Bedrick v. Bedrick
77 A.L.R. 6th 765, 17 A.3d 17, 300 Conn. 691 (2011)
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Rule of Law:
A postnuptial agreement is valid and enforceable in Connecticut if it complies with ordinary contract principles, its terms were fair and equitable at the time of execution, and its terms are not unconscionable at the time of the marriage's dissolution.
Facts:
- On December 10, 1977, Deborah Bedrick and Bruce L. Bedrick executed a postnuptial agreement while married.
- The agreement stipulated that in the event of dissolution, neither party would pay alimony, and Deborah would receive a cash settlement in an amount to be 'reviewed from time to time'.
- The agreement also provided that Deborah would waive her interests in Bruce's car wash business.
- The parties modified the agreement with handwritten addenda on five occasions, with the final modification on May 18, 1989, setting Deborah's cash settlement at $75,000.
- After the final modification in 1989, the parties had a child together in 1991.
- Subsequent to the last modification, Bruce's car wash business initially prospered and later deteriorated.
- At the time of the dissolution action, the parties' combined assets were valued at approximately $927,123.
Procedural Posture:
- In August 2007, Deborah Bedrick (plaintiff) filed an action for dissolution of marriage against Bruce L. Bedrick (defendant) in a Connecticut trial court.
- Bruce Bedrick filed a cross complaint seeking enforcement of the parties' postnuptial agreement.
- The trial court declined to enforce the agreement, concluding it was not fair and equitable.
- The court ordered Bruce to pay Deborah lump sum alimony of $392,372 from the total marital assets of $927,123.
- Bruce filed a motion to reargue, contending the court should have applied principles of contract law.
- After reargument, the trial court again declined to enforce the agreement, finding it lacked consideration and its enforcement would be unjust due to changed circumstances.
- Bruce Bedrick (appellant) appealed the judgment to the Connecticut Appellate Court.
- The Connecticut Supreme Court granted the appellant's motion to transfer the case to itself.
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Issue:
Is a postnuptial agreement enforceable solely based on ordinary principles of contract law, or must a court also determine that the agreement was fair and equitable at the time of execution and not unconscionable at the time of dissolution?
Opinions:
Majority - McLachlan, J.
No, a postnuptial agreement is not enforceable based solely on contract principles; it is also subject to special scrutiny for fairness and conscionability. Postnuptial agreements are consistent with public policy because they encourage private resolution of family financial matters. However, they require stricter scrutiny than prenuptial agreements because spouses are in a confidential relationship and do not deal at arm's length, creating a potential for coercion or advantage-taking. Therefore, a postnuptial agreement is enforceable only if it (1) complies with contract principles, (2) was fair and equitable at the time of execution (i.e., entered into voluntarily, without fraud or duress, and with full financial disclosure), and (3) is not unconscionable at the time of dissolution. In this case, significant unforeseen changes occurred after the agreement was last updated in 1989, including the birth of a child and dramatic shifts in the value of the family business. Enforcing the $75,000 settlement from a marital estate of over $900,000 would be unconscionable and work an injustice.
Analysis:
This case is significant for establishing for the first time in Connecticut that postnuptial agreements are valid and enforceable. By creating a hybrid legal standard that combines contract law with heightened equitable scrutiny, the court recognized the unique, confidential nature of the marital relationship. The decision mandates a 'second look' at the agreement's fairness at the time of divorce, creating a precedent that protects spouses from the enforcement of agreements that have become grossly inequitable due to unforeseen life changes over the course of a long marriage.
