PATTERSON VS. PATTERSON

Statutes cited

Key holdings

Practitioner summary

This is an appeal from the denial of an NRCP 60(b) motion to set aside a stipulated divorce decree. The Court of Appeals reviewed the district court's ruling for abuse of discretion, noting that it "will not disturb the district court's decision unless it is unsupported by substantial evidence . . . or disregards established legal principles." Willard v. Berry-Hinckley Indus., 139 Nev., Adv. Op. 52, 539 P.3d 250, 255 (2023). The court first noted that Bruce did not renew on appeal his arguments about whether contract-formation elements were satisfied under the settlement, deeming those waived. Powell v. Liberty Mut. Fire Ins. Co., 127 Nev. 156, 161 n.3, 252 P.3d 668, 672 n.3 (2011). Review was limited to the post-judgment motion arguments. Fraud upon the court (NRCP 60(d)(3)). Although Bruce cited NRCP 60(b)(1), the court characterized his claim that original counsel settled without his consent as falling under NRCP 60(d)(3), citing NC-DSH, Inc. v. Garner, 125 Nev. 647, 652, 218 P.3d 853, 857 (2009) ("[a] party is not bound by the label he puts on his papers"). Under NC-DSH, "when a lawyer fraudulently enters into a settlement agreement on behalf of his client without authority, the lawyer commits a fraud upon the court that provides a basis for setting aside a final judgment." Id. at 655-57, 218 P.3d at 859-60. The movant bears a "heavy burden" of establishing fraud upon the court by "clear and convincing evidence." Id. at 657, 218 P.3d at 860-61. The court found Bruce knew of the settlement as early as May 27, 2021 (per his own declaration), failed to object at the enforcement hearing, and raised the consent argument only post-decree without supporting evidence, thus failing to meet his burden. The court further held that while NC-DSH requires "a proper hearing" before granting NRCP 60(d)(3) relief, no such hearing is required before denial, citing Hansen v. Aguilar, No. 64239, 2016 WL 3136154, at *2 n.2 (Nev. Ct. App. May 25, 2016). Bruce's separately raised NRPC 1.7(a)(2) conflict-of-interest theory was deemed waived for failure to raise it below. Old Aztec Mine, Inc. v. Brown, 97 Nev. 49, 52, 623 P.2d 981, 983 (1981). NRCP 60(b)(1) — equalization payment. Relief under NRCP 60(b)(1) is available where a judgment resulted from "mistake, inadvertence, surprise, or excusable neglect." The correspondence showed Bruce's counsel offered to increase the equalization payment to $150,000 in lieu of indemnification, reflecting the parties' intent to divide community property and debts equally, which the district court accepted. See NRS 125.150(1)(b). Because both Bruce and his counsel knew of the ballooning accident (September 2019) and associated lawsuits during the settlement negotiations, the circumstances could not constitute mistake, inadvertence, surprise, or excusable neglect. Bruce relied only on bald assertions and a self-serving declaration, insufficient under Clawson v. Lloyd, 103 Nev. 432, 434-35, 743 P.2d 631, 633 (1987), and offered no cogent argument, see Edwards v. Emperor's Garden Rest., 122 Nev. 317, 330 n.38, 130 P.3d 1280, 1288 n.38 (2006). An ineffective-assistance theory was unavailing in a civil family-law action. Garcia v. Scolari's Food & Drug, 125 Nev. 48, 57 n.7, 200 P.3d 514, 520 n.7 (2009); Nicholson v. Rushen, 767 F.2d 1426, 1427 (9th Cir. 1985). NRCP 60(b)(1) — omitted debts. Bruce asserted $188,000 in omitted community debts without documentation beyond his self-serving declaration. See Clawson, 103 Nev. at 434-35, 743 P.2d at 633. The district court recognized its authority under NRS 125.150(3) to adjudicate omitted community property or liability "omitted from the decree or judgment as the result of fraud or mistake," reasoned that Bruce's motion was primarily directed at attacking the decree rather than developing the omitted-debts issue, denied that portion, and directed Bruce to file a separate motion. The court found no abuse of discretion. Doan v. Wilkerson, 130 Nev. 449, 453, 327 P.3d 498, 501 (2014), superseded by NRS 125.150(3) on other grounds, as recognized in Kilgore v. Kilgore, 135 Nev. 357, 364-65, 449 P.3d 843, 849 (2019). Evidentiary hearing arguments. The court rejected Bruce's contention that Blanco v. Blanco, 129 Nev. 723, 311 P.3d 1170 (2013), required an evidentiary hearing, distinguishing Blanco because here the district court was asked to consider NRCP 60(b) relief after already having distributed community property and debts pursuant to the parties' agreement, and because Bruce failed to provide meaningful argument and supporting evidence.

In plain language

Bruce and Andrea Patterson were getting divorced. During the divorce, their lawyers exchanged letters and emails working out how to divide the couple's shared property and debts. Bruce's lawyer eventually emailed Andrea's lawyer saying Bruce agreed to all the settlement terms except one about the couple's IRS tax debt, and suggested that the tax issue be handled at a trial while the rest of the terms were locked in by agreement. The trial never happened. Instead, the parties filed paperwork canceling the trial because they were "finalizing the terms of their divorce," and the court accepted it. Later, Bruce said he changed his mind about one of the already-agreed terms. Andrea then asked the court to enforce the settlement. The court held a hearing and found that, except for the IRS tax debt issue, the parties had agreed to a set of terms. The court enforced those agreed terms and set a separate evidentiary hearing to deal with the tax debt. The parties then filed more paperwork agreeing to split their personal IRS tax debt for 2016 and 2017 equally, canceling that hearing too. When Andrea prepared the final divorce decree, Bruce got a new lawyer and refused to sign it, saying he had not known about the settlement and had concerns about its terms and about assets and debts he believed were left out. Andrea submitted the decree without his signature, and the court entered it. Bruce then asked the court to undo essentially the entire divorce decree. He made three main arguments: (1) his earlier lawyer had agreed to the settlement without his permission; (2) the decree left out some assets and about $188,000 in debts; and (3) the decree required him to make what he called an "absurd" $150,000 "equalization payment" (a payment one spouse makes the other to even out the split of property) even though, he claimed, there was no marital property and the money did not exist. The district court denied his motion, and Bruce appealed. The Court of Appeals affirmed. On the claim that his old lawyer acted without his consent, the court explained that under Nevada Supreme Court precedent, a lawyer who fraudulently settles a case without authority commits a "fraud upon the court" that can justify setting aside a judgment. But the court found Bruce knew about the settlement as early as May 27, 2021, when he signed a sworn declaration, and never complained at that time or at the enforcement hearing that his lawyer acted without permission. He raised the objection only after the decree was entered and offered no supporting evidence. Because proving fraud upon the court requires "clear and convincing evidence," and Bruce offered none, the court found no abuse of discretion. The court also explained that a hearing is required before granting such relief, but not before denying it. On the $150,000 equalization payment, the court noted that the emails showed Bruce's own lawyer had offered to raise the payment to $150,000 in exchange for Andrea giving up an indemnification demand, and that both Bruce and his lawyer already knew about the hot air balloon business accident and related lawsuits when they negotiated. Because Bruce knew about these circumstances at the time, they could not amount to the "mistake, inadvertence, surprise, or excusable neglect" required to reopen a judgment under NRCP 60(b)(1). He provided only a self-serving declaration and no documentation. On the roughly $188,000 in allegedly omitted debts, the court found Bruce's claims vague and unsupported. The district court had told Bruce it could handle omitted assets and debts through a separate motion under NRS 125.150(3) and invited him to file one if he had a valid claim. The Court of Appeals found no abuse of discretion in that approach.