Doan v. Wilkerson

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.
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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.
J.
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Pickering
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CILS16 1•J.
Parraguirre
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