Estate of Crawford, Matter of

• Decision Date: 31 December 1986
• Docket Number: No. 52186-7,52186-7
• Citation: 107 Wn.2d 493,730 P.2d 675
• Parties: In the Matter of the ESTATE OF Robert J. CRAWFORD.
• Court: Washington Supreme Court

Page 493

107 Wn.2d 493

730 P.2d 675

In the Matter of the ESTATE OF Robert J. CRAWFORD.

No. 52186-7.

Supreme Court of Washington,

En Banc.

Dec. 31, 1986.

Curtis Coons, Bremerton, for appellant.

Shiers, Kamps, Love & Chrey, Frank Shiers, Port Orchard, for respondent.

CALLOW, Justice.

This case involves a prenuptial agreement and a petition for an award in lieu of homestead by a wife following the death of her husband.

A prenuptial agreement is one entered into by prospective spouses prior to marriage but in contemplation and in consideration thereof. By it, the property rights of one or both of the prospective spouses are determined or are secured to one or both of them or to their children.

Friedlander v. Friedlander, 80 Wash.2d 293, 298-99, 494 P.2d 208 (1972). It is an

agreement between prospective spouses made in contemplation of marriage and to be effective upon marriage.

Uniform Premarital Agreement Act § 1(1), 9A Uniform Laws 1985. The trial court denied the petition for an award in lieu of homestead concluding that the agreement appeared to be fair on its face and in its effect. We reverse the trial court.

Robert T. Crawford (hereinafter decedent) had been married once before his marriage to the petitioner Genevieve M. Crawford (hereinafter Mrs. Crawford). He had owned and operated a successful automobile dealership. His first wife died in 1968 leaving one child, Robert H. Crawford. The first wife left her interest in the property which had been owned as community property to her son, Robert H. Crawford. The present Mrs. Crawford testified that she married the decedent on December 8, 1968. She was substantially younger than he was. Three days before their marriage, the decedent and Mrs. Crawford went to the office of the decedent's attorney and executed an "Agreement" wherein arrangements were made relative to the separate property which each had acquired as the result of their previous marriages.

The Agreement specified that the decedent owned as his separate property: three parcels of land located in Bremerton Washington, 10 shares of stock of American Motors Corporation, 110 shares of stock of Crawford Motors, Inc., household goods and furnishings located at the couple's residence in Bremerton, and a 1969 automobile. The decedent also retained complete control and use of all of the revenues, income, interest, improvements, and appreciation in the value of the listed property. The Agreement, however, did not disclose the value of the decedent's property. Mrs. Crawford's separate property consisted only of furniture, furnishings and personal effects.

The Agreement also stated that "[t]here shall be a community of properties and gains between the contracting parties from the date of their contemplated marriage to each other, which said community of properties and gains shall embrace all future acquisitions and shall embrace only said future acquisitions". It further provided that other than such provision as was made in the Agreement for the other party, neither party would assert any claim against the estate of the other by way of inheritance, homestead allowances or family allowances. No provision was made for Mrs. Crawford upon the eventuality of death or divorce. She was not given a copy of the Agreement. They spent less than 10 minutes at the decedent's attorney's office.

On February 23, 1971, the decedent executed his will in which he nominated his son Robert H. Crawford as his personal representative. In this will he left all of his separate property to his son with provision for disposition of his property to his two grandchildren provided that his son should die first. The only provision in his will for Mrs. Crawford was the sum of $1.

Mrs. Crawford was employed for nearly 13 years during the marriage. He had retired prior to the marriage and did not work at any time during the marriage. He died May 8, 1982.

We must answer whether a spouse is bound by a prenuptial agreement signed by her in the presence of the decedent's attorney, 3 days before the marriage, when (a) no provision was made for her in the case of divorce or death; (b) she was not given a full disclosure of the value of the property of the decedent; and (c) she was not afforded an opportunity to review the agreement with the assistance of independent counsel. We must also answer whether the statute of limitations has run from the time of the execution of the premarital agreement to bar any claim by the objecting spouse that the agreement was invalid.

The prenuptial agreement in question is unfair on its face. It made no provision for Mrs. Crawford in the event of divorce or the death of the decedent. When the effect of a prenuptial agreement is to leave the economically subservient spouse with nothing, it can only be upheld by a showing that (1) there was a full and frank disclosure of all the other spouse's property and its value and (2) the agreement was signed freely and voluntarily on competent independent advice with full knowledge of rights. Whitney v. Seattle-First Nat'l Bank, 90 Wash.2d 105, 579 P.2d 937 (1978). A prenuptial agreement still may be valid in the absence of a fair and reasonable provision for the less advantaged spouse if there was a full and fair disclosure of all material facts relating to the amount, character, and value of the property involved, Friedlander, 80 Wash.2d at 302-03, 494 P.2d 208; Hamlin v. Merlino, 44 Wash.2d 851, 864, 272 P.2d 125 (1954), and it was entered into voluntarily with full understanding upon the advice of competent independent counsel. Whitney v. Seattle-First Nat'l Bank, supra. The burden of establishing these prerequisites is upon the party asserting the agreement. Friedlander, 80 Wash.2d at 300, 494 P.2d 208; Hamlin, at 862; In re Marriage of Cohn, 18 Wash.App. 502, 505, 569 P.2d 79 (1977); In re Marriage of Sanchez, 33 Wash.App. 215, 218, 654 P.2d 702 (1982). The objective is to prevent abuse and overreaching by the dominant party. Friedlander, 80 Wash.2d at 301, 494 P.2d 208. As observed by In re Marriage of Matson, 107 Wash.2d 479, 730 P.2d 668 (1986), (1) if the agreement makes a fair and reasonable provision for the party not seeking its enforcement, the agreement may be upheld, but, (2) if the agreement does not make a fair and reasonable provision for the economically subservient spouse, then, it will not be upheld unless (a) there was full disclosure of the amount, character and value of the property involved and (b) it was entered into voluntarily upon the advice of independent counsel with full awareness of the economic and legal ramifications of the agreement.

There is no absolute requirement of independent counsel. Whitney, 90 Wash.2d at 111, 579 P.2d 937. Whitney, however, did not require the advice of independent counsel because the agreement was fair- and reasonable, and there was no showing of fraud or overreaching. Here the agreement was patently unreasonable. Independent counsel was required.

A clear and important distinction certainly exists between saying that in particular circumstances a transaction could not be supported in the absence of independent advice, and saying that a general rule of equity exists which makes independent advice indispensable to the validity of transactions between persons occupying a fiduciary relationship.

Where it is plainly shown that a transaction was fair and free from objectionable influence, and especially where the person supposed to have been at a disadvantage is shown to have been of strong and independent mind and in a position to form an intelligent judgment, a requirement that in addition he must have had independent advice "would seem to be arbitrary and unnecessary."

(Footnotes omitted.) Whitney, at 109, 579 P.2d 937 (quoting Annot., Independent Advice as Essential to Validity of Transaction Between Persons Occupying a Confidential or Fiduciary Relationship, 123 A.L.R. 1505, 1512-13 (1939).

"Parties to an [prenuptial] agreement do not deal at arm's length with each other. Their relationship is one of mutual trust and confidence. They must exercise the highest degree of good faith, candor and sincerity in all matters bearing on the proposed agreement."

Whitney, at 108, 579 P.2d 937 (quoting Hamlin v. Merlino, 44 Wash.2d at 864, 272 P.2d 125.

Applying these considerations to the circumstances, we find: (1) that Mrs. Crawford was unaware that an agreement had been drafted and was first advised of its existence on her arrival at the office of the decedent's attorney; (2) the decedent's attorney had drafted the agreement and the decedent was in the dominant bargaining position; (3) the agreement did not disclose the value of the decedent's property; (4) Mrs. Crawford spent less than 10 minutes at the attorney's office; (5) the agreement was first seen and signed only 3 days before the wedding; (6) Mrs. Crawford indicated that she did not understand the agreement; (7) she was not given a copy of the agreement; (8) she did not discuss the document with independent counsel until after she had discovered that she had been effectively disinherited; and (9) she had not seen the agreement from the date it was signed in 1968 until a copy was demanded by her present counsel.

Where an agreement attempts to eliminate or restrict property rights of a member of the marital community, it must be scrupulously examined for fairness. While the Uniform Premarital Agreement Act, 9A Uniform Laws Annotated 333 (pocket part 1985), has not been adopted by our Legislature, the considerations set forth in § 6 thereof cogently express many of the same concerns that have been expressed in our cases, as follows:

(a) A premarital agreement is not enforceable if the party against whom enforcement is sought proves that:

(1) that party did not execute the agreement voluntarily; or

(2) the agreement was unconscionable when it was executed and, before execution of the agreement, that party:

(i) was not provided a...