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New Cases: Marriage of Melissa and Marriage of Facter

by Michael Tobriner on November 13, 2013

in Family Law,Mediation,Spousal Waivers

We have two recent cases talking about the validity of premarital agreements as a whole and the validity of spousal support waivers included in premarital agreements – two different but related sets of analysis. The cases are Marriage of Facter, a January 2013 case from Marin County and the First District Court of Appeal, and Marriage of Melissa, a December 2012 case from the Fourth District Court of Appeal.

Some history

Here’s a nice summary from Melissa of the evolution of the law on the validity of spousal support waivers:

“Thus, over the past 25 years the case law and statutory rules regarding spousal support waivers has evolved significantly. The rules and underlying public policy regarding support waivers has swung like a pendulum from the one extreme of complete prohibition, to the other extreme of being condoned but highly regulated with technical requirements and safeguards. While we no longer believe prenuptial agreements containing spousal support waivers encourage dissolution or will harm society, we are also well aware of the need for safeguards to ensure fairness and voluntariness.”

Results

Melissa involved a 1985 PMA that waived spousal, so the court said we have to apply the law in effect at that time. (The waiver was invalid.) Facter went off on a severance issue. Mr. Facter in effect conceded that the spousal support waiver in his PMA was invalid, but he wanted to sever the presumably invalid waiver from the part of the PMA that made all of his marital earnings his separate property. The Marin trial court said no severance, but the appeals court said yes.

He or she who represents him or herself has a [you fill it in] for a client

Two interesting features in Facter:  First, it shows once again that unless he or she can’t afford it, the party who represents him or herself, shouldn’t. Mr. Facter, a Harvard-trained lawyer with a six-figure income, drafted his own PMA without consulting counsel. The Agreement just didn’t do what he wanted it to and thought it did; litigation, inevitably, ensued.

What’s “unconscionable”?

Second, even though Mr. Facter in effect conceded the invalidity of the support waiver, the court found it necessary to decide whether the waiver would be “unconscionable at the time of enforcement” (Family Code Sec. 1615(c)) and therefore invalid. (The court conflates the question of whether enforcement would be “unjust”, which was the standard in effect at the time this PMA was signed, with the question of whether enforcement would be “unconscionable”, which is the standard now.) How to determine “unconscionability”? Well, said the court, let’s look at what spousal support would have been without the waiver, and let’s compare that to Ms. Facter’s present financial circumstances.

Conclusion:

“Compared to what she is likely to receive in court-ordered spousal support, these assets are manifestly inadequate. Given that Jeffrey’s self-reported separate property is now in excess of $10 million and his earnings $1 million per year, whereas Nancy amassed no separate property during the marriage and has no income at all, we have little difficulty in concluding that the Agreement’s spousal support waiver is presently unconscionable.”

But isn’t the whole idea of a support waiver to avoid a “need and ability to pay” analysis? And if that’s the analysis, won’t most support waivers fail?

What do you think?

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