REED VS. REED

Statutes cited

Key holdings

Practitioner summary

Standard of review: The court reviews a decision to grant or deny a motion to modify alimony for an abuse of discretion, Davitian-Kostanian v. Kostanian, 139 Nev., Adv. Op. 27, 534 P.3d 700, 705 (2023), and will not disturb findings supported by substantial evidence, "which is evidence that a reasonable person may accept as adequate to sustain a judgment," Ellis v. Carucci, 123 Nev. 145, 149, 161 P.3d 239, 242 (2007). "[W]e review questions of law, including interpretation of caselaw, de novo." Martin v. Martin, 138 Nev., Adv. Op. 78, 520 P.3d 813, 817 (2022). Framework: Under NRS 125.150(8), a district court may modify unaccrued alimony payments based on a showing of changed circumstances. Under NRS 125.150(12), a 20 percent or greater change in a spouse's income deems circumstances changed and requires the court to review alimony to determine whether modification is warranted. In that review, the court must consider whether the payor's income "has been reduced to such a level that the spouse is financially unable to pay the amount of alimony the spouse has been ordered to pay," NRS 125.150(8), and may consider any other factors it deems relevant. Application of Rosenbaum: In Rosenbaum v. Rosenbaum, 86 Nev. 550, 471 P.2d 254 (1970), the supreme court permitted district courts "to consider what a husband or father could in good faith earn if he so desired," emphasizing good faith, and explained that if a party intentionally holds a job below his reasonable level of skill or purposefully earns less than his capabilities permit, the court should take that into account in fixing alimony or child support; conversely, if reduced earnings stem from circumstances beyond the party's control, the award should be in keeping with ability to pay. Here, the district court found Samarn knowingly, deliberately, and willfully violated USPS's rules of employment and ethical policies, so his demotion and reduced income did not result from circumstances beyond his control - implicitly finding a lack of good faith, though the court did not use that terminology. The Court of Appeals held those findings were supported by substantial evidence, including USPS's letter of decision and Samarn's testimony. The court rejected three challenges to the Rosenbaum analysis. First, the demotion's nominally involuntary character did not remove it from Rosenbaum's ambit: Samarn agreed to the settlement, and the employment changes were precipitated by his voluntary, deliberate, willful conduct undertaken with knowledge of USPS's rules. Second, the analysis did not violate Rodriguez v. Rodriguez, 116 Nev. 993, 13 P.3d 415 (2000), which held that marital misconduct or fault is not an appropriate factor in assessing whether an alimony award is just and equitable under NRS 125.150(1) ("Alimony is not a sword to level the wrongdoer. Alimony is not a prize to reward virtue."). The present case was distinguishable because the district court was concerned with the violation of USPS's employment rules that led to the demotion, not with marital misconduct, and nothing in Rodriguez suggests an intent to overrule Rosenbaum. The court also invoked Sengel v. IGT, 116 Nev. 565, 573, 2 P.3d 258, 262-63 (2000) (parties are presumed to know the law). Third, Rosenbaum imposes no requirement that the court first find the spouse became unemployed or underemployed for the purpose of evading alimony or child support. NRS 125.150(9) factors: The court held that in evaluating a motion to modify alimony, the district court generally is not required to consider all of the NRS 125.150(9) factors; those factors govern initial alimony awards, not modification. The court must consider ability to pay under NRS 125.150(8) and may consider other relevant factors; if the parties tender additional relevant factors, the court should consider them. See Swanson v. Swanson, No. 54105, 2011 WL 1659877, at *3 (Nev. Apr. 29, 2011) (Order of Affirmance). Here, the district court considered the circumstances of the demotion, the parties' financial circumstances, and the short interval since the stipulated decree; it found Samarn was "operating right at a break-even level given his current income" but that his spending on trips and heavy credit-card use suggested his margins were not as tight as argued, and it credited Dorothy's testimony that she was struggling financially and going further into debt. Samarn's NRS 125.150(9) arguments focused on the parties' financial circumstances, which the district court considered without framing its findings in those terms; his challenge amounted to a request to reweigh evidence, which appellate courts do not do. Ellis, 123 Nev. at 152, 161 P.3d at 244. The judgment was affirmed.

In plain language

Samarn and Dorothy Reed were married for about 29 years. Before the divorce, Samarn was an executive-level employee at the United States Postal Service (USPS) earning over $200,000 per year. In 2021 he began a relationship with a coworker whom he had promoted and for whom he had advocated for management training and other benefits. When Dorothy learned of the relationship, she filed for divorce; around the same time, Samarn notified USPS's human relations department about the relationship, triggering an internal investigation. In April 2022, the parties entered a stipulated (agreed-upon) divorce decree requiring Samarn to pay alimony - $1,250 per month at first, rising to $2,500 per month for 10 years once his child support obligation for the parties' youngest child ended. The decree contained no provision making the alimony nonmodifiable. In January 2023, USPS concluded its investigation and terminated Samarn's employment, finding he had promoted an applicant with whom he was romantically or sexually involved and knew his conduct violated USPS's rules of employment and ethical guidelines. Samarn appealed to the United States Merit Systems Protection Board, then settled: instead of termination, he accepted a voluntary demotion to a non-executive position paying $110,000 per year and agreed not to seek a promotion at USPS until February 2025. About two weeks later, Samarn asked the district court to terminate his alimony, arguing his demotion cut his monthly income by 45 percent and he could not afford $2,500 per month. He later argued the court should at least reduce alimony to $557.87 per month to equalize the parties' incomes. Dorothy opposed any change, arguing the income reduction stemmed from Samarn's knowing violation of USPS's rules and that he could still afford the payments. After an evidentiary hearing, the district court declined to terminate or substantially modify alimony. Instead, it narrowly restructured the obligation: $2,000 per month from October 1, 2023, through January 31, 2025 (the period before Samarn could again seek a promotion), returning to $2,500 per month thereafter, with the alimony term extended by three months to roughly offset the temporary reduction. The court found that Samarn's income loss was not beyond his control but resulted from his deliberate, willful, and knowing violation of USPS's rules, that he could maintain a nominal budget surplus if he cut unnecessary expenses, and that there was no evidence Dorothy's finances had improved since the divorce. The Nevada Court of Appeals affirmed. It held the district court properly relied on the Nevada Supreme Court's decision in Rosenbaum v. Rosenbaum, which allows courts to consider whether a spouse's reduced earnings result from the spouse's own intentional or purposeful conduct rather than circumstances beyond the spouse's control. The court rejected Samarn's argument that his demotion was involuntary because USPS imposed it, reasoning that Samarn agreed to the settlement and that the changes were precipitated by his own deliberate conduct. It also rejected his argument that considering that conduct improperly penalized him for "bad behavior" during the marriage, distinguishing Rodriguez v. Rodriguez: the district court was concerned not with marital misconduct but with the violation of USPS's employment rules that caused the demotion. Finally, the court held the district court was not required to walk through the NRS 125.150(9) factors - which govern initial alimony awards - and that the court had in substance considered the parties' financial circumstances anyway, so no abuse of discretion occurred.