Court Opinion

ID: 4016078
Source: CourtListenerOpinion
Date Created: 2016-07-15 15:06:44.364395+00
Date Added: 2024-06-11T14:05:12.513284
License: Public Domain

IN THE SUPREME COURT OF THE STATE OF NEVADA

                   KIMBERLY JONES,                                      No. 66632
                   Appellant,
                   vs.
                   FLETCHER JONES, JR.,
                                                                              FILED
                   Respondent.                                                JUL 1 4 2016
                                                                              TFtACIE K LINDE MA N
                                          ORDER OF AFFIRMANCE              CLERK OF SUPREME C O URT

                                                                          BY -341)=SA=6€4.----
                                                                               D PUTY CLE
                              This is an appeal from a final judgment entered, after a bench
                   trial, on a complaint for declaratory judgment and specific performance
                   regarding three marital agreements entered into by the parties. Eighth
                   Judicial District Court, Clark County; Gayle Nathan, Judge.
                              Fletcher Jones, Jr. (Ted), and Kimberly Jones were married on
                   July 4, 1998. Prior to their marriage, Ted and Kimberly signed a
                   prenuptial agreement. During the course of Ted and Kimberly's
                   separation and subsequent reconciliation, they signed two additional
                   marital agreements: (1) a "Marital Settlement Agreement" (MSA), and (2)
                   "Post Marital Agreement" (PMA).
                              Kimberly filed a petition for dissolution of marriage in
                   California on January 4, 2012. On October 4, 2012, Ted filed a complaint
                   for declaratory judgment and specific performance in Nevada to enforce
                   the parties' agreements. As part of the agreements, it was provided that
                   Ted would give a sum of money each year to Kimberly. The no-contest
                   clause stated that as a condition precedent to bringing any challenge to
                   the agreement appellant had to repay the annual payments that she
                   received "together with" anything purchased or obtained with the money
                   from those payments. Without any prepayment, Kimberly filed a motion
                   to dismiss Ted's complaint in the Nevada action on October 30, 2012,

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                alleging that the Nevada district court lacked jurisdiction because of the
                ongoing California divorce proceedings. The district court denied her
                motion and, after a bench trial, it entered a judgment finding that
                Kimberly violated the no-contest clause in the prenuptial agreement and
                awarded Ted specific performance and attorney fees.
                             Kimberly raises the following issues on appeal: (1) whether
                the district court erred by refusing to extend comity to the California
                court; (2) whether a no-contest clause in a prenuptial agreement is
                enforceable; (3) whether the language in the provision at issue actually
                calls for a condition precedent, as opposed to a forfeiture; (4) whether
                Kimberly actually violated the clause at issue; (5) whether the district
                court erred by admitting evidence related to Kimberly's credibility; (6)
                whether the district court erred by granting Ted a cash award and real
                property; and (7) whether the district court erred by awarding Ted
                attorney fees.
                The district court did not err by refusing to extend comity to the California
                court
                             The doctrine of comity "is a principle of courtesy by which the
                courts of one jurisdiction may give effect to the laws and judicial decisions
                of another jurisdiction out of deference and respect."   Gonzales—Alpizar v.
                Griffith,   130 Nev., Adv. Op. 2, 317 P.3d 820, 826 (2014) (internal
                quotations omitted). "[Comity] is appropriately invoked according to the
                sound discretion of the [trial] court."   Mianecki v. Second Judicial Dist.
                Court, 99 Nev. 93, 98, 658 P.2d 422, 425 (1983).
                             Here, the district court in Nevada had ample reasons for
                refusing to grant comity to the California proceedings. For example,
                Kimberly filed a writ petition with this court contending that the district
                court should have dismissed Ted's complaint in light of the proceedings in
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                   California. Jones v. Eighth Judicial Dist. Court, Docket No. 62614 (Order
                   Denying Petition for Writ of Mandamus or Prohibition, July 24, 2013).
                   This court denied Kimberly's request for relief, holding that "[i]t is not
                   clear . . . that the issues presented in the [Nevada] declaratory relief
                   action may be adjudicated in the California case." Id. This court further
                   stated that "nothing in the record [reflected] that the California court
                   considered or made findings as to. . . whether it. . . would adjudicate the
                   validity of the marital [contracts]."        Id.   The district court expressed
                   similar concerns regarding whether the California court would adjudicate
                   the issues relating to the agreements, noting that Ted ran the risk of the
                   California courts sending him back to Nevada.
                               The district court's statements indicate that it weighed the
                   likelihood that California would reach the issue of validity and, in its
                   discretion, refused to extend comity to the California courts on this issue.
                   Furthermore, on May 9, 2016, this court granted Ted's motion seeking
                   judicial notice of the following decisions in the California litigation: (1) the
                   parties' marital dissolution judgment; (2) the final statement of decision
                   following trial; and (3) an April 5, 2015, order granting full faith and credit
                   to the Nevada district court on the issues of validity and enforceability of
                   the marital contracts. These documents all show that the California court
                   actually deferred to the Nevada courts on the issues raised in Kimberly's
                   appeal. Therefore, the Nevada district court did not err by refusing to
                   extend comity to the California court.
                   A no-contest clause in a prenuptial agreement is enforceable
                                This court reviews the validity of a prenuptial agreement de
                   novo. NRS 123A.080(3); Sogg v. Nevada State Bank, 108 Nev. 308, 312,
                   832 P.2d 781, 783 (1992).

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                           NRS Chapter 123A
                                 Prenuptial agreements are governed by the Uniform
                     Premarital Agreement Act (UPAA), codified at NRS 123A.010. Parties
                     under the UPAA may contract with respect to "[a]ny . . matter, including
                     their personal rights and obligations, not in violation of public policy or a
                     statute imposing a criminal penalty." NRS 123A.050(1)(h). Furthermore,
                     a prenuptial agreement is enforceable so long as it was executed
                     voluntarily and was not unconscionable when executed.' NRS 123A.080.
                                 The no-contest clause in Ted and Kimberly's prenuptial
                                 agreement does not violate public policy
                                 Although "there is a strong public policy favoring individuals
                     ordering and deciding their own interests through contractual
                     arrangements," equally strong public policy considerations have been used
                     to render premarital agreements partially or wholly unenforceable.
                     Bloomfield v. Bloomfield,    764 N.E.2d 950, 952 (N.Y. 2001) (internal
                     quotations omitted).
                                 Additionally,
                                 [c]ourts in many states have held that
                                 considerations of public policy limit the
                                 permissible scope of a premarital agreement. For
                                 example, states have an overriding interest in
                                 protecting the welfare of children. Therefore,
                                 courts have held that a premarital agreement's
                                 waiver of child support, custody or visitation is
                                 unenforceable. States also have an interest in
                                 protecting the economic welfare of their adult
                                 residents. Therefore, some states treat premarital

                           'Kimberly does not dispute that the prenuptial agreement was
                     entered into voluntarily or that financial disclosures were an issue.

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                            provisions that waive or limit spousal support as
                            violative of public policy and unenforceable.
                Gail Frommer Brod, Premarital Agreements and Gender Justice, 6 Yale
                J.L. & Feminism 229, 254-55 (1994) (footnotes omitted).
                            Here, none of the public policy concerns regarding spousal
                support or child-related issues are involved. In fact, the no-contest clause
                expressly states that lalny claim for alimony, spousal support or relating
                to the custody or support of children shall not be deemed an act which
                triggers the provisions of this paragraph." Furthermore, the record
                reflects that the prenuptial agreement would not adversely affect
                Kimberly's economic welfare. Paragraph IV(G) of the prenuptial
                agreement states:
                            While the parties remain married and are residing
                            together in the same residence, Ted will pay the
                            reasonable expenses for the general health,
                            maintenance, recreation, support and welfare of
                            the parties. . . . Each month the parties reside
                            together after marriage, Ted will make available
                            for Kimberly's exclusive use, cash and/or credit in
                            the sum of $5,000.00 per month, for Kimberly to
                            utilize for her personal expenses. There shall be
                            cost of living adjustments to said amount every
                            three years.
                            The district court found that Ted complied with this
                paragraph until the parties' divorce proceedings in 2005, paying all living
                expenses of the parties and even increasing the monthly amount available
                to Kimberly for her personal use from $5,000 to $10,000. Therefore, the
                prenuptial agreement did not limit spousal support, and thus, did not
                affect Kimberly's economic welfare to the extent that it would render the
                prenuptial agreement unenforceable as against public policy.

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                             The no-contest clause in Ted and Kimberly's prenuptial
                             agreement was not unconscionable when executed
                             "A contract is unconscionable only when the clauses of that
                 contract and the circumstances existing at the time of the execution of the
                 contract are so one-sided as to oppress or unfairly surprise an innocent
                 party." Bill Stremmel Motors, Inc. v. IDS Leasing Corp., 89 Nev. 414, 418,
                 514 P.2d 654, 657 (1973).
                             Here, the clauses of the agreement and the circumstances
                 existing at the time of the execution of the contract were not so one-sided
                 as to either oppress or unfairly surprise Kimberly. Kimberly was
                 independently represented and understood the legal significance of the
                 agreement. She also signed the agreement freely and voluntarily.
                 Furthermore, proposed changes to the prenuptial agreement were
                 discussed between Kimberly's and Ted's attorneys, with "Ted agree[ing] to
                 every material change proposed by Kimberly to the prenuptial
                 agreement." Lastly, the validity of the prenuptial agreement was restated
                 twice during Kimberly and Ted's marriage, once when they ratified the
                 MSA and again when they ratified the PMA. Therefore, the agreement
                 was not so one-sided as to unfairly surprise Kimberly. 2 Additionally, the
                 terms of the prenuptial agreement were not so one-sided as to oppress her

                       2Kimberly argues that the no-contest clause is void because it only
                 punishes her. However, Kimberly fails to view the clause in the context of
                 the entire agreements. Ted was under an ongoing obligation to pay
                 Kimberly funds during their marriage and, as the record reflects, is
                 currently under an obligation to pay Kimberly a substantial amount per
                 month for spousal support. This is in addition to the child support that
                 she receives. Therefore, we hold that the no-contest clause is neither one-
                 sided nor unfairly punishes Kimberly.

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                    in an unconscionable manner. We thus hold that the agreement was not
                    unconscionable.
                    The language in the provision at issue calls for a condition precedent
                                "Contract interpretation is subject to a de novo standard of
                    review." May v. Anderson, 121 Nev. 668, 672, 119 P.3d 1254, 1257 (2005).
                    If contract language is clear, it will be enforced as written.     Buzz Stew,

                    LLC v. City of N. Las Vegas,      131 Nev., Adv. Op. 1, 341 P.3d 646, 650
                    (2015).
                                The no-contest clause states:
                                      In the event Kimberly seeks in any way to
                                set aside, impair or• invalidate any of the
                                provisions of this Agreement, directly or
                                indirectly, as a condition precedent to the right to
                                bring or maintain such action(s), the amounts
                                previously paid to her or for her benefit under the
                                terms of Paragraph II(B)(9) [an annual sum of
                                $250,000] of this Agreement shall be forfeited and
                                repaid to Ted, together with all income or
                                accumulations thereto or assets acquired
                                therewith, and all future amounts otherwise
                                payable under Paragraph II(B)(9) shall no longer
                                be payable, and Ted's obligations under said
                                Paragraph shall terminate. Any claim for
                                alimony, spousal support or relating to the custody
                                or support of children shall not be deemed an act
                                which triggers the provisions of this paragraph.
                                In its decision, the district court found that the term
                    "condition precedent" did not restrict Ted's methods for claiming breach.
                    Instead, the district court found the term was used to specify the actions
                    that Kimberly needed to take before challenging the agreements. Because
                    she failed to take these actions, the district court found that Kimberly
                    breached the no-contest clause.

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                                     We agree. From the plain language of the provision, it is clear
                     that the term "condition precedent" was used to specify that Kimberly
                     must make the reimbursement prior to any challenge to the parties'
                     agreements. By taking these prohibited actions prior to making the
                     payments, Kimberly failed to comply with the agreement, thereby
                     breaching it. Therefore, Ted is entitled to repayment pursuant to the
                     agreed upon terms of the provision. 3
                     Kimberly violated the clause at issue
                                     While a party's conduct is a question of fact, whether said
                     conduct violates a no-contest clause is a legal question reviewed de novo.
                     See Redman-Tafoya v. Armijo,        126 P.3d 1200, 1210 (N.M. Ct. App. 2005);
                     see also In re Estate of Davies, 26 Cal. Rptr. 3d 239, 246 (Ct. App. 2005).
                     Additionally, "Morfeiture provisions are strictly construed."      Am. Fire &
                     Safety, Inc. v. City of N. Las Vegas,    109 Nev. 357, 360, 849 P.2d 352, 355
                     (1993).
                                     The language in the no-contest provision uses the term of art
                     to "bring or maintain" an action, which means "the initiation of legal
                     proceedings in a suit."      Harris v. Garner, 216 F.3d 970, 973 (11th Cir.
                     2000) (citing Black's Law Dictionary 192 (6th ed. 1990)). As a forfeiture
                     clause is to be strictly construed, the term "action" therefore refers to a
                     legal action.

                           3 Kimberly  makes the additional argument that the involuntary
                     forfeiture of benefits is a void form of liquidated damages. Because
                     Kimberly raises this issue for the first time on appeal, it has been waived.
                     Old Aztec Mine v. Brown, 97 Nev. 49, 52, 623 P.2d 981, 983 (1981) (issues
                     may not be raised for the first time on appeal).

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                              Under a plain reading of the language of the no-contest clause,
                it is clear that Kimberly breached the no-contest clause. First,. Kimberly's
                own attorneys conceded that the California litigation sought to attack the
                validity of the agreements. Second, Kimberly's August 2012 responses to
                requests for admission clearly constituted an attempt to set aside, impair,
                or invalidate provisions of the prenuptial agreement Lastly, Kimberly's
                answer to Ted's complaint included affirmative defenses that
                demonstrated an intent to set aside the agreements. Because an answer is
                considered a pleading in a court action, NRCP 7(a), we hold that the
                affirmative defenses alleged in Kimberly's answer, in addition to
                statements made by Kimberly's counsel, constitute a breach of the plain
                language of the no-contest clause. 4
                The district court did not abuse its discretion by admitting evidence related
                to Kimberly's credibility
                              A district court's evidentiary rulings are reviewed for abuse of
                discretion.   FGA, Inc. v. Giglio, 128 Nev. 271, 283, 278 P.3d 490, 497
                (2012). If the correct ruling is clear, however, refusing to follow it is an
                abuse of discretion. Fabbi v. First Nat'l Bank of Nev., 62 Nev. 405, 414,
                153 P.2d 122, 125 (1944).

                      4 Kimberly   argues that even if herS affirmative defenses had
                prevailed, that would not have invalidated the agreements. This
                argument lacks merit. Kimberly's answer denied the validity and
                enforceability of the agreement, as well as raised allegations such as lack
                of consideration, adhesion, invalidity, mutual mistake, and that the
                prenuptial agreement was the result of "Ted's misrepresentations,
                concealment, circumvention and unfair practices." Had Kimberly
                prevailed on any of these affirmative defenses, all the agreements would
                have likely been invalidated and deemed unenforceable.

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                                 The district court did not abuse its discretion
                                       Evidence that is not relevant is not admissible. NRS 48.025.
                        A spouse's credibility is relevant to the issue of validity of prenuptial
                        agreements.      See In re Marriage of Shanks, 758 N.W.2d 506, 513 (Iowa
                        2008) (finding the wife's testimony regarding validity of the prenuptial
                        agreement as not credible).
                                       Here, the district court admitted testimony related to
                        Kimberly's claim that the no-contest clause was illegal, that Ted had
                        waived his rights under the clause, that the clause was not equitable, that
                        Kimberly felt pressured and unduly influenced by the proximity of the
                        wedding to sign the prenuptial agreement, that she had not read the
                        prenuptial agreement, and that she never negotiated a forum-selection
                        clause.
                                       Therefore, Kimberly's testimony was relevant as to whether
                        she had breached the no-contest clause, whether the clause was valid,
                        whether Ted was entitled to specific performance, and whether Ted
                        breached provisions of the agreements. Additionally, this court, in
                        denying Kimberly's writ petition, stated: "To the extent that [Kimberly]
                        contends the agreements were not freely negotiated and were
                        unreasonable, these are fact questions that should be determined by the
                        district court after the evidentiary hearing as to the validity of the
                        agreements."       Jones u. Eighth Judicial Dist. Court, Docket No. 62614
                        (Order Denying Petition for Writ of Mandamus or Prohibition, July 24,
                        2013).
                                       Accordingly, because her testimony was relevant on these
                        issues, her credibility was therefore an issue.            See NRS 50.075 ("The
                        credibility of a witness may be attacked by any party . . . ."). Therefore, we

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                        hold that the district court did not abuse its discretion by admitting
                        evidence related to Kimberly's credibility.°
                        The district court did not abuse its discretion by granting Ted an award of
                        damages plus specific performance
                                    An award of damages following a bench trial is reviewed for an
                        abuse of discretion. Asphalt Prods. Corp. v. All Star Ready Mix, Inc., 111
                        Nev. 799, 802, 898 P.2d 699, 701 (1995).
                                    The no-contest clause, if triggered, explicitly mandates that
                        Kimberly repay the annual sum of $250,000 paid to her by Ted, "together
                        with all income or accumulations thereto or assets acquired therewith."
                        As stated earlier, this provision was negotiated at length by both parties
                        and both parties were represented by counsel.
                                    Based on the language in the no-contest clause, the district
                        court awarded Ted a cash award of $1.75 million—comprised of the annual
                        $250,000 sum paid to Kimberly by Ted from 1999-2005—along with an
                        award of real properties—consisting of three properties that Kimberly had
                        acquired with the annual $250,000 sum. The district court found that
                                    Kimberly has breached the parties' Prenuptial
                                    Agreement contract and Ted is entitled to specific
                                    performance. Such remedy is appropriate here,

                               °Kimberly also argues that the district court "should not have
                        permitted Kimberly's former attorney, Kathryn Stryker Wirth, to lead the
                        impeachment effort against Kimberly by relying on privileged notes."
                        However, the district court ruled that there was an attorney-client
                        privilege and properly redacted the documents. See In re Grand Jury
                        Proceedings, 689 F.2d 1351, 1352 (11th Cir. 1982). Kimberly fails to
                        identify any specific testimony by Wirth that disclosed privileged
                        communications impacting the trial or any part of the district court's
                        findings and conclusions in which the district court improperly relied on
                        privileged testimony from Wirth.

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                                  since the breach of contract involves real property,
                                  and the remedy at law is inadequate. Real
                                  property is so unique that money damages will not
                                  suffice to make a party whole.
                                  We hold that the district court correctly found that Kimberly
                      must repay Ted the annual sums that she received from him, together
                      with the properties she acquired therewith. Because the no-contest clause
                      is explicit in its terms, it will therefore be enforced as written. 6 Buzz Stew,
                      131 Nev., Adv. Op. 1, 341 P.3d at 650.
                      The district court did not abuse its discretion by awarding Ted attorney
                      fees
                                   "[Al district court's award of attorney[ ] fees will not be
                      overturned absent a manifest abuse of discretion." Barmettler v. Reno Air,
                      Inc., 114 Nev. 441, 452, 956 P.2d 1382, 1389 (1998). In awarding attorney
                      fees, the district court must state its basis for the amount.     Henry Prods.,
                      Inc. v. Tarmu, 114 Nev. 1017, 1020, 967 P.2d 444, 446 (1998). The district

                            6 Kimberly   makes the additional arguments that (1) the real
                      properties could not be forfeited because they were an independent award
                      under the MSA, and (2) the district court had no jurisdiction to compel
                      nonparties to disgorge the real properties, as the properties were owned by
                      rental management companies organized as LLCs owned by Kimberly.
                      We hold that these arguments lack merit. Although Ted may have
                      released his rights to the properties at issue pursuant to the MSA, nothing
                      in the MSA indicates that Ted waived any future interest in the
                      properties. Clark v. Columbia/ HCA Info. Servs., Inc., 117 Nev. 468, 480,
                      25 P.3d 215, 223-24 (2001) ("Contractual release terms are only
                      enforceable against claims contemplated at the time of the signing of the
                      release and do not apply to future causes of action unless expressly
                      contracted for by the parties."). Therefore, the terms of the MSA did not
                      prevent Ted from accruing an interest in the properties upon Kimberly's
                      breach of paragraph XII. Furthermore, Kimberly withdrew the
                      affirmative defense of non-joinder of parties at trial. Therefore, we hold
                      that she waived this issue and we need not address it.

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                court must also demonstrate that the costs awarded were actually
                incurred and reasonable. Cadle Co. v. Woods & Erickson,         LLP,   131 Nev.,
                Adv. Op. 15, 345 P.3d 1049, 1054 (2015).
                              In the present case, the district court provided the bases for its
                award. Its order stated that it based its attorney fee award on the
                agreements and EDCR 7.60. Furthermore, the record in this case bolsters
                Ted's argument that the attorney fees in the current action were
                reasonable and actually incurred. Accordingly, the district court did not
                abuse its discretion in awarding attorney fees to Ted.
                              Therefore, we
                              ORDER the judgment of the district court AFFIRMED. 7

                                                                                       J.
                                                      Har

                                                      GibbonA

                                                            Ejjaeg                     J.
                                                      Pickerir:

                      7 TheHonorable Ron D. Parraguirre, Chief Justice, voluntarily
                recused himself from participation in the decision of this matter.

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                cc: Hon. Gayle Nathan, District Judge
                     Lewis Roca Rothgerber Christie LLP/Las Vegas
                     Kolodny Law Group
                     Black & LoBello
                     Wasser, Cooperman & Carter
                     The Jimmerson Law Firm, P.0
                     Seastrom & Seastrom
                     Lemons, Grundy & Eisenberg
                     Eighth District Court Clerk

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