CARLSON VS. CARLSON (RETIREMENT DIVISION)

Key holdings

Practitioner summary

Motions under NRCP 60(b) lie within the district court's sound discretion and are reviewed for abuse of discretion; the rule is liberally construed to redress injustices resulting from excusable neglect or the wrongs of an opposing party. Heard v. Fisher's & Cobb Sales & Distrib., Inc., 88 Nev. 566, 568, 502 P.2d 104, 105 (1972); Nevada Indus. Devel., Inc. v. Benedetti, 103 Nev. 360, 364, 741 P.2d 802, 805 (1987). The court rejected the contention that a district court reviewing an EDCR 5.81 domestic relations referee's report must affirm it if supported by substantial evidence, distinguishing the administrative-review analogy and holding NRCP 53's master provisions inapplicable because no Rule 53 master had been appointed; the ordinary abuse-of-discretion standard governs. On the merits, the record showed Austin and his counsel represented the division as "essentially equal" when Trudy in fact received approximately twenty-nine percent of the assets. If both parties were mistaken about the pension's value, relief was warranted for mutual mistake under NRCP 60(b)(1); if Austin or his counsel knew the value, the misrepresentation was fraud warranting relief under NRCP 60(b)(2). The court further held the divorce decree should be amended to constitute a qualified domestic relations order under ERISA (29 U.S.C. Section 1056(d)(3)) formally designating Trudy as Austin's surviving spouse; because Austin's surviving-spouse annuity election was irrevocable, the designation would not affect his annuity, but without it Trudy would lose the survivor benefits. Reversed and remanded.

In plain language

After twenty-five years of marriage, Trudy and Austin Carlson divorced. Austin had a pension from roughly twenty years working at Kaiser Steel; when he retired he chose an irrevocable "Life and Surviving Spouse" option that would pay Trudy monthly benefits if she outlived him. During settlement negotiations, Trudy's lawyer tried to get the pension's true value from the plan administrator (New York Life), but the administrator responded slowly and did not reveal the actual value until after the divorce decree was entered. Relying on Austin's and his counsel's representation that the proposed division was "essentially equal," Trudy agreed to the settlement, which the court incorporated into the decree. Trudy later learned the pension's true value and realized she had received only about twenty-nine percent of the couple's assets. She asked the court to reopen the decree under the rule allowing relief from judgments (NRCP 60(b)). A domestic relations referee recommended granting relief, but the district judge overruled the referee. The Nevada Supreme Court reversed. The court explained that a district court reviewing a referee's report is not required to accept it merely because it is supported by evidence, but reviews such motions for abuse of discretion, and Rule 60(b) is to be construed liberally to redress injustice. On this record, the "essentially equal" representation was either a mutual mistake (grounds for relief under Rule 60(b)(1)) or, if Austin or his lawyer knew the pension's real value, a fraud (grounds under Rule 60(b)(2)). Either way, Trudy was entitled to relief. The court also held the decree should be amended so it qualifies as a "qualified domestic relations order" (QDRO) formally naming Trudy as Austin's surviving spouse, so she would not lose the survivor benefits under federal pension law; because Austin's election was irrevocable, the designation would not affect his own annuity. Reversed and remanded.