Ansin v. Craven-ansin

• Decision Date: 16 July 2010
• Docket Number: SJC-10548.
• Citation: 457 Mass. 283,929 N.E.2d 955
• Parties: Kenneth S. ANSINv.Cheryl A. CRAVEN-ANSIN.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

457 Mass. 283

929 N.E.2d 955

Kenneth S. ANSINv.Cheryl A. CRAVEN-ANSIN.

SJC-10548.

Supreme Judicial Court of Massachusetts,

Worcester.

Argued April 5, 2010.

Decided July 16, 2010.

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Susan E. Stenger (Nancy R. Van Tine & Robin M. Lynch Nardone with her), Boston, for the defendant.

David H. Lee (Kevin M. Corr with him), Boston, for the plaintiff.

Present: MARSHALL, C.J., IRELAND, SPINA, COWIN, CORDY, BOTSFORD, & GANTS, JJ.

MARSHALL, C.J.

We granted direct appellate review in this divorce proceeding to determine whether so-called “postnuptial” or “marital” agreements are contrary to public policy and if not, whether the marital agreement at issue is enforceable.¹ The dispute is between Kenneth S. Ansin (husband) and Cheryl A. Craven-Ansin (wife) concerning the validity of their 2004 written agreement “settling all rights and obligations arising from their marital relationship” in the event of a divorce. Two years after the agreement was executed, in November, 2006, the husband filed a complaint for divorce and sought to enforce the terms of the agreement. At the time of the complaint, the parties had been married for twenty-one years and had two sons.

A judge in the Probate and Family Court upheld the agreement, finding that it was negotiated by independent counsel for each party, was not the product of fraud or duress, and was based on full financial disclosures by the husband, and that the terms of the agreement were fair and reasonable at the time of execution and at the time of divorce. Judgment entered enforcing the marital agreement. The wife appealed, and we granted both parties' applications for direct appellate review.² We now affirm.

1. Facts. We recite the facts as found by the judge, all of which are supported by the record.

a The marital assets. At the time of the execution of the marital agreement in 2004, the value of the combined assets of the husband and wife was approximately $19 million. One of the assets, now at issue, is the husband's interest in certain trusts and business entities established by his grandfather, currently managed by his uncle. The assets of these various entities are substantial real estate holdings in Florida.³ The husband's interest in the Florida real estate is passive; he was not involved in the management of the properties, and did not have or exercise control over the sale or other disposition of the properties. During the course of the marriage, the husband received, and the wife was aware of, distributions from his interest in the Florida real estate. The timing and amount of the distributions was unpredictable, and varied widely, as the wife knew.

During the course of their marriage the couple retained RINET Company LLC (RINET) to provide financial advice to them and to prepare their joint tax returns. The parties' primary financial planner from RINET met with the couple on a quarterly basis, and RINET prepared “periodic summary reports” to permit the couple to monitor their financial affairs. Because the husband's interest in the Florida real estate was “fractional” and “non-controlling,” and because “speculation” is “inherent in any attempt to assign any values to such interests,” there was no attempt by RINET to assign concrete values to these assets. Rather, on the reports prepared by RINET, the husband's interest in the Florida real estate was given a “placeholder” value of $4 million to $5 million (the amount varied from time to time), of which the wife was well aware. The wife understood that the husband's principal objective in executing a marital agreement was to protect his interest in the Florida real estate in the event of a divorce.

b The marital agreement. The parties were married in July, 1985. The execution of their marital agreement nineteen years later was precipitated by marital problems that began toward the end of 2003. At the time the couple sought the assistance of a marriage counsellor. In early 2004, the husband informed his wife that he “needed” her to sign an agreement if their marriage was to continue. He testified that his “uncertainty” about the wife's commitment to their relationship was the reason for this request. It caused the wife a “great deal of stress”; she told her husband that she would not sign any such agreement, and that discussion of the issue made her “physically ill.” The parties separated, as it turned out for some six weeks. While the parties were separated, the husband promised his wife that he would recommit to the marriage if she would sign a marital agreement. She agreed to do so, she said, in an attempt to preserve the marriage and the family. The parties resumed living together, and went on a “second honeymoon.”

In April, 2004, they began negotiating the terms of the agreement, which we describe below. Each retained counsel. The judge's detailed description of the negotiations depicts back-and-forth discussions between counsel for the wife and counsel for the husband, during which the wife negotiated terms more favorable to her. Several draft agreements were exchanged. The judge found that in the course of the negotiations the wife was “fully informed” of the marital assets, and that she was “satisfied” with the disclosures made by the husband with respect to the Florida real estate, which included the financial summaries prepared by RINET that used the “placeholder” values. Finally, with the assistance of their respective counsel, the parties reached an agreement; it was signed in July, 2004.

We briefly summarize key provisions of the marital agreement. The agreement sets forth the parties' intent that, in the event of a divorce, the terms of the agreement are to be “valid and enforceable” against them, and “limit the rights” that “otherwise arise by reason of their marriage.” ⁴ The agreement recites that the parties are aware of the rights to which they may be entitled under Massachusetts law, that each has retained independent legal counsel, and that each executed the agreement “freely and voluntarily.” The agreement states that the parties are “aware of the other's income,” warrants that each has been provided with “all information requested by the other,” and affirms that each “waives his or her rights to further inquiry, discovery and investigation.” The agreement further recites that each is “fully satisfied” that the agreement “will promote marital harmony” and “will ensure the treatment of Husband's property to which the parties agreed before their marriage and since their separation.”

As for the distribution of property in the event of a divorce, the agreement states that the wife “disclaims any and all interest she now has or ever may have” in the husband's interest in the Florida real estate and other marital assets. The husband agreed to pay the wife $5 million, and thirty per cent of the appreciation of all marital property held by the couple from the time of the agreement to the time of the divorce.⁵ The agreement provides that the wife could remain in the marital home for one year after any divorce, with the husband paying all reasonable expenses of that household. The husband agreed to pay for the wife's medical insurance until her death or remarriage, and he agreed to maintain a life insurance policy to the exclusive benefit of the wife in the amount of $2.5 million while the parties remained married.

c. Events following execution of marital agreement. On execution of the marital agreement, the relationship between the husband and wife took on, in the judge's words, a “light and optimistic tone” and both were “looking forward to strengthening their marriage.” The two engaged in numerous activities together, including training for a marathon and traveling. However, in August, 2004, the parties had a discussion that “led the [w]ife to believe that their marriage was over.” The husband had not decided to divorce his wife, and the judge credited his testimony that he was “unwilling” to abandon the marriage at that time.

In response to their marital difficulties, the parties again considered separating, but decided not to do so at least until their younger son graduated from high school. They remained living together from August, 2004, until June, 2005, engaged in an intimate relationship, and “attempted to preserve the appearance of their marriage.” During this time, they purchased a new home for $790,000, and paid $500,000 for its renovations.

Meanwhile, the husband applied for and was accepted to Harvard University's Kennedy School of Government; his decision to enroll as a student there was not supported by his wife. The wife began to increase her consumption of alcohol, leading to more arguments with her husband. In June, 2005, at the wife's request, the husband moved out of the house. He did not file for divorce at that time, believing that while things looked “grim,” filing for divorce would have been the “ultimate declaration” that his marriage was over. After separating from her husband, the wife maintained contact with their RINET financial advisor, inquiring on multiple occasions what the value of any payment to her would be under the terms of the marital agreement. In 2006 the wife became involved in a serious relationship with another man. In February of that year, the wife informed the husband that “one of us has to be strong enough to take the steps to bring closure to our relationship.” She did not commence divorce proceedings. In November, 2006, the husband filed a petition for divorce.

2. Validity of marital agreement. Whether a marital agreement should be recognized in Massachusetts is a long-deferred question of first impression. See Fogg v. Fogg, 409 Mass. 531, 532 n. 2, 567 N.E.2d 921 (1991).⁶ Consistent with the majority of States to address the issue, see Bratton v. Bratton, 136 S.W.3d 595, 599-600 (Tenn.2004), we conclude that such agreements may be enforced. See e.g. Matter of Estate of Harber, 104 Ariz....