Marriage of Matson, Matter of, 52049-6
| Decision Date | 31 December 1986 |
| Docket Number | No. 52049-6,52049-6 |
| Citation | 730 P.2d 668,107 Wn.2d 479 |
| Parties | In the Matter of the MARRIAGE of James T. MATSON, Petitioner, Judith A. Matson, Respondent. |
| Court | Washington Supreme Court |
Halverson & Applegate, P.S., Donald Bond, Yakima, for petitioner.
Walters, Whitaker, Finney & Falk, Ronald Whitaker, Yakima, for respondent.
Petitioner James Matson challenges a Court of Appeals decision voiding his prenuptial agreement with respondent Judith Matson. We affirm the Court of Appeals and remand the case for further proceedings.
Judith Matson worked for James Matson as a secretary during the 1969 legislative session when he was a member of the Washington State Senate. Judith subsequently moved to Yakima and filed for divorce from her husband in July 1969. James recommended Judith use his personal attorney as her attorney for the divorce. This attorney was also petitioner's business attorney and friend.
In the early part of 1970, James and Judith became engaged to marry. During this same period, around February, James began discussing his desire for a prenuptial agreement with Judith. He told her he wanted to protect the interest of his three sons from his previous marriage in his estate. James' specific intent of making certain everything obtained in the future would be separate and go to his sons was not relayed to respondent.
In early March 1970, James asked his attorney to prepare a prenuptial agreement for the upcoming marriage. The attorney testified he was representing James in this transaction. Shortly after, in the week before their marriage, the couple met with the attorney on two occasions to discuss prenuptial agreements. The first meeting on March 17, 1970 (4 days before the wedding) was to discuss the nature of the prenuptial agreement, the need for it, the effect of it, and the property involved. The attorney and the couple reviewed, paragraph by paragraph, a sample prenuptial agreement.
On the eve of the wedding, the couple met again to execute the prenuptial agreement. The attorney had drafted a prenuptial agreement which provided all income and earnings derived from petitioner's separate property would remain separate, as would any increases in value to that property. At this time, the couple was given separate copies of the agreement to read through before meeting with the attorney. The attorney did not advise Judith to seek independent counsel but did say to both parties, if "[y]ou want somebody else to look at this, fine." In addition, paragraph 15 of the agreement stated (just above the couple's signatures):
This agreement is being signed only after having been read completely by each party, and after each has had an opportunity to seek advice and counsel of his or her own choosing.
After being advised of the nature and value of the other's property, both parties signed the prenuptial agreement. Judith did not receive a copy of the agreement. James testified that if Judith had objected to signing the agreement on the eve of the wedding it would have been delayed until an unobjectionable agreement could have been prepared. The couple was married the next day on March 21, 1970.
At the time of the agreement, James owned one-half of the shares of stock in the Matson Fruit Company and real estate in Yakima County consisting of approximately 44 acres (part in orchard). This property was worth about $330,000. Petitioner's net worth, as of the trial date, was approximately $830,000. Judith, on the other hand, owned only her personal effects.
In June 1983, James Matson petitioned for dissolution of the couple's marriage. He requested the court divide their property in accordance with the prenuptial agreement. Judith Matson then challenged the validity of that agreement.
Following a hearing limited to this issue, the trial court upheld the validity of the prenuptial agreement even though it found the agreement "grossly disproportionate in favor of the petitioner ..." The Court of Appeals reversed, 41 Wash.App. 660, 705 P.2d 817, holding the agreement void. The key issue before us is whether either court applied the appropriate legal standard regarding prenuptial agreements.
A prenuptial agreement, created freely and intelligently is regarded as "conducive to marital tranquility and the avoidance of disputes about property in the future." Friedlander v. Friedlander, 80 Wash.2d 293, 301, 494 P.2d 208 (1972). Although prenuptial agreements are not directly authorized by statute, we have long recognized the right of the members of a prospective marital community to contract between themselves regarding their property. Washington State Bar Ass'n, Community Property Deskbook § 18.1 (1977); Comment, Antenuptial and Postnuptial Contracts in Washington, 54 Wash.L.Rev. 135, 137-38 (1978). If fair and fairly made, we have held prenuptial agreements between competent parties to be valid and binding. Whitney v. Seattle-First Nat'l Bank, 90 Wash.2d 105, 579 P.2d 937 (1978); Hamlin v. Merlino, 44 Wash.2d 851, 272 P.2d 125 (1954).
Preliminarily we observe that if a prenuptial agreement merely operated to direct that the separate property of each party was to remain the separate property of each party, RCW 26.09.080, which deals with disposition of property and liabilities, would control and all property (separate and community) would be before the court for a just and equitable distribution. However, if, as here, the prenuptial agreement operates to waive the marital partners' statutory right to an equitable distribution, a different analysis will take place. A prenuptial agreement of this kind must be achieved only without the attendant dangers of abuse and overreaching by the dominant party. Friedlander, 80 Wash.2d at 301, 494 P.2d 208.
During the past 30 years, we have developed a two-pronged analysis for evaluating the validity of a prenuptial agreement. First, the court must decide whether the agreement provides a fair and reasonable provision for the party not seeking enforcement of the agreement. If the court makes this finding, then the analysis ends and the agreement may be validated. This was the situation in Whitney. Because the agreement was fair and reasonable and because the challenging party had not shown fraud or overreaching, there was no need to advance to the second prong of the analysis. Whitney v. Seattle-First Nat'l Bank, supra 90 Wash.2d at 111, 579 P.2d 937.
The second prong of this analysis involves two tests derived from our past cases. Whitney, at 110, 579 P.2d 937. See In re Marriage of Hadley, 88 Wash.2d 649, 565 P.2d 790 (1977); Friedlander v. Friedlander, supra; Hamlin v. Merlino, supra. The two tests are:
(1) whether full disclosure has been made by [the parties] of the amount, character and value of the property involved, and (2) whether the agreement was entered into fully and voluntarily on independent advice and with full knowledge by [both spouses of their] rights....
Whitney, 90 Wash.2d at 110, 579 P.2d 937 (quoting Hadley, 88 Wash.2d at 654, 565 P.2d 790).
Although the earlier cases of Friedlander and Hamlin appeared to require each party be represented by independent counsel, we indicated in Whitney that the actual standard should be applied on a case-by-case basis.
A clear and important distinction certainly exists between saying that in particular circumstances a transaction could not be supported in the absence of independent advice, and saying that a general rule of equity exists which makes independent advice indispensable to the validity of transactions between persons occupying a fiduciary relationship.
Where it is plainly shown that a transaction was fair and free from objectionable influence, and especially where the person supposed to have been at a disadvantage is shown to have been of strong and independent mind and in a position to form an intelligent judgment, a requirement that in addition he must have had independent advice "would seem to be arbitrary and unnecessary."
Whitney, 90 Wash.2d at 109, 579 P.2d 937 ().
We further observed:
Whitney, at 108, 579 P.2d 937 (quoting Hamlin, 44 Wash.2d at 864, 272 P.2d 125).
The demise of the rule in this state that the husband was deemed to be the sole manager of all community property in favor of the "equal manager" concept (see RCW 26.16.030) has not resulted, however, in the demise of a fiduciary duty. Rather, the duty has become gender neutral. Cf. RCW 26.16.210. To uphold the validity of a prenuptial agreement under Washington law still requires full disclosure by both parties of all aspects of each party's assets, with the agreement entered into fully and voluntarily on independent advice and with full knowledge by each spouse of the individual rights of each party. Whitney, 90 Wash.2d at 110, 579 P.2d 937.
In the second prong of the prenuptial agreement test, the circumstances or procedure surrounding the execution of the agreement are the crucial factors. The bargaining positions of the parties, sophistication of the parties, presence of independent advice, understanding of the legal consequences and rights, and timing of the agreement juxtaposed with the wedding date are some of the factors involved in the circumstances surrounding the document signing. Thus, even though our state laws have, in theory, reached equality of the sexes (see, e.g., Const. art. 31 (Equal Rights Amendment) and RCW Title 26 (domestic relations)), the status of the relationship between the two parties entering into the agreement requires...
To continue reading
Request your trial
-
Marriage of Bonds, In re
...more closely when one spouse has waived all rights to property acquired during the marriage (see, e.g., Matter of Marriage of Matson (1986) 107 Wash.2d 479, 730 P.2d 668). This is another factor that is present here, since Sun waived her right to community property.8 Similarly, another prac......
-
In re Estate of Smid
...Cal.Rptr.2d 252, 5 P.3d at 826-27; Lutz, 563 N.W.2d at 97-98; Kahn v. Kahn, 756 S.W.2d 685, 695 (Tenn. 1988); In re Marriage of Matson, 107 Wash.2d 479, 730 P.2d 668, 671 (1986); Button v. Button, 131 Wis.2d 84, 388 N.W.2d 546, 551 [¶ 48.] Based on these authorities, and considering South D......
-
Lasater v. Guttmann
... ... largely upon Guttmann's alleged financial malfeasance during the marriage. Soon thereafter, on November 14, 2005, Guttmann filed for divorce, also ... 12 A hearing was held, after 5 A.3d 85 which the court held the matter sub curia. On December 19, 2008, the court entered an order granting ... W.3d 723, 731 (Tex.App.2009)); and Washington ( In re Marriage of Matson, 107 Wash.2d 479, 484, 730 P.2d 668 (Wash.1986)). The majority of these ... ...
-
McAlpine v. McAlpine
... ... About a week prior to their marriage in 1989, Michael McAlpine and Jonnie Fox signed an antenuptial agreement ... hold that antenuptial waivers of permanent alimony are invalid as a matter of public policy would be illogical because permanent alimony is granted ... Gant, 174 W.Va. 740, 329 S.E.2d 106 (1985); Matson v. Matson, 107 Wash.2d 479, 730 P.2d 668 (1986); Hengel v. Hengel, 122 ... ...
-
§ 4.03A Points of Disagreement and Other Concerns
...1991). Ohio: Rowland v. Rowland, 74 Ohio App.3d 415, 599 N.E.2d 315 (1991). Washington: Matter of Marriage of Matson, 107 Wash.2d 479, 730 P.2d 668 (1986); Friedlander v. Friedlander, 80 Wash.2d 293, 494, P.2d 208, 213 (1970). In such states, to be enforceable, an agreement must either be f......
-
Chapter A. Restrictions On Property Subject to Succession
...in determining intent under the current statute. See Chapter 4, §B.3.a. 26 Phelps, 54 Wash. L. Rev. 135. 27 In re Marriage of Matson, 107 Wn.2d 479, 730 P.2d 668 (1986); Friedlander v. Friedlander, 80 Wn.2d 293, 494 P.2d 208 (1972); Hamlin v Merlino, 44 Wn.2d 851, 272 P.2d 125 (1954); In re......
-
Table of Cases
...13.10(5), 13.11(2)(a), 13.11(2)(b) Matsas, In re Estate of, 46 Wn.2d 266, 280 P.2d 678 (1938): 13.3(1)(d) Matson, In re Marriage of, 107 Wn.2d 479, 730 P.2d 668 (1986): 4.5(2)(a), 4.5(2)(b), 4.5(2)(c) McCuen, In re Estate of, 137 Wn.App. 1017, No. 57452-3-I, 2007 WL 512541 (Feb. 20, 2007): ......
-
Table of Cases
...817 (1985) . . . . . . . . . . . . . . . . . . . . 54.04[5][b] TABLE OF CASES [References are to sections] Matson, In re Marriage of, 107 Wn.2d 479, 730 P.2d 668 (1986) . . . . . 9.03[2], [a], [b]; 54.04[5][b]; 71.03[1] Matsuo v. United States, 416 F. Supp. 2d 982 (D. Haw. 2006) . . . . . .......