Thursday, September 8, 2005

Case Law Development: Claim of Economic Contribution Allowed Despite Post-Nuptial

In an opinion that reveals just how difficult it is to draft air-tight agreements, a majority of the Texas Court of Appeals allowed a wife’s claim of economic contribution to the marital home, despite a post-nuptial agreement dividing the parties’ properties, waiving claims against each other’s estates, and designating the marital home as community property.

Moroch v. Collins, 2005 Tex. App. LEXIS 7359 (September 6, 2005)

Opinion on the web at http://www.courtstuff.com/cgi-bin/as_web.exe?c05topin.ask+D+12311

After eleven years of marriage, the Morochs partitioned their property in a post-nuptial agreement. Other than the household checking account, the only item designated as community property was the the marital home, worth over $1.5 million.  All other properties were allocated to the separate estate of husband or wife.  Moreover, the agreement provided that wife “waives and releases any right of reimbursement that she might presently or in the future have or claim on behalf of her separate estate or the community estate against the separate estate of Husband.”

When the couple divorced in 2004, wife made a claim for economic contribution based on her down-payment on the home, her payment of the mortgage, and her funding of major remodeling. Despite the fact that all these contributions were made before the 1987 prenuptial, the trial court held that the prenuptial only waived wife’s claims against husband’s separate estate, not against the community estate.  The court also held that the designation of the marital home as community property did not extinguish her claim against the marital estate for her economic contributions.  Since her total claim for contribution exceeded the value of the home, the court awarded her the entire interest in the home.

One judge dissented, providing the text of the pertinent provisions of the prenuptial and arguing that the parties intended to preclude any separate claims for contribution, whether against each other or against the marital estate.

BGF

http://lawprofessors.typepad.com/family_law/2005/09/case_law_develo_9.html

Antenuptial (postnuptial) Contracts | Permalink