KOGOD VS. CIOFFI-KOGOD C/W 71994

Statutes cited

Key holdings

Practitioner summary

Standard of review. The court reviews divorce-decree decisions, including alimony and community property dispositions, for abuse of discretion. Buchanan v. Buchanan, 90 Nev. 209, 215, 523 P.2d 1, 5 (1974); Wolff v. Wolff, 112 Nev. 1355, 1359, 929 P.2d 916, 919 (1996); Shydler v. Shydler, 114 Nev. 192, 196, 954 P.2d 37, 39 (1998). Alimony — purpose and scope. NRS 125.150(1)(a) authorizes alimony "as appears just and equitable," and NRS 125.150(9) lists eleven factors the court must consider. See DeVries v. Gallio, 128 Nev. 706, 711-13, 290 P.3d 260, 264-65 (2012). Marital fault may not be considered. Rodriguez v. Rodriguez, 116 Nev. 993, 999, 13 P.3d 415, 419 (2000). The court surveyed the historical foundations of alimony (citing Manby v. Scott (1663) 86 Eng. Rep. 781, 784 (Exch.); In re application of Phillips, 43 Nev. 368, 187 P. 311 (1920); Wilde v. Wilde, 2 Nev. 306 (1866); Applebaum v. Applebaum, 93 Nev. 382, 566 P.2d 85 (1977); Foy v. Estate of Smith, 58 Nev. 371, 81 P.2d 1065 (1938); Greinstein v. Greinstein, 44 Nev. 174, 191 P. 1082 (1920); Lake v. Bender, 18 Nev. 361, 7 P. 74 (1884); Gilman v. Gilman, 114 Nev. 416, 956 P.2d 761 (1998)) and held that alimony can be just and equitable both to support the economic needs of a spouse and to compensate for economic losses from the marriage and divorce, including to equalize post-divorce earnings or help maintain the marital standard of living. The need-based factors include NRS 125.150(9)(a), (b), (e), (j), and (k); the loss-based factors include NRS 125.150(9)(d), (e), (f), (g), (h), and (i). Application — alimony reversed. The district court awarded $18,000/month for nine years, reduced to a lump sum of $1,630,292, while expressly recognizing the case was not need-based. The majority held this was an abuse of discretion. Income disparity alone does not support alimony; equalization is appropriate only where there is economic need, the marriage caused the disparity, or one spouse cannot maintain the marital standard of living while the other can. See Shydler, 114 Nev. at 199, 954 P.2d at 41; Gardner v. Gardner, 110 Nev. 1053, 1058, 881 P.2d 645, 648 (1994). Gabrielle's cash assets would passively earn $500,000-$800,000 annually, far exceeding her roughly $16,000 monthly expenses; the district court should have weighed that passive income under NRS 125.150(9)(j). Distinguishing Shydler, Sprenger v. Sprenger, 110 Nev. 855, 878 P.2d 284 (1994), Wright v. Osburn, 114 Nev. 1367, 970 P.2d 1071 (1998), and Rutar v. Rutar, 108 Nev. 203, 827 P.2d 829 (1992), the court found Gabrielle could maintain her marital standard of living from the property division alone and her career did not suffer from the marriage. Citing Heim v. Heim, 104 Nev. 605, 763 P.2d 678 (1988), and persuasive authority including Lang v. Lang, 425 N.W.2d 800 (Mich. Ct. App. 1988); Italiano v. Italiano, 873 So. 2d 558 (Fla. Dist. Ct. App. 2004); and Billion v. Billion, 553 N.W.2d 226 (S.D. 1996), the court reversed the alimony award. Community property division — dissipation framework. Under NRS 125.150(1)(b), unequal disposition requires a "compelling reason." Dissipation can be such a reason. Lofgren v. Lofgren, 112 Nev. 1282, 1283, 926 P.2d 296, 297 (1996). Wheeler v. Upton-Wheeler, 113 Nev. 1185, 1190, 946 P.2d 200, 203 (1997)'s "adverse economic impact" requirement was distinguished as concerning physical abuse, not direct community spending on a paramour. (a) Extramarital affairs ($1,853,212): Affirmed as dissipation, with extensive persuasive authority including Neely v. Neely, 563 P.2d 302 (Ariz. Ct. App. 1977); Rabbath v. Farid, 4 So. 3d 778 (Fla. Dist. Ct. App. 2009); In re Marriage of Meadow, 628 N.E.2d 702 (Ill. App. Ct. 1993); Omayaka v. Omayaka, 12 A.3d 96 (Md. 2011); McNair v. McNair, 987 S.W.2d 4 (Mo. Ct. App. 1998); Basile v. Basile, 605 N.Y.S.2d 133 (App. Div. 1993); and Spruill v. Spruill, 624 S.W.2d 694 (Tex. Ct. App. 1981). (b) Family gifts ($72,200): Affirmed. Gifts violating an injunction or that depart materially from the established marital pattern constitute dissipation. See Lofgren; Robinette v. Robinette, 736 S.W.2d 351 (Ky. Ct. App. 1987); Decker v. Decker, 435 S.E.2d 407 (Va. Ct. App. 1993); Kleet v. Kleet, 264 S.W.3d 610 (Ky. Ct. App. 2007). (c) "Potential community waste not elsewhere classified" ($2,162,451): Reversed. The district court erred by burdening Dennis with proving a marital purpose for everyday expenditures absent a reasonable inference of waste. Distinguishing dissipation from disproportionate consumption, the court relied on Putterman v. Putterman, 113 Nev. 606, 609, 939 P.2d 1047, 1048-49 (1997). Termination of community. Under NRS 123.220 and Rust v. Clark Cty. Sch. Dist., 103 Nev. 686, 689, 747 P.2d 1380, 1382 (1987) (citing NRCP 58(c)), an oral pronouncement of divorce does not terminate the community; the written decree does. See also Gojack v. Second Judicial Dist. Court, 95 Nev. 443, 445, 596 P.2d 237, 239 (1979). Remanded for the district court to address community accumulation and waste between the oral pronouncement and the written decree. Sanctions for joint preliminary injunction violations. EDCR 7.60(b)(5) allows sanctions for failures to comply "without just cause." The injunction's prohibition on spending "except in the usual course of business or for the necessities of life" was not sufficiently clear and unambiguous given the parties' wealth to support per-transaction sanctions. See Cunningham v. Eighth Judicial Dist. Court, 102 Nev. 551, 559-60, 729 P.2d 1328, 1333-34 (1986). The proper remedy for excess spending in violation of the injunction is an unequal disposition of community property. The $19,500 sanction was reversed. Costs. A district court may not award costs absent statutory, rule, or contractual authority. U.S. Design & Constr. Corp. v. Int'l Bhd. of Elec. Workers, Local 357, 118 Nev. 458, 462, 50 P.3d 170, 173 (2002). Neither NRS 125.141 (offer of judgment) nor NRS 18.020 (prevailing party) applied. Expert fees in excess of $1,500 require findings under NRS 18.005(5). See Khoury v. Seastrand, 132 Nev. 520, 541, 377 P.3d 81, 95 (2016). The $75,650 award was reversed. Dissent. Justice Hardesty, joined by Justice Stiglich, would affirm the alimony award, arguing the district court properly applied the NRS 125.150(9) factors, expressly considered Gabrielle's income-producing assets, and followed Shydler's principle that a spouse should not be required to deplete his or her share of community property for support, citing also Sargeant v. Sargeant, 88 Nev. 223, 228-29, 495 P.2d 618, 621-22 (1972).

In plain language

Dennis and Gabrielle Kogod married in New York in 1991 and eventually settled in Las Vegas. Dennis rose to become Chief Operating Officer of a Fortune 500 healthcare company, earning an average of nearly $14 million per year, while Gabrielle worked part-time as a nurse consultant earning about $55,000 per year. Unbeknownst to Gabrielle, Dennis had also formed a long-term second relationship in southern California, fathered twin daughters with another woman, and supported that household with marital funds. Gabrielle filed for divorce in 2013. By the time the district court entered its decree in 2016, the marital estate was worth roughly $47 million, with about $35 million in community property left to divide. The district court did several things in the decree. It found that Dennis had wasted (or "dissipated") community money on his extramarital relationships, on gifts to his family, and on personal spending that exceeded what he had reported on his financial disclosures. Because of that, it gave Gabrielle a larger share of the community property than Dennis. It also awarded Gabrielle alimony in a lump sum of $1,630,292, even while acknowledging Gabrielle did not actually need alimony to support herself. The court further sanctioned Dennis $19,500 for transactions over $10,000 it considered violations of an automatic order forbidding either spouse from spending money "except in the usual course of business or for the necessities of life," and required Dennis to pay $75,650 of the cost of Gabrielle's forensic accountant. In the end, Gabrielle received nearly $21 million and Dennis received just under $14 million. On appeal, the Nevada Supreme Court took up the case en banc and reached several conclusions. On alimony, the court took the opportunity to clarify Nevada law: alimony does not have to be based on financial need; it can also be awarded to compensate a spouse for economic losses caused by the marriage and divorce, such as a lower earning capacity from sacrifices made for the marriage, or the inability to maintain the standard of living the couple shared. But on the facts here, the court reversed the alimony award. Gabrielle had received mostly cash assets in the property division, which she conceded would generate between $500,000 and $800,000 a year in passive income—far more than enough to cover her roughly $16,000 in monthly expenses and to maintain her marital standard of living. With no real economic need and no loss in earning capacity from the marriage (the district court had found her nursing career did not suffer from the moves), the majority held there was no proper basis for awarding alimony. On the unequal property division, the court agreed with the district court that the roughly $1.85 million Dennis spent on extramarital affairs was dissipation justifying an unequal split, and that approximately $72,200 in non-routine gifts to family during the divorce was also dissipation. But it reversed the portion of the unequal split based on $2,162,451 of Dennis's general overspending categorized by Gabrielle's accountant as "potential community waste not elsewhere classified." The court explained that ordinary overconsumption by a high-earning spouse, without evidence the spending was directed against the marriage, is not the same as dissipation. The court also held that the community estate did not end when the judge orally pronounced the parties divorced; under Nevada law, only the written decree (entered six months later) terminated it. The case was sent back so the district court could account for community property accumulated and any waste during that interval. The court reversed the $19,500 in sanctions, explaining that the preliminary injunction's "usual course of business" language was too vague to support contempt-style sanctions for these wealthy parties; if Dennis's spending was excessive, the right remedy was an unequal division of property, not a per-transaction fine. Finally, it reversed the $75,650 in costs awarded to Gabrielle, because the district court had not identified any statute, rule, or contract authorizing the award and had not justified expert fees above the $1,500 statutory cap. Two justices, Hardesty and Stiglich, dissented from the alimony reversal. They would have upheld the alimony award, arguing the district court carefully applied the statutory factors, considered the income-producing assets Gabrielle received, and properly relied on Shydler v. Shydler for the principle that a spouse should not be forced to deplete a community property share for support.