MINUTES OF MEETING
ASSEMBLY COMMITTEE ON JUDICIARY
Sixty-seventh Session
April 7, 1993
The Assembly Committee on Judiciary was called to order by Chairman Robert M. Sader at 8:10 a.m., Wednesday 7, 1993, in Room 332 of the Legislative Building, Carson City, Nevada. Exhibit A is the Meeting Agenda, Exhibit B is the Attendance Roster.
COMMITTEE MEMBERS PRESENT:
Mr. Robert M. Sader, Chairman
Mr. Gene T. Porter, Vice Chairman
Mr. Bernie Anderson
Mr John C. Bonaventura
Mr. John C. Carpenter
Mr. Tom Collins, Jr.
Mr. James A. Gibbons
Mr. William D. Gregory
Mr. Ken L. Haller
Mr. William A. Petrak
Mr. John B. Regan
Mr. Scott Scherer
Mr. Michael A. Schneider
Ms. Stephanie Smith
Mr. Louis A. Toomin
COMMITTEE MEMBERS ABSENT:
None
GUEST LEGISLATORS PRESENT:
None
STAFF MEMBERS PRESENT:
Ms. Denice Miller, Research Analyst
OTHERS PRESENT:
Ms. Judy Matteucci, Director of the Department of
Administration
Mr. Bob Gagnier, State of Nevada Employees Association
Ms. Susan McCurdy, Executive Secretary of the Nevada Board of Parole Commissioners
OTHERS PRESENT (Con'd):
Doctor Rhianon Retfalvy, Inpatient Psychologist of the
Mental Health and Mental Retardation Division of the
Department of Human Resources
Mr. Bryn Armstrong, Chairman of the Nevada Board of Parole Commissioners
Ms. Pat McGaffin, Correctional Case Record Manager of the
Department of Prisons
Ms. Ann Price McCarthy, Nevada Trial Lawyers Association
Mr. Thomas Standish, Nevada Trial Lawyers Association
Ms. Victoria Riley, Nevada Trial Lawyers Association
Ms. Debbie Cahill, Nevada State Education Association
Ms. Bobbie Gang, Nevada Women's Lobby
Following the roll call, Chairman Sader opened the hearing on AB 391.
ASSEMBLY BILL 391 -
Revises provisions governing delegation by state board of parole commissioners of its authority to hear applications for parole.
Ms. Judy Matteucci, the Director of the Department of Administration, the requesting agency, testified on AB 391. Ms. Matteucci said AB 391 was an administration bill and it was recommended to resolve what appeared to the Department of Prisons to be a conflict between NRS 213.108 and NRS 213.133. The main purpose of the bill was to reduce the amount of time it took to obtain a final decision on an inmate's application for parole. Prior to the 1991 legislature a parole decision was final if ratified by two members. Hearings were held and decisions were ratified at the time of the hearing. This decision process was expeditious in releasing inmates on parole.
The language contained in NRS 213.1331B significantly slowed down the decision process. NRS 213.1331B mandated all decisions were subject to a majority of the parole board commissioners which was four out of the six parole board commissioners. The parole decision process currently involved two hearings: first a two member panel hearing and a second hearing to reach a majority decision. This process was time consuming according to the Department of Prisons lasting upwards to two weeks in some cases to obtain a final decision on the parole application because the parole release process could not commence until decisions and files were delivered to the Department of Parole and Probation.
Mr. Sader asked Ms. Matteucci under the way the system worked presently when a recommendation was made after a hearing did the board wait until the next hearing for approval. Ms. Matteucci said the law did not require the board to wait until the next hearing, and the information submitted by the Department of Prisons indicated it might phone to obtain the information but the problem with this was sometimes the majority of parole commissioners were not at work or were unavailable. Mr. Sader ask if this bill made things the way they were before the 1991 legislation. Ms. Matteucci said yes.
Ms. Smith told Ms. Matteucci one suggestion made last time this legislation was heard was not to apply it to people convicted of murder, and in those cases a majority of the parole board was still required. Ms. Matteucci believed restrictions in the legislation were already there on capital cases and there was no intent to change such language.
Mr. Bryn Armstrong, Chairman of the Nevada Board of Parole Commissioners, testified in opposition to AB 391. Mr. Armstrong said the parole board in at least 90 percent of its cases saw inmates two months prior to their parole eligibility date. He said all their hearings presently were held by panels. He said these panels went out to various institutions and interviewed a parole applicant, and the panel submitted its recommendation to the full board under the existing NRS 213.133 where a majority vote was required. He said the 1991 session of the Legislature did not pass this act; it had been on the books as long as he had been on the board, 16 years in July. He noted the process of calling people at home to cast a vote happened rarely.
Mr. Sader asked Mr. Armstrong what the normal lag time was between the hearing at the prison and the ratification. Mr. Armstrong said since there sometimes was a difference of opinion among board members, the normal range of time to obtain a decision was between one to four days 75 percent of the time or one month 25 percent of the time. Mr. Sader asked what caused the delays 25 percent of the time. Mr. Armstrong said usually the delays were caused by disagreement among the commissioners regarding a decision. Mr. Sader said a significant factual dispute would cause lag time in the decision-making process.
Mr. Sader asked Ms. Mettucci where she disagreed with Mr. Armstrong's description of the procedure for ratification. Ms. Mattucci said she had provided information given to her by the Department of Prisons. Mr. Sader asked Ms. Mattucci if she had any indication this was an average case or an usual case. Ms. Mattucci said she did not know, but she would obtain this information.
Ms. Pat McGaffin, Correctional Case Records Manager for the Department of Prisons, testified in support of AB 391. Ms. McGaffin said her responsibility was the initiation of lists, parole agendas, and the determination of results in dissemination and production of the parole board agendas.
Mr. Sader asked if Ms. McGaffin disagreed with Mr. Armstrong and why. Ms. McGaffin said she was on a time constraint, and when she produced a parole agenda she would be delayed in putting out a new agenda because of the parole board's ratification process. She said for instance March hearings which should have occurred and been finalized in March sometimes took until the tenth of April. Mr. Sader asked Ms. McGaffin if ten days was the average turn around time to receive information from the parole board. She answered yes.
Mr. Sader asked Mr. Armstrong if there was a lag between the time the board decided and the time it was communicated to the prisons. Mr. Armstrong said it was one day at the very most and it was inputted into the Nevada Correctional Information Network. Mr. Sader said when this information was punched in, then it was available to the prison system. Mr. Armstrong said this was correct.
Mr. Sader asked Ms. McGaffin according to Mr. Armstrong the average parole hearing was two months before the parole eligibility date and was this the information she had. Ms. McGaffin said her department tried to schedule hearings two months in advance of the legal parole release date to allow, if granted a parole, the Department of Parole and Probation to prepare this inmate for release. She said what had occurred in the last two years because the law had changed was to pull out the one year minimum for parole eligibility, and now all inmates were eligible after serving one third of their sentences. There were many inmates who were entering the prison system and who were eligible for parole release two months later. She said anyone with a sentence of five years and under was eligible for release in nine to ten months. Mr. Sader asked Ms. McGaffin what the difference was if it took the parole board four days or ten days to give her results. She said 30 percent of the inmates who currently appeared at their first board hearing were immediately eligible for release, and this occurred primarily because of the one year statutory minimum which was removed in 1991. She said what the department of prisons had clearly requested in NRS 213.108 was two members could ratify a decision except in cases of capital offenses. Ms. McGaffin explained she could not process an inmate for release or refer the case to the department of parole and probation for processing until the decision had been ratified and those files were delivered to the department of parole and probation.
Mr. Toomin asked Ms. McGaffin how many parole cases were on her March agenda. Ms. McGaffin said she did not have the exact statistics but on an average three hundred a month. Mr. Toomin asked how many were ratified in March. Ms. McGaffin said the information was not available, it was still being put in the database.
Mr. Haller asked Mr. Armstrong where this process of making a decision with a few people and some phone calls had came from. Mr. Armstrong said the law required a majority vote of the panel and this law had been on the books as long as he had been on the board.
Mr. Anderson asked Ms. McGaffin, regarding the 60 percent of paroles she had mentioned, what percentage had less than five-year sentences and thus fell under an early release because of the new changes. Ms. McGaffin said she did not have this statistic with her, but she could provide the information for the committee.
Mr. Anderson asked Mr. Armstrong if the parole board had been over burdened because of the change in the law in 1991 where the minimum sentencing of one year was no longer required. Mr. Armstrong said he did have this anomaly of people being eligible for parole consideration when they hit the gates of the prison.
Mr. Armstrong said this occurred when people received a certain amount of good-time credit in the county jails.
Mr. Anderson asked Ms. McGaffin if the department of prisons computed good-time credit. Ms. McGaffin said this was her responsibility as she created all the parole agendas and discharge lists, but the department of prisons had a database which calculated this information.
Mr. Armstrong interjected the board had long recognized a conflict between the statutes and had resolved it by asking its counsel at the Attorney General's Office what to do. The counsel at the Attorney General's office advised the parole board to abide by NRS 213.133, and this was the way the board had been doing it. Mr. Armstrong said he understood the problem of resources in the department of prisons and the need for beds, but this board was also very much concerned about the quality of its decisions. He said it was not the quantity nor the expediency with which all this volume of paperwork was handle. The quality of the decision was very important from the standpoint of public interest and also to the inmate and his family. Mr. Armstrong said this was not an assembly-line operation. He said the parole board made decisions which affected the entire state of Nevada as well as inmates and their families.
Mr. Petrak said stern rules for the panel should be instituted and four members should be required to attend the initial hearing. Mr. Armstrong said commissioners held hearings scattered around the state and this was why not all of the commissioners could always be present in one location to make decisions. Mr. Petrak said the parole board could not make a decision the same day as it had to have a judgment from additional members who were not present and who would review the file and then make a decision. Mr. Petrak strongly felt this whole process cost the state money and held up valuable prison bed space.
Ms. Smith commented Ms. McGaffin had two basic problems: first, releasing inmates eligible for parole, and second, preparing parole agendas. Ms. Smith said as a music teacher she did recitals and programs all the time and sometimes she had to revise her schedules due to some unforseen occurrence. Ms. Smith asked if once the agenda was set, could it be varied in any form. Ms. McGaffin said there was the open-meeting law and publication issues which required hearings to be announced 30 days in advance. She said she used to have an add-on agenda for individuals who in needed to be added to the agenda. She produced two agendas a month, a regular parole agenda and two weeks later a stop-gap agenda which contained all the information in the system. For example, if an inmate received meteritorious credits she produced an add-on agenda to reflect this information. She said there was a consequence with using these add-on agendas because the parole board did not meet its open-meeting publication requirements and the department of prisons discontinued the add on agenda over a year ago. Ms. Smith asked Ms. McGaffin if there was a problem with taking someone off the agenda. Ms. McGaffin answered that was not a problem.
Mr. Bonaventura asked Ms. McGaffin once the inmate arrived in the custody of prison how long did it take to do the sentence computation. Ms. McGaffin said it was done the next day after arrival.
There being no further testimony, Mr. Sader closed the hearing on AB 391.
ASSEMBLYMAN TOOMIN MOVED TO INDEFINITELY POSTPONE AB 391.
ASSEMBLYMAN SCHERER SECONDED THE MOTION.
ASSEMBLYMAN HALLER OPPOSED THE MOTION.
THE MOTION CARRIED.
ASSEMBLY BILL 175 -
Prohibits persons from directly or indirectly threatening or intimidating state employees.
Mr. Bob Gagnier, Executive Director of the State of Nevada Employee Association, the requesting agency testified on AB 175. Mr. Gagnier provided written testimony Exhibit C. He explained the bill addressed only threats and intimidation and would not apply to an altercation which did not affect the job. He said the bill was a preventative measure, and state employees were only asking for inclusion in an existing statute. They had no objection to the bill applying to all public employees.
Doctor Rhianon Retfalvy, Inpatient Psychologist of the Mental Health and Mental Retardation Division of the Department of Human Resources, testified in favor of AB 175. Dr. Retfalvy related her experience when she was shot one morning in the parking lot on her way to work. She was in the hospital for six days and was currently receiving SIIS payments.
Mr. Sader asked Dr. Retfalvy what threats were made and how did she fall under this bill. Dr. Retfalvy said she did not know anything about the threats because her superior had dealt with them. She said when she returned to work she would be very careful the next time someone told her some very specific remarks. Mr. Sader said he understood the individual who shot Dr. Retfalvy was the husband of a patient in the institute. He asked Dr. Retfalvy why this alleged shooter was unhappy with her. Dr. Retfalvy said this alleged shooter was not necessarily unhappy with her, but instead he was unhappy with the system and with the decision which several physicians and her colleague Dr. Moore made to keep the patient institutionalized against her will. She said the alleged shooter termed the decision "incarceration." Mr. Sader clarified a decision was made to keep the woman in the institute and he was unhappy with this decision. Mr. Sader asked Mr. Gagnier if the alleged perpetrator had threaten employees at the institute and said if his wife was not released something terrible would happen. Mr. Gagnier said this was what he understood had occurred. He said the other doctor who was wounded might have been the real target of the attack while Dr. Retfalvy happened to be with the him at the time.
Mr. Schneider said problems of this nature existed in all phases of industry. He commented this legislation would cover one specific group of people, state employees, while there were other private hospitals where this also had happened. He asked Mr. Gagnier if legislation should be provided just for one particular group or were there current laws to protect everyone. Mr. Gagnier answered there were two issues: first, if a person actually shot someone, this was a crime anywhere, and what he was trying to accomplish by this bill was to stop the activity before it escalated to a dangerous point by having a mechanism to charge people who threaten and intimidate. Second, the legislature had already chosen to establish a law which provided protection for public officers, jurors, referees, arbitrators and appraisers. He emphasized all his association asked was for state employees to be included in this list.
Mr. Sader noted this legislation would provide a felony for any threat or intimidation made with the intent to induce a state employee to make, omit or delay any act or decision.
Mr. Toomin asked Mr. Gagnier why municipal and county employees were not included in this bill. Mr. Gagnier said at the time this bill was drafted his association only addressed the interests of state employees; however, he had no objections if the language was changed to include other public employees.
Mr. Gregory asked Mr. Gagnier to focus on the line 5 where it said "authorized by law to hear or determine any controversy or matter" and asked if the intent was to apply the bill only to state employees who were in a position to hear a matter or determine a controversy. Mr. Gagnier replied his association was concerned since the bill was considerably less than what they had hoped because under this bill the only people who were affected were those who were in a decision-making position where they might be induced to change their decision.
Mr. Sader pointed out Mr. Gregory had noticed the open-ended language in the bill where it said on lines 4 and 5 "Any person authorized by law to hear or determine any controversy..." Mr. Sader believed the intent of the language, if narrowly read, dealt with certain decisions of a judicial nature. He said however, if this bill were expanded to all state employees, then the question arose how to apply the language to employees who made noncontroversial decisions; for instance a state employee who made decisions to issue driver's licenses. Mr. Gagnier said it was his association's impression the bill applied to employees who made decisions; therefore if an employee was involved in a decision-making process, then the bill would apply. Mr. Sader told Mr. Gagnier it was important the intent of the bill was clearly stated.
Ms. Smith said in Las Vegas the committee heard testimony from Department of Motor Vehicle employees who were pushed, spat upon and shoved and employees who worked in mental facilities who were physically threatened and hurt. She said these people were not making decisions but would they be protected under this bill. Mr. Gagnier said some of the testimony heard in Las Vegas was given out of frustration, although he sympathized with their situations, they would not necessarily be covered by this bill because this bill did not cover rudeness. He said good manners could not be legislated.
Ms. Debbie Cahill, Nevada State Education Association, testified in support of AB 175. Ms. Cahill said currently teachers and pupils enjoyed a similar protection in NRS 392, and she wanted her association to be on the record urging the committee to support this bill so state employees would receive the same protection.
Mr. Sader postponed the processing of AB 175 until another time since there were several issues which needed to be addressed.
ASSEMBLY BILL 420 -
Provides that community property of parties which is not divided upon divorce is held by parties as tenants in common.
Mr. Thomas Standish, Nevada Trial Lawyers Association, the requesting agency, testified on AB 420. Mr. Standish submitted written documentation for the record (Exhibit D). Mr. Standish stated, "I'm the co-chair of the Nevada Trial Lawyers Domestic Committee. We are here, Ms. McCarthy and I, on all three of the bills that you've just mentioned. The Trial Lawyers Domestic Committee has tried to look to some procedural matters that need to be clarified and corrected, based on Supreme Court decisions, and other things that have come along in the last few years, and these bills arise from our committee work on those subjects. Starting with AB 420, incidentally all three of these bills deal with amendments to one particular statute NRS 125.150. The first bill AB 420 concerns property that is not disposed of in a decree of divorce that is actually community property. The rule in Nevada for many years was quite confused actually and it's still confused. But the rule was that if you could come back to the court within six months and ask that property be divided that was omitted from the decree then you had a pretty good chance of doing that. If you're going to try and come back to the court more than six months after the date of the decree it was much more difficult and the Supreme Court developed this elaborate concept of extrinsic fraud, and it had to do with whether or not you could make it to the courthouse and you were represented, had an opportunity to be heard and so forth and that was essentially the rule. The latest case on that topic which was McCarroll vs. McCarroll the Supreme Court essentially said, `Look, if you are represented by an attorney and this issue was not raised during the divorce, you're out of luck coming back after the six months.' We're not going to help you and in that case in fact, it was a lady who had not gotten a share of her husband's pension and she was out of luck. I suppose she could have filed a claim against her lawyer, but that was her only remedy. Amie vs Amie is a 1990 case where the Supreme Court seemed to reverse course only they did it under different facts. Mr. Amie was one of the Hilton plaintiffs and when he got divorced nobody thought the case was worth anything and his cause of action was left out of the decree. After he got a million dollar verdict, his wife came back to court two and a half years later and said, `Say, this is community property I want a share of it.' The law was very clear at least the prior law that she was not going to be able to succeed on that claim. When it got to the Supreme Court the Supreme Court said very simply it was an omitted asset. It can be divided which was very much a change in the law. They seem to have again said that in a subsequent decision, a very old divorce decree, in Mr. Blanchard a man who owned a construction company in Las Vegas. What we're trying to do with this bill is simply clarify what I believe is the direction of the Supreme Court now and what the committee feels is the fairest way to treat this type of an issue. And that is, if there is community property that was omitted from the decree, let the parties or the agreed party come back to court and have the court divide the property saying, in essence, what the Supreme Court has said before and now what they have said more recently in the Amie case. It's very confusing. Just to give you that example in its clearer sense, the McCarroll case was a case the husband allegedly fraudulently concealed the fact that he had this pension. He lied to the wife. When she came back, this court said, `We can't give you any assistance here.' In the Amie case there was no fraud whatsoever. It had just been left out; nobody thought it was really worth anything. They allowed the wife to recover there. So when you take that in context, the present rule must be that the fraudulent person is going to be protected, and the person who just made a mistake or forgot something is going to have the property divided. It's confusing, it doesn't make any sense. AB 420, the words of it just amend the section of NRS 125.150 that deals with talks to `after discovered property.' We think its straight forward and needs to be done and will help everybody involved in a divorce case to divide community property that they did not get their fair share of in the divorce."
Mr. Gibbons said page 2, Section 1, subsection 4, lines 1 through 3 was also a change from the current law where the wording "separate property" was required to adjudicate either the wife's or the husband's support. Mr. Gibbons asked why eliminate the opportunity to use community property for support. Ms. Ann Price McCarthy, Nevada Trial Lawyers Association, addressed Mr. Gibbons' question. Ms. McCarthy said this was not the case because the page 2, Section 1, subsection 4, line 1 stated, "In granting a divorce, the court may also..." and it was in the subsection which discussed, community property. Ms. McCarthy said if this language was considered in the context of the next two bills which were to be discussed certainly it had to begin with community property, but in some circumstances there might not be sufficient community property to care for one spouse or another given specific findings of fact and circumstances. Mr. Gibbons interjected this could be done by the court now. Ms. McCarthy stated, "The court can do it now but its not clear. All this bill does is clarify what we're all doing in the trenches and what most of the judges are doing."
Mr. Standish further stated page 2, Section 1, subsection 7 was in essence AB 420. AB 420 only changed subsection 7. Mr. Gibbons said there was a language problem with subsection 7 because the word "rights" was the modifier of the verb and it should have been "are" instead of "is". Mr. Gibbons next said he wanted to deal with subsection 7 with the term "tenants in common." He said there was the assumption of any property under subsection 7 became "tenant in common" title. Mr. Gibbons asked what if it was originally recorded as joint tenancy. Mr. Standish said the rule in Nevada provided upon decree of the divorce being filed and entered by the court, any joint tenancy property owned by the parties was automatically by operation of law converted to a tenancy in common. Mr. Gibbons replied if it was listed in the decree. Mr. Standish answered if it was listed was correct. Mr. Gibbons said this bill presumed property not listed in the decree even though joint tenancy property became tenancy in common. Mr. Gibbons said what if there was property which was recorded which was not listed in the decree which did not give notice at the time of some event, ie. death of one of the parties, what was held in joint tenancy, what would be the operative circumstances, and what would happen to that property. Mr. Standish said arguably under the statute which automatically converted it, if it was held in joint tenancy and the parties were no longer married, whether or not it was in the decree, it would be converted to tenants in common. Mr. Gibbons asked Mr. Standish if a person had to come back to court under this statute. Mr. Standish explained in his opinion a person did not have to come back, but if it was something which was not divided by the court, then this amendment to the statute would allow a person to come back by a simple motion and have that property divided. Mr. Gibbons asked Mr. Standish about page 2, Section 1, subsection 7, line 20 where it discussed the request for "an equal division of property"; he said why an equal division when there might be a presumption of an equal or an unequal contribution in community property. Mr. Standish revealed the starting point for division of community property in Nevada was or should be an equal division. He said the court then exercised its discretion to determine whether or not some other equitable principles or concepts of fairness should operate to divide it otherwise.
Ms. McCarthy said perhaps Mr. Gibbons was concerned about the situation where property which was not originally adjudicated in a divorce would be noticed in court. She said practically speaking this bill would allow everyone to have a say about their property but would prevent the deed, if it was held in joint tenancy with rights of survivorship, from being improperly dealt with in a probate if something should happen to one of the parties.
Mr. Sader asked Mr. Standish to define the terms "tenancy in common" and "joint tenancy." Mr. Stadish stated, "Tenants in common" refers to any people who hold property in common meaning they don't have an exact division identified in the deed. The practical effect of tenants in common versus joint tenancy is really as follows: If one tenant in common dies, his portion of the property passes through his estate to his heirs. In joint tenancy when a joint tenant dies, at the moment of his death his rights in the property are extinguished and the remaining joint tenants on the deed own the property 100 percent." Mr. Sader asked Mr. Standish if the usual circumstance for a married couple with real property was to hold the property in joint tenancy so when one of them died the survivor received all of the property by operation of death. Mr. Standish said this was correct. Mr. Sader said the practical effect of this bill was, if a person had a piece of joint tenancy property, generally real property, which was omitted from the decree, it immediately became tenancy in common, not joint tenancy; so subsequently, if an ex-spouse died, the survivor would not take whole account, it was still a 50/50 asset. Mr. Standish said this was already an existing statute, but this bill would not change the law, instead it only made the law more consistent. Mr. Standish explained it was less an issue of tenancy in common versus joint tenancy in asmuch as it addressed the issue of community property "things" which were not necessarily held with a title or a deed.
Mr. Haller addressed a problem on page 2, Section 1, subsection 9, line 36 which stated, "Whether a spouse who would pay such alimony has obtained greater job skills or education during the marriage..." and he said the problem was the next word "and" meaning the other spouse was the one who supported the education. Mr. Haller suggested Mr. Standish should address this provision in terms of alimony and recommended "and" be replaced by the word "or". Ms. McCarthy said she would be happy to look into the "and" versus "or" issue for Mr. Haller.
Mr. Scherer asked Mr. Standish in the case of a pension was a pension necessarily divided equally and was an entire pension community property even if the bulk of it was earned during the marriage. Mr. Standish stated, "The courts had adopted a very simple formula for that type of division. What they do is they take the contributions to the pension during the marriage, either in dollars or in years, and they compared that to the total number of years that the individual has in that pension plan when they retire. Most of the time you can't divide a pension at the time of the divorce, you have to wait until the person receives the money in order to do that. We called it the `time rule' as a common term. There were arguments back and forward but overall it really is the fairest way to do that. So if you had five years contributions during the marriage but the person had twenty years in at the time they retired, the community portion would be five over twenty; it would be a quarter and the husband or the wife, the person not in the plan, would receive one half of that community portion as a part of the monthly payment." Mr. Scherer asked if a person would receive one eighth of the total pension and the one quarter would be the portion which was divided equally under this bill. Mr. Standish said this was correct.
Mr. Porter asked if Mr. Standish alluded to a rule 60 B motion when he discussed "filed within the six months." Mr. Porter asked if this bill would eliminate the rule 60 B motion. As he understood the old state of the law, there were six months under rule 60 B to prove one of the alleged grounds to receive relief from judgment. The exception to this rule was fraud where an individual deliberately hid an asset or secreted something. If this was discovered three years later an individual was allowed to come back in on a separate action for fraud. Mr. Porter asked Mr. Standish what this bill did do to finality in divorce decrees and property settlements. Mr. Standish said there were two concepts: first, with respect to rule 60 B, this amendment would change 60 B to the extent if there was an asset which was significant enough which was omitted from the case and omitted from the decree, then it would allow the party who did not receive his share of the asset to come back to court; in this respect the six month rule would be extended, perhaps even indefinitely. Mr. Standish explained the difficulty was if a person omitted an asset and the other person truly did not know about it or the person's attorney was so incompetent not to ask about it, suing his attorney was a tough remedy. This bill provided an easy remedy, and was more fair to the person who had been shorted. Mr. Standish told Mr. Porter he was right, this would cause less finality in this specific context of facts to a divorce action.
Mr. Porter commented unless the Supreme Court had changed, there had always been some type of finality of actions in divorce cases which was why 60 B was limited to six months for an individual to reopen a case unless he could prove fraud. Mr. Standish said this had been the Supreme Court's position but in Amie vs. Amie and Blancherd vs. Blancherd , the decisions went contrary to the Supreme Court's norm. In Blancherd it was many years and in Amie it was two and half to three years, but the Supreme Court decided to reopen these cases. Mr. Standish said these cases raised an issue which needed to be resolved one way or the other because there was a real conflict.
Ms. Bobbie Gang, Nevada Women's Lobby, testified in favor of AB 420. Ms. Gang asked the committee to support AB 420 since it clarified language which might be ambiguous in the law regarding divorce and property settlement.
There being no further testimony, Chairman Sader closed the hearing on AB 420.
Mr. Regan recommended an amendment on page 2 line 16. He said the word "is" should be replaced by the word "are."
ASSEMBLYMAN REGAN MOVED TO AMEND AND DO PASS AB 420.
ASSEMBLYMAN HALLER SECONDED THE MOTION.
Mr. Porter opposed the motion because he felt the law had in the past and should in the future require a certain finality to domestic actions. He said passing this statute would allow either party for years the ability to go back into court and argue as to whether or not an asset was not specifically enumerated in a property settlement agreement.
Mr. Sader supported the motion. Although he agreed there would be a lack of finality, he was more concerned with the rare situations in which there was a very high degree of injustice where assets were intentionally omitted. He said the better rule was to let the court decide on a case-by-case basis without the very high standards of fraud and mistake interfering with the concept.
Mr. Carpenter was torn between Mr. Porter's and Mr. Sader's positions, but he still felt a time limit should be imposed.
Mr. Scherer said he agreed with Mr. Porter's and Mr. Carpenter's comments and some finality was necessary. He did not see the bill's language imposed any time limit and he was not certain the Supreme Court would.
Mr. Petrak said he was in favor of the motion.
Ms. Smith said she agreed with Mr. Sader. She said if somebody came back after twenty years, a judge should be the one to decide if a case was frivolous, unsubstantiated or justifiable. She believed these types of cases were only brought in extreme or significant situations, and they deserved to be heard and decided upon. She supported the motion.
Mr. Gregory also felt there should be finality; therefore, he opposed the motion.
Mr. Porter stated as rebuttal from a finality standpoint the element of time was the issue. He said after time had passed people had new lives. He said people wanted to keep their past in the past and not reopen old wounds. He said he thought finality was needed especially in divorce cases.
Mr. Sader asked for a roll call vote.
THE MOTION FAILED.
ASSEMBLYMEN ANDERSON, BONAVENTURA, CARPENTER, COLLINS, GIBBONS, GREGORY, PETRAK, PORTER, SCHERER AND SCHNEIDER VOTED NO.
ASSEMBLYMEN HALLER, REGAN, SADER, SMITH AND TOOMIN VOTED YES.
Mr. Anderson requested to amend and do pass AB 420 by replacing the word "and" with the word "or" on line 37 and to eliminate section 7 restoring the numerical order to the bill. Mr. Sader ruled Mr. Anderson's motion out of order.
ASSEMBLYMAN ANDERSON MOVED TO INDEFINITELY POSTPONE AB 420.
ASSEMBLYMAN BONAVENTURA SECONDED THE MOTION.
THE MOTION CARRIED.
ASSEMBLYMEN HALLER, REGAN, SADER, SMITH AND TOOMIN VOTED NO.
Mr. Carpenter suggested he and Mr. Porter could work something out with Nevada Trial Lawyers on this issue. Mr. Sader thought this was a good idea in order to obtain a sense of equity and fairness for both sides of this issue. Mr. Porter agreed to assist in this area.
ASSEMBLY BILL 347 -
Requires equal disposition of community property of parties in proceeding for divorce under certain circumstances.
Mr. Thomas Standish, Nevada Trial Lawyers Association, the requesting agency, testified on AB 347. Mr. Standish stated,
"AB 347 is what's commonly referred to among us domestic lawyers as the McNabney bill but it has some important other factors to it. I'll try not to make a simple concept more complicated than it is. The best way I can explain it is as follows: Nevada's been a community property, state since as long as anybody has known. The basic concept of community property is that if assets are identified as community property then they are to be equally divided between the parties. Along with that goes the notion that divorce courts are courts of equity. They are not bound by strict legal principles. Of course they are not bound in divorce cases to exactly divide property 50/50, that's what the court's discretion is all about. They have tremendous discretion both in property division and even more so with alimony awards. What happened was there are some words in the statute as it exists now, and it says essentially, there are several terms. It says the courts to divide property and joint tenancy property and community property as appears just inequitable. Along came the McNabney decision. In McNabney the trial court found for basically good reasons that a major asset of the marriage should not be divided equally; the judge divided it unequally. When the Supreme Court brought down their opinion in McNabney, they went much further than just saying these seem to be solid reasons from the trial court and it will affirm an unequal division. They went on to say well these words "just inequitable;" What does that mean? Are we an equal distribution state or are we an equitable distribution state? They went on to make a very strong case for the fact that Nevada's an equitable distribution state, meaning the judge can divide the property any way the judge sees fit. There's no equal division requirement and so forth and so on. McNabney was probably the right result, but the Supreme Court has really confused this area. I have had arguments in virtually every area of community property law in Nevada in cases where I've been involved, where counsel have argued that McNabney no longer requires an equal division, that they can abandon those laws, and they can just do whatever they want with the property. What we would like to do is bring some sanity back to this statute. I think that the amendment is very plainly worded and straight forward. It says to the extent practicable, in other words you can't always divide something equally, but to the extent practicable the judge should make an equal division. If the judge then finds a compelling reason to make an unequal division, he puts those reasons in writing, and that's the way it will be. The Supreme Court's rule that it's been long standing forever is they don't change judge's decisions from the trial level because those judges have seen the parties and they've seen them eye to eye and heard their testimony live. Unless it's an abuse of discretion, they're not going to disturb that on appeal. That's all that we're really trying to do here is to say, let's leave the foundation of community property law the way it is. It starts with an equal division, but then the judge takes a look at the situation and exercises his or her discretion. I think that's the main focus of the first part. The second and perhaps even more important part of this AB 347 is that it proposes to eliminate other words in this paragraph I just referred to, and those words are that the courts should have regard to the respective merits of the parties when they divide property. Nevada has always been a no-fault divorce state, meaning that you can file for divorce on the grounds of incompatibility. You do not have to allege cruelty, adultery, mental cruelty, desertion or any of the old common law things that people can endlessly fight over. But the Supreme Court in a series of decisions has hinted very strongly that this phrase "respective merits of the parties" needs to be defined. For fifty years in Nevada we've been doing just fine in community property law being a no-fault state keeping all of those personal things out of the courts, and now the Supreme Court has said in the Heim decision people thought they said that fault was an issue. They then clarified in a more recent decision about a year ago in Rutar; they said well, we specifically did not define those words in our Heim decision, but they mean something. Well, I can tell you at the family law conference of all of the State of Nevada Domestic Lawyers in Tonopah several weeks ago, from the comments and lectures that were given, domestic lawyers are already assuming that the Supreme Court has brought the fault concept back into Nevada law. I've had depositions where I've had lawyers go on for an hour asking, `Why did you leave? Why did you do this? What did you do wrong in the marriage? Did you attempt to reconcile? Did you see a marriage counselor?' I mean this is a black cloud on the horizon, I feel. I think it will be an extraordinary change in domestic litigation if this comes. Just the effect on children to have people fight that much more over the fault concept and the millions of dollars in attorney's fees and the thousands of hours of court time and expense. It's not a direction that I think we want to go in. The Supreme Court again, they are so concerned about doing equity in cases that I feel that they have taken the route, and they've started down this path, and they feel we must define these words because they're in the statute. I can tell you in my thirteen years of litigation in divorce, I've never had a judge refer to this phrase. They have never referred to "the respective merits of the parties" in making a decision. It is not a necessary phrase but it's about to become a very important phrase in a way that scares me to death. Part of what we're asking here is to eliminate that language from this statute and let's simply go back to-let's stay in the bounds that we have now; let's not pull out divorce courts to be a forum for every single recrimination in the breakdown of a relationship."
Mr. Sader said he became involved in these Heim, Rutar, and McNabney decisions by chairing the judiciary committee during the interim, and what Mr. Standish said was absolutely true.
He said divorce attorneys felt compelled by law under these decisions to argue all of the fault issues because of the effect it might have on the court's decision on how to divide community property and debts. He said now fault issues were injected into what used to be considered a straight-up question of equity and equal division.
Mr. Carpenter asked Mr. Standish if the words "for benefit of the children" were taken out, what did the other language on Section 1, subsection 1, line 16 accomplish in regard to "for the benefit of the children." Mr. Standish explained the discretion of the courts in setting aside property for the benefit of the children was specifically covered in another statute, but the power to do so was without question because children came first in Nevada courts. Ms. McCarthy revealed family law lawyers had for years put children of a marriage first. She said this was their primary concern, and as Mr. Standish said, it was addressed in other specific statutes and the court always put the children first.
Mr. Carpenter was very skeptical anything would really change if the language Mr. Standish's suggested was adopted. Mr. Standish replied it would not change the practice as it exists now, but when the Supreme Court brought down the inevitable decision that a case needed to be determined by who was at fault, then there would be a tremendous change in the way a case was litigated.
Mr. Porter told Mr. Standish if what he was trying to accomplish was to keep fault out of the proceeding, this language did just the opposite. Mr. Porter suggested if Mr. Standish wanted to take the fault out of the legislation, simply put a period after the word "parties" in Section 1, line 10.
Mr. Standish said if Mr. Porter's recommendation was incorporated into the bill, a judge's discretion would be eliminated.
Mr. Porter noted Mr. Standish's prior testimony said the court was going more toward an equitable distribution than an equal distribution, and the reason he was there today was to stop this. Mr. Standish answered no, he thought what the court had done was to eliminate the starting point. Mr. Standish said there were certain guide posts for how courts made decisions, and step one was they started with an equal division and step two was they exercised their discretion. He said the Supreme Court had in effect eliminated step one and said start anywhere, just arrive at an equitable distribution which was very difficult for litigants to handle. He said lawyers and litigants needed a starting point. He thought a starting point had always existed prior to McNabney now he had no idea where it was.
Mr. Porter asked if it would be better to make a blanket statement an equal distribution, period, and eliminate the discretion. Mr. Standish replied he did not think so because it was impossible to deal with the vast variety of human facts and situations without having the discretion of a judge. Mr. Standish stated, "In McNabney, the husband received eighty percent of an annuity because the court looked to the wife and saw she had substantial separate property and an excellent government job where she did not need the support of her husband. On the other hand, the annuity was a major part of the husband's income and he was dependent on it." Therefore the judge gave the wife 20 percent of the annuity while he divided the other property equally and frankly Mr. Standish thought this was the right decision. Mr. Porter interjected this would turn the concept of community property upside down if this was in fact what the Supreme Court had done. He said the concept of community property had always been partnership and whatever was acquired during a marriage, with the exception of gift or inheritance, was presumed to be community property. Mr. Standish said the word "compelling" on page 1, Section 1, line 18 gave very clear parameters to the court. He quoted "a compelling reason to do so and set forth in writing the reasons for making the unequal disposition...." He pointed out right now there was no need to justifiy a departure from equal division.
Mr. Anderson asked Ms. McCarthy if it was possible to pick up the language starting at Section 1, subsection 1, lines 14 through 16 where it stated "and to the party through whom the property was acquired, and to the burdens, if any, imposed upon it, for the benefit of the children" and insert it at the end of line 10. Ms. McCarthy said it did not bother her association if the language was included to leave in the condition in which they would be left by the divorce and the rest of the language, "the burdens if any imposed upon it for the benefit of the children." She said property, assets, money and things were not the only things divided, debts were also divided. She said if liabilities and assets were divided equally then it would be a great hardship because not everybody earned the same amount of money and had the same amount of education. She believed it was improper to divide things exactly equally.
Mr. Bonaventura believed if there were two people and one of them was significantly more aggressive and smarter than the other, why should the assets not be divided equally. He said the person worked hard to get what he had and helped out the family and when the two people divorced it should be divided equally. He agreed with Mr. Porter's suggestion of putting a period after the word "parties" in Section 1, line 10.
Ms. Bobbie Gang, Nevada Women's Lobby, testified in favor of AB 347. Ms. Gang asked the committee to support AB 347 since it clarified language which might be ambiguous in the law regarding divorce and property settlement.
There being no further testimony, Mr. Sader closed the hearing on AB 347.
ASSEMBLYMAN SCHERER MOVED TO DO PASS AB 347.
ASSEMBLYMAN SMITH SECONDED THE MOTION.
Mr. Anderson was concerned because of the elimination of the information in Section 1, subsection 1, lines 15 and 16 of the current language where the wording "for the benefit of the children" would also be deleted. He said even though he had been assured other statutes might clarify this issue, he would be more comfortable with the bill if it also included this language so the judge clearly knew this was the intent.
Mr. Scherer disagreed with Mr. Porter's arguments. Mr. Scherer believed it was better not to include a laundry list in the bill to define the term "a compelling reason," and he said if this list was left out, the compelling reason would become evident. For instance, in the situation where children were involved, the compelling reason would be the benefit of the children. Mr. Scherer said this was why he did not recommend any amendments to this bill.
Mr. Bonaventura said he opposed Mr. Scherer's comments he felt there should be an amendment which was discussed earlier by Mr. Porter and he would be voting against the motion also.
Mr. Porter stated, "What I've been trying to get at with my recommendation of just putting the period after the word `parties' was to make sure that fault was not interjected into the economic equation. The Chair has been whispering in my ear for the last half hour about perhaps some of the inequities that could happen because not only will I take fault out of the equation, but I take the whole economics out of the equation. ......I can see where that probably might work a hardship somewhere. There's no `might'; it definitely would work a hardship in some situations because it would totally tie the court's hands. Let me echo also for purpose of this record Mr. Scherer's comments, and that is that I think this legislature needs to send a message in community property law fault does not have a place in terms of economic distribution of property. It would seem to me that only in the words we are here choosing "is compelling", and we do not define that, but compelling has long been defined in terms of constitutional challenges to guarantee fundamental rights. As a compelling state enters that is the highest interest that the state can require. Using that same analysis to the word "compelling" on line 18 of this bill, I would presume and I would hope that the courts would have to find a very, very substantial reason for injecting fault into the equation in awarding property. So with all due respect to Mr. Anderson and Mr. Bonaventura, I appreciate them supporting my position, with that clarity on this record, I will support Mr. Scherer's motion."
Mr. Carpenter supported the motion.
THE MOTION CARRIED UNANIMOUSLY TO DO PASS AB 347.
ASSEMBLY BILL 435 -
Provides for disposition upon divorce of property held by parties in joint tenancy.
Mr. Thomas Standish, Nevada Trial Lawyers Association, the requesting agency, testified on AB 435. Mr. Standish stated, "AB 435 attempts to apply community property law to the division of a joint tenancy property on divorce. I believe it's clear that the Legislature intended to do that. If you look at the sentence that we were just discussing previously at lines 12 and 13 it says "condition in which they will be left by the divorce and to the party through whom the property was acquired." In other words the court is to have regard to the party through whom the property was acquired. So, to me that should have meant that if the wife came into the marriage with a house, and she owned it free and clear, and she put it into joint tenancy for whatever reason, and there was then a divorce six months later, the judge would look to the fact that the wife had owned the house free and clear before the divorce and wouldn't just automatically give half of the house to the husband. What's happened though in jurisprudence in the decisions of the Supreme Court over the number of years in Nevada is that a completely different interpretation has evolved. This is the present state of the law. The Supreme Court has applied the law of gift to a transfer of property into joint tenancy. The law of gift is very strong; it creates a presumption; it's almost a conclusion that if you put the property into joint tenancy, you meant to give half of it away. Now you can overcome that presumption and you can change that rule if you show by clear and certain evidence that there was not an intention on both parties part to have it shared 50/50. Well, that phase means that you have to have almost a written agreement, either that or you'd have to parade in 20 witnesses who said, if oh yes, I heard Mary and John discuss this many times, and they said oh even though John put the house in both names, you know he didn't really mean for Mary to have half of it. In other words once it's in joint tenancy, its going to be divided equally and that's the way that it goes. The problem with that is that people place ordinary people who don't understand the law who are not lawyers they don't know that this is the effect of placing something into joint tenancy. Properties between marriage spouses, particularly the family residences, goes into joint tenancy under all kinds of different circumstances. If there is any kind of a loan against the property and there is a trustee that's going to be filed, nobody's going to loan money unless both spouses names are on the title. So they will force you to put the title into joint tenancy with any kind of a loan. There have been a tremendous number of refinancings lately with the drop in interest rates. Title companies will not insure that title, and mortgage companies will not loan that money unless it goes into both names. Title companies just automatically put it into joint tenancy if it is husband and wife. I've never seen a title company ever put something into tenants in common. It always goes into joint tenancy, and it gives them very strong gift presumption to that. People do it for estate planning essentially. They do it because if they die they want the house to go to their wife or husband without having to go through probate and all that expense. Joint tenancy is very effective; it just passes, you just make out an affidavit recorded with a copy of the death certificate and the house goes to the surviving spouse. But people don't understand the effect of that. I had a recent case where a doctor had a $300,000 house. He had almost entire ownership. There was a small mortgage; he refinanced it. He got divorced two years later; it was impossible to overcome the presumption. He didn't know to ask his wife for a quick claim deed back or have an agreement that she wouldn't get half of it. It was very sad and I see it all the time. Women are also victim to that I think, in terms of sometimes being dominated by their spouse saying, honey the house should be in both names, so she does it not realizing that if she's left or divorced a year later, it's going to be divided equally. I had a client recently that was the most interesting. He was only married for about three months, and he put his house that he owned free and clear himself right into joint tenancy, and the divorce came about a year and a half later. And I said to him, `Why did you do this?' There was no reason to do it. He said, `Tom, I thought that's what you were supposed to do when you got married was to put the house into both names.' He had no idea that the court would divide it 50/50 because of that gift presumption. So what we're trying to do in AB 435 is simply say that a joint tenancy property like that is community property. In community property if something is gotten into both names, you're allowed under community property law to trace back to your separate property. If you can show you put money into this house, and you can show clearly to the court that you did that, then the court will -- a bank account is the best example. If you can show that you put a certain amount of money in there, and it's always been in there and it was your separate property, the court can consider awarding that to you. There's a burden there, and obviously you have to prove it, but that's the way community property works. It's not just slam, bang and that's it; it's community property. People can argue that those things are still separate property or have a component of separate property, and that's what AB 435 would do. It simply says that if you can prove and overcome the presumption of community property and show your separate property contribution to the asset, then the court can divide it accordingly if you meet that burden of proof. The rule we have now is very tough. I don't think that it works equity between the parties. It's really arbitrary."
Mr. Scherer asked Mr. Standish why it required clear and convincing evidence to rebut the presumption. Mr. Standish stated, "That is the existing standard under Nevada case law for tracing separate property into a community property asset. The basic rule you have to understand in a community property state like Nevada is that if you acquired the asset during the marriage or it's in both names, the court is going to start out presuming it's community property. But if you can then show that you contributed separate property to it and you do that by a clear and convincing standard, then the court will consider awarding you your portion of that separate property component back out of that asset before it's divided."
Mr. Scherer asked Mr. Standish how this was different from what he described as the law of gift. Mr. Standish stated, "The law of gift presumes that you meant to give 50 percent to the other party, and to overcome that presumption you meant to give it is very difficult. Just showing that you contributed money doesn't help you; you've already been deemed by the court,.... that you meant to give it away. ......People don't enter into written agreements saying that if we get divorced, it won't be divided equally."
Mr. Petrak asked Mr. Standish if a husband was injured and he went through litigation and later received a settlement, for example of $50,000 for his injury, would his settlement be considered community property. Mr. Standish stated, "No, Nevada follows the rule that a personal injury recovery is a completely separate property payment to that person, and also a disability payment would fall into this same category unless the opportunity to receive that disability payment had been built up over the years by contributions from their employment. Technically speaking if he had a $50,000 recovery but $10,000 of that recovery was specifically designated as lost wages, perhaps those wages can be considered community property, but the recovery for his disability, pain or suffering is a separate property asset."
Mr. Carpenter asked Mr. Standish what the difference was between joint tenancy and community property and how would these terms be affected by this bill. Mr. Standish stated, "It would not be affected. Joint tenancy is a solid concept in the law, and it applies to what we discussed earlier, and that was if you hold it as tenants in common, it's not going to go to the surviving person. Joint tenancy is unique; it's a legal concept that extinguishes any rights the joint tenant has upon the death of that person. So it's really a great estate planning or probate avoidance type of device, and I think it works very well in that role. It's gotten a little bit confused when you place a joint tenancy piece of property into a community property marriage because the courts have always interpreted joint tenancy to be a different kind of property. For purposes of divorce I think that's worked a hardship on people because of how the courts have interpreted joint tenancy as being gift and all that, and it's made it very difficult. It's sort of a irrevocable act once you transfer property."
Ms. Bobbie Gang, Nevada Women's Lobby, testified in favor of AB 435. Ms. Gang asked the committee to support AB 435 since it clarified language which might be ambiguous in the law regarding divorce and property settlement.
There being no further testimony, Chairman Sader closed the hearing on AB 435.
ASSEMBLYMAN TOOMIN MOVED TO DO PASS AB 435.
ASSEMBLYMAN BONAVENTURA SECONDED THE MOTION.
THE MOTION CARRIED UNANIMOUSLY.
There being no further business to come before committee, the meeting was adjourned at 10:52 a.m.
RESPECTFULLY SUBMITTED:
CHANDRA PENDERLAND
Committee Secretary
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Assembly Committee on Judiciary
April 7, 1993
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