Tschider v. Tschider
926 N.W.2d 126, 2019 ND 112 (2019)
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Rule of Law:
A prenuptial agreement provision limiting spousal support is not unconscionable at the time of enforcement simply because of a large disparity in the parties' post-divorce incomes, especially when the challenging spouse is educated, had the opportunity for legal counsel, receives a substantial property distribution, and possesses the ability to become self-supporting.
Facts:
- Stacy Tschider and Melanie Tschider began dating in 1995 and living together in 1996.
- Shortly before their marriage in December 2002, both parties signed a prenuptial agreement.
- At the time of the marriage, Stacy Tschider had a net worth of $1,783,500, while Melanie Tschider, a Certified Public Accountant (CPA), had a net worth of less than $50,000.
- The agreement contained a provision (Paragraph 16) stating that if Melanie Tschider reduced or terminated her employment to care for children and the parties divorced, Stacy Tschider would supplement her income for a maximum of 24 months.
- The parties had one child in 2004, after which Melanie Tschider left her full-time employment as a CPA.
- During the marriage, Stacy Tschider's net worth increased to over $11 million, and Melanie Tschider's net worth increased to nearly $3 million through assets acquired during the marriage.
Procedural Posture:
- In August 2015, Melanie Tschider filed a divorce action against Stacy Tschider in the District Court of Burleigh County.
- The district court bifurcated the proceedings, holding a trial first on the validity of the parties' prenuptial agreement.
- The district court ruled that the prenuptial agreement was generally valid, but found Paragraph 16, which limited spousal support, to be unconscionable and unenforceable.
- Following a second trial on the remaining issues, the district court awarded Melanie Tschider rehabilitative spousal support for a total of seven years, contrary to the terms of Paragraph 16.
- Final judgment was entered by the district court in February 2018.
- Stacy Tschider (appellant) appealed to the Supreme Court of North Dakota, challenging the district court's finding that Paragraph 16 was unconscionable and the subsequent spousal support award.
- Melanie Tschider (cross-appellant) cross-appealed, arguing the entire prenuptial agreement should have been invalidated and that the spousal support award was insufficient.
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Issue:
Is a provision in a prenuptial agreement that limits spousal support to two years of income supplementation unconscionable and thus unenforceable when the spouse challenging the provision, who left the workforce to care for a child, is an educated professional who receives a multi-million-dollar property settlement upon divorce?
Opinions:
Majority - Justice McEvers
No. The prenuptial agreement provision limiting spousal support is not unconscionable and is therefore enforceable. A premarital agreement is not rendered unconscionable merely due to a significant disparity in income or because one spouse forwent career opportunities to care for a child. The court reasoned that Melanie Tschider is an educated professional (a CPA) who had the opportunity to consult with an attorney and successfully negotiated revisions to the agreement before signing it, indicating it was entered into voluntarily and without duress. Furthermore, she is leaving the marriage with significant assets (nearly $3 million) and has the professional skills and ability to re-enter the workforce and become self-supporting. These factors, taken together, prevent a finding that enforcing the agreed-upon spousal support limitation would be 'clearly unconscionable' under the statute.
Analysis:
This decision reinforces the high threshold required to invalidate a prenuptial agreement on the grounds of unconscionability in North Dakota. It underscores the principle of freedom of contract and signals that courts will uphold such agreements even if they result in disparate financial outcomes, provided the agreement was procedurally fair at its inception and does not leave one spouse destitute at the time of divorce. The ruling clarifies that a spouse's education, earning capacity, and the size of their property settlement are critical factors in determining unconscionability, weighing heavily against claims that an agreement is substantively unfair. This precedent makes it more difficult for a financially disadvantaged but capable spouse to challenge a spousal support waiver.
