Spousal Support Waivers in Premarital Agreements May Be Enforced
Marriage of Howell (May 24, 2011) 195 Cal.App.4th 1062
The Fourth District out of San Diego County recently published an opinion
upholding a spousal support waiver contained in a premarital agreement
that was executed before 2002, when California adopted the Uniform Premarital
Agreement Act (UPAA) and amended
Family Code section 1612.
Section 1612 invalidates any provision in a premarital agreement regarding
spousal support, including, but not limited to, a waiver of such support
if (i) the party against whom enforcement of the spousal support provision
is sought was not represented by independent counsel at the time the agreement
containing the provision was signed or (ii) that provision is unconscionable
at the time of enforcement.
Michael and Pamela Howell began dating in 1997 and married in mid-May,
1998. They separated in March, 2008. Prior to marriage they executed a
prenuptial agreement that included, among other things, a provision that
they each waived any right to seek spousal support from the other in the
event of divorce. At trial there was a dispute concerning the circumstances
surrounding the timing and execution of the agreement, with Michael claiming
he contacted his lawyer to draft the prenup a year before the wedding,
and that he gave her a copy to review in December, 1998. He testified
that he told Pamela to take her time in reading it, and to consult a lawyer.
He said that Pamela reported she'd discussed it with family members
and friends and that she concluded there was no need to have it independently
reviewed because Michael had "nothing" to protect. It was signed
on January 30, 1999.
Pamela's story was that Michael waited until the wedding day was fixed
and paid for by Pamela and her family before raising the issue of a prenup.
She said they argued about it, and Michael threatened to call of the wedding
and so cause her great embarrassment and expense if she refused to sign.
She claimed she had the agreement for only about three days before she
signed and didn't understand what rights she was waiving. Nor did
she have the money to hire a lawyer and advise her, since she'd spent
it all on the wedding and Michael never offered to pay for to consult
with an attorney.
The agreement recited that Michael had been previously married twice and
had a daughter; Pamela was never married and had no children. Michael
worked for the U.S. Postal Service earning $38,000/year and Pamela worked
at a mortgage company and made $24,000 annually. Paragraph 5 stated that
the agreement had been drafted by Michael's attorney, who represented
Michael only, and it urged Pamela to seek independent counsel but that
she has declined to do so with full knowledge of the interests she was
waiving. In another portion the language stated both parties were of sound
mind and not acting under duress. Both parties fully disclosed their assets,
liabilities, and income.
The spousal waiver stated: "The parties mutually waive any right to receive future spousal support,
maintenance or alimony from the other in the event of a Dissolution of
Marriage or Legal Separation."
The trial court found that the waiver did not comply with the 2002 amendments
to Family Code section 1612, even though it was executed four years before
their enactment, and that Pamela had lacked independent counsel. Nonetheless,
however, the court went on to make a number of findings for the record
- that Pamela entered the agreement voluntarily
- Pamela was capable of understanding the admonition to obtain her own attorney
- she had sufficient time to do so
- at a minimum she could have inquired into the cost of retaining counsel
- the premarital agreement was twelve pages long, not particularly complex,
involved a small estate, made full disclosure, and basically sought to
maintain the parties' separate property interests
- she was fluent in English
- she was employed in the field of bookkeeping, which involves the keeping
- under either parties' version, she had at least 14 days prior to the
wedding to consider the agreement
- there was no evidence of duress - it was presented to her at least four
months prior to the wedding; indeed, she'd provided her own financial
information some five months earlier
- given that Michael had been twice divorced, it was reasonable that he would
have raised the request for a prenup much earlier than admitted by Pamela,
which was way before the parties began to plan for a wedding
- she had mental capacity and there was no evidence of trick or deception
- there was no evidence the agreement was unconscionable when signed
Nonetheless, because the Court believed that FC section 1612 had to be
applied retroactively it declined to enforce the waiver and ordered Michael
to pay spousal support of $1,015 per month as temporary support, and then
$1,659/month until further of court. It ordered Michael to contribute
$10,000 to Pamela's attorney fees per
Family Code section 2030. Michael appealed the support ruling but not the attorney fees' order.
Justice Benke of the the Fourth District reversed the trial court's
determination that FC § 1612 could be applied retroactively. The
Court decided that the California legislature must have intended otherwise
because (a) there was no express retroactivity provision contained in
the statute itself, (b) there was nothing in the legislative history to
suggest the legislature so intended; and (c) the addition of the requirement
of independent counsel added in 2002 constituted a material change in
prior law and to apply it retroactively would upset the expectations of
parties to a contract based upon the state of the prior law by imposing
a new duty (to obtain counsel) that hadn't existed earlier.
Ironically, it wasn't until 2000 that the California Supreme Court
first declared that a waiver of spousal support did not per se violate
public policy (IRMO Pendleton and Fireman, 24 Cal.4th 39). Up to that
point it was an open question in California whether premarital agreements
could ever be enforced as to support waivers.
Howell trial court had been careful to lay the groundwork in its factual findings
to support a knowing and intelligent waiver by Pamela, but for the reach
of the 2002 amendments to FC section 1612. Without retro application,
there was sufficient evidence in the record to enforce the waiver. Pamela's
lack of independent counsel in a pre-2002 prenup was just one of several
factors that a court needs to consider in answering whether a support
waiver is enforceable in a pre-UPAA agreement.
The appellate court ruled:
"In light of the trial court's findings, which are supported by
ample evidence in the record, and based on the law as it existed at the
time the parties executed their premarital agreement, we conclude on this
record that Pamela, despite not having independent counsel at the time
she executed that agreement, knowingly and voluntarily waived her right
to spousal support in that agreement."
This prenup was executed in January, 1999, at a time when most family
law attorneys anticipated that premarital waivers of spousal support would
one day be upheld as enforceable, but had no idea when and under what
conditions. Prenuptial agreements used to be viewed with great suspicion
by the Courts under the assumption that they were 'promotive of divorce.'
The law has radically shifted since then, as has the legislative and public
sentiment. Many people - and evidently Michael in this case - who have
prior marriages and children won't get married without one. In that
sense they may actually serve to promote marriage.
I find one of the most interesting facts of this case to be the evident
simplicity of this particularly premarital agreement. Rarely have I seen
a prenup agreement that is only twelve pages long. We lawyers tend to
make them quite complicated, partly out of fear of committing malpractice
in this area of the law; we may want to reconsider this strategy. The
Howell decision, which would have had a different outcome if the agreement had
been executed after the enactment of the 2002 amendments to FC §
1612, expresses a major new judicial attitude that support waivers in
premarital agreements are to be enforced when they are not unconscionable
at the time they are signed, or under current 1612 at the time a party
seeks to enforce them. It may serve people to reduce them to their bare
essence rather than elongating them. An agreement that is 50 pages long
may seem incomprehensible to most nonlawyers.
By the way, prenups that don't mention spousal support will be much
more easily enforced. While it is possible for a court to strike only
the spousal support language in agreements that contain them, it is also
possible the entire agreement could be stricken if the waiver is rejected
depending upon how interrelated various provisions are.
For those contemplating drafting or signing a prenup it remains very difficult
to predict whether they will be enforced under the circumstances of a
contemporary divorce or legal separation. Section 1612(c) reads:
"(c) Any provision in a premarital agreement regarding spousal support,
including, but not limited to, a waiver of it, is not enforceable if the
party against whom enforcement of the spousal support provision is sought
was not represented by independent counsel at the time the agreement containing
the provision was signed, or if the provision regarding spousal support is
unconscionable at the time of enforcement. An otherwise unenforceable provision in a premarital agreement regarding
spousal support may not become enforceable solely because the party against
whom enforcement is sought was represented by independent counsel."
We await further appellate rulings to determine what the bounds of "unconscionab[ility]
at the time of enforcement" are. This is where drafting these agreements
is especially tricky, and requires great skill. Don't believe that
support waivers will always be enforced, particularly where they are blanket
waivers (as opposed to limiting spousal support rights by duration, amount,
or future circumstances at time of enforcement).
In the meantime, as to this decision, it appears that Pamela's side
threw all the standard objections at the trial court that one would expect
where there is a challenge to a prenup (wedding already planned, embarrassment
and cost, duress, lack of understanding, no independent review and Michael
didn't offer to pay for her to get one), and they didn't stick.
She has to repay all the alimony she received, plus Michael's costs
T.W. Arnold, C.F.L.S.