DeLorean v. DeLorean

• Decision Date: 10 April 1986
• Citation: 511 A.2d 1257,211 N.J.Super. 432
• Parties: John Z. DeLOREAN, Plaintiff, v. Cristina DeLOREAN, Defendant.
• Court: New Jersey Superior Court

Page 432

211 N.J.Super. 432

511 A.2d 1257

John Z. DeLOREAN, Plaintiff, v. Cristina DeLOREAN, Defendant.

Superior Court of New Jersey, Chancery Division Family Part, Somerset County.

Decided April 10, 1986.

John J. Trombadore, Somerville, for plaintiff (Schachter, Cohn, Trombadore & Offen, Somerville, attorneys).

David M. Wildstein, Woodbridge, for defendant (Wilentz, Goldman & Spitzer, Woodbridge, attorneys).

IMBRIANI, J.S.C.

This matrimonial case examines the circumstances under which an antenuptial agreement may be enforced and whether that issue may be resolved by arbitration. The intent of most marriages is to create an "indivisible union of one" in which both spouses generally contribute whatever they own prior to the marriage or acquire thereafter into a common marital fund. Upon death the survivor usually receives whatever has been accumulated but, if a divorce ensues, in the usual case they share all marital assets equally.

However, when parties enter into an antenuptial agreement their purpose is to alter that usual arrangement and enter into an economic partnership whereby many or all of the assets owned prior to the marriage or acquired thereafter are not contributed into a common marital fund but are kept segregated and, when the marriage ceases, whether by death or divorce, they are not shared equally but pursuant to a plan conceived and agreed upon before the marriage was consummated. It is important that we understand that normally the intent of most antenuptial agreements is to deny a spouse an interest in assets held in the sole name of the other which the former would ordinarily receive by operation of law when the marriage ceased.

These parties entered into an antenuptial agreement on May 8, 1973 (only a few hours before they married) which provided that:

any and all property, income and earnings acquired by each before and after the marriage shall be the separate property of the person acquiring same, without any rights, title or control vesting in the other person.

The potential assets could exceed $20 million and practically all of them are in the sole name of the husband. Absent this agreement and considering that this is a thirteen-year marriage in which there are two minor children, under New Jersey law this wife could reasonably have anticipated receiving approximately 50% of the marital assets at the time of divorce. But if this agreement is upheld she will receive relatively little. She asserts that this agreement should not be enforced because (1) she was not provided with a full and complete disclosure of her husband's financial affairs before she signed it and (2) undue influence was exerted upon her by her husband who possessed far greater financial knowledge and experience than she.

Initially, it is clear that "antenuptial agreements fixing post-divorce rights and obligations [are] ... valid and enforceable" and courts should "welcome and encourage such agreements at least 'to the extent that the parties have developed comprehensive and particularized agreements responsive to their peculiar circumstances'." D'Onofrio v. D'Onofrio, 200 N.J.Super. 361, 366, 491 A.2d 752 (App.Div.1985). In determining whether to enforce an antenuptial agreement there are at least three requirements that have to be met.

First, that there was no fraud or duress in the execution of the agreement or, to put it another way, that both parties signed voluntarily. The wife alleges she did not sign voluntarily because her husband presented the agreement to her only a few hours before the marriage ceremony was performed and threatened to cancel the marriage if she did not sign. In essence she asserts that she had no choice but to sign. While she did not have independent counsel of her own choosing, she did acknowledge that before she signed she did privately consult with an attorney selected by her husband who advised her not to sign the agreement. Yet, for whatever reasons, she rejected the attorney's advice and signed.

While her decision may not have been wise, it appears that she had sufficient time to consider the consequences of signing the agreement and, indeed, although she initially refused to sign it, after conferring with her intended spouse and an attorney, she reconsidered and decided to sign it. Concededly, the husband was 25-years older and a high powered senior executive with General Motors Corporation, but she was not a "babe in the woods." She was 23-years old with some business experience in the modeling and entertainment industry; she had experienced an earlier marriage and the problems wrought by a divorce; and she had advice from an attorney who, although not of her own choosing, did apparently give her competent advice and recommended that she not sign. While it may have been embarrassing to cancel the wedding only a few hours before it was to take place, she certainly was not compelled to go through with the ceremony. There was no fraud or misrepresentation committed by the husband. He made it perfectly clear that he did not want her to receive any portion of the marital assets that were in his name. At no time did she ever make an effort to void the agreement and, of course, it was never voided. Under these circumstances the court is satisfied that the wife entered into the agreement voluntarily and without any fraud or duress being exerted upon her.

Second, the agreement must not be "unconscionable." This is not to say that the agreement should be what a court would determine to be "fair and equitable." The fact that what a spouse receives under an antenuptial agreement is small, inadequate or disproportionate does not in itself render the agreement voidable if the spouse was not overreached and entered into the agreement voluntarily with full knowledge of the financial worth of the other person. See 41 Am.Jur.2d § 298. So long as a spouse is not left destitute or as a public charge the parties can agree to divide marital assets in any manner they wish. Marschall v. Marschall, 195 N.J.Super. 16, 30-31, 477 A.2d 833 (Ch.Div.1984). Mrs. DeLorean presently enjoys substantial income from her employment as a talk-show television hostess and was given a life interest in a trust of unknown amount created by Mr. DeLorean, which he testified had assets of between $2 and $5 million dollars. ¹ She will not be left destitute. The court is unaware of any public policy which requires that the division of marital assets be made in what the court believes to be fair and equitable if the parties freely and voluntarily agree otherwise. In the final analysis it is for the parties to decide for themselves what is fair and equitable, not the court. So long as a spouse had sufficient opportunity to reflect on her actions, was competent, informed, and had access to legal advice and that of any relevant experts, a court should not, except in the most unusual case, interject its own opinion of what is fair and equitable and reject the wishes of the parties. Since the wife voluntarily agreed to this division of the marital assets and she will not become destitute or a public charge, the agreement is not unconscionable.

Third, the spouse seeking to enforce the agreement made a full and complete disclosure of his or her financial wealth before the agreement was signed. Obviously, one cannot make a knowing and intelligent waiver of legal and financial rights unless fully informed of all of the facts; otherwise one cannot know what is being waived. The husband asserts that the wife acknowledged that she received a full and complete disclosure of his financial wealth because the agreement states:

Husband is the owner of substantial real and personal property and he has reasonable prospects of earning large sums of monies; these facts have been fully disclosed to Wife.

However, that statement is not very meaningful and is insufficient to satisfy his obligation to make a full and complete disclosure of his financial wealth. While several states hold that a full and complete disclosure is not synonymous with a detailed disclosure, see e.g., Lopata v. Metzel, 641 P.2d 952 (Sup.Ct.Colo.1982), those cases can be distinguished because they impose upon each spouse a duty to inquire and investigate into the financial condition of the other. However, as far as this court can ascertain, New Jersey imposes no such duty.

A conflict arose as to precisely what financial information was disclosed by Mr. DeLorean. However, the court is satisfied that even if it accepted as true the testimony of Mr. DeLorean he did not satisfy his legal obligation to make a full and complete disclosure. But we should address the question of how to avoid disputes of this nature in the future. It is clear that we can ascertain with complete certainty whether there was a full and complete disclosure only by requiring a written list of assets and income be attached to the antinuptial agreement. Anything less will encourage a plethora of plenary hearings which would frequently be complicated by contradictory and conflicting testimony, often tainted by memory lapses. Research has disclosed, for reasons not clear to this court, several cases in which the suggestion of a written list has been rejected, Roberts v. Estate of Roberts, 664 S.W.2d 634 (Mo.App.1984); Hengel v. Hengel, 122 Wis.2d 737, 365 N.W.2d 16 (App.1985).

Our purpose must be to fashion a rule which will avoid litigation. As said in Brandenburg v. Brandenburg, 83 N.J. 198, 416 A.2d 327 (1980):

the complexity of the many issues facing a matrimonial court call for rules that possess some degree of certainty and ease of application. [at 207, 416 A.2d 327]

Obviously, a rule which relies upon the testimony of the parties and their witnesses of what was said and done many years ago will not do so and, in fact, will result in considerable litigation.

It is interesting to note that when our Supreme Court was confronted in Brandenburg with the issue of when to fix the...