Court Opinion

ID: 9906069
Source: CourtListenerOpinion
Date Created: 2023-11-30 20:07:24.573082+00
Date Added: 2024-06-11T09:24:05.416990
License: Public Domain

139 Nev., Advance Opinion 5 4

IN THE COURT OF APPEALS OF THE STATE OF NEVADA

MARIA LOPEZ, aR. GHD80: ‘COA

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Appellant, ey LE 5.

PEDRO LOPEZ,

Respondent. NOV 38 202
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GRIEF DEPUTY CLERK

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Appeal from a district court decree of divorce. Eighth Judicial
District Court, Family Division, Clark County; Dawn Throne, Judge.
Affirmed.

McFarling Law Group and Emily McFarling, Las Vegas,
for Appellant.

Leavitt Law Firm and Dennis M. Leavitt and Frank A. Leavitt, Las Vegas,
for Respondent.

BEFORE THE COURT OF APPEALS, GIBBONS, C.J., and BULL and
WESTBROOK, JJ.

OPINION

By the Court, GIBBONS, C.J.:

In this appeal, we examine the district court’s authority in a
divorce action to resolve community property disputes over property held in
a revocable inter vivos trust. Our analysis brings us to an issue of first
impression: whether a revocable inter vivos trust holding community

property must be named as a necessary party in a divorce action where the
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divorcing spouses are co-trustees, co-settlors, and beneficiaries. Because we
conclude that the spouses are the materially interested parties, and that
divorce revokes every devise given by a settlor to their former spouse ina
revocable inter vivos trust, we hold that the parties are not required to name
such a revocable inter vivos trust as a necessary party in a divorce action
where the spouses are co-settlors, co-trustees, and beneficiaries. We
accordingly uphold the district court's distribution decisions and,
ultimately, affirm its decree of divorce.

FACTS AND PROCEDURAL HISTORY

Appellant Maria Lopez and respondent Pedro Lopez were
married in Mexico in 1995. After they were married, the parties moved to
the United States and created the P & D Family Trust, a revocable inter
vivos trust over which they, as co-settlors and co-trustees, retained the right
to revoke, alter, or amend at any point during their lifetimes.! During their
marriage, the parties collectively placed eight properties into the P & D
Family Trust. Of those eight: properties, Maria and Pedro had jointly
purchased seven; they rented out six and used one as their marital
residence. Maria’s father purchased the eighth property and gave it to
Maria’s brother. - That property is currently titled in the name of both.
Maria's brother and the family trust.2. Maria, a licensed realtor, managed

the six rental properties and oversaw rent collection. |

1Maria and Pedro, and their children in the co-trustees’ discretion, are
the trust beneficiaries. :

2The district court excluded this jointly titled property from its
community property distributions, and we therefore do not include it in our
references to trust property. - .

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Around 2008, Maria and Pedro defaulted on their mortgage
payments for three of the trust properties that they controlled (Grizzly
Forest, Abrams Avenue, and San Gervasio). After defaulting, Maria and
Pedro sold Grizzly Forest and Abrams Avenue via short sales to third-party
buyers with whom they had close relationships, and they financed these
short sales with personal funds. Specifically, Maria and Pedro gave Maria’s
sister $280,000 to purchase Grizzly Forest and a close family friend $80.000
to purchase Abrams Avenue. Maria contends that the funds came from her
separate property, while Pedro argues that the funds came from their
community assets. Almost immediately after Maria's sister and the parties’
friend purchased the properties, they gifted the properties back to Maria, in
her name alone, titled as her sole and separate property. As tc San
Gervasio, Maria alleges that she used her inheritance to pay off the
mortgage, after which Pedro signed over his community interest in. the
property to Maria.? Pedro denies conveying his interest in San Gervasio to
Maria and alleges that Maria forged his signature on the deed.

Throughout the parties’ marriage, Maria and Pedro each
maintained separate and joint bank accounts. The parties, particularly

Maria, were neither forthcoming nor transparent regarding their funds—

3In its decree of divorce, the district court referred to Maria as San
Gervasio’s short sale buyer. However, it is undisputed that Maria paid off
the San Gervasio mortgage and did not purchase the property via a short
sale. Thus, the court’s characterization of Maria as a short sale buyer is
inaccurate, but this does not change our anaiysis or conclusion.

4At trial, the district court questioned Pedro regarding a grant,
bargain, and sale deed that purported to convey Pedro's interest in San
Gervasio to Maria. Notably, however, the record does not contain this ceed.
The only San Gervasio deed in the record is a subsequent quitclaim deed
that Maria signed but Pedro did net.

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each made several transfers from che joint acccunts to their separate
accounts without telling the other. Shortly before the divorce, Maria also
deviated from her historical practice of depositing rental payments into the
parties’ joint accounts and instead began placing the proceeds in her
separate accounts.

Pedro filed for divorce in April 2021. During the case
management conference (CMC), the district court urged the parties to
comply with their mandatory NRCP 16.2 financial disclosure requirements
and eroshane accurate and thorough financial disclosure forms (FDFs).5
Throughout the CMC and later hearings, Maria represented that the
Grizzly Forest, Abrams Avenue, and San Gervasio properties were her
separate property and should not be included in the court's community

property distribution decisions. She also argued that the district court did

5Pursuant to NRCP 16.2(c)(1), each party. must complete, file, and
serve a General Financial Disclosure Form “within 30 days of service of the
summons and complaint, unless” the court requires, or the parties request,
a Detailed Financial Disclosure Form (DFDF) pursuant to 16.2(c)(2). Here,
the district court did not require, and the parties did not request, a DFDF,
but NRCP 16.2 and the court’s admonitions subjected the parties to relevant
discovery. Concurrent with the filing of the financial disclosure form, each
party must also provide “financial statement(s), document(s), receipt(s), or
other information or evidence relied upon to support the figure represented
on the form.” NRCP 16.2(d)(2). Specifically, each “party must provide
copies of all monthly or periodic bank, checking, savings, brokerage,
investment, cryptocurrency, and security account statements in which any
party has...an interest,” as well as “credit card [and] debt statements,”
real property documents, property debt statements, loan applications,
promissory notes, deposits, receivables, retirement assets, insurance and
insurance policies, the values of all real property, tax returns, proof of
income, personalty, and “a copy of every other document or exhibit .... that
a party expects to offer as evidence at trial in any manner.” NRCP

16.2(d)(3)(A)-(P).

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not have the authority to make distributions of the family trust’s assets
because it did not have jurisdiction over the family trust. Additionally.
Maria claimed a prenuptial agreement existed that the parties signed in
Mexico; the agreement supposedly demonstrated that Maria had $80,000 in
personal savings and a $250,000 inheritance from her father that were to
remain her separate property throughout the marriage. Pedro denied the
agreement's existence and expressed his concern that Maria would attempt
to fabricate a document with her sister, an attorney in Mexico, to use at
trial. The district court repeatedly cautioned Maria that she would need to
produce the prenuptial agreement before trial with an official translation
for the court to admit it into evidence. The district court also expressed
frustration that neither party had engaged in sufficient discovery;
subpoenaed bank records; or obtained formal appraisals for their real
property, which at that point had approximately $3 million in equity.
Prior. to trial, the district court held a hearing to resolve all
pending moticns. At that hearing, the district court found that-both Maria’s
and Pedro's FDFs were inadequate and did not provide the court with a

sufficient basis from which it could distribute the parties’ community

_ assets. The district court noted that any party claiming family trust

property to be his or her separate property would need to overcome the
presumption of community property by clear and convincing evidence. The
district court also acknowledged Pedro’s concern that Maria had yet to
produce the prenuptial agreement.

At trial, Maria argued that the Grizzly Forest, Abrams Avenue,
and San Gervasio properties were her separate property because she
financed the Grizzly Forest and-Abrams Avenue short sales with separate

property and paid off the San -Gervasio mortgage with funds from her

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inheritance. The district court was unconvinced and found that Maria had
not produced adequate tracing evidence (through her NRCP 16.2
disclosures or otherwise) sufficient to show that the funds used to finance
the short sales and pay off the mortgage came from anywhere other then
the parties’ community assets.® The district court also conveyed its strong
belief that the parties had used “straw-buyers” to engage in mortgage fraud.
The judge emphasized her distaste for the parties’ behavior and expressed
her distrust for both parties.

During Maria’s cross-examination of Pedro, she questioned him
about the alleged prenuptial agreement, and Pedro flatly denied its
existence. After Pedro's denial, Maria proffered an unsigned physical
document, written in Spanish, purporting to be a copy of the alleged
prenuptial agreement. Pedro objected to its admission, and Maria
responded that she had been able to obtain the document from Mexico only
two days before trial. Maria did not explain why she did not disclose the
document to Pedro in those two days or how she was finally able te procure
it. Pedro argued that the document was untimely’ and not properly
authenticated. The district court agreed, stating that because Maria had
not produced the document prior to trial as the court had instructed, and
because the document was in Spanish, with no signatures, and without any
translation, the document was inadmissible. The district court explained

that allowing Maria to cross-examine Pedro on an-unproduced document

6The district court also found that all assets in both parties’ bank
accounts were community property because the accounts were created after
the marriage, there was significant commingling of community and alleged
separate funds in the accounts, and there was no tracing evidence. to
distinguish the alleged separate funds.

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that had not been properly authenticated or translated would amount to

trial by ambush.

When questioning Maria about the bank accounts, the di

strict

court instructed Maria to open and display her online banking information,

which revealed that Maria had understated the total amount in the

accounts by almost $342,000 during her testimony.’ The district

court

called this a material misrepresentation that Maria made in an attempt to

defraud Pedro.

In its findings of fact, conclusions of law, and decree of diyorce,

the district court deemed all family trust properties to be comm

unity

property and ordered them distributed equally between the parties because

neither party offered a compelling reason for an unequai distribution.

appeal followed.
ANALYSIS
On appeal, Maria argues that the district court (1) did not

This

have

authority to distribute the P & D Family Trust’s assets; (2) made an unequal

distribution of property and abused its discretion because it distribute
Grizzly Forest, Abrams Avenue, and San Gervasio properties as comm
property and not Maria’s separate property; and (3) abused its disc
when it did not allow Maria to question Pedro on cross-examination §

the alleged prenuptial agreement. Maria also claims (4) that,-on ren

Maria claimed at trial that one of her separate accounts had ar
$80,000 in it and that her other separate account had $10,000
However, at trial, the district court challenged Maria to reveal her a

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banking records, which showed that her accounts contained $311,839 and

$120,115, respectively.

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this case should be reassigned to a new judge because of alleged prejudicial
comments the district court judge made during the trial.®
The district court had authority to distribute the P & D Family Trust’s assets

Maria argues that the district court erred when it exercised
authority over the family trust’s assets. Because the trust was a revocable
inter vivos trust established after marriage, and the parties were co-
settlors, co-trustees, and beneficiaries, we conclude that the district court
did not err in concluding it had authority to distribute trust assets.

The trust’s distributions were immediately revoked upon divorce

Maria argues that the district court did not have authority to
distribute the family trust's assets because the trust was not irrevocable.
Pedro responds that the family trust was revocable upon divorce and that
the district court automatically had authority to distribute the community
assets in the family trust upon its revocation.

NRS 111.781(1) establishes that unless “ctherwise provided by
the express terms of a governing instrument,” divorce revokes anv revocable
disposition of property made to a former spouse, including dispositions
made pursuant toa trust. In re Colman Family Revocable Living Tr., Dated

June 28, 2011, 136 Nev. 112, 113-14, 460 P.3d 452, 454 (2020) (summarizing

8Maria additionally argues that the district court abused its
discretion when. it used Zillow estimates that Pedro presented instead of
actual appraisal values as the basis for its property valuations. However,
despite the district court's pretrial warnings that without appraisal-values
it would be forced to either order the sale of the properties and divide the
proceeds or use Zillow estimates in lieu of appraisals, neither party obtained
appraisal values for trial. At trial, therefore, the parties stipulated to the
use of Zillow estimates to avoid the sale of the properties. Maria, a licensed
realtor, also declined to offer her opinion on the value of the properties.
Thus, we conclude that the district court did not abuse its discretion by
using the Zillow estimates.

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NRS 111.781); see also NRS 163.565 (stating that unless otherwise
provided, divorce “revokes every devise, beneficial interest or designation to
serve as trustee given by the settlor to the former spouse of the settlor in a
revocable inter vivos trust”); NRS 133.115 (stating the same as applied to
wills—namely, that divorce operates to revoke “every devise, beneficial
interest or designation to serve as personal representative given to the
testator’s former spouse in a will”). The theory underlying this principle is
that revocable trusts with dispositions between spouses generally become |
ineffective once there remains no surviving spouse to benefit post-divorce.
See Colman, 136 Nev. at 112-13, 460 P.3d at 453. NRS 125.150(1)(b)
additionally grants courts in divorce actions express authority to make
equal dispositions of any community property transferred into irrevocable
trusts, which by their nature are much more restrictive than inter vivos
trusts.

Here, the parties did not offer the family trust as an exhibit at
trial, nor does it appear in the record on appeal, and we cannot verify its
provisions. Regardless, neither party argues that the trust’s express terms
would have precluded the district court from removing and distributing the
family trust's community property. Instead, Maria contends that, pursuant
to NRS 111.781 and NRS 125.150, district courts have express authority to
distribute community assets placed in irrevocable trusts but not those
placed in revocable inter vivos trusts. Yet, Maria’s argument fails to
account for the distinct nature of revocable inter vivos trusts that makes
these statutes inapplicable. Unlike property transferred to irrevocable
trusts—and in contrast to the general principle that settlors no longer own
trust property once they transfer that property into a trust—property

transferred to or held in a revocable inter vivos trust is considered to remain

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with the settlor because “any interest of other beneficiaries is purely
potential and can evaporate at the settlor’s whim.” 90 C.J.S. Trusts § 254
(2020) (also noting that a “settlor may be the owner of property in a
revocable trust of which the settlor is the trustee”); see also Linthicum v.
Rudi, 122 Nev. 1452, 1453, 148 P.3d 746, 747 (2006) (concluding that “a
beneficiary's interest in a revocable inter vivos trust is contingent at most”);
see, e.g., Wishengrad v. Carrington Mortg. Servs., 139 Nev., Adv. Op. 13, 529
P.3d 880, 886 (2023) (noting that, with respect to real property held in a
revocable inter vivos trust, the trustees “hold legal title’’ and the
beneficiaries “are the equitable owners’). Further, dispositions between
spouses from a revocable trust are immediately revoked upon divorce unless
the instrument expressly states otherwise. Colman, 136 Nev. at 114, 460
P.3d at 454. Thus, the district court automatically assumed the authority
to distribute the family trust’s community assets contemporaneous with
Maria and Pedro’s divorce.

The trust was not a necessary party to the divorce action

Maria also implies that the family trust should have been joined
as a necessary party in order to distribute the trust’s assets. NRCP 19
requires that all necessary parties be joined in an action, so long as the
party’s joinder does not deprive the court of subject matter jurisdiction. A
necessary party includes a party without whom the court cannot accord
complete relief and a party whose interest in the action is such that the
party’s ability to protect its interests will be impeded if that party is not
joined. NRCP 19(a)(1).

In a divorce action, the spouses are the materially interested
parties. Where the spouses are the co-settlors, co-trustees, and
beneficiaries of a revocable inter vivos trust, the court’s distribution of the

trust’s joint assets will not impede the trust’s interests because the

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necessary parties are already named in the litigation.® See, e.g., Tsai v. Hsu,
No. 50549, 2010 WL 8270973, at *4-5 (Nev. Apr. 29, 2010) (Order of
Affirmance) (concluding that a revocable inter vivos trust between spouses
was not a necessary party to a divorce proceeding because the husband and
wife (both co-trustees) were already parties to the litigation, and the district
court’s distribution of the trust’s assets did not substantially affect the
rights of nonparties).

Here, neither Pedro nor Maria filed a motion under NRCP 19
to join the trust separately as a necessary party, and this court is therefore
not required to consider the: argument on appeal. Diamond. Enters., Inc. v.
Lau, 113 Nev. 1376, 1378, 951 P.2d 73, 74 (1997); see also Rose, LLC v.
Treasure Island, LLC, 135 Nev. 145, 152-53, 445 P.3d 860, 866-67 (Ct. App.
2019) (noting that in contrast to federal courts, Nevada permits parties to
raise NRCP 19 challenges for the first time on appeal, but only so long as
the parties raise the challenges in good faith and not merely in response to
an adverse ruling).

However, even if considered on the merits, the trust in this case
is not a necessary party to the action because Maria and Pedro, like the co-
trustees in Tsai, were beth existing parties to the divorce action and the
trust's co-trustees, co-settlors, and beneficiaries. The parties’ status as co-
trustees 18 particularly noteworthy. Legal proceedings involving a trust

must be “brought by or against the trustees in their own name[s].”

9This.case does not present a situation where the revocable inter vivos
trust's settlor(s), trustee(s), and beneficiary(ies) are unnamed third parties
who may have an interest in the trust’s assets if that trust were to become
subject to litigation. We therefore need not address whether a revocable
inter vivos trust would be a necessary party to divorce litigation in that
scenario.

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Americold Realty Tr. v. Conagra Foods, Inc., 577 U.S. 378, 383 (2016).
Consequently, to join the trust would require naming Maria or Pedro in
their co-trustee capacities, which would be redundant because Maria and
Pedro were already parties to the litigation. See id.

Joining the family est was also not a prerequisite for complete
relief, as neither Maria’s nor Pedro’s interests were impeded by not naming
the family trust as a separate party. In fact, the district court’s disposition
of the trust’s assets was a necessary part of the divorce’s execution because
all revocable distributions between Maria and Pedro in the family trust
were revoked upon divorce. See NRS 111.781(1). Thus, we conclude that
the family trust was not a necessary party and failing to name the family
trust in the action did not preclude the district court's ability to distribute
the trust’s assets.!°

Accordingly, we conclude that the district court had authority
to distribute the family trust’s assets because the divorce revoked the trust’s
distributions between Maria and Pedro, Maria and Pedro were the co-
settlors, co-trustees, and beneficiaries, and the trust was not a necessary

party.!!

This conclusion is consistent with trust law, in which the United
States Supreme Court has clarified that “[t]raditionally, a trust was not
considered a distinct legal entity, but a ‘fiduciary relationship’ between
multiple people.” See Americold, 577 U.S. at 383 (quoting Klein v. Bryer,
177 A.2d 412, 413 (Md. 1962)).

llMaria also argues that the district court did not have authority to
distribute the family trust’s assets because the trust was not a named party
pursuant to Klabacka v. Nelson, 133 Nev. 164, 394 P.3d 940 (2017). We
conclude that Klabacka is inapposite. Kiabacka involved the jurisdictional
issue of whether a district court judge sitting in the family division had.
subject matter jurisdiction over the divorcing parties’ irrevocable self-

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The district court did not make an unequal distribution or abuse its
discretion when it distribuied Grizzly Forest, Abrams Avenue, and. San
Gervasio as community property

Maria argues that the district court abused its discretion when
it deemed three trust properties that were allegedly purchased with her
separate property funds to be community property and then distributed
those properties as community assets. By doing so, Maria contends that the
court made an unequal distribution without a compelling reason. Because
Maria and Pedro purchased the properties while they were married and
Maria failed to overcome the community presumption by clear and
convincing evidence, we conclude that the district court did not abuse its
discretion—or make an unequal distribution—by distributing the three

disputed properties as community property.!*

settled spendthrift trusts (SSSTs). Jd. at 169, 394 P.3d at 945. Irrevocable
SSSTs are afforded special statutory protection in Nevada and are subject
to specialized proceedings that make them wholly distinct from the
revocable inter vivos trust at issue here. Jd. at 173, 394 P.3d at 948.
Additionally, Klabacka is factually distinct from this case because the
parties in Klabacka voluntarily added the SSSTs as necessary parties in
their divorce proceeding. Jd. at 165, 394 P.3d at 943. Consequently,
Klabacka has no bearing on whether the district court in this case acted
properly in distributing the family trust’s assets, and we reject this portion
of Maria’s argument.

12Maria also argues that the district court abused its discretion when
it included two of her separate bank accounts as part of its equalization
payment. We conclude that the district court did not abuse its discretion in
including those accounts in the equalization payment primarily for the
same reason she could not overcome the community presumption for the
disputed properties—namely, as will be discussed below, the district court
could reasonably find that insufficient evidence supports a finding of
separate funds. Maria’s evidence to support a separate property finding is
the fact that the accounts were titled in her name. However, an account’s
titling is not determinative of the character of the funds contained therein,

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All P & D Family Trust properties were community property

Maria and Pedro purchased the properties in the family trust
jointly during their marriage, which raises a presumption that the
properties are community property. See NRS 123.220(1). Maria, however,
alleges that three of the properties—Grizzly Forest, Abrams Avenue, and
San Gervasio—were gifted to her by the new purchasers as separate
property prior to the parties’ divorce. To that end, Maria argues that it was
Pedro's burden to show that these three properties were transmuted back
to community property from separate property. Pedro argues that Maria is
attempting to improperly shift the burden to him to prove transmutation
and that the burden is instead on Maria to overcome the initial presumption
of community property by clear and convincing evidence. We agree with
Pedro and conclude that the district court could reasonably find that Maria
did not meet her burden to overcome the initial presumption of community
property.

Properties acquired during marriage are presumed to be
community property, and this presumption can be overcome only by clear
and convincing evidence. Todkill v. Todkill, 88 Nev. 231, 236, 495 P.2d 629,
631-32 (1972). Regarding marital rights, we will uphold the district court’s
property characterizations, so long as those characterizations are supported
by substantial evidence. Waldman v. Maini, 124 Nev. 1121, 1128, 195 P.3d
850, 855 (2008).

and a separate account may contain solely community assets if there is no
tracing evidence to support otherwise. See Peters v. Peters, 92 Nev. 687,
690, 557 P.2d 713, 715 (1976). Other than her contested testimony, Maria
adduced no evidence that the funds contained anything but community
funds; therefore, the accounts were properly characterized as community

property.

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NRS 123.220(1) provides that “[aJll property, other than
[separate property outlined] in NRS 123.130, acquired after marriage by
either spouse or both spouses, is community property unless otherwise
provided by... [a]n agreement in writing between the spouses.” When
reviewing tracing evidence to support a finding of separate property,
function takes precedence over form, and nominal changes from community
to separate property are not, without additional evidence, enough to
overcome the initial presumption of community property. See Peters v.
Peters, 92 Nev. 687, 690, 557 P.2d 713, 715 (1976). The appearance of a
signature on a stock transfer, for example, is not evidence of transmutation
from community to separate property without additional evidence. See
Sprenger v. Sprenger, 110 Nev. 855, 858, 878 P.2d 284, 286-87 (1994).

Regarding real property, sufficient tracing evidence requires a _
party to prove the source of purchasing funds by clear and convincing
evidence. See Colman, 136 Nev. at 114, 460 P.3d at 454 (citing Verheyden
v. Verheyden, 104 Nev. 342, 344-45, 757 P.2d 1328, 1330-31 (1988)). To that
end, even a deed that places title in one spouse as that spouse's separate
property is insufficient to overcome the community presumption if the party
cannot also show that the homie was purchased with separate funds. Pascua
vu. Bayview: Loan Servicing, LLC, 135 Nev. 29, 33, 434 P.3d 287, 290 (2019);
see also Pryor v. Pryor, 103 Nev. 148, 150, 734 P.2d 718, 719 (1987) (holding
that a deed reciting that a husband owned his estate as separate property
was not, of itself, enough to overcome the community presumption).

Here, it is undisputed that the parties originally purchased the
properties jointly—with community funds—during their marriage, which
raises a presumption that the properties are community property. Thus,

Maria had the burden to overcome the community presumption by clear and

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convincing evidence. In reviewing the record, the district court’s
determinations will be upheld if they are supported by substantial evidence,
and when “conflicting evidence exists, all favorable inferences must be
drawn towards the prevailing party.” Quintero v. McDonald, 116 Nev. 1181,
1183, 14 P.3d 522, 523 (2000) (quoting Yamaha Motor Co., U.S.A. v.
Arnoult, 114 Nev. 233, 238, 955 P.2d 661, 664 (1998)).

As noted above, when Maria and Pedro defaulted on the
mortgages for three properties around 2008, they sold Grizzly Forest and
Abrams Avenue via short sales to third-party buyers who then gifted the
properties back to Maria as Maria’s “sole and separate property.” Maria
and Pedro financed those third-party purchases with their personal funds;
however, Maria argues that these funds came from her separate property,
and Pedro counters that the sales were financed with community assets.

To overcome the community property presumption, Maria
needed to show at the outset that the funds used to purchase the properties
at the short sales came from her separate property. However, Maria did
not proffer any tracing evidence, either during discovery or trial, sufficient
to show that her separate funds financed the short sales. If anything, the
parties’ banking records show significantly commingled funds, with both
Maria and Pedro consistently transferring joint account funds to their
separate accounts. “Once an owner of separate property funds commingles
these funds with community funds, the owner assumes the burden of
rebutting the presumption that all the funds in the account are community
property.” See Malmquist v. Malmquist, 106 Nev. 231, 245, 792 P.2d 372,
381 (1990). Maria’s FDFs failed to adequately account for her assets and
debts, and, as will be addressed below, the alleged prenuptial agreement

was inadmissible to support her separate property claims. The district

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court also determined that all assets in every bank account—both joint and
separate—belonged to the community.

Additionally, because substantial evidence supports the district
court’s findings that community funds financed the short sales, the fact that
the third-party buyers gifted the properties back to Maria as her “sole and
separate property’ is of little consequence. Function takes precedence over
form, and without proof that the funds used to purchase the properties came
from a separate property source, aginaliy titling the properties as Maria’s
separate property was insufficient for Maria to overcome the community
presumption. See Peters, 92 Nev. at 690, 557 P.2d at 715. This conclusion
is particularly relevant in this case because the district court found that the
third parties who purchased the homes were “straw buyers” who facilitated
the nominal changes in title.

As to San Gervasio, Maria alleges that she paid off the
mortgage with inherited funds and that, after the mortgage was satisfied,
Pedro transferred his interest in the property to Maria. Pedro disputes the
validity of the deed and argues that his signature was forged, as he testified
at trial. The same findings that applied to Grizzly Forest and Abrams
Avenue regarding the insufficiency of Maria’s tracing evidence apply to San
Gervasio as well. The district court determined that Maria used community
funds to pay off the San Gervasio mortgage and that Pedro’s testimony was

more credible than Maria’s at trial.!’> Given Maria's lack of tracing

'3To support its credibility determinations, the district court found
that Pedro’s testimony regarding the rental payment structure aligned with
the banking records, while Maria’s did not, and that Maria materially
misrepresented the funds in her bank accounts. We will not reweigh the
district court’s witness credibility determinations on appeal. See Castle v.
Simmons, 120 Nev. 98, 103, 86 P.3d 1042, 1046 (2004).

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evidence, coupled with the district court’s credibility determinations and
conclusion that Pedro did not voluntarily relinquish his community interest
to Maria, there is substantial evidence to support the finding that the funds
used to finance the two short sale purchases and pay off the San Gervasio
mortgage were derived from community assets.

Accordingly, we conclude that the district court did not abuse
its discretion by characterizing the Grizzly Forest, Abrams Avenue, and San
Gervasio properties as community property because its determinations are
supported by substantial evidence that Maria failed to overcome the initial
community property presumption. Therefore, because all of the property
was community property, Maria’s argument that the district-court made an
unequal distribution absent a compelling reason necessarily fails.

The district court did not abuse its discretion when it disallowed questioning
about tie alleged prenupiial agreement

. Maria argues that the district court erred when it denied her
the opportunity to question Pedro about the alleged prenuptial agreement
on cross-examination because it was corroborative of her.claims regarding
her separate property, and once Pedro denied the agreement's existence, the
alleged prenuptial agreement was admissible as evidence of a prior
inconsistent statement. Pedro responds that the alleged prenuptial
agreement was not properly authenticated and that to permit questioning
about the agreement would have amounted to trial by ambush:
Additionally, Pedro asserts that because Maria did not attempt to introduce
the alleged agreement as a prior inconsistent statement at trial, this court
need not consider that portion of her argument on appeal. See Old. Aztec
Mine, Inc. v. Brown, 97 Nev. 49, 52, 623 P.2d 981, 983 (1981) (explaining
that issues not argued below are “deemed to have been waived and will not

be considered on appeal”). We agree with Pedro on all accounts.

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The alleged prenuptial agreement was not properly authenticated

Proper authentication or identification is a condition precedent
to admissibility and requires the proponent to show that the documentary
evidence is what the proponent claims it to be. NRS 52.015(1). “[W]e review
a district court’s decision to admit or exclude evidence for abuse of
discretion.” M.C. Multi-Family Dev., LLC v. Crestdale Assocs., Ltd., 124
Nev. 901, 915, 193 P.3d 536, 545 (2008).

We conclude that the district court did not abuse its discretion
when it excluded evidence of the alleged prenuptial agreement. Maria had
ample time and opportunity to obtain and produce this document prior to
trial, yet she did not. Maria also knew that. Pedro would likely object to the
document’s authenticity; on multiple occasions at pretrial conferences,
Pedro indicated that he believed Maria was attempting to fabricate the
document with her sister, an attorney in Mexico. At trial, Maria presented
an unsigned document, written entirely in Spanish, and without any
translation. NRS 123A.040 requires a premarital agreement to be in
writing and signed by both parties. Maria not only failed to offer any
authority to support or explain how the unsigned document would be
controlling, or even corroborative, but she also did not testify to the
document's authenticity in any meaningful way. Namely, she did not
explain the circumstances surrounding how she obtained the document or
the details regarding when and how she and Pedro entered into this alleged
agreement before their marriage.

Further, Maria included neither the document nox a translation
as proposed exhibits from trial in the record on appeal. See NRAP 30(b)(3)
(stating an appellant must include any “portions of the record essential to

determination of issues raised in appellant’s appeal’); Cuzze v. Univ. &

Cmty. Coll. Sys. of Nev., 123 Nev. 598, 603, 172 P.38d 131, 135 (2007)

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(providing that we presume the missing portion of the record supports the
district court’s ruling); see also NRS 48.040(1)(b) (stating that error may not
be predicated on a ruling excluding evidence unless a substantial right of a
party is affected and the substance of the evidence was made known to the
court by offer of proof), Therefore, we cannot assess the alleged document's
authenticity or how it may have been a prior inconsistent statement.
Consequently, we will not disturb the district court’s findings that the
alleged agreement was not properly authenticated and unduly prejudicial
because these findings are supported by substantial evidence. See Colman,
136 Nev. at 113, 460 P.3d at 454.

Maria’s cross-examination of Pedro about the alleged prenuptial
agreement would have constituted trial by ambush

The district court also ruled that Maria’s use of the alleged
prenuptial agreement would have constituted “trial by ambush” and
therefore also excluded it on those grounds. NRCP 16.2(d)(8)(P)’s
mandatory disclosure requirement requires a party to provide a copy of
every document or exhibit “that a party expects to offer as evidence at trial
in any manner.” This rule serves to prevent trial by ambush. “Trial by
ambush traditionally occurs where a party withholds | discoverable
information and then later presents this information at trial, effectively
ambushing the opposing party through gaining an advantage by surprise
attack.” Turner v. State, 186 Nev. 545, 553, 473 P.3d 438, 447 (2020)
(quoting Land Baron Invs., Inc. v. Bonnie Springs Family Ltd. P’ship, 131
Nev. 686, 701 n.14, 356 P.3d 511, 522 n.14 (2015)).14

‘4The surprise attack is one that is so fundamentally| unfair as to
require a mistrial. See, e.g., Bubak v. State, No. 69096, 2017 WL 570931, at
*4.5 (Nev. Ct. App. Feb. 8, 2017) (Order of Reversal and Remand). In
Bubak, the district court denied a motion to continue stemming from the

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While we review a district court’s decision to admit or exclude
evidence for an abuse of discretion, see Klabacka v. Nelson, 133 Nev. 164,
174, 394 P.3d 940, 949 (2017), we review decisions related to trial by
ambush for palpable error, see Sheehan & Sheehan v. Nelson Malley & Co;,
121 Nev. 481, 492-93, 117 P.3d 219, 226-27 (2005) (stating it was not
palpable error for the district court to overrule an objection of “trial by
ambush” when it admitted the challenged document after finding the
decument had been provided to the objecting party during discovery).
Judges may “exercise reasonable control over the mode and order of”
evidence presentation and witness interrogation. NRS 50.115(1). We will
not disturb the district court’s findings if they are supported by substantial
evidence. See Colman, 136 Nev. at 113, 460 P.3d at 454.

Here, Maria has not demonstrated that the district court
abused its discretion. Maria’s argument that she was attempting to
introduce or use the document solely on cross-examination is unpersuasive
because at no point did Maria explicitly mention impeachment. See NRS
50.085(3). Maria also did not preserve the error for review on appeal or
otherwise explain how cross-examination about this unsigned document
would have changed the trial’s result. See Wyeth v. Rowatt, 126 Nev. 446,
465, 244 P.8d 765, 778 (2010) (“To establish that an error is prejudicial, the
movant must show that the error affects the party’s substantial rights so
that, but for the alleged error, a different result might reasonably have been
reached.”): cf. NRCP 61 (stating that an error in excluding evidence is not

|
late discovery of inculpatory evidence. We concluded that trial by ambush
occurred because the denial directly undermined the defendant's ability to

cross-examine a witness and precluded his right to.a fair trial. /d. at *3, *5-
6. |

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|
grounds for disturbing a judgment unless justice so requires). She did not,

for instance, argue that she could impeach Pedro’s credibility with the
ernssioned document itself, as he had previously denied its existence. Nor
did Maria attempt at trial to make an offer of proof or submit supplemental
briefing to discuss the issue and argue how she would be prejudiced by the
district court’s denial. See NRS 47.040(1)(b) (stating that error may not be
predicated upon a ruling excluding evidence unless the offer made the
substance of the evidence known to the court).

| The district court's decision also acted as a permissible

discovery sanction because the court had previously ordered Maria to timely
disclose the agreement at the CMC and the January 2022 hearing on all
pending motions.45 See NRCP 37(b)(1)(B) (providing that a court may
disallow evidence as a discovery sanction); see also APCO Constr., Inc. v.
Zitting Bros. Constr., Inc., 136 Nev. 569, 576, 473 P.3d 1021, 1028 (2020).
Accordingly, we conclude that the district court did not abuse its discretion
when|it did not allow Maria to question Pedro on cross-examination about

the alleged prenuptial agreement.

15At the July 2021 CMC, the district court said that the agreement
needed to be produced with an official translation before the court could
admit it into evidence, and at the January 2022 hearing on all pending
motions, the court stated that it was “too late” for Maria to produce the
agreement, as she had already had ten months to obtain the document and
had not done so. See NRCP 16.2()(2)(E) (noting that each party must serve
“a written list of all documents not provided under NRCP 16.2(d)” with an
“explanation as to why each document was not provided”); NRCP
16.2()(4)(A)(viii) (providing that a CMC order may include any other
necessary orders); see also EDCR 5.404(a)(2) (providing that a CMC order
can direct disclosures and discovery requirements).

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This case will not be reassigned to a new judge

Maria argues that this case should be reassigned to a new judge
because the district court judge presiding over the case expressed a serious
personal distaste towards the parties’ property transactions and found both
parties not credible, although she found Pedro to be more credible than
Maria.

The reassignment issue is moot because we are affirming the
judgment of the district court. However, even if these parties were to
appear before the district court again, reassignment to a new judge would
not be required. We presume judges are unbiased, and Maria has not shown
bias sufficient to warrant disqualification. See Millen v. Eighth Judicial
Dist. Court, 122 Nev. 1245, 1254, 148 P.3d 694, 701 (2006). Specifically,
because the judge’s comments in this case reflected opinions the judge
formed during litigation—and did not originate from an extrajudicial
source—Maria has not demonstrated a basis for reassignment. See In re
Petition to Recall Dunleavy, 104 Nev. 784, 789-90, 769 P.2d 1271, 1275
(1988) (“The personal bias necessary to disqualify ‘must stem from an
extrajudicial source and result in an opinion on the merits on some basis
other than what the judge learned from his participation in the case.”
(quoting United States v. Grinnell Eoxn., 384 U.S. 563, 583 (1966))}).
Additionally, regarding the judge’s opinions, Maria has not established any
“deep-seated favoritism or antagonism.” Canarelli v. Highth Judicial Dist.
Court, 188 Nev. 104, 105, 506 P.3d 334, 336 (2022); see also Cameron v.
State, 114 Nev. 1281, 1283, 968 P.2d 1169, 1171 (1998) (noting that
generally, a judge’s remarks “made in the context of a court proceeding are
not considered indicative of improper bias or prejudice unless they show
that the judge has closed his or her mind to the presentation of all the

evidence’). Accordingly, this case need not be reassigned to a new judge.

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* CONCLUSION

Because we hold that the revocable inter vivos family trust did
not need to be named in the divorce action or joined as a necessary party,
we conclude that the district court had authority to distribute the trust’s
assets between the parties as community property. We also conclude that
the district court did not abuse its discretion in finding that Maria failed to
overcome the community property presumption by clear and convincing
evidence and therefore had authority to equally divide the family trust's
assets. Finally, we conclude that the district court did- not abuse its
diserétion in denying Maria the ability to question Pedro about the alleged
prenuptial agreement on cross-examination because doing so would have
allowed the use of a properly excluded document and amounted to trial by
ambush. Accordingly, we affirm the district court’s decree of divorce.!6

LN for
Gibbons

, Od.

We concur:

Westbrook

'6Tn light of this decision, the partial stay entered on October 11, 2022,
regarding the trust and real property, is necessarily lifted.

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