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Peters-Riemers v. Riemers, 2002 ND 72, 644 N.W.2d 197

http://www.court.state.nd.us/court/opinions/20010135.htm

The following excerpt from the Peters-Riemers v. Riemers court decision illustrates some of the factors courts consider in determining whether a premartial agreement is enforceable.

IX. Premarital Agreement

Roland and Jenese entered into a premarital contract which the [trial] court found was unconscionable and unenforceable. Section 14-03.1-06, N.D.C.C., provides in relevant part:

1. A premarital agreement is not enforceable if the party against whom enforcement is sought proves that:

a. That party did not execute the agreement voluntarily; or

b. The agreement was unconscionable when it was executed and, before execution of the agreement, that party:

(1) Was not provided a fair and reasonable disclosure of the property or financial obligations of the other party;
(2) Did not voluntarily sign a document expressly waiving any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided; and
(3) Did not have notice of the property or financial obligations of the other party.

...

3. An issue of unconscionablility of a premarital agreement is for decision by the court as a matter of law.

Section 14-03.1-07, N.D.C.C., provides:

Notwithstanding the other provisions of this chapter, if a court finds that the enforcement of a premarital agreement would be clearly unconscionable, the court may refuse to enforce the agreement, enforce the remainder of the agreement without the unconscionable provisions, or limit the application of an unconscionable provision to avoid an unconscionable result.

Relevant to this issue, the trial court made the following specific findings of fact:

22. Three days before the parties married, Roland pressed Jenese to execute a premarital agreement. Such agreement purported to allocate the parties' debts and assets in the event of a divorce. It did not , however, prohibit an award of spousal support.

23. The parties' premarital agreement is not enforceable pursuant to NDCC, § 14-03.1-06, due to the following factual circumstances:

a. The premarital agreement was sprung on Jenese just three days before the parties' marriage.

b. Jenese did not have the benefit of independent legal advice prior to signing the agreement... She was required to read the agreement in the same room, at the same table, where Roland and his attorney sat, causing a coercive environment. Her reading of the agreement was, thus, cursory, and her understanding of its consequences limited.

c. Roland did not provide Jenese a fair and reasonable disclosure of his property and financial obligations. Roland evidences an abject disability to make honest financial disclosures. This fact was particulary evident with respect to the financial disclosures he made to Jenese in the premarital agreement. For example, Roland disclosed a "net worth" of $473,724 in the premarital agreement. However, just a matter of months earlier, on loan applications, he had disclosed a net worth of $1,341,500, $683,683 and $706,178. Roland provided no explanation for these widely varying amounts. In addition, attached to each of Roland's loan applications is a "Schedule of Real Estate Owned". These schedules disclose equity values for Roland's various real estate holdings vastly different than the amounts he disclosed on the premarital agreement.

d. Jenese did not voluntarily waive her right to a fair and reasonable disclosure of Roland's property or financial obligations.

e. Jenese did not have notice of the true state of Roland's property or financial obligations.

...

31. Roland's representations of his income are neither credible nor reliable. He did not file taxes in 1997, 1998 or 1999, a failure a Court appointed forensic accounting expert deemed a criminal violation. Roland drafted multiple phony returns in 1998, which identified income amounts varying by more than $80,000, some of which identified Jenese as his wife, even though they weren't married until March of 1999.

Based upon these findings, the trial court reached the following conclusion:

16. PREMARITAL AGREEMENT UNENFORCEABLE : The parties' premarital agreement, dated March 3, 1999, is unenforceable pursuant to North Dakota Century Code, Sections 14-03.1-06 and 14-03.1-07.

Lack of adequate legal advice for a prospective spouse to obtain independent counsel is a significant factor in weighing the voluntariness of a premarital agreement. Even if a premarital agreement has been voluntarily entered, the substantive enforceability of it is a matter of law to be decided by the court. Roland's failure to provide truthful and accurate financial information to Jenese prior to her entering the premarital agreement is sufficient ground to render it unenforceable...

Last updated December 28, 2005

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