Johnson v. Steel, Inc.

• Decision Date: 26 July 1978
• Docket Number: No. 9093,9093
• Citation: 581 P.2d 860,94 Nev. 483
• Parties: Joyce JOHNSON, Appellant, v. STEEL, INCORPORATED, a Nevada Corporation, Sophia Weiner a/k/a Sophie Weiner, Clyde T. Turner and Stanley Johnson, Respondents.
• Court: Nevada Supreme Court

Page 860

581 P.2d 860

94 Nev. 483

Joyce JOHNSON, Appellant, v. STEEL, INCORPORATED, a Nevada Corporation, Sophia Weiner a/k/a Sophie Weiner, Clyde T. Turner and Stanley Johnson, Respondents.

No. 9093.

Supreme Court of Nevada.

July 26, 1978.

Galane & Tingey and James J. Jimmerson, Las Vegas, for appellant.

John Peter Lee, Las Vegas, for respondents.

OPINION

PER CURIAM:

The principal issue presented in this divorce appeal is whether the district judge abused his discretion in distributing the community property of the parties and in fixing the alimony award.

1. The parties had been married about 20 years when the decree was entered, granting Joyce a divorce. She was then 39 years old and her husband, Stanley, 40.

There were two minor children of the marriage: Kristine, age 14, and Kara, age 7. The elder daughter had a chronic medical condition (curvature of the spine) which required supervision and medical care for an indefinite period.

Joyce was married at the age of 19, and had never worked outside the home nor acquired any marketable skills which would enable her to earn a living. Stanley, in the words of the district judge, during marriage had "acquired the skills of his trade, primarily from working in the trade itself. Through his efforts he has built a thriving business in a highly competitive (field)".

The court below ordered Stanley to pay the community debts, $7,500 in attorneys' fees, and awarded Joyce custody of the two children and $250 per child per month child support, plus medical expenses. The court also awarded Joyce alimony in the amount of $1,250 per month for two years, then $250 per month thereafter until the death or remarriage of Joyce, or the majority or emancipation of the younger daughter.

Joyce, in this appeal, urges that the court below abused its discretion in (1) failing to distribute sufficient income-producing property to her, and (2) in providing for a substantial reduction in alimony after two years.

2. Courts in Nevada are granted broad discretion by statute to determine equitable distribution of community property assets and to award alimony. NRS 125.150(1). ¹ "Before the appellate court will interfere with the trial judge's disposition of the community property of the parties or an alimony award, it must appear on the entire record in the case that the discretion of the trial judge has been abused." Shane v. Shane, 84 Nev. 20, 22, 435 P.2d 753, 755 (1968). The decision of the trial judge should be upheld if a review of the record indicates that "the trial judge after considering all the evidence in the record made a fair, just and equitable award". Id.

A. Distribution of Community Property.

Joyce asserts various assignments of error, predicated primarily on the trial judge's failure to recognize that she would not realize yearly income from the major asset distributed to her: shares representing 40.13% ownership of Steel, Inc., a close corporation of which her husband was president and had been controlling stockholder. ² The trial court explained that its decision to divide the shares of Steel, Inc., rather than have Stanley pay Joyce half their total value, was based upon "the lack of cash assets of the parties". The office building was awarded Stanley because it housed his business operation, and he was "in a better position to pay off the encumbrances" of some $82,000 on the building.

Appellant has set forth her estimate of the value of each of the community property assets as distributed. When the assumption of community property debts of $134,846, as ordered by the court, is included, and the amounts totalled, it appears that Joyce received assets valued at $356,059, while Stanley received assets, over and above the community debt, of $350,443.

The court "was not compelled to make an exact equal distribution to the parties of either the community property itself or the value thereof". Fox v. Fox, 81 Nev. 186, 196, 401 P.2d 53, 58 (1965).

The record shows that the trial court entered its order for distribution of the community property assets after consideration of voluminous evidence, both documentary and oral, and upon a practical consideration of the business realities involved. Its determination in this regard may not be disturbed on appeal.

B. Award of Alimony.

Joyce suggests that the court abused its discretion in awarding her alimony of $1,250 per month for two years, with a reduction to $250 per month thereafter. We agree.

The trial court explained its alimony award as follows:

"Joyce has not worked during the course of her marriage and has no skill or trade to rely upon. The Court therefore should provide a period for her to learn a trade. The Court after examining the income tax returns (Exhibits 3, 4, 5 and 6) believes that alimony in the amount of $1250 per month for a period of two years would be a reasonable sum and time for Joyce to learn a trade or skill."

It is clear that the two year award was in the nature of "rehabilitative alimony", awarded wives for the purpose of facilitating their entry into the labor market. Some states have explicitly or implicitly provided for such awards. See Reback v. Reback, 296 So.2d 541, 543 (Fla.App.1974); In re Marriage of Lopez, 38 Cal.App.3d 93, 113 Cal.Rptr. 58, 72 (1974). The broad discretion afforded by NRS 125.150(1), supra, authorizes such an award in an appropriate case.

While the trial courts have wide discretion in the determination of alimony, nevertheless, there are limits to their discretion. The guidelines have been set forth as follows:

"Much depends upon the particular facts of the individual case. Among the matters to be considered are: the financial condition of the parties; the nature and value of their respective property; the contribution of each to any property held by them as tenants by the entirety; the duration of the marriage; the husband's income, his earning capacity, his age, health and ability to labor; and the wife's age, health, station and ability to earn a living." (citation omitted). Buchanan v. Buchanan, 90 Nev. 209, 215, 523 P.2d 1, 5 (1974).

In Buchanan, the wife was granted a payment of $300 per month, for three years as part of a property settlement. This court found the award showed "reasonable effort on the part of the trial court to allow appellant to adjust to the situation". 90 Nev. at 214, 523 P.2d at 4. The record revealed that the marriage had lasted only three years; that the wife was 31 years old, and capable of earning $20 per day as a model, at the time of the award; and that the husband's gross annual income during marriage had averaged $13,500.

In the instant case, however, there was a marriage of long duration (20 years), during which Joyce had cared for the house and the children. These responsibilities will continue for a number of years. Joyce was not found to be capable of earning a living at the time of the award. Respondents frankly conceded that the property allocated Joyce will generate little income. Nor are the stocks in Steel, Inc., a close corporation likely to be readily marketable. The parties differ considerably in their estimates of the gross income of Joyce's husband, but Stanley did concede a personal income before taxes of $83,000 in 1975. The trial court made no finding on the issue but did conclude, on the basis of its examination of income tax returns, that Joyce was initially entitled to $1,250 per month alimony.

Recently appellate courts in other jurisdictions have begun to question the wisdom of awarding "rehabilitative alimony" in cases involving marriages of long duration, particularly where there are minor children in the care and custody of the wife, and there is no showing that the wife will be able to acquire an earning capacity commensurate with her former standard of living.

In Kay v. Kay, 37 N.Y.2d 632, 376 N.Y.S.2d 443, 339 N.E.2d 143 (1975), the New York Court of Appeals upheld an Appellate Division determination that the trial court award of alimony had been inadequate. After recognizing the legitimate and healthy trend toward consideration of the wife's ability to become self-supporting in the determination of alimony (citing, among other cases, Freeman v. Freeman, 79 Nev. 33, 378 P.2d 264 (1963)), the court pointed out:

". . . in our zeal to correct what may have been inequitably burdensome alimony arrangements and to recognize the selfhood of women as functioning, independent persons, we would do injustice to the men and women we seek to treat more equally if we ignored the facts of life. A woman who, for...