Andrew B. v. Abbie B.
| Decision Date | 03 September 2021 |
| Docket Number | Supreme Court No. S-17740 |
| Citation | 494 P.3d 522 |
| Court | Alaska Supreme Court |
| Parties | ANDREW B., Appellant, v. ABBIE B., Appellee. |
Jacob A. Sonneborn and Molly Gallagher, Law Office of Jacob Sonneborn, and A. William Saupe, Ashburn & Mason, Anchorage, for Appellant.
Kimberlee A. Colbo and Jenna L. Krohn, Hughes White Colbo Wilcox & Tervooren, LLC, Anchorage, for Appellee.
Before: Bolger, Chief Justice, Winfree, Maassen, Carney, and Borghesan, Justices.
Before getting married, Andy drafted a prenuptial agreement. Abbie first saw the agreement the night before their wedding, when she was intoxicated. The agreement, designed to protect Andy's substantial assets, designated only certain earnings marital property. It referenced an investment account for Abbie's benefit, but the paragraph pertaining to this account contained only the words "Not Used ," and no such account was ever created.
The superior court enforced the agreement over Abbie's objection that it was not voluntarily executed. The court then ruled that all income reported on the parties’ tax returns during the marriage is part of the marital estate subject to division and awarded Abbie an additional sum to compensate for the nonexistent investment account. Because this interpretation of the agreement is erroneous and key facts relevant to whether the agreement is enforceable were not addressed, we reverse and remand.
Andrew (Andy) and Abbie B. started living together in 2000.1 Six years later they decided to get married.
On the eve of their destination wedding in Maui, the parties executed a prenuptial agreement. The agreement includes a number of terms related to the parties’ finances. Notably, the agreement provides for a community estate composed of joint checking and savings accounts, to be funded by "50% of each party's earnings by reason of employment or personal services up to [$250,000] each per year ...." The agreement states that any "remaining income and income from separate assets shall be the separate property of the party in whose name it stands." It also provides that "in the event their marriage is terminated by court order, the investment account, if any, established pursuant to Paragraph 2.5 [of the agreement], shall be awarded to [Abbie] as her sole and separate property for the purpose of establishing a residence for herself and the [parties’] child, if any." Paragraph 2.5, however, does not contain any provisions and instead includes only the words "Not Used ."
Andy and Abbie had two children during the marriage. After 11 years of marriage, the parties separated; in May 2018, Abbie filed for divorce. The parties resolved custody of their two children without a trial. Abbie has primary physical and sole legal custody of the children, and Andy has flexible visitation.
Abbie filed a motion asking the superior court to declare the prenuptial agreement unenforceable. She argued that her execution of the agreement was involuntary, unconscionable, and the product of duress, and that facts and circumstances had changed since the agreement was entered so as to make its enforcement unfair and unreasonable. Andy opposed the motion.
The superior court held a one-day evidentiary hearing. Andy testified about the impetus for drafting the prenuptial agreement. He said that Abbie was pressuring him to get married, telling him "to make it happen or take a hike." He said that his father, who owned a successful commercial construction company and other businesses, "strongly recommended that in order to protect some of the assets, [Andy] come up with a prenuptial agreement." Andy described owning several businesses and being in "the trailer court business, ... vehicle storage business, and film production." According to Andy, the trailer court was a family business in which Andy attained ownership from a family trust. He said he received capital to start other businesses from his parents. Andy also said that in the six to twelve months before the wedding, he and his parents "were developing some trusts and some different LLCs and things of that nature."
Andy testified that he drafted the prenuptial agreement using a template provided by a friend who is an attorney, and that he told Abbie that she had to sign the agreement for the wedding to go through. Andy said that he had previously presented Abbie with a draft of the prenuptial agreement but conceded this draft may have been different from the contract that was eventually presented to Abbie and signed by the parties.
Abbie testified that she saw the prenuptial agreement for the first time on the night of December 6, 2006 — the night before the couple's wedding. The prenuptial agreement states the parties had reviewed a draft of the agreement on December 3, 2006 and had "the opportunity to counsel with his/her independent attorney in connection with the ... execution of this [a]greement." But Abbie testified that she had not reviewed any drafts nor received legal advice about the agreement.
Abbie testified that at the time of the wedding she was taking narcotic pain medications for a broken leg
caused by Andy the month before when he "pulled [her] out of his truck [while] trying to kick [her] out of a parking lot." Abbie said that as a result of these pain medications, plus "three or four drinks at the rehearsal dinner" followed by "more cocktails" with her friends, she was intoxicated when she found the prenuptial agreement. Abbie said she "ha[d] no idea when [she] signed [the prenuptial agreement]"; it could have been either the night before or the day of the wedding, as at both times she was under the influence of alcohol and pain pills.
The superior court denied Abbie's motion. It found that Andy presented the agreement to her sometime between one and three days before the wedding, but that she likely did not see the terms of the agreement until the night before the wedding. It found that "Abbie was more likely than not competent to sign a legally binding contract the day of December 7, 2006, prior to the wedding." The court also found that her "signature was voluntary, in the sense that she was not coerced." It acknowledged Abbie's argument that "the totality of [the] circumstances forced her to make a decision under duress." But despite that observation, the court reasoned that "[e]ven assuming the domestic violence allegation is true," there was no evidence that Andy "confronted" Abbie about signing the agreement, so she was not "subject to any coercive acts of Andy." The court ruled that Abbie had "not shown by clear and convincing evidence that there was no alternative" to signing the agreement and that the agreement was therefore enforceable.
The superior court later held a property division trial. Andy and Abbie testified to their respective understandings of the prenuptial agreement and described their lifestyle and spending habits during the marriage.
Their testimony depicted an extravagant lifestyle during the marriage, with spending on foreign travel, vacations, visits to Andy's properties in Idaho and Hawaii, an expensive car, jewelry, and other valuable personal possessions. Both parties testified that they spent from a joint account or put their purchases onto credit cards, and Andy paid off the credit cards in part with profits from his businesses; neither party provided any records of this spending. The couple also received an annual $100,000 gift from Andy's parents. However, at the time of divorce, there was no account or set of funds that could be identified as the community estate the parties had agreed to create in the prenuptial agreement.
In its findings of fact and conclusions of law, the superior court observed that the prenuptial agreement was "poorly written," with "missing paragraphs" and "inconsistent statements." The court nonetheless discerned that the prenuptial agreement's primary intent was to keep the parties’ separate property separate and protected from division in the event of divorce. The court described what it viewed as the core of the agreement:
[The] provisions were designed primarily to prevent [Abbie] from claiming an ownership interest in [Andy's] and his family's ongoing and future business interests. In exchange, [Andy] agreed to fund a community estate, fund an investment account and allow consideration of his separate property when dividing the community estate upon divorce.
The superior court found there was no evidence presented of any joint accounts "and certainly no evidence ... showing deposits or withdrawals from an account designated as a community account." It also found there was no evidence presented indicating that an investment account had been created or funded. The court reasoned that without the community estate and investment account "being honored in good faith by [Andy], the entire prenuptial agreement then is unenforceable" because Andy would "receive the benefit of his bargain, but then be able to control the finances such that [Abbie] does not receive her part of the bargain." Therefore, the court "ha[d] to conclude that [Andy] wants to honor his part of funding the community estate and the investment account."
To enforce Andy's part of the bargain, the superior court constructed a community estate and investment fund for division according to the agreement. In deciding the value of the community estate, the court accepted Abbie's calculations showing that the couple should have contributed $1,457,497 to the community estate over the course of the marriage. The court deducted Abbie's constructive contributions, yielding a figure of $1,123,517.08 in the community estate. It did not deduct any of the couple's expenditures during the marriage from this figure, reasoning that "[m]oney spent during the marriage could easily have been from the defendant gifting his separate...
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In re Eichstadt
...referred to the voluntariness inquiry as one examining the procedural fairness of the premarital agreement. See Andrew B. v. Abbie B. , 494 P.3d 522, 529–30 (Alaska 2021) (procedural fairness looks at whether the agreement was freely entered into); In re Marriage of Shanks , 758 N.W.2d 506,......