AGREEMENTS Flashcards
What is the requirement for all prenup post October 1, 2007
UPAA requires prenup to be in writing
What is the difference between a prenuptial agreement and post nuptial agreement
Prenup sets forth spousal obligations and rights prior to marriage
Postnup defines and distributes what already exists
What impact does the doctrine of parens patria have on children’s issues in prenup
Children’s issues can always change
Are agreements as to custody and child support conclusive
No - always subject to review by court to assure child best interest considered
Can prenup deal with rights upon death
Yes, it allows parties to waive rights and interest in the event of a divorce or death
What may parties waive in a prenup
- Rights to alimony after divorce IF waiver is specific
- Right to modify alimony if waiver is express
- Rights to ED
- Death Rights
- Homestead rights
- Right to claim attorney’s fees and costs incurred AFTER divorce
Can a prenup include general waiver of rights be interpreted to include waiver of alimony?
No - there has to be a clear waiver of alimony
Prenup provides for term of 5 years of alimony but it does not include a specific waiver for modification of that term. Can party move to modify the term to permanent alimony?
YES - THERE MUST BE A SPECIFIC WAIVER OF MODIFIFCATION OF ALIMONY WHICH MIGHT RISE IN THE FUTURE
Is a general waiver of ED sufficient in a prenup
Hahamovitch said YES - a general waiver of ED is sufficient to waive claim to enhancement of nonmarital property as a result of marital efforts
What are death rights that can be waived in a prenup?
- Elective share
- Homestead
- Intestate succession
- Family Allowance
- Preference in appointment of personal rep
What is the result of waiving homestead rights in a prenup
For purposes of constitutional restriction on devise of homestead, waiving spouse is deemed to have died before the decedent
What rights cannot be waived in a prenup
- temp support
- Tempo attorney fees incurred through FJ
- CS, child custody and TS
- Pension rights unless requirements of ERISA met:
-spouse consents to election of waiver in writing
-writing designates a nonspouse beneficiary or expressly
permits designation by participant spouse without any
requirement of further consent of his / her spouse
-writing acknowledges consent to waiver is witnessed by
plan admin or notary
-writing is made within applicable election period
What is the exception to the prohibition on waiving temp fees in a prenup?
Can include a prevailing party clause for seeking to enforce or prevent a breach of the prenup (Lashkajani)
What consideration is needed for a prenup
The marriage itself is sufficient - if not married, prenup not valid.
Under FL law, a prenup may be set aside for what two reason
- Direct method
- Indirect Method
What is the direct method of setting aside a prenup
Direct Method STEP 1- Casto
(1) It was entered into under fraud, deceit, duress, coercion, misrepresentation or overreaching. The court evaluates the circumstances at the time of signing to determine whether the consent of the challenging party was voluntary.
Who has the burden of proof under direct method to prove fraud deceit durrect
Challenging party
Name 4 examples of overreaching
- party takes advantage of close confidential and trusting fiduciary like relationship and exerts emotional pressure to sign
- dominant party who acts in bad faith by misrepresenting impact of agreement and other party relies on inducements to sign
- W had agreement drawn up and gave W all assets and left H with insufficient funds to support himself and H wasn’t represented
- When dominant party is the grossly disproportionate beneficiary of the transaction there is a presumption of undue influence
When will overreaching not be foudn
- party had no lawyer
When is coercion or duress found
When a party coerces or intimidates another to sign prenup then agreement is not voluntary
Can duress be established where the agreement was drafted 3 days before the wedding and executed 1 day before the wedding, W had been given only 1 day to seek her own attorney to make an independent evaluation of the agreement absent any financial disclosure, and she had to either sign the agreement or cancel the wedding
Yes - duress found. Hjortass, 2d DCA 1995
Is duress found if threat to expose H’s tax violations so he would sign
Yes - not voluntary
W received agreement 2 weeks before wedding, H told W about proposed terms long before the agreement was prepared, H told W that before they would get married she would have to sign prenuptial agreement, and there was testimony that even if the parties did not marry as a result of W’s refusing to sign agreement H would have continued relationship - can W claim duress/coercion?
No duress Waton, 4th DCA 2004)
Will threatening to not get married on its own constitute coercion?
No
Will a claim of emotional strain at the time of signing the agreement constitute a claim of duress
No
When is a prenup set aside for fraud or misrepresentation
a) The intentional concealment or misrepresentation of a party’s financial status prior to the execution of a prenuptial agreement constitutes fraud on the other party (Del Vechhio, Fla. 1962).
b) When a party to an agreement is prejudiced by the misrepresentation or fraud, he or she may attack the validity of the agreement when the other party seeks to enforce it.
c) The affirmative defense is that the agreement was procured by fraud, that the challenging spouse reasonably relied on the misrepresentation or fraudulent act and suffered prejudice so that it would be inequitable to enforce the agreement.
H’s misrepresentation of his income to the W - is this sufficient to set aside prenup?
YES Baker, 4th DCA 1981).
c) H’s threat to inform child of W’s affair or child from a previous marriage is this sufficient to set aside prenup?
YES
How can a spouse set aside a prenup under the indirect method?
The challenging spouse must establish that the agreement makes an unfair or unreasonable provision for that spouse, given the circumstances of the parties.
Once a spouse can prove that the agreement makes an unfair or unreasonable provision for that spouse, given the circumstances of the parties, what presumption arises?
A presumption arises that there was either concealment by the defending spouse or a presumed lack of knowledge by the challenging spouse of the defending spouse’s finances at the time the agreement was reached
Once a spouse can prove that the agreement makes an unfair or unreasonable provision for that spouse and the burden shifts to the defending spouse, what must they prove PRE UPAA
a) Defending spouse made a full, frank financial disclosure relative to the value of the marital property and the income of the parties;
or
b) The challenging spouse has a general and approximate knowledge of the character and extent of the parties’ assets and income.
What is the test with respect to the adequacy of the challenging spouse’s knowledge?
Look at what the challenging spouse knew at the time of the agreement and whether the challenging spouse is prejudiced by lack of information.
In determining whether the agreement is fair under an indirect challenge to prenup, the court should consider:
a) The parties’ relative situations, including ages, health, education, financial status and experience.
b) Whether the provisions made in the agreement would enable both parties to maintain a standard of living consistent with that established during the marriage.
c) Whether the provisions for the less affluent spouse is disproportionate to the means of the more affluent spouse.
d) Compare the provisions to what each party would get without the agreement.
e) Examine property each brought into the marriage.
What is the general premise of full & frank disclosure
a) Actual form and manner of disclosure is not significant so long as the party provides their financial net worth and income.
b) The disclosure need only be full and fair, not minutely detailed or exact.
What are defenses to enforcement of prenups
- Abandonment and Rescission—where one party acts inconsistent with the existence of the agreement and the other party acquiesces in the inconsistent conduct (i.e. tearing up agreement with intent to destroy).
- Reformation—appropriate where there has been a mutual mistake in the way the instrument was drawn which does not accurately express the true intention or agreement of the parties.
- Acceptance of the Benefits—a person may not retain the benefits of a settlement while attacking its validity. However, where the person is entitled to at least the amount accepted, he/she is not stopped from claiming a greater amount.
What principles apply to interpretation of an prenup
- When language of agreement is subject to more than one reasonable interpretation, Court must use the rules of contract construction to advocate a certain interpretation or application.
- Words of a contract are to be given their plain and simple meaning, unless the context of a contract indicates that an unusual meaning was intended.
- Where a contract is ambiguous, it should be interpreted against the interests of the party having drafted it.
How should court handle ambiguity in a prenup
- Court cannot ignore overall intent of the agreement and should interpret any ambiguity so that it does not ignore the clear operative clauses of the agreement
Are whereas clauses in a prenup binding?
a) Prefatory recitations contained in the “whereas” clauses are not binding, operative provisions to an otherwise unambiguous contract.
b) Operative clauses prevail over the recital clauses in the event of a discrepancy.
When can a court resort to recital clauses?
If the operative provisions are ambiguous, in order to ascertain the meaning of its operative provisions.
Is attorney client privilege waived when a party seeks to invalidate a prenup?
In moving to invalidate a prenuptial agreement, movant does not automatically waive his/her attorney-client privilege as to the comments made to attorney regarding his/her awareness of the other spouse’s financial circumstances.
What law applies to a prenyp
- Law specifically set forth in agreement but if it’s silent then
- contract law applies in determining what state law will govern—Doctrine of lex loci contractus—law of jurisdiction where a contract was executed controls.
THIS WAS ASKED VIA MC OR SHORT ANSWER ONCE OR TWICE
Is a party is challenging a prenup - must it be plead?
YES - pleading must allege the challenge as an affirmative defensive in answer if you are respondent and if the basis is fraud - must plead with specificity
If petitioner doesn’t raise prenup in pdm, and R wants to enforce, raise it as an affirmative defense in answer
What is the UPAA
Uniform Premarital Agreement Act
What does UPAA apply to
All prenups after 10/1/2007
How can you challenge prenup under UPAA
- Adopts Casto “Direct” method of challenging, and adds “or not entered voluntarily.”
- Adopts Casto “Indirect” method of challenging with notable change—the initial question is whether the agreement is “unconscionable”.
Pre UPAA, what was the initial question under the indirect method
Whether agreement is unfari
Post UPAA, what is the initial question under indirect method
Whether agreement is unconscionable
What is the big distinction under a challenge to prenup under UPAA
Under UPAA, once an agreement is shown to be unconscionable, the burden REMAINS with the challenging party to prove no disclosure and no adequacy of knowledge of finances (this is unlike pre-UPAA cases where once an agreement is shown to be unfair, the burden shifts to the other party to prove the sufficiency of disclosure).
What does the UPAA provide
- All prenuptial agreement must be in writing and signed by both parties;
- Allows the parties to address all substantive rights in the agreement; and
- Provides that after marriage, a premarital agreement may only be amended, revoked or abandoned by written agreement signed by both parties.
How does UPAA govern challenges to prenup
- The party did not execute the agreement voluntarily.
- The agreement was the product of fraud, duress, coercion or overreaching OR (DIRECT METHOD)
- The agreement was unconscionable when it was executed, and before the execution of the agreement, the challenging party:
a) Was not provided fair and reasonable disclosure of the property or financial obligations of the other party;
b) Did not voluntarily and expressly waive in writing any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided; and
c) Did not have or reasonably could not have had an adequate knowledge of the property or financial obligations of the other party.
Is a postnuptial agreement required to be in writing
In writing or read into the record.
When can an oral post judgment agreement be enforceable
a) An agreement entered into on the record where there was a clear understanding of its finality by the parties was an effective and enforceable settlement of pending litigation, notwithstanding that it was subject to being reduced to writing at a later time
Just need a meeting of the minds on essential elements of the deal
What is deemed sufficient consideration of postnuptial agreement
Mutual promises encompassing various rights of the parties, in addition to disposing of property owned by them, have been considered sufficient consideration.
What are the requirements of a postnuptial agreement
- in writing or read into record
- consideration
- consent
- execution
What is consent for purposes of postnuptial agreement
Must have voluntary, informed, mutual consent.
What is required for execution of a postnup
a) Both parties must execute a final written marital settlement agreement.
b) Two witnesses are also required if the agreement provides for a conveyance of real property.
c) Two witnesses are also required if the agreement requires either party to make or refrain from making a will, or to devise or not to revoke a will or devise.
When are witnesses necessary to a postnup
Two witnesses are also required if the agreement provides for a conveyance of real property.
Two witnesses are also required if the agreement requires either party to make or refrain from making a will, or to devise or not to revoke a will or devise.
What governs challenges of a postnuptial agreement
Casto test REGARDLESS if executed before or after October 1, 2007.
What is the difference between a postnuptial agreement and an MSA for purposes of a challenge
Postnups are entered during a period of nonlitigation
MSA is reached after litigation commenced and completion of discovery
If an agreement is reached after litigation commenced and after discovery produced, what is a litigant prevented from doing
Cannot them later claim lack of knowledge and 12.540 applies bc the party could have done due diligence to unearth all relevant factors.
However, if party is not afforded time to do discovery then Casto may apply.
E.g. Macar v. Macar (Fla. 2001) a settlement agreement reached after the initiation of litigation are not permitted to claim lack of knowledge since they could have unearthed all relevant facts through due diligence
What happens if a party fails to claim fraud as a defense to a postnup or msa
Claim is waived. Fraud must be plead with specificity
When will an MSA not be enforced
MSA that has
a. not been entered into with adequate consideration,
b. mutual consent,
c. legal purpose, or
d. in compliance with the Statute of Frauds will not be enforceable.
What is the Del Vecchio/Casto Test
- Overreaching, Fraud, Duress, Coercion, Concealment, or Misrepresentation.
- Unfairness and Lack of Financial Disclosure.
- False Financial Affidavit
- Unconscionable Agreement
Is the fact that H was under tremendous emotional strain at the time he signed the agreement enough to show overreaching?
That fact alone is insufficient
FW made lied and said that she and daughter would remain in the marital residence so the child could grow up there & she knew it was a lie but did so to induce FH to sign and he relied on that rep and was then injured by this reliance - does this satisfy fraud?
YES
When is allegation of lack of financial disclosure less persuasive
After the parties have engaged in contentious litigation while each was represented by counsel.
H’s motion to set aside MSA reversed where agreement required H to pay alimony in the amount of $36,000 per year, where his total gross income was $36,000 per year and the H was not represented by counsel - does he prevail on motion to set aside on grounds it was unconscionable
YES
However, on the other hand, an unconscionable agreement that left H with only $105 per month and no assets WAS enforced where it appeared that it was entered into freely, evidence rebutted presumption of concealment and there was evidence that H wanted out of the marriage at any cost
Does casto fairness test apply to litigation agreements
NO - the parties are not dealing at arm’s length. When the parties are litigating, they are no longer in a position of trust. Therefore, the Casto indirect (unfair and unreasonable) test does not apply to litigation agreements. They are no longer dealing in arm’s length and have the benefit of retaining counsel and completing full discovery.
What is the Petracca test
TEST USED TO ATTACH PRE-LITIGATION AGREEMENTS IE. POSTNUPTIAL
Unfair or unreasonable property or monetary settlements reached in the course of contested divorce litigation are enforceable as long as they are entered into knowingly and voluntarily, and not otherwise against public policy (Petracca, 4th DCA 1998).
What is the Macar test
USED TO ATTACH POST LITIGATION AGREEMENTS I.E. MSA
Macar (Fla. 2001): Court erred in granting W’s to set aside final judgment incorporating MSA on basis that agreement was unfair, the H had not fully disclosed his assets and there were errors in his financial affidavit.
(1) Allegation of lack of financial disclosure/knowledge is much less persuasive after the parties have engaged in contentious litigation while each was represented by counsel.
(2) Where case is based upon 12.540, argument is limited to fraud or newly discovered evidence. Error to apply Casto test.
(3) Errors in H’s financial affidavit did not constitute fraud where H had substantially complied with all discovery requests, and that subsequent determination by W’s accountants that some brokerage accounts held by H had or could have been partially marital was not newly discovered evidence where the accountants had or could have received all documents and information regarding assets and their proper valuation prior to trial.
What presumption exists with litigation agreements
A presumption exists that a “litigation agreement” reached after discovery and just before trial was executed with full knowledge by the challenging spouse, and courts are precluded from inquiring into the reasonableness of a litigation settlement. If the parties agreed to the terms, it is presumptively and conclusively fair as a matter of law
Challenges to a litigation agreement is limited to what
Coercion, fraud or misrepresentation in discovery
What are grounds under 12.540 to set asdie
Must be filed within 1 year unless it’s based on fraudulent FA
a) Clerical mistakes arising from oversights or omissions may be corrected by the Court at any time on its own initiative, or on the Motion of any party.
b) Mistakes
c) Inadvertence
d) Surprise
e) Excusable neglect
f) Newly discovered evidence
g) Fraud
h) Misrepresentation or other misconduct of an adverse party
i) Void judgment or decree
j) Satisfaction or Release
k) Reversal or Vacation of a prior judgment or decree on which the judgment is based
l) Filing of a false financial affidavit (no time restraint).
What is the standard of review for contract interpretation
De novo
What is a latent ambiguity
where the language employed is clear and intelligible and suggests but a single meaning, but some extrinsic fact or extraneous evidence creates the necessity for interpretation, or a choice among two or more possible meanings
when is parole evidence permitted in contract interpretation
Never - unless latent ambiguity
What are the effects of reconciliation or remarriage to an MSA
If parties reach a MSA and then reconcile or remarry, whether the agreement is effective in subsequent DOM action is based upon Provisions of the MSA. In order to have the prior MSA withstand a reconciliation or remarriage, the provision of the Agreement should specifically state the intention.
What is novation
new contract
W agreed to 6 years of alimony in MSA. Parties remarried. Prior agreement did not mention remarriage or reconciliation, was the Wife was entitled to present evidence of entitlement to permanent, rehabilitative, lump sum alimony?
Yes
What factors are required for novation
a) The existence of a previously valid contract;
b) Agreement of all the parties to a new contract;
c) The extinguishment of the original contractual obligation; and
d) Validity of the new contract.
Can a party avoid enforcement of choice of law provisions
Yes but has burden to demonstrate that the foreign law contravenes public policy
How does a litigate apply for foreign law
Must apply for judicial notice
What is a forum selection clause
Parties agreeing to convey personal jurisdiction upon specific forum in which to adjudicate their dispute
are forum selection clause enforceable
- Fully enforceable absent a showing that enforcement of the provision would be unreasonable and unjust.
- Forum selection clause is a procedural issue that is to be determined in accordance with the law of the forum state rather than the law designated in the choice of law provision.
If trial is bifurcated to determine validity of prenup and court finds the prenup INVALID - can you appeal
Yes - you can appeal the non final order
If trial is bifurcated to determine validity of prenup and court finds the prenup VALID - can you appeal
NO - you have to wait until the end to appeal the final order
Are arbitration clauses enforceable in family
Yes if it doesn’t involve custody, visitation or CS
If prenup requires arbitration, when can the demand be made
Not until validity is determined
Parties were divorced and husband received the deferred compensation fund under the agreement, without stating anything else. When husband died, he still had wife listed as the beneficiary back from when they were married. Husband’s daughter claimed the proceeds from the fund did not belong to wife since they divorced. Does daughter prevail?
NO - FL Supreme Court said if the MSA doesn’t specifically say who is or is not to receive the death benefits or specifying who is to be the beneficiary - then whoever is named beneficiary prevails.
How is duress defined in the context of prenuptial agreements
A “condition of mind produced by an improper external pressure or influence that practically destroys the free agency of a party and causes them to do an act or make a contract not of their own volition.”
How does one prove duress?
1) “that the act sought to be set aside was effected involuntarily and thus not as an exercise of free will”; and
(2) “that this condition of mind was caused by some improper and coercive conduct of the opposite side.
In other words, the defending spouse’s external pressure must result in the challenging spouse’s subjective loss of free will at the time the prenuptial agreement is signed.
What is the primary difference between duress and coercion
The primary difference between “duress” and “coercion” is the level of compulsion exerted by the compelling party.
While “duress” generally occurs by means of actual physical force or threatened physical force to one’s person or by threats to one’s property or reputation,
Coercion” occurs where the defending spouse, through undue influence or moral or economic force, compels the challenging spouse to sign a prenuptial agreement under circumstances which, from a subjective viewpoint, evidence that the challenging spouse did not act of his or her own free will.
What is sufficient consideration for a postnuptial agreement
Mutual promises related to various rights and/or disposing of marital property
Do marital and postnups HAVE to be in writing?
If an agreement can be performed in less than a year, no statute of frauds considerations.
If a party is seeking to prove and oral agreement establishes assent of opposing party, what must it prove
- Meeting of the minds
- Clear and unequivocal consent to the agreement
How is duress defined
As being a condition of mind produced by an improper external pressure or influence that practically destroys the free agency of a party and causes him or her to do an act or make a contract not of his or her own volition.
Bates v. Bates, (Fla. 3d DCA 2021
How is coercion defined
Where the defending spouse, through undue influence or moral or economic force, compels the challenging spouse, to sign a prenuptial agreement under circumstances which, from a subjective viewpoint, evidence that the
challenging spouse did not act of his or her own free will
What is overreaching
Occurs not solely when an agreement is one-sided or unfair, but when an agreement resulted from an inequality of bargaining power or other circumstances such that there was no meaningful choice on the part of the
disadvantaged party.
What is the standard to modify alimony
DEPENDS ON THE DISTRICT
3RD & 4TH - SAME STANDARD WHETHER ORDERED BY COURT OR BY AGREEMENT
-2ND - IF ALIMONY BY AGREEMENT, EXCEPTIONALLY HEAVY BURDEN ON MOVANT
NOT RESOLVED BY FL SUPREME COURT YET
