Court Opinion

ID: 2714024
Source: CourtListenerOpinion
Date Created: 2014-08-06 15:18:19.316644+00
Date Added: 2024-06-11T13:22:06.530827
License: Public Domain

130 Nev., Advance Opinion 140)
                       IN THE SUPREME COURT OF THE STATE OF NEVADA

                CRAIG A. DOAN,
                Appellant,
                  vs.
                                                                     N° W E D       E
                RICHARD WILKERSON, PERSONAL                                  JUN 2 6 2014
                REPRESENTATIVE,
                Respondent.
                                                                          T
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                                                                       BY
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                                                                            CHiEF BEI         RK

                           Appeal from a district court order modifying a divorce decree
                to divide marital property that was disclosed in the divorce pleadings but
                omitted from the written divorce decree. Eighth Judicial District Court,
                Family Court Division, Clark County; Cheryl B. Moss, Judge.
                           Reversed.

                Lemons, Grundy & Eisenberg and Christopher M. Rushy, Reno,
                for Appellant.

                Willick Law Group and Marshal S. Willick, Las Vegas,
                for Respondent.

                BEFORE THE COURT EN BANC.

                                                OPINION

                By the Court, CHERRY, J.:
                            This case presents us with the opportunity to address whether
                and under what circumstances a marital asset omitted from the divorce
                decree may be partitioned through a motion for relief from judgment that
                is filed many years after the divorce was finalized. Because the time
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                   frame for filing a motion for relief from judgment under NRCP 60(b) is
                   within six months after the decree is entered, we conclude that an ex-
                   spouse who did not timely pursue a motion for relief from a divorce decree
                   is not entitled to partition absent exceptional circumstances justifying
                   equitable relief. See Bonnell v. Lawrence, 128 Nev. „ 282 P.3d 712,
                   715 (2012). One such circumstance justifying equitable relief is when a
                   community asset was not litigated and adjudicated in the divorce
                   proceedings.
                               Here, the contested marital asset was disclosed and discussed
                   during the course of the divorce proceedings and then left out of the
                   divorce decree. The ex-spouse then waited more than six years after the
                   final decree was entered to file a motion for relief from judgment, long
                   after the applicable six-month period under NRCP 60(b) had expired.
                   Furthermore, even if the motion were considered an independent action
                   for equitable relief, the facts here do not warrant equitable relief because
                   the asset was adjudicated in the divorce proceedings. Accordingly, we
                   reverse the district court's order modifying the final decree of divorce.
                                     FACTS AND PROCEDURAL HISTORY
                               Catherine Doan and appellant Craig Doan married in May
                   1985. During the course of their marriage, Craig was employed as an air
                   traffic controller for the Federal Aviation Administration (FAA). Craig
                   retired from the FAA with more than 23 years of service. He received
                   multiple retirement benefits as a federal employee.
                               Before Craig retired, the parties filed an action for divorce,
                   seeking dissolution of the marriage and an equitable division of
                   community debts and assets. Catherine and Craig exchanged affidavits of
                   financial condition setting forth their respective monthly incomes,
                   monthly expenses, and marital assets. Although not identifying any
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                specific account by name, both Catherine and Craig indicated in their
                affidavits that they owned retirement accounts or pensions, or both. Craig
                also listed retirement contributions as a monthly expense.
                            In anticipation of trial, Catherine and Craig each filed pretrial
                memoranda. Catherine specified in her memorandum that there were
                federal retirement benefits accrued during the marriage. Craig attached
                statements of earnings and leave from the FAA, which indicated that he
                received retirement benefits. He also provided W-2 wage and tax
                statements, which indicated that he had a retirement plan, pension plan,
                and deferred compensation.
                            Although both Catherine and Craig were represented by
                counsel during most of the divorce proceedings, their respective counsel
                withdrew from representation shortly before trial. As a result, Catherine
                and Craig appeared in proper person for their scheduled trial. They
                agreed to participate in a pretrial settlement conference with the presiding
                judge. During the settlement conference, Catherine and Craig agreed to
                divide their property and debt. The district court awarded Catherine
                spousal support and ordered a final decree of divorce. The final decree of
                divorce, prepared by Craig and approved by Catherine, was entered in
                August 2003. The divorce decree did not include Craig's FAA retirement
                benefit. Another retirement benefit, a voluntary thrift savings plan, was
                distributed as part of the final decree.
                            Six years later, in June 2009, Catherine filed a motion for
                division of an omitted asset after her new counsel discovered that
                Catherine was not receiving Craig's FAA retirement benefits. She
                asserted that Craig's retirement benefits were omitted from the divorce
                decree and must be divided by the district court. She also requested that

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                Craig reimburse her for her share of the retirement benefits that he had
                previously received.
                            After two hearings, the district court denied Catherine's
                motion to divide the omitted asset, ordering that Catherine was not
                entitled to Craig's retirement benefits. The district court found that the
                retirement benefits had been disclosed during discovery because there
                were references to Craig's retirement in his leave and earnings statements
                and W-2's. The district court also found that Catherine's first counsel
                knew about Craig's FAA retirement benefits. Citing Arnie u. Arnie, 106
Nev. 541, 796 P.2d 233 (1990), the district court concluded that there was
                full and fair disclosure of Craig's retirement and, thus, the retirement
                benefits could not be treated as an omitted asset.
                            Shortly thereafter, Catherine filed a motion for
                reconsideration, which the district court granted. Although the district
                court maintained that there was full disclosure of Craig's retirement
                benefits, discussion of retirement, notice of the retirement, and that the
                retirement was considered in determining the length of alimony, the court
                found that Craig's retirement benefits were omitted from the divorce
                decree because of a mutual mistake by the parties. The district court
                further determined that the four-year residual statute of limitations for
                civil actions did not apply. The court divided Craig's retirement benefits
                in accordance with a fractional formula under United States Code, Title 5,
                § 8445 (2012).

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                            This appeal followed. 1 This court has stayed enforcement of
                the partition pending resolution of this matter.
                                               DISCUSSION
                            "This court reviews district court decisions concerning divorce
                proceedings for an abuse of discretion." Shydler v. Shydler, 114 Nev. 192,
                196, 954 P.2d 37, 39 (1998). District court rulings supported by
                substantial evidence will not be disturbed absent an abuse of discretion.
                Devries v. Gallio,    128 Nev. „ 290 P.3d 260, 263 (2012).
                "However, . . . the district court must apply the correct legal standard."
                Williams v. Waldman, 108 Nev. 466, 471, 836 P.2d 614, 617-18 (1992).
                            NRS 125.090 requires that family law cases "conform to the
                Nevada Rules of Civil Procedure as nearly as conveniently possible."
                NRCP 60(b) places a six-month time limitation on motions for relief from
                judgment. In Kramer v. Kramer, 96 Nev. 759, 762, 616 P.2d 395, 397
                (1980), we held that NRCP 60(b)'s time limitation applied to a motion to
                modify the property distribution in a divorce decree, where that decree did
                not reserve continuing jurisdiction. We reasoned that "[i]f the legislature
                had intended to vest the courts with continuing jurisdiction over property
                rights, it would have done so expressly, as it did in NRS 125.140(2)
                concerning child custody and support." Kramer, 96 Nev. at 762, 616 P.2d
                at 397. The policy in favor of finality and certainty underlying NRCP
                60(b) applies equally, and some might say especially, to a divorce
                proceeding. Therefore, in accordance with NRS 125.090 and Kramer, we

                      1 Catherine
                                passed away during the pendency of the appeal, and
                Richard Wilkerson, her son from a prior marriage, was substituted as the
                respondent.

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                 hold that NRCP 60(b)'s time limitation applies to a motion for relief from
                 or modification of a divorce decree.
                 Relief under NRCP 60(b)
                             Craig argues that the district court did not have jurisdiction to
                 entertain Catherine's motion for relief from judgment because her motion
                 was filed more than six months after the divorce decree. Under NRCP
                 60(b), a motion for relief from judgment for mistake, newly discovered
                 evidence, or fraud must be filed not more than six months after entry of
                 final judgment. 2 Although Catherine does not specifically argue which, if
                 any, of these bases for relief applies, it would be irrelevant in any case.
                 Where, as here, a motion for relief or modification premised on mistake,
                 newly discovered evidence, or fraud is filed more than six months after
                 final judgment, the motion is untimely and must be denied.       See Kramer,
96 Nev. at 761, 616 P.2d at 397.
                             Craig asserts that we must reverse the district court's ruling if
                 Catherine's motion was untimely and she failed to file an independent
                 action for relief. It is true that, after NRCP 60(b)'s time limitation has
                 expired, Catherine's only means of relief is an independent action for relief
                 on equitable grounds. See Bonnell, 128 Nev. at , 282 P.3d at 715. Yet
                 we do not agree that this procedural issue is dispositive. "'A party is not
                 bound by the label he puts on his papers. A motion may be treated as an
                 independent action or vice versa." NC-DSH, Inc., v. Garner, 125 Nev. 647,

                       2 NRCP  60(b)(4) and (5) are not subject to thefl time limitation, but
                 neither are they germane to this case. Catherine makes no suggestion
                 that "the judgment is void," NRCP 60(b)(4), or "has been satisfied,
                 released, or discharged, or a prior judgment upon which it is based has
                 been reversed or otherwise vacated." NRCP 60(b)(5).

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                652, 218 P.3d 853, 857 (2009) (quoting 11 Charles Alan Wright, Arthur R.
                Miller & Mary Kay Kane, Federal Practice and Procedure §2868 (2d ed.
                1995)). Accordingly, we will consider Catherine's motion for relief as if it
                were an independent action and apply the standards pertinent to such
                actions.
                Equitable relief as an independent action
                              Relief in equity by independent action may be granted when
                the claimant meets the traditional requirements of an equitable action,
                which are more demanding than the requirements of NRCP 60(b)(1)-(3).
                Bonnell, 128 Nev. at , 282 P.3d at 715. An independent action for relief
                from a judgment that has become final or unreviewable "[is] available
                only to prevent a grave miscarriage of justice." Id. (alteration in original)
                (quoting United States v. Beggerly, 524 U.S. 38, 47 (1998)).
                              Claim preclusion does not bar independent actions for
                equitable relief because the exceptional circumstances justifying equitable
                relief also justify deviation from the doctrine of claim preclusion. Bonnell,
128 Nev. at 282 P.3d at 717 (adopting the reasoning of Beggerly that
                independent actions for relief must meet a demanding standard to justify
                "departure from rigid adherence to the doctrine of res judicata" (internal
                quotation omitted)); see also Arnie, 106 Nev. at 542, 796 P.2d at 234 ("The
                right to bring an independent action for equitable relief is not necessarily
                barred by res judicata."). 3 Society has no interest in the finality of a

                      3 Our  decision in Tomlinson v. Tomlinson, 102 Nev. 652, 654, 729
P.2d 1363, 1364 (1986), held that an action for partition of a military
                pension was barred by issue or claim preclusion.        Tomlinson applied
                Michigan law in its claim preclusion analysis. See id. But to the extent
                that Tomlinson conflicts with our later rulings in Arnie and Williams, we
                hold that it has been abrogated by those decisions.

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                  judgment that was procured by fraud upon the court. NC-DSH, 125 Nev.
                  at 653, 218 P.3d at 858.
                              Historically, our caselaw held that ex-spouses may not bring
                  independent actions to partition after the final judgment of the court
                  unless they show fraud upon the court.       See Taylor v. Taylor, 105 Nev.
384, 386-87, 775 P.2d 703, 704 (1989) ("The decisional law in this state
                  prior to the enactment of NRS 125.161 held that, absent extrinsic fraud on
                  the part of the party opposing post-divorce partition of retirement benefits,
                  ex-spouses may not bring a new cause of action to partition retirement
                  benefits after the property agreement has become a judgment of the
                  court."). We have since recognized the nonadjudication of marital assets
                  as an exceptional circumstance justifying equitable relief. When a
                  community asset is omitted from divorce proceedings and is therefore not
                  litigated or adjudicated, the asset "may be subject to partition in an
                  independent action in equity." Williams, 108 Nev. at 474, 836 P.2d at 619.
                  Hence, the determinative issue in this case is whether Craig's FAA
                  retirement benefit was adjudicated.
                              In Amie, we held that the property at issue was unadjudicated
                  when it simply had been omitted from consideration by the parties. 106
Nev. at 542-43, 796 P.2d at 234-35. Likewise, in Henn v. Henn, the
                  seminal case regarding partition of omitted assets, the California Supreme
                  Court stated that "under settled principles of California community
                  property law, property which is not mentioned in the pleadings as
                  community property is left unadjudicated by decree of divorce." 605 P.2d
10, 13 (Cal. 1980) (quoting In re Marriage of Brown, 544 P.2d 561, 569
                  (Cal. 1976)), superseded by statute as stated in In re Marriage of Thorne &
                  Raceina, 136 Cal. Rptr. 3d 887, 895 (Ct. App. 2012). And in Williams, 108

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                Nev. at 474, 836 P.2d at 619, we reasoned that property was
                unadjudicated where a party did not have a fair opportunity to present the
                issue of the property's disposition to the court. 4
                              Unlike Arnie, Henn, or Williams, the marital asset in this case
                was disclosed and discussed during the divorce proceedings and the
                parties had a fair opportunity to litigate its division. The district court
                found that there was full disclosure and that retirement benefits were
                considered in determining the length of alimony. The record supports this
                finding. Craig attached statements of earnings and leave from the FAA,
                which indicated that he received earnings for retirement. Craig also
                provided W-2 wage and tax statements that evidenced his retirement plan.
                Retirement contributions were listed as a monthly expense in Craig's
                affidavit of financial condition. Catherine's pretrial memorandum even
                explicitly identified Craig's FAA retirement benefit as property subject to
                division.
                              We conclude that the district court's finding, that the FAA
                retirement benefit was disclosed and considered, was supported by
                substantial evidence. 5 The district court erred as to the law, however,

                      4 We appear to have applied the same rule in the short opinion in
                McCarroll v. McCarroll, 96 Nev. 455, 456, 611 P.2d 205, 205 (1980),
                although the facts were not fully described there.

                      5 The amicus brief filed by the Family Law Section of the State Bar of
                Nevada addresses the danger of creating a rule that might incentivize
                parties to divorce proceedings to hide assets. The parties' responses argue
                whether the FAA retirement pension was disclosed during the divorce
                proceedings. As noted, we conclude that the record contains substantial
                evidence in support of the district court's finding that the retirement
                benefit was disclosed and discussed—the asset was not hidden. Amicus's
                worry about hidden assets, therefore, is misplaced.

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                 when it ruled that the retirement benefit was an omitted asset merely
                 because it was not mentioned in the decree. Our caselaw, including Arnie,
106 Nev. at 542, 796 P.2d at 234, and Williams, 108 Nev. at 474, 836 P.2d
                 at 619, demonstrates that the relevant inquiry is whether the asset was
                 litigated and adjudicated, not merely whether it was written down in the
                 decree. Here, the evidence shows that the retirement benefit was
                 mentioned in court documents, disclosed, and considered. Thus, the
                 benefit was not omitted from the divorce litigation. Catherine is
                 attempting to relitigate an issue that was already before the district court
                 at the time of the original divorce proceeding.
                             The fact that the FAA retirement benefit was not mentioned
                 in the decree is not an exceptional circumstance justifying equitable relief.
                 It is up to the Legislature whether to create an action, or permit
                 continuing jurisdiction, for partitioning property that was merely left out
                 of the divorce decree. California has done so: "A party may file a
                 postjudgment motion ... in order to obtain adjudication of any community
                 estate asset or liability omitted. .. by the judgment." Cal. Fam. Code. §
                 2556 (West 2004); see also In re Marriage of Thorne & Raccina, 136 Cal.
                 Rptr. 3d at 895 ("Mlle trial court may divide a community property asset
                 not mentioned in the judgment."). But under current Nevada law,
                 Catherine is barred from maintaining an independent action to partition
                 the FAA retirement benefit without showing extraordinary circumstances
                 justifying equitable relief, and she has not done so here. Because we so
                 hold, there is no need to address Craig's contention that the independent
                 action was barred by Nevada's four-year residual statute of limitations in
                 NRS 11.220.

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                               For the reasons stated above, we reverse the district court's
                 judgment partitioning Craig's FAA retirement benefit.

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