4)." Here, HFCR
Rule 37 applied, and not HFCR Rule 55.
"Without leave of the court . . . , any party may
serve upon any other party written interrogatories" and "[e]ach
interrogatory shall be answered separately and fully in writing
under oath, unless it is objected to, in which event the
objecting party shall state the reasons for objection and shall
answer to the extent the interrogatory is not objectionable."
HFCR Rules 33(a) and (b)(1). "The party submitting the
interrogatories may move for an order under Rule 37(a) of these
Rules with respect to any objection to or other failure to
answer an interrogatory." HFCR Rule 33(b)(5).
If "a party fails to answer an interrogatory submitted
under Rule 33 of these Rules, . . . the discovering party may
move for an order compelling an answer . . . ." HFCR
Rule 37(a)(2). Where a motion to compel is granted and a party
fails to obey the order, the family court may make "[a]n order
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striking out pleadings or parts thereof, or staying further
proceedings until the order is obeyed, or dismissing the action
or proceedings or any part thereof, or rendering a judgment by
default against the disobedient party[.]" HFCR Rule 37(b)(2)(C)
(emphasis added).
As stated, DK missed the first deadline (February 23,
2017) to provide her financial information. DK's counsel then
moved to withdraw, in part because DK was not complying with
deadlines. DK missed her second deadline (April 11, 2017) to
provide information. JK moved to compel, and attached a notice
indicating that a hearing on the motion was set for May 31, 2017
at 10:00 a.m. DK was served a copy of the Motion to Compel and
Notice of Motion at the P.O. Box 849 mailing address she
provided to the court.
When DK did not appear at the May 31, 2017 hearing,
the family court found DK "is hereby in default for her failure
to appear herein[,]" granted JK's Motion to Compel Discovery,
awarded JK's attorney's fees and costs, and scheduled a further
hearing on the matter. That order was entered on June 26, 2017,
and that is the default order DK challenges in her second point
of error.
When DK failed to appear on May 31, 2017, the family
court found her in default for failing to appear and scheduled
another hearing on the matter. Nowhere in the June 26, 2017
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order did the family court cite to HFCR Rule 55 or enter a
judgment of default. Instead, the family court gave DK another
opportunity to comply with the order granting JK's Motion to
Compel. Further, the family court gave DK notice in paragraph 6
of the June 26, 2017 order that "if [DK] fails to appear at that
status hearing mentioned above or fails to respond to the
discovery requests by the deadline stated herein, the court may
granted [sic] the proposed Divorce Decree submitted and filed by
[JK]."
Based on this record, the June 26, 2017 order finding
DK in default for failing to appear was not a "default judgment"
pursuant to HFCR Rule 55. And even if it was a default judgment,
such a judgment is authorized by HFCR Rule 37(b)(2)(C). A trial
court is given broad discretion when imposing sanctions for
discovery abuse, and there was no abuse of discretion in finding
DK in default for failing to appear on May 31, 2017 and providing
her another opportunity to comply with the order granting JK's
Motion to Compel Discovery. See Aloha Unlimited, Inc., 79 Hawai‘i
527, 532-33, 904 P.2d 541, 546-47.
In sum, the family court's denial of DK's motion to
set aside the judgment as void based on HFCR Rule 60(b)(4) was
not wrong.
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B. HFCR Rule 60(b)(6)
In her third point of error, relying on HFCR
Rule 60(b)(6) (other reasons justifying relief), DK argues that
"[t]he one-sided divorce decree drafted by [JK] is so
disproportionately in his favor as to be unconscionable." DK
clarifies she "is not appealing the divorce, but is appealing
the division of assets."
DK, however, raised this issue for the first time in
her motion for reconsideration. "[T]he purpose of a motion for
reconsideration is to allow the parties to present new evidence
and/or arguments that could not have been presented during the
earlier adjudicated motion." See Kamaka v. Goodsill Anderson
Quinn & Stifel, 117 Hawai‘i 92, 104, 176 P.3d 91, 103 (2008)
(citation omitted). It "is not a device to relitigate old
matters or raise new arguments or evidence that could and should
have been brought during the earlier proceeding."
Id.
Pursuant to HFCR Rule 60(b)(6), the court may relieve
a party from any or all provisions of a final judgment for "any
other reason justifying relief from the operation of the
judgment." But, HFCR Rule 60(b)(6) "is only invoked upon a
showing of exceptional circumstances." Thomas-Yukimura v.
Yukimura, 130 Hawai‘i 1, 9, 304 P.3d 1182, 1190 (2013) (citation
omitted); see also Nakata v. Nakata,
3 Haw. App. 51, 56,
641
P.2d 333, 336 (1982) (stating HFCR Rule 60(b) is not intended to
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"reliev[e] a party from free, calculated, and deliberate choices
he, she, or it has made") (citations omitted).
Included with her Motion for Reconsideration and
supplemental declaration, DK provided information appraising the
increase in the value of the Property, an incomplete assignment
of rights for her business dated for 2013, American Web invoices
dated in 2015 and 2017, unsigned 2015 and 2016 tax information,
correspondence related to sales of artwork dated November 3 and
24, 2017, and correspondence related to advertisement for a one-
bedroom apartment dated March 6, 2018.
DK, however, provided no explanation as to why these
documents or information could not have been provided with her
June 20, 2018 Motion to Set Aside or at the August 6, 2018
hearing. With no explanation from DK and no transcripts of the
August 6, 2018 hearing, we cannot say that the family court
erred in finding DK "has not brought to this court's attention
any new evidence or arguments which could not have been
presented at the August 6, 2018 hearing on [her] Motion to Set
Aside Default Judgment." Thus, the family court's denial of
DK's Motion to Reconsider based on HFCR Rule 60(b)(6) was not an
abuse of its discretion.
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C. HFCR Rule 60(b)(3) - Fraud, Misrepresentation, Misconduct
In her fourth, fifth, and sixth points of error DK
relies on HFCR Rule 60(b)(3) for fraud, misrepresentation, or
misconduct.
Under the two-part test for HRCP Rule 60(b)(3), which
is nearly identical to HFCR Rule 60(b)(3), 'the movant must, (1)
prove by clear and convincing evidence that the verdict was
obtained through fraud, misrepresentation, or other misconduct,
and (2) establish that the conduct complained of prevented the
losing party from fully and fairly presenting [her] case or
defense." Kawamata Farms, Inc. v. United Agri Prods., 86 Hawai‘i
214, 251-52, 948 P.2d 1055, 1092-93 (1997) (cleaned up). "In
all averments of fraud or mistake, the circumstances
constituting fraud or mistake shall be stated with
particularity." HFCR Rule 9(b); HFCR Rule 60(b) (providing in
part that for HFCR Rule 60(b)(3), "the averments in the motion
shall be made in compliance with Rule 9(b) of these Rules").
1. Misrepresentation
In her fourth point of error, DK contends that the
family court "abused its discretion by failing to set aside the
July 20, 2017 default judgment." DK argues that "[r]eviewing
the transcript side by side with the outcome leads to the
conclusion that Judge Poelman was misled by [JK's]
misrepresentations."
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DK, however, did not raise this argument or provide a
transcript of the July 20, 2017 hearing when she filed her
Motion to Set Aside Default. See HRS § 641–2 (2016) ("The
appellate court . . . need not consider a point that
was not presented in the trial court in an appropriate manner.")
DK furnished the July 20, 2017 transcripts with her Motion for
Reconsideration, but failed to provide any explanation as to why
that evidence could not have been presented in her Motion to Set
Aside or the August 6, 2018 hearing on the Motion to Set Aside.
As stated above, a motion for reconsideration "is not
a device to relitigate old matters." Kamaka, 117 Hawai‘i at 104,
176 P.3d at 103. The July 20, 2017 transcripts "could and
should have been brought during the earlier proceeding."
Id.
Thus, the family court did not abuse its discretion in denying
DK's Motion for Reconsideration based on misrepresentation under
HFCR Rule 60(b)(3).
2. Resolving doubt
In her fifth point of error, DK contends that the
family court "abused its discretion by failing to resolve any
doubt as to the accuracy of JK's representations in favor of
[DK] under HFCR, Rule 60(b)(3)." In her opening brief, DK
points out that this issue was "presented to the Family Court at
p.9 of [her] motion for reconsideration." In that section of
her Motion for Reconsideration, DK fails to provide any reason
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why this argument could not have been raised in her Motion to
Set Aside or during the August 6, 2017 hearing on her Motion to
Set Aside. Thus, we cannot say that the family court erred in
determining that DK "has not brought to this court's attention
any new evidence or arguments which could not have been
presented at the August 6, 2018 hearing on [her] Motion to Set
Aside Default Judgment."
3. Misconduct
In her sixth point of error, DK contends that the
family court "abused its discretion by failing to set aside the
July 20, 2017 default judgment under HFCR Rule 60(b)(3) as it
was procured by 'other misconduct.'"
DK argues that her "reasonable efforts to prepare
financial disclosures, and to secure defense counsel to comply
with court orders, were stymied in large part by [JK's]
'misconduct.'" DK alleges there were three instances of
misconduct - (a) JK "interfering with [her] preparation of
financial disclosures[,]" (b) JK's "misuse of control of the
couple's money[,]" and (c) JK's "failure to make financial
disclosures" – that, individually or "[t]aken together, . . .
provides this Court with ample evidence to find that the family
court abused its discretion when it failed to set aside the
default judgment based on misconduct within HFCR, Rule
60(b)(3)." (Formatting altered.)
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DK, however, did not provide any evidence that there
was misconduct regarding the CPA services of Berman. DK
provided a letter from Berman, dated April 18, 2017, stating he
cannot prepare her 2016 tax return "[d]ue to ethical reasons and
conflicts of interest." But, the letter makes no reference to
any kind of misconduct by JK, and JK received a similar letter.
DK's "Income and Expense" statement described her
salary and her housing, transportation, and personal expenses
for the month, and her "Asset and Debt Statement" described two
checking accounts, a cemetery plot, and debts from Square,
Hawaiian Air, American Express, and Hana Rose. DK does not
explain how any of these disclosures showed fraudulent
misconduct by JK or what conduct by JK prevented her from
disclosing this information during the 2017 proceedings.
Moreover, DK did not provide evidence in her motion to
set aside default of JK misusing the couple's money. JK,
however, provided copies of numerous processed checks showing
that DK wrote checks on JK's business bank account.
And, as discussed above, JK was not required to file
financial disclosures with his Motion to Compel and, thus, that
was not misconduct on JK's part. Also as discussed above, JK's
testimony during the July 20, 2017 hearing was not a substitute
for HFCR Rule 10(c) financial statements. But, this does not
amount to HFCR Rule 60(b)(3) misconduct by JK.
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Accordingly, DK did not establish that the judgment in
this case was obtained by JK's fraudulent misconduct, and with
no transcripts of the August 6, 2017 hearing, we cannot say that
the family court abused its discretion by denying DK's Motion to
Set Aside based on HFCR Rule 60(b)(3).
D. HFCR Rule 60(b)(1) - Excusable Neglect
In her seventh and final point of error, DK contends
that the family court "abused its discretion by failing to set
aside the July 20, 2017 default judgment under HFCR
Rule 60(b)(1) on the grounds of mistake, inadvertence, surprise,
or excusable neglect." DK argues that her failure to appear at
the two hearings was excusable.
"The determination of what conduct constitutes
'excusable neglect' under Rule 60(b)(1) and similar rules 'is at
bottom an equitable one, taking account of all relevant
circumstances surrounding the party's omission.'" Brandt v. Am.
Bankers Ins. Co. of Florida, 653 F.3d 1108, 1111 (9th Cir. 2011)
(quoting Pioneer Inv. Servs. Co. v. Brunswick Assoc. Ltd.,
507
U.S. 380, 395 (1993)). "[A] party cannot have relief under
60(b)(1) merely because he is unhappy with the judgment.
Instead he must make some showing of why he was justified in
failing to avoid mistake or inadvertence. Gross carelessness is
not enough." Joaquin v. Joaquin,
5 Haw. App. 435, 443,
698 P.2d
298, 304 (1985) (citations omitted and emphasis added).
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1. Attorney
DK argues that her difficulty finding an attorney
contributed to her failure to appear at the two hearings. She
asserts that she "was unable to find a Maui Family Law attorney
who was willing to take her case" because "they had a conflict
of interest" with JK and the per diem judge with whom he had a
relationship.
The record indicates that on April 12 and 28, 2017, DK
communicated with JK's lawyer that she was still looking for an
attorney, and moved her search to O‘ahu. In her declaration, DK
named four attorneys she contacted, with two willing to
represent her but she did not have the funds to hire one and she
declined to proceed with another due to a conflict with a
contractor.
But, DK does not explain how difficulties in obtaining
an attorney justified her failure to appear at the scheduled
hearings. Should DK have appeared at one of the hearings, she
could have explained her difficulty in finding an attorney to
the family court and requested more time.
2. E-mail
DK also argues that another factor contributing to her
missing the two hearings was because JK's counsel did not send
her a courtesy e-mail of the hearings. DK cites to no legal
authority that requires JK to provide a courtesy e-mail of any
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upcoming hearings. Instead, the record indicates that JK's
counsel properly notified DK pursuant to HFCR Rule 5.
3. Notice
DK further argues that lack of notice and confusing
and conflicting notices contributed to her missing the two
hearings. As to the lack-of-notice argument, DK asserts that
"the Court's May 31 order was not served on [her] until 14 days
after the June 13 deadline." DK is correct that the May 31,
2017 order regarding the June 2017 deadlines and hearing was not
served on her until after the deadlines had passed. But, she is
not being held accountable for missing the June 2017 deadlines
and hearing because she was not served, and the June 2017
deadlines and hearing were continued to July 2017. Thus, the
lack of notice of the May 31, 2017 order does not demonstrate
excusable neglect for missing the two hearings.
As to her confusing-and-conflicting argument, DK
asserts that "at a time when [she] was unrepresented, she was
served simultaneously with confusing and conflicting notices."
This assertion, like the lack-of-notice assertion does not apply
to, or demonstrate excusable neglect for, DK missing the first
hearing on May 31, 2017.
For the July 20, 2017 hearing, DK was served with two
filings. The first was "the Ex Parte Motion to Extend Deadlines
and to Continue Status hearing; Exhibit 'A'; Declaration of
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Counsel; Ex Parte Order filed June 26, 2017[,]" and the second
was "the Order of the Hearing Held May 31, 2017 on Plaintiff's
Motion to Compel Discovery and for Attorney's Fees and Costs
filed May 4, 2017; Exhibits 'A' and 'B' filed June 26, 2017[.]"
In the first filing, the first page stated that JK
moves "for an order extending the deadlines in this matter and
continuing the status hearing currently set for June 27, 2017."
That first page also stated, "The grounds for this Motion are
that [DK] has not been served with the Order relating to the
Motion to Compel Discovery filed May 5, 2017 and heard on
May 31, 2017." Thus, that first page explained that the June
2017 deadlines and the June 27, 2017 hearing, should be extended
because DK had not been served.
The third page of the first document is the
"Declaration of Counsel," which stated that "[i]t is
respectfully requested that the Court continue the deadlines
ordered at the hearing of May 31, 2017." The declaration is
then followed by the "Ex Parte Order," which set forth July
deadlines handwritten in blue ink, and the July hearing date
stamped. This order was signed by the judge, also in blue ink.
In the second filing, the first page is entitled
"Order of the Hearing Held May 31, 2017 on Plaintiff's Motion to
Compel Discovery and For Attorney's Fees and Costs Filed May 4,
2017." This document set forth the June deadlines, which, as DK
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noted, had already passed by the time she received these
documents.
In sum, the documents show that the June 2017 dates
needed to be continued because DK was not served in a timely
manner, the June 2017 dates had passed by the time the documents
were served on DK, and the July dates were the only dates with
which DK could comply. Thus, serving the documents that
established the June 2017 deadlines and hearing with the
documents that set forth the continued July 2017 deadlines and
hearing, did not provide an excuse for failing to appear at the
July 20, 2017 hearing. Joaquin, 5 Haw. App. at 442,
698 P.2d at
303 (explaining that "[a] mistake as to the nature and effect of
a document caused by a failure to read it is not an excusable
mistake") (citation omitted); Pogia v. Ramos,
10 Haw. App. 411,
417,
876 P.2d 1342, 1345–46 (1994) (explaining that "'lack of
legal sophistication . . . cannot form the basis of a claim of
excusable neglect . . . for purposes of Rule 60(b)' where the
defendant, after receiving notice, failed to appear or answer")
(citation omitted). Accordingly, DK did not show why she was
justified in failing to appear at the July 20, 2017 hearing.
DK's missing the July hearing was not an aberrant act
on the record in this case. Instead, it was a continuation of
her conduct throughout the discovery process, where she
repeatedly failed to provide her financial information. This
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failure to provide financial information deprived JK, and the
family court, of information needed to proceed to trial. See
Aloha Unlimited, Inc., 79 Hawai‘i at 533, 904 P.2d at 547.
4. Equity
Again, "[t]he determination of what conduct
constitutes 'excusable neglect' under Rule 60(b)(1) and similar
rules 'is at bottom an equitable one, taking account of all
relevant circumstances surrounding the party's
omission.'" Brandt, 653 F.3d at 1111 (citation omitted). The
gist of DK's appeal is that the division of property was unfair
because, as DK stated, "the increase in equity as a result of
paying off the mortgage during our marriage is about $70,000,
and the value of my business is at best the purchase price of
$60,000 minus the debt accumulated by the business since
purchase ($34,000) which comes out to only $26,000."
But the information DK provided to the family court
regarding her business was vague and conflicting. In the income
and expense statement attached to her motion to set aside, DK
represented that Edible Hawaiian Islands Magazine was her
employer, and she earned a gross, net, and take-home pay of
$4,166 per month. Also, DK provided no information about Edible
Hawaiian Islands Magazine in the attached Asset and Debt
Statement. About a month later, DK filed a revised Asset and
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Debt Statement that included Edible Hawaiian Island Magazine
valued at $60,000 with a debt of $34,000.
In connection with her Motion for Reconsideration less
than two months later, DK provided an agreement to acquire
Edible Hawaiian Island Magazine for $60,000 dated for 2013 that
was not signed by the seller. And, in contrast to her income
and expense statement, DK represented to the court, "I have
never taken a salary from Edible Hawaiian Islands, LLC -- only
the draws shown on my Schedule C returns, which was less than
$25,000 per year for those three years."
Taking account of all the relevant circumstances
surrounding DK's failure to meet deadlines, appear at hearings,
and provide reliable information regarding the income from and
value of her business, we cannot say that her conduct
constituted excusable neglect. As such, we cannot say the
family court abused its discretion by denying DK's Motion to Set
Aside and Motion for Reconsideration based on HFCR Rule
60(b)(1).
III. CONCLUSION
For the reasons above, we affirm the family court's
(1) September 5, 2018 "Order Denying Defendant [DK's] Motion to
Set Aside Entry of Default and Default Judgment filed June 29,
2018," and (2) October 1, 2018 "Order Denying [DK's]
September 17, 2018 Motion to Reconsider the September 5, 2018
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Order Denying Defendant's Motion to Set Aside Entry of [the
June 26, 2017] Default and [July 24, 2017] Default Judgment."
DATED: Honolulu, Hawai‘i, November 30, 2022.
On the briefs: /s/ Lisa M. Ginoza
Chief Judge
Anthony L. Ranken and
Napoleon L. Taylor, /s/ Sonja M.P. McCullen
for Defendant-Appellant. Associate Judge
Elizabeth C. Melehan,
for Plaintiff-Appellee.
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DISSENTING OPINION by Nakasone, J.
I respectfully dissent because I would hold that the
default judgment should have been set aside under Hawai‘i Family
Court Rules (HFCR) Rule 60(b)(1) for excusable neglect under the
particular circumstances of this case, where: (1) the default
judgment was entered during a time period after DK's counsel had
withdrawn and DK was without counsel (Self-Represented DK);1 (2)
Self-Represented DK received two notices that left ambiguities
about the adequacy of notification of the family court's
discovery and continuance orders leading to the default
judgment; (3) the default judgment was entered as a sanction for
a discovery violation under circumstances that did not appear
extreme enough to warrant this level of sanction; (4) DK
provided an explanation for her neglect to render it excusable
under a broad, equitable inquiry of the circumstances; and (5)
assuming arguendo there was doubt as to whether Self-Represented
DK's neglect was excusable, any doubt must be resolved in favor
of the party seeking relief from a default judgment in the
interest of justice, consistent with the public policy of
favoring disposition of cases on their merits.
1. Default judgments are disfavored and any doubt
should be resolved in favor of the party seeking
relief.
"[T]he sanction of a default judgment is a harsh
one." Rearden Fam. Tr. v. Wisenbaker, 101 Hawai‘i 237, 254, 65
P.3d 1029, 1046 (2003). "Generally, default judgments are not
favored because they do not afford parties an opportunity to
litigate claims or defenses on the merits." In re Genesys Data
1 I refer to DK as "Self-Represented DK" during the time period
from March 9, 2017 (date of hearing at which DK's counsel was allowed to
withdraw) to July 24, 2017 (date default judgment was filed). DK's new
counsel made his first appearance upon filing DK's Motion to Set Aside
Default Judgment on June 29, 2018.
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Techs., Inc., 95 Hawai‘i 33, 40, 18 P.3d 895, 902 (2001)
(citations omitted). In Wisenbaker, the Hawai‘i Supreme Court
reaffirmed that "defaults and default judgments are not favored
and that any doubt should be resolved in favor of the party
seeking relief, so that, in the interest of justice, there can
be a full trial on the merits." 101 Hawai‘i at 254,
65 P.3d at
1046 (emphasis added) (internal quotation marks and citations
omitted). Citing these principles in In re TW, 124 Hawai‘i 468,
472,
248 P.3d 234, 238 (App. 2011), we held that the family
court "abused its discretion in imposing the harsh and drastic
sanction of default against Mother based upon her single nonappearance" and in granting the Department of Human Service's
petition for permanent custody of the mother's child. Id. at
474, 248 P.3d at 240. Where a court has "the ability to levy
lesser sanctions" such as "attorney's fees and monetary
sanctions" for a party's failure to attend a conference or a
hearing, the imposition of such lesser sanctions "better serves
the interest of justice." Dela Cruz v. Quemado, 141 Hawai‘i 338,
345-46,
409 P.3d 742, 749-50 (2018) (citing Wisenbaker, 101
Hawai‘i at 255,
65 P.3d at 1047) (brackets and internal quotation
marks omitted).
2. Default judgment as a discovery sanction is a
drastic measure appropriate as a last resort or
only under extreme circumstances, such as
willful, contemptuous or otherwise opprobrious
behavior.
This case did not involve a default judgment entered
under HFCR Rule 55(b) where a party had "failed to appear or
otherwise defend[.]" Rather, it was a default judgment entered
as a discovery sanction under HFCR Rule 37(b)(2)(c). See
Wisenbaker, 101 Hawai‘i at 253-54, 65 P.3d at 1045-46 (holding
that where default judgment was imposed as a sanction under RCCH
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Rule 12.1 for settlement-conference-related conduct, Hawai‘i
Rules of Civil Procedure (HRCP) Rule 55(c) was not the
appropriate basis for motion to set aside default judgment and
defendant could move for relief under Rule 60(b)). In Long v.
Long, 101 Hawai‘i 400, 405-06, 69 P.3d 528, 533-34 (App. 2003),
we observed that "granting judgments on default as sanctions for
violating discovery orders are generally deemed appropriate only
as a last resort, or when less drastic sanctions would not
ensure compliance with a court's orders." (emphasis added)
(quoting 7 J. Moore, Moore's Federal Practice § 37.50[2][a] (3d
ed. 2002)). In W.H. Shipman, Ltd. v. Hawaiian Holiday Macadamia
Nut Co. Inc.,
8 Haw. App. 354, 361-63,
802 P.2d 1203, 1207-1208
(1990), this court construed the parallel provision in the HRCP,
Rule 37(b)(2), and noted that: "[t]he federal cases indicate
that the Rule 37(b)(2)(c) drastic sanctions of dismissal and
default judgment are authorized only in extreme
circumstances[;]" and these sanctions "represent the most severe
penalty that can be imposed." (cleaned up) (citations omitted).
"[T]he trial court has a broad spectrum of sanctions
to impose, although the sanction chosen must be commensurate
with the offense." Weinberg v. Dickson-Weinberg, 123 Hawai‘i 68,
75, 229 P.3d 1133, 1140 (2010) (italics and citations omitted).
"[A] sanction which is tantamount to the entry of default
'should be supported by evidence of willful or contemptuous or
otherwise opprobrious behavior.'" TW, 124 Hawai‘i at 473, 248
P.3d at 239 (quoting Weinberg, 123 Hawai‘i at 77,
229 P.3d at
1142). The following five factors are considered in when
reviewing whether an entry of default judgment as a discovery
sanction constitutes an abuse of discretion: "'(1) the public's
interest in the expeditious resolution of litigation; (2) the
court's need to manage its docket; (3) the risk of prejudice to
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the party moving for sanctions; (4) the public policy favoring
disposition of cases on their merits; and (5) the availability
of less drastic sanctions.'" Id. (citation omitted) (quoting
Weinberg, 123 Hawai‘i at 71,
229 P.3d at 1136).
Here, Self-Represented DK's discovery violation was
for failing to respond to the first Request for Production of
Documents2 by a February 23, 2017 deadline. The motion to compel
discovery was filed on May 4, 2017 and heard on May 31, 2017,
after Self-Represented DK's counsel had withdrawn. The motion
to compel requested, inter alia, that Self-Represented DK be
ordered to respond, and for attorney's fees and costs. The
motion argued that "[JK] has been more than reasonable in
waiting more than two months for [DK]'s responses." It also
requested the further sanction under HFCR Rule 37(b)(2) that:
"[i]f [DK] fails to respond as ordered by this court, [JK]
respectfully requests this court issue sanctions against [DK],
including, but not limited to, refusing to allow [DK] to
introduce evidence at the trial in this matter." Notably, JK
did not request the sanction of default judgment in his motion.
In the Motion to Set Aside Default Judgment, DK set
forth her reasons for missing the first May 31, 2017 hearing and
the second July 20, 2017 status hearing on the motion to compel.
DK's declaration explained that during the relevant time period,
2 The Request for Production of Documents (RPOD) was dated January
24, 2017, approximately three months after JK's October 20, 2016 Complaint.
The RPOD was a detailed, complex listing of 33 numbered requests, excluding
subparts, covering a wide range of real estate and financial documents,
including every conceivable type of asset and source of potential income and
liability. The RPOD included, inter alia, all statements for all business
accounts for the last four years, all check registers or electronic registers
for the last three years, all checks signed for any account in DK's name for
the last three years, loan applications in the last five years, all credit
card statements for the last three years, asset ownership and value documents
at the date of marriage, documents reflecting debt/liabilities as of the date
of marriage, and a list of 25 sub-requests pertaining to "Edible Hawai‘i
Islands[.]"
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she and the couple's teen daughter were moving out of the family
home, where DK had lived for 23 years; DK was working two jobs;
DK had no counsel at the time she received the "confusing and
conflicting" hearing notices; and DK was "scrambling to find a
replacement attorney" that she could afford and who did not
"have a conflict of interest" due to JK's relationship with a
per diem family court judge.3 In light of Self-Represented DK's
3 DK's declaration stated:
3. In the four months that followed, I missed two
important hearings:
a. A discovery hearing on May 31 (2 days after my
daughter and I moved out of our family home); and
b. A hearing for entry of default judgment on July
20, 2017 (originally set for June 27, 2017, but
continued the day before the hearing, to July 20).
The hearing was continued by [JK]'s attorney Ex Parte
-- i.e., without notice to me.
4. The following factors contributed to my missing these
vital hearings:
a. Unrepresented by Counsel. I was unrepresented
by counsel as I was scrambling to find a replacement
attorney (i) who I could afford; and (ii) who did not
have a conflict of interest either because they had
already been consulted by [JK], or because of [JK]'s
extra-marital affair with Michelle Drewyer, who, at
that time, was a Per Diem Family Court Judge;
b. Moving. I was moving out of the family home we
had lived in for the last 23 years, with my 16 year
old daughter, [];
c. Working two jobs. I was working long hours to
pay for the living expenses of myself and my
daughter. I took on a second job cleaning commercial
properties. [JK] made no financial contributions to
our living expenses;
d. Change of address. I changed my personal
address from our family home to my business P.O. box;
e. Lack of Notification. [JK]'s attorney contacted
me by phone and email regarding settlement and
discovery but in those conversations she never
notified me of any hearing dates, nor did she provide
me with a courtesy copy of upcoming motions or
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explanation, her self-represented status, and the ambiguities
surrounding the adequacy of the notification in the discovery
and continuance orders Self-Represented DK received, as
explained infra, the evidence does not show that there was
"willful or contemptuous or otherwise opprobrious behavior" by
Self-Represented DK to warrant the imposition of the harshest
hearing dates, which she could easily have done via
email, voicemail, or text.
f. [JK] also neglected to notify me of any hearing
dates despite the fact that he knew I was
unrepresented, I was still living in the family home,
and he met with me on both May 28 and May 29, and on
neither occasion did he let me know verbally, or by
text, voicemail, or email, that there was an
important hearing just two days later, on May 31st.
g. Lack of Service. [JK]'s attorney did not serve
the Court's May 31 order on me until June 27, 2018
[sic] - 14 days after the June 13 deadline to comply
with the order had passed! See Plaintiffs Ex Parte
Motion attached as Exhibit A in which plaintiffs
attorney admits that I was not served with the May 31
order:
. . . .
h. Confusing and Conflicting Notices. To add to
the confusion, when [JK]'s attorney finally did serve
the May 31 order, she did so at the same time as an
Ex Parte Order filed on June 26, 2017 with the result
that, at a time when I was unrepresented, I was
served simultaneously with confusing and conflicting
notices. . . .
5. As a consequence, [JK] obtained a discovery order and
a default judgment against me during this transitional
period when I was moving out of the family home, and when I
was unrepresented by counsel.
DK also listed the names of all of the family law attorneys she had
contacted on Maui in her attempt to find replacement counsel, and
stated she expanded her search to Oahu due to the "relatively small
pool of family law attorneys on Maui." DK finally found her current
counsel who was willing to handle her case, but she could not afford
the retainer. DK explained that: "[i]t was only as the one-year
deadline to file this motion was approaching that my attorney reviewed
my case with the Office of Disciplinary Counsel and determined that he
could defer payment of his fees until the case is resolved without
violating the rules governing attorneys, which he then offered to do."
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discovery sanction of default judgment -- relief that went
beyond the attorney's fees and costs and preclusion of evidence
sanctions that JK's motion requested pursuant to HFCR Rule
37(b)(2). TW, 124 Hawai‘i at 473, 248 P.3d at 239 (quoting
Weinberg, 123 Hawai‘i at 77, 229 P.3d at 1142).
3. The two notices that Self-Represented DK
received leading up to the default judgment
left ambiguities about the adequacy of their
notification.
In Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd.
P'ship, 507 U.S. 380, 398 (1993), the United States (U.S.)
Supreme Court found that a notice that was "outside the ordinary
course" in a bankruptcy case due to its "'peculiar and
inconspicuous placement'" left a "dramatic ambiguity" in the
adequacy of the notification. (Citation omitted). Pioneer set
forth an equitable standard for review of "excusable neglect"
for tardy claims filed after a bankruptcy court's "bar date"
deadline; and this same equitable standard was expressly adopted
by the Hawai‘i Supreme Court in Enos v. Pac. Transfer &
Warehouse, Inc., 80 Hawai‘i 345, 352,
910 P.2d 116, 123 (1996),
and Eckard Brandes, Inc. v. Dep't. of Labor and Indus. Rels.,
146 Hawai‘i 354, 364,
463 P.3d 1011, 1021 (2020), to review
"excusable neglect" for late extensions of time to file a notice
of appeal under Hawai‘i Rules of Appellate Procedure Rule
4(a)(4)(B). The problematic notice in Pioneer was a significant
factor in the U.S. Supreme Court's conclusion that counsel's
neglect in that case was excusable, as follows:
In assessing the culpability of respondents' counsel,
we give little weight to the fact that counsel was
experiencing upheaval in his law practice at the time of
the bar date. We do, however, consider significant that
the notice of the bar date provided by the Bankruptcy Court
in this case was outside the ordinary course in bankruptcy
cases. As the Court of Appeals noted, ordinarily the bar
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date in a bankruptcy case should be prominently announced
and accompanied by an explanation of its significance. We
agree with the court that the "peculiar and inconspicuous
placement of the bar date in a notice regarding a
creditors' meeting," without any indication of the
significance of the bar date, left a "dramatic ambiguity"
in the notification. This is not to say, of course, that
respondents' counsel was not remiss in failing to apprehend
the notice. To be sure, were there any evidence of
prejudice to petitioner or to judicial administration in
this case, or any indication at all of bad faith, we could
not say that the Bankruptcy Court abused its discretion in
declining to find the neglect to be "excusable." In the
absence of such a showing, however, we conclude that the
unusual form of notice employed in this case requires a
finding that the neglect of respondents' counsel was, under
all the circumstances, "excusable."
507 U.S. at 398-99 (emphases added) (citation and brackets
omitted).
Here, in my view, the two notices served
simultaneously appear to be "confusing and conflicting" as DK
stated in her declaration, and leave ambiguities in the adequacy
of the notification provided to a self-represented party like
DK. The "Ex Parte Motion to Extend Deadline and to Continue
Status Hearing" (6/26/17 EPM to Continue 6/27/17 Hearing) and
the "Order of the Hearing Held May 31, 2017 on Plaintiff's
Motion to Compel Discovery and for Attorney's Fees and Costs
filed May 4, 2017" (Order of 5/31/17 Hearing) were both filed
simultaneously on June 26, 2017, the day prior to the June 27,
2017 continued hearing on JK's motion to compel discovery. The
single Certificate of Service (COS) filed June 27, 2017,
indicates that Self-Represented DK was simultaneously served
with two documents at her P.O. Box.
Document No. 1: 6/26/17 EPM to Continue 6/27/17
Hearing
The 6/26/17 EPM to Continue 6/27/17 Hearing is a sixpage document. Notably, it is filed "ex parte," without any
notice to the other side, seeking a last-minute continuance of
the next day's hearing, the afternoon before the hearing. The
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Declaration of Counsel does not indicate whether JK's counsel
made efforts to notify Self-Represented DK regarding the last-minute EPM to continue the hearing, as would be required in the
circuit court. Cf. Rules of the Circuit Court of Hawai‘i (RCCH)
Rule 7.2(f).4
The Declaration of Counsel states that JK's counsel
"has drafted the Order of the hearing held May 31, 2017, but has
not provided a copy to [Self-Represented DK]." This statement
indicates that Self-Represented DK was not given any information
about what occurred at the May 31, 2017 discovery hearing that
she missed and had not received any notice of the subsequent
June 27, 2017 hearing.
The "Ex Parte Order" is inconspicuously placed, and
does not appear until page five of the EPM. The Ex Parte Order
sets a new deadline of July 10, 2017 for Self-Represented DK to
comply with the discovery order and a new date of July 20, 2017
for a "status hearing" on the motion to compel. The final
paragraph warns Self-Represented DK that if she "fails to appear
at that status hearing mentioned above or fails to respond to
the discovery requests by the deadline stated herein, the court
4 The HFCR do not have any rules pertaining to ex parte filings.
By contrast, RCCH Rule 7.2, which applies only to cases governed by the HRCP,
does contain a rule regarding last-minute ex parte filings, for which there
are a number of requirements for EPMs and shortening of time including: the
reasons for filing the motion ex parte, efforts made to notify parties, and,
if shortening time or advancing a hearing, the efforts made to obtain a
stipulation or response from the other parties in the case, or an explanation
stating the reasons why "no attempt was made." See RCCH Rule 7.2(f) (2014)
("A motion entitled to be heard ex parte shall: (1) cite the statute, rule,
or other authority authorizing the court to entertain the motion ex parte;
(2) be supported by an affidavit or declaration stating the reason(s) for
filing the motion ex parte, the efforts made to notify parties, and, if the
motion is to shorten time or advance a hearing pursuant to subsection (g)(5)
of this Rule, the efforts made to obtain a stipulation or response from the
other parties in the case or the reason(s) why no attempt was made; (3) be
accompanied by a proposed order; and (4) be served on the date that the
motion was presented to the court.").
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may granted [sic] the proposed Divorce Decree submitted and
filed by [JK]."
The Ex Parte Order's notification that there is a
"status hearing" on a motion to compel discovery lacked
explanation of its significance, as it did not inform Self-Represented DK that the "status hearing" may turn into a default
judgment hearing. The warning that the consequence for failure
to appear or comply with the discovery request is the court "may
granted [sic] the proposed Divorce Decree" -- lacked explanation
that the family court was referring to a discovery sanction of
"judgment by default against the disobedient party" under HFCR
Rule 37(b)(2)(C). The record also does not reflect that a
document entitled "Proposed Divorce Decree" or "Divorce Decree"
was filed by JK as the family court ordered; instead, a
differently entitled document, "Judgment Granting Divorce and
Awarding Child Custody" is inconspicuously attached to a
separate document, the Order of 5/31/17 Hearing. Thus, the Ex
Parte Order leaves multiple ambiguities as to the adequacy of
the notification Self-Represented DK received, due to the
"inconspicuous placement" issues and lack of "explanation of its
significance." Pioneer, 507 U.S. at 398.
Document No. 2: Order of 5/31/17 Hearing
The Order of 5/31/17 Hearing is a thirteen-page
document, and pages 1 and 2 inform Self-Represented DK about
what transpired at the hearing she missed, and order Self-Represented DK "to respond to the discovery requests no later
than June 13, 2017." (Emphasis added). However, the Order is
not filed or served until two weeks after this deadline had
passed. The Order thus appears obsolete because it is
impossible to comply with a passed deadline.
The Order of 5/31/17 Hearing informs Self-Represented
DK that she must appear at a further hearing on June 27, 2017 at
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10:00 a.m., yet the Order was served on Self-Represented DK's
P.O. Box on the day of the hearing, making the notice
nonsensical. Generating additional confusion, this Order states
the June 27, 2017 hearing is at 10:00 a.m., but the first
document discussed supra, the 6/26/17 EPM to Continue 6/27/17
Hearing, had a different hearing time of 1:30 p.m. on page one.
The Order of 5/31/17 Hearing advised Self-Represented
DK that if she "fails to respond to the discovery requests and
fails to appear at the hearing of June 27, 2017," the family
court "may grant a proposed Divorce Decree submitted to the
Court by [JK] which is attached hereto as Exhibit 'B'." For the
reasons already set forth supra, this obsolete order's
notifications also lack explanation of its significance and the
significance of the "Judgment Granting Divorce and Awarding
Child Custody" that was attached. See Pioneer, 507 U.S. at 398.
Finally, as set forth supra, the only notice of the "proposed
Divorce Decree" that Self-Represented DK ever received was
confusingly placed, attached to this second obsolete document
giving notice of a discovery deadline that had passed weeks
before. Thus, the Order of 5/31/17 Hearing, viewed together
with the Ex Parte Order, amplifies the ambiguities as to the
adequacy of the notification Self-Represented DK received. See
id.
4. Self-Represented DK's neglect appears excusable
under a broad, equitable inquiry taking into
account all relevant circumstances.
The Majority applies the Ninth Circuit's equitable
determination of excusable neglect, that: "The determination of
what conduct constitutes 'excusable neglect' under Rule 60(b)(1)
and similar rules 'is at bottom an equitable one, taking account
of all relevant circumstances surrounding the party's
omission.'" Brandt v. Am. Bankers Ins. Co. of Fla., 653 F.3d
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1108, 1111 (9th Cir. 2011) (quoting Pioneer,
507 U.S. at 395).
I agree with this standard but disagree with the conclusion
reached. The Brandt standard is the same equitable standard for
"excusable neglect" reaffirmed by the Hawai‘i Supreme Court in
Eckard Brandes, which the supreme court explained came from
Pioneer:
Accordingly, as indicated by the United States Supreme
Court in Pioneer, 507 U.S. 380,
113 S.Ct. 1489, which was
cited favorably in Enos, whether "excusable neglect" exists
is "at bottom an equitable" decision; it is necessary to
first determine whether there is "neglect," and, if so,
whether the "neglect" is "excusable." 507 U.S. at 393-94,
113 S.Ct. 1489. As also noted, with respect to determining
whether existing "neglect" could be deemed "excusable,"
Enos expressly adopted the equitable standard set forth by
the United States Supreme Court in Pioneer, and stated,
"reasons for failure to comply with a court-ordered
deadline range from acts of God to a party's choice to
flout the deadline and ... 'excusable neglect' is not
restricted to those circumstances beyond a party's
control." We therefore clarify that, as indicated in
[Enos], "excusable neglect" is to be construed pursuant to
its plain language: "neglect" that is "excusable," which,
"involve[s] a broad, equitable, inquiry" "taking into
account all relevant circumstances surrounding the party's
omission." Pioneer, 507 U.S. at 389, 393-94,
113 S.Ct.
1489.
146 Hawai‘i at 364,
463 P.3d at 1021 (emphases added) (footnote
omitted). "[E]quity jurisprudence" is "not bound by the strict
rules of the common law," but enables a court to "mold its
decrees to do justice amid all the vicissitudes and intricacies
of life." Haw. Ventures, LLC v. Otaka, Inc., 114 Hawai‘i 438,
456,
164 P.3d 696, 714 (2007) (quoting Fleming v. Napili Kai,
Ltd.,
50 Haw. 66, 70,
430 P.2d 316, 319 (1967) (internal
quotation marks omitted)). While the principles upon which
equity jurisprudence proceeds are "eternal[,] . . . their
application in a changing world will necessarily change to meet
changed situations."
Id.
In concluding the neglect here was inexcusable, the
Majority relies on Pogia v. Ramos, 10 Haw. App. 411,
876 P.2d
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1342 (1994) and Joaquin v. Joaquin,
5 Haw. App. 435,
698 P.2d
298 (1985), both of which are distinguishable from this case.
Pogia involved a self-represented defendant who failed to answer
a complaint on grounds that she did not understand "'what the
legal papers meant,'" and we held that in order to establish
"excusable neglect" under HFCR Rule 60(b)(1), a defaulted party
"who failed to answer a complaint must make a showing of why the
party was justified in failing to respond to the complaint or to
obtain an extension of time to respond," and that "'ignorance of
the law'" was not "excusable neglect."
10 Haw. App. at 416, 876
P.2d at 1345 (citations omitted). Unlike the notices Self-Represented DK received here that contained multiple ambiguities
in the adequacy of their notification, we noted that the summons
in Pogia "clearly sets forth Defendant's obligations to respond
within twenty days or have judgment by default taken against
her." Id. at 417, 876 P.2d at 1345. Joaquin involved a
defendant who had signed a divorce agreement and appearance and
waiver without reading them, which we held did not constitute
"excusable neglect" under 60(b)(1).
5 Haw. App. at 443,
698
P.2d at 304. We held there that the defendant "'must make some
showing of why he was justified in failing to avoid mistake or
inadvertence. Gross carelessness is not enough.'"
Id. (citing
11 Charles Alan Wright & Arthur R. Miller, Federal Practice and
Procedure § 2858 (1973); 7 Moore's Federal Practice § 60.22[2]
(1983)). Here, Self-Represented DK did not sign documents
without reading them, and there is "some showing" why DK's
neglect may have been excusable due to the multiple ambiguities
surrounding the adequacy of the notifications she received. Id.
In Ass'n of Apartment Owners of Kai Makani v. Oleksa,
No. CAAP-XX-XXXXXXX, 2019 WL 2281248, at *3 (May 29, 2019)
(SDO), we concluded that relief was warranted under HRCP Rule
60(b)(1), under circumstances where the Oleksas, who were self-
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represented like DK here, supplied justification for their
failure to oppose a motion for summary judgment that
constituted excusable neglect, where they left on a trip and did
not receive the motion until after they returned from their
trip, which had been unexpectedly lengthened due to a medical
emergency. We explained that:
[u]nder HRCP Rule 60(b)(1), a party can be granted relief
from judgment where there is a showing of, inter alia,
'excusable neglect' that interferes with the fair
dispensation of justice." Isemoto Contracting Co., Ltd, v.
Andrade, 1 Haw. App. 202, 204,
616 P.2d 1022, 1025 (1980).
"HRCP Rule 60(b)(1), . . . exists to remedy some
dereliction of the movant in the litigation itself; for
example, failure to answer the complaint, failure to answer
interrogatories, ineffective assistance of counsel, or
unauthorized settlement by counsel." Citicorp Mortg.,
Inc., v. Bartolome, 94 Hawai‘i 422, 437, 16 P.3d 827, 842
(App. 2000) (citations omitted).
Id.
Here, Self-Represented DK's failure to comply with the
discovery order and missing two hearings on the motion to compel
constituted neglect. HFCR Rule 60(b)(1) exists to remedy this
type of dereliction in the litigation by a movant whose neglect
is shown to be excusable. See id. Applying a "broad,
equitable, inquiry taking into account all relevant
circumstances surrounding [Self-Represented DK]'s omission[s],"
which include her self-represented status, the multiple
ambiguities surrounding the adequacy of the notification that
Self-Represented DK received, her personal situation regarding
the housing transition and working two jobs, and the financial
and logistical challenges she encountered in finding conflictfree replacement counsel on Maui –- in my view, all militate in
favor of a conclusion that her neglect was excusable. Eckard
Brandes, Inc., 146 Hawai‘i at 364,
463 P.3d at 1021; see Pioneer,
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507 U.S. at 398-99; Haw. Ventures, LLC, 114 Hawai‘i at 456,
164
P.3d at 714.
5. HFCR Rule 60(b)(1) relief was warranted.
For the reasons explained above, I would conclude that
relief under HFCR Rule 60(b)(1) was warranted because Self-Represented DK's neglect appeared excusable under a broad,
equitable inquiry of the relevant circumstances; and assuming
arguendo there was doubt whether her neglect was excusable, our
case law counsels that, in the interest of justice, any doubt in
setting aside a default judgment should be resolved in favor of
the party seeking relief. See Wisenbaker, 101 Hawai‘i at 254, 65
P.3d at 1046. The record also reflects that the harshest
discovery sanction of default judgment was imposed in this case,
where Self-Represented DK's failure to respond did not rise to
the level of willful, contemptuous, or opprobrious conduct
justifying this level of discovery sanction. See TW, 124 Hawai‘i
at 474, 248 P.3d at 240; Weinberg, 123 Hawai‘i at 77,
229 P.3d at
1146. Setting aside the default judgment in this case is also
consistent with the public policy favoring disposition of cases
on their merits. See Weinberg, 123 Hawai‘i at 71,
229 P.3d at
1136; Wisenbaker, 101 Hawai‘i at 254,
65 P.3d at 1046.
Accordingly, I would conclude that the family court abused its
discretion in denying the motion to set aside the default
judgment. See LaPeter v. LaPeter, 144 Hawai‘i 295, 304,
439 P.3d
247, 256 (App. 2019) (reviewing HFCR Rule 60(b) motion for abuse
of discretion).
/s/ Karen T. Nakasone
Associate Judge
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