DeMatteo v DeMatteo

• Court: Supreme Judicial Court of Massachusetts
• Writing for the Court: Kantrowitz
• Citation: DeMatteo v DeMatteo, 436 Mass. 18, 762 N.E.2d 797 (Mass. 2002)
• Decision Date: 08 February 2002
• Docket Number: SJC-08614
• Parties: M. JOSEPH DEMATTEO vs. SUSAN J. DEMATTEO. Docket No.:MASSACHUSETTS SUPREME COURT County: Plymouth

M. JOSEPH DEMATTEO vs SUSAN J. DEMATTEO

Docket No.: SJC-08614

MASSACHUSETTS SUPREME COURT

County: Plymouth

October 2, 2001.

February 8, 2002

Summary: Divorce and Separation, Separation agreement, Attorney's fees. Contract, Antenuptial agreement. Husband and Wife, Antenuptial agreement.

Complaint for divorce filed in the Plymouth Division of the Probate and Family Court Department on March 13, 1998.

The case was heard by Catherine P. Sabaitis, J.

The Supreme Judicial Court granted an application for direct appellate review.

Jacob M. Atwood (Mark T. Smith & David E. Cherny with him) for the plaintiff.

Peter F. Zupcofska (Fiona S. Trevelyan with him) for the defendant.

Present: Marshall, C.J., Greaney, Ireland, Spina, Cowin, Sosman, & Cordy, JJ.

MARSHALL, C.J.

At issue in this appeal is the validity of a judgment in the Probate and Family Court that an antenuptial agreement is not enforceable. The judge concluded that the agreement was not fair and reasonable either at the time it was executed or when the husband sought its enforcement on commencing a divorce action nearly eight years after the parties were married. The husband appealed and we granted his application for direct appellate review. On appeal he challenges the judge's order as to the enforceability of the antenuptial agreement and her order that he pay the wife's attorney's fees.¹ We hold that the evidence did not warrant a conclusion that the antenuptial agreement is unenforceable, and reverse so much of the judgment to that effect. We affirm so much of the judgment as orders the husband to pay the wife's attorney's fees, but remand the case to the Probate and Family Court for a determination of the amount to be paid.

1. Factual background. The circumstances in which the parties' antenuptial agreement was negotiated and executed were as follows.² M. Joseph DeMatteo (husband) and Susan J. DeMatteo (wife) were married on March 23, 1990. At the time the husband was forty-seven years old, and the wife was forty-one years old. They had known each other as adolescents and had dated occasionally in the 1970's. In 1987, they renewed their earlier acquaintance. In 1989, the husband proposed marriage. He did so on condition that the wife sign an antenuptial agreement. She agreed to do so.

This was to be the husband's first marriage, and the wife's second. The wife had a daughter, born in 1983, from her first marriage. Until shortly before her second marriage in 1990, the wife lived with her daughter in a rented two-bedroom house in Dedham. She worked as a secretary earning approximately $25,000 a year, owned no real property, and had few assets. In contrast, the husband was a wealthy individual. He had a substantial ownership interest in his family's construction business; this and other real estate holdings and investments established him as a man of significant net worth, described more fully below. It is undisputed that the wife knew that her future husband was a man of considerable wealth, and that the husband knew that his future wife had few financial assets.

During the fall and winter of 1989-1990, the wife and the husband discussed the terms and necessity of an antenuptial agreement. The judge found that, although he was not "overbearing," the husband was "very clear that such an agreement was necessary." At the husband's urging, the wife retained independent legal counsel -- Ann C. Palmer -- to represent her in negotiating the agreement. Palmer was recommended to the wife by a friend. The husband was represented by his business counsel, Joel Lewin.

In February and March, 1990, Lewin and Palmer spoke several times and Lewin sent Palmer a draft antenuptial agreement. The draft provided, among other things, that if the marriage terminated by legal proceedings, including separation or divorce, the wife would receive the marital home free of encumbrance, the automobile that she was then driving, and an annual payment from the husband of $25,000 until her death or remarriage. On Palmer's advice, the wife did not accept these terms. Palmer sent a letter to Lewin rejecting the draft; she also requested full disclosure of the husband's assets. In response, Lewin delivered to Palmer the husband's tax returns for 1984 through 1988 and a current financial statement showing the husband's net worth to be between $83 million and $108 million. The husband's interests in his family's construction business comprised a majority of his assets. The wife made no further inquiries regarding the husband's assets and has not claimed that the husband's financial disclosures made before she signed the antenuptial agreement were incomplete, inaccurate, or misleading.³

On receipt of the husband's financial disclosures, Palmer consulted further with her client. She then informed Lewin that her client required that the husband increase the annual payments to the wife to $35,000, adjusted annually for increases in the cost of living. She also requested medical insurance, life insurance, and the lesser of twenty per cent of the husband's estate or $5 million. The husband rejected these requests. Further negotiations followed, the details of which are not necessary to describe, except to note that the wife dropped her demand for the lesser of twenty per cent of the husband's estate or $5 million in the event that the marriage was terminated by divorce.

The parties executed the agreement on March 21, 1990. The agreement, fifteen pages long, to which the parties' respective statements of assets were attached and incorporated,⁴ contains provisions concerning the disposition of their separate assets on death⁵ or if the marriage was "terminated or interrupted by divorce or other legal proceedings" during their lifetimes, disposition of liabilities, and numerous other provisions concerning such issues as breach, modifications, and choice of law. The agreement also contains provisions concerning waiver,⁶ "fairness,"⁷ warranties about legal advice,⁸ and child support "if any children shall be born of their marriage."⁹

Concerning termination of the marriage on divorce, the agreement provided that the wife would receive the marital home free of encumbrance,¹⁰ yearly support of $35,000 until her death or remarriage with an annual cost-of-living increase,¹¹ an automobile, and medical insurance until her death or remarriage. All property jointly acquired during the marriage would be divided between the parties in equal shares.

Both attorneys were present when the parties executed the agreement and the signing was recorded on videotape. The recording shows the husband's attorney reciting the terms of the agreement and the parties communicating their understanding of and consent to those terms. The parties acknowledge they have received advice from counsel of their choice, that they understand their rights in the absence of the agreement, and that they each have read the other's financial disclosures.

2. Procedural background. On March 13, 1998, the husband filed a complaint for divorce under G. L. c. 208, § 1B, alleging that the marriage was irretrievably broken down and seeking enforcement of the antenuptial agreement. The wife denied that the marriage was irretrievably broken down and challenged the enforceability of the agreement. The judge allowed the husband's motion to bifurcate the trial to consider first the validity and enforceability of the agreement. There followed three days of testimony solely on that issue. On February 12, 2001, the judge issued comprehensive findings of fact, conclusions of law, and a judgment that the antenuptial agreement was "not fair and reasonable at the time of its execution and is not fair and reasonable at the present time, and therefore may not be enforced." Because it elucidates our discussion of the issues, we describe in some detail the judge's rulings of law and her supporting analysis; her findings are summarized above.

The judge considered whether the agreement was fair and reasonable. See Osborne v. Osborne, 384 Mass. 591, 599 (1981). Without differentiating between fairness at the time of execution and fairness at the time of the trial, the judge concluded that the agreement was neither fair nor reasonable at either point in time. She based her determination on "the entirety of the financial settlement" to the wife, on what she termed "the lack of substantial negotiations involved before the agreement was executed," the "sophistication of the issues involved," and "the lifestyle of the parties during the marriage and the vast disparity between the parties' ability to acquire future assets and income."

Addressing the claims of the wife, the judge placed no reliance on her assertion that she was incapacitated at the time she executed the agreement. She found that the wife did not suffer from any incapacity due to any health reasons at the time, nor did she lack "education or business acumen to appreciate the significance of what she was doing," as the wife had also claimed. The judge did not credit the wife's contention that she signed the agreement under duress: "If she was under as much duress as she claimed to be, it was not at all apparent" on the video taped recording."¹²

Concerning the negotiations preceding the agreement's execution, the judge found that there was "complete financial disclosure by both parties." She nevertheless pointed to what she characterized as "minimal" negotiations prior to the agreement's execution, noting that "the financial and legal issues involved in this case were quite complex." The judge concluded that the wife "did not fully explore all the options available to her, nor was there any real discussion with her about either the consequences of this agreement or the possible results after a [G. L. c. 208,] § 34 hearing." She gave no weight to the fact that the wife was represented by independent counsel, noting only that the wife did not "discuss with her counsel what she might...