Little v. Little, 2008 WL 756651 (March 24, 2008) - Successful challenge to prenuptial agreement’s restriction on spousal support affirmed.

This case arises out of an eight year marriage.  Wife argued that the prenuptial agreement should be set aside based on the “presumption of duress, undue influence, misrepresentation, and fraud.” Wife felt that the prenuptial agreement was “ambiguous, one-sided and unconscionable” because it required her to “give up everything and get nothing.”

The wife was 24 when she entered into the prenuptial agreement, had never been married and did not have a formal education. Husband was 33 years old, had already been married and divorced.

In re Marriage of Ford, 2008 WL 1801535 (April 22, 2008) - Challenge to a prenuptial agreement in which wife claimed she failed to read the contract falls flat.

In the case of In re Marriage of Ford, 2008 WL 1801535 (April 22, 2008) (”Ford”), the California Court of Appeal First District, Division 2, heard an appeal filed by a wife who claimed she failed to read her prenuptial agreement before she signed it back in 1967.

A wise husband-attorney rejects his own prenuptial attorney’s attempts to overreach.

At the time of marriage, husband was a partner of a law firm. Wife was secretary to the president of a company. The idea of entering into a prenuptial agreement was -surprise, surprise- the lawyer-husband who had been divorced once before and felt that his first wife had “received more money in the divorce than he though she deserved.”

Especially when viewed with the benefit of 20-20 hindsight of the developed body of case law which has evolved, the husband-lawyer did some very smart things before his wife signed the premarital agreement forty years ago in 1967. By way of example, and there are many, husband insisted that wife get her own counsel back in 1967, which she did. Wife was represented by attorney Harvey Black in connection with the prenuptial agreement.

Although husband’s lawyer had initially prepared the prenuptial agreement so that it would bar wife from ever obtaining any community property interest in his law partnership’s earnings, husband insisted that his own attorney make the agreement more balanced. As a result, the agreement was modified to provide that husband’s work was to be his separate property “for a period of five years until a sum of $60,000 was reached.” Husband did obtain other significant community property carve outs; for example, the agreement allotted to husband all of the death and retirement benefits from his law partnership.

You had better read that prenuptial agreement before you sign it.

Despite having been represented by counsel, wife argued that she had not read the prenuptial agreement so she should be permitted to rescind it based on the doctrine of “unilateral mistake.” The court was not impressed with this argument.

In upholding the validity of the prenuptial agreement, the court noted that “wife signed the prenuptial agreement after meeting with attorney Black.” Moreover, the final paragraph of the prenuptial agreement confirmed that both husband and wife “were represented by counsel, that each had read the agreement, and that each had its contents fully explained to them by their counsel and were fully aware of the contents of the agreement and its legal effect.” The court also found significant the fact that wife had not only signed the agreement, but had “initialed each page of the agreement.”

At the end of the day, the Court’s decision was based on the simple fact that wife’s “failure to read the agreement constitutes neglect of her legal duty and bars rescission.” The moral of the story from Ford is simple: the “I just didn’t bother to read it” defense gets short shrift when the other spouse has been fair in the process, and made sure his fiancée was represented by counsel.

 

     The few reported cases from 2008 involving notable challenges to premarital agreements consist entirely of unpublished decisions by the California Court of Appeals.

In re Estate of Dito, 2008 WL 821694 (March 28, 2008) - a one sided agreement is sucessfully set aside by wife.

In the matter of In re Estate of Dito, 2008 WL 821694 (March 28, 2008) (Dito) a prenuptial agreement was struck down as being “substantively and procedurally unconscionable” pursuant to Family Code Section 1615. In this unpublished case, the California Court of Appeal First District affirmed a decision of a San Mateo family law judge throwing out a prenuptial agreement as being “both substantively and procedurally unconscionable.”

Anna Nicole Smith - Take Two.

The parties in Dito are much more memorable than the prenuptial agreement they entered into, and which was ultimately struck down. If you recall the pictures of Anna Nicole Smith sitting on the lap of wheelchair-bound billionaire J. Howard Marshall, you already have a good idea of the cast of characters which were before the court in Dito.

At the time of their marriage in 1997, the husband it Dito was 94 and his much younger wife was 28. The wife in Dito was a Brazilian national who had overstayed her Visa before she got married to Mr. Dito. This unlikely couple met after wife started performing domestic housework and acting as a caregiver for husband and his prior deceased wife.

Following husband’s death in 2004, a dispute arose regarding the legality of husband’s marriage to wife and the validity of a prenuptial agreement between them which would have resulted in wife getting almost nothing.

Once again, the young surviving vixen wins.

The family law court sided with the wife over the complaining descendents of Mr. Dito who naturally desired to have the stingy prenuptial agreement enforced in its entirety. The court in Dito found that the parties prenuptial agreement was “totally one-sided” because it left “almost nothing to wife, aside from the right to remain in the family residence for six months after husband’s death.” Moreover, the court found significant that the prenuptial agreement didn’t even allow for a minimal level of spousal support in the event of dissolution, despite the fact that wife apparently had little or no money and a limited ability to provide for herself. One of the important lessons to take away from Dito is that it pays not to be too greedy in negotiating prenuptial agreements. Like many other instances in life, people considering entering into such arrangements should recall the old adage which warns that pigs get fat, but hogs get slaughtered.

The court also found significant that wife was “unrepresented at the time she signed the agreement,” and that she was possibly “unaware of what she was signing” because of her questionable “English-speaking skills.” Finally, the court also noted that husband made “inadequate [financial] disclosures” of his assets in his attachments to the prenuptial agreement. These of course are reoccurring themes in cases in which prenuptial agreements have been challenged. If you want your prenuptial agreement to withstand judicial scrutiny, you should take every step to assure that your fiancée is represented by independent counsel who is encouraged and permitted to take a vigorous and active role in the process.

When the parties entered into their prenuptial agreement in 1997, the pertinent section of the Family Law Code governing such agreements was different from what it is today. Family Code Section 1615 was amended on January 1, 2002. The court in Dito explained that “because there is no indication the changes in the statute were intended to apply retroactively, we apply the version of section 1615 in effect when [the parties] entered into their prenuptial agreement.”

     For most people who enter into premarital or postnuptial agreements, the stakes could not be any higher. This is especially true given the recent surge in popularity of prenuptial agreements from people from all different walks of life. While in the past premarital agreements have been used primarily to protect the assets and future income streams of high net worth individuals, now it is not at all uncommon for Joe The Plumber to insist on adding one to his tool belt before strolling down the aisle. While Joe the Multi-Millionaire may not find himself on the streets if his prenup is set aside by a family law court, Joe The Plumber does not enjoy the same luxury.

     Like most complex areas of the law that can have profound impacts on people’s lives, much can be learned from the errors of the past. This series of  articles has been prepared by family law attorney Brian J. Kramer to assist other professionals and people interested in entering into such arrangements understand why such agreements have been challenged in reported and unreported cases throughout California. This blog series is updated regularly to discuss the holdings of recent cases in which prenuptial agreements have been challenged or set aside.

     Mr. Kramer is the founder of L.A. Prenup Lawyer and the Brian J. Kramer Professional Corporation which represents individuals throughout California in complex family law matters. Mr. Kramer can be contacted at info@laprenuplawyer.com or at (310) 850-1894.

     Thank you for visiting our blog.  In addition to launching www.laprenuplawyer.com which has one of the most comprehensive Frequently Asked Questions Section about the subject of matrimonial agreements on the Worldwide Web, we formed this blog to provide a forum for people searching for information about premarital, postnuptial, cohabitation, domestic partnership agreements in California.  
 
     This blog is authored by family law attorney Brian J. Kramer, who is the founder of L.A. Prenup Lawyer and the Brian J. Kramer Professional Corporation.  Brian has extensive experience representing people from all walks of life who wish to enter into such agreements, and is available to speak to other lawyers, business managers, and financial planners about why their clients may benefit by entering into such agreements.   

            This blog’s comments are open to those who have general questions relating to family law matters including premarital agreements (commonly referred to as prenuptial agreements).  If there is a specific matter you would like to consult with us about, please feel free to e-mail or contact us at info@laprenuplawyer.com or call at (310) 850-1894