Kogod v. Cioffi-Kogod

• Decision Date: 25 April 2019
• Docket Number: No. 71147, No. 71994,71147
• Citation: 439 P.3d 397
• Parties: Dennis KOGOD, Appellant/Cross-Respondent, v. Gabrielle CIOFFI-KOGOD, Respondent/Cross-Appellant. Dennis Kogod, Appellant/Cross-Respondent, v. Gabrielle Cioffi-Kogod, Respondent/Cross-Appellant.
• Court: Nevada Supreme Court

439 P.3d 397

Dennis KOGOD, Appellant/Cross-Respondent,

v.Gabrielle CIOFFI-KOGOD, Respondent/Cross-Appellant.

Dennis Kogod, Appellant/Cross-Respondent,

v.Gabrielle Cioffi-Kogod, Respondent/Cross-Appellant.

No. 71147

No. 71994

Supreme Court of Nevada.

FILED APRIL 25, 2019

OPINION

By the Court, PICKERING, J.:

This is a divorce action with a $ 47 million community property estate, in which the district court awarded alimony not based on need and also unequally distributed the parties’ community property due to one spouse’s extramarital affairs, gifts to family, and excess spending. In this opinion, we recognize that alimony can be just and equitable even when not based on financial need, but we reverse the alimony award in this case because the receiving spouse’s share of community property will produce passive income sufficient to maintain her marital standard of living. We also hold that community funds spent on extramarital affairs are dissipated such that the district court has a compelling reason to make an unequal disposition of community property. Finally, this opinion addresses whether monetary sanctions were appropriate for expenditures in violation of the automatic joint preliminary injunction ordering the parties not to spend money outside the usual course of business; whether expert witness and attorney fees were warranted; and when a community property estate properly ends. We affirm in part, reverse in part, and remand.

I.

Dennis Kogod and Gabrielle Cioffi-Kogod married in 1991 in New York City. They lived in various cities throughout their marriage, moving each time to advance Dennis’s career in the healthcare industry. In 2003, Dennis and Gabrielle moved to Las Vegas. Dennis worked for a healthcare company based in southern California and Gabrielle worked part-time in Las Vegas as a nurse consultant. Dennis traveled frequently for work and spent his weekdays either traveling or at his office in southern California. He spent most weekends with Gabrielle in Las Vegas.

Dennis and Gabrielle considered themselves upper-middle class until 2004, when Dennis took a more senior role at his company. By 2009, Dennis was promoted to Chief Operating Officer of a Fortune 500 healthcare company. With his new promotion, he earned an average base salary of $ 800,000 per year, but received bonuses that put his average annual income at almost $ 14,000,000. Gabrielle, as a part-time nurse consultant, earned approximately $ 55,000 per year. Dennis describes this time period after he and Gabrielle moved to Las Vegas as one in which they were essentially living separate lives, but Gabrielle disputes Dennis’s characterization and claims that they spoke every day, sometimes multiple times a day.

Unknown to Gabrielle, Dennis had started a separate family in southern California. He met Nadya in November 2004 and by June 2005 they participated in a wedding-type ceremony in Mexico. Shortly after, Dennis informed Nadya he was already married. Despite this, Dennis and Nadya remained together and, after participating in in-vitro fertilization, had twin girls in 2007. Dennis paid for all of Nadya’s and his daughters’ expenses, including a condominium in southern California, luxury cars, shopping trips and vacations, cosmetic surgery, and Nadya’s college classes—he even invested in a business on Nadya’s behalf. Dennis and Nadya remained together until 2015 when Nadya discovered that Dennis had another girlfriend.

Dennis initially filed for divorce from Gabrielle in 2010, but the action was dismissed and the couple instead became informally separated as of July 2010. Gabrielle then filed this divorce action in December 2013, at which time she still did not know about Dennis’s extramarital family. Had Dennis and Gabrielle divorced in 2010 when they informally separated, just one year after Dennis was promoted to COO, the marital estate would have been significantly smaller than the approximately $ 47 million ultimately divided by the district court.

The district court entered its divorce decree in August 2016. Because the district court previously awarded more than $ 6 million to each Gabrielle and Dennis as separate property throughout the divorce proceedings, $ 35 million of community property remained in the marital estate. Due to Dennis’s expenditures on extramarital affairs, gifts to his family during the divorce proceedings, and spending in excess of his self-declared expenses, the district court found that Dennis dissipated $ 4,087,863 in community property and unequally divided the parties’ community property on that basis. The district court also awarded Gabrielle alimony in the lump sum of $ 1,630,292 to compensate for economic losses as a result of the marriage and divorce, but recognized that she did not need alimony to support herself. In total, Gabrielle, 58 years old, received nearly $ 21 million in the divorce decree and Dennis, 57 years old, received just under $ 14 million. Gabrielle received mostly cash assets, which she does not contest can passively earn her between $ 500,000 and $ 800,000 per year, whereas Dennis’s assets largely consist of real property.

In addition to the unequal disposition of community property and the alimony award, the district court sanctioned Dennis $ 19,500 for purported violations of an automatic joint preliminary injunction and awarded $ 75,650 in expert witness costs to Gabrielle to pay for the forensic accounting firm that analyzed over 27,200 of her and Dennis’s financial transactions from between 2008 and 2016. Dennis appealed from the district court’s orders, and Gabrielle cross-appealed.

II.

Dennis first challenges the award of alimony to Gabrielle. Permanent alimony is financial support paid from one spouse to the other for a specified period of time, or in a lump sum, following a divorce. NRS 125.150(1)(a) ; Rodriguez v. Rodriguez , 116 Nev. 993, 999, 13 P.3d 415, 419 (2000) ("Alimony is financial support paid from one spouse to the other whenever justice and equity require it."). When granting a divorce, a district court may award alimony to either spouse "as appears just and equitable." NRS 125.150(1)(a). The decision of whether to award alimony is within the discretion of the district court. Buchanan v. Buchanan, 90 Nev. 209, 215, 523 P.2d 1, 5 (1974) ("In determining whether alimony should be paid, as well as the amount thereof, courts are vested with a wide range of discretion.").

When determining if alimony is just and equitable, a district court must consider the eleven factors listed in NRS 125.150(9).¹ See DeVries v. Gallio, 128 Nev. 706, 711-13, 290 P.3d 260, 264-65 (2012). The district court may also consider any other relevant factor, but it must not consider the marital fault or misconduct, or lack thereof, of the spouses. Rodriguez , 116 Nev. at 999, 13 P.3d at 419 ("Alimony is not a sword to level the wrongdoer. Alimony is not a prize to reward virtue.").

NRS 125.150(9) ’s authorization to award alimony as appears just and equitable is amorphous and does not explain the purpose of alimony. See David A. Hardy, Nevada Alimony: An Important Policy in Need of a Coherent Policy Purpose, 9 Nev. L. J. 325, 330 (2009) ("Nevada does not provide a coherent policy rationale for why, when, and how alimony should be awarded."); Robert Kirkman Collins, The Theory of Marital Residuals: Applying an Income Adjustment Calculus to the Enigma of Alimony, 24 Harv. Women’s L. J. 23, 23 (2001) ("Statutes simply list factors for trial courts to consider without providing any guidance as to how the judge should weigh or apply them."). Leaving the purpose of alimony nebulous makes alimony awards unpredictable for parties and their attorneys, and leaves courts uncertain as to when, and in what amount, alimony should be awarded. Marshal Willick, In Search of a Coherent Theoretical Model for Alimony, Nev. Law., Apr. 2007, at 41 (noting that alimony is "the last great crapshoot in family law" because "it is a category of remedy without any substantive underlying theoretical rationale").

The parties’ arguments in this case highlight the undefined nature of alimony awards. Dennis argues that a judge’s discretion to award alimony is limited to instances of financial need, and that no Nevada case or statute extends alimony beyond financial need. Gabrielle responds that alimony may be awarded to equalize post-divorce earnings or maintain the marital standard of living, regardless of need. Our previous cases often addressed alimony without discussing its purpose or scope in express terms. But after examining the historical underpinnings of alimony and our prior case law, we now hold that alimony can be "just and equitable" both when necessary to support the economic needs of a spouse and to compensate for a spouse’s economic losses from the marriage and divorce, including to equalize post-divorce earnings or help maintain the marital standard of living.

A.

Alimony, in its most elementary form, is based on the receiving spouse’s need and the paying spouse’s ability to pay. When alimony originated in England, a woman’s legal rights, including ownership of property and the ability to work and keep her wages, were subsumed by her husband under the doctrine of coverture. See Collins, The Theory of Marital Residuals, 24 Harv. Women’s L.J. at 28-29 ("[M]arried women were barred by the doctrine of unity from holding certain property, signing contracts, working at many professions, or retaining their own earnings when they did work.... ") (footnotes omitted). And absolute divorce, where the marital relationship was terminated, was exceedingly difficult to obtain. See id . Rather than absolute divorce, spouses could seek a " ‘divorce’ from bed and board," where the spouses lived apart without actually terminating the marriage or the wife being released from coverture. Id. This meant the husband had an ongoing legal and moral obligation to continue to provide for his wife, despite the "divorce," because she could not...