Scherer v. Scherer
| Decision Date | 22 June 1982 |
| Docket Number | No. 38539,38539 |
| Citation | 292 S.E.2d 662,249 Ga. 635 |
| Parties | SCHERER v. SCHERER. |
| Court | Georgia Supreme Court |
Henry Angel, Savell, Williams, Cox & Angel, Atlanta, for Linda Hellstrom Scherer.
Edward E. Bates, Jr., Atlanta, for Robert Pauli Scherer, Jr. MARSHALL, Justice.
The parties to this divorce proceeding, Robert Pauli Scherer, Jr., and Linda Hellstrom Scherer, were residents of the State of Michigan when they married in 1976. Immediately prior to their marriage, they executed an antenuptial agreement. The agreement states that it is to be construed and enforced in accordance with the laws of the State of Michigan. However, the parties subsequently became Georgia residents, and Robert filed the present complaint for divorce against Linda in the Fulton Superior Court. Both parties filed motions for partial summary judgment on issues concerning the enforceability and construction of the antenuptial agreement. The trial judge granted Robert's motion, and we granted Linda's application to appeal. The facts are:
When Robert and Linda married in 1976, it was the second marriage for both of them. Linda had one minor child by her former marriage, and Robert had four minor children by his former marriage.
By gift and inheritance, Robert owned and controlled 21.4% of the stock in R. P. Scherer Corporation, with a market valuation of approximately $20,000,000. This corporation was founded by Robert's father in Detroit, Michigan, in 1933. Although it was originally a closely-held family corporation, it later became a public corporation with its stock traded on the over-the-counter market. Robert was the chief executive officer and chairman of the board of this corporation.
Robert desired to keep the stock in this corporation in the Scherer family, and to effectuate this he and Linda executed an antenuptial agreement on the evening before their marriage. Under this agreement, Robert's stock in the R. P. Scherer Corporation is referred to as the "Scherer stock," which is defined to include "any proceeds or other property received from any sale or exchange of such stock or any part thereof, and any proceeds from sale or exchange of such other property, and the principal of any investments from any such proceeds." Insofar as is material to the issues raised here, the provisions of the agreement provide as follows:
In 1979, a disagreement developed between Robert and other members of the Board of Directors of the R. P. Scherer Corporation concerning the management of the company. As a result, in December of 1979 certain segments of the business conducted by the R. P. Scherer Corporation were incorporated under the name Storz Instrument Company. Robert transferred all of his stock in the R. P. Scherer Corporation to that corporation, and all of the stock in Storz Instrument Company was transferred to Robert. The main offices of the Storz Instrument Company were located in Atlanta, and Robert and Linda moved to Atlanta.
In December of 1980, Robert filed a complaint for divorce against Linda, stating that there were no minor children born of the marriage and requesting a divorce on grounds that the marriage was irretrievably broken. Linda filed an answer, admitting that the marriage was irretrievably broken and requesting, among other things, an equitable division of property as well as support for herself and her minor child. A divorce on the pleadings was granted, with the remaining issues reserved for later disposition.
Linda filed a motion for partial summary judgment, seeking enforcement of the antenuptial agreement by requesting Robert to pay her the sum of $531,264 plus interest. Robert filed a cross-motion for partial summary judgment, seeking a declaration that the antenuptial agreement was unenforceable in this state, or, in the alternative, an interpretation of the agreement under which Linda would be entitled to no payment from Robert as a result of their divorce.
The trial court entered an order denying Linda's motion for partial summary judgment, and granting Robert's cross-motion to the extent of ruling that the antenuptial agreement is enforceable and that Linda released any rights and/or interests which may have resulted from the marriage of the parties with respect to the Scherer Stock as defined by the agreement.
1. Although the agreement itself states that it is to be construed according to the laws of the State of Michigan, in this proceeding both of the parties seek to have the enforceability of the agreement determined under the laws of the State of Georgia. In addition, as pointed out in Division 2, infra, the enforceability of antenuptial agreements is, of course, a matter of public policy. And it would appear that where the enforcement of a contract in this state draws public-policy considerations into question, those public-policy considerations will be determined according to the laws of this state. See Nasco, Inc. v. Gimbert, 239 Ga. 675(2), 238 S.E.2d 368 (1977) and cits. Code Ann. § 102-108. For these reasons, we determine the enforceability of this agreement under Georgia law.
2. Davies, Validity of Prenuptial Contracts Which Fix Alimony, 14 Ga.State Bar Journal 18, (1977) (referred to hereinafter as Prenuptial Contracts). See also Note, The Impact of the Revolution in Georgia's Divorce Law on Antenuptial Agreements, 11 Ga.L.Rev. 406 (1977) ().
Although prior Georgia decisions have upheld antenuptial agreements in which a spouse waived his or her rights in the other spouse's estate at death, Nally v. Nally, 74 Ga. 669 (1885); Holmes v. Liptrot, 8 Ga. 279 (1850), antenuptial agreements in contemplation of divorce have been held invalid on the ground that such agreements are contrary to the policy of this state to hinder facility in the procurement of divorces. Reynolds v. Reynolds, 217 Ga. 234(6), 123 S.E.2d 115 (1961) and cits.
However, with the advent of no-fault divorce laws and the changes in society which such laws represent, courts in other jurisdictions have begun re-evaluating the question of whether antenuptial agreements in contemplation of divorce...
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