Kerley v. Kerley

Decision Date27 April 1995
Docket NumberNo. 23220,23220
PartiesNancy KERLEY, Appellant, v. Thomas KERLEY, Respondent. Thomas KERLEY, Appellant, v. Nancy KERLEY, Respondent.
CourtNevada Supreme Court

Scarpello & Alling and Richard Glasson, Stateline, for Nancy Kerley.

Jack Sheehan, Minden, for Thomas Kerley.

OPINION

PER CURIAM:

FACTS

On August 15, 1981, appellant Nancy Kerley married respondent Thomas Kerley. Prior to their marriage, Thomas possessed real property located at 1045 Verde Way, Gardnerville, Nevada. 1 In 1982, Thomas conveyed the Verde Way property to himself and Nancy as joint tenants (1982 Deed). In the spring of 1983, Thomas and Nancy executed a quitclaim deed to the Verde Way property vesting title in Thomas's name only (1983 Deed). On September 14, 1983, Thomas recorded the deed.

On August 21, 1989, Thomas filed for divorce. On March 3, 1992, the district court entered its findings of fact, conclusions of law, judgment, and decree of divorce. The district court concluded that because the 1982 Deed and the 1983 Deed were obtained and acquired during the marriage, Verde Way therefore would be presumed to be held as community property per NRS 123.220. This presumption, the district court added, could be overcome by clear and convincing evidence, but the court concluded that Thomas had failed to overcome the presumption.

The court explained that "[s]ince the Verde Way property was acquired by [Thomas] prior to marriage and later became the community property of the parties, Malmquist v. Malmquist, 106 Nev. 231, 792 P.2d 372 [ (1990) ], provides the distribution procedure of the property.... [T]his Court finds the community property amount due [Nancy] to be $32,150.00." 2

Additionally, the court noted in its findings of fact that although Thomas may have expended separate property funds on remodeling portions of the Verde Way property, evidence regarding the timing of and amounts spent in remodeling were inconclusive and speculative. Despite acknowledging that separate property may have been spent improving the community property, the district The district court equally divided all of the community personal property and awarded each of the parties their separate property. The district court, additionally, awarded Nancy rehabilitative alimony in the amount of $250.00 per month for a period of two years. The district court explained that Thomas "has the ability, through his present skill and licensing [as a contractor], to generate income sufficient to pay [Nancy]" reasonable alimony.

court found that "such expenditures were nevertheless a gift to the community."

On March 16, 1992, Nancy filed a post-trial motion to alter and/or amend the judgment, contending that the district court abused its discretion in the division of the Verde Way property.

On April 1, 1992, Thomas filed a motion to modify the decree of divorce in regard to alimony, arguing that the district court abused its discretion in awarding Nancy rehabilitative alimony. The district court denied both motions. Both Nancy and Thomas then appealed and these appeals were consolidated.

DISCUSSION

The district court erred in applying the Malmquist property apportionment formulae to the division of the community real property.

This court, in reviewing divorce proceedings on appeal, generally has upheld district courts' rulings which are supported by substantial evidence and are otherwise free of a clear abuse of discretion. " 'Where a trial court, sitting without a jury, has made a determination upon the basis of conflicting evidence, that determination should not be disturbed on appeal if it is supported by substantial evidence.' " Williams v. Waldman, 108 Nev. 466, 471, 836 P.2d 614, 617 (1992) (quoting Lubbe v. Barba, 91 Nev. 596, 600, 540 P.2d 115, 118 (1975)). However, in reaching a determination, the district court must apply the correct legal standard. Id., 836 P.2d at 617-18.

In Malmquist v. Malmquist, 106 Nev. 231, 792 P.2d 372 (1990), this court addressed the issue of separate and community property improvements to real property and developed formulae for reimbursement for those improvements. Id. at 240, 247, 792 P.2d at 378, 382. Nancy contends that in its apportionment of the Verde Way property, the district court improperly extended Malmquist to a situation in which a separate property contribution was made to real property held as community property. Nancy argues that the district court's application of Malmquist under these facts is "illogical" and requests this court to divide the community real property equally.

Although the facts of Malmquist did not address the instant situation of separate property payments on a community residence, this court stated: "[W]e believe that the formulae should apply both to community contributions to separate property residences and to separate property contributions to community property residences." Id. at 240 n. 1, 792 P.2d at 378 n. 1.

Despite this logical extension set forth in Malmquist, we conclude that the district court's decree apportioning the Verde Way property through the Malmquist formulae was fundamentally flawed. The district court cannot perform a Malmquist apportionment unless either separate property has increased in value through community efforts, or conversely, community property value has been enhanced by separate property contributions.

In the instant case, the district court first found that the Verde Way property was community property and then improperly apportioned that property between separate property and community property interests without first finding that the property had either been transmuted back into separate property or had been substantially enhanced in value by separate property...

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4 cases
  • State v. Quinn
    • United States
    • Nevada Supreme Court
    • September 17, 2001
  • Stucke v. Stucke
    • United States
    • Nevada Court of Appeals
    • June 22, 2022
    ...community efforts, or conversely, community property value has been enhanced by separate property contributions." Kerley v. Kerley, 111 Nev. 462, 466, 893 P.2d 358, 360 (1995).Here, we first conclude that the district court accurately determined that the West Maule property was community pr......
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  • Kerley v. Kerley, s. 23220
    • United States
    • Nevada Supreme Court
    • January 31, 1996
    ...Jack Sheehan, Minden, and Robert A. Grayson, Carson City, for Thomas Kerley. OPINION ON REHEARING PER CURIAM: In Kerley v. Kerley, 111 Nev. 462, 893 P.2d 358 (1995), we reversed and remanded to the district court the issue of apportionment of the real property located at 1045 Verde Way. Tho......

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