A California statute concerning validity of prenuptial agreements cannot be applied retroactively.
A California Appellate Court has ruled that a Trial Court was wrong in applying California Family Code Section 1612(c), retroactively to invalidate a spousal support waiver in a prenuptial agreement that was executed by the parties in 1999. In the case of In re Marriage of Howell, Husband and Wife became engaged in 1998, after dating for about a year. On January 30, 1999, in anticipation of their upcoming marriage, Husband and Wife signed a prenuptial agreement that, among other things, contained a provision that each of them waived the right to receive spousal support from the other party if they were legally separated or divorced in the future. Husband and Wife were married in May of 1999, but separated in March of 2008.
At divorce trial, Trial Court bifurcated the issue of the validity of the parties’ prenuptial agreement from the other issues in the case and tried that issue first. According to Husband’s testimony, he had already been married twice before and really didn’t want to marry for a third time. When Wife pressed for marriage, Husband agreed to marry if Wife would sign a prenuptial agreement, as had one of his former wives. Husband testified that in May or June of 1998, he asked his attorney to prepare a prenuptial agreement, and Wife gave him a schedule of her assets and debts. Husband said he gave a copy of the agreement to Wife in December of 1998, and told her to take her time to read it carefully and to consult an attorney. According to Husband, Wife told him that she had discussed the agreement with her mother and some friends, but "concluded it was unnecessary because [Husband] had ‘nothing’ to protect."
Wife testified that Husband waited until she and her family had planned and paid for the wedding before announcing that he wanted a prenuptial agreement. She said she and Husband "argued several times" about the need for a prenuptial agreement, but Husband "threatened to call off the wedding" if she did not sign one. Wife claimed that Husband first gave her a copy of the prenuptial agreement about three days before she signed it. She said she did not understand all of its provisions and could not afford to consult an attorney to explain it to her. Besides, Wife asserted, it would have been too embarrassing to call off the wedding at that late date. So, she signed the agreement.
When the bifurcated trial concluded, Trial Court found that Wife was capable of understanding the need to consult an attorney, had sufficient time to do so, and "could have inquired as to the cost." Wife, Trial Court continued, fully understood all the terms of the prenuptial, except for the spousal support waiver, and the prenuptial was neither lengthy nor complex, contained full disclosures by both parties, was not unconscionable, and was basically intended to keep the parties’ separate property separate. Trial Court determined that Wife did not sign the agreement under duress because she had received a copy of the agreement at least four months before the wedding and that time period was sufficient to have "diminished the coercive force of the normal desire to avoid social embarrassment or humiliation" of calling off the wedding.
Trial Court concluded, however, that the spousal support waiver in the prenuptial agreement was not enforceable because, as amended in 2002, California Family Code Section 1612(c) precludes enforcement of spousal support waivers against party who was not represented by independent counsel when waiver was signed or where spousal support provision (including waiver) was unconscionable at the time of enforcement. Thus, the parties’ prenuptial was valid and enforceable, except for that provision. Later, Trial Court ordered Husband to pay spousal support of $1,015 per month from July 1, 2008, through August of 2009, and $1,659 per month from September of 2009, until further Trial Court order.
Claiming, among other things, that Trial Court erred by applying amended Family Code Section 1612(c) retroactively, Husband appealed the Trial Court’s decision. Now, the California Court of Appeals has affirmed the Trial Court’s decision in part and reversed it in part. The Appellate Court has ruled that (1) when Husband and Wife signed the prenuptial in 1999, California Family Code Section 1612 did not require independent representation as precondition to a valid spousal support waiver; (2) a statute that substantially changes existing law may not be applied retroactively unless that statute specifically provides for retroactive application; (3) the 2002 amendments to Family Code Section 1612, which added subsection (c), substantially changed the then-existing law and did not specifically provide for retroactive application; (4) the legislative history of Section 1612(c) shows that the Legislature did not intend the retroactive application of that subsection; (5) the case of Fellows (2006) 39 Cal.4th 179, [per California Family Code Section 4, all amendments to Family Code apply retroactively unless amendment falls within statutory exception or specifically precludes retroactivity] is factually inapposite; and (6) parties’ spousal support waiver was valid and enforceable. The Appellate Court, thus, held that Trial Court erred by applying Family Code Section 1612(c) retroactively and reversed Trial Court’s order invalidating the parties’ spousal support waiver. The Appellate Court also reversed Trial Court’s subsequent spousal support orders.