KERLEY VS. KERLEY (DIVORCE PROPERTY & ALIMONY)

Statutes cited

Key holdings

Practitioner summary

Per Curiam. In these consolidated divorce appeals, the court reversed the apportionment of the parties' real property and affirmed the award of rehabilitative alimony. Malmquist apportionment. Reviewing divorce determinations for substantial evidence and abuse of discretion while requiring application of the correct legal standard (Williams v. Waldman, 108 Nev. 466, 471, 836 P.2d 614, 617-18 (1992)), the court held the district court erred in applying the Malmquist v. Malmquist, 106 Nev. 231, 792 P.2d 372 (1990), formulae to the Verde Way property. A Malmquist apportionment is available only where separate property has increased in value through community efforts or community property value has been enhanced by separate-property contributions. Here, after finding the property community, the district court apportioned it without first finding either a transmutation back to separate property or a substantial enhancement in value by separate-property contributions; indeed, it found the evidence of separate-property remodeling 'inconclusive and speculative' and any such expenditures 'a gift to the community.' Because separate contributions did not add substantial value, the property was removed from Malmquist apportionment. The court reversed the $32,150 award and remanded for redistribution consistent with the opinion and NRS 125.150 (see also McNabney v. McNabney, 105 Nev. 652, 782 P.2d 1291 (1989)). Alimony. District courts enjoy wide discretion in awarding alimony (Fick v. Fick, 109 Nev. 458, 464, 851 P.2d 445, 450 (1993)), which under NRS 125.150(1) must be 'just and equitable' (Heim v. Heim, 104 Nev. 605, 609, 763 P.2d 678, 680 (1988)). Given findings that Thomas could generate income as a licensed contractor and that Nancy needed support because she was not gainfully employed during most of the marriage at his request, the court found no abuse of discretion and affirmed the temporary rehabilitative alimony. (This opinion was subsequently modified on rehearing, Kerley v. Kerley, 112 Nev. 36, 910 P.2d 279 (1996).)

In plain language

Nancy and Thomas Kerley divorced after marrying in 1981. The main dispute was over a house on Verde Way in Gardnerville that Thomas had owned before the marriage. In 1982 he deeded it to himself and Nancy as joint tenants; in 1983 the couple signed a quitclaim deed putting it back in Thomas's name only. The trial court treated the house as community property and used the 'Malmquist' formula (a method for reimbursing separate-property or community-property contributions when the two are mixed in a home) to give Nancy $32,150. It also awarded Nancy $250 per month in rehabilitative alimony for two years. Both sides appealed, and the appeals were consolidated. On the property, the Supreme Court reversed. The Malmquist formula applies only in two situations: when separate property has increased in value through community efforts, or when community property's value has been enhanced by separate-property contributions. Neither happened here. The trial court found that whatever separate funds Thomas may have spent remodeling were 'inconclusive and speculative' and were 'a gift to the community' - meaning no substantial enhancement of value by separate contributions. Without that predicate, the property could not be apportioned under Malmquist, so the Court reversed the $32,150 award and remanded for a proper redistribution under NRS 125.150. On alimony, the Court affirmed. District courts have wide discretion in awarding alimony, which must be 'just and equitable' under NRS 125.150(1). The trial court found Thomas could generate income through his contractor's license and that Nancy needed support because, at Thomas's request, she had not worked during most of the marriage. Thomas failed to show the award was anything other than just and equitable, so it stood. (Note: this decision was later modified on rehearing, which corrected the separate treatment of the community-property presumption; see the companion rehearing opinion at 112 Nev. 36.)