Curtis v. Dorn

234 P.3d 683, 123 Haw. 301, 2010 Haw. App. LEXIS 299
CourtHawaii Intermediate Court of Appeals
DecidedJune 17, 2010
Docket28299
StatusPublished
Cited by1 cases

This text of 234 P.3d 683 (Curtis v. Dorn) is published on Counsel Stack Legal Research, covering Hawaii Intermediate Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Curtis v. Dorn, 234 P.3d 683, 123 Haw. 301, 2010 Haw. App. LEXIS 299 (hawapp 2010).

Opinion

Opinion of the Court by

REIFURTH, J.

This ease involves the partition under chapter 668, Hawaii Revised Statutes, of improved real property held by an unmarried couple as tenants in common. Plaintiff-Ap-pellee Catherine Curtis (Curtis), the cotenant in possession (COTIP) since January 1994, wishes to purchase the interest held by Defendant-Appellant Jeff Dorn (Dorn), the co-tenant out of possession (COTOP), but the parties cannot agree on a purchase price. On appeal, we hold that a COTOP who was not ousted from the property, but from whom a COTIP seeks contribution for unpaid maintenance and improvements, may be entitled to offset a proportionate share of the property’s rental value during the 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 court) 1 in favor of Curtis. The Second Amended Judgment ordered Dorn to transfer to Curtis his interest in the home that Curtis and Dorn owned as tenants in common in Kilauea, Ha-wai'i, on the island of Kaua'i (Kilauea property), and directed Curtis to pay $51,132.87 to Dorn.

On appeal, Dorn argues that the circuit court reversibly erred by not crediting him with the rental value of 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.

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 ease 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, 1993, 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 $171,000. 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 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 equal *304 ly. The couple’s relationship deteriorated and Dorn moved out in December 1993.

In June 1994, 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 1999, 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 $1,800 and $2,100 per month. 2 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 $171,000, investing $34,000 and $2,000 respectively as a cash down payment, and leaving them mutually responsible for the $135,000 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 $155,148.38.

2. Contributions To Property

In January 1994, the month after Dorn moved out, Curtis began paying the monthly mortgage payment of $1,258.59. She continued paying monthly payments for the next 11 years and 10 months, for a total of $178,719.78. 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 $23,219.94 toward home insurance, property taxes, and ongoing home expenses, whereas Dorn contributed a total of $1,421.00 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 “scufffied] 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.”

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Cite This Page — Counsel Stack

Bluebook (online)
234 P.3d 683, 123 Haw. 301, 2010 Haw. App. LEXIS 299, Counsel Stack Legal Research, https://law.counselstack.com/opinion/curtis-v-dorn-hawapp-2010.