## Facts

- Lois Michoff and Max Michoff lived together for about nine years without marrying and, at times, represented themselves as husband and wife.
- During the relationship, Lois changed her last name to “Michoff,” and the pair filed joint tax returns as husband and wife.
- The couple operated a construction-equipment and contracting business that was later organized as Western States Construction, Inc. (Western States).
- Lois handled significant business tasks, including office work such as bookkeeping, payroll, and paperwork, and also assisted with equipment-related work.
- Lois obtained and maintained business and licensing paperwork connected to the enterprise, and she signed a “consent of spouse” that enabled Max to enter a business partnership.
- After the relationship ended, Lois sued Max and Western States seeking one-half of the property accumulated during the relationship, relying on community-property concepts.
- The trial court treated the assets acquired during the relationship as if they were community property and awarded Lois one-half of the net assets, entering judgment against both Max and Western States.
- Max and Western States appealed.

## Issues

1. Whether Lois’s pleadings were sufficient under Nevada’s notice-pleading rules to support recovery based on an express or implied agreement between unmarried cohabitants to share property.
2. Whether Nevada law permits enforcement of express or implied property-sharing agreements between unmarried cohabitants, and whether community-property concepts may be used by analogy to carry out that agreement.
3. Whether Western States Construction, Inc. could be held directly liable on an agreement that existed between Lois and Max personally.

## Decision

- The Nevada Supreme Court affirmed the judgment against Max, concluding that the evidence supported the trial court’s finding of an express and/or implied agreement that Lois and Max would share property acquired during their relationship.
- The court held that, even though Lois framed her claim using community-property language, the pleadings gave fair notice of a contract-based claim under Nevada’s notice-pleading standard.
- The court approved using community-property principles by analogy as a method to value and divide property in a way that carried out the parties’ agreement, rather than imposing marital property rights based only on cohabitation.
- The court reversed the judgment against Western States because the corporation was not a party to the agreement between Lois and Max and could not be held liable for Max’s personal obligations.
- The case was remanded for further proceedings concerning the proper disposition of interests connected to the corporation (including stock or ownership interests) consistent with Lois’s rights against Max.

## Legal Principles

- A complaint satisfies Nevada notice pleading if it gives fair notice of the nature and basis of the claim and the relief sought; labeling a claim in community-property terms does not defeat a contract theory when the facts alleged indicate an agreement.
- Unmarried cohabitants may enter enforceable express or implied agreements concerning ownership and division of property acquired during their relationship, so long as enforcement is not based solely on sexual services.
- Courts may use community-property concepts by analogy as a remedial tool to implement a proven agreement to share property, but cohabitation alone does not create community-property rights.
- Enforcing a voluntary agreement between cohabitants does not violate Nevada public policy favoring marriage because the court is enforcing a private bargain, not conferring marital status.
- A corporation is a separate legal entity and is not liable for a shareholder’s or officer’s personal contract unless the corporation was a party to the agreement or otherwise legally bound; any recovery tied to corporate value generally must proceed through the individual’s ownership interest.

## Conclusion

Western States Construction, Inc. v. Michoff holds that Nevada will enforce an unmarried couple’s express or implied agreement to share property acquired during cohabitation and may use community-property rules by analogy to implement that agreement, but it will not impose direct liability on a corporation that was not a party to the cohabitants’ agreement; the judgment was affirmed against Max and reversed and remanded as to Western States for proceedings addressing the parties’ interests connected to the corporation.


Western States Construction, Inc. v. Michoff, 840 P.2d 1220 (1992)