In a recent case decided by the Suffolk County Supreme County on December 5, 2016, our firm successfully represented the Plaintiff in an action to set aside a prenuptial agreement.
A prenuptial agreement is a contract, and under New York law there is a presumption of validity. Parties are generally free to enter into private agreements in reference to financial obligations. As such, in an action to set aside a prenuptial agreement, a party is met with the initial premise that the agreement is presumed to be valid. The burden is substantial in order to overcome the presumption of validity.
In the case before the court, our firm prevailed in establishing that the agreement was unconscionable, which is defined as a bargain “such as no person in his or her senses and under no delusion would make on the one hand, and as no honest or fair person would accept on the other”. Hume v. United States, 132 US 406, 411 and also cited another case as ”the inequality being so strong and manifest as to shock the conscience and confound the judgment of any person of common sense” Christian v. Christian, 42 NY2d 63 (1977). In the case before the court, the Plaintiff did not have to establish fraud, which is a basis to set aside a contract. Instead, because of what it is known as the fiduciary agreement between spouses, those agreements are subject to a close scrutiny in order to determine if there is “overreaching” by one of the parties.
The facts in the case are not uncommon. The parties had been living together for approximately four (4) years, when the wife learned that she was pregnant. She was employed as a staff person in a mortgage company, while the husband was an attorney admitted to practice in New York and New Jersey, though not practicing law, but working at the mortgage company as well. The gentleman requested that his future wife have an abortion, but she refused. In fact the next day he advised his significant other that he had made an appointment for her to get an abortion. The future wife reiterated her refusal to have an abortion, and then the future husband’s position changed. He said “ok, we will get married, but we have to have a prenuptial agreement”.
What happened is that the man contacted his attorney about preparing a prenuptial agreement, and stated that his future wife needed an attorney. His attorney selected an attorney for the woman, who was paid for by the gentleman who became her husband. The parties traveled together to an office and the plaintiff wife testified that she had not met the attorney, had not reviewed the agreement nor had any time alone with him, even at the office for the signing. After about a half hour of contact, where the attorney spoke to her in the presence of her future husband and his attorney, she signed the agreement.
The Defendant’s testimony, as noted by the court, was “problematic”. He claimed ignorance of who drafted the agreement, could not remember if he requested certain provisions also important to him or whether they were boilerplate. He also feigned a lack of memory as to the physical location where he worked, when he purportedly gave the Plaintiff a copy of the agreement. “His lack of memory and recollection concerning the circumstance surrounding the agreement are not credible. In short, the court has concluded that the Defendant dissembled through much of his testimony”.
In reaching its decision the court discussed the testimony of both parties and stated “The Court concludes that plaintiff met her burden to establish a fact-based inequality. Thus the burden shifted to the Defendant to disprove overreaching” citing Petracca v. Petracca, 101 AD3d 695 (2nd Dept. 2012).
Our firm on behalf of the Plaintiff established that the Defendant could not disprove overreaching, as the court’s decision noted “To characterize the language of the Agreement as “sweeping” would be an understatement. It is a distinctly one-sided Agreement as defendant’s earnings and assets far outweighed plaintiff’s. Further, buried in the Agreement is a waiver of all of plaintiff’s rights under Domestic Relations Law Section 236, Part B, which includes, inter alia, maintenance. Also contained in the Agreement is a waiver of any statutory inheritance rights.”
The court went on to state “It is mystifying that an attorney would participate in a series of events that gave plaintiff no time to fairly consider the Agreement given the fact that she was relinquishing every right she had under the statute or otherwise. Since defendant was and is clearly the monied spouse and plaintiff had less than five percent of his net worth, the Agreement cannot be considered to be one that an “honest and fair person would accept” Rarely has this Court been confronted with an Agreement that is so manifestly one-sided. Further, the defendant did not meet his burden of disproving overreaching”.
Our client was quite prepared for the trial by our office, testifying truthfully that she trusted her soon to be husband when he said that he only wanted to protect the assets that he had in existence at that time. Therefore, she did not review the agreement, which included a waiver of everything that he might acquire after the date of the marriage as well. Also, as noted by the court, the prenuptial agreement included waivers of every possible right that a party could have under the Domestic Relations Law.
What should be drawn from the decision, if the reader is in fact considering entering into a prenuptial agreement, is that such an agreement cannot be completely one-sided. For example, if one party wanted to protect assets that he or she had prior to a marriage, and the other party thought that was acceptable, a fair agreement might be one that provided for the acquisition of property after the date of the marriage, to be deemed marital subject to equitable distribution. That would recognize the often made statement that marriage is a partnership. Other provisions in pre-nuptial agreements that have been held as enforceable, are specific dollar amounts for settlements based on the duration of the marriage, and also specified amounts of spousal maintenance. It is noted that a prenuptial agreement can never include a waiver of future child support.
The foregoing are meant to be just a few examples of what could be unfair, and what could be an enforceable agreement. There are many factors that should be considered by parties before entering into a prenuptial agreement, and each party should have an attorney selected by that party, and not by the other attorney.