DeLorean v. DeLorean
211 N.J. Super. 432, 511 A.2d 1257 (1986)
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Rule of Law:
An antenuptial agreement is enforceable if entered into voluntarily without fraud or duress, is not unconscionable, and meets the financial disclosure requirements of the state law designated in the agreement's choice-of-law provision, which may be a less stringent standard than that of the forum state.
Facts:
- On May 8, 1973, hours before their wedding, John Z. DeLorean, a 48-year-old senior executive, presented a prenuptial agreement to his fiancée, Cristina DeLorean, who was 23 years old.
- The agreement stipulated that any property, income, and earnings acquired by each party before and after the marriage would remain their separate property.
- John DeLorean stated he would not proceed with the wedding unless Cristina signed the agreement.
- Cristina DeLorean consulted privately with an attorney selected by John, who advised her not to sign the agreement.
- Despite the attorney's advice, Cristina signed the agreement, which included a clause specifying that it would be construed under the laws of California.
- John DeLorean did not provide a detailed written list of his assets, but Cristina was aware that he was a person of substantial wealth.
- The parties were married for thirteen years and had two children.
Procedural Posture:
- Cristina DeLorean filed a suit for divorce in California and was granted a judgment of divorce.
- John DeLorean filed a suit for divorce in the Superior Court of New Jersey, Chancery Division, challenging the validity of the California proceeding.
- Following a plenary hearing, the New Jersey court ruled that the California divorce was invalid due to a lack of residency and held that New Jersey had proper jurisdiction over the matrimonial dispute.
- Subsequent to the jurisdictional ruling, both parties voluntarily entered into a written agreement to submit the specific issue of the prenuptial agreement's validity to a retired California judge for a binding decision.
- The retired California judge conducted a hearing with testimony from both parties and issued a formal decision finding the prenuptial agreement to be valid and enforceable.
- The husband now asks the New Jersey Superior Court to enforce the arbitrator's decision and uphold the prenuptial agreement as part of the ongoing divorce proceedings.
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Issue:
Is an antenuptial agreement enforceable under California law when one party, prior to signing, did not receive a detailed written disclosure of the other's substantial assets but had a general knowledge of their wealth and access to legal counsel?
Opinions:
Majority - Imbriani, J.S.C.
Yes, the antenuptial agreement is enforceable. Under the three-part test for validity, the agreement was entered into voluntarily, is not unconscionable, and satisfied the applicable disclosure requirements. Although Cristina signed under pressure, she was an adult with business experience and acted against the advice of counsel, which constitutes a voluntary act, not one under duress. The agreement is not unconscionable because she is not left destitute, having her own income and a life interest in a multi-million dollar trust. While New Jersey law would likely require a full, written disclosure of assets, the agreement's choice-of-law clause mandates the application of California law. California law imposes a less stringent disclosure standard, not treating pre-marital parties as fiduciaries, and requires only a general knowledge of the other's wealth, placing a duty on the other party to inquire further. John DeLorean's disclosures met this standard. Furthermore, the parties submitted this specific issue to a retired California judge for a binding decision, which constitutes an arbitration. The arbitrator found the agreement valid, and his decision is binding on the court absent statutory grounds for vacatur, which are not present here.
Analysis:
This decision emphasizes the critical role of choice-of-law provisions in contracts, illustrating that the governing law can be determinative of an outcome, particularly where standards for things like financial disclosure differ significantly between states. It also strongly affirms the validity and binding nature of arbitration for resolving specific issues within matrimonial litigation, promoting it as an efficient alternative dispute resolution mechanism. The court's distinction between the stricter New Jersey disclosure standard and the more lenient California standard serves as a key precedent on the enforcement of such clauses and provides a practical lesson on the importance of attaching detailed financial statements to prenuptial agreements to preempt litigation.
