Sabad v. Fessenden

• Decision Date: 22 May 2003
• Citation: 825 A.2d 682
• Court: Pennsylvania Superior Court
• Parties: Michael G. SABAD, Appellant v. Elizabeth A. FESSENDEN, Appellee Michael G. SABAD, Appellee v. Elizabeth A. FESSENDEN, Appellant

825 A.2d 682

Michael G. SABAD, Appellant v. Elizabeth A. FESSENDEN, Appellee Michael G. SABAD, Appellee v. Elizabeth A. FESSENDEN, Appellant

Superior Court of Pennsylvania.

Argued January 15, 2003.

Filed May 22, 2003.

Mark R. Galzerano, Alquippa, for Sabad.

Lori K. Doerr, Butler, for Fessenden.

Before: DEL SOLE, P.J., MUSMANNO, and KELLY, JJ.

KELLY, J.:

¶ 1 In this opinion, we are called upon to determine whether the parties' antenuptial agreement was valid and enforceable under the law of New York and Pennsylvania, whether the agreement was an effective waiver of rights to alimony, whether the agreement provided full and fair disclosure of the parties' assets and set forth the parties' statutory rights, whether the agreement's enforceability was limited to testamentary disposition, and whether a party can effectively waive rights to the equitable distribution of the marital portion of pension plans which are subject to ERISA.¹ We conclude that the parties' agreement was valid and enforceable under the law of New York and Pennsylvania, that it was not an effective waiver of the parties' rights to alimony, that it provided full and fair disclosure, that it was intended to address the treatment of the parties' respective property both during their lifetime and upon their death, and that it represented an effective waiver of their rights to equitable distribution of the marital portion of their pension plans that are subject to ERISA. Accordingly, we affirm in part, reverse in part, and remand the case for further proceedings consistent with this opinion.

¶ 2 The relevant facts and procedural history of this case, gleaned from the record, are as follows. Appellant, Michael G. Sabad ("Husband"), and Appellee, Elizabeth A. Fessenden ("Wife"), lived together in New York for approximately six years prior to their marriage on February 8, 1991. This was the second marriage for both parties; Husband had one child from his first marriage. On January 30, 1991, the parties entered into an antenuptial agreement, drafted by a New York attorney, while both were residents of New York. In 1998, the parties moved to Tennessee and then to Pennsylvania, where they separated in 2000. Husband filed a complaint in divorce on July 17, 2000, seeking equitable distribution, spousal support, alimony pendente lite, alimony, attorney's fees, costs and expenses. Wife filed an answer and counterclaim, raising the issue of equitable distribution and exclusive possession of the marital residence. The parties were eventually divorced on January 19, 2001, without prejudice to the parties' other claims. Since the parties' separation, Husband has relocated to Santa Claus, Indiana and Wife has relocated back to New York, New York.

¶ 3 On March 13, 2001, Wife filed a motion for special relief, asserting that "after the filing of Inventory & Appraisement forms by both parties, it is clear that [there] exists a dispute as to the interpretation of the language of the parties' Antenuptial Agreement, since former Wife excludes all of each part[y's] separately owned assets from `marital property,' and former Husband includes all assets no matter when acquired or how titled, in the definition of `marital property."' (Motion for Special Relief, filed 3/13/01, at 1). On April 2, 2001, Husband filed his Answer to Wife's motion and a request for declaratory judgment, stating: "[T]he document which purports to be an Antenuptial Agreement is void for divorce purposes, is unenforceable except for testamentary disposition purposes, and is not applicable to the Parties' divorce case according to Pennsylvania case law." (Answer and Motion for Declaratory Judgment, filed 4/2/01, at 2).

¶ 4 On August 8, 2001, the court ordered the parties to file briefs on the issue of whether New York law or Pennsylvania law should be applied to the interpretation of the January 30, 1991 antenuptial agreement. Having reviewed the parties' briefs, the court entered an order on October 31, 2001, which stated that the issue of the validity of the agreement would be determined under New York law and all other issues regarding the agreement's interpretation would be determined under Pennsylvania law. On January 30, 2002, the court took testimony regarding the validity and the effect of the parties' agreement.² Following the hearing, the court reviewed new briefs on the matter and on May 24, 2002, entered its findings of fact and conclusions of law on the record. Therein, the court stated that the January 30, 1991 agreement was valid and binding, and an effective antenuptial waiver of rights in equitable distribution and alimony, except as to equitable distribution of the marital portion of the parties' pension plans, which are subject to ERISA. On June 20, 2002, Husband filed timely notice of appeal with this Court from the May 24, 2002 order; on July 2, 2002, Wife filed notice of cross-appeal.

¶ 5 On appeal at No. 1111 WDA 2002, Husband presents the following questions for our consideration:

DID THE TRIAL COURT ERR WHEN IT FOUND THAT THE ANTENUPTIAL AGREEMENT BETWEEN THE PARTIES WAS A VALID, BINDING AND ENFORCEABLE AGREEMENT UNDER NEW YORK AND PENNSYLVANIA LAW?

DID THE TRIAL COURT ERR WHEN IT FOUND THAT THE AGREEMENT WAS AN EFFECTIVE WAIVER OF RIGHTS TO ALIMONY?

DID THE TRIAL COURT ERR WHEN IT FOUND THAT THE AGREEMENT PROVIDED FULL AND FAIR DISCLOSURE OF THE PARTIES' ASSETS AND FINANCIAL CONDITIONS AND THAT THE AGREEMENT SET FORTH THE STATUTORY RIGHTS WHICH THE PARTIES WERE RELINQUISHING BY SIGNING THE AGREEMENTS?

DID THE TRIAL COURT ERR WHEN IT DID NOT LIMIT THE AGREEMENT'S ENFORCEABILITY TO ISSUES CONCERNING TESTAMENTARY DISPOSITION ONLY?

(Husband's Brief at 4).

¶ 6 On cross-appeal at No. 1141 WDA 2002, Wife proposes the following issue for our review:

WHETHER THE TRIAL COURT ABUSED ITS DISCRETION BY FINDING THAT THE AGREEMENT WAS NOT AN EFFECTIVE WAIVER AS TO THE EQUITABLE DISTRIBUTION OF THE "MARITAL" PORTION OF PENSION PLANS THAT ARE SUBJECT TO ERISA?

(Wife's Brief at 4).

¶ 7 "The determination of marital property rights through prenuptial, post-nuptial and settlement agreements has long been permitted, and even encouraged." Laudig v. Laudig, 425 Pa.Super. 228, 624 A.2d 651, 653 (1993). Where a prenuptial agreement between the parties purports to settle, fully discharge, and satisfy any and all interests, rights, or claims each party might have to the property or estate of the other, a court's order upholding the agreement in divorce proceedings is subject to an abuse of discretion or error of law standard of review. See Busch v. Busch, 732 A.2d 1274, 1276 (Pa.Super.1999),

appeal denied, 563 Pa. 681, 760 A.2d 850 (2000) (citing Laudig, supra). An abuse of discretion is not lightly found, as it requires clear and convincing evidence that the trial court misapplied the law or failed to follow proper legal procedures. Paulone v. Paulone, 437 Pa.Super. 130, 649 A.2d 691 (1994). We will not usurp the trial court's fact-finding function. Laudig, supra.

¶ 8 In his first issue, Husband asserts that the parties' antenuptial agreement is not valid under New York law because it is manifestly unfair to Husband. Husband argues that the terms of the agreement are unconscionable. Husband maintains that there was no full and fair disclosure of the parties' assets. Husband complains that the agreement failed to set forth the statutory rights the parties were relinquishing by signing the agreement. Husband indicates that he was not represented when he signed the agreement. Husband also complains that the agreement failed to provide for a division of property in the event of divorce. Husband states that the agreement failed to provide any guidance in the event of divorce because "there is no mention in the agreement of the words divorce, separation, property distribution, alimony, alimony pendente lite, maintenance, spousal support, counsel fees, costs or any other claims which are usually involved in a divorce action." (Husband's Brief at 16). Further, Husband complains the agreement does not state what happens to the increase in value of the "separate property" of the parties. Husband concludes, therefore, the trial court erred when it found that the antenuptial agreement between the parties was a valid agreement under New York law and enforceable under Pennsylvania law. We disagree.

¶ 9 With regard to the issue of whether New York or Pennsylvania law should apply to the question of the validity of the antenuptial agreement, the trial court reasoned in its October 31, 2001 opinion as follows:

In Griffith v. United Air Lines, Inc., 416 Pa. 1, 203 A.2d 796 (1964), the Pennsylvania Supreme Court adopted the principles of the Restatement of Conflicts Second to address conflict of law questions. The general provisions concerning choice of law are set forth in Section 6 of the Restatement and the more specific provisions regarding contracts are set forth in Section 188. The beginning point of our analysis is the fact that Pennsylvania has no statutory directive concerning the choice of law on these issues. This being the case the general principles involved are set forth in Section 6(2). Applicable to this situation is 2(d) "the protection of justified expectations." It can be reasonably inferred that the alleged agreement was entered in contemplation of marriage which occurred in New York State on February 8, 1991, some five days after the agreement. Parties do not enter contracts with the expectation that they are invalid or void. They are entered with an anticipation of a valid enforceable agreement. It is reasonable to anticipate that [Husband] and [Wife] in this case intended their agreement to be valid. In further analysis of this situation we looked to Section 188. It is our conclusion that of the factors set forth in Section 188, New York State has the most significant contacts. It is the place of contracting, the place of negotiation, one of the many places which parties

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