Court Opinion

ID: 3198938
Source: CourtListenerOpinion
Date Created: 2016-04-28 18:05:24.850851+00
Date Added: 2024-06-11T14:28:58.259333
License: Public Domain

132 Nev., Advance Opinion 1/45`f
                       IN THE SUPREME COURT OF THE STATE OF NEVADA

                MARK ANDERSON,                                       No. 62059
                Appellant,
                vs.                                                           FILED
                SOPHIA SANCHEZ,
                Respondent.                                                   APR 2 8 2016
                                                                                IE K. LINDEMAN
                                                                                        EMbreDURT
                                                                         BY
                                                                                 DEPUTY CLERK

                           Appeal from a district court divorce decree. Fifth Judicial
                District Court, Nye County; Kimberly A. Wanker, Judge.
                           Affirmed.

                The Abrams & Mayo Law Firm and Vincent Mayo, Las Vegas,
                for Appellant.

                Law Office of Daniel Marks and Daniel Marks and Christopher L.
                Marchand, Las Vegas,
                for Respondent.

                BEFORE PARRAGUIRRE, C.J., HARDESTY, DOUGLAS, CHERRY,
                SAITTA, GIBBONS and PICKERING, JJ.

                                                OPINION

                PER CURIAM:
                           In this appeal, appellant seeks to set aside the parties'
                property settlement agreement incorporated into the divorce decree on the

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                ground of mutual mistake and to join his sister as a third party to the
                action because she allegedly had an unresolved interest in certain real
                property, which was distributed as a community asset under the
                settlement agreement. We conclude that there was no mutual mistake
                because the parties were aware at the time they negotiated the settlement
                agreement of the facts supporting the sister's claim of interest in the
                property. Thus, appellant was not entitled to set aside the property
                settlement agreement and his request to join his sister in the action was
                properly denied. Accordingly, we affirm the divorce decree.

                                             BACKGROUND

                            In 2012, appellant Mark Anderson filed a complaint for
                divorce from respondent Sophia Sanchez. The parties agreed to mediation
                before a retired district court judge to discuss the distribution of their
                assets and debts. At issue were several pieces of real property, including a
                home located on East Wilson Avenue in Orange, California (Wilson
                property). Both parties were represented by independent legal counsel
                during the mediation, reached a settlement agreement resolving their
                issues, and signed a written Memorandum of Understanding (MOU)
                memorializing their agreement. As to the Wilson property specifically, the
                MOU stated that it was owned by the parties' trust and they agreed that
                the property would be awarded to Mark in exchange for a $75,000
                payment to Sophia from Mark's retirement account, representing half of
                the property's net value. In the MOU, the parties acknowledged that they
                had carefully read the document, that it accurately reflected their

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                agreement, and that each voluntarily signed it without undue influence or
                coercion and agreed to be contractually bound by its terms The parties
                initialed each page of the MOU and signed it at the end.
                            When Mark filed a notice stating his intent to withdraw and
                revoke his signature from the MOU, Sophia moved to enforce it, arguing
                that the settlement agreement was valid and the parties had agreed to be
                contractually bound by its terms. Mark, in turn, moved to set aside the
                MOU as unenforceable, citing NRCP 60(b), and arguing that his sister
                Cheryl Parr had an ownership interest in the Wilson property. Although
                acknowledging that he and Sophia held title, Mark alleged that they had a
                prior oral agreement with Cheryl, under which Cheryl transferred title to
                Mark and Sophia for the purpose of facilitating loans needed to renovate
                the residence. He further alleged that once the loans were paid off from
                rental income generated by the property, Mark and Sophia had agreed to
                transfer title back to Cheryl. Consequently, Mark argued that he and
                Sophia were merely holding title to the Wilson property for Cheryl's
                benefit under a resulting or constructive trust theory, and because the
                parties lacked authority to enter into an agreement affecting property
                owned by Cheryl, the MOU as to the Wilson property should be set aside
                as void. To support his position, Mark provided offers of proof including
                trust documents and affidavits or other statements indicating knowledge
                of this arrangement between the parties and Cheryl. Mark also requested
                to join Cheryl in the divorce action and amend the pleadings to reflect her
                ownership rights in the Wilson property. In response, Sophia argued that

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                 she and Mark undisputedly held title to the Wilson property, the MOU
                 was an enforceable settlement agreement, and Cheryl lacked standing to
                 join the action.
                              After hearing argument, the district court ruled that the MOU
                 was enforceable under Nevada law and denied the request to join Cheryl
                 in the action.' On the record, the court observed that Mark and Sophia
                 were legal owners of the property and any circumstances creating a
                 constructive trust in Cheryl's favor were known to them. The court
                 entered the divorce decree, which adopted the parties' MOU and ordered
                 the property to be divided in accordance with their agreement.
                              Mark filed this appeal from the decree, and we transferred the
                 case to the court of appeals. That court reversed and remanded as to the
                 disposition of the Wilson property, concluding that the district court
                 should have conducted an evidentiary hearing to decide the joinder issue
                 before adjudicating the parties' property pursuant to the settlement
                 agreement. We granted Sophia's petition for review and withdrew the
                 court of appeals' opinion.

                                               DISCUSSION

                              The present dispute requires us to examine the creation and
                 enforceability of the parties' property settlement agreement. Mark
                 contends that the district court should have set aside the MOU based on
                 the parties' mutual mistake that the Wilson property was community

                       'Cheryl also moved to intervene below, but the district court denied
                 her motion and she was never made a party to the action. Thus, Cheryl is
                 not a party to this appeal. She did not file a separate writ petition
                 challenging the decision on intervention.

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                  property subject to division. He argues that both he and Sophia shared a
                  misconception during negotiations that title to the Wilson property in
                  their name supplanted Cheryl's ownership interest and they were
                  unaware of how a resulting or constructive trust in Cheryl's favor could
                  affect their rights in, and authority to, dispose of the Wilson property.
                              An agreement to settle pending divorce litigation constitutes a
                  contract and is governed by the general principles of contract law.
                  Grisham v. Grisham, 128 Nev., Adv. Op. 60, 289 P.3d 230, 234 (2012); see
                  also DCR 16 (requiring an agreement or stipulation between the parties to
                  be in writing or entered into the minutes in the form of an order).
                  Contract interpretation generally presents a question of law subject to de
                  novo review. Grisham, 128 Nev., Adv. Op. 60, 289 P.3d at 236. Whether a
                  contract exists is a question of fact, however, and this court will defer to
                  the district court unless the factual findings are clearly erroneous or not
                  supported by substantial evidence. Id.
                              An enforceable contract requires "an offer and acceptance,
                  meeting of the minds, and consideration." May v. Anderson, 121 Nev. 668,
                  672, 119 P.3d 1254, 1257 (2005). A mutual mistake may be grounds to
                  equitably rescind a contract or to render a contract void.         Tarrant v.
                  Monson, 96 Nev. 844, 845, 619 P.2d 1210, 1211 (1980). "Mutual mistake
                  occurs when both parties, at the time of contracting, share a misconception
                  about a vital fact upon which they based their bargain?        Gen. Motors v.
                  Jackson, 111 Nev. 1026, 1032, 900 P.2d 345, 349 (1995).
                              We conclude that Mark's argument regarding mutual mistake
                  is unavailing. It was undisputed that Mark and Sophia held title to the

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                Wilson property through a trust at the time they entered into the MOU.
                Holding title constitutes "the legal right to control and dispose of
                property." Hamm v. Arrowcreek Homeowners' Ass'n, 124 Nev. 290, 298,
                183 P.3d 895, 902 (2008) (quoting Title, Black's Law Dictionary (8th ed.
                2004)). It was also undisputed that the parties were aware of the facts
                supporting Cheryl's purported interest in the Wilson property when they
                entered into the MOU. Indeed, Mark represented in his motion to set
                aside that the parties had always known the Wilson property belonged to
                Cheryl and he attached offers of proof to support that position. Thus, the
                parties' had no shared misconception of a vital fact concerning the Wilson
                property. See Gen. Motors, 111 Nev. at 1032, 900 P.2d at 349.
                            Despite his knowledge, Mark did not include in his pleadings
                any allegations as to Cheryl's interest, and he ultimately signed the MOU
                reflecting that he and Sophia were the sole holders of title to the Wilson
                property and agreeing to a specific division between them. Both parties
                were represented by independent legal counsel and engaged in the
                negotiations before a retired district court judge before signing the written
                MOU and each declared that they were "of sound mind and mental
                capacity to understand the nature and affect of [the] agreement." Both
                parties acknowledged that the MOU "represents what each believes to be
                a fair and reasonable resolution of the issues, and each agrees to be
                contractually bound by its terms."
                            Even assuming, as Mark now argues, that the parties were
                unaware or misinformed of the legal effect Cheryl's purported interest had
                on their disposition of the Wilson property, mutual mistake is not grounds
                for rescission when the party bears the risk of mistake. Land Baron Inv.,
                Inc. v. Bonnie Springs Family LP, 131 Nev., Adv. Op. 69, 356 P.3d 511,

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                517 (2015). More specifically, "Mb the party is aware at the time he enters
                into the contract 'that he has only limited knowledge with respect to the
                facts to which the mistake relates but treats his limited knowledge as
                sufficient," the court will allocate the risk of mistake to that party.        Id.
                (quoting Restatement (Second) of Contracts § 154 cmt. b (Am Law Inst.
                1981)); see Restatement (Second) of Contracts § 151(b) (observing that the
                law in effect at the time of the contract is "part of the total state of facts").
                If Mark did not have sufficient knowledge of the legal consequences of any
                oral agreement with Cheryl, he was aware of the facts underlying his
                claim that the Wilson property was the subject of an equitable trust and
                therefore not appropriate for distribution under the MOU, and he could
                have pursued the issue further rather than agreeing to the settlement.
                See Restatement (Second) of Contracts § 154(c) (indicating that the court
                may allocate the risk of mistake to a party when it is reasonable under the
                circumstances); cf. Janusz v. Gilliam, 947 A.2d 560, 567 (Md. 2008)
                (holding that a mutual mistake of law was not grounds to rescind a
                property settlement agreement particularly where both parties were
                represented by counsel during the negotiations and were on equal footing
                to know or learn of the relevant law). Thus, Mark bore the risk of mistake
                when he entered into the MOU despite being aware of his limited
                knowledge. Accordingly, the district court's decision to enforce the MOU is
                supported by substantial evidence. Grisham, 128 Nev., Adv. Op. 60, 289
                P.3d at 236.

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                              Finally, because we conclude that the MOU was enforceable
                  with respect to the parties' disposition of the Wilson property, Mark's
                  request to join Cheryl in the action for the purpose of adjudicating any
                  interest she may have in the property was properly denied. For the
                  reasons set forth herein, the district court's divorce decree is affirmed.

                                           Parraguirre

                                               J.                            )ca's             J.
                  Hardesty

                  Gibbons

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