KANTOR VS. KANTOR (DIVORCE PROPERTY & ALIMONY)

Statutes cited

Key holdings

Practitioner summary

Leave to amend a pleading is addressed to the sound discretion of the trial court and will not be reversed absent an abuse of discretion; leave should be freely given when justice requires, but may be denied for undue delay, bad faith, or dilatory motive. NRCP 15(a); Stephens v. Southern Nevada Music Co., 89 Nev. 104, 105-06, 507 P.2d 138, 139 (1973); Connell v. Carl's Air Conditioning, 97 Nev. 436, 439, 634 P.2d 673, 675 (1981). The court affirmed denial of Janet's motion to amend her amended answer, finding substantial evidence that she was dilatory (the premarital agreement exhibits listed KNC and RDC separately and she was represented by counsel), that the motion came on the eve of trial in a multimillion-dollar case, and that both parties relied on the agreement's validity, including Gary's retention of drafting counsel who risked disqualification under SCR 178 had validity been contested. Under the Uniform Premarital Agreement Act, codified in NRS Chapter 123A, the burden of proving an agreement unenforceable rests on the party challenging it. NRS 123A.080. Because Janet's amended answer admitted the agreement's validity, the district court was under no obligation to independently determine its validity or substantive fairness. The court distinguished the fiduciary-disclosure principle of Fick v. Fick, 109 Nev. 458, 464, 851 P.2d 445, 450-51 (1993), as unnecessary given the admission. On attorney's fees, a timely notice of appeal generally divests the district court of jurisdiction. Rust v. Clark Cty. School District, 103 Nev. 686, 688, 747 P.2d 1380, 1382 (1987). The district court erred in characterizing the divorce decree as interlocutory, see NRS 125.130(1), but retained jurisdiction to rule on fees because that issue was collateral to and independent of the matters on appeal and did not affect the merits. Bongiovi v. Bongiovi, 94 Nev. 321, 322, 579 P.2d 1246, 1247 (1978). The court held Gary was entitled to fees under the agreement's indemnity provision because Janet's motion to amend was an attempt to set aside or nullify the agreement, and that the $19,580 award, though large, was not an abuse of discretion given the detailed billing. Nelson v. Peckham Plaza Partnerships, 110 Nev. 23, 26, 866 P.2d 1138, 1139-40 (1994).

In plain language

Dr. Gary Kantor, a kidney specialist with substantial business interests, and Janet Kantor signed a premarital agreement before marrying in 1990. The agreement generally made each spouse's income separate property, but it said that salary or fees Gary received for his personal medical services (which came through his professional corporation, KNC) would be community property. Gary also owned dialysis-center businesses (RDC) that could not bill for physician services. When Gary filed for divorce in 1997, Janet's first amended answer admitted the premarital agreement was valid. Shortly before trial, after her accounting expert suggested Gary's income from the dialysis centers (over $5 million) should also count as community property, Janet asked the court for permission to amend her answer again to challenge the agreement's validity. The district court refused. After trial, it ruled the dialysis-center income was not community property under the agreement, granted the divorce, and later awarded Gary about $19,580 in attorney's fees under an indemnity clause in the agreement. Janet appealed. The Supreme Court affirmed. It held the district court did not abuse its discretion in denying leave to amend, because Janet was dilatory, filed on the eve of trial, and both parties had relied on the agreement's validity (including Gary's continued use of the attorneys who drafted it, who might have been disqualified if validity were challenged). Because Janet had admitted the agreement was valid, the court was not required to independently test its fairness. The Court also held the district court kept jurisdiction to award attorney's fees even after Janet's appeal, because fees were a collateral issue, and that Gary was entitled to fees under the agreement's indemnity provision because Janet's motion was an attempt to nullify the agreement. Although the Court expressed surprise at the size of the fee award, it found no abuse of discretion.