Mallen v. Mallen
2005 Fulton County D. Rep. 3496, 280 Ga. 43, 622 S.E.2d 812 (2005)
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Rule of Law:
Under Georgia law, a prenuptial agreement is enforceable and will not be invalidated for fraud, duress, or unconscionability merely because of a significant disparity in wealth or because one party insists on it as a condition of marriage, as there is no confidential relationship between persons who have agreed to marry.
Facts:
- Catherine Mallen (Wife) and Peter Mallen (Husband) lived together for approximately four years before their marriage.
- In 1985, Wife became pregnant and went to a clinic to terminate the pregnancy.
- Husband called Wife at the clinic, asked her not to have an abortion, and proposed marriage, to which she agreed.
- Nine or ten days before the wedding, Husband presented Wife with a prenuptial agreement prepared by his attorney.
- At the time, Wife had a net worth of approximately $10,000, while Husband, a business owner, had a net worth of at least $8,500,000.
- Wife's attorney advised her that he did not have adequate time to fully review the agreement before the wedding date.
- Wife negotiated modifications to the agreement's life insurance and alimony provisions before signing it.
- The parties were married for 18 years and had four children before Husband filed for divorce.
Procedural Posture:
- Peter Mallen (Husband) filed an action for divorce against Catherine Mallen (Wife) in a Georgia trial court in 2003.
- Husband sought to enforce the prenuptial agreement the parties signed before their marriage.
- The trial court held that the prenuptial agreement was enforceable and incorporated its terms into the final divorce decree.
- Catherine Mallen (Wife), as the appellant, appealed the trial court's judgment to the Supreme Court of Georgia.
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Issue:
Is a prenuptial agreement enforceable when one party is pregnant, there is a significant disparity in financial status and business experience, and the wealthier party did not disclose his income but insisted on the agreement as a condition of marriage?
Opinions:
Majority - Benham, Justice
Yes, the prenuptial agreement is enforceable. The court evaluated the agreement using the three-part test from Scherer v. Scherer and found no grounds for invalidation. First, there was no fraud, duress, or material nondisclosure. The court explicitly rejected the existence of a confidential relationship between engaged persons, meaning Wife had a duty of ordinary diligence to verify Husband's representations. Husband’s insistence on the agreement as a condition of marriage did not constitute duress, and Wife’s awareness of his wealthy lifestyle meant the failure to list his exact income was not a material nondisclosure. Second, the agreement was not unconscionable, as it merely perpetuated the pre-existing financial disparity between the parties. Third, the growth of Husband’s wealth during the marriage was a foreseeable development, not a change in circumstances that would make enforcement unfair or unreasonable.
Dissenting - Sears, Chief Justice
No, the prenuptial agreement is not enforceable. The dissent argues that the majority misapplied the 'nondisclosure of material facts' standard from Scherer. Because the prenuptial agreement significantly limited Wife's right to alimony, Husband's income—approximately $560,000 per year at the time—was a critical and material fact necessary for Wife to make an informed decision. Since it is undisputed that Husband did not disclose his income, this nondisclosure of a material fact renders the prenuptial agreement unenforceable.
Analysis:
This decision solidifies Georgia's position as a jurisdiction that strongly favors the enforcement of prenuptial agreements. By explicitly rejecting the existence of a confidential relationship between prospective spouses, the court places a significant burden of due diligence on the party with less bargaining power. The ruling makes it more difficult to challenge prenuptial agreements on grounds of duress or nondisclosure, as long as a party has a general, albeit imprecise, understanding of the other's financial status. Future challenges to prenups in Georgia will likely fail if they are based on foreseeable events, such as the accumulation of wealth during the marriage.
