MAMONE VS. MAMONE

Statutes cited

Key holdings

Practitioner summary

**Standard of review.** The court reviews decisions made in a divorce decree for abuse of discretion, and will uphold the district court's determinations if supported by substantial evidence. Devries v. Gallio, 128 Nev. 706, 709, 290 P.3d 260, 263 (2012). Witness credibility is not reweighed on appeal. Castle v. Simmons, 120 Nev. 98, 103, 86 P.3d 1042, 1046 (2004). **Apportionment framework (Pereira vs. Van Camp).** Rents and profits from separate property are separate, but earnings of either spouse during coverture are community. Neuhoff, 94 Nev. at 25-26, 573 P.2d at 1173. Where a spouse devotes time, labor, and skill to increasing separate-property value, these principles conflict, and Nevada applies either Pereira or Van Camp. Johnson v. Johnson, 89 Nev. 244, 246, 510 P.2d 625, 626 (1973). Van Camp applies where the increase is primarily due to external factors or the character of the property itself, allocating to the community an annual sum equal to reasonable compensation for the owner-spouse's services, with the balance treated as separate. See Schulman v. Schulman, 92 Nev. 707, 715, 558 P.2d 525, 530 (1976); Neuhoff, 94 Nev. at 26, 573 P.2d at 1173. Pereira applies where the increase is primarily due to the skill and effort of one or both spouses, allocating a fair return on the owner-spouse's initial investment as separate property and the excess to the community. Neuhoff, 94 Nev. at 26, 573 P.2d at 1173; see In re Marriage of Dekker, 21 Cal. Rptr. 2d 642, 649 (Ct. App. 1993). "The preferred method appears to be that suggested in Pereira unless the owner of the separate estate can establish that a different method of allocation is more likely to accomplish justice." Neuhoff, 94 Nev. at 26, 573 P.2d at 1173. Courts are not bound to either method and may select whichever achieves substantial justice. Johnson, 89 Nev. at 247, 510 P.2d at 626-27. **Application to SCM.** Substantial evidence supported the district court's finding that SCM's increase in value during the marriage was due primarily to Shane's effort, skill, and labor, including Shane's own concession that Redwood would not have awarded the projects absent his efforts, corroborated by Charisse's testimony. The court held the district court acted within its discretion in applying Pereira. **Community expenses.** There is a rebuttable presumption that property acquired by either spouse after marriage is community property, Kelly v. Kelly, 86 Nev. 301, 309, 468 P.2d 359, 364 (1970), and a presumption that community expenses are paid from community property, Beam v. Bank of Am., 490 P.2d 257, 263 (Cal. 1971). Under Cord v. Cord, 98 Nev. 210, 214, 644 P.2d 1026, 1029 (1982), separate property used to pay community expenses "when community assets are exhausted" entitles the separate estate to reimbursement; but where a spouse makes a conscious choice to use separate property rather than available community property, the use is a gift to the community. Robison v. Robison, 100 Nev. 668, 671, 691 P.2d 451, 454 (1984). The record showed no exhaustion of community assets—Shane's $1,237,000 in reported W-2 wages during the marriage were community property, see Forrest v. Forrest, 99 Nev. 602, 604, 668 P.2d 275, 277 (1983), and would satisfy the community expenses. The district court acted within its discretion in refusing to deduct community expenses from the community interest in SCM. **The $37,500 withdrawal (reversed).** Under NRS 125.150(1)(b), the district court "[s]hall, to the extent practicable, make an equal disposition of the community property of the parties." Under Hybarger v. Hybarger, 103 Nev. 255, 257-58, 737 P.2d 889, 890-91 (1987), where an owner-spouse withdraws separate funds from a separate-property business to acquire other separate property, the district court errs by failing to reduce the owner-spouse's remaining separate-property interest by the withdrawn amount before applying Pereira. Here, Shane withdrew $37,500 from SCM to repay his cousin for his one-half interest in 200 Citrus LLC (undisputed separate property). The district court instead increased Charisse's community interest and decreased Shane's community interest by that amount. Correctly applied, Shane's separate-property interest of $1,790,000 reduces to $1,752,500, yielding a community interest of $547,500 ($2,300,000 − $1,752,500) rather than $510,000. The court reversed this portion of the decree. **SEP IRA.** Retirement benefits earned during marriage are community property subject to equal division. Walsh v. Walsh, 103 Nev. 287, 288, 738 P.2d 117, 118 (1987); Kilgore v. Kilgore, 135 Nev. 357, 360, 449 P.3d 843, 846 (2019). Shane began contributing in 2015, the year of the marriage, and contributed throughout. His argument that early 2015 contributions were separate failed because he provided no evidence of the precise timing and amounts, thus failing to overcome the community-property presumption. Kelly, 86 Nev. at 309, 468 P.2d at 364. The court upheld the $93,000 award to Charisse. **Vehicles.** Because neither party provided testimony establishing the character of the retained vehicles, and Shane did not claim them as separate on his general financial disclosure form, the district court properly presumed them community property. NRS 125.150(1)(b); Forrest, 99 Nev. at 605, 668 P.2d at 278. The court affirmed. **Tax overpayment.** Though Nevada had not specifically decided whether a joint-return tax overpayment is divided equally as community property, the court looked to United States v. Elam, 112 F.3d 1036, 1037-38 (9th Cir. 1997) (applying California law), and noted other jurisdictions treating tax refunds as marital property, Phillips v. Phillips, 351 S.E.2d 178, 180 (S.C. Ct. App. 1986); Reyes v. Reyes, 458 S.W.3d 613, 619 (Tex. App. 2014). The $206,625 overpayment was presumed community property, and Shane presented insufficient evidence and no cogent argument to overcome the presumption. Forrest, 99 Nev. at 605, 668 P.2d at 278. Affirmed. **Attorney fees.** An order awarding attorney fees is appealable as a special order made after final judgment and must be appealed within 30 days of service of notice of entry. Winston Prods. Co. v. DeBoer, 122 Nev. 517, 525, 134 P.3d 726, 731 (2006). Shane failed to appeal the July 8, 2021, fee order despite being permitted to contest the fee memorandum, and failed to provide relevant authority or cogent argument. Edwards v. Emperor's Garden Rest., 122 Nev. 317, 330 n.38, 130 P.3d 1280, 1288 n.38 (2006). The court declined to consider the argument. **Charisse's SEP IRA discrepancy.** The court declined Charisse's request to remand for recalculation of her interest in the SEP IRA based on Shane's post-trial disclosure of a value in excess of $500,000, because she filed no cross-appeal. Ford v. Showboat Operating Co., 110 Nev. 752, 755, 877 P.2d 546, 548 (1994). The court offered no opinion as to the availability of any other remedy. (The supreme court had previously denied Charisse's motion for limited remand in October 2022.)

In plain language

This is a divorce case centered on how to divide property between a husband and wife when one spouse owns a business he started before the marriage. Shane Mamone founded a construction company, SCM, in 2000, years before he married Charisse in 2015. During the marriage, SCM grew and landed several large, multimillion-dollar contracts, largely through Shane's continued work, reputation, and business relationships. When the couple divorced, the central financial question was: how much of the increase in the business's value during the marriage belongs to the "community" (shared property both spouses can claim) versus Shane's "separate property" (what he brought into the marriage and keeps for himself)? Nevada courts use two competing methods to answer that question. One method, called Van Camp, tends to apply when a business grows mostly because of outside factors (like a booming economy). Under Van Camp, the community gets credited only with the fair value of the working spouse's labor, and the rest stays separate property. The other method, called Pereira, tends to apply when the growth comes mostly from the working spouse's own skill and effort. Under Pereira, the owner spouse keeps his original investment plus a fair rate of return, and any additional growth is shared as community property. The trial court used the Pereira method, finding that SCM's growth was due largely to Shane's own efforts. Shane even admitted at trial that the big contracts would not have come his way without the work he put in during the marriage. The Court of Appeals agreed there was enough evidence to support that choice, so it upheld the use of Pereira. Shane raised several other arguments. He said the community's share of the business should be reduced by all the household expenses paid during the marriage, some of which came from his separate money. The court rejected this because the couple's community money was never used up (Shane alone reported over $1.2 million in wages during the marriage that counted as community property). Under Nevada law, when a spouse voluntarily uses separate money to pay shared expenses while shared money is still available, that use is treated as a gift to the community, not something that must be paid back. The court did agree with Shane on one point. During the marriage, Shane took $37,500 out of SCM to repay his cousin for his half-interest in a separate rental property (200 Citrus LLC). The trial court handled this by increasing Charisse's share of the business by that amount. The Court of Appeals said the correct approach was instead to subtract the $37,500 from Shane's separate-property interest in the business before calculating the community share. Doing the math the correct way, the community interest in SCM should have been $547,500, not $510,000. Because this was a calculation error, the court reversed that part of the decree and sent it back to be corrected. On the retirement account (the SEP IRA), Shane argued the whole thing, or at least his early 2015 contributions, should be his separate property. But he began contributing the same year he married, and he gave no clear evidence about exactly when and how much he contributed. Because Nevada presumes property acquired after marriage is community property, and Shane didn't overcome that presumption, the court upheld splitting the account, with Charisse receiving half ($93,000). The court also upheld treating certain vehicles as community property (Shane didn't provide evidence they were separate) and dividing the couple's $206,625 tax overpayment equally as community property. Finally, Shane challenged having to pay 64 percent of Charisse's attorney fees. The court declined to consider this because Shane never filed a separate, timely appeal from the later order that actually awarded the fees, and he offered no supported legal argument that the award was an abuse of discretion. Charisse separately argued that the SEP IRA turned out to be worth far more than the roughly $186,000 Shane described at trial (a post-trial disclosure showed over $500,000). The court declined to address this because Charisse never filed a cross-appeal, which is required to change the judgment in her favor.