Wednesday, August 16, 2006

Case Law Development: Duress & Undue Influence in Post-Nuptial Agreements

The California Court of Appeals addresses the burdens of proof and standards for establishing the defenses of undue influence and duress when seeking to make a marital agreement regarding property unenforceable.  The case involved a couple who had executed a premarital agreement giving Husband all his business property.  Eleven years later, while Husband and Wife were staying at an inn, he executed a document transferring to Wife as her separate property 20% of the stock in his business and the family home.  The couple separated a few months later and Husband soon thereafter filed for divorce.  The trial court found that this document was unenforceable due to undue influence and duress, as Husband had provided credible evidence that he had signed the document after Wife had screamed at him, struck him, and threatened to divorce him and alienate him from their children if he did not provide her with this security.  The court of appeals affirmed.

In regards to the undue influence argument, the court began with the presumption that, because married couples are in a confidential relationship with one another, "if one spouse secures an advantage from [an interspousal] transaction, a statutory presumption arises under section 721 that the advantaged spouse exercised undue influence and the transaction will be set aside."   Since Wife gained an advantage from the transaction, she then had the burden of rebutting the presumption of undue influence by proving that Husband's signature was "freely and voluntarily made, with full knowledge of all the facts, and with a complete understanding of its effect."  The court found that the trial court's decision that Wife had not met this burden was supported by the evidence.  The court agreed Husband had "executed the document as a reaction to [Wife's] continued yelling and screaming and out of fear that she would otherwise block him from having a continued relationship with his children" and therefore the agreement was not freely and voluntarily made.

The court also found that the alternative grounds of duress was supported by the evidence. 

The court of appeals, found that duress does not require proof of illegal acts but rather "includes whatever destroys one's free agency" and may be proven by "threats, importunity or any species of mental coercion"'

In this case, Ralph's free will was constrained by Kathleen's threats to deny him access to his children. Kathleen disagrees, saying that any threat to deny Ralph access to the children could hardly constitute duress, inasmuch as child custody and visitation matters are resolved by the courts. She emphasizes that Ralph, as a successful businessman, had access to lawyers and should have known better than to be frightened at the suggestion that she somehow could have thwarted his rights to see his children. However, as Ralph testified, he did not discuss Kathleen's threats with legal counsel until after the date he was constrained to execute the October 1999 writing. Moreover, it is not unheard of for one parent to fail to comply with court custody or visitation orders or to engage in efforts to scuttle the relationship between the children and the other parent. As a practical matter, the courts are ill-equipped to undo the damage done by infighting parents....

It is also true, as Kathleen states, that Ralph admitted he was not actually afraid for his physical safety on account of Kathleen's physical abuse of him. The fact that he did not expect to wind up in the hospital the next time she struck him does not, however, mean that her abuse did not have a cumulative and real effect on his mental state.

In re Marriage of Balcof, 2006 Cal. App. LEXIS 1252 (August 15, 2006)
Opinion on the web (last visited August 15, 2006 bgf)

Antenuptial (postnuptial) Contracts, Domestic Violence | Permalink

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