RENO - A settlement agreement has been signed but the fireworks aren't over yet in the first divorce case involving a sitting Nevada governor.
First lady Dawn Gibbons is accusing Gov. Jim Gibbons of jeopardizing the agreement they reached in December by lying on his application to refinance their Reno home and taking it off the market.
Her lawyer, Cal Dunlap, said the Republican governor and former congressman could be guilty of fraud because he suggested he intends to live at the Reno home, contrary to the settlement that calls for the house to be sold after a divorce decree is scheduled to be finalized before the end of February.
"The proposal by Mr. Gibbons that this property not be listed and that a lender be led to believe that the property will not either continue to be listed or be relisted is a misrepresentation or fraud of the participation of which our client, Mrs. Gibbons, will have no part," Dunlap said in a motion filed Tuesday in Washoe County District Court.
The governor filed for divorce in May 2008. He cited incompatibility with his wife and in one court document compared her to an "enraged ferret." She accused him of having affairs with a former Playboy model and the estranged wife of a Reno doctor - allegations he denied.
Dunlap said in the filing on Tuesday that Gibbons also wrongly claimed on the Jan. 22 loan application form he is not involved in any pending lawsuits. He's currently a defendant in two federal suits.
Ron Bath, Gibbons interim campaign manager, said the governor checked the wrong box concerning the lawsuits and will correct that. He said he misunderstood the question regarding his current and future residency.
The settlement calls for the governor to pay monthly alimony totaling 25 percent of his gross income for the next five years. That will amount to about $4,000 a month next year.
The couple also agreed to sell their Reno home and their 40 acres in scenic Lamoille in Elko County, with the proceeds to be divided equally, lawyers said. Each property has a net value of about $575,000.
Dunlap said in the new filing the governor appears to be reneging on his pledge to pay his estranged wife her share for the sale of the Lamoille property. He said that payment is "an obligation fundamental to the settlement agreement and a precondition to entry of the decree of divorcee."
The governor's failure to comply was "yet another development which stands to irreparably damage and prejudice (Dawn) in her ability to move forward," Dunlap said.
As a result, he has placed his wife "in a position of absolute insecurity" in direct contradiction to the Dec. 28 settlement, Dunlap wrote.
The couple purchased the four-bedroom, 4,677-square-foot home in southwest Reno in 1989 for $680,000. They put it up for sale in 2008 with an asking price of $1.5 million, but the market has tumbled since.
Gibbons lives in the Governor's Mansion in Carson City and listed that as his current address on the loan application.
Bath said he misunderstood the question when he checked "yes" on the loan form when asked if he planned to occupy the couple's Reno home as his primary residence.
"He thought it referred to where he lived, where he voted and the fact that the refinance was for a long period of time and he intended to return to that residence," Bath said.
Dixie Grossman, a lawyer for Gibbons, said in a letter to Dunlap on Feb. 3 that when the governor tried to go forward with the loan for refinancing, he was told that he could not refinance while the house was on the market, so he stopped the sale until the financing could be completed.
Grossman said that interpreting the settlement agreement to forbid temporary removal of the property from the market "would lead to an absurd and unintended result."
"As a result of Mrs. Gibbons' refusal to participate in the refinancing process, the (Reno) property is not in the process of refinance and not closer to being on the market," she said.
