Anderson v. Sanchez

• Decision Date: 23 July 2015
• Docket Number: No. 62059.,62059.
• Citation: 355 P.3d 16,131 Nev. Adv. Op. 51
• Parties: Mark ANDERSON, Appellant, v. Sophia SANCHEZ, Respondent.
• Court: Nevada Court of Appeals

355 P.3d 16

131 Nev. Adv. Op. 51

Mark ANDERSON, Appellant

v.Sophia SANCHEZ, Respondent.

No. 62059.

Court of Appeals of Nevada.

July 23, 2015.

Abrams Law Firm, LLC, and Vincent Mayo, Las Vegas, for Appellant.

Law Office of Daniel Marks and Daniel Marks and Christopher L. Marchand, Las Vegas, for Respondent.

Before GIBBONS, C.J., TAO and SILVER, JJ.

OPINION

By the Court, GIBBONS, C.J.:

This case involves the enforceability of a divorce settlement agreement in the face of a claim that the agreement distributes property belonging to a third party. At issue here is the district court's denial of appellant's motion to set aside the parties' settlement agreement, and join his sister to the underlying divorce proceeding, because she claimed an interest in property that was treated as community property in the settlement agreement. Under NRCP 19(a), a court must join a person to an action if complete relief cannot be accorded among the parties already present, or the person to be joined claims to have an interest in the subject matter of the action, and adjudication of the action in the person's absence may either impair the person's ability to protect that interest, or leave any of the current parties subject to double, multiple, or otherwise inconsistent obligations due to the claimed interest.

In light of this rule and the facts in this case, we conclude the district court should have conducted an evidentiary hearing to decide the joinder issues before the court adjudicated the parties' property pursuant to the settlement agreement. We therefore vacate the district court's divorce decree only as it affects the disposition of the property at issue and remand this matter to the district court with instructions to conduct an evidentiary hearing to determine whether the sister should have been joined under NRCP 19(a).

BACKGROUND

This appeal arises out of a divorce between appellant Mark Anderson and respondent Sophia Sanchez. Mark filed a complaint for divorce in March 2012. Thereafter, the parties immediately agreed to participate in mediation before retired district court judge Robert Gaston, but not pursuant to a court order or district court rule, which can be used to set the parameters of the mediation. At the conclusion of the mediation, the parties executed a written Memorandum of Understanding (MOU), which provided the framework for dividing their various assets and debts. The award of the Wilson property, a residence located on East Wilson Avenue, Orange, California, is the only term of the MOU challenged on appeal. Under the terms of the MOU, Mark was to receive the Wilson property in exchange for the payment of a portion of his retirement funds to Sophia.

After the parties executed the MOU, Mark filed a notice of withdrawal of his signature, stating, without any explanation or citation to law, that he was revoking his signature from the MOU. In response, Sophia filed a motion to enforce the MOU, asserting that the parties had entered into a legally binding contract and requesting that the district court enter a divorce decree based on the terms of the MOU. Mark then filed, among other things, an opposition to the motion to enforce, a countermotion to set aside and deem the MOU unenforceable, and a countermotion for joinder of his sister, Cheryl Parr. Cheryl also filed a motion to intervene in the divorce proceeding based on the same factual allegations set forth in Mark's opposition and countermotion regarding joinder, and she asked for a finding and order that the Wilson property was held in constructive trust, declaratory relief, an injunction, and attorney fees.

In his opposition and countermotions, Mark argued, as relevant here, that the MOU was void because it improperly distributed property that did not belong to Mark and Sophia. Further, Mark argued the MOU was subject to rescission because it was based on a mutual mistake, a misrepresentation, or unconscionable terms. In support of these arguments, Mark alleged Cheryl had an ownership interest in the Wilson property, which he and Cheryl had received as beneficiaries of the Jack and Lavonne Anderson Trust (the Jack and Lavonne Trust), which previously held that property. Mark claimed he and Cheryl had agreed Cheryl would keep the Wilson property in exchange for Mark receiving other trust assets. Cheryl currently lives on the Wilson property.

Continuing his arguments in support of joinder and setting aside the MOU, Mark alleged that, between May 2005 and May 2006, he and Sophia entered into two agreements with Cheryl in which Cheryl allowed them to use the Wilson property as collateral to secure loans. In order to obtain financing, the second agreement required Mark and Cheryl, as trustees of the Jack and Lavonne Trust, to convey the Wilson property to Mark and Sophia. Mark and Sophia then transferred the Wilson property to their own newly created trust, the Anderson Trust. The Anderson Trust provides that the Wilson property is to he conveyed to Cheryl should she survive both Mark and Sophia. Additionally, David Parr, Cheryl's son, is named as a beneficiary of the Anderson Trust, should he survive Cheryl, Mark, and Sophia. The Anderson Trust was not made a party in this case. None of Mark and Sophia's five other properties are held in a trust.

Mark contended he and Sophia entered into an oral agreement with Cheryl whereby he and Sophia would transfer the Wilson property to Cheryl after all loans were satisfied. Until such time, however, Mark and Sophia would hold the Wilson property in the trust for Cheryl's benefit. Thus, in his opposition and countermotions, Mark argued the agreement created a resulting trust or a constructive trust for Cheryl's benefit.

Mark filed several statements in district court by individuals familiar with the arrangement to prove the oral agreements. These included an affidavit signed by Mark and Sophia's accountant, who provided a loan collateralized by the Wilson property; a letter signed by the trust attorney who drafted the Anderson Trust, which recited his understanding that the property was held in Mark's name, but was actually owned by Cheryl; a notarized statement signed by Israel Sanchez, Sophia's brother, which outlined his understanding of Mark and Sophia's arrangement with Cheryl, consistent with Mark's contentions; and the Anderson Trust agreement, which held the Wilson property at the time of divorce and which provided that the Wilson property would go to Cheryl free of encumbrances following the deaths of both Sophia and Mark if she survived them. Based on his contention that Cheryl was the true owner of the Wilson property, Mark maintained that Cheryl must be joined to the action pursuant to the provisions of NRCP 19(a).

Sophia filed a reply in support of her motion to enforce the settlement agreement and an opposition to Mark's countermotions. She denied the existence of an agreement between herself, Mark, and Cheryl, referring to the alleged agreement as “a secret deal between [Mark] and his sister.” Sophia contended she and Mark were the rightful owners of the Wilson property, as they, not Cheryl, paid the mortgage and property taxes on the Wilson property and because a quitclaim deed released the property to Mark and Sophia forever.

The district court held two hearings on the various motions. In rendering its decisions, the district court stated at the hearings, “I don't know how Cheryl [Parr] would—could become a party in this case. We're talking about a piece of property in California, so we don't—we don't have jurisdiction over a property in California. She's not a party to this proceeding. This is a divorce.” Second, the district court stated, “[a] settlement was reached.... It was placed in writing. And now what I hear is that somehow that—that really there was this constructive trust regarding this California property that [i]s the problem. Those facts were known to [Mark]. Those facts were known to [Sophia].” Third, the district court emphasized the importance that “[Mark and Sophia are] legal owners of the property.”

After the second hearing, the district court issued an order that (1) granted Sophia's motion to enforce the MOU, (2) denied all of Mark's countermotions, and (3) denied Cheryl's motion to intervene and related motions. In addition to concluding the MOU was a valid and binding agreement, the district court found that Cheryl lacked standing to intervene and that the court lacked jurisdiction to allow her to intervene.¹ The court also entered a decree of divorce dissolving Mark and Sophia's marriage and incorporating the MOU. This appeal by Mark followed.

ANALYSIS

Mark maintains that the arrangement with Cheryl created an implied trust for Cheryl's benefit. Therefore, he asserts that when he and Sophia divided the Wilson property as part of their community property, they mistakenly included property that belonged to Cheryl. Thus, Mark contends that the MOU should be set aside as to that provision and the matter should be remanded to the district court for further proceedings in which Cheryl's interest in the Wilson property is determined. Sophia disagrees, arguing that the parties entered into an enforceable settlement agreement and that joinder of Cheryl was not required.

This court reviews de novo a district court's legal conclusions relating to court rules, Casey v. Wells Fargo Bank, N.A., 128 Nev. ––––, ––––, 290 P.3d 265, 267 (2012). Subject matter jurisdiction is similarly reviewed de novo. Ogawa v. Ogawa, 125 Nev. 660, 667, 221 P.3d 699, 704 (2009).

Generally, when parties to a divorce have entered into a signed, written settlement agreement, such agreement is binding and “can be enforced by motion in the case being settled.” Grisham v. Grisham, 128 Nev. ––––, ––––, 289 P.3d 230, 233 (2012). Nevertheless, in order to render a complete decree in any civil action, “all persons materially interested in the subject matter of the suit [must] be made parties so that there is a complete decree to bind...