Jones v. Jones, Jr. ( 2016 )

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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