Gentry v. Gentry

• Decision Date: 08 November 1990
• Docket Number: 89-SC-726-DG,Nos. 89-SC-501-D,s. 89-SC-501-D
• Citation: 798 S.W.2d 928
• Parties: Kathryn R. GENTRY, Movant, v. Thomas E. GENTRY, Respondent. Thomas E. GENTRY, Cross-Movant, v. Kathryn R. GENTRY, Natalie S. Wilson and Gess, Mattingly, Saunier and Atchison, Cross-Respondents.
• Court: United States State Supreme Court — District of Kentucky

Page 928

798 S.W.2d 928

59 U.S.L.W. 2356

Kathryn R. GENTRY, Movant, v. Thomas E. GENTRY, Respondent.

Thomas E. GENTRY, Cross-Movant, v. Kathryn R. GENTRY, Natalie S. Wilson and Gess, Mattingly, Saunier and Atchison, Cross-Respondents.

Nos. 89-SC-501-DG, 89-SC-726-DG.

Supreme Court of Kentucky.

Nov. 8, 1990.

Walter R. Morris, Jr. and Natalie S. Wilson, Gess, Mattingly, Saunier & Atchison, Lexington, for movant, cross-respondents.

Glen S. Bagby, Brock, Brock & Bagby, Lexington, for respondent, cross-movant.

JAMES G. SHEEHAN, Jr., Special Justice.

Kathryn R. Gentry and Thomas E. Gentry were married February 26, 1975. It was the second marriage for both. Each had two children at the time they married. Both Tom and Kathy had been through protracted divorce proceedings and Kathy was aware that Tom's divorce and property settlement had been particularly bitter.

A few days before their wedding, Tom and Kathy executed a document titled "ANTENUPTIAL AGREEMENT", the preamble to which recited as follows:

Whereas Tom and Kathy contemplate entering into marriage and each are [sic] possessed of property in his and her own right, and each has children by a former marriage, and

Whereas, it is desired by Tom and Kathy that their marriage shall not in any way change their legal property rights or the rights of their children or heirs at law to the property of each of them as they presently are before the marriage of Tom and Kathy, or their rights to bequeath property by their last will and testament as they see fit.

The agreement disclosed the nature and value of Tom's and Kathy's respective assets. Tom's net worth was approximately 1,500,000.00. Kathy's was nominal. The essential, or operative, terms of the agreement were reciprocal releases:

3. Tom hereby renounces and releases to Kathy, her heirs and assigns, any and all right, title and interest or right of dower and courtesy [sic] to any property both real and personal of which Kathy may now be seized [sic] or that she may hereafter acquire. Tom further specifically renounces and releases to Kathy's heirs-at-law, next of kin, legatees and devisees under her Last Will and Testament should Kathy predecease him, any and all right, title, interest and right of dower and courtesy [sic] of which Tom may have or be entitled, both real and personal. Tom further agrees to make no claim to any part of Kathy's estate as surviving spouse with respect to the estate owned by Kathy prior to the time of their marriage or with respect to any property, real or personal acquired by her subsequent to said marriage. However, in no event shall Kathy be prevented from bequeathing property to Tom in her Last Will and Testament as she determines at her sole discretion.

4. Kathy hereby renounces and releases to Tom, his heirs and assigns, any and all right, title and interest or right of dower and courtesy [sic] to any property, both real and personal, of which Tom may now be seized [sic] or that he may hereafter acquire. Kathy further specifically renounces and releases to Tom's heirs-at-law, next of kin, legatees and devisees under his Last Will and Testament should Tom predecease her, any and all right, title, interest and right of dower and courtesy [sic] of which Kathy may have or be entitled, both real and personal. Kathy further agrees to make no claim to any part of Tom's estate as surviving spouse with respect to the estate owned by Tom prior to the time of their marriage or with respect to any property, real or personal, acquired by him subsequent to said marriage. However, in no event shall Tom be prevented from bequeathing property to Kathy in his last will and testament as he determines at his sole discretion.

The final paragraph of the agreement recited that the agreement was made in contemplation of their impending marriage, that it was entered into "freely, willingly and without duress" and further, that it was made for the purpose of insuring to each Tom and Kathy "that they will not claim any interest in the estate of the other upon his or her death, except as each may designate in his or her respective last will and testament."

The agreement was drawn by an attorney and mutual friend, who testified that it was duly executed February 21, 1975. The trial court found the agreement to have been executed freely, knowingly and voluntarily by both parties.

Although Tom and Kathy enjoyed a very high standard of living while they were married, the marriage was stormy. According to Kathy, she "very early on" knew there were problems. The parties separated several times, the first time in 1978. No children were born of the marriage.

Kathy was not employed outside the home after the marriage, although she had been a school teacher before she and Tom married. The Gentrys' income was derived chiefly from Tom Gentry Farms, a thoroughbred breeding enterprise of which Tom was the principal operator. Kathy does not claim to have been actively involved with the thoroughbred horses or with the day to day farm operations. The evidence indicated that her skills in decorating, advertising, and entertaining contributed to the success of the annual yearling sale. The trial court found, and Kathy conceded, however, that her efforts were far less significant than Tom's to the sales which funded the accumulation of property during the marriage.

While they were married, the parties maintained separate bank accounts. Virtually all assets acquired during the marriage were purchased with funds from Tom's farm account. All income from the enterprise apparently went into Tom's farm account, over which only Tom had signature authority. From that account, Kathy received a sum of money each month. In addition, the evidence showed she was frequently reimbursed for purchases and expenditures. At the time of the separation, Kathy had banking accounts in her own name, including an account with Merrill-Lynch, worth approximately $42,000.00.

Tom made several significant gifts and transfers of personal property, including jewelry, to Kathy during the marriage. He gave her a Steinway piano for her birthday. Frequently, jewelry and gifts were chosen by or delivered to Kathy shortly after the summer yearling sales, from which Tom Gentry Farms derived most of its annual income.

Kathy's name does not appear upon the documents evidencing title to any assets acquired during the marriage, with the exception of the bank accounts in her name and a parcel of real estate in California which was purchased in joint names during the marriage. Kathy apparently lived primarily in the California house during the last two years of the marriage.

A decree of divorce was entered July 1, 1986. After multiple hearings and a trial, the Fayette Circuit Court held that the antenuptial agreement had been freely and voluntarily entered into by both Tom and Kathy, that each had made full disclosure to the other of their respective assets at the time the agreement was made, and that the intent of the parties was to provide for the disposition of all property in the event of termination of the marriage by either death or divorce. The circuit court further held that the agreement did not violate public policy and was not unconscionable.

The trial court found Tom's net worth to have declined significantly and to be between $650,000.00 and $750,000.00 as of the time Kathy filed for divorce, in January, 1986. The court found the parties had kept their property separate and awarded to Tom all property titled in his name and to Kathy all property titled in her name, except the California house, which, title notwithstanding, the court awarded to Tom as his separate property. Kathy was awarded all items of jewelry which had been given her, as well as the Steinway piano. Two silver pieces were found to be jointly owned and the court awarded one to each party. All other personalty was found to be separately owned. Most of it was awarded to Tom.

The circuit court awarded maintenance to Kathy in decreasing amounts over a seven year period. It also ordered Tom to pay the sum of $100,000.00 toward Kathy's attorneys fees to cross-respondents Natalie S. Wilson and Gess, Mattingly, Saunier and Atchison and, in addition, to reimburse Kathy for the costs of this action. At that time, costs exceeded $50,000.00.

Kathy appealed to the Kentucky Court of Appeals, which affirmed the trial court. She then filed a motion for discretionary review; Tom filed a cross motion as to the award of attorneys fees and costs. Both motions were granted.

We remand the Case to the Fayette Circuit Court with directions to award one-half the equity in the California house to Kathy Gentry. In all other respects, on both appeal and cross-appeal we affirm the result reached by the circuit court and the Court of Appeals.

I. THE ANTENUPTIAL AGREEMENT BETWEEN TOM AND KATHY GENTRY WAS INTENDED TO CONTROL THE DISPOSITION OF ALL PROPERTY OF THE PARTIES UPON TERMINATION OF THE MARRIAGE, WHETHER BY DEATH OR BY DIVORCE.

The Court of Appeals held the Gentry antenuptial agreement was ambiguous. We disagree; but we conclude, as did the Court of Appeals, that the agreement is a valid and controlling contract for the disposition of all Tom and Kathy's property upon termination of their marriage by divorce.

The preamble of the agreement states that both parties desire that their marriage "shall not in any way change their legal property rights or the rights of their children or heirs at law to the property of each of them as they presently are before the marriage...." (emphasis added). The final paragraph states that the agreement is made for the purposes of insuring neither party will claim an interest in the estate of the other.

Tom argues that the preamble is clear and controlling and the concluding paragraph is nothing more than an effort to steer clear of the prohibition of Stratton v. Wilson, 170 Ky. 61, 185 S.W. 522 (1916) against agreements "providing for, and looking to,...