CORD VS. CORD (DIVORCE PROPERTY & ALIMONY)

Statutes cited

Key holdings

Practitioner summary

On the second appeal in this community-property apportionment dispute, the court affirmed a judgment declaring all assets of the deceased E.L. Cord's estate to be separate property. The first appeal, Cord v. Neuhoff, 94 Nev. 21, 573 P.2d 1170 (1978), invalidated a post-nuptial agreement and remanded for apportionment. On remand the parties stipulated that 11.6 percent of the holdings were community property for 1937-1953, and trial addressed 1953-1974. Law of the case: The court rejected appellant's contention that the district court disregarded language in Cord v. Neuhoff describing Errett Cord as devoting great time and energy to his wealth. A rule of law necessary to an appellate decision becomes the law of the case and controls on subsequent appeals in which the facts are substantially the same. LoBue v. State ex rel. Dept. Hwys., 92 Nev. 529, 554 P.2d 258 (1976); Walker v. State, 85 Nev. 337, 455 P.2d 34 (1969); State v. Loveless, 62 Nev. 312, 150 P.2d 1015 (1944). The first appeal turned on the post-nuptial agreement and considered only 1937-1953 records; the facts on remand (1953-1974) were not substantially the same, so law of the case was not violated. Reimbursement of separate estate: Distinguishing See v. See, 415 P.2d 776 (Cal. 1966) (conscious election to use separate property for community expenses is a gift to the community, non-reimbursable), the court applied Beam v. Bank of America, 490 P.2d 257 (Cal. 1971), because E.L. Cord made no conscious choice to spend separate property on community expenses - he assumed all funds were separate under the post-nuptial agreement. Reimbursement to the separate estate for community expenses paid after community assets were exhausted was therefore proper. Apportionment and standard of review: Rents and profits from separate property are separate, but property acquired after marriage is presumptively community, rebuttable by clear and convincing evidence. Kelly v. Kelly, 86 Nev. 301, 468 P.2d 359 (1970); NRS 123.220. Increases in value must be apportioned between separate and community estates unless due solely to natural enhancement or minimal owner effort. Pereira v. Pereira, 103 P. 488 (Cal. 1909); Johnson v. Johnson, 89 Nev. 244, 510 P.2d 625 (1973). The district court found E.L. Cord expended minimal effort and that increases were attributable to other managers, raw-land holdings, inflation, and natural enhancement. On conflicting evidence, a bench determination supported by substantial evidence will not be disturbed unless clearly erroneous. Fletcher v. Fletcher, 89 Nev. 540, 516 P.2d 103 (1973); Ormachea v. Ormachea, 67 Nev. 273, 217 P.2d 355 (1950). Finding substantial evidentiary support, the court affirmed.

In plain language

This was the second appeal in a long-running dispute over the estate of E.L. Cord, a wealthy businessman, brought by his widow, Virginia Cord, against the co-executors of his estate. In the first appeal (in 1978), the Nevada Supreme Court had struck down a post-nuptial agreement between the Cords and sent the case back so the district court could figure out how much of E.L. Cord's estate should be treated as community property (shared by the marriage) versus his separate property. On remand, the parties agreed that from 1937 to 1953, about 11.6 percent of E.L. Cord's holdings were community property. So the trial focused on his finances from 1953 until his death in 1974. After a two-week trial with dueling accounting experts (the widow's experts said about 79 percent should go to the community; the estate's experts said none of it was community property), the district court found the estate's evidence more credible and ruled that all of E.L. Cord's assets were his separate property. The Nevada Supreme Court affirmed. First, it rejected the widow's argument that the trial court ignored the "law of the case" from the first appeal (which had described E.L. Cord as devoting great time and energy to managing his wealth); that earlier observation was based only on financial records from 1937 to 1953, not the different 1953-1974 period now at issue. Second, the court held that E.L. Cord's separate estate was entitled to reimbursement for community expenses paid from separate funds after community assets ran out, because - like the husband in a leading California case (Beam) and unlike another (See) - he never made a conscious choice to spend separate property on the family; he assumed all his money was separate under the (later-invalidated) post-nuptial agreement. Finally, applying the rule that increases in the value of separate property must be apportioned between separate and community estates unless the increase is due only to natural enhancement or minimal owner effort, the court found substantial evidence supported the trial court's finding that E.L. Cord expended only minimal effort and that his assets grew due to raw-land holdings, inflation, and natural enhancement. Because the determination rested on conflicting evidence and was supported by substantial evidence, it would not be disturbed.