Enforceability of Prenuptial Agreements

Prenuptial agreements can be used to resolve issues related to spousal maintenance, equitable distribution, and other issues that may come up in the event the parties decide to divorce. While I have previously written about different issues involving validity and enforceability of prenuptial agreements, and how the courts would analyze them, a recent case raised an issue of what happens to the prenuptial agreement if a claim is made that the parties verbally agreed to revoke it.

In Braha v. Braha, 45 Misc 3d 1211(A) (Sup Ct. Kings Co. 2014), the wife claimed that the parties agreed to revoke their prenuptial agreement which was then torn in pieces and thrown off the honeymoon cruise ship. The agreement, which was entered by the parties shortly before the marriage after an engagement of less than three week, was signed by the bride after the groom told her that his father “threatened to cut him off” if he did not sign a prenuptial agreement. According to the wife, the parties never intended agreement to be enforceable and did not even attempt to negotiate it.

After twelve years of marriage, when the husband filed for divorce, he asked the court to enforce the agreement. The wife argued that she was fraudulently induced to sign the agreement after the husband told her that the agreement would never be enforced and that once on their honeymoon, the parties had torn up the agreement and threw it into the ocean. The husband pointed out to the court that both parties were represented by counsel and was able to produce an original agreement.

In rejecting the wife’s claims that parties orally agreed that they would not be bound by the agreement, the judge noted that the prenuptial agreement contained the boilerplate provision that:

This Agreement contains the entire understanding of the parties with respect to the matters set forth herein, including, without limitation, the rights of the party with respect to the property of the other party. There are no representations, warranties, promises, covenants or understandings, oral or otherwise, other than those expressly set forth herein.

The court further held that ripping up the agreement and throwing it into the ocean did not revoke the agreement since it provided that:

Neither this Agreement [nor] any provisions hereof, including without limitation, this article, may be altered, modified, terminated, or revoked, except by an instrument executed and acknowledged by both parties with the same formalities as this Agreement.

According to the terms of the agreement, the only way this agreement could have been revoked is in writing, signed and properly acknowledged by the parties.

The takeaway from Braha is that when it comes to prenuptial agreements, anything and everything has to be done in writing, signed and properly acknowledged. The parties should negotiate their agreements and not rely on oral statements. If there is a divorce action in the future, unless the agreement was properly revoked, it will be offered in court.

Validity of Prenuptial Agreements in New York

I have previously written about prenuptial agreements and issues associated with them. Generally, in New York, a prenuptial agreement may be overturned only if the party challenging the agreement sustains the burden of proof, demonstrating that the agreement was the product of fraud, duress, or it was improperly executed.

In order to prove coercion or duress, a party must establish that he or she was somehow pressured into signing the agreement.  The threat that there will be no marriage unless the agreement is signed is not duress according to numerous court decisions.  If both of the parties were independently represented by counsel, and the agreement was the product of arm’s length negotiations, it may be nearly impossible to prove that the prenuptial agreement was procured by duress.

However, a recent appellate decision, Cioffi-Petrakis v. Petrakis, 2013 N.Y. Slip. Op. 01057 (2nd Dept. 2013), broke with the long-established line of cases and upheld a Long Island judge’s decision to void an prenuptial agreement that the wife of a millionaire says she was forced into signing by false promises made by her husband-to-be, 4 days before the wedding. The wife claimed that she believed her husband to be when he told her orally that his lawyers had made him get a prenuptial agreement signed to protect his business and promised to destroy the document once they had children and put her name on the deed to the house. She also claimed that her future husband gave her an ultimatum four days before the wedding for which her father had already paid $40,000, telling her to sign the document or it wouldn’t occur.

While the appellate decision is extremely brief, the trial decision is fairly detailed and provided the facts stated above. The key factor according to the trial judge was what he called a fraudulently induced contract and detrimental reliance on the part of the wife. Fraudulent inducement was the oral promise made by the husband to be and, according to the trial court, the bride relied upon that promise. However, most agreements in New York provide that the parties are only relying on the written representations contained in the agreement, and they are not relying on promises or representations not contained in the prenuptial agreement.

This decision is unprecedented. It is likely to create a great deal of litigation in cases where a party feels that his or her prenuptial agreement is unconscionable. I also suspect that it may get appealed to the Court of Appeals.