Anderson v. Sanchez , 2015 NV 51 ( 2015 )

131 Nev., Advance Opinion 51
IN THE COURT OF APPEALS OF THE STATE OF NEVADA
MARK ANDERSON, No. 62059
Appellant,
vs. FILED
SOPHIA SANCHEZ,
Respondent. JUL 2 3 2015
7 K. 77:7777777
•E
Appeal from a district court divorce decree. Fifth Judicial
District Court, Nye County; Kimberly A. Wanker, Judge.
Reversed and remanded with instructions.
Abrams Law Firm, LLC, and Vincent Mayo, Las Vegas,
for Appellant.
Law Office of Daniel Marks and Daniel Marks and Christopher L.
Marchand, Las Vegas,
for Respondent.
BEFORE GIBBONS, C.J., TAO and SILVER, JJ.
OPINION
By the Court, GIBBONS, C.J.:
This case involves the enforceability of a divorce settlement
agreement in the face of a claim that the agreement distributes property
belonging to a third party. At issue here is the district court's denial of
appellant's motion to set aside the parties' settlement agreement, and join
his sister to the underlying divorce proceeding, because she claimed an
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interest in property that was treated as community property in the
settlement agreement. Under NRCP 19(a), a court must join a person to
an action if complete relief cannot be accorded among the parties already
present, or the person to be joined claims to have an interest in the subject
matter of the action, and adjudication of the action in the person's absence
may either impair the person's ability to protect that interest, or leave any
of the current parties subject to double, multiple, or otherwise inconsistent
obligations due to the claimed interest.
In light of this rule and the facts in this case, we conclude the
district court should have conducted an evidentiary hearing to decide the
joinder issues before the court adjudicated the parties' property pursuant
to the settlement agreement. We therefore vacate the district court's
divorce decree only as it affects the disposition of the property at issue and
remand this matter to the district court with instructions to conduct an
evidentiary hearing to determine whether the sister should have been
joined under NRCP 19(a).
BACKGROUND
This appeal arises out of a divorce between appellant Mark
Anderson and respondent Sophia Sanchez. Mark filed a complaint for
divorce in March 2012. Thereafter, the parties immediately agreed to
participate in mediation before retired district court judge Robert Gaston,
but not pursuant to a court order or district court rule, which can be used
to set the parameters of the mediation. At the conclusion of the mediation,
the parties executed a written Memorandum of Understanding (MOU),
which provided the framework for dividing their various assets and debts.
The award of the Wilson property, a residence located on East Wilson
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Avenue, Orange, California, is the only term of the MOU challenged on
appeal. Under the terms of the MOU, Mark was to receive the Wilson
property in exchange for the payment of a portion of his retirement funds
to Sophia.
After the parties executed the MOU, Mark filed a notice of
withdrawal of his signature, stating, without any explanation or citation
to law, that he was revoking his signature from the MOU. In response,
Sophia filed a motion to enforce the MOU, asserting that the parties had
entered into a legally binding contract and requesting that the district
court enter a divorce decree based on the terms of the MOU. Mark then
filed, among other things, an opposition to the motion to enforce, a
countermotion to set aside and deem the MOU unenforceable, and a
countermotion for joinder of his sister, Cheryl Parr. Cheryl also filed a
motion to intervene in the divorce proceeding based on the same factual
allegations set forth in Mark's opposition and countermotion regarding
joinder, and she asked for a finding and order that the Wilson property
was held in constructive trust, declaratory relief, an injunction, and
attorney fees.
In his opposition and countermotions, Mark argued, as
relevant here, that the MOU was void because it improperly distributed
property that did not belong to Mark and Sophia. Further, Mark argued
the MOU was subject to rescission because it was based on a mutual
mistake, a misrepresentation, or unconscionable terms. In support of
these arguments, Mark alleged Cheryl had an ownership interest in the
Wilson property, which he and Cheryl had received as beneficiaries of the
Jack and Lavonne Anderson Trust (the Jack and Lavonne Trust), which
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previously held that property. Mark claimed he and Cheryl had agreed
Cheryl would keep the Wilson property in exchange for Mark receiving
other trust assets. Cheryl currently lives on the Wilson property.
Continuing his arguments in support of joinder and setting
aside the MOU, Mark alleged that, between May 2005 and May 2006, he
and Sophia entered into two agreements with Cheryl in which Cheryl
allowed them to use the Wilson property as collateral to secure loans. In
order to obtain financing, the second agreement required Mark and
Cheryl, as trustees of the Jack and Lavonne Trust, to convey the Wilson
property to Mark and Sophia. Mark and Sophia then transferred the
Wilson property to their own newly created trust, the Anderson Trust.
The Anderson Trust provides that the Wilson property is to be conveyed to
Cheryl should she survive both Mark and Sophia. Additionally, David
Parr, Cheryl's son, is named as a beneficiary of the Anderson Trust,
should he survive Cheryl, Mark, and Sophia. The Anderson Trust was not
made a party in this case. None of Mark and Sophia's five other
properties are held in a trust.
Mark contended he and Sophia entered into an oral agreement
with Cheryl whereby he and Sophia would transfer the Wilson property to
Cheryl after all loans were satisfied. Until such time, however, Mark and
Sophia would hold the Wilson property in the trust for Cheryl's benefit.
Thus, in his opposition and countermotions, Mark argued the agreement
created a resulting trust or a constructive trust for Cheryl's benefit.
Mark filed several statements in district court by individuals
familiar with the arrangement to prove the oral agreements. These
included an affidavit signed by Mark and Sophia's accountant, who
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provided a loan collateralized by the Wilson property; a letter signed by
the trust attorney who drafted the Anderson Trust, which recited his
understanding that the property was held in Mark's name, but was
actually owned by Cheryl; a notarized statement signed by Israel Sanchez,
Sophia's brother, which outlined his understanding of Mark and Sophia's
arrangement with Cheryl, consistent with Mark's contentions; and the
Anderson Trust agreement, which held the Wilson property at the time of
divorce and which provided that the Wilson property would go to Cheryl
free of encumbrances following the deaths of both Sophia and Mark if she
survived them. Based on his contention that Cheryl was the true owner of
the Wilson property, Mark maintained that Cheryl must be joined to the
action pursuant to the provisions of NRCP 19(a).
Sophia filed a reply in support of her motion to enforce the
settlement agreement and an opposition to Mark's countermotions. She
denied the existence of an agreement between herself, Mark, and Cheryl,
referring to the alleged agreement as "a secret deal between [Mark] and
his sister." Sophia contended she and Mark were the rightful owners of
the Wilson property, as they, not Cheryl, paid the mortgage and property
taxes on the Wilson property and because a quitclaim deed released the
property to Mark and Sophia forever.
The district court held two hearings on the various motions.
In rendering its decisions, the district court stated at the hearings, "I don't
know how Cheryl [Parr] would—could become a party in this case. We're
talking about a piece of property in California, so we don't—we don't have
jurisdiction over a property in California. She's not a party to this
proceeding. This is a divorce." Second, the district court stated, "[a]
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settlement was reached. . .. It was placed in writing. And now what I
hear is that somehow that—that really there was this constructive trust
regarding this California property that fi] s the problem. Those facts were
known to [Mark]. Those facts were known to [Sophia]." Third, the district
court emphasized the importance that "[Mark and Sophia are] legal
owners of the property."
After the second hearing, the district court issued an order
that (1) granted Sophia's motion to enforce the MOU, (2) denied all of
Mark's countermotions, and (3) denied Cheryl's motion to intervene and
related motions. In addition to concluding the MOU was a valid and
binding agreement, the district court found that Cheryl lacked standing to
intervene and that the court lacked jurisdiction to allow her to intervene.'
The court also entered a decree of divorce dissolving Mark and Sophia's
marriage and incorporating the MOU. This appeal by Mark followed.
ANALYSIS
Mark maintains that the arrangement with Cheryl created an
implied trust for Cheryl's benefit. Therefore, he asserts that when he and
Sophia divided the Wilson property as part of their community property,
they mistakenly included property that belonged to Cheryl. Thus, Mark
'Cheryl was never made a party to the district court action and is
thus not a party to this appeal. Moreover, because Cheryl did not file a
petition for a writ of mandamus challenging the denial of her motion to
intervene, the denial of that motion is not before us. Nevertheless, the
district court's comments in this regard are equally relevant to the denial
of Mark's joinder motion as they were to the denial of Cheryl's motion to
intervene.
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contends that the MOU should be set aside as to that provision and the
matter should be remanded to the district court for further proceedings in
which Cheryl's interest in the Wilson property is determined. Sophia
disagrees, arguing that the parties entered into an enforceable settlement
agreement and that joinder of Cheryl was not required.
This court reviews de novo a district court's legal conclusions
relating to court rules. Casey v. Wells Fargo Bank, N.A., 128 Nev. ,
290 P.3d 265, 267 (2012). Subject matter jurisdiction is similarly reviewed
de novo. Ogawa v. Ogawa, 125 Nev. 660, 667, 221 P.3d 699, 704 (2009).
Generally, when parties to a divorce have entered into a
signed, written settlement agreement, such agreement is binding and "can
be enforced by motion in the case being settled." Grisham v. Grisham, 128
Nev. „ 289 P.3d 230, 233 (2012). Nevertheless, in order to render a
complete decree in any civil action, "all persons materially interested in
the subject matter of the suit [must] be made parties so that there is a
complete decree to bind them all." Gladys Baker Olsen Family Trust ex
rel. Olsen v. Eighth Judicial Dist. Court, 110 Nev. 548, 553, 874 P.2d 778,
781 (1994). For that reason, the Nevada Supreme Court has held that the
failure to join a necessary party to a case was "fatal to the district court's
judgment." Id. at 554, 874 P.2d at 782. In light of this authority, we
conclude that, if Cheryl was a necessary party, the district court's
judgment was invalid to the extent that it affected rights in property in
which Cheryl claimed an interest. See id. Thus, we begin by considering
Mark's argument that the district court erred by denying his motion to
join Cheryl in the underlying action.
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Joinder of necessary parties
Although NRCP 19(a) refers to parties who are to be joined if
feasible, a person who falls within that subsection of the rule is generally
referred to as a "necessary party." See Disabled Rights Action Comm. v.
Las Vegas Events, Inc., 375 F.3d 861, 878 (9th Cir. 2004) (explaining that
an individual who should be joined under the analogous federal rule,
FRCP 19(a), is "referred to as a 'necessary party"); see also Blaine Equip.
Co., Inc. v. State, 122 Nev. 860, 864 n.6, 138 P.3d 820, 822 n.6 (2006)
(referring to a party who should be joined under NRCP 19(a) as a
necessary party). There are three types of circumstances in which an
absent party is necessary under NRCP 19(a): (1) an individual must be
joined if the failure to join will prevent the existing parties from obtaining
complete relief; (2) an individual must be joined if an interest is claimed in
the subject matter of the action and adjudication of the action in the
individual's absence may inhibit the individual's ability to protect that
claimed interest; and (3) an individual must be joined if the person claims
an interest in the subject matter of the action and adjudication of the
action in the individual's absence subjects an existing party "to a
substantial risk of incurring double, multiple, or otherwise inconsistent
obligations." See NRCP 19(a). 2
2NRCP 19(a) provides that, if a person is subject to service of process
and that person's joinder will not deprive the court of subject matter
jurisdiction, then the person "shall be joined as a party in the action if (1)
in the person's absence complete relief cannot be accorded among those
already parties, or (2) the person claims an interest relating to the subject
of the action and is so situated that the disposition of the action in the
person's absence may (i) as a practical matter impair or impede the
continued on next page...
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Without addressing whether this case presented any of the
circumstances set forth in NRCP 19(a), the district court declined to join
Cheryl, apparently based on two preliminary conclusions—that the court
lacked jurisdiction to determine Cheryl's rights in property located in
another state and that an outside party could not be joined to a divorce
action. We now address each of these conclusions in turn.
Jurisdiction over the Wilson property
Although the district court failed to make specific factual
findings, its oral comments indicate that it concluded it lacked jurisdiction
to adjudicate the ownership rights to the Wilson property because the
property is located outside of Nevada. To that end, the written order
recites, "Ms. Parr's remedy lies in a different jurisdiction, this Court does
not have jurisdiction to allow her to intervene into this matter."
A court of equity, however, may adjudicate out-of-state
property rights in a divorce action. Buaas v. Buaas, 62 Nev. 232, 236, 147
P.2d 495, 496 (1944). In Buass, the former wife appealed a divorce decree
obtained in Nevada, alleging that the Nevada court lacked jurisdiction to
adjudicate the status of real property located in California. Id. at 234, 147
P.2d at 496. The Nevada Supreme Court held that, although the lower
court could not render a judgment in rem over the California property, it
could pass indirectly upon the title via its jurisdiction over the parties. Id.
at 236, 147 P.2d at 496; see also Lewis v. Lewis, 71 Nev. 301, 306, 289 P.2d
...continued
person's ability to protect that interest or (ii) leave any of the persons
already parties subject to a substantial risk of incurring double, multiple,
or otherwise inconsistent obligations by reason of the claimed interest."
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414, 417 (1955) (stating that a district court possesses control over an out-
of-state property through jurisdiction over the parties and that the district
court can exercise such control to avoid multiplicity of suits).
Here, Mark and Sophia were properly before the district court
in their divorce proceeding and included the Wilson property among the
assets to be divided. Further, Cheryl submitted to the district court's
jurisdiction by filing a motion to intervene in the divorce proceeding. 3
Thus, although the Wilson property was located in California, the district
court could have adjudicated the parties' rights to the property based on
its personal jurisdiction over all of the parties purporting to have an
interest in the property. See Buass, 62 Nev. at 236, 147 P.2d at 496.
Consequently, the district court erred in concluding it lacked jurisdiction
to consider Cheryl's interest in the Wilson property based on the
property's location. We now turn to the court's other apparent conclusion,
that it could not join a third party to a divorce action.
Joinder in a divorce action
In addition to the district court's conclusions relating to the
location of the property, the district court's comments and written order
suggest the court found it would be improper to join or allow intervention
by a third party to a divorce action. We disagree.
Nothing in NRCP 19(a) limits the type of civil action to which
a necessary party must be joined. And although the Nevada Supreme
Court has not specifically addressed whether a third party may be joined
3 Therefore NRCP 19(b), regarding an absent but indispensable third
party that could not be feasibly joined, is inapplicable.
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to a divorce action, that court has held that joinder was required in certain
post-divorce proceedings. See, e.g., Johnson v. Johnson, 93 Nev. 655, 659,
572 P.2d 925, 927 (1977) (holding that an order requiring an absent third
party to transfer property was void because the absent third-party
transferee was not joined in the post-divorce action); Olsen Family Trust,
110 Nev. at 554, 874 P.2d at 782 (holding that a trust created by a third
party was a necessary party to a post-divorce action in which the district
court ordered trust property to be transferred to the appellant to satisfy
spousal support arrearages). Thus, Nevada case law supports the
possibility that an absent third party may be joined to a family law action
in certain circumstances.
Moreover, courts in other jurisdictions have concluded that a
third party may be joined to a divorce proceeding when such joinder is
necessary to resolve disputes as to property rights. For instance, in
Cadwell v. Cadwell, 178 P.2d 266, 267 (Kan. 1947), the district court had
allowed the wife's mother to intervene in the parties' divorce action
because she had claimed to be the true owner of certain real and personal
property held by the husband and wife. 4 On appeal, the court noted that,
generally, "a third person has no legal interest in or right to interfere with
a divorce action for the purpose of opposing the granting of a decree of
4 Several of the cases discussed herein consider the issue of bringing
third parties into divorce cases based on the third party's motion to
intervene. See, e.g., Cadwell, 178 P.2d at 267-69. Although joinder, rather
than intervention, is at issue in this appeal, these cases are relevant to the
consideration of whether the third party may properly be made a party to
a divorce action. Whether a party is necessary, such that joinder is
required, is discussed separately below.
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divorce." Id. at 268. Nevertheless, the court recognized that, when the
third person seeks to intervene based on a claim of a right to property held
by the divorcing parties, courts have typically held that intervention for
such a purpose is proper. Id. at 268-69.
Similarly, in Wharff v. Wharff, 56 N.W.2d 1, 2 (Iowa 1952), a
divorcing wife alleged that real property titled in the parties' names was
actually purchased with her separate money and was "held in trust for her
children by a previous marriage." On this basis, the children moved to
intervene in the divorce to assert their interest in the property. Id.
Concluding that intervention in divorce cases was typically subject to the
ordinary rules of civil procedure, the Wharf court noted that intervention
is generally proper when a third person "claims an interest in property
involved in litigation." Id. at 3-4. The court recognized that allowing
intervention would help avoid a multiplicity of suits and the possibility
that the division of property in a divorce might be rendered inequitable if
property divided in the divorce is later awarded to the third person in a
separate action. Id. at 4.
These cases represent the majority view that a third person
may be joined as a party to a divorce action based on a claimed interest in
real or personal property that is to be divided among the divorcing parties.
See also Copeland v. Copeland, 616 S.W.2d 773, 775 (Ark. Ct. App. 1981)
("Third parties may be brought into, or intervene in, divorce actions for the
purpose of clearing or determining the rights of the spouses in specific
properties."); Gaudio v. Gaudio, 580 A.2d 1212, 1217 (Conn. App. Ct. 1990)
("The prevailing view in the majority of other jurisdictions is that a third
person with a claimed interest in property that is the subject of a
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dissolution action may properly be joined as a party."); Lancaster v.
Lancaster, 291 S.W.2d 303, 308 (Tex. 1956) ("On a petition for divorce and
for partition of the community property, all persons who have an interest
in the property are proper parties.").
Thus, considering this extrajurisdictional authority in light of
the Nevada Supreme Court cases indicating that joinder may be proper in
family law cases, we conclude that a third person may be joined to a
divorce action when that person claims an interest in property that is
purported to be part of the marital estate. As a result, the district court
erred to the extent that it apparently found that Cheryl could not be joined
because the underlying action was a divorce action.
But having determined that Cheryl could have been joined in
the underlying divorce action does not end our inquiry because Mark did
not move for joinder of Cheryl until after he signed the MOU. Generally,
when parties to a divorce have entered into a signed, written settlement
agreement, such agreement is binding and "can be enforced by motion in
the case being settled." Grisham, 128 Nev. at , 289 P.3d at 233. Mark
attempts to avoid the binding effect of the agreement by arguing both that
Cheryl was a necessary party under NRCP 19(a) and that the MOU was
subject to being set aside based on the parties' mutual mistake as to the
nature of Cheryl's interest in the Wilson property. We address these
arguments in turn.
Necessary party
As noted above, in order to render a complete decree in any
civil action, "all persons materially interested in the subject matter of the
suit [must] be made parties so that there is a complete decree to bind them
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all." Olsen Family Trust, 110 Nev. at 553, 874 P.2d at 781. For this
reason, the Nevada Supreme Court has held that the failure to join a
necessary party to a case was "fatal to the district court's judgment." Id.
at 554, 874 P.2d at 782; see also Univ. of Nev. v. Tarkanian, 95 Nev. 389,
396, 594 P.2d 1150, 1163 (1979) (explaining that "the question of waiver is
not appropriate to the determination of [a joinder] issue, and the trial
court or the appellate court may raise the issue sua sponte"). Thus, if
Cheryl was a necessary party, the district court's judgment was invalid to
the extent it resolved any issues for which Cheryl's joinder was necessary.
See Tarkanian, 95 Nev. at 396, 594 P.2d at 1163.
As discussed above, NRCP 19(a) requires joinder in three
situations—when the failure to join the individual will prevent the parties
to the case from obtaining complete relief, when the individual claims an
interest in the subject matter of the action and adjudication in the
individual's absence may inhibit the ability to protect that claimed
interest, and when the individual claims an interest in the subject matter
of the action and adjudication in the individual's absence potentially
subjects an existing party to "double, multiple, or otherwise inconsistent
obligations." In applying NRCP 19(a), the Nevada Supreme Court has
broadly indicated that a third party must be joined if the third party's
interest "may be affected or bound by the decree," or if the third party
"claims an interest in the subject matter of the action." Olsen Family
Trust, 110 Nev. at 553-54, 874 P.2d at 781-82.
Generally, the subject matter of a divorce action will involve
the division of the parties' property, but may not necessarily require the
court to determine title to the property or otherwise establish ownership.
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See Aniballi v. Aniballi, 842 P.2d 342, 343 (Mont. 1992) (noting that "a
decree of dissolution resolves rights to the marital property as between the
parties seeking dissolution of the marriage, but will not determine title in
rem"). Instead, the parties may simply divide their interest in the
property, leaving any interests of third parties undisturbed. See id.; see
also Walters v. Walters, 113 S.W.3d 214, 219 (Mo. Ct. App. 2003)
(recognizing that the trial court did not need to determine the relative
interests of a couple and the husband's mother in property being divided
in a divorce proceeding, but could properly divide only the couple's interest
by awarding " laJny interest the parties may have' in the property).
Nevertheless, in some cases, such as this one, the parties may
dispute the extent of their interest in the property, putting ownership of
the property at issue in the divorce proceeding See Callnon v. Callnon, 46
P.2d 988, 990 (Cal. Ct. App. 1935) (recognizing that parties to a divorce
"may seek a determination of their property rights"). As discussed above,
in that situation, a third party who claims an interest in the property
generally may be joined to the action and the action will be binding on
that party. See id. Conversely, any third party not joined will not be
bound by the• determination of ownership in the divorce action. See
Johnson, 93 Nev. at 658, 572 P.2d at 927 (recognizing that a third party
would not be legally bound by an order entered in an action to which the
third party had not been joined).
Here, insofar as Cheryl will not be bound by the action if she is
not joined, it does not appear that her ability to protect her claimed
interest in the Wilson property would be impaired or impeded, as she will
be able to file a separate action to enforce her claimed interest. See
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Aniballi, 842 P.2d at 343 (noting that a parent who claimed an interest in
the parties' marital residence would not be prevented by the divorce
decree from bringing a separate action to determine the interest in the
property). Indeed, Sophia asserted in her appellate brief that Cheryl has
filed a lawsuit in Orange County, California, against Mark and Sophia.
As a result, Cheryl does not appear to be a necessary party
under NRCP 19(a)(2)(i), which requires joinder when a third party claims
an interest in the subject matter of the action and the third party's
absence from the litigation may impair or impede the person's ability to
protect that interest. But that ability to file a separate action raises
questions as to whether, in Cheryl's absence, the existing parties will be
able to obtain complete relief, and whether the failure to join Cheryl may
leave Mark "subject to a substantial risk of incurring double, multiple, or
otherwise inconsistent obligations," and thus, whether Cheryl may be a
necessary party under NRCP 19(a)(1) or NRCP 19(a)(2)(ii). See
Tarkanian, 95 Nev. at 397-98, 594 P.2d at 1164 (concluding that complete
relief could not be afforded among existing parties where resolution in the
absence of a third party would not "completely and justly" determine the
rights and obligations presented by the action); see also NRCP 1 (providing
that the rules of civil procedure "shall be construed and administered to
secure the just, speedy, and inexpensive determination of every action").
Because the district court erroneously determined that it did
not have authority to join Cheryl based on the location of the Wilson
property and the nature of the action as a divorce proceeding, the court
failed to consider whether complete relief could be afforded among the
parties in Cheryl's absence, or whether Cheryl's absence might leave any
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of the existing parties subject to a substantial risk of double, multiple, or
otherwise inconsistent obligations. But insofar as Cheryl may seek relief
in another jurisdiction with regard to the Wilson property, it appears
reasonably possible that her absence may cause any relief afforded in the
district court to be incomplete, or may leave Mark subject to a potential
risk of multiple, double, or inconsistent obligations. See NRCP 19(a)(1),
(a)(2)(ii).
Determining the potential effect of any litigation by Cheryl
may require the resolution of factual issues. Therefore, we reverse the
district court's denial of joinder and remand this case to the district court
for that court to consider whether Cheryl was a necessary party within the
meaning of NRCP 19(a). See Ryan's Express Transp. Servs., Inc. v.
Amador Stage Lines, Inc., 128 Nev. „ 279 P.3d 166, 172 (2012) ("An
appellate court is not particularly well-suited to make factual
determinations in the first instance."); see also Nev. Power Co. v. Fluor
108 Nev. 638, 645, 837 P.2d 1354, 1359 (1992) (recognizing that an
evidentiary hearing may be necessary in order to properly decide disputed
questions of fact).
If the district court determines that Cheryl is a necessary
party, the court must then determine the relative rights of Mark, Sophia,
and Cheryl in the Wilson property, see Callnon, 46 P.2d at 990, and must
revisit the portions of the MOU concerning that property, as appropriate.
In the event the district court does not find the circumstances to fall
within the parameters of NRCP 19(a), Mark contends the MOU may still
be set aside based on mutual mistake. Thus, in the final section of this
opinion, we turn to his mutual mistake argument.
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Mutual mistake
Mark argues the district court erred by failing to set aside the
MOU based on mutual mistake and other contract defenses. Sophia, on
the other hand, contends the MOU was properly upheld because no
mutual mistake occurred. A contract may be set aside based on mutual
mistake, which "occurs when both parties, at the time of contracting,
share a misconception about a vital fact upon which they based their
bargain." Gen. Motors v. Jackson, 111 Nev. 1026, 1032, 900 P.2d 345, 349
(1995); see also May v. Anderson, 121 Nev. 668, 672, 119 P.3d 1254, 1257
(2005) (providing that a settlement agreement is a contract that is
governed by contract law).
In the divorce decree, the district court found "good cause" to
adopt the MOU over Mark's objections. And in a related order, the court
concluded that Mark and Sophia had entered into a valid and binding
agreement pursuant to Casentini v. Hines, 97 Nev. 186, 625 P.2d 1174
(1981), which recognizes that a stipulation is enforceable if it is in writing
and signed by the party against whom enforcement is sought. The district
court did not, however, specifically address Mark's mutual mistake
argument by making findings as to whether the MOU was based on the
parties' "misconception about a vital fact." See Gen. Motors, 111 Nev. at
1032, 900 P.2d at 349.
In particular, although the district court generally stated at
the hearing on the motion to set aside the MOU that certain facts were
known to the parties at the time they entered into the agreement, nothing
in the record indicates that the court considered Mark's contentions
regarding his and Sophia's understanding of their respective rights as to
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the Wilson property, and the effect of that understanding on their decision
to execute the MOU. See id. Thus, the district court erred by concluding
the MOU was enforceable without properly addressing Mark's mutual
mistake argument. Because determining the understanding of the parties
when they entered into the MOU will require the resolution of factual
issues, we also reverse those portions of the district court's orders that
denied Mark's motion to set aside the MOU based on mutual mistake. See
Ryan's Express, 128 Nev. at ,279 P.3d at 172.
If the district court concludes that Cheryl is a necessary party,
it may not be necessary for the court to revisit the mutual mistake and
other related arguments. But if the district court finds Cheryl is not a
necessary party, the court must address the mutual mistake and other
contract defense arguments to determine whether Mark has demonstrated
grounds under general contract law for setting aside the MOU. 5
5 Ifthe court concludes that Cheryl was not a necessary party and
that no contractual basis for setting aside the MOU exists, then Mark
waived his argument that Cheryl should have been joined as a permissive
party under NRCP 20 by entering into a binding settlement agreement
that distributed the parties' interests in the Wilson property without
seeking joinder of Cheryl. See McKellar v. McKellar, 110 Nev. 200, 202,
871 P.2d 296, 297 (1994) (explaining that a waiver may be implied from
"conduct which evidences an intention to waive a right, or by conduct
which is inconsistent with any other intention than to waive a right"); see
also Nev. Gold St Casinos, Inc. v. Am. Heritage, Inc., 121 Nev. 84, 89, 110
P.3d 481, 484 (2005) ("Waiver is generally a question of fact. But when
the determination rests on the legal implications of essentially
uncontested facts, then it may be determined as a matter of law."
(citations omitted)). Thus, we do not address Mark's NRCP 20 arguments
further in this opinion.
COURT OF APPEALS
OF
NEVADA
19
(0)
CONCLUSION
Because the district court improperly determined that it did
not have jurisdiction to join Cheryl to a divorce proceeding involving out-
of-state property, we reverse the district court's denial of joinder and
remand this matter to the district court for that court to consider whether
Cheryl is a necessary party within the meaning of NRCP 19(a). If the
court determines Cheryl is a necessary party under that rule, the court
must then consider what interest, if any, Cheryl has in the Wilson
property and must revisit the portions of the MOU relating to that
property, as appropriate. If the district court does not find Cheryl to be a
necessary party, then the court must consider Mark's mutual mistake and
other contract arguments to determine whether the MOU must be set
aside on a contract basis, and conduct any further proceedings as
necessary. The parties do not challenge any other aspect of the divorce
decree. As a result, we affirm the status of the parties as divorced.
C.J.
Gibbons
We concur:
Tao
ir J
J.
Silver
COURT OF APPEALS
OF
NEVADA 20
(01 194713