SCHREIBER VS. SCHREIBER (DIVORCE PROPERTY & ALIMONY)

Statutes cited

Key holdings

Practitioner summary

This appeal from a divorce decree challenged the district court's refusal to give effect to an oral property settlement agreement, and the court reversed. The parties orally agreed at separation in 1977 to divide their community assets and performed that agreement - selling the residence and splitting the proceeds, with the wife taking most family assets and the husband taking a masonry business. When the wife sued for divorce in 1980, the district court found the parties had entered an oral agreement to divide community assets but held it null and void because it was not in writing, and proceeded to order conveyances of community property. Appellant acknowledged that a property settlement agreement must be in writing; NRS 123.220 requires a writing to transmute community property into separate property. He argued, however, that the agreement was enforceable because fully performed, and alternatively that the wife should be estopped from asserting the writing requirement to avoid unjust enrichment. The court relied on Evans v. Lee, 12 Nev. 393, 398 (1877), for the principle that the statute of frauds is intended to protect the parties to a parol agreement, and that where one party has proceeded so far in performance that he has no adequate remedy unless the whole contract is enforced, equity requires enforcement lest the statute designed to prevent fraud become an instrument of fraud. That rule had been applied outside the settlement-agreement context. See Alpark Distributing, Inc. v. Poole, 95 Nev. 605, 600 P.2d 229 (1979); cf. Jones v. Barnhart, 89 Nev. 74, 506 P.2d 430 (1973). Other jurisdictions had applied it to oral property settlement agreements. See Brown v. Brown, 343 A.2d 59 (D.C. 1975); Waters v. Stevens, 176 P.2d 808 (Okla. 1947). Perceiving no basis to distinguish oral property settlement agreements from other oral agreements normally required to be in writing but enforceable upon a showing of part performance or estoppel, the court reversed and remanded for the district court to determine whether the parties' oral agreement was enforceable under those doctrines.

In plain language

Clyde and Betty Lou Schreiber married in 1955 and moved to Clark County, Nevada, in 1960. When their marriage broke down in 1977, they separated and made an oral (spoken, not written) agreement to divide their community property and go their separate ways. Acting on that agreement, they sold the family home and split the proceeds evenly; Betty Lou kept most of the other family assets, while Clyde kept the assets of a masonry contracting business the couple owned. In 1980, Betty Lou filed for divorce and asked the court to divide the community property. The district court found that the couple had in fact made an oral agreement to divide their assets, but ruled that because the agreement was not in writing, it was null and void and had no effect - so the court divided the property itself, ordering Clyde to hand over portions of the community property he held. The Nevada Supreme Court reversed. Clyde agreed that a property settlement agreement generally must be in writing (a Nevada statute requires a writing to convert community property into separate property). But he argued the oral agreement should still be enforced because the couple had already fully carried it out, and that letting Betty Lou hide behind the writing requirement would unjustly enrich her. The court agreed that the writing requirement (the statute of frauds) is not an absolute bar: under longstanding Nevada law, an oral agreement can still be enforced if the party seeking enforcement proves "part performance" or a basis for "estoppel," so that the statute meant to prevent fraud does not itself become a tool of fraud. The court saw no reason to treat oral property settlement agreements differently from other oral contracts. It sent the case back to the district court to decide whether the couple's oral agreement was enforceable under those principles.