Gardner v. Gardner, 94-0141
| Decision Date | 14 December 1994 |
| Docket Number | No. 94-0141,94-0141 |
| Parties | William E. GARDNER, Petitioner-Respondent, v. Dianne K. GARDNER, Respondent-Appellant. d |
| Court | Wisconsin Court of Appeals |
On behalf of the respondent-appellant, the cause was submitted on the briefs of John A. Fiorenza and Jeffrey M. Leggett of Fiorenza & Hayes, S.C., Milwaukee.
On behalf of the petitioner-respondent, the cause was submitted on the brief of Anne Willis Reed and David G. Hanson of Reinhart, Boerner, Van Deuren, Norris & Rieselbach, S.C. Milwaukee.
Before ANDERSON, P.J., and BROWN and NETTESHEIM, JJ.
Dianne K. Gardner appeals from a divorce judgment which found a marital property agreement to be procedurally and substantively fair, which found under the terms of the agreement that William E. Gardner retained sole interest in the parties' principal residence and which found under the agreement that Dianne was not entitled to a portion of the funds deposited by William in the parties' joint checking account and paid out to satisfy William's personal obligations. Dianne also contends that the trial court erred when it found that William did not fraudulently induce her to part with an ownership interest in a joint business venture. Finally, Dianne challenges the trial court's ruling finding her claims involving the joint business venture and the joint checking account were frivolous and imposing nominal attorney's fees.
We affirm the judgment of the trial court. We conclude that the marital property agreement satisfies the procedural and substantive fairness requirements of the law. The terms of the agreement are plain and straightforward and the trial court did not err in awarding the Slinger residence to William. Further, we determine that the terms of the agreement do not subject William's separate property, deposited in a joint checking account solely for the purpose of paying William's separate obligations, to division at the time of a divorce.
There is substantial and credible evidence to support the finding that Dianne was not fraudulently induced into parting with an ownership interest in a joint business venture. Finally, we independently conclude that several claims Dianne pursued during the proceedings were frivolous and sustain the trial court's award of nominal attorney's fees.
Marital property agreements (MPA) are recognized as essential in many interpersonal relationships; in divorce actions the trial court must consider the existence of any written MPA:
Any written agreement made by the parties before or during the marriage concerning any arrangement for property distribution; such agreements shall be binding upon the court except that no such agreement shall be binding where the terms of the agreement are inequitable as to either party. The court shall presume any such agreement to be equitable as to both parties.
Section 767.255(11), Stats. The law is well settled that a marital property agreement is equitable if it satisfies all of the following requirements:
Procedural Fairness:
1. Each spouse made fair and reasonable disclosure to the other of his or her financial status;
2. Each spouse has entered into the agreement voluntarily and freely; and
Substantive Fairness:
3. The substantive provisions of the MPA dividing the property upon divorce are fair to each party.
Greenwald v. Greenwald, 154 Wis.2d 767, 779-80, 454 N.W.2d 34, 38 (Ct.App.1990). If an MPA fails to meet any one of these requirements it must be invalidated.
The law presumes marital property agreements are equitable. Id. at 784, 454 N.W.2d at 40. The determination of whether an MPA is equitable requires the exercise of discretion by the trial court. Id. at 780, 454 N.W.2d at 38. On appeal, we affirm the determination of the trial court if it considered the relevant law and facts and set forth a process of logical reasoning. See id. During our review we are obligated to accept the trial court's resolution of the credibility of the witnesses because of the court's superior opportunity to judge such matters. Id. at 781, 454 N.W.2d at 39.
Dianne disputes all three requirements. First, she charges William with failing to fairly disclose the actual value of his major asset. Second, she insists that the imminent wedding, with all of the accompanying plans, left her no choice but to sign the MPA three days before the wedding. Finally, Dianne asserts her payout of $200,000 under the MPA is substantively unfair because it does not take into account her contributions to the prosperity of the marriage. Because Dianne is challenging the MPA, she has the burden of persuasion and production of evidence to overcome the statutory presumption that the MPA is equitable. See id. at 784, 454 N.W.2d at 40.
William and Dianne began dating in 1983; Dianne had been married three times before and William had been married once before. When they started to talk about marriage in 1985, William told Dianne he would not consider marriage unless they reached a written agreement protecting his property. William was the sole shareholder of Gardner Bender, Inc., with a substantial income and assets. Dianne was a waitress with minimal income and assets.
Beginning in June 1985, William discussed an MPA with his attorney who then drafted a proposal. As part of the proposal, a schedule of William's assets was attached. William's major asset, stock in Gardner Bender, Inc., was listed with a value of $2,045,000 but included a footnote: William's total assets were in excess of $3,000,000. Another addendum listed Dianne's assets at $22,000. Dianne retained separate counsel and several drafts of the MPA were exchanged during negotiations. The negotiations resulted in a substantial increase in the cash William was to pay to Dianne in the event of termination of the marriage by divorce or separation.
Dianne complains that this disclosure was not a "fair and reasonable" disclosure. Based upon testimony of her expert witness, she contends that the stock's fair market value in 1985 was in the vicinity of $18,000,000 to $20,000,000. Dianne argues that William had the duty to provide a fair and reasonable disclosure and she had no duty to seek out additional information about the stock.
The trial court correctly noted Dianne's attorney had a background in accounting and he had carefully explained the difference between book value and fair market value to Dianne. Based on the attorney's testimony, the court was satisfied that Dianne understood the valuation methods of stock and was content with the disclosure. The court observed that Dianne's attorney made the professional judgment that it was unnecessary to seek an independent appraisal of the company. The trial court also found that Dianne's attorney told her the agreement was not in her best interest and advised her not to sign it. All of these findings are amply supported by the record and, in and of themselves, support the conclusion that the disclosure made by William was fair and reasonable.
We agree with the trial court's conclusion that the dollar value placed on the stock was of no significance to Dianne. Dianne was determined to marry William. This determination to marry overcame her attorney's advice that the MPA was not in her best interest and his advice not to sign the agreement. Dianne herself testified that the value of William's assets was not important to her. "The purpose of a fair and reasonable disclosure is to guard against the possibility that '[a] party might not have entered into the agreement had she or he known the facts.' " Id. at 782, 454 N.W.2d at 39 (quoting Button v. Button, 131 Wis.2d 84, 95, 388 N.W.2d 546, 550 (1986)). Dianne's conduct demonstrates that specific knowledge of William's assets and finances was not an important component of her decision to marry William.
Dianne's other assault on the procedural fairness of the MPA is her contention that she did not have adequate time to review the agreement. As she must, Dianne concedes that she was represented by independent counsel, understood the terms of the agreement and their affect, and understood her financial rights in the absence of an MPA. See Button, 131 Wis.2d at 95-96, 388 N.W.2d at 551. She argues that with a wedding pending she did not have time to adequately consider the agreement when the final draft was submitted to her five days before the wedding.
In June 1985, William told Dianne he would not marry her until they reached an agreement that would protect his separate property. After William made this statement, Dianne began to tell her friends that she and William were to be married and she started to plan an October wedding. As she was planning the wedding she was also negotiating the MPA, she had independent counsel and she attended two counseling sessions devoted to the MPA. Dianne and her attorney received a draft of the MPA in early August 1985. During subsequent negotiations, Dianne was successful in getting the MPA revised several times until she had doubled her payout in the event of divorce.
We conclude that Dianne had a "meaningful choice." Greenwald, 154 Wis.2d at 782, 454 N.W.2d at 39. There is no evidence to support a conclusion that Dianne was coerced, rushed or, in any manner, forced to sign the MPA. Dianne was resolved in her decision to marry William. Any pressure to sign the MPA arose from her resolve and not from William. In reaching this same conclusion, the trial court commented that Dianne's testimony on many key points was less than credible. We must give due deference to this finding. Id. at 783, 454 N.W.2d at 40.
A party's statement requiring an MPA as a condition of marriage is not coercion. The other party is free to leave the...
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