In re Traster

• Decision Date: 07 December 2012
• Docket Number: No. 106,092.,106,092.
• Parties: In the Matter of the MARRIAGE OF David M. TRASTER, Appellee, and Debra C. Traster, Appellant.
• Court: Kansas Court of Appeals

48 Kan.App.2d 356
291 P.3d 494

In the Matter of the MARRIAGE OF David M. TRASTER, Appellee,
and
Debra C. Traster, Appellant.

No. 106,092.

Court of Appeals of Kansas.

Dec. 7, 2012.

[291 P.3d 498]

Syllabus by the Court

1. Premarital and postmarital contracts between spouses generally are not contrary to public policy unless they promote or encourage divorce or separation.

2. An agreement will be found to promote or encourage divorce if it obligates a spouse to procure a divorce or obligates a spouse not to defend or contest a divorce.

3. In the absence of terms or conditions that serve to encourage divorce or separation, postmarital agreements are considered to be consistent with public policy in that they encourage the private resolution of family issues without resort to separation or divorce.

4. The Kansas Uniform Premarital Agreement Act (KUPAA) governs the law relating to premarital agreements executed by couples who are contemplating marriage. This legislation precludes the court from enforcing such an agreement, however, if it was involuntary or unconscionable when executed or signed without an adequate disclosure of assets. K.S.A. 2011 Supp. 23–2401 et seq.

5. The Kansas statutory scheme controlling dissolution of marriage governs agreements executed by spouses who are contemplating divorce and have no intention of staying married. Once a divorce action is filed in Kansas, this legislation requires the court to incorporate the separation agreement into the divorce decree if the court finds the agreement is valid, just, and equitable. K.S.A. 60–1610(b)(3).

6. A postmarital agreement is an agreement between spouses who plan to continue their marriage but at the same time want to alter or confirm the legal rights and obligations that would otherwise arise under the law governing marital dissolution.

7. There is no existing Kansas statute that governs the law relating to postmarital agreements that are made when the parties intend to stay married. In the absence of a statute, we must determine the proper standard for assessing the enforceability of postmarital agreements.

8. The appropriate standard for assessing the enforceability of a postmarital agreement is review of the agreement by the court to determine whether (1) each party had an opportunity to obtain separate legal counsel of each party's own choosing; (2) there was fraud or coercion in obtaining the agreement; (3) all material assets were fully disclosed by both parties before the agreement was executed; (4) each spouse knowingly and explicitly agreed in writing to waive the right to a judicial equitable division of material assets and all marital rights in the event of a divorce; (5) the terms of the agreement were fair and reasonable at the time of execution; and (6) the terms of the agreement are not unconscionable at the time of dissolution.

9. A court may not award attorney fees absent statutory authority or an agreement by the parties. Where the district court has authority to grant attorney fees, its decision is reviewed under an abuse of discretion standard. An abuse of discretion occurs if the discretion is guided by an erroneous legal conclusion.

Stephen P. Weir, of Stephen P. Weir, P.A., of Topeka, for appellant.

Kristy L. Simpson, of Wichita, and Gary L. Ayers, of Foulston Siefkin LLP, of Wichita, for appellee.

Before STANDRIDGE, P.J., LEBEN and BRUNS, JJ.

STANDRIDGE, J.

During their marriage, Debra and David Traster executed a postmarital agreement setting forth the respective legal rights and obligations of each spouse in the event the marriage did not survive. After more than 25 years of marriage, David filed for divorce and—contrary to the terms of the postmarital agreement—requested the court equitably divide the marital property. Debra moved for partial summary judgment, asking the district court to find that the postmarital agreement was valid and enforceable and

[291 P.3d 499]

that it controlled the disposition of any and all of the parties' real and personal property.

The district court ultimately construed the postmarital agreement as a separation agreement and, as required by K.S.A. 60–1610(b)(3), reviewed it to determine whether the agreement was valid, just, and equitable. After an evidentiary hearing, the court held the postmarital agreement (1) was invalid because it ran counter to public policy by encouraging divorce and (2) was unjust and inequitable in the distribution of property because Debra received virtually all of the personal property acquired during the marriage through gift, inheritance, and joint effort of the parties. On appeal, Debra alleges the district court erred in construing the postmarital agreement as a separation agreement under K.S.A. 60–1610(b)(3). Debra claims the district court was limited to reviewing the postmarital agreement to determine if it generally complied with contract principles. Reviewed in this context, Debra argues the agreement is not contrary to public policy and must be enforced as written. Finally, Debra claims she is entitled to an award of attorney fees based on an indemnity provision in the written agreement.

We conclude the district court erred in finding the postmarital agreement ran counter to public policy and in construing the postmarital agreement as a separation agreement under K.S.A. 60–1610(b)(3) for purposes of determining its enforceability. In the absence of a statute governing the law related to postmarital agreements between spouses who plan to continue their marriage, we conclude the appropriate standard for assessing the enforceability of postmarital agreement is review of the agreement by the court to determine whether (1) each party had an opportunity to obtain separate legal counsel of each party's own choosing; (2) there was fraud or coercion in obtaining the agreement; (3) all assets were fully disclosed by both parties before the agreement was executed; (4) each spouse knowingly and explicitly agreed in writing to waive the right to a judicial equitable division of assets and all marital rights in the event of a divorce; (5) the terms of the agreement were fair and reasonable at the time of execution; and (6) the terms of the agreement are not unconscionable at the time of dissolution. Applying this standard to the postmarital agreement between David and Debra here, we find it enforceable and, therefore, reverse the decision of the district court and remand with directions to enforce it as written and agreed to by the parties.

Facts

David and Debra were married on June 25, 1976. They never had children. David has been a practicing attorney since 1981, while Debra's employment during the marriage was limited. Although she graduated from law school, Debra never sat for the bar exam or practiced law due to mental health issues and a traumatic brain injury she received in 1983 as the result of a car accident.

The parties signed two postmarital agreements after they were married, both of which were drafted by David. The first agreement, drafted sometime in the 1980's, provided that Debra would be entitled to all of the parties' assets in the event of a divorce. This agreement was either lost or misplaced. In 2004, David drafted a second postmarital agreement, which was similar if not identical to the distributive provisions set forth in the original agreement. The 2004 written agreement acknowledged David's role as scrivener and provided that Debra “does not have David's practical experience with drafting and enforcing agreements. For this reason, David has superior knowledge and understanding concerning the drafting of agreements such as this and Debra is relying on David's legal expertise and advice.”

The written agreement also acknowledged that the parties had experienced problems and difficulties during the marriage but stated that the parties “currently have a valid marriage” and that neither party had “current plans [to] seek a dissolution of the marriage.” In the event the marriage did fail, however, the agreement provided that David would receive his personal belongings and effects, including his clothing, tools, and guns, and Debra would receive all other assets including, but not limited to, the couple's home, vehicles, personal property, accounts, funds, stocks, bonds, investments, buildings,

[291 P.3d 500]

contracts, and leases. The agreement also required David to maintain a $1 million life insurance policy naming Debra as the sole beneficiary, even if the marriage ended in divorce.

On June 20, 2007, David filed for divorce and—notwithstanding the terms of both agreements he drafted and executed during the marriage—requested “an equitable division of the property and debts.” In response, Debra requested an award of spousal maintenance and asked the court to divide the property consistent with the 2004 postmarital agreement. Debra later moved for partial summary judgment, asking the district court to find that the postmarital agreement was valid and enforceable and that it controlled the disposition of any and all of the parties' real and personal property. Debra also requested attorney fees and costs, as contemplated by an indemnification provision in the postmarital agreement. In response to Debra's motion, David argued the district court was required to make a determination under K.S.A. 60–1610(b)(3) that the postmarital agreement was “valid, just and equitable” prior to its incorporation into a final divorce decree. To that end, David argued the postmarital agreement was invalid because it ran counter to public policy by promoting and encouraging divorce. David also argued that the agreement was neither just nor equitable in the distribution of assets.

Following argument, the district court found the postmarital agreement was drafted and executed in contemplation of divorce and, therefore, qualified as a separation agreement under K.S.A. 60–1610(b)(3), subject to review by the court to determine if it was valid, fair, and equitable. In...