Recent Case Law Affecting Pre-Nuptial Agreements
Recent Case Law Affecting Pre-Nuptial Agreements
California appellate courts continue to clarify ambiguities in the law regarding premarital agreements. In two recent cases, the California Court of Appeals dealt with pre-marital agreements which each contained unenforceable provisions.
In re Marriage of Facter
In the matter of In re Marriage of Facter, (filed January 14, 2013)1, the Court of Appeals reversed the Trial Court decision which invalidated the entire premarital agreement solely because certain sections of the agreement, namely a waiver of the right to receive spousal support, child support and future attorneys fees, were not enforceable. Based on these unenforceable provisions, the Trial Court had also rendered the rest of the agreement void, including a provision that stated that none of the property acquired by the husband during marriage would be deemed community property, which was an otherwise enforceable provision. However, the Court of Appeals reversed, stating that the Trial Court must sever and enforce those provisions that are enforceable. The Court of Appeals did uphold the Trial court's invalidation of the spousal support waiver because the Court found from the evidence that such a waiver was unconscionable.
In re Marriage of Melissa
Likewise, in In re Marriage of Melissa (filed January 2, 2013), the Court of Appeals upheld a Trial Court decision which found a waiver of spousal support unenforceable because the law in effect at the time the parties signed their agreement was that such waivers were deemed invalid as against public policy.2
History of Spousal Support Waivers in California
In this case, the Court of Appeals reviewed the history of spousal support waivers. The Court cited the 1985 Supreme Court case of In re Marriage of Higgason (1973) 10 [Cal.3d] 476, which held that "premarital agreements designed to waive, diminish, or alter the statutory obligation of spouses to mutually support each other were contrary to public policy and therefore void and unenforceable." As the Court in Melissa explains, the rationale for that rule was that marriage was considered "a social institution vital to society's stability" and "more than a mere contract." Although in 1985 there was no per se rule invalidating premarital agreements, it was determined that "any written waiver of the statutory obligation of spouses to mutually support each other was void as being contrary to public policy." Since this law was in effect at the time the Parties entered into the agreement, the Court of Appeals upheld the Trial Court's decision to apply this law.
However, soon after Higgason was decided, in 1986, the legislature enacted the Uniform Premarital Agreement Act ("UPAA"). In the UPAA of 1986, the Legislature deleted the subdivision which would have expressly permitted the parties to modify or eliminate spousal support. The Court in Melissa noted that the Parties had executed their Agreement before the Uniform Act was adopted and before it became effective in 1986, and held that it would not control their Agreement. The Court in Melissa explained that with the UPAA the legislature intentionally omitted language that would change existing California case authority holding spousal support waivers invalid, because "public policy had not yet evolved on the issue to prompt the Legislature to expressly recognize and condone such waivers."
As the Court in Melissa explains, the public policy of the state changed when in 1998, the California Supreme Court decided Marriage of Pendleton & Fireman (1998) 62 Cal. App. 4th 751, 72 Cal. Rptr. 2d 840, which stated that public policy had shifted and no longer supported an absolute prohibition against spousal support waivers. The Court in Pendleton stated, "we no longer believe prenuptial agreements containing spousal support waivers encourage dissolution or will harm society, [however,] we are also well aware of the need for safeguards to ensure fairness and voluntariness."
In response to the Pendleton decision, the legislature amended the UPAA (Family Code § 1600, et seq.), to account for this shift in public policy which allowed for spousal support waivers as long as certain safeguards were in force. Specifically, the UPAA now expressly holds, as follows:
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." (Emphasis added). Family Code § 1612(c).
Nevertheless, the Court in Melissa held that the Pendleton decision did not change the result as to agreements signed prior to its issuance and applied the holding of Higgason and majority rule existing in 1985. Although the Legislature's 2002 amendments to the UPAA reflect the most current public policy concerning spousal support agreements, it does not control agreements which were entered into prior to its enactment.
Thus, under current California law, the law which exists at the time an agreement is entered into prevails, irrespective of the contemporary public policy of the day.