Mallen v. Mallen

• Decision Date: 21 November 2005
• Docket Number: No. S05F0982.,S05F0982.
• Citation: 622 S.E.2d 812,280 Ga. 43
• Parties: MALLEN v. MALLEN.
• Court: Georgia Supreme Court

280 Ga. 43

622 S.E.2d 812

MALLEN v. MALLEN.

No. S05F0982.

Supreme Court of Georgia.

November 21, 2005.

COPYRIGHT MATERIAL OMITTED

Edward E. Bates Jr., Andrea Marie Dyer, Warner, Mayoue, Bates, Nolen & Collar, Atlanta, for Appellant.

Richard W. Schiffman, Jr., Kurt Allen Kegel, Davis, Matthews & Quigley, P.C., Atlanta, for Appellee.

BENHAM, Justice.

At issue in this appeal from a judgment and decree of divorce is the trial court's decision to enforce a prenuptial agreement between the parties. Catherine (Wife) and Peter (Husband) Mallen had lived together unmarried for about four years when Wife got pregnant in 1985. While she was at a clinic to terminate the pregnancy, Husband called to ask her not to have the abortion and to marry him, to both of which requests she agreed. A few days later, nine or ten days before their planned wedding, Husband asked Wife to sign a prenuptial agreement prepared by his attorney. Wife contends Husband told her the agreement was just a formality and he would always take care of her. She took the agreement to an attorney whom she claims Husband paid, who advised her that he did not have time to fully examine it in the days remaining before the wedding. Wife did not consult another attorney or postpone the wedding, but spoke and met with Husband and his counsel about the agreement more than once. She agreed to sign it after a life insurance benefit was increased and the alimony provisions were modified to provide for increases for each year of marriage. The agreement provided that in the event of a divorce, Wife would receive a basic alimony amount to be adjusted for the number of years of marriage, and assets would belong to whomever owned the property originally or received it during the marriage. At the time the agreement was executed, Wife had a high school education and was working as a restaurant hostess, while Husband had a college degree and owned and operated a business. Wife had a net worth of approximately $10,000 and Husband's net worth at the time of the agreement's execution was at least $8,500,000. The record shows that Husband's net worth, as of 2002, appeared to be approximately $22,700,000. After 18 years of marriage and the birth of four children, Husband filed an action for divorce in 2003 and sought to enforce the prenuptial agreement. The trial court held the prenuptial agreement enforceable and incorporated that holding in its final judgment, ruling in accordance with the agreement that Wife was entitled to $2900 per month in alimony for four years and Husband was entitled to all the assets with which he entered the marriage and all assets accumulated during the marriage. This appeal is from that judgment.¹

Three factors are to be considered in deciding the validity of a prenuptial agreement: "(1) [W]as the agreement obtained through fraud, duress or mistake, or through misrepresentation or nondisclosure of material facts? (2) [I]s the agreement unconscionable? (3) Have the facts and circumstances changed since the agreement was executed, so as to make its enforcement unfair and unreasonable?" Scherer v. Scherer, 249 Ga. 635(3), 292 S.E.2d 662 (1982). "Whether an agreement is enforceable in light of these criteria is a decision made in the trial court's sound discretion. [Cit.]" Alexander v. Alexander, 279 Ga. 116, 117, 610 S.E.2d 48 (2005).

1. With regard to the first factor, Wife claims the agreement is infected with fraud, duress, and nondisclosure of material facts.

A. Fraud. The alleged misrepresentation forming the basis of the fraud claim was a statement Wife avers Husband made to induce her to enter into the agreement, an assertion that the agreement was just a formality and a promise that he would "take care" of her. To avoid the general rule that "in the absence of special circumstances one must exercise ordinary diligence in making an independent verification of contractual terms and representations, ..." (Hubert v. Beale Roofing, 158 Ga.App. 145, 146, 279 S.E.2d 336 (1981)), Wife asserts that by virtue of their engagement, she and Husband had a confidential relationship which excused her from the duty to verify Husband's statement. While it is true that spouses enjoy a confidential relationship entitling one to repose confidence and trust in the other (Beller v. Tilbrook, 275 Ga. 762(3), 571 S.E.2d 735 (2002)), Georgia law has not recognized the existence of a confidential relationship between persons who have agreed to marry. A majority of jurisdictions which have addressed the issue have recognized a special relationship between persons engaged to be married that imposes a higher duty with regard to contracts between the parties than exists between other contracting parties. Cannon v. Cannon, 384 Md. 537, 865 A.2d 563 (2005); Griffin v. Griffin, 94 P.3d 96, 2004 OK CIV APP 58 (2004); In re Estate of Hollett, 150 N.H. 39, 42-43, 834 A.2d 348 (2003); In re Marriage of Drag, 326 Ill.App.3d 1051, 1056, 261 Ill.Dec. 184, 762 N.E.2d 1111 (2002); Wiley v. Iverson, 295 Mont. 511, 517, 985 P.2d 1176 (1999); Randolph v. Randolph, 937 S.W.2d 815, 821 (Tenn.1996); Fletcher v. Fletcher, 68 Ohio St.3d 464, 466, 628 N.E.2d 1343 (1994); Carpenter v. Carpenter, 19 Va.App. 147, 152, 449 S.E.2d 502 (1994); Pajak v. Pajak, 182 W.Va. 28, 33, 385 S.E.2d 384 (1989); Tiryakian v. Tiryakian, 91 N.C.App. 128, 132, 370 S.E.2d 852 (1988); Rosenberg v. Lipnick, 377 Mass. 666, 389 N.E.2d 385 (1979); Merrill v. Merrill's Estate, 275 Or. 653, 656, 552 P.2d 249 (1976); Allison v. Stevens, 269 Ala. 288, 112 So.2d 451 (1959). However, we believe Georgia law to be more consistent with the states that have rejected such a protective stance. See In re Marriage of Bonds, 24 Cal.4th 1, 27, 99 Cal.Rptr.2d 252, 5 P.3d 815 (2000); Eckstein v. Eckstein, 129 A.D.2d 552, 553, 514 N.Y.S.2d 47 (N.Y.A.D.,1987). In deciding that prenuptial agreements should not be considered void as against public policy, this Court in Scherer v. Scherer, supra, put into place the factors quoted above which are to be considered in judging the validity to such agreements, but did not impose the additional burden of acting in "the utmost good faith," as would be required of persons in confidential relationships. OCGA § 23-2-58. Accordingly, we reject Wife's contention that there existed when the agreement was executed a confidential relationship between the parties which would relieve her of responsibility to verify representations regarding the meaning and content of the agreement.

Applying the rule requiring ordinary diligence in making an independent verification of contractual terms and representations (Hubert v. Beale Roofing, supra), Husband's alleged statement that the agreement was a mere formality cannot serve as a basis for a claim of fraud since Wife could ascertain from the clear terms of the agreement that her rights in the event of divorce would be extremely limited. "In the absence of a special relationship or confidence between parties, a matter equally open to the observation of all parties, such as the terms of a written contract, will generally not support a claim of fraud. [Cit.]" Equifax v. 1600 Peachtree, 268 Ga.App. 186, 195-196, 601 S.E.2d 519 (2004). Husband's alleged promise to take care of Wife is likewise insufficient as a basis for a claim of fraud because it amounts to no more than a promise regarding future action, which is not actionable. Id. at 195, 601 S.E.2d 519 (actionable fraud cannot be predicated upon promises to perform some act in the future or on a mere failure to perform promises made).

B. Duress. The duress Wife asserts was applied to compel her to execute the agreement was that the marriage would not occur in the absence of the prenuptial agreement and she would be left pregnant and unmarried. As was prefigured in the concurrence penned by then-Presiding Justice Sears in Alexander v. Alexander, supra, 279 Ga. at 118, 610 S.E.2d 48, we conclude that insistence on a prenuptial agreement as a condition of marriage "does not rise to the level of duress required to void an otherwise valid contract." Id. at 118, 610 S.E.2d 48. See also In re Marriage of Murphy, 359 Ill.App.3d 289, 295 Ill.Dec. 831, 834 N.E.2d 56 (2005) (merely conditioning marriage upon the execution of an antenuptial agreement does not give rise to duress); Doig v. Doig, 787 So.2d 100, 102-103 (Fla.App. 2 Dist.2001) (ultimatum that without the agreement there would be no wedding does not, in itself, constitute duress); Liebelt v. Liebelt, 118 Idaho 845, 848, 801 P.2d 52 (1990) (refusal to proceed with the wedding unless the agreement was signed would not constitute duress). Compare Holler v. Holler, 364 S.C. 256, 268, 612 S.E.2d 469 (2005) (pregnant, non-English-speaking wife without employment or funds or ability to consult with counsel, and with expiring visa signed agreement written only in English under duress). 34;`Duress which will avoid a contract must consist of threats of bodily or other harm, or other means amounting to coercion, or tending to coerce the will of another, and actually inducing him to do an act contrary to his free will.' [Cit.] `The threats must be sufficient to overcome the mind and will of a person of ordinary firmness.' [Cit.]" Tidwell v. Critz, 248 Ga. 201, 203, 282 S.E.2d 104 (1981). Nothing in the record of this case suggests that Wife's free will was overcome by the "threat" of not going through with the wedding. In fact, Wife exercised her free will and declined to sign the agreement in the form it was presented to her, acquiescing only when changes were made improving her position in the event of divorce or Husband's death. The fact of Wife's pregnancy does not make Husband's insistence on the agreement rise to the level of duress. She had already demonstrated her willingness to terminate the pregnancy, so she cannot credibly claim the pregnancy put such pressure on her as to overcome her will.

C. Nondisclosure of material facts. Attached to the...