Kremer versus Kremer

The Minnesota Supreme Court upheld a lower court decision invalidating an antenuptial agreement.

The story

For almost three years, Robbie and Michelle lived together as a couple on a farm in Fulda, Minnesota. Robbie owned and operated a farming enterprise. Michelle had three children from a previous marriage. Robbie told Michelle that he would require an antenuptial agreement if they ever married. Michelle was ambivalent about such an agreement, and the parties did not discuss or negotiate any terms.

In August 2000, Robbie and Michelle decided to marry. They scheduled a destination wedding in the Cayman Islands for March 2001.

As the wedding approached, and without telling Michelle, Robbie contacted an attorney to prepare an antenuptial agreement. Robbie had a minimum of six contacts with the attorney over the course of at least a month. Without Michelle’s knowledge, he furnished the attorney with copies of her tax returns.

On February 26, 2001, at his attorney’s office, Robbie signed the antenuptial agreement (“the Agreement”). Later that day, he presented the Agreement to Michelle. Robbie made clear that if Michelle did not sign the Agreement, the wedding was off. The couple was scheduled to leave for the Cayman Islands just three days later. Family members had paid for their lodging and airfare to the destination, and some were already en route.

After being presented with the Agreement, Michelle attempted unsuccessfully to meet with the attorney who represented her in a previous divorce. On February 28, she met with a different attorney with whom she had no experience. The attorney explained the terms of the Agreement, her rights under the law, and the potential impact of the  Agreement upon dissolution of the marriage or Robbie’s death. After receiving legal advice, Michelle signed the Agreement. The next day, the couple left for the Cayman Islands to be married…

Robbie and Michelle had one child together, born in 2008. Over the course of the marriage, Michelle contributed to the farming operation, the value of which increased significantly. She did not herself earn much income.

The marriage did not endure. In 2010, Michelle petitioned for dissolution and moved to set aside the Agreement, arguing that it was unfair. 

The court majority

Analyzing the Agreement as a whole, we conclude that it was not “equitably and fairly made.” Specifically, two of the Kinney factors—whether the Agreement was supported by adequate consideration and whether the Agreement was procured by duress— weigh heavily in Michelle’s favor.

The consideration was unworthy of consideration.

In this case, the language of the Agreement appears equitable on its face given that “each party renounces any right to claim alimony or maintenance” and “[e]ach party shall retain his or her Property free of any right or claim of the other.” (Emphasis added.) But the circumstances reveal that these terms are patently one-sided. Here, Robbie came into the relationship with significant assets which increased in value over the course of the marriage, and Michelle came into the marriage with very little. If the Agreement were enforced, she would leave the marriage with very little. Yet Michelle contributed to Robbie’s farm operation throughout the marriage, maintained the household, and cared for the couple’s child. We cannot conclude that the consideration Michelle received for executing this Agreement was anywhere near adequate.

Duress

As the district court found, “there was an overreaching” because Robbie “intentionally created a situation where [Michelle] was pressured/coerced into signing” the Agreement. This finding is well-supported by the record. Michelle’s free will was overcome by Robbie’s threat to call off the wedding and the limited amount of time that Michelle had to consider the Agreement, consult with an attorney, and decide whether to sign it or not. Robbie knew that Michelle had reservations about signing an antenuptial agreement and that no terms had been negotiated. She was completely in the dark for more than a month while Robbie received legal advice and prepared the Agreement. Robbie presented Michelle with his signed Agreement a mere three days before they were scheduled to depart for their destination wedding. As a result, Michelle was left to scramble to find an attorney, with whom she met on the day before the couple’s departure.

Before the district court, Robbie attempted to discount the implications of his tactics, claiming that his attorney had advised him not to tell Michelle about the Agreement or its terms and that Michelle had every opportunity to negotiate. The district court did not find these assertions to be credible. To the contrary, the district court determined that Robbie intentionally created a situation that “took away [Michelle’s] ability to seek counsel of her own choice and receive and digest [an attorney’s] advice in any meaningful way.” These facts show that Robbie procured the Agreement by duress.

Justice Anderson dissented

 there is no explicit finding by the district court of duress. The district court found that Robbie intended to create that effect. But the district court did not find that Michelle’s will was actually overborne by the circumstances Robbie created. Rather, the district court found that Michelle did not have “an adequate opportunity to negotiate any of the terms of the . . . agreement.” Unlike in Kinney, where one spouse testified to feeling coerced, 733 N.W.2d at 120–21, the district court did not find that Robbie actually coerced
Michelle into signing the agreement. Assuming that the common-law factors from Kinney apply here, I would remand this case to the district court to make factual findings under the common-law standard in the first instance.

(Mike Frisch)