SOTELO VS. SOTELO (CHILD CUSTODY)

Statutes cited

Key holdings

Practitioner summary

**Standard of review.** The court reviewed the district court's alimony and community property determinations for abuse of discretion, citing Kivazi v. Etvazi, 139 Nev. 408, 411, 537 P.3d 476, 482 (Ct. App. 2023). Property characterizations are upheld if supported by substantial evidence, Lopez v. Lopez, 139 Nev. 533, 541, 541 P.3d 117, 125 (Ct. App. 2023), with substantial evidence defined as "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). The court noted that "deference is not owed to legal error, or to findings so conclusory they may mask legal error." Davis v. Ewalefo, 131 Nev. 445, 450, 352 P.3d 1139, 1142 (2015). **Community property characterization framework.** Properties acquired during marriage are presumed community property, rebuttable only by clear and convincing evidence. Lopez, 139 at 542, 541 P.3d at 125; NRS 123.220. For real property purchased during marriage, sufficient tracing evidence requires proof of the source of purchasing funds by clear and convincing evidence. Lopez, 139 Nev. at 542, 541 P.3d at 125. A deed placing title in one spouse as separate property is insufficient to overcome the community presumption absent a showing that the home was purchased with separate funds. Id. The court also recognized that an interspousal conveyance of title creates a presumption of a gift, and therefore separate property under NRS 123.130, rebuttable only by clear and convincing evidence. Kerley v. Kerley, 112 Nev. 36, 37, 910 P.2d 279, 280 (1996); NRS 123.130. Once that gift presumption is established, the burden shifts to the transferring spouse to prove by clear and convincing evidence that the property is community property, and the common-law gift presumption remains even with conflicting evidence. Todkill v. Todkill, 88 Nev. 231, 237-38, 495 P.2d 629, 632 (1972). **Application — characterization.** Although Paulina disclosed the grant, bargain, and sale deed; the deed of trust; and Randy's quitclaim deed in her NRCP 16.2(d)(1) disclosures and pretrial pleadings, she failed to offer any of these documents into evidence at trial. The district court could therefore consider only that the home was purchased during the marriage, which established the community-property presumption and placed the rebuttal burden on Paulina. NRS 123.220; Lopez, 139 Nev. at 541, 541 P.3d at 125. The court found Paulina failed to rebut the presumption for three reasons: (1) she did not admit the deeds, and even if considered, her pretrial briefing acknowledged the title was placed in her name because Randy was "financially unstable," indicating the conveyance was for financial reasons rather than a gift, with no trial testimony clarifying intent; (2) she conceded at the beginning and end of trial that the home was community property; and (3) she did not request the home be characterized as her sole and separate property, instead requesting the home as part of the property disposition. The court held the district court did not abuse its discretion notwithstanding the absence of express findings, invoking the principle that "[i]n the absence of express findings, [this court] will imply findings where the evidence clearly supports the judgment." Gorden v. Gorden, 93 Nev. 494, 496, 569 P.2d 397, 398 (1977). The court rejected Paulina's Malmquist argument (Malmquist v. Malmquist, 106 Nev. 231, 240-41, 792 P.2d 372, 377-78 (1990)) as inapplicable, citing Kerley v. Kerley, 111 Nev. 462, 466, 893 P.2d 358, 360 (1995), reh'g granted, 112 Nev. 36, 910 P.2d 279 (1996). **Alimony framework.** Disposition of property and alimony awards are not disturbed absent abuse of discretion. Kogod v. Cioffi-Kogod, 135 Nev. 64, 66, 75, 439 P.3d 397, 400, 406 (2019). The district court must consider the eleven statutory factors under NRS 125.150(9). Under NRS 125.150(1)(a), the court may award periodic or lump-sum alimony as appears just and equitable. Schwartz v. Schwartz, 126 Nev. 87, 90, 225 P.3d 1273, 1275 (2010). Where a party presents a reason that periodic payments would be less just and equitable and/or illusory compared to a lump-sum payment, the district court must analyze which is more appropriate. Id. at 91-92, 225 P.3d at 1276; see also Daniel v. Baker, 106 Nev. 412, 414, 794 P.2d 345, 346 (1990). **Application — alimony and sale of home.** The district court analyzed the NRS 125.150(9) factors, awarded $750 per month for 11 years, and later extended the award to permanent alimony while rejecting lump-sum payment. The court's findings — income disparity, long-term marriage, Randy's good health and earning ability, and Paulina's disability — were supported by substantial evidence and unchallenged. However, the Court of Appeals identified error in the handling of the home sale and lump-sum analysis. The district court disregarded the parties' Zillow-based valuation evidence in favor of a preference for an appraisal, even though both parties submitted such evidence, there was no objection, and the parties effectively agreed it was reliable. The evidence reflected approximately $237,000 in equity against approximately $27,000 in community debt. The court held that where the home's value was highly relevant to Paulina's requested relief, the district court should not have disregarded this undisputed evidence as not competent or credible. The court further held the district court did not give adequate consideration to Paulina's request to retain the home — noting her testimony that her $1,487 monthly disability income could not support alternative housing but could support the $1,268.47 mortgage — and failed to analyze her lump-sum alimony request, which could potentially offset Randy's interest in the home with Paulina forgoing Randy's retirement benefits. The court remanded for the district court to reevaluate whether lump-sum alimony is just and equitable. See Schwartz, 126 Nev. at 90-92, 225 P.3d at 1275-76. The court noted that on remand the district court may authorize discovery or additional evidence regarding valuation, citing NRCP 16.21.

In plain language

Paulina and Randy Sotelo married in October 1997 and had three children, two of whom were still minors when the case went to trial. Both spouses worked during the marriage, but in 2018 Paulina developed chronic diastolic heart failure that prevented her from working, and she began receiving permanent disability benefits. In 2005, the couple bought a house for $350,000 using community funds (money belonging to the marriage). However, the purchase documents — the grant, bargain, and sale deed and the deed of trust — named only Paulina as the owner and described the house as her "sole and separate property." Randy also signed a quitclaim deed giving up his interest in the house to Paulina at the time of purchase. Despite this paperwork, both parties agreed that community funds were used to pay the mortgage during the marriage. Randy filed for divorce in February 2023. Several issues were contested: who would have custody of the children, whether the house belonged solely to Paulina or to the marriage, and how alimony (financial support paid by one ex-spouse to the other) should be structured. The district court gave Randy primary physical custody of the younger child, G.S., and gave the parties joint physical custody of E.S. On the house, the district court ruled it was community property, ordered it sold to pay off the couple's community debt, and ordered the remaining money split equally. The court also awarded Paulina alimony of $750 per month — at first for 11 years, later extended to permanent (indefinite) alimony — and refused to give her the alimony as a single lump-sum payment. The alimony payments were also set to begin only after the home was sold. Paulina appealed. On the question of who owned the house, the Court of Appeals agreed with the district court. Although the deeds and the quitclaim deed might ordinarily have suggested the home was a gift to Paulina (and thus her separate property), Paulina never actually submitted those documents as evidence at trial. More importantly, she had told the court in her pretrial papers that the house was put in her name because Randy was "financially unstable" at the time — meaning the transfer was done for financial reasons, not as a gift. She also agreed at trial, when the judge asked, that the home was a community asset. Because property bought during a marriage is presumed to belong to the marriage unless proven otherwise by strong evidence, and Paulina did not overcome that presumption, the court upheld the community-property ruling. However, the Court of Appeals found problems with how the district court handled the alimony and the sale of the home. The district court had refused to consider the value of the home — and therefore how much equity (the home's value minus what was owed) the couple had — because it was dissatisfied that the value estimate came from the Zillow website rather than a formal appraisal. But both parties had provided Zillow-based figures, neither objected, and they effectively agreed those figures were reliable. The evidence indicated the home had roughly $237,000 in equity against only about $27,000 in community debt. Paulina had testified that on her monthly disability income of $1,487 she could not afford to rent a house or apartment in Las Vegas even with child support and periodic alimony, but that she could afford the existing monthly mortgage of $1,268.47 and keep the family home for herself and the children. She had asked the court for a lump-sum alimony award that would offset Randy's share of the home's equity, in exchange for giving up any claim to Randy's retirement benefits. The Court of Appeals concluded that the district court did not give adequate consideration to her request to keep the home, did not properly weigh the hardship of losing it when she might be left without reasonable housing, and did not properly analyze whether lump-sum alimony would be more appropriate. The court sent these issues back to the district court to reconsider.