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D M. JOSEPH DEMATTEO
vs.
SUSAN J. DEMATTEO.
Docket No.: SJC-08614
MASSACHUSETTS SUPREME COURT
County: Plymouth.
October 2, 2001.
February 8, 2002
.
Summary: Divorce and Separation,
Separation agreement, Attorney's fees. Contract, Antenuptial
agreement. Husband and Wife, Antenuptial agreement.
Complaint for divorce filed in the Plymouth Division of the
Probate and Family Court Department on March 13, 1998.
The case was heard by Catherine P. Sabaitis, J.
The Supreme Judicial Court granted an application for direct
appellate review.
Jacob M. Atwood (Mark T. Smith & David E. Cherny with him)
for the plaintiff.
Peter F. Zupcofska (Fiona S. Trevelyan with him) for the
defendant.
Present: Marshall, C.J., Greaney, Ireland, Spina, Cowin,
Sosman, & Cordy, JJ.
MARSHALL, C.J.
At issue in this appeal is the validity of a judgment in the
Probate and Family Court that an antenuptial agreement is
not enforceable. The judge concluded that the agreement was
not fair and reasonable either at the time it was executed
or when the husband sought its enforcement on commencing a
divorce action nearly eight years after the parties were
married. The husband appealed and we granted his application
for direct appellate review. On appeal he challenges the
judge's order as to the enforceability of the antenuptial
agreement and her order that he pay the wife's attorney's
fees.(FN1) We hold that the evidence did not warrant a
conclusion that the antenuptial agreement is unenforceable,
and reverse so much of the judgment to that effect. We
affirm so much of the judgment as orders the husband to pay
the wife's attorney's fees, but remand the case to the
Probate and Family Court for a determination of the amount
to be paid.
1. Factual background. The circumstances in which the
parties' antenuptial agreement was negotiated and executed
were as follows.(FN2) M. Joseph DeMatteo (husband) and Susan
J. DeMatteo (wife) were married on March 23, 1990. At the
time the husband was forty-seven years old, and the wife was
forty-one years old. They had known each other as
adolescents and had dated occasionally in the 1970's. In
1987, they renewed their earlier acquaintance. In 1989, the
husband proposed marriage. He did so on condition that the
wife sign an antenuptial agreement. She agreed to do so.
This was to be the husband's first marriage, and the wife's
second. The wife had a daughter, born in 1983, from her
first marriage. Until shortly before her second marriage in
1990, the wife lived with her daughter in a rented
two-bedroom house in Dedham. She worked as a secretary
earning approximately $25,000 a year, owned no real
property, and had few assets. In contrast, the husband was a
wealthy individual. He had a substantial ownership interest
in his family's construction business; this and other real
estate holdings and investments established him as a man of
significant net worth, described more fully below. It is
undisputed that the wife knew that her future husband was a
man of considerable wealth, and that the husband knew that
his future wife had few financial assets.
During the fall and winter of 1989-1990, the wife and the
husband discussed the terms and necessity of an antenuptial
agreement. The judge found that, although he was not
"overbearing," the husband was "very clear that such an
agreement was necessary." At the husband's urging, the wife
retained independent legal counsel -- Ann C. Palmer -- to
represent her in negotiating the agreement. Palmer was
recommended to the wife by a friend. The husband was
represented by his business counsel, Joel Lewin.
In February and March, 1990, Lewin and Palmer spoke several
times and Lewin sent Palmer a draft antenuptial agreement.
The draft provided, among other things, that if the marriage
terminated by legal proceedings, including separation or
divorce, the wife would receive the marital home free of
encumbrance, the automobile that she was then driving, and
an annual payment from the husband of $25,000 until her
death or remarriage. On Palmer's advice, the wife did not
accept these terms. Palmer sent a letter to Lewin rejecting
the draft; she also requested full disclosure of the
husband's assets. In response, Lewin delivered to Palmer the
husband's tax returns for 1984 through 1988 and a current
financial statement showing the husband's net worth to be
between $83 million and $108 million. The husband's
interests in his family's construction business comprised a
majority of his assets. The wife made no further inquiries
regarding the husband's assets and has not claimed that the
husband's financial disclosures made before she signed the
antenuptial agreement were incomplete, inaccurate, or
misleading.(FN3)
On receipt of the husband's financial disclosures, Palmer
consulted further with her client. She then informed Lewin
that her client required that the husband increase the
annual payments to the wife to $35,000, adjusted annually
for increases in the cost of living. She also requested
medical insurance, life insurance, and the lesser of twenty
per cent of the husband's estate or $5 million. The husband
rejected these requests. Further negotiations followed, the
details of which are not necessary to describe, except to
note that the wife dropped her demand for the lesser of
twenty per cent of the husband's estate or $5 million in the
event that the marriage was terminated by divorce.
The parties executed the agreement on March 21, 1990. The
agreement, fifteen pages long, to which the parties'
respective statements of assets were attached and
incorporated,(FN4) contains provisions concerning the
disposition of their separate assets on death(FN5) or if the
marriage was "terminated or interrupted by divorce or other
legal proceedings" during their lifetimes, disposition of
liabilities, and numerous other provisions concerning such
issues as breach, modifications, and choice of law. The
agreement also contains provisions concerning waiver,(FN6)
"fairness,"(FN7) warranties about legal advice,(FN8) and
child support "if any children shall be born of their
marriage."(FN9)
Concerning termination of the marriage on divorce, the
agreement provided that the wife would receive the marital
home free of encumbrance,(FN10) yearly support of $35,000
until her death or remarriage with an annual cost-of-living
increase,(FN11) an automobile, and medical insurance until
her death or remarriage. All property jointly acquired
during the marriage would be divided between the parties in
equal shares.
Both attorneys were present when the parties executed the
agreement and the signing was recorded on videotape. The
recording shows the husband's attorney reciting the terms of
the agreement and the parties communicating their
understanding of and consent to those terms. The parties
acknowledge they have received advice from counsel of their
choice, that they understand their rights in the absence of
the agreement, and that they each have read the other's
financial disclosures.
2. Procedural background. On March 13, 1998, the husband
filed a complaint for divorce under G. L. c. 208, § 1B,
alleging that the marriage was irretrievably broken down and
seeking enforcement of the antenuptial agreement. The wife
denied that the marriage was irretrievably broken down and
challenged the enforceability of the agreement. The judge
allowed the husband's motion to bifurcate the trial to
consider first the validity and enforceability of the
agreement. There followed three days of testimony solely on
that issue. On February 12, 2001, the judge issued
comprehensive findings of fact, conclusions of law, and a
judgment that the antenuptial agreement was "not fair and
reasonable at the time of its execution and is not fair and
reasonable at the present time, and therefore may not be
enforced." Because it elucidates our discussion of the
issues, we describe in some detail the judge's rulings of
law and her supporting analysis; her findings are summarized
above.
The judge considered whether the agreement was fair and
reasonable. See Osborne v. Osborne, 384 Mass. 591, 599
(1981). Without differentiating between fairness at the time
of execution and fairness at the time of the trial, the
judge concluded that the agreement was neither fair nor
reasonable at either point in time. She based her
determination on "the entirety of the financial settlement"
to the wife, on what she termed "the lack of substantial
negotiations involved before the agreement was executed,"
the "sophistication of the issues involved," and "the
lifestyle of the parties during the marriage and the vast
disparity between the parties' ability to acquire future
assets and income."
Addressing the claims of the wife, the judge placed no
reliance on her assertion that she was incapacitated at the
time she executed the agreement. She found that the wife did
not suffer from any incapacity due to any health reasons at
the time, nor did she lack "education or business acumen to
appreciate the significance of what she was doing," as the
wife had also claimed. The judge did not credit the wife's
contention that she signed the agreement under duress: "If
she was under as much duress as she claimed to be, it was
not at all apparent" on the video taped recording."(FN12)
Concerning the negotiations preceding the agreement's
execution, the judge found that there was "complete
financial disclosure by both parties." She nevertheless
pointed to what she characterized as "minimal" negotiations
prior to the agreement's execution, noting that "the
financial and legal issues involved in this case were quite
complex." The judge concluded that the wife "did not fully
explore all the options available to her, nor was there any
real discussion with her about either the consequences of
this agreement or the possible results after a [G. L. c.
208,] § 34 hearing." She gave no weight to the fact that the
wife was represented by independent counsel, noting only
that the wife did not "discuss with her counsel what she
might anticipate in terms of an appropriate financial
settlement in the even[t] of a divorce." The judge found
that the wife was "aware of the criteria considered by the
Court under [§] 34," but that "there was [no] real
explanation of its application to her case."(FN13)
Turning to other factors, the judge also noted that "in view
of the fact that this is a ten year marriage which produced
two children," the settlement for the wife was "less than
modest." She pointed to the "financial holdings" of the
husband, the parties' "lifestyle during the marriage," and
the husband's "ability to acquire... significant assets" as
compared to the wife, whose ability to acquire assets, she
termed "vastly inferior" to that of the husband.
In reaching her conclusion the judge explicitly relied on
the "fair and reasonable" test as elaborated by the Appeals
Court in Dominick v. Dominick, 18 Mass. App. Ct. 85 (1984),
a decision concerning the enforceability of a separation
agreement. She reviewed the factors listed in that
case(FN14) to conclude that the antenuptial agreement at
issue here was unenforceable. The Dominick case, she noted,
permitted her to consider the mandatory and discretionary
factors in G. L. c. 208, § 34, which governs the assignment
of assets by a judge in divorce proceedings.(FN15) Thus, the
judge pointed to the length of the marriage, station, amount
and source of income, employability, estate, and the needs
of each party and the opportunity of each for future
acquisition of assets and income.
The judge also noted that "[a] divorcing party's needs are
to be measured by the standard of living enjoyed during the
marriage, not by whether a proposed allocation would enable
the party to merely survive or even to live comfortably,"
citing Rosenblatt v. Kazlow-Rosenblatt, 39 Mass. App. Ct.
297, 301 (1995). In that connection, the judge stated that,
"[a]lthough they lived in a manner more frugally than their
income required," the parties "lacked no comfort or
convenience, and their lifestyle was by choice rather than
necessity." She noted that the couple had spent money "on
trips, jewelry, home and yard maintenance, outside help and
other things that made life easier and actually, more
luxurious," and that "[t]here were no limits placed on their
personal spending." Finally, the judge concluded that an
agreement will be "struck down" if there are countervailing
equities to its enforcement or if it contains
representations not supported in the record, even if the
agreement recites that it was entered into knowingly by the
parties, who were advised of their rights by independent
counsel, citing to Stansel v. Stansel, 385 Mass. 510,
514-515 (1982); Randall v. Randall, 17 Mass. App. Ct. 24, 31
(1983).
3. Enforceability of the antenuptial agreement. In Osborne
v. Osborne, 384 Mass. 591, 598 (1981), we held that it is
permissible for parties contemplating marriage to enter into
an antenuptial contract settling their alimony or property
rights in the event their marriage should prove
unsuccessful. Noting that the freedom to limit or waive
those rights in the event of divorce is not unrestricted, we
set forth "some guidelines to be used in determining the
extent to which such agreements should be enforced."(FN16)
Id. at 599. First, a judge must determine whether an
antenuptial agreement is valid. Second, "the agreement must
be fair and reasonable at the time of entry of the judgment
nisi." Id.
As to whether an agreement is valid, we adopted the "fair
disclosure" rules announced in Rosenberg v. Lipnick, 377
Mass. 666 (1979), where we considered the validity of an
antenuptial agreement settling property rights on the death
of a party. Under those rules, a judge must determine
whether the agreement:
"(1)... contains a fair and reasonable provision as measured
at the time of its execution for the party contesting the
agreement; (2) the contesting party was fully informed of
the other party's worth prior to the agreement's execution,
or had, or should have had, independent knowledge of the
other party's worth; and (3) a waiver by the contesting
party is set forth" (footnote omitted).
Id. at 672.(FN17)
A
We first examine the judge's conclusion that the antenuptial
agreement in this case was not valid at the time of
execution. The application of the second and third Rosenberg
rules to the evidence are disposed of first.(FN18) It is
clear that the wife was "fully informed" of the worth of her
prospective husband before she executed the agreement. The
judge found that there was "complete financial disclosure"
by both parties, and it is undisputed that the wife was
apprised that her prospective husband had a net worth
between $108 million and $133 million; the husband gave the
wife a detailed statement of his net worth, which he later
supplemented. See note 4, supra. He also acceded to her
request and provided her with copies of his income tax
returns for the most recent five years.
Full and fair disclosure of each party's financial
circumstances is a significant aspect of the parties'
obligation to deal with each other "fairly and
understandingly" because they stand in a confidential
relationship with each other. Rosenberg v. Lipnick, supra at
673. While we have not elaborated on the point, it seems
clear that it is sufficient that the disclosure be such that
a decision by the opposing party may reasonably be made as
to whether the agreement should go forward.(FN19) See, e.g.,
In re Estate of Lopata, 641 P.2d 952, 955 (Colo. 1982) (fair
disclosure "is not synonymous with detailed disclosure," but
"contemplates that each spouse should be given information,
of a general and approximate nature, concerning the net
worth of the other"); Button v. Button, 131 Wis. 2d 84, 95
(1986) (requiring "fair and reasonable disclosure [of]
financial status").
The wife claims that the negotiations were compressed in
time and that she did not receive disclosure of the
husband's assets until two weeks before the parties executed
the agreement. There is no evidence that time precluded the
wife from exploring her options. The judge found the husband
was not "overbearing"; he issued no ultimatum at the last
moment.(FN20) The wife plainly had sufficient knowledge of
her future husband's worth to make an informed decision as
to whether she wished to consent to the agreement. What the
judge characterized as "minimal negotiations" are
circumstances insufficient to invalidate the agreement. The
parties reached agreement after full disclosure of their
respective financial positions and after negotiations during
which they exchanged offers and counteroffers. The second
Rosenberg rule is satisfied.
As to the third rule, that the agreement set forth a waiver
by the contesting party of his or her rights, this agreement
did just that, providing a waiver by the wife of all spousal
rights, except those specifically provided in the agreement.
See note 6, supra. The wife did challenge the agreement's
validity, raising defenses of lack of capacity and duress,
but the judge did not credit her evidence on those issues.
See note 12, supra. The findings on this point are fully
supported by the evidence.
Moreover, the parties were each represented by independent
counsel. The judge found that the wife's attorney had
informed her client that, by signing an antenuptial
agreement, "she gave up her right to have the Court make an
assignment of property to her."(FN21) The judge found that
the wife "initiated little discussion" with her attorney
concerning the agreement, did not "assert herself regarding
any changes" to the draft agreements, and "did not discuss"
what she "might receive by way of property division from the
Court in the event of a divorce." However, the wife selected
her own counsel, and she cannot now attack the agreement on
the ground that her counsel was not sufficiently
sophisticated in matters of antenuptial agreements.(FN22)
Nor can the wife take advantage of her own failure to
question her counsel more fully about the legal consequences
of signing the antenuptial agreement and thereby avoid the
agreement.(FN23)
Waiver is important because it underscores that each party
is exercising a meaningful choice when he or she agrees to
give up certain rights in anticipation of marriage. It was
therefore correct for the judge to consider such factors as
whether each party was represented by independent counsel,
the adequacy of the time to review the agreement, the
parties' understanding of the terms of the agreement and
their effect, and a party's understanding of his or her
rights in the absence of an agreement. See Button v. Button,
supra at 95-96. See also Rinvelt v. Rinvelt, 190 Mich. App.
372, 376-379 (1991) (agreement must be "entered into
voluntarily, with full disclosure, and with the rights of
each party and the extent of the waiver of such rights
understood"). But the evidence does not support a conclusion
that the wife's waiver of her rights was not meaningful.
However minimal her inquiries to her counsel, the failure to
explore more fully with her lawyer the effect of signing the
agreement is chargeable to her (or her lawyer), not the
husband.(FN24) The wife recognized that marriage conferred
certain rights, and that she waived those rights by signing
the agreement. The third Rosenberg rule is satisfied.
We turn finally to the first Rosenberg rule, the requirement
that an antenuptial agreement contain a "fair and reasonable
provision" for the contesting party, measured at the time of
execution. The application of this legal standard to the
parties' agreement was vigorously contested at trial, as it
is on appeal.
In Rosenberg v. Lipnick, supra at 672, we said that it is
permissible to consider "the parties' respective worth, the
parties' respective ages, the parties' respective
intelligence, literacy, and business acumen, and prior
family ties or commitments." We noted, however, that "the
reasonableness of any monetary provision in an antenuptial
contract cannot ultimately be judged in isolation." Id. On
the one hand, any examination of the validity of an
antenuptial agreement must respect the parties' freedom to
contract. The Legislature has recognized that antenuptial
agreements settling property rights on marriage serve the
useful function of permitting the parties to arrange their
financial affairs as they best see fit. See G. L. c. 209, §
25.(FN25) We recognize those same interests. See Osborne v.
Osborne, 384 Mass. 591, 598 (1981) ("There is no reason not
to allow persons about to enter into a marriage the freedom
to settle their rights in the event their marriage should
prove unsuccessful, and thus remove a potential obstacle to
their divorce"); Rosenberg v. Lipnick, supra at 673 ("The
right to make antenuptial agreements settling property
rights in advance of marriage is a valuable personal right
which courts should not regulate destructively"). On the
other hand, the State has an interest in protecting the
financial interests of spouses when they divorce. Marriage
is not a mere contract between two parties, but a legal
status from which certain rights and obligations arise. See
French v. McAnarney, 290 Mass. 544, 546 (1935). See also
Button v. Button, supra at 94. It was for this reason that
we determined that the freedom to limit or waive legal
rights in the event of divorce "is not appropriately left
unrestricted." Osborne v. Osborne, supra at 599.
To meet the requirement of "fair and reasonable," at the
time of execution an antenuptial agreement need not
approximate an alimony award and property division ruling a
judge would be required to make under G. L. c. 208, § 34.
Judged by those statutory requirements, the parties' right
to settle their assets as they wish would be meaningless.
The relinquishment of claims to the existing assets of a
future spouse, even if those assets are substantial, also
does not necessarily render an antenuptial agreement
invalid. An antenuptial agreement may be most desired when a
wealthy individual contemplating marriage seeks to ensure
that, if the marriage is not successful, his or her own
assets will not accrue to the spouse. Many valid agreements
may be one sided, and a contesting party may have
considerably fewer assets and enjoy a far different
lifestyle after divorce than he or she may enjoy during the
marriage. It is only where the contesting party is
essentially stripped of substantially all marital interests
that a judge may determine that an antenuptial agreement is
not "fair and reasonable" and therefore not valid. Cf.
French v. McAnarney, supra at 546-548.(FN26) Where there is
no evidence that either party engaged in fraud, failed to
disclose assets fully and fairly, or in some other way took
unfair advantage of the confidential and emotional
relationship of the other when the agreement was executed,
an agreement will be valid unless its terms essentially
vitiate the very status of marriage. Our test of "fair and
reasonable" is not the same as the test of
"unconscionability" that has been adopted in other
jurisdictions. Upham v. Upham, 36 Mass. App. Ct. 295, 301
(1994). We agree with the reasoning of the Appeals Court in
Upham that while there may be substantial overlap between
the standards, a standard of unconscionability generally
"requires a greater showing of inappropriateness." Id.,
citing 3 Lindey, Separation Agreements and Antenuptial
Contracts § 90.07 (1993). See Brash v. Brash, 407 Mass. 101,
106 (1990) (separation agreement deemed "not... fair and
reasonable and, in fact,... unconscionable"). A number of
States have adopted a test of unconscionability. See, e.g.,
Scherer v. Scherer, 249 Ga. 635, 641 (1982); Gentry v.
Gentry, 798 S.W.2d 928, 936 (Ky. 1990); Ferry v. Ferry, 586
S.W.2d 782, 786 (Mo. Ct. App. 1979); MacFarlane v. Rich, 132
N.H. 608, 614, 616-617 (1989).(FN27) The standard of
unconscionability measured at the time of an antenuptial
agreement's making was also adopted in the Uniform
Premarital Agreement Act.(FN28) 9C U.L.A. 35 (Master ed.
2001). On the other hand, our "fair and reasonable" test is
consonant with the standard recognized in a number of other
States. See, e.g., Ex parte Walters, 580 So. 2d 1352, 1354
(Ala. 1991); Harbom v. Harbom, 134 Md. App. 430, 443 (2000),
quoting Hartz v. Hartz, 248 Md. 47, 63 (1967) (antenuptial
agreement upheld if agreement was "fair and equitable under
the circumstances"); McKee-Johnson v. Johnson, 444 N.W.2d
259, 267-268 (Minn. 1989) (agreement must be substantively
fair at the time of execution and at the time of
enforcement); Matter of the Estate of Crawford, 107 Wash. 2d
493, 496 (1986) ("if the agreement makes a fair and
reasonable provision for the party not seeking its
enforcement, the agreement may be upheld").
We see no reason to replace our standard of "fair and
reasonable" when we test the validity of the agreement at
the time of execution with a standard of
"unconscionability." As noted by the commissioners, the
unconscionability standard was adopted in the Uniform Act in
part because it "is used in commercial law, where its
meaning includes protection against one-sidedness,
oppression, or unfair surprises... and in contract law." 9C
U.L.A. 49-50 at comment, quoting Commissioner's Note,
Uniform Marriage and Divorce Act § 306, 9A (Part I) U.L.A.
249 (Master ed. 1988). Antenuptial agreements by their
nature concern confidential relationships, and a standard
for testing the validity of a business agreement seems to us
inappropriate in this context.
We turn to examine the judge's analysis in this case of the
fairness and reasonableness of the agreement at the time it
was executed. In making her determination, the judge
considered the factors enumerated in Dominick v. Dominick,
18 Mass. App. Ct. 85, 92 (1984),(FN29) as well as some of
the factors listed in G. L. c. 208, § 34. The judge also
emphasized the parties' lifestyle and standard of living
during their marriage, relying on Rosenblatt v.
Kazlow-Rosenblatt, 39 Mass. App. Ct. 297, 301 (1995). We
agree with the husband that the judge applied the incorrect
legal standard. The considerations that permit a judge to
conclude that a separation agreement is "fair and
reasonable" are different from those that permit a judge to
conclude that an antenuptial agreement is "fair and
reasonable." Parties to a separation agreement are joined in
marriage. On termination of their marriage, it is entirely
appropriate that the statutory factors that govern the award
of property and support should inform, in part, the fairness
and reasonableness of a separation agreement. The separation
agreement is, after all, a substitute for the independent
application by a judge of those same statutory factors. An
antenuptial agreement, in contrast, permits the parties to
define the material aspects of their relationship before
they enter into the status of marriage. If the terms of a
proposed antenuptial agreement are unsatisfactory, a party
is free not to marry. See C.P. Kindregan, Jr., & M.L. Inker,
Family Law and Practice § 20.10, at 661 (2d ed. 1996) ("If
antenuptial agreements are to have any standing under which
the parties can rely on them as an effective settlement of
their financial interests, then it is clear that a trial
judge cannot simply base the judgment nisi on the same
factors set out in [G. L. c. 208, § 34]").
Applying the correct legal standard, we conclude that the
judge's findings do not support a conclusion that the
agreement was not fair and reasonable when it was executed.
Substantively, the agreement provided that in the event of
divorce the husband would continue to provide for the wife's
support and her health insurance until her death or
remarriage; she would also have housing (the marital home)
and transportation. These provisions do not strip the wife
of her marital rights. In fact, they leave her in a better
economic position than she had before the marriage. The
first Rosenberg rule is therefore satisfied. That a judge
might have awarded her a significantly larger share of the
marital estate under G. L. c. 208, § 34, does not render the
agreement unfair and unreasonable at the time of its
execution. We recognize that the standard of living the wife
will be able to enjoy after any divorce will be
significantly lower than the one she enjoyed during her
marriage. However, she was free to refuse to sign the
antenuptial agreement; she was free to refuse marriage on
those terms.
For all of these reasons, we conclude that the antenuptial
agreement was valid when it was executed by the parties
before their marriage in 1990.
B
By concluding that the antenuptial agreement "was not fair
and reasonable at the time of execution," the judge held, in
essence, that the agreement was not valid. See Osborne v.
Osborne, 384 Mass. 591, 599 (1981) (validity of antenuptial
agreements "should be judged by the same 'fair disclosure'
rules" as in Rosenberg v. Lipnick, supra). She nevertheless
proceeded to consider whether the agreement was "fair and
reasonable" at the time of the divorce trial, although a
"second look" at the agreement is required only when a judge
concludes that an antenuptial agreement is valid. Id.
Because we have concluded that the agreement is indeed
valid, we are required to consider whether there is any
reason not to enforce it.
In Osborne, we suggested that this "second look" at an
antenuptial agreement gave the judge the authority to
deviate from the terms of an antenuptial agreement "in
certain situations, for example, where it is determined that
one spouse is or will become a public charge, or where a
provision affecting the right of custody of a minor child is
not in the best interests of the child." Id.(FN30) We
pointed to Knox v. Remick, 371 Mass. 433, 436-437 (1976), in
which we explained:
"If a judge rules, either at the time of the entry of a
judgment nisi of divorce or at any subsequent time, that the
agreement was not the product of fraud or coercion, that it
was fair and reasonable at the time of the entry of the
judgment nisi, and that the parties clearly agreed on the
finality of the agreement on the subject of interspousal
support, the agreement concerning interspousal support
should be specifically enforced, absent countervailing
equities."
We are not persuaded that the parties' agreement is not
enforceable now.
Before we explain our conclusion, we pause to comment on the
standard applicable to the "second look" a judge must
undertake when a party challenges the enforceability of a
valid agreement. In Osborne, we described the standard as
"fair and reasonable." Osborne v. Osborne, supra. In the
twenty years since Osborne was decided, no Massachusetts
appellate court has elaborated on that test, and at least
one commentator has suggested that the Osborne second-look
test is one of "conscionability." See C.P. Kindregan, Jr., &
M.L. Inker, supra at § 20.10, at 661-662.
The nomenclature attached to the standard of review --
whether it be "fair and reasonable" or "conscionability" --
is but a shorthand descriptor of what is of real moment: the
content and meaning behind the label, and the careful
analysis required of judges, case by case, of each
antenuptial agreement and the circumstances surrounding its
enforcement. Indeed, whether termed "unconscionable," "fair
and reasonable," "inequitable," or something else, in
jurisdictions that employ a "second-look" analysis, the vast
majority direct trial judges to undertake an analysis that
is remarkably similar in substance. Compare 1 H.H. Clark,
Jr., Domestic Relations in the United States § 1.9, at 52
n.51 (2d ed. 1987) ("Unconscionability seems to be defined
as occurring when enforcement of the agreement would leave
the spouse without sufficient property, maintenance, or
appropriate employment to support himself"), and MacFarlane
v. Rich, 132 N.H. 608, 616-617 (1989) (defining
"unconscionable" when "provisions in an antenuptial
agreement may lose their vitality by reason of changed
circumstances so far beyond the contemplation of the parties
at the time they entered the contract that its enforcement
would work an unconscionable hardship"), and Miles v. Werle,
977 S.W.2d 297, 303 (Mo. Ct. App. 1998), and cases cited
(agreement unenforceable that attempts to "totally take from
one of the spouses his or her presumed right to marital
property.... By contrast, where an antenuptial agreement
permits each spouse to retain a share of the marital
property, albeit a disproportionately small one, courts are
more likely to uphold and enforce the agreement"), with
Cladis v. Cladis, 512 So. 2d 271, 273 (Fla. Dist. Ct. App.
1987) ("a trial court may determine that the agreement...
does not adequately provide for the challenging spouse and,
consequently, is unreasonable"), and Button v. Button, 131
Wis. 2d 84, 98-99 (1986) ("If... there are significantly
changed circumstances after the execution of an agreement
and the agreement as applied at divorce no longer comports
with the reasonable expectations of the parties, an
agreement which is fair at execution may be unfair to the
parties at divorce").
In Massachusetts, a valid antenuptial agreement is not
unenforceable at the time of divorce merely because its
enforcement results in property division or an award of
support that a judge might not order under G. L. c. 208, §
34, or because it is one sided. Moreover, it is not
appropriate for a judge to use the same test of
enforceability of an antenuptial agreement as she would for
the enforceability of a separation agreement, for the
reasons explained earlier.(FN31) Rather, we follow the
majority of courts and require that a judge may not relieve
the parties from the provisions of a valid agreement unless,
due to circumstances occurring during the course of the
marriage, enforcement of the agreement would leave the
contesting spouse "without sufficient property, maintenance,
or appropriate employment to support" herself. See 1 H.H.
Clark, Jr., Domestic Relations in the United States, supra
at § 1.9. Such circumstances might include, for example, the
unanticipated mental or physical deterioration of the
contesting party (here the antenuptial agreement provided
for full health insurance for the wife), or the erosion by
inflation of agreed-on support payments to such a degree as
to nullify the obvious intention of the parties at the time
of the agreement's execution (here the support payments
agreed to by the parties contained an adjustment for cost of
living, which the wife does not claim is inadequate). The
"second look" at an agreement is to ensure that the
agreement has the same vitality at the time of the divorce
that the parties intended at the time of its execution. See
MacFarlane v. Rich, supra at 616-617.
As we noted above, we will not recognize the validity of an
antenuptial agreement that essentially strips the contesting
spouse of substantially all of her marital interests. For
the same reason -- that marriage is a special status from
which certain obligations arise -- we will not enforce an
antenuptial agreement that prevents a spouse from retaining
her marital rights, of which maintenance and support,
however disproportionately small, are the most critical. See
Knox v. Remick, 371 Mass. 433, 436-437 (1976). See also
Gentry v. Gentry, 798 S.W.2d 928, 936 (Ky. 1990) (agreement
enforceable where "the terms of the agreement were not
"manifestly unfair"; agreement "did not attempt to limit or
deny maintenance or support").
We have described the inquiry a judge must undertake when a
party contests the enforceability of a valid antenuptial
agreement. Our description gives content to, but does not
depart from, the standard that has been in effect since
Osborne v. Osborne, 384 Mass. 591 (1981). There we described
the standard as "fair and reasonable." We now hold that the
term "conscionability" is a more appropriate term to
describe the standard at the time of enforceability. We
trust that this change of nomenclature will be of assistance
to judges and members of the bar, and will facilitate the
recognition of the distinction between the enforceability of
separation agreements and the enforceability of antenuptial
agreements.
Applying the standard to the antenuptial agreement at issue
here, the judge made no findings, and the wife points to no
evidence, that circumstances during the marriage led to any
changes of any significance: the wife suffered no
debilitating illness and she is not unable to work should
she choose to supplement her income. The judge grounded her
decision on three postmarriage factors: "the lifestyle of
the parties during the marriage," "the vast disparity
between the parties' ability to acquire future assets and
income,"(FN32) and "the fact that this is a ten year
marriage which produced two children." None is sufficient to
render the agreement unenforceable. The settlement is, as
the judge characterized it, "less than modest, given the
financial holdings of the plaintiff." But the wife was fully
apprised of the husband's holdings before she agreed to
these "less than modest" arrangements.
4. Attorney's fees. The judge ordered the husband to pay the
wife's attorney's fees. The husband challenges that aspect
of the order on three grounds: (1) that the judge "lack[ed]
jurisdiction" to make the order, (2) that the antenuptial
agreement provides that the party in breach is liable for
the parties' attorney's fees, and (3) that the judge failed
to address the reasonableness of the fees. We agree with the
husband as to his last claim only.
General Laws c. 208, §§ 17 and 38,(FN33) permit the judge to
make an award of attorney's fees. Such an award is within
the sound discretion of the judge and will not ordinarily be
disturbed. See, e.g., Kennedy v. Kennedy, 400 Mass. 272, 274
(1987) ("This matter rests in the discretion of the judge");
Ross v. Ross, 385 Mass. 30, 39 (1982), quoting Smith v.
Smith, 361 Mass. 733, 738 (1972) ("[T]he award... may be
presumed to be right and ordinarily ought not to be
disturbed"). See also Kane v. Kane, 13 Mass. App. Ct. 557,
560 (1982) ("any award made [is] entitled to considerable
respect on review"). The factors a judge may consider
include the amount of time required to prepare the case and
pleadings, the complexity of the issues involved, the value
of the marital property, and spouse's ability to pay. See
Kane v. Kane, supra at 560-561. See also Kennedy v. Kennedy,
supra at 274 (consideration of award should appropriately
take into account important interests at stake and amount of
opposition interposed by opposing party); Goldman v.
Roderiques, 370 Mass. 435, 437 (1976) (in making award of
attorney's fees, "the basic factors of need and relative
economic positions of the spouses" must be considered). The
judge was well within her discretion in ordering the husband
to pay the wife's attorney's fees during the pendency of the
litigation to enable her to defend the action and to contest
the validity and enforceability of the antenuptial
agreement.
While the order is proper, the judgment provides only that
the husband "shall pay the parties' counsel fees." We remand
the case to the Probate Court for a determination of the
fees for the wife's attorney "not incommensurate with an
objective evaluation of the services performed." Ross v.
Ross, supra at 38-39.
4. Conclusion. The judgment that the antenuptial agreement
is unenforceable is reversed. The judgment that the husband
pay the wife's attorney's fees is affirmed. The case is
remanded to the Probate and Family Court for a determination
of the amount of such fees.
So ordered.
NOTES:
(FN1). The judge denied the husband's motion to stay the
divorce hearing and payment of attorney's fees pending the
disposition of this appeal. The husband raises no claim in
connection with that order.
(FN2). The relevant facts are drawn from the judge's written
findings of fact. The husband does not dispute the findings;
rather, he argues that the judge's subsidiary and ultimate
findings do not support her rulings of law.
(FN3). The wife does complain that the husband divulged the
financial information to her only two weeks before the
agreement was executed.
(FN4). The husband's revised statement of assets showed his
net worth to be between $108 million and $133 million. The
wife's financial statement showed assets of less than $5,000
in several bank accounts and ownership of a 1977 Chevrolet
Nova automobile. At the time of trial in 2000 on the
enforceability of the agreement, the husband's financial
statement showed assets of $112 million and liabilities of
$2 million.
(FN5). The parties negotiated and made provisions in the
final agreement for property division and support should
their marriage be terminated by the death of either one of
them. Those negotiations and the terms of the final
agreement on this point -- substantially more favorable to
the wife than the provisions concerning termination of the
marriage by divorce -- are not relevant to this action.
(FN6). The parties acknowledged that they were informed of
their rights, had considered the effect of the agreement on
their estates, and freely and willingly waived rights that
"may well have great value" in exchange for the provisions
of the agreement.
(FN7). A section entitled "Fairness Considerations" provided
that the husband and the wife "acknowledge that they have
considered the fairness of this Agreement in light of the
present size and character of his and her estate as
disclosed in [the Agreement and that]... [a]fter
consideration of their respective disclosures as to their
respective financial circumstances... each party deems it to
be in his or her best interest to execute this Agreement."
(FN8). The husband and the wife acknowledged that they had
legal advice of their own choosing, and that with the advice
of counsel each had considered carefully the financial
disclosures appended to the agreement.
(FN9). The wife and the husband had two children during
their marriage. The agreement provided for a judicial
resolution of all matters concerning any children of the
marriage, including child support, custody, and visitation.
The agreement made no provision for the wife's only child of
her first marriage. At the time of entry of judgment, the
husband continued to support the wife's daughter, as he had
done since the parties began living together.
(FN10). At the time of the execution of the agreement, the
parties lived with the wife's child in the husband's Hyannis
condominium. The agreement provides that the wife would
receive the Hyannis property, or a residential property "of
substantially equal value" if the Hyannis property were
sold.
The judge found that, after they were married, the parties
continued to live in Hyannis, but that, in 1992, they
purchased the "marital" home in Norwell, and spent their
summers at the Hyannis property. After the parties separated
the husband purchased a second home in Norwell where he now
resides.
(FN11). The cost of living increase covered the period
between the date of the parties' marriage and the time of
the initiation of any divorce action only. There would be no
further cost of living increases from the commencement of a
divorce action to the time of the wife's death or
remarriage.
(FN12). The wife testified that she did not want to sign the
agreement and felt ill and nauseous on the day of execution.
The judge found that the wife did not so inform the husband
and showed no reluctance in signing it. The judge also found
that the videotape recording showed no indication that the
wife appeared "distressed, distracted, resistant,
uncooperative, or otherwise unwilling" to sign the
agreement.
(FN13). In her findings of fact, the judge noted that the
wife's counsel had been a member of the bar since 1979, and
that sixty to seventy-five per cent of her practice was
devoted to family law. The judge found that this was the
attorney's "first case involving a premarital agreement, and
her first case involving assets over one million dollars."
The judge did not find that the attorney was not qualified
to represent the wife or that she had failed to represent
her adequately.
(FN14). Dominick v. Dominick, 18 Mass. App. Ct. 85 (1984),
lists eight factors for assessing whether a separation
agreement is fair and reasonable. These factors are "(1) the
nature and substance of the objecting party's complaint; (2)
the financial and property division provisions of the
agreement as a whole; (3) the context in which the
negotiations took place; (4) the complexity of the issues
involved; (5) the background and knowledge of the parties;
(6) the experience and ability of counsel; (7) the need for
and availability of experts to assist the parties and
counsel; and (8) the mandatory and, if the judge deems it
appropriate, the discretionary factors set forth in G. L. c.
208, § 34" (footnotes omitted). Id. at 92. That the Dominick
case involved a separation agreement, rather than an
antenuptial agreement -- as is at issue in this case -- is
discussed infra.
(FN15). General Laws c. 208, § 34, provides that: "In
determining the amount of alimony, if any, to be paid, or in
fixing the nature and value of the property, if any, to be
so assigned, the court, after hearing the witnesses, if any,
of each party, shall consider the length of the marriage,
the conduct of the parties during the marriage, the age,
health, station, occupation, amount and sources of income,
vocational skills, employability, estate, liabilities and
needs of each of the parties and the opportunity of each for
future acquisition of capital assets and income. In fixing
the nature and value of the property to be so assigned, the
court shall also consider the present and future needs of
the dependent children of the marriage. The court may also
consider the contribution of each of the parties in the
acquisition, preservation or appreciation in value of their
respective estates and the contribution of each of the
parties as a homemaker to the family unit."
(FN16). An antenuptial agreement must also, of course,
comport with the rules governing the formation of all
contracts, for example, the necessity of consideration and
the absence of fraud, misrepresentation, and duress. See
Rosenberg v. Lipnick, 377 Mass. 666, 673 (1979).
(FN17). We also noted in Rosenberg v. Lipnick, supra at 673,
that "antenuptial agreements must be so construed as to give
full effect to the parties' intentions, but we are concerned
that such agreements be executed fairly and understandingly
and be free from fraud, imposition, deception, or
over-reaching."
(FN18). The judge correctly noted that she was to test the
enforceability of the agreement under the disclosure rules
of Rosenberg v. Lipnick, supra at 672-673, although she did
not examine each rule separately.
(FN19). A leading treatise has described the test this way:
"The issue is whether an intelligent, competent person did
have or should have had a general, adequate and sufficient
knowledge of the other's worth to make an informed decision
as to whether they wished to consent to the terms of the
proposed premarital agreement." C.P. Kindregan, Jr., & M.L.
Inker, Family Law and Practice § 20.8, at 654 (2d ed. 1996).
(FN20). Other courts have held that the lack of negotiations
or insufficient notice, standing alone, is seldom enough to
invalidate an antenuptial agreement. See, e.g., Liebelt v.
Liebelt, 118 Idaho 845, 848 (Ct. App. 1990); Howell v.
Landry, 96 N.C. App. 516, 528 (1989). Courts generally have
treated such a claim as one of duress, and have found such a
defense inapplicable where, as here, the party contesting
the agreement had notice of the agreement. See, e.g., Rose
v. Rose, 526 N.E.2d 231, 235-236 (Ind. Ct. App. 1988)
(parties discussed necessity of agreement several times
before wedding, and husband told wife he would not marry her
if she did not sign agreement); Matter of the Marriage of
Adams, 240 Kan. 315, 319-320 (1986) (husband approached wife
morning of wedding and asked her to sign agreement;
agreement was identical to one wife reviewed with her
attorney); Taylor v. Taylor, 832 P.2d 429, 431 (Okla. Ct.
App. 1991) (wife in possession of the agreement for three
months prior to its execution); Shepherd v. Shepherd, 876
P.2d 429, 432 (Utah Ct. App. 1994) (parties discussed
agreement for months prior to marriage and each had
opportunity to review and make changes to it).
(FN21). Counsel's letter states in part: "When you sign a
pre-marital contract, you give up the opportunity of having
the Court make an independent assignment of marital
property, and accept the terms of the contract instead."
(FN22). To the extent there was any inadequacy of
representation by the wife's attorney, that is a claim of
the wife against her lawyer, not a basis for voiding the
antenuptial agreement.
(FN23). The evidence is undisputed that the wife's attorney
wrote to her before the execution of the agreement, enclosed
a copy of G. L. c. 208, § 34, and instructed the wife to
read it carefully, "so that you can evaluate properly the
terms of the Pre-Marital Agreement that we are negotiating."
Her attorney further told her that they would go over the
statute when they met at the attorney's office the following
Monday, March 19. The judge found that the wife's attorney
had advised her client that the agreement in its final form
was fair and reasonable.
(FN24). The wife did not claim or prove that her counsel was
incompetent. Cf. Cladis v. Cladis, 512 So. 2d 271, 274 (Fla.
Dist. Ct. App. 1987) (trial judge's finding that wife did
not have competent assistance of counsel no basis for
setting aside valid property settlement agreement).
(FN25). General Laws c. 209, § 25, provides that: "At any
time before marriage, the parties may make a written
contract providing that, after the marriage is solemnized,
the whole or any designated part of the real or personal
property or any right of action, of which either party may
be seized or possessed at the time of the marriage, shall
remain or become the property of the husband or wife,
according to the terms of the contract. Such contract may
limit to the husband or wife an estate in fee or for life in
the whole or any part of the property, and may designate any
other lawful limitations. All such limitations shall take
effect at the time of the marriage in like manner as if they
had been contained in a deed conveying the property
limited."
(FN26). See also C.P. Kindregan, Jr., & M.L. Inker, supra at
§ 20.8, at 652.
(FN27). See also 2 A. Lindey & L.I. Parley, Separation
Agreements and Antenuptial Contracts § 110.66[2], at 110-59
(2d ed. 1999).
(FN28). See Uniform Premarital Agreement Act § 6 (a)(2). 9C
U.L.A. 48-49 (Master ed. 2001) The Act, first approved in
1983, has been substantially adopted in at least
twenty-eight States and the District of Columbia: Arizona,
Arkansas, California, Connecticut, Delaware, Hawaii, Idaho,
Illinois, Indiana, Iowa, Kansas, Maine, Mississippi,
Montana, Nebraska, Nevada, New Jersey, New Mexico, North
Carolina, North Dakota, Oregon, Rhode Island, South Dakota,
Texas, Utah, Virginia, West Virginia, and Wisconsin.
Legislation to adopt the Act has been introduced in the
South Carolina General Assembly, but has not passed. See
Hardee v. Hardee, No. 3417 (slip op. at 4 n.6) (S.C. App.
Dec. 10, 2001).
(FN29). See note 14, supra.
(FN30). Custody and the support of the parties' minor
children are not at issue in this case.
(FN31). In this aspect of her ruling, the judge also
incorrectly relied on the factors identified in Dominick v.
Dominick, supra, including those enumerated in G. L. c. 208,
§ 34.
(FN32). The judge noted that, during their ten years of
marriage, the wife was "completely dependent on [the
husband] for her financial security."
(FN33). General Laws c. 208, § 17, provides: "The court may
require either party to pay into court for the use of the
other party during the pendency of the action an amount to
enable him to maintain or defend the action...."
General Laws c. 208, § 38, provides: "In any proceeding
under this chapter, whether original or subsidiary, the
court may, in its discretion, award costs and expenses, or
either, to either party, whether or not the marital relation
has terminated. In any case wherein costs and expenses, or
either, may be awarded hereunder to a party, they may be
awarded to his or her counsel, or may be apportioned between
them."