LOCKEN VS. LOCKEN (DIVORCE PROPERTY & ALIMONY)

Statutes cited

Key holdings

Practitioner summary

Despite the family caption, this was a father-son real property dispute resolved on constructive trust and attorney's fees grounds; the court affirmed in part and reversed in part. To satisfy a third party's debt, the respondent father accepted two land patent applications; because the Desert Land Act, 43 U.S.C. sec. 321, barred more than one entry in his own name, the parties orally agreed to place one application in the son's name, with the father to improve the land and the son to convey it after the patent issued. The father performed; the son refused to convey. Constructive trust and statute of frauds: NRS 111.205(1) requires a writing to create or transfer an interest in land, but subsection (2) preserves trusts arising by implication or operation of law. That exception permits a constructive trust to avert the fraud the statute is designed to prevent. Davidson v. Streeter, 68 Nev. 427, 234 P.2d 793 (1951). A constructive trust is a remedial device holding a legal-title holder to be trustee for another entitled in good conscience. Danning v. Lum's, Inc., 86 Nev. 868, 478 P.2d 166 (1970). It arises where (1) a confidential relationship exists; (2) retention of legal title would be inequitable; and (3) the trust is essential to the effectuation of justice. Schmidt v. Merriweather, 82 Nev. 372, 418 P.2d 991 (1966). All elements were present given the confidential father-son relationship and the son's abuse of it. Clean hands / illegality: The son's unclean-hands argument (based on the father's patent-application affidavit disclaiming interest) failed because the alleged misconduct was not directed against the son and did not affect the transaction between them, and, absent intent to deceive, did not constitute unclean hands. McKelvie v. Hackney, 360 P.2d 746 (Wash. 1961); Xerox Corp. v. Dennison Mfg. Co., 322 F. Supp. 963 (S.D.N.Y. 1971); see Loughran v. Loughran, 292 U.S. 216 (1933). Even assuming the agreement was illegal or against public policy, non-enforcement would not apply where the public interest could not be restored, no serious moral turpitude was involved, the son bore greater moral fault, and the rule would unjustly enrich the son. Magill v. Lewis, 74 Nev. 381, 333 P.2d 717 (1958). Attorney's fees: Under the American rule, fees are unavailable absent a statute, rule, or contract. Consumers League of Nevada v. Southwest Gas Corp., 94 Nev. 153, 576 P.2d 737 (1978). NRS 18.010 permitted a prevailing plaintiff's fees only where recovery did not exceed $10,000; the property's value exceeded $50,000, so the fee award was reversed and remanded.

In plain language

This case was a property dispute between a father (Hugh Locken) and his son (Lawrence Locken) over ownership of land - not a divorce, despite the "Locken v. Locken" caption. The father had agreed to accept two land patent applications to satisfy a debt. Because federal law (the Desert Land Act) barred him from making more than one land entry in his own name, the father and son verbally agreed to put one application in the son's name; the father would improve the land, and once the patent issued, the son would deed the property to the father. The father did his part - spending considerable time, effort, and money improving the land - but the son refused to convey the property. The district court ruled that the son held the land in a "constructive trust" for his father (a court-created remedy that treats the legal owner as holding property for the person truly entitled to it), ordered the son to convey the land, and awarded the father attorney's fees. The Nevada Supreme Court affirmed the constructive trust but reversed the attorney's fees. On the constructive trust, the court held that the statute of frauds (which normally requires land agreements to be in writing) did not bar the trust, because the statute expressly allows trusts arising by operation of law. A constructive trust arises where (1) a confidential relationship exists, (2) the holder's retention of title would be inequitable, and (3) the trust is essential to justice - all present here, given the close father-son relationship and the son's abuse of it. The court rejected the son's "unclean hands" argument (based on the father's affidavit stating he had no interest in the parcel), because that misstatement was not directed at the son and, absent intent to deceive, did not amount to unclean hands; even an agreement that was arguably illegal would not shield the son from having to right his own subsequent wrong. On attorney's fees, the court reversed. Nevada follows the rule that attorney's fees are not awarded without a statute, rule, or contract. The statute the father could have relied on allowed fees only to a prevailing party recovering $10,000 or less, and the property here was worth over $50,000 - far exceeding the statutory limit - so the fee award was improper.