Newman v. Newman – Prenuptial Agreement
Newman v. Newman, 653 P.2d 728 (Colo. 1982).
NATURE OF THE CASE: This was a dispute over the validity of an antenuptial agreement.
FACTS: Husband and wife were both previously married and divorced. Because of the problems with the previous marriages and the fact that H was a man of means it was suggested that they enter into a prenuptial agreement. The terms of the agreement were suggested by W at a meeting with H and his attorney. The attorney acted as scrivener and did not advise the wife regarding her interests. W signed the agreement without benefit of counsel but had been given the opportunity to consult a lawyer. The agreement provided that in the event of divorce dissolution of the marriage W would get the car she was then driving, any gifts given to her by H, all of her separately owned property at the time of marriage, $2,000 in cash, and one half of the balance of any joint savings accounts into which all the earnings of the marriage were to be deposited. There would be no maintenance and support or other property division and if W was disabled at divorce she would be entitled to receive $500 per month.
W’s dissolution requested maintenance and support, a property division, attorney’s fees, and costs. At trial the divorce court entered judgment for H and W appealed. W contends that prenuptial agreements are void as against public policy as they support divorce. H lost an appeal issue regarding the maintenance provisions of the contract and this appeal resulted.
ISSUE: Are prenuptial agreements void as against public policy? Under what circumstances will a prenuptial support and maintenance agreement be unconscionable and unenforceable?
RULE OF LAW: No. Prenuptial agreements are not void as against public policy on the grounds that they encourage and support divorce. For a prenuptial support and maintenance agreement to be unconscionable it must leave the spouse without means of reasonable support, either because of a lack of property resources or a condition of unemployability.
Our public policy supports contracts entered into freely when made after full and fair disclosure and absent any fraud or overreaching. The state has an interest in marriage but also has an interest in settling the affairs of parties amicably. An unhappy partner in a marriage has the right to end that unhappiness with relative ease and as such we cannot say that public policy does not favor agreements to agree when such events do occur if those agreements resolve disputes regarding financial settlements. To the contrary, we believe that prenuptial agreements support greater stability in marriage by protecting the financial expectations of the parties. Prenuptial agreements do not necessarily encourage or contribute to dissolution.
W’s claim that this agreement was unconscionable and constructively fraudulent as a matter of law is incorrect. Parties to an antenuptial agreement are in a fiduciary relationship and therefore must act in good faith and with a high degree of fairness and disclosure of all circumstances bearing materially on the antenuptial agreement. Prenuptial agreements are subject to a fairness review within the common law context of fraud, overreaching or sharp dealing. This analysis must take place at the time of the making of the agreement and not at the time of the dissolution. Such agreements would be unfair if there were nondisclosure, fraud or overreaching at the time the agreement was made.
Under these facts, W was a mature person who decided not to obtain independent counsel and she had access to all of H’s financial records as she had worked for him as his bookkeeper for the two years prior to the marriage. We find no unfairness. As for unconscionability as applied to the agreement relating to maintenance; we agree with the lower court and reverse the decision of the appeals court. There is no statutory proscription against contracting for maintenance in antenuptial agreements. Unconscionability becomes an issue when the enforcement of the agreement results in a spouse having insufficient property to provide for his reasonable needs and who is otherwise unable to support himself through appropriate employment. Thus for W to prevail she must prove that the maintenance agreement rendered her without means of reasonable support, either because of a lack of property resources or a condition of unemployability. Under these facts, W completed her college education during the marriage and was employed as an accountant earning over $1,500 per month. The parties have no children. No reason exists to set aside the maintenance terms of this agreement.
Disposition: Affirmed in part and reversed in part.