SMITH VS. SMITH (DIVORCE PROPERTY & ALIMONY)

Statutes cited

Key holdings

Practitioner summary

The court affirmed the property division, alimony, and attorney's fee rulings in a divorce. Stock acquired by bequest is separate property under NRS 123.130(2); the court rejected the appellant's proposed "onerous versus lucrative title" distinction, holding that property acquired by bequest or inheritance is separate regardless of alleged remuneration for services, and that she failed to prove the testatrix's motive. On apportionment, the appellant bore the burden of proving that the respondent's labor, skill, and industry caused the increase in value of his separate property to overcome the NRS 123.130(2) presumption that rents, issues, and profits of separate property remain separate (Schulman v. Schulman; Johnson v. Johnson; Pereira/Van Camp). Because the respondent worked less than eight hours a week, had turned over active management years earlier, and the business's growth was primarily attributable to Clark County's expansion, the rents, issues, and profits were properly found separate. The $1,000 per month alimony (with cost-of-living increases), the refusal to set aside separate property for support, and the denial of an $18,000 attorney's fee request were within the district court's discretion under NRS 125.150.

In plain language

Evelyn and Paul Smith married in 1951. Paul went to work for the Ideal Supply Company and eventually became its sole owner - largely because the prior owner's widow left her controlling stock to Paul alone by will, and the remaining stock was retired. When they divorced, Evelyn challenged the property division, the amount of alimony, and the attorney's fees, arguing the Ideal stock should be treated as community property or at least partly hers. The Nevada Supreme Court affirmed the district court. It held that stock acquired by bequest is separate property under Nevada's community property statute, and it rejected Evelyn's theory that a bequest made to reward services should be treated differently - she had not proved the widow's motive, and property acquired by inheritance is separate regardless. The court also rejected her claim that she was entitled to a share because Paul kept working at the company after he became owner: to get an apportionment, she had to prove that Paul's own labor and skill caused the increase in the business's value, but the evidence showed he worked less than eight hours a week, had turned over daily management years earlier, and that growth was mainly due to the booming Clark County economy. So the rents, issues, and profits stayed separate property too. Finally, the court found no abuse of discretion in the $1,000 per month alimony award (with cost-of-living increases) or in the denial of the $18,000 attorney fee request.