PELLETIER VS. PELLETIER (DIVORCE PROPERTY & ALIMONY)

Key holdings

Practitioner summary

Although the mother's tort claim was improperly pleaded (she was not a party under NRCP 13(b) and had not intervened under NRCP 24), the court elected to resolve the conversion claim on the record rather than require a fresh action. Substantively, the court held there is no presumption that a non-party's property becomes the divorcing spouses' community property merely by commingling. Conversion is established by an exercise of ownership rights inconsistent with the owner's, such as taking possession, selling the property, and pocketing the proceeds (Wantz v. Redfield, 74 Nev. 196, 326 P.2d 413 (1958)), and is not excused by good faith or lack of knowledge (Bader v. Cerri, 96 Nev. 352, 609 P.2d 314 (1980)). Given the trial court's finding that the mother owned some of the coins and the undisputed evidence that the wife cashed them in and spent the proceeds, the district court erred in not finding conversion; the court reversed and remanded solely on damages.

In plain language

This unusual case grew out of a divorce between Emma and George Pelletier. George's mother, Phebe Pelletier, believed that Emma had sold coins that belonged to her (Phebe). Rather than filing her own lawsuit, Phebe tried to inject herself into Emma and George's divorce by filing a "counterclaim" against Emma for conversion (wrongfully taking and using someone else's property). Phebe was not a party to the divorce and had not properly intervened, so her counterclaim did not really belong in the case. Everyone nonetheless proceeded as if it did, and the divorce case went to trial with the coin dispute tangled into it. The trial judge found that some coins had been bought with community funds and some with Phebe's money, that the coins were "commingled," and that Emma had justifiably relied on a presumption that the coins were community property. The court dismissed Phebe's conversion claim, and Phebe appealed. The Nevada Supreme Court reversed. Rather than making Phebe start over, the court decided the conversion issue on the record. It held that Phebe's coins did not become the couple's community property just by being commingled, and there was no basis to presume her coins were community property. Emma admitted she took the coins, cashed them in, and spent the money - which is conversion - and good faith or lack of knowledge is no excuse. Because the trial court found Phebe owned some of the coins and the evidence of interference was undisputed, the Supreme Court held that Emma was liable for conversion as a matter of law and sent the case back only to determine damages.