Lopata's Estate, In re

• Decision Date: 01 March 1982
• Docket Number: No. 80SA293,80SA293
• Citation: 641 P.2d 952
• Parties: In re ESTATE OF Jack H. LOPATA, Deceased. Bernice LOPATA, Petitioner-Appellant, v. Barbara Lopata METZEL, and National City Bank of Denver, N.A. SpecialAdministrator, Respondents-Appellees.
• Court: Colorado Supreme Court

Page 952

641 P.2d 952

In re ESTATE OF Jack H. LOPATA, Deceased.

Bernice LOPATA, Petitioner-Appellant, v. Barbara Lopata METZEL, and National City Bank of Denver, N.A. SpecialAdministrator, Respondents-Appellees.

No. 80SA293.

Supreme Court of Colorado, En Banc.

March 1, 1982.

Feuer, Flossic & Rich, Laurence J. Rich, Denver, for petitioner-appellant.

Grant, McHendrie, Haines & Crouse, P. C., Steven E. Napper, Denver, for Barbara Lopata Metzel.

Arkin, McGloin & Davenport, P. C., Gary C. Davenport, Denver, for National City Bank of Denver, N. A.

ROVIRA, Justice.

Bernice Lopata (appellant) appeals ¹ an order of the Probate Court in and for the City and County of Denver denying her petition to take an elective share of her late husband's estate ² and her petition for exempt property allowance ³ and family allowance. ⁴ The court's order was based on an antenuptial agreement executed by the appellant and her husband, Jack H. Lopata (decedent).

The appellant contended that the antenuptial agreement was void because the decedent failed to disclose the nature and extent of his assets; she was unduly influenced by the decedent to sign the document; she did not understand her rights as a surviving spouse under Colorado law; and her signature was obtained as a result of fraud, duress, and undue influence.

The trial court concluded that the antenuptial agreement was valid and the appellant failed to establish lack of knowledgeable waiver after fair disclosure. We affirm the judgment.

I.

The appellant and the decedent were married on August 23, 1970. She was 57 years old, he was 10 years her senior, and both had living children from prior marriages. Three days before their wedding, they executed an antenuptial agreement which provided, inter alia:

"9. The parties hereto have read the above and foregoing terms and conditions herein set forth and each of them know and understand the contents herein contained and the terms and effect of each of the conditions herein contained and each have had full opportunity to counsel with the attorney of his or her choice and each is fully satisfied with the terms and conditions contained herein and executes this agreement of his or her free will, act or deed. That each party has full knowledge of the other's assets and that even if such knowledge is inaccurage (sic) and incomplete, the requirement to know the extent of the other's property is hereby waived and stated to be of no consequence in the performance and preparation of this contract."

The agreement also provided that in the event of death of either party the survivor would not assert any claim, right, interest or widow's allowance in the estate of the deceased, and each waived all rights as surviving spouse. Mr. Lopata also agreed to execute a will in which the appellant would receive $100,000 at the time of his death. Such a will was prepared and signed in 1973, and there is no dispute as to appellant's entitlement to this sum.

Although not required to do so by the terms of the antenuptial agreement, the appellant executed a will in June 1977, leaving a life estate to her husband in the family apartment. This will referred to the antenuptial agreement entered into between the parties.

After trial, the court found that at the time the antenuptial agreement was executed, the appellant was not represented by independent counsel; the decedent's attorney, who drafted the antenuptial agreement, did not advise the appellant of her marital rights as a spouse under Colorado law; there was no evidence, other than paragraph 9 of the agreement itself, that either party had made disclosure to the other of assets prior to the signing of the agreement or had actual knowledge of the nature and extent of the assets of the other; the net worth of the decedent in 1970 was approximately $1,000,000; and the net worth of the appellant was approximately $25,000.

The court, after hearing testimony concerning the education, background, and business experience of the appellant, found that she was well versed in day-to-day business affairs and was accustomed to consulting professionals in matters of law, tax, and accounting. The evidence disclosed that she had one year of college education and had operated a retail business with her first husband until his death. Subsequently, she was appointed administrator of his estate and worked with an attorney-accountant in selling the business and closing the estate. She also participated in an investment club, and her income tax returns were professionally prepared.

The court concluded that the evidence failed by any standard to establish fraud, concealment, material misrepresentation, or undue influence by Mr. Lopata at the time the antenuptial contract was entered into. Further, the court found that the appellant, having the burden of proof to establish "lack of knowledgeable waiver after fair disclosure" failed to meet that burden and denied her request to have the antenuptial agreement set aside. ⁵

II.

There can be no doubt that nuptial agreements are valid and enforceable and will generally be given full force and effect. In re Marriage of Franks, 189 Colo. 499, 542 P.2d 845 (1975); Moats v. Moats, 168 Colo. 120, 450 P.2d 64 (1969); Remington v. Remington, 69 Colo. 206, 193 P. 550 (1920); In re Estate of Lebsock, Colo.App., 618 P.2d 683 (1980); In re Estate of Lewin, 42 Colo.App. 129, 595 P.2d 1055 (1979). Such agreements provide a means by which parties can arrange their affairs, both prior to and subsequent to marriage, and are fully consistent with the public policy of this state. It is well recognized, however, that the parties to nuptial agreements do not deal at arm's length. Rather, a confidential relationship exists between them, and each has a responsibility to act with good faith and fairness to the other. Such a responsibility contemplates that each party will make fair disclosure of his or her assets to the prospective spouse prior to the execution of the agreement. ⁶ See Moats v. Moats, supra.

Fair disclosure is not synonymous with detailed disclosure such as a financial statement of net worth and income. The mere fact that detailed disclosure was not made will not necessarily be sufficient to set aside an otherwise properly executed agreement. Where the agreement was freely executed, the fact that one party did not disclose in detail to the other party the nature, extent, and value of his or her property will not alone invalidate the agreement or raise a presumption of fraudulent concealment. In re Estate of Lewin, supra; In re Estate of Ward, 178 Kan. 366, 285 P.2d 1081 (1955). Fair disclosure contemplates that each spouse should be given information, of a general and approximate nature, concerning the net worth of the other. Each party has a duty to consider and evaluate the information received before signing an agreement since they are not assumed to have lost their judgmental faculties because of their pending marriage.

In estate proceedings, where there is a claim that the surviving spouse has waived his or her rights, the legislature has codified the fair disclosure requirement by adopting section 2-204 of the Uniform Probate Code. Section 15-11-204, C.R.S.1973 (1981 Supp.). This section provides that rights acquired incident to marriage may be waived, "before or after marriage, by a written contract, agreement, or waiver signed by the party waiving after fair disclosure." Id.

III.

Appellant first contends that the trial court based its decision upon insufficient evidence in that there was no evidence establishing fair disclosure and knowledgeable waiver of rights prior to the signing of the antenuptial agreement. Central to her argument is the contention that the burden of proving fair disclosure is upon the party seeking to uphold the agreement. We disagree.

It is well settled that once the proponent of an antenuptial agreement has established the existence of the agreement itself, the party contesting the validity of the antenuptial agreement has the burden of proving fraud, concealment or failure to disclose material information. Moats v. Moats, supra; In re Estate of Stever, 155 Colo. 1, 392 P.2d 286 (1964); In re Marriage of Ingels, 42 Colo.App. 245, 596 P.2d 1211 (1979); In re Estate of Lewin, supra; Linker v. Linker, 28 Colo.App. 131, 470 P.2d 921 (1970). ⁷ The appellant argues, however, that the legislature altered existing law when it enacted section 15-11-204, C.R.S.1973 (1981 Supp.).

There is no indication in either the language of the statute or of the comments provided by the drafters of the Uniform Probate Code that this section was intended to change burden of proof requirements already established with respect to fair disclosure. ⁸ We conclude that the legislature in enacting section 204, intended to codify existing law and not to modify or alter it in any way. Therefore, existing case law consistent with this enactment is still binding with respect to the fair disclosure requirement. ⁹ See 2A C. Sands, Sutherland's Statutes and Statutory Construction §§ 50.01-.05 (4th ed. 1973).

In Colorado, the critical inquiry is whether the agreement was executed after fair disclosure and whether there is an absence of fraud or concealment. In re Estate of Lebsock, supra. Thus, antenuptial agreements receive the same scrutiny as any other contract except that there is the additional requirement of fair disclosure imposed upon both parties in recognition of the confidential relationship existing between them.

In the present case, the trial court ruled that there was no evidence of fraud, concealment, material misrepresentation, or undue influence by the decedent and that the appellant had failed to meet her burden of proving a lack of knowledgeable waiver after full disclosure. These findings are supported by the record and are binding on this court. Linley v. Hanson, 173 Colo. 239, 477 P.2d 453 (1970). Therefore, the trial court did not err in enforcing...