Michigan Court of Appeals Holds Prenuptial Agreement Enforceable
On December 18th, 2014, the Michigan Court of Appeals held in a divorce case that a prenuptial (or antenuptial) agreement is enforceable under the facts of the case. On appeal, defendant-wife argued that the agreement was void because she allegedly signed it under duress, its terms were unconscionable, and changed circumstances would make enforcement of the agreement unreasonable and unfair. The Court rejected all of these arguments because defendant-wife failed to present sufficient evidence to meet her burdens of proof and persuasion.
In Allard v. Allard, Docket No. 308194, the Michigan Court of Appeals addressed the issue of whether an antenuptial agreement signed shortly before a wedding at the insistence of the groom's dying father was enforceable.
The Court first recited the facts of the case:
The parties signed an antenuptial agreement on September 9, 1993, two days before their wedding on September 11, 1993. This case primarily deals with the validity and enforcement of that antenuptial agreement.
In August 1992, plaintiff’s father, who was ill and hospitalized for treatment of lung cancer, summoned his family attorney, John Carlisle, to the hospital and instructed him to draft antenuptial agreements for his two sons. Plaintiff’s father had advised plaintiff that, while it was his intention to leave him a substantial inheritance in the event of his death, he would not do so if plaintiff had not secured an antenuptial agreement before he married. Carlisle did not actually draft any antenuptial agreements until he was approached by plaintiff in mid-to-late summer 1993.
Approximately 10 days before their wedding, plaintiff gave defendant a draft of an antenuptial agreement dated August 25, 1993. Plaintiff and defendant discussed his father’s expression that he did not approve plaintiff getting married unless he and defendant first signed an antenuptial agreement, and his intention to honor his father’s wishes. Evidently, defendant did not consult with an attorney about the agreement; instead, she consulted with her father, who had signed an antenuptial agreement prior to his second marriage. On September 9, the day of the rehearsal dinner, plaintiff reminded defendant that his father was adamant that, if she did not sign the agreement, there should be no wedding, and that plaintiff intended to honor his father’s wishes. Both plaintiff and defendant then drove together to Carlisle’s office.
There is no dispute that, at some point in time, whether 10 days before the wedding or at some other occasion, defendant asked Carlisle what would happen if plaintiff died during their marriage. According to Carlisle, in direct response to defendant’s question, he added a life insurance provision to the agreement. According to defendant, the draft agreement already contained a life insurance provision, and her question to Carlisle prompted an increase in the coverage from $200,000 to $250,000 . . .
The parties were married on September 11, 1993. During the course of the marriage, the parties held a joint checking account with Private Bank, which was closed in November 2010. There were no other jointly held accounts. Defendant worked at two different advertising agencies the first several years of the marriage. At the end of her employment, she earned approximately $30,000 per year. In 1999, after she became pregnant with the couple’s second child, defendant stopped working and did not seek further employment . . .
After a long marriage, the parties sought a divorce. Defendant-wife moved the trial court to find that the antenuptial agreement was void and therefore enforceable because it was signed under duress, its terms were unconscionable, and changed circumstances would render enforcement unfair and unreasonable.
The Court's analysis of whether the agreement was void followed:
We first address defendant’s arguments that the antenuptial agreement was void, and therefore unenforceable. We disagree . . .
“To determine if a prenuptial agreement is unenforceable because of a change in circumstances, the focus is on whether the changed circumstances were reasonably foreseeable either before or during the signing of the prenuptial agreement.” Woodington v Shokoohi, 288 Mich App 352, 373;793 NW2d 63 (2010). Like she argued at the trial court, defendant on appeal claims that she was abused during the marriage, which she claims constituted an unforeseen change of circumstances that would make enforcement of the antenuptial agreement unreasonable. We disagree . . .
[E]ven assuming that the abuse occurred and was unforeseeable, this change in circumstances is not sufficient to void the parties’ antenuptial agreement in this instance. The types of changes of circumstances that may void an otherwise valid antenuptial agreement must relate to the issues addressed in the antenuptial agreement. Since the primary focus of the antenuptial agreement addressed spousal support and the division of the parties’ assets, any changes of circumstances must relate to these aspects, and here, the domestic abuse does not. See Justus v Justus, 581 NE2d 1265, 1273 (Ind App, 1991) (while reviewing how other jurisdictions have addressed a change of circumstances after the execution of an antenuptial agreement, the court concluded that courts “may decline to enforce an antenuptial agreement, but only where enforcement would leave a spouse in the position where he would be unable to support himself. At that point, the state’s interest in not having the spouse become a public charge outweighs the parties’ freedom to contract.”) . . .
[As to whether duress occurred,] . . . defendant never suggested that any unlawful or illegal coercion took place when she signed the antenuptial agreement. As she stated in her deposition, she explained that she felt under “duress” because the agreement was executed on the day of the rehearsal dinner for the wedding. She was concerned that, if she did not sign the agreement, then the wedding would be called off and 150 wedding guests would have to be notified. She also explained her fear of losing deposits and payments associated with the wedding and that “[i]t was money I couldn’t afford to lose at the time.” These facts do not support the conclusion that anyone engaged in any illegal or unlawful acts to coerce defendant to sign the antenuptial agreement, and defendant’s “[f]ear of financial ruin alone is insufficient to establish economic duress.” Weldon, 232 Mich App at 681 (quotation marks omitted). Therefore, because defendant never offered any evidence of any illegal behavior, her claim of duress is without merit, and the trial court correctly determined that she could not prevail on this issue as a matter of law . . .
[As to whether the terms of the agreement were unconscionable,] . . . there was no evidence that there was any procedural unconscionability. On appeal, defendant relies on her characterization that plaintiff timed the signing of the agreement “perfectly” on the day of the rehearsal dinner. But in her affidavit, she admitted that she received a draft of the agreement 10 days before the wedding. Plus, she testified in her deposition that she had time to consult with her father regarding the antenuptial agreement. Moreover, defendant admitted that during her meeting with plaintiff and his attorney, a term of the agreement was modified because of a concern she had regarding what would happen in the event plaintiff died during the marriage. In sum, the evidence is not sufficient to establish that there was any procedural unconscionability.
Likewise, there was no evidence that there was any substantive unconscionability. Defendant relies on the disparate outcome after enforcing the agreement. But that is not the proper focus. Instead, courts must look to the terms of a contract itself. See id. On appeal, defendant fails to identify any specific terms of the agreement that she deems to be unconscionable. But our review of the agreement’s terms shows that they are neutral. For instance, the agreement provided that “[e]ach party shall during his or her lifetime keep and retain sole ownership, control, and enjoyment of all real, personal, intangible, or mixed property now owned, free and clear of any claim by the other party.” It also provided that in the event of divorce, the marital assets would be divided equally between the parties and that “[a]ny property acquired in either party’s individual capacity or name during the marriage . . . shall remain the sole and separate property of the party named on the account or the party who acquired the property in his or her individual capacity or name.” Thus, it is clear that the terms of the agreement were neutral with respect to the parties, and they do not “shock the conscious.”
Therefore, the trial court did not err in concluding that, as a matter of law, that the antenuptial agreement was enforceable. There was no change of circumstances that made its enforcement unfair and unreasonable; the agreement was not signed under duress; and the agreement itself was not unconscionable.