Anderson v. Sanchez , 2016 NV 34 ( 2016 )

132 Nev., Advance Opinion 1/45`f
IN THE SUPREME COURT OF THE STATE OF NEVADA
MARK ANDERSON, No. 62059
Appellant,
vs. FILED
SOPHIA SANCHEZ,
Respondent. APR 2 8 2016
IE K. LINDEMAN
EMbreDURT
BY
DEPUTY CLERK
Appeal from a district court divorce decree. Fifth Judicial
District Court, Nye County; Kimberly A. Wanker, Judge.
Affirmed.
The Abrams & Mayo Law Firm and Vincent Mayo, Las Vegas,
for Appellant.
Law Office of Daniel Marks and Daniel Marks and Christopher L.
Marchand, Las Vegas,
for Respondent.
BEFORE PARRAGUIRRE, C.J., HARDESTY, DOUGLAS, CHERRY,
SAITTA, GIBBONS and PICKERING, JJ.
OPINION
PER CURIAM:
In this appeal, appellant seeks to set aside the parties'
property settlement agreement incorporated into the divorce decree on the
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ground of mutual mistake and to join his sister as a third party to the
action because she allegedly had an unresolved interest in certain real
property, which was distributed as a community asset under the
settlement agreement. We conclude that there was no mutual mistake
because the parties were aware at the time they negotiated the settlement
agreement of the facts supporting the sister's claim of interest in the
property. Thus, appellant was not entitled to set aside the property
settlement agreement and his request to join his sister in the action was
properly denied. Accordingly, we affirm the divorce decree.
BACKGROUND
In 2012, appellant Mark Anderson filed a complaint for
divorce from respondent Sophia Sanchez. The parties agreed to mediation
before a retired district court judge to discuss the distribution of their
assets and debts. At issue were several pieces of real property, including a
home located on East Wilson Avenue in Orange, California (Wilson
property). Both parties were represented by independent legal counsel
during the mediation, reached a settlement agreement resolving their
issues, and signed a written Memorandum of Understanding (MOU)
memorializing their agreement. As to the Wilson property specifically, the
MOU stated that it was owned by the parties' trust and they agreed that
the property would be awarded to Mark in exchange for a $75,000
payment to Sophia from Mark's retirement account, representing half of
the property's net value. In the MOU, the parties acknowledged that they
had carefully read the document, that it accurately reflected their
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agreement, and that each voluntarily signed it without undue influence or
coercion and agreed to be contractually bound by its terms The parties
initialed each page of the MOU and signed it at the end.
When Mark filed a notice stating his intent to withdraw and
revoke his signature from the MOU, Sophia moved to enforce it, arguing
that the settlement agreement was valid and the parties had agreed to be
contractually bound by its terms. Mark, in turn, moved to set aside the
MOU as unenforceable, citing NRCP 60(b), and arguing that his sister
Cheryl Parr had an ownership interest in the Wilson property. Although
acknowledging that he and Sophia held title, Mark alleged that they had a
prior oral agreement with Cheryl, under which Cheryl transferred title to
Mark and Sophia for the purpose of facilitating loans needed to renovate
the residence. He further alleged that once the loans were paid off from
rental income generated by the property, Mark and Sophia had agreed to
transfer title back to Cheryl. Consequently, Mark argued that he and
Sophia were merely holding title to the Wilson property for Cheryl's
benefit under a resulting or constructive trust theory, and because the
parties lacked authority to enter into an agreement affecting property
owned by Cheryl, the MOU as to the Wilson property should be set aside
as void. To support his position, Mark provided offers of proof including
trust documents and affidavits or other statements indicating knowledge
of this arrangement between the parties and Cheryl. Mark also requested
to join Cheryl in the divorce action and amend the pleadings to reflect her
ownership rights in the Wilson property. In response, Sophia argued that
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she and Mark undisputedly held title to the Wilson property, the MOU
was an enforceable settlement agreement, and Cheryl lacked standing to
join the action.
After hearing argument, the district court ruled that the MOU
was enforceable under Nevada law and denied the request to join Cheryl
in the action.' On the record, the court observed that Mark and Sophia
were legal owners of the property and any circumstances creating a
constructive trust in Cheryl's favor were known to them. The court
entered the divorce decree, which adopted the parties' MOU and ordered
the property to be divided in accordance with their agreement.
Mark filed this appeal from the decree, and we transferred the
case to the court of appeals. That court reversed and remanded as to the
disposition of the Wilson property, concluding that the district court
should have conducted an evidentiary hearing to decide the joinder issue
before adjudicating the parties' property pursuant to the settlement
agreement. We granted Sophia's petition for review and withdrew the
court of appeals' opinion.
DISCUSSION
The present dispute requires us to examine the creation and
enforceability of the parties' property settlement agreement. Mark
contends that the district court should have set aside the MOU based on
the parties' mutual mistake that the Wilson property was community
'Cheryl also moved to intervene below, but the district court denied
her motion and she was never made a party to the action. Thus, Cheryl is
not a party to this appeal. She did not file a separate writ petition
challenging the decision on intervention.
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property subject to division. He argues that both he and Sophia shared a
misconception during negotiations that title to the Wilson property in
their name supplanted Cheryl's ownership interest and they were
unaware of how a resulting or constructive trust in Cheryl's favor could
affect their rights in, and authority to, dispose of the Wilson property.
An agreement to settle pending divorce litigation constitutes a
contract and is governed by the general principles of contract law.
Grisham v. Grisham, 128 Nev., Adv. Op. 60, 289 P.3d 230, 234 (2012); see
also DCR 16 (requiring an agreement or stipulation between the parties to
be in writing or entered into the minutes in the form of an order).
Contract interpretation generally presents a question of law subject to de
novo review. Grisham, 128 Nev., Adv. Op. 60, 289 P.3d at 236. Whether a
contract exists is a question of fact, however, and this court will defer to
the district court unless the factual findings are clearly erroneous or not
supported by substantial evidence. Id.
An enforceable contract requires "an offer and acceptance,
meeting of the minds, and consideration." May v. Anderson, 121 Nev. 668,
672, 119 P.3d 1254, 1257 (2005). A mutual mistake may be grounds to
equitably rescind a contract or to render a contract void. Tarrant v.
Monson, 96 Nev. 844, 845, 619 P.2d 1210, 1211 (1980). "Mutual mistake
occurs when both parties, at the time of contracting, share a misconception
about a vital fact upon which they based their bargain? Gen. Motors v.
Jackson, 111 Nev. 1026, 1032, 900 P.2d 345, 349 (1995).
We conclude that Mark's argument regarding mutual mistake
is unavailing. It was undisputed that Mark and Sophia held title to the
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Wilson property through a trust at the time they entered into the MOU.
Holding title constitutes "the legal right to control and dispose of
property." Hamm v. Arrowcreek Homeowners' Ass'n, 124 Nev. 290, 298,
183 P.3d 895, 902 (2008) (quoting Title, Black's Law Dictionary (8th ed.
2004)). It was also undisputed that the parties were aware of the facts
supporting Cheryl's purported interest in the Wilson property when they
entered into the MOU. Indeed, Mark represented in his motion to set
aside that the parties had always known the Wilson property belonged to
Cheryl and he attached offers of proof to support that position. Thus, the
parties' had no shared misconception of a vital fact concerning the Wilson
property. See Gen. Motors, 111 Nev. at 1032, 900 P.2d at 349.
Despite his knowledge, Mark did not include in his pleadings
any allegations as to Cheryl's interest, and he ultimately signed the MOU
reflecting that he and Sophia were the sole holders of title to the Wilson
property and agreeing to a specific division between them. Both parties
were represented by independent legal counsel and engaged in the
negotiations before a retired district court judge before signing the written
MOU and each declared that they were "of sound mind and mental
capacity to understand the nature and affect of [the] agreement." Both
parties acknowledged that the MOU "represents what each believes to be
a fair and reasonable resolution of the issues, and each agrees to be
contractually bound by its terms."
Even assuming, as Mark now argues, that the parties were
unaware or misinformed of the legal effect Cheryl's purported interest had
on their disposition of the Wilson property, mutual mistake is not grounds
for rescission when the party bears the risk of mistake. Land Baron Inv.,
Inc. v. Bonnie Springs Family LP, 131 Nev., Adv. Op. 69, 356 P.3d 511,
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517 (2015). More specifically, "Mb the party is aware at the time he enters
into the contract 'that he has only limited knowledge with respect to the
facts to which the mistake relates but treats his limited knowledge as
sufficient," the court will allocate the risk of mistake to that party. Id.(quoting Restatement (Second) of Contracts § 154 cmt. b (Am Law Inst.
1981)); see Restatement (Second) of Contracts § 151(b) (observing that the
law in effect at the time of the contract is "part of the total state of facts").
If Mark did not have sufficient knowledge of the legal consequences of any
oral agreement with Cheryl, he was aware of the facts underlying his
claim that the Wilson property was the subject of an equitable trust and
therefore not appropriate for distribution under the MOU, and he could
have pursued the issue further rather than agreeing to the settlement.
See Restatement (Second) of Contracts § 154(c) (indicating that the court
may allocate the risk of mistake to a party when it is reasonable under the
circumstances); cf. Janusz v. Gilliam, 947 A.2d 560, 567 (Md. 2008)
(holding that a mutual mistake of law was not grounds to rescind a
property settlement agreement particularly where both parties were
represented by counsel during the negotiations and were on equal footing
to know or learn of the relevant law). Thus, Mark bore the risk of mistake
when he entered into the MOU despite being aware of his limited
knowledge. Accordingly, the district court's decision to enforce the MOU is
supported by substantial evidence. Grisham, 128 Nev., Adv. Op. 60, 289
P.3d at 236.
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Finally, because we conclude that the MOU was enforceable
with respect to the parties' disposition of the Wilson property, Mark's
request to join Cheryl in the action for the purpose of adjudicating any
interest she may have in the property was properly denied. For the
reasons set forth herein, the district court's divorce decree is affirmed.
Parraguirre
J. )ca's J.
Hardesty
Gibbons
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