Matter of Marriage of Foran
834 P.2d 1081, 67 Wash. App. 242 (1992)
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Rule of Law:
A patently unfair prenuptial agreement is unenforceable if the party seeking to enforce it cannot prove that the unrepresented, economically disadvantaged party entered into the contract with a full and intelligent understanding of its legal consequences.
Facts:
- James Foran and Peggy Estes began living together in 1976.
- In 1977, Peggy began working for James' company, Jim Foran Trucking, Inc., as a dispatcher and bookkeeper.
- On January 11, 1980, one day before leaving for their wedding trip, the couple signed a prenuptial agreement drafted by James' attorney; Peggy had first seen the document the previous day.
- At the time of signing, James' net worth was approximately $1,198,500, while Peggy's was $8,200.
- The agreement allowed James to prevent the accumulation of community property and enrich his separate estate at the expense of the marital community, and Peggy waived significant marital property rights.
- James' attorney informed Peggy he was representing only James and advised her to seek independent counsel, which she did not do.
- During their relationship prior to the marriage, James had engaged in several episodes of domestic violence against Peggy, who later testified she feared she would be hit if she refused to sign the agreement.
- Throughout the marriage, Peggy continued to work for the trucking company, but neither party received much salary, preventing the accumulation of significant community assets while their labor enhanced James' separate property.
Procedural Posture:
- The marriage of James Foran and Peggy Foran was dissolved by a decree of a trial court in August 1990.
- In the dissolution proceeding, the trial court concluded the prenuptial contract was unenforceable, finding it would be inequitable to enforce it due to James' conduct after the marriage.
- The trial court divided the property and awarded maintenance and attorney's fees to Peggy.
- James Foran (appellant) appealed the trial court's judgment to the Court of Appeals of Washington, challenging the unenforceability of the prenuptial agreement and the subsequent awards.
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Issue:
Is a patently unreasonable prenuptial agreement, which allows one spouse to enrich their separate estate at the community's expense, enforceable when the economically disadvantaged spouse signs it without independent counsel and without fully understanding its legal consequences, despite being advised to seek counsel?
Opinions:
Majority - Kennedy, J.
No. A patently unfair prenuptial agreement is void from its inception if the unrepresented party did not voluntarily and intelligently enter into it with a full understanding of its legal consequences. The court applied the two-prong test from In re Marriage of Matson. First, the court determines if the agreement provides a fair and reasonable provision for the non-enforcing party. This contract failed the first prong as a matter of law because it was patently unreasonable; it allowed James to enrich his $1.2 million separate estate at the expense of the marital community, while Peggy, who had negligible assets, waived nearly all her marital rights. Because the contract was substantively unfair, the court then zealously examined the procedural fairness. It found that although Peggy's signing was 'voluntary' in a narrow sense, it was not 'intelligent.' Merely advising an unrepresented party to seek independent counsel is insufficient. The attorney for the represented party, if they explain any part of the contract's effect, must explain the 'whole story,' including the risks. Here, Peggy was not made to understand how the contract would allow James to prevent the creation of a community estate. The burden was on James to prove Peggy intelligently signed the contract, and he failed to do so.
Analysis:
This decision significantly clarifies the standards for enforcing prenuptial agreements in Washington, particularly under the Matson test. It establishes that for a 'patently unfair' agreement, the procedural fairness requirement is heightened; a simple advisory to seek counsel is not enough to ensure enforceability. The ruling places a heavier burden on the economically dominant party and their counsel to ensure the other party has a truly 'intelligent' understanding of what they are waiving. This case serves as a strong precedent for courts to invalidate one-sided prenuptial agreements where a significant imbalance of power, information, and representation exists, promoting a more substantive view of fairness over mere procedural formalities.
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