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No Duress, Undue Influence or Lack of Financial Disclosure to Invalidate Prenuptial Agreement

Robert D. Feder, Esq. on 9/19/2012

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Mr. Feder is of counsel to the Family Law Practice Group at Cozen O'Connor

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Article Image The Lycoming County Court of Common Pleas recently addressed the issues of duress, undue influence and lack of financial disclosure and whether they are bases to invalidate a prenuptial agreement in the case R.S. v. F.S., 112 PDDRR 88 (Lycoming C.C.P. June 11, 2012). The factual background of the case is as follows. The parties had two children prior to their marriage. They decided to marry on September 18, 1999. Wife alleged that husband presented the agreement to her two days before the wedding. Husband alleged that he presented the agreement to her in late August or early September. It was undisputed that husband told wife that if she did not sign the agreement there would be no wedding. Wife signed the agreement. Wife sought to have the agreement declared invalid and unenforceable on three bases: (1) lack of full and fair disclosure; (2) duress; (3) undue influence. The court rejected all three of wife’s allegations.

As to her claim of a lack of full and fair disclosure, husband disclosed a variety of assets including two businesses and two pieces of real estate. With respect to one of the businesses, husband testified that at the time the agreement was drafted he did not actually own the business but anticipated inheriting it since he was the only family member working in the business and he was the manager. Both parties agreed that the business had a value of $750,000. The disputed issue was husband’s interest in a family trust from his grandfather. However, husband testified credibly that he had no knowledge of the contents of his grandfather’s will. He had never received a copy of the will or any type of notice after his grandfather’s death of the contents of the will. Husband believed that his grandmother would receive all of his grandfather’s assets. The will did provide a trust for Husband but he was not aware of that trust. Wife presented no testimony or evidence that husband had any knowledge of his grandfather’s will. Consequently, the court believed husband that he disclosed in the prenuptial agreement every asset he had knowledge of at that time. Wife failed to prove through “clear and convincing evidence” that husband knew about and intentionally withheld information regarding the trust. Further, the court found that wife had failed to rebut the presumption of full and fair disclosure.

It is clear that to invalidate a prenuptial agreement on the basis of a lack of full and fair disclosure, the moving party has a heavy burden. There is a presumption in favor of full and fair disclosure especially when the agreement itself has a provision wherein the parties acknowledge that such a disclosure has been made. To prove that such a disclosure has not been made, the moving party has to prove that by clear and convincing evidence, not by the weight of the evidence.

With respect to duress, the court stated the standard dates back to 1967. Duress is “that degree of restrain or danger, actually inflicted or threatened and impending, which is sufficient in severity or apprehension to overcome the mind of a person of ordinary firmness.” Carrier v. William Penn Broadcasting Co., 233 A.2d 519, 521 (1967). Wife alleged that the threat of calling off the wedding two days prior to the scheduled date rose to the level of duress. The court rejected that position. The court looked to the Pennsylvania Supreme Court decision, Simeone v. Simeone, 525 Pa. 392 (1990), the seminal case in Pennsylvania on prenuptial agreements. In Simeone, the day before the wedding at five o’clock in the evening, wife was presented with a prenuptial agreement and told she had to sign it. The Supreme Court held that this was not duress. In that case, wife was aware that the prenuptial agreement was being drafted. She was presented with the agreement to sign at that late date because she had made a request that the agreement be revised. In the present case, there was a dispute about wife’s knowledge of the agreement prior to it being presented to her before the wedding. Husband claimed that the parties had had multiple conversations about it and that he had presented it to her in writing several weeks before the wedding. Wife denied that. There was no corroborating witnesses for either party on this point. However, wife was given the agreement in the mid-morning or early afternoon of a weekday when law firms would be open for business. In the absence of threats of actual bodily harm, there can be no duress where the party is free to consult with counsel. See Carrier at 521. Neither party presented testimony that husband prohibited wife from seeking the advice of counsel about the prenuptial agreement. In fact, husband testified he had given wife the agreement several weeks prior to the wedding and asked wife whether or not she intended to take the agreement to an attorney. Consequently, the trial court found that wife did not sign the agreement under duress.

Although the trial court was sympathetic to wife’s position that it was difficult to refuse to sign the prenuptial agreement two days prior to the wedding when all of the arrangements had been made and guests had already traveled to attend the wedding, such emotional stress does not rise to the level of duress under Pennsylvania law. If there had been threats of actual bodily harm if she did not sign the agreement, that would be duress. If she had been barred by husband from seeing an attorney prior to signing the agreement, that would have been duress. However, even if the agreement is provided to a party a few days before the wedding, if he or she has the opportunity to see an attorney and not been subject to threat of bodily harm, there can be no duress. The opportunity to consult with an attorney gives that party the opportunity to understand the rights they are waiving if they sign the agreement; to refuse to sign the agreement; or to require that revisions be made to the agreement. Under such circumstances even if the party has not actually met with an attorney but had the ability to do so, there is no duress absent threat of bodily harm. The legal standard for duress is a high one and is very difficult to meet.

Wife’s final position was that she was under undue influence by husband. To succeed on an allegation of undue influence, the moving party must establish there was a confidential relationship and “…such influence is obtained by excessive importunity, superiority of will or mind, or by any other means constraining the grantor to do what he is unable to refuse.” Thomas v. Seaman, 304 A.2d 134, 138 (1973). The court found that the testimony failed to show that wife was “without the ability to think freely and clearly due to husband’s superior will or mind or influence.” The court ruled that wife did not sign the agreement under undue influence.

In a footnote, the court acknowledged that the law concerning prenuptial agreements is now codified in 23 Pa.C.S. §3106. The Code section did not change the law under Simeone but codified it. However, the statutory provision became effective on June 28, 2005 and only for prenuptial agreements signed on or after the effective date of the provision. The provision was not applicable to the 1999 prenuptial agreement in this case. However, when counsel is advising a client now about a prenuptial agreement, counsel should be fully familiar with §3106 and provide their clients with a copy of the provision. Except in exceptional circumstances, a prenuptial agreement will be valid in Pennsylvania so long as there has been a full and fair financial disclosure. The failure to disclose would need to be a substantial one in order to invalidate an agreement. Duress is an extremely difficult defense to establish. Another potential defense is lack of competency to enter into such an agreement but the threshold for competency is a low one. Contrary to other states across the country, Pennsylvania law upholds the validity of prenuptial agreements except in exceptional circumstances.

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  • 4/13/2013 by Joni

    I thought this was an interesting prenuptial article. Just sharing

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