By Bruce I. Shapiro, Esq., Pecos Law Group
1. INTRODUCTION
What does the determination of alimony have to do with salaries in Major League Baseball? Nothing, but perhaps it should. The determination of alimony in divorces is arbitrary, inconsistent and fails most litigants. Other than child custody, the award of alimony in many cases has the most dramatic consequences to people’s lives.
Child support involves minimal conflict because of NRS 125B that imposes a presumptive amount of child support based on the gross income of the payor parent. Under NRS 125.150, community property must be divided equally absent a compelling reason. Then, there is alimony. There is no generally accepted formula for an alimony award. The Nevada Supreme Court has implicitly discouraged the use of formula for alimony through child support cases.1 Every judge views alimony differently and each judge’s award can be drastically different. The same judge, with similar facts, on a different day, could award a different alimony award. How does this serve anyone’s best interests? With 20 different family court judges, it is difficult for even the seasoned divorce lawyer to advise his or her client as to what alimony will be. When negotiating alimony, counsel have no clear guidelines. When you take an alimony issue to trial, you are playing Russian Roulette.
2. WHAT IS ALIMONY?
Although there is no specific legal standard for temporary support, it is sometimes more predictable and consistent than post-divorce orders because the standard is different. In Nevada, all income acquired during marriage is community.2 “The wages of either spouse during marriage are considered to be community funds regardless of which spouse earns the greater income or which spouse supports the community.” Norwest Financial v. Lawver, 109 Nev. 242, 246, 849 P.2d 324 (1993). NRS 125.150(1)(b) mandates that the court “[s]hall, to the extent practicable, make an equal disposition of the property of the parties . . . .” In other words, earnings during marriage are community. The court should therefore have some obligation to equally divide the community income pending a divorce.
The Nevada Supreme Court has recognized two general forms of alimony. The first “is a form of alimony a court may award in order to satisfy the demands of justice and equity. A second type of alimony (rehabilitative alimony) is that provided by the legislature under NRS 125.150(8) which is designed to provide necessary training or education ‘relating to a job, career or profession.’” Gardner v. Gardner, 110 Nev. 1053, 1057, 881 P.2d 645 (1994). A case by case analysis will determine the appropriate amount and length of any alimony award. Gardner, 100 Nev. at 1056-58, 881 P.2d 647-48; Rutar v. Rutar, 108 Nev. 203, 206-08, 827 P.2d 829, 831-33 (1992). Alimony is an equitable award serving to meet the post-divorce needs and rights of the former spouse. Cf. Gardner v. Gardner, 100 Nev. 1053, 881 P.2d 645, 647 (1994). It follows from the Nevada Supreme Court decisions in this area that two of the primary purposes of alimony, at least in marriages of significant length, are to narrow any large gaps between the post-divorce earning capacities of the parties, and to allow the recipient spouse to live “as nearly as fairly possible to the station in life they enjoyed before the divorce.” Sprenger at 860.
The court must award alimony as appears “‘just and equitable,’ having regard to the conditions in which the parties will be left in by the divorce.” Sprenger v. Sprenger, 110 Nev. 855, 859, 878 P.2d 284 (1994), citing NRS 125.150(1)(a). In Sprenger, the court cited seven factors that should be used in determining an alimony award in a divorce case:
So what does this laundry list of factors actually mean? In Sprenger, the district court awarded the wife $1,500.00 per month alimony for two years. Sprenger at 858. The Supreme Court reversed the lower court’s award, finding that based on the relevant factors, the district court’s alimony award was an abuse of discretion. The Supreme Court then remanded the case to the district court to “both increase and extend [the] alimony award such that [wife] is able to live ‘as nearly as fairly possible to the station in life she enjoyed before the divorce,’ for the rest of her life or her financial circumstances substantially improve.” Sprenger at 860, citing Heim v. Heim, 104 Nev. 605, 612-13, 763 P.2d 678, 683 (1988).
In Gardner, the parties had been married for 27 years and had no children. The Husband earned $75,000.00 per year and the wife earned $43,000.00 per year. Gardner at 1055. The district court awarded the wife $1,300.00 per month alimony for the first year and $1,000.00 per month for the second year. Gardner at 1055. Considering all of the relevant factors, the Supreme Court attempted to achieve “income parity” between the parties by increasing “the length of [the] alimony award by an additional ten years, at the rate of $1,000.00 per month.” Gardner at 1058-1059.
As it did in the above cases, the Nevada Supreme Court, in Alba v. Alba, 111 Nev. 426, 892 P.2d 574 (1995), equalized the parties’ income for a reasonable period. Alba involved a marriage of only seven years. Alba at 426. Husband earned $35,000.00 per year, less $6,000.00 paid in child support, and wife earned $20,400.00 per year, and $6,000.00 per year received in child support. Therefore, husband had an adjusted income of approximately $29,000.00 per year and Wife had an adjusted income of $26,400.00 per year. The Nevada Supreme Court affirmed the lower court’s award of $1,000.00 per month alimony to the wife for three years. Alba at 428. The alimony was affirmed because the earning potential of the husband was “higher” than that of the wife. Alba at 428.
In Wright v. Osburn, 114 Nev. 1367, 970 P.2d 1071 (1998), the husband’s income was $62,124.00 per year, and the wife’s income was $19,200.00 per year. The Nevada Supreme Court reversed the lower court’s award of $500.00 per month for five years and remanded the case for an award that was “fair and equitable,” having regard to the conditions in which the parties will be left by the divorce, noting that “it appears very unlikely that in five years, [the wife] will be able to earn an income that will enable her to either maintain the lifestyle she enjoyed during the marriage or a lifestyle commensurate with, although not necessarily equal to, that of [the husband].” The amount and length of alimony are to be determined by “the individual circumstances of each case,” although the district court was not required to award alimony “so as to effectively equalize salaries.” Shydler v. Shydler, 114 Nev. 192, 954 P.2d 37 (1998). It is apparent from Wright and Shydler that that while “equalization of incomes” is not the goal of an alimony award, the district court should make an attempt to “close the gap”of the parties’ standard of living for some period after the divorce.
3. DO WE NEED GUIDELINES?
The simple answer is yes, we need something. The district court awards of alimony are often inadequate. It should be noted that there has never been a published Nevada Supreme Court decision that reversed a trial court for awarding too much alimony. All reversals have been due to the district court failing to award sufficient alimony.
It is not being argued that the court should necessarily equalize incomes. The superior earning capacity of one spouse may have nothing to do with the community contributions of the other spouse. In most cases there is a need for alimony, but the ability to pay is limited. The standard of living usually cannot be maintained after divorce because the same income will be supporting two homes instead of one. Further, it is not argued that marriage itself, without any other factors, entitles a spouse to any post-divorce alimony. There must, however, be more guidance.
The Child Support Enforcement Amendments of 1984 required all states to develop advisory mathematical guidelines to calculate child support awards.4 As a result, in 1987 the Nevada legislature enacted NRS 125B.070 and NRS 125B.080, which created a rebuttable presumption that the guidelines represent the proper child support award and that a deviation from the guidelines will be allowed only upon a written finding that the application of the guidelines would result in an unjust or inappropriate mathematical award. These child support guidelines were developed because the child support awards being made prior to enactment of the formulas were found to be severely deficient when compared to the actual economic costs of rearing children. Orders resulted in inconsistent awards and caused inequitable treatment of parties in similarly situated cases and inefficient adjudication of child support awards in the absence of uniform standards.5 Judicial discretion, unassisted by the presumptive guidelines, often resulted in severely deficient child support awards.6 The same is true of alimony and has been acknowledged by the Nevada Supreme Court when it stated that “the legislature has failed to set forth an objective standard for determining the appropriate amount. Absent such a standard, there appears to be a disparity in the awards for spousal support on similar facts even greater than for child support.”7
The child support formula scheme enacted by the Nevada legislature in 1987, and the case law that has followed, has alleviated many of the problems in inconsistent and inadequate child support awards. The same is needed for alimony. There does not seem to be much support for specific guidelines similar to the child support guidelines. Perhaps this is because some lawyers believe they benefit from the chaos and lack of predictability. Some type of general guidelines, however, are needed to alleviate some of the vast inconsistencies amongst judicial departments.
4. NO INCENTIVE TO BE REASONABLE
In many cases, the financially disadvantaged spouse does not have any incentive to negotiate a reasonable alimony award early in the case. Since temporary support cannot be credited toward post divorce alimony, the financially disadvantaged spouse has an incentive to receive this “free,” temporary support for as long as possible before negotiating a resolution. Conversely, once the matter nears trial, the financially advantaged spouse is ready to take his or her chances at trial. Even when nearing trial, the uncertainly of “Russian Roulette” often does not provide adequate incentive for either party to negotiate a reasonable alimony award.
NRS 125.141 offer of judgment statute for family court specifically excludes alimony. This is one of the problems. Why is there is reluctance to punish a spouse who is either being unreasonable in asking for too much or offering too little in alimony? If one party is clearly being unreasonable with respect to alimony and causes the matter to go to trial, there should be a consequence. Now, alimony is negotiated like the sale of a used car. The “buyer” asks for an unreasonable amount of alimony so he or she has “room” to negotiate. Same with the “seller,” or payor. Neither party wants to give up too much in their negotiating power so the negotiations often have no relation to the facts of the case. These unreasonable positions carry over to trial and the court often finds both parties’ positions to be unreasonable and orders alimony somewhere in the middle. “Splitting the baby” in turn encourages both parties to be unreasonable so that the “middle” is closer to their request.
This brings us to salary arbitration in Major League Baseball. In the Major League Baseball salary arbitration process, each party submits a salary request to the arbitrator, along with their position as to why their request is appropriate. Rather than “splitting the baby” by finding a salary in the middle, which again provides incentive for both parties to exaggerate their requests, the arbitrator must pick one or the other. The arbitrator is forced to pick the most reasonable of the two submissions, thereby forcing both parties to be more reasonable. Instead of going for the “home run,” there is incentive to simply get a base hit, rather than risk striking out.
A similar concept could work with alimony. By requiring the court to choose one proposal or the other, it forces both parties to be more reasonable in their requests. There could be an “out” for the judge if both proposals are so unreasonable that in good conscience the court could pick neither, but in that case, I would propose that there is a requirement that the “more” reasonable party must be awarded his or her attorney’s fees. Unless it is mandatory, the family court judges in Clark County simply will not award attorney’s fees for alimony claims.
5. CONCLUSION
Absent guidelines or the ability of the judges to be more consistent in their alimony awards, alternatives must be explored. Absent a formula or guidelines, using baseball style arbitration is certainly a possibility. Too many litigants are striking out when it comes to alimony and too many judges simply miss the call. It’s time to “Play ball” with alimony.
1. See Hoover v. Hoover, 106 Nev. 388, 793 P.2d 1329 (1990); Lewis v. Hicks, 108 Nev. 1107, 843 P.2d 828 (1992).
3. Sprenger at 859, citing Fondi v. Fondi, 106 Nev. 856, 862-64, 802 P.2d 1264, 1267-69 (1990).
4. Pub. L. No. 98-38, §18, 98 Stat. 1305.
5. See Williams, Guidelines For Setting Levels Of Child Support Orders, 21 Fam. Law Quart. 281, 282, 326 (1987). See also Advisory Panel On Child Support Guidelines, Development Of Guidelines For Child Support Enforcement, National Center For State Courts I-3, 4 (1987) (hereinafter “Advisory Panel”).
6. See Williams, Guidelines For Setting Levels of Child Support Orders, 21 Fam. Law Quart. 281, 283 (1987); Child Support Guidelines: Formula To Protect Our Children From Poverty and the Economic Hardships of Divorce, 23 Creighton Law Review 835 (1990); Goldfarb, Child Support Guidelines: A Model For Fair Allocation of Child Care, Medical, And Educational Expenses, 21 Fam. Law Quart. 335 (1987); U.S. Department Of Health And Human Services, Administration For Children and Families, Office Of Child Support Enforcement, The Treatment of Multiple Family Cases Under State Child Support Guidelines, July, 1991 pages 1-4 (hereinafter “Treatment”) citing U.S. Bureau of the Census, U.S. Dept. of Commerce, Divorce, Custody and Child Support, Current Population Reports, Series P-23, No. 84 (1979), Bureau of the Census, U.S. Dept. of Commerce, Child Support and Alimony – 1983, Current Population Reports, Series P-23 No. 141 (1985); Bureau of the Census, U.S. Dept. of Commerce, Child Support and Alimony: 1985 (Supplemental Report), Current Population Report, Series P-23, No. 154 (1989).
7. Wright v. Osburn, 114 Nev. 1367, 1369; 970 P.2d 1071, 1072 (1998).
“Published in the Nevada Family Law Report, Winter 2012”
Reprinted with permission from the State Bar of Nevada 2012.