Bedrick v. Bedrick

• Decision Date: 26 April 2011
• Docket Number: No. 18568.,18568.
• Citation: 17 A.3d 17,300 Conn. 691
• Court: Connecticut Supreme Court
• Parties: Deborah BEDRICKv.Bruce L. BEDRICK.

300 Conn. 691

17 A.3d 17

Deborah BEDRICK

v.Bruce L. BEDRICK.

No. 18568.

Supreme Court of Connecticut.

Argued Dec. 2, 2010.Decided April 26, 2011.

Campbell D. Barrett, with whom were Jon T. Kukucka, and, on the brief, C. Michael Budlong, Hartford, and Felicia Hunt, for the appellant (defendant).Barbara J. Ruhe, with whom, on the brief, was Jonathan W.A. Ruhe, Wethersfield, for the appellee (plaintiff).Kenneth J. McDonnell, Essex, for the minor child.ROGERS, C.J., and NORCOTT, PALMER, ZARELLA, McLACHLAN and EVELEIGH, Js.McLACHLAN, J.

This appeal involves a dissolution of marriage action in which the defendant, Bruce L. Bedrick, seeks to enforce a postnuptial agreement.¹ Today we are presented for the first time with the issue of whether a postnuptial agreement is valid and enforceable in Connecticut.

The defendant appeals from the trial court's judgment in favor of the plaintiff, Deborah Bedrick. The defendant claims that the trial court improperly relied upon principles of fairness and equity in concluding that the postnuptial agreement was unenforceable and, instead, should have applied only ordinary principles of contract law. We conclude that postnuptial agreements are valid and enforceable and generally must comply with contract principles. We also conclude, however, that the terms of such agreements must be both fair and equitable at the time of execution and not unconscionable at the time of dissolution. Because the terms of the present agreement were unconscionable at the time of dissolution, we affirm the judgment of the trial court.

The record reveals the following undisputed facts and procedural history. In August, 2007, the plaintiff initiated this action, seeking dissolution of the parties' marriage, permanent alimony, an equitable distribution of the parties' real and personal property and other relief. The defendant filed a cross complaint, seeking to enforce a postnuptial agreement that the parties executed on December 10, 1977, and modified by way of handwritten addenda on five subsequent occasions, most recently on May 18, 1989.

The agreement provides that in the event of dissolution, neither party will pay alimony. Instead, the plaintiff will receive a cash settlement in an amount to be “reviewed from time to time.” The May 18, 1989 addendum to the agreement provides for a cash settlement of $75,000. The agreement further provides that the plaintiff will waive her interests in the defendant's car wash business, and that the plaintiff will not be held liable for the defendant's personal and business loans.

In its memorandum of decision, the trial court stated that, although “[t]here is scant case law addressing the enforcement of postnuptial agreements in Connecticut ... it is clear that a court may not enforce a postnuptial agreement if it is not fair and equitable.... [C]ourts have refused to enforce postnuptial agreements for lack of consideration, failure to disclose financial information, or an improper purpose.” Concluding that the agreement was not fair and equitable, the trial court declined to enforce it. The court found that the value of the parties' combined assets was approximately $927,123, and ordered, inter alia, the defendant to pay lump sum alimony in the amount of $392,372 to the plaintiff. The defendant filed a motion to reargue claiming that the court should have applied principles of contract law in determining the enforceability of the agreement.

Following reargument, the trial court issued a second written decision, again declining to enforce the postnuptial agreement, and noting that the Connecticut appellate courts have not yet addressed the issue of the validity of such agreements. The court further declined to apply Connecticut's law governing prenuptial agreements, reasoning that, unlike a prenuptial agreement, a postnuptial agreement is “inherently coercive” because one spouse typically enters into it in order to preserve the marriage, while the other is primarily motivated by financial concerns.

The trial court additionally determined that, even if postnuptial agreements were valid and enforceable under Connecticut law, the present agreement did not comply with ordinary contract principles because it lacked adequate consideration. The court explained that, because past consideration cannot support the imposition of a new obligation, continuation of the marriage itself cannot constitute sufficient consideration to support a postnuptial agreement. Moreover, the trial court emphasized that the plaintiff did not knowingly waive her marital rights because she neither received a sworn financial affidavit from the defendant nor retained independent legal counsel to review the agreement.

The trial court also opined that enforcement of the agreement would have been unjust and was “not ... a fair and equitable distribution of the parties' assets” because the financial circumstances of the parties had changed dramatically since the agreement was last modified in 1989. Since 1989, the parties had had a child together and the defendant's car wash business had both prospered and deteriorated. This appeal followed.²

I

The defendant contends that the trial court improperly applied equitable principles in determining whether the postnuptial agreement was enforceable and, instead, should have applied only principles of contract law.³ Specifically, the defendant cites Crews v. Crews, 295 Conn. 153, 167, 989 A.2d 1060 (2010), in which we stated that “equitable considerations codified in our statutes ... have no bearing on whether [a prenuptial] agreement should be enforced.... In other words, whether ... [a] court ... thinks the agreement was a good bargain for the plaintiff does not enter into the analysis of the issue.” (Internal quotation marks omitted.) The defendant claims that Crews precludes the consideration of factors beyond those of pure contract law in determining whether an agreement is enforceable. Although we agree with the defendant that principles of contract law generally apply in determining the enforceability of a postnuptial agreement, we conclude that postnuptial agreements are subject to special scrutiny and the terms of such agreements must be both fair and equitable at the time of execution and not unconscionable at the time of dissolution. Because the terms of the present postnuptial agreement were unconscionable at the time of dissolution, the trial court properly concluded that the agreement was unenforceable.

The standard applicable to postnuptial agreements presents a question of law, over which our review is plenary. Id., at 161, 989 A.2d 1060. We begin our analysis of postnuptial agreements by considering the public policies served by the recognition of agreements regarding the dissolution of marriage, including prenuptial, postnuptial and separation agreements.

Historically, we have stated that “[t]he state does not favor divorces.... Its [public] policy is to maintain the family relation[ship] as a life status.” (Citation omitted.) McCarthy v. Santangelo, 137 Conn. 410, 412, 78 A.2d 240 (1951). Accordingly, prenuptial agreements were generally held to violate public policy if they promoted, facilitated or provided an incentive for separation or divorce. McHugh v. McHugh, 181 Conn. 482, 488–89, 436 A.2d 8 (1980). Similarly, a separation agreement is not necessarily contrary to public policy unless it is made to facilitate divorce or is concealed from the court. See Rifkin v. Rifkin, 155 Conn. 7, 9–10, 229 A.2d 358 (1967); Hooker v. Hooker, 130 Conn. 41, 47, 32 A.2d 68 (1943); Felton v. Felton, 123 Conn. 564, 568, 196 A. 791 (1938). “While contracts between husband and wife regarding property settlements entered into prior to instituting proceedings for divorce should be carefully examined, they are not necessarily contrary to public policy....” Koster v. Koster, 137 Conn. 707, 711, 81 A.2d 355 (1951); see also Lasprogato v. Lasprogato, 127 Conn. 510, 513–14, 18 A.2d 353 (1941); Weil v. Poulsen, 121 Conn. 281, 286, 184 A. 580 (1936).

More recently, our court has acknowledged that the government has an interest in encouraging the incorporation of separation agreements into decrees for dissolution. See, e.g., Billington v. Billington, 220 Conn. 212, 221, 595 A.2d 1377 (1991) (“private settlement of the financial affairs of estranged marital partners is a goal that courts should support rather than undermine” [internal quotation marks omitted] ). Postnuptial agreements may also encourage the private resolution of family issues. In particular, they may allow couples to eliminate a source of emotional turmoil—usually, financial uncertainty—and focus instead on resolving other aspects of the marriage that may be problematic. By alleviating anxiety over uncertainty in the determination of legal rights and obligations upon dissolution, postnuptial agreements do not encourage or facilitate dissolution; in fact, they harmonize with our public policy favoring enduring marriages. “Such contracts may inhibit the dissolution of marriage, or may protect the interests of third parties such as children from a prior relationship.” Ansin v. Craven–Ansin, 457 Mass. 283, 289, 929 N.E.2d 955 (2010).

Postnuptial agreements are consistent with public policy; they realistically acknowledge the high incidence of divorce and its effect upon our population. We recognize “the reality of the increasing rate of divorce and remarriage.” Heuer v. Heuer, 152 N.J. 226, 235, 704 A.2d 913 (1998). “[R]ecent statistics on divorce have forced people to deal with the reality that many marriages do not last a lifetime. As desirable as it may seem for couples to embark upon marriage in a state of optimism and hope, the reality is that many marriages end in divorce. There is a growing trend toward serial marriage; more people expect to have more than one spouse during their lifetime.” T. Perry, “ Dissolution Planning in Family Law: A Critique of Current Analyses...