Texas Court Finds Prenuptial Agreement Was Enforceable

Texas Court Finds Prenuptial Agreement Was Enforceable

Originally published by Robert Epstein.

By

Texas law generally favors the freedom of contract.  This principle also applies to prenuptial agreements.  In Texas divorce cases, prenuptial agreements are generally valid and enforceable unless they were involuntarily signed or were unconscionable and signed without proper disclosures.

A wife recently challenged the enforceability of a prenuptial agreement. The couple met online while the wife lived in Vietnam.  When the husband visited Vietnam, he gave her a copy of the prenuptial agreement his attorney drafted.  The wife did not speak English, so she had it translated.  She requested a change to the agreement.

The wife came to the U.S. and told the husband she was pregnant a few months later.  He told her she needed to sign the agreement before they got married. The husband stated a paragraph was removed from the agreement based on the wife’s request.

 

He took her to a Vietnamese-speaking attorney for a consultation. The husband paid the fee, but was not there for the consultation.  The parties signed the prenuptial agreement in the attorney’s office after the consultation.

The wife filed for divorce in 2015.  The trial court found the prenuptial agreement was enforceable and incorporated it into the final divorce decree.  The wife appealed, arguing the agreement was unconscionable, involuntarily signed, and violated both federal law and the Texas Constitution.

In support of her unconscionability argument, the wife asserted she was pregnant “when it was made clear” she had to sign or go back to Vietnam.  She also argued it was unconscionable to “forc[e] a mother to accept a likely future in which her child would seldom see his father,” especially when both “would be at risk of shame and humiliation” in Vietnam.  She said she thought her child’s life would be better in Texas.  She argued it was unconscionable to require her to sign to avoid having to go back to Vietnam. She claimed taking her to a lawyer found in the yellow pages was just “window dressing.”  She asserted she was more unsophisticated than the husband and did not speak English.  She also argued he had not disclosed information about his assets and liabilities.  Finally, she argued it was a one-sided agreement.

When reviewing unconscionability, courts consider the circumstances, including available alternatives, bargaining ability, illegality or public policy against the contract, and whether it is “oppressive or unreasonable.” When reviewing prenuptial agreements, courts may consider age and maturity, business and educational backgrounds, and prior marriages.  The court will generally enforce a voluntarily-entered contract unless there is mistake, fraud, or oppression.

The wife knew the husband expected a prenuptial agreement before she met him in person. She testified they commonly discussed it after their engagement.  He gave her a copy when he was in Vietnam in the summer of 2007.  They executed the agreement in August 2008. The appeals court found she knew about the prenuptial agreement long before she arrived in the U.S. and became pregnant.

The court found the wife’s various reasons for not wanting to return to Vietnam did not make the agreement unconscionable. There was no evidence the mother or the child would be in danger there.

The appeals court also rejected the mother’s argument regarding her attorney. She argued the attorney could not have performed independent due diligence, such as finding out the property values.  The appeals court found no evidence that information was necessary or the wife did not already know it.  She testified she understood the terms of the agreement.

The wife argued the husband had not disclosed information about his assets and liabilities.  There was testimony the husband had disclosed.  Even if he had not, it would not make the agreement unconscionable.  Lack of disclosure is the second prong of the test and only matters once the agreement is found unconscionable.

The appeals court also rejected the wife’s argument she was less sophisticated and had less bargaining power.  Both parties were mature adults.  Although she had less formal education, the wife had owned and operated two businesses in Vietnam.

An agreement is not unconscionable just because it is one-sided or unfair. The appeals court found no evidence of mistake, fraud, or oppression.

There was no error in the trial court’s finding the agreement was not unconscionable.

The wife also argued the agreement was not voluntarily executed. In reviewing voluntariness, courts consider whether the party had an attorney’s advice, whether there were misrepresentations, what information was provided, and whether anything was withheld.  She argued her attorney had not had opportunity to study the agreement, analyze the information about the assets and liabilities, and “review the immigration agreements.”  The appeals court found no evidence the attorney did not have sufficient time to review the agreement.  Both the wife and the attorney testified she understood the agreement’s terms. She did not claim she received incompetent legal advice.

The appeals court rejected her claim the agreement was involuntary because it contained material misrepresentations regarding whether it disclosed the value of assets and liabilities.  There was evidence the husband had disclosed the information regarding the assets and liabilities.

The wife also argued she was under duress because she did not want to return to Vietnam.  The appeals court noted duress is only a defense to a contract if it involves a threat to do something the party has no right to do.  The husband did not have a legal duty to marry the wife, so his threat not to marry her if she did not sign did not constitute duress.

The wife argued the agreement violated federal law because it conflicted with the affidavit of support the husband signed.  She argued the affidavit created an obligation requiring the husband to use all of his assets to support her, while the prenuptial agreement only obligated him to use community property.  The appeals court found any obligation created by the affidavit ended when she became a citizen.  The appeals court also rejected the wife’s argument the agreement violated the Texas Constitution.

The appeals court affirmed the trial court’s judgment.

If you are facing a divorce involving a prenuptial agreement, an experienced Dallas divorce attorney can assist you.  Call McClure Law Group at 214.692.8200 to set up a consultation.

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.



Read More –>