In re the Marriage of Porter
381 P.3d 873, 281 Or. App. 169, 2016 Ore. App. LEXIS 1141 (2016)
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Rule of Law:
Under Oregon's Uniform Premarital Agreement Act (UPAA), an agreement is not executed voluntarily if the surrounding circumstances indicate coercion, surprise, or a lack of meaningful opportunity to review the agreement and understand the rights being waived, even without evidence of direct physical coercion or duress at the time of signing.
Facts:
- The parties met in May 2002; wife was a German national with advanced degrees but was inexperienced with U.S. legal matters, while husband was a wealthy American who had been married twice before.
- In early December 2002, husband told wife his attorney would prepare a prenuptial agreement, explaining it was only to ensure she was not marrying him for his money.
- On the afternoon of December 24, 2002, husband drove wife to a bank and, without any prior discussion of its specific terms, presented her with the 12-page agreement and a list of his assets for the first time.
- Wife spent about five minutes at the bank, glanced at the document without understanding the legal terminology, and signed it where husband instructed.
- The agreement stated that, upon divorce, each party would keep their separate property and that neither party would make a claim for spousal support.
- Wife trusted husband's representation that the agreement was insignificant and did not feel she could ask for an explanation or consult a lawyer.
- Later that same evening, after the agreement was signed, the parties became formally engaged to be married.
- The parties married on April 19, 2003.
Procedural Posture:
- Wife filed a petition for dissolution of marriage in the Oregon trial court.
- Simultaneously, wife sought a judicial declaration that the parties' prenuptial agreement was unenforceable.
- The trial court held a hearing and ruled the agreement was unenforceable because it was not signed voluntarily and was unconscionable.
- The trial court proceeded with the dissolution case and entered a judgment awarding wife spousal support and a division of property.
- Husband, as appellant, appealed the trial court's judgment to the Oregon Court of Appeals, arguing the court erred in finding the agreement unenforceable.
- Wife, as respondent, cross-appealed, arguing the property division was not just and proper.
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Issue:
Is a premarital agreement unenforceable under ORS 108.725 on the grounds that it was not executed voluntarily when one party, who was unfamiliar with U.S. legal matters, was presented with the agreement for the first time immediately before signing, had no opportunity to consult with independent counsel, and did not understand its terms or legal consequences?
Opinions:
Majority - Duncan, P. J.
Yes, the premarital agreement is unenforceable because it was not executed voluntarily. Voluntariness under ORS 108.725 requires more than the mere absence of duress; it involves a holistic assessment of the circumstances to determine if there was a meaningful choice. Citing its prior decision in Rudder and Rudder, the court applied a multi-factor analysis, considering: the surprise presentation of the agreement, the absence of independent counsel, the inequality of bargaining power due to wife's lack of sophistication in U.S. legal matters, and wife's lack of understanding of the rights she was waiving. Although the signing was not immediately proximate to the wedding, the court found that husband intentionally created a coercive environment by presenting the document suddenly, misrepresenting its significance, and not allowing wife sufficient time to review it or seek legal advice. The court distinguished Knoll and Knoll, noting that while a party generally has a duty to read a contract, that rule does not apply where, as here, the party attempted to read it but could not understand it and reasonably relied on the other party’s misleading representations.
Analysis:
This decision reinforces and clarifies the broad, multi-factor inquiry courts must use to determine 'voluntariness' when assessing the enforceability of a premarital agreement under the UPAA. It establishes that procedural fairness in the execution process can be dispositive, even when the agreement is signed months before a wedding. The court's focus on the power imbalance, surprise presentation, and lack of opportunity for legal counsel signals that parties with greater sophistication and bargaining power cannot rely on formal recitals in an agreement to overcome evidence of an inherently coercive signing environment. This case serves as a strong precedent for challenging premarital agreements based on the totality of the circumstances surrounding their execution, rather than just the absence of classic duress.
