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Pre-Nuptial Agreement Drafted by Husband Not Enforceable Against Him Because He Didn't Have an Attorney & Seven Days to Review It

Posted By Anthony P. Azemika, Esq.   |   Comments (0)
Community & Separate Property, Divorce, Legal Cases,

 

 

A California Court of Appeals has ruled that a pre-nuptial agreement initially drafted by Husband, but later revised by Wife’s attorney, is not enforceable against Husband, who was not represented by an attorney and did not have at least seven days to review the final version before he signed it. The Court also ruled that the statement in the pre-nuptial agreement that the parties each had the seven-day review period before they signed it is not binding against an unrepresented party.

In the case of In re Marriage of Clarke and Akel, Husband and Wife, set their wedding date as March 7, 2008. On February 26, 2008, Husband, using a downloaded form as a guide, drafted a pre-nuptial agreement which, among other things, provided that Husband’s separate property house would remain his separate property after the marriage, but Wife would acquire a 2% interest in that home for each year of their marriage, and that the home would become community property after seven years of marriage. The pre-nuptial agreement also provided that Wife and any children would have a lifetime tenancy in Husband’s home.

Husband then retained an attorney to represent Wife in the negotiation and execution of the pre-nuptial agreement, but he “did not believe he needed an attorney himself” and thus, he did not seek advice from an independent counsel. Husband emailed a copy of his draft pre-nuptial agreement to Wife’s attorney on February 29, 2008, and followed it up with a revised draft on March 3, 2008, which contained the same provisions regarding his home. Wife’s attorney reviewed the draft and made notes regarding certain issues.

On March 4, 2008, Husband, Wife, and her attorney met to discuss the pre-nuptial agreement. Wife’s attorney advised Husband to seek an independent counsel, but Husband said “he was able to represent himself.” The attorney then met separately with Wife to explain the provisions of the agreement and its legal effect. The attorney also asked Husband about his understanding of the term “divorce” in connection with Wife’s acquiring a two percent (2%) interest in Husband’s home and also discussed whether Husband intended to waive his right to California Family Code Section 2640 (reimbursement of his separate property contribution to purchase of community property) if his home became community property after seven years.

On March 5, 2008, Wife’s attorney sent Husband and Wife each copies of the revised pre-nuptial agreement, to which he had added several provisions regarding the parties’ waiver of their separate property interest in community property, including Family Code Section 2640 reimbursement, Husband’s specific waiver of reimbursement regarding his home, and Husband’s obligation to pay all expenses on the home during Wife’s lifetime tenancy. The revised pre-nuptial agreement also contained a statement that each party had had more than seven days to review the pre-nuptial agreement before signing it. Husband and Wife signed this pre-nuptial agreement on March 6, 2008. Husband also executed a separate written waiver of counsel, stating that Wife’s attorney had advised him to retain separate counsel, and acknowledging that Wife’s attorney represented only Wife.

Husband and Wife separated “in 2013 or 2014” and began divorce proceedings. Wife sought to enforce the pre-nuptial agreement giving her a lifetime tenancy in Husband’s home, but Husband contended that the agreement was not enforceable. After trial, Trial Court determined that the pre-nuptial agreement was not enforceable because Husband was not presented with the final version at least seven days before he signed it, as required by California Family Code Section 1615(e)(2) and was also unenforceable under Family Code Section 1615(c)(3) because Husband had not received a written advisement of the rights he was giving up under the pre-nuptial and had not signed a written waiver of those rights. Wife appealed, but California Court of Appeals has now affirmed Trial Court’s decision.

The Appellate Court has ruled that (1) Family Code Section 1615(c) provides that a pre-nuptial agreement will be considered to have been executed involuntarily (and thus unenforceable) if, among other things: (a) the party against whom enforcement is sought had less than seven days to review it and be advised to seek independent counsel before signing it, (b) an unrepresented party against whom enforcement is sought was not fully informed of the terms and basic effects of the pre-nuptial agreement as well as the rights and obligations he or she would give up on signing it; (c) the explanation of relinquished rights and obligations was not memorialized in writing and delivered to the unrepresented party, who must then execute a declaration of having received the writing and by whom the information was given; and (d) the agreements and writing were executed under duress, fraud, or undue influence or by parties who were not competent to enter into them; (2) here, Husband was not presented with the final version of the pre-nuptial or advised to seek independent counsel at least seven days before he signed it; (3) the statement in the pre-nuptial agreement that the parties had seven days to review the agreement does not save the agreement from being unenforceable because the underlying policy for the seven-day review period (protection of unrepresented parties) would be thwarted if it could be invalidated by a boilerplate provision; (4) the pre-nuptial agreement is also unenforceable under Family Code Section 1615(c)(3) because Husband did not receive a written advisement of the rights and obligations he was giving up in signing the pre-nuptial and did not execute a written waiver of those rights (Husband’s waiver of right to counsel does not meet those requirements); and (5) the fact that Husband did the initial drafting of the pre-nuptial does not extend the seven-day review period or indicate that he was aware of or advised of the rights and obligations he would be giving up and it does not constitute a written waiver of them. The Court of Appeals has thus ruled that Trial Court did not err in concluding that the pre-nuptial agreement was unenforceable for lack of compliance with Family Code Section 1615 (c)(2) and (3).

 

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