Smetana v. Smetana

• Decision Date: 10 January 2007
• Docket Number: No. 24045.,24045.
• Citation: 726 N.W.2d 887,2007 SD 5
• Parties: Joyce A. SMETANA, Plaintiff and Appellee, v. Robert D. SMETANA, Defendant and Appellant.
• Court: South Dakota Supreme Court

726 N.W.2d 887

2007 SD 5

Joyce A. SMETANA, Plaintiff and Appellee, v. Robert D. SMETANA, Defendant and Appellant.

No. 24045.

Supreme Court of South Dakota.

Considered on Briefs November 27, 2006.

Decided January 10, 2007.

Richard A. Johnson, Gregory T. Brewers of Strange, Farrell & Johnson, P.C., Sioux Falls, SD, for plaintiff and appellee.

E. Steeves Smith of Tinan, Smith and Bucher, Mitchell, SD, for defendant and appellant.

GILBERTSON, Chief Justice.

[¶ 1.] Robert D. Smetana appeals the property division in a judgment and decree of divorce from Joyce A. Smetana. He contends that the trial court erroneously invalidated the antenuptial agreement between the parties and improperly awarded Joyce attorney fees. We affirm in part and reverse and remand in part.

FACTS AND PROCEDURE

[¶ 2.] Robert and Joyce were married on September 8, 1978. At the time of marriage, Robert was fifty-two years old and Joyce was forty-four years old. This was a second marriage for both parties. Prior to the marriage, Joyce had obtained a bachelor's degree in Psychology and Elementary Education and a master's degree in Special Education and Reading. She worked at Delmont Public Schools and later the Mental Healthcare Center in Mitchell and Dakota Wesleyan University. After the marriage, Joyce continued to work outside of the home until 1986. She also assisted in the farming operation by disking, combining and acting as a "gopher" for Robert. In addition, Joyce attended to the gardening, cleaning, cooking and laundry. The farming operation incorporated in 1980, and in 1988, Joyce assumed the duties of bookkeeper for Smetana Farms, Incorporated.

[¶ 3.] Robert owned and operated farms in North Dakota until 1967 when the machinery and equipment were sold. Thereafter, the North Dakota farmland was rented out. The trial court did not include any of the North Dakota land as marital property. Robert moved to South Dakota in 1957 and began purchasing land there. In 1963, Robert purchased land from E.F. Colfax on a fifteen-year contract for deed. This contract, however, was not paid off until October 1988, ten years after the marriage. Although a portion of the value of this land was deemed pre-marital, approximately forty percent was included in the marital estate.

[¶ 4.] Also, in 1973, Robert purchased 17 acres from Melvin Potthast by warranty deed. He completely paid for this parcel before the marriage. However, eighty percent of the value of the Potthast land was included in the marital portion. Robert acquired another 233.94 acres of land in South Dakota by two contracts for deed from William and Joe Hank in 1974. One contract, for 155.87 acres, was paid in full in 1976, about two years before Robert and Joyce married. The other contract, for 78.07 acres, extended until March 1, 1981. The record reflects that half of this contract for 78.07 acres was paid before the marriage. However, eighty-four percent of the value of the entire 233.94 acres was included in the marital estate as Robert's property. At the time of the marriage, Robert owned and operated this land in South Dakota. After the marriage, Robert acquired another 163 acres of land, which was all included in the marital estate as Robert's property.

[¶ 5.] Two days before their marriage the parties entered into an antenuptial agreement prepared by Joyce's attorney. The entire antenuptial agreement consisted of the following language:

This antenuptial contract entered into this 6th day of September, 1978, between Robert D. Smetana of Fulton, South Dakota, hereinafter for convenience referred to as Husband, and Joyce Funkhauser King of Mitchell, South Dakota, hereinafter for convenience referred to as Wife, Witnesseth:

I. Husband and Wife intend to marry each other soon, and it is agreed that after such marriage, all of the properties of any name or nature, real, personal or mixed, wherever they may be found, belonging to Husband before marriage shall be and remain forever his personal estate, and that this shall include all interest, rents, and profits which may in time accrue or result in any manner from increase in value, or be collected for the use of the same in any way.

II. All properties of any name or nature, real, personal or mixed, wherever the same shall be found which belong to Wife before marriage shall be and remain forever her personal estate, and this shall include all interest, rents, and profits which may in time accrue or result in any manner from increase in value, or be collected for the use of the same in any way.

III. Each party agrees to sign with the other, all title paper, deeds or other papers necessary to transfer property when sold to a purchaser, in any event, it is necessary that such title papers be executed by a man and wife, either in the State of South Dakota or any other State, and this courtesy shall be prompt at any time and in any place.

IV. Husband agrees to, from his own personal estate, assume necessary expense of support and maintenance of Wife.

V. Nothing herein shall be construed to be a bar to either party to this agreement, giving any property of which they may be possessed to the other party by will or otherwise. Each party to this agreement shall control their personal estate as described herein, and do with the properties thereof whatsoever they wish and will, by his or her orders or directions or by will, the same as either could or would do if no marriage existed between them. That upon the demise of each party, their personal estates shall pass by their individual Wills, or by law to their individual heirs, and each party waives any claim participation they may otherwise be entitled to by law in the estate of the other.

The antenuptial agreement did not set forth in detail or even list what Joyce and Robert each owned prior to the marriage. After receiving briefs from both parties, the trial court found that the agreement was ineptly drawn and did not adequately disclose the nature and extent of either Joyce's or Robert's assets or liabilities. The court further found that Joyce did not have a reasonable approximation of the magnitude of Robert's wealth and the agreement did not contain adequate provisions for Joyce in the event of divorce. Therefore, the court concluded that the antenuptial agreement was invalid as unconscionable. The court further mentioned that "the values to be received by the parties would make little if any difference at all in any final division if the court were to hold the antenuptial agreement valid or invalid."

[¶ 6.] After twenty-five years of marriage, Joyce filed for divorce on June 21, 2003. During the course of the trial, the court made rulings on several disputed property issues. At the conclusion of the trial, the court awarded Joyce one fourth of her attorney's fees, approximately $6,600. Robert appeals:

1. Whether the trial court erred when it invalidated the antenuptial agreement.

2. Whether the trial court abused its discretion when it awarded Joyce attorney fees.

STANDARD OF REVIEW

[¶ 7.] "An issue of unconscionability of a premarital agreement shall be decided by the court as a matter of law." SDCL 25-2-21(b). "We review question[s] of law under the de novo standard." Sanford v. Sanford, 2005 SD 34, ¶ 12, 694 N.W.2d 283, 287 (citations omitted). "Findings of fact, reviewed under the clearly erroneous standard, will not be overturned unless the reviewing court is left with a firm conviction that a mistake has been made." Godfrey v. Godfrey, 2005 SD 101, ¶ 11, 705 N.W.2d 77, 80 (citation omitted). "An award of attorney fees is reviewed under the abuse of discretion standard." Crisman v. Determan Chiropractic, Inc., 2004 SD 103, ¶ 24, 687 N.W.2d 507, 513 (citing City of Sioux Falls v. Johnson, 2003 SD 115, ¶ 6, 670 N.W.2d 360, 362).

ANALYSIS AND DECISION

[¶ 8.] 1. Whether the trial court erred when it invalidated the antenuptial agreement.

[¶ 9.] It must first be noted that "antenuptial agreements are favored in law since they allow parties to protect the inheritance rights of their respective children by prior marriages and thus prevent subsequent strife over the disposition of their respective estates." Schutterle v. Schutterle, 260 N.W.2d 341, 347 (S.D.1977), superseded by statute on other grounds, SDCL 19-13-3, as recognized in State v. Catch the Bear, 352 N.W.2d 640, 645 (S.D. 1984) (citations omitted). Taking this fact into consideration, this Court first set forth the criteria for determining the enforceability of antenuptial agreements in Schutterle when it stated,

[s]ome courts appear to have established a hard and fast rule that there must have been a full and frank disclosure by the prospective husband to his prospective wife concerning the nature and extent of his property before an antenuptial agreement will be held to be valid and binding as against the wife. We conclude, however, that the better rule is that under which an antenuptial agreement will be held valid if the prospective spouse can be said to have had adequate knowledge of the nature and extent of the other party's property, either as a result of disclosure by the other party or through the independent knowledge, however acquired, of the prospective spouse, or if the prospective spouse has been adequately provided for by the agreement.

260 N.W.2d at 348 (citations omitted). In Schutterle, "the trial court found that although Ralph had made no disclosure to Edna of the exact extent and value of his estate prior to their marriage, Edna had learned during their courtship that Ralph owned land, livestock and farm machinery in South Dakota." Id. This Court was persuaded by the totality of the circumstances that Edna "had sufficient knowledge of the nature and extent of Ralph's property to satisfy the alternative tests of disclosure or independent knowledge." Id. at 349.

[¶ 10.] "The validity of an antenuptial agreement is to be decided on the basis of the facts of each case." Ryken v. Ryken (...