Case Name: In the Matter of the Marriage of KNOLL, Respondent - Cross-Appellant, and KNOLL, Appellant - Cross-Respondent
Court: Oregon Court of Appeals
Jurisdiction: Oregon
Decision Date: 1983-11-09
Citations: 65 Or. App. 484
Docket Number: 29867; CA A25285
Parties: In the Matter of the Marriage of KNOLL, Respondent - Cross-Appellant, and KNOLL, Appellant - Cross-Respondent.
Judges: Before Buttler, Presiding Judge, and Warren and Rossman, Judges.
Reporter: Oregon Reports, Court of Appeals
Volume: 65
Pages: 484–493

Head Matter:
Argued and submitted July 8,
reversed and remanded for further proceedings November 9, 1983
In the Matter of the Marriage of KNOLL, Respondent - Cross-Appellant, and KNOLL, Appellant - Cross-Respondent.
(29867; CA A25285)
671 P2d 718
William M. Holmes, Bend, argued the cause for appellant - cross-respondent. With him on the brief was Gray, Fancher, Holmes & Hurley, Bend.
John S. Cavanagh, Portland, argued the cause for respondent - cross-appellant. With him on the brief was Bolliger, Hampton and Tarlow, Portland.
Before Buttler, Presiding Judge, and Warren and Rossman, Judges.
ROSSMAN, J.
Warren, J., dissenting.

Opinion:
ROSSMAN, J.
Husband appeals the trial court's invalidation of the antenuptial agreement entered into by him and his wife. We find the agreement to be valid and reverse the trial court. Our review in dissolution cases is de novo; however, we give deference to the trial judge's opportunity to observe the witnesses first hand. McCoy and McCoy, 28 Or App 919, 923-24, 562 P2d 207 (1977).
The parties began dating in 1976, when wife was living in Portland. At that time, husband was 40 years old and wife was 30. Both parties had been married before. Wife had been working for 12 years as a dental assistant. In May, 1976, she moved to Bend and began living with husband, who was involved in a variety of commercial enterprises. Eventually, wife began working for husband on his various projects. By the time the couple married, she had become quite knowledgeable about his businesses. She handled the bookkeeping and the payroll and was in charge of ten business checking accounts. She was actively involved in husband's construction business, arranging financing, monitoring progress, aiding with building inspections and marketing the completed houses. She even helped run husband's fish processing plant. She did not receive a salary for any of her services, which varied from part to full-time.
Anticipating marriage, the parties discussed the necessity for an antenuptial agreement in March, 1977. In April of that year, husband's attorney drafted an agreement and provided wife with a copy, urging her to seek independent counsel. This advice was repeated often over the next seven or eight months during the course of regular phone conversations between wife and husband's attorney concerning husband's business. In spite of those frequent urgings, wife testified that she failed to seek counsel or even to read the agreement. In December, 1977, just prior to their marriage in Reno, husband and wife signed the agreement and had it notarized. That document was subsequently lost, but in 1980, in response to an institutional lender's requirement that husband submit written evidence of the antenuptial agreement, the parties signed a duplicate and an affirmation, in which they acknowledged that the original document, signed in 1977, was in full force and effect. Although no one ever explained the agreement to wife section by section, husband did make it clear that he was trying to preserve his property for his children and to hold her harmless from any of his business debts. Wife's testimony on this issue differs substantially from husband's, but it was disregarded by the trial judge, because he found it not credible.
Antenuptial agreements are not only recognized in Oregon, they are favored. ORS 108.140; Coward and Coward, 35 Or App 677, 680, 582 P2d 834 (1978). But the fiduciary relationship existing between fiances requires
" good faith and a full and frank disclosure of all circumstances materially bearing on the contemplated agreement, generally including full disclosure of assets:
" 'The exercise of good faith necessitates disclosure by the prospective husband of all material facts relating to the amount, character and value of his property, so that the prospective wife may have sufficient knowledge on which to base her decision to enter into the agreement.' 2 Lindey, Separation Agreements and Ante-Nuptial Contracts 90-43, § 90 (1967) and many cases cited thereunder." Bauer v. Bauer, 1 Or App 504, 507-08, 464 P2d 710 (1970).
Ultimately, however, the validity of an antenuptial agreement depends on the circumstances of each particular case and the degree of sophistication possessed by the party against whom the agreement is being enforced. See Merrill v. Merrill, 275 Or 653, 656, 552 P2d 249 (1976); Kosik v. George, 253 Or 15, 452 P2d 560 (1969); Coward and Coward, supra.
Judged in the light of the circumstances in this case, and given wife's range of experience, we find the agreement valid. The agreement was invalidated by the trial court, because no one had provided wife with a detailed explanation of it. In the context of this case, we believe that such a requirement would be pushing husband far beyond what is legally required and into the realm of chivalry.
Wife was 30 years old and entering into her second marriage. She had worked outside the home for 12 years prior to moving to Bend and continued to do so in Bend, both before and after the wedding. She was advised of the necessity of a antenuptial agreement by husband at least nine months before the wedding. She knew that its purpose was to preserve husband's assets for his children and to protect her from husband's business debts. At least seven months before the wedding, she was given a copy of the actual agreement and was advised to seek independent counsel. That advice was repeated often. Moreover, she had great familiarity with husband's business. We are not attempting to say, as the dissent erroneously suggests, that wife was an expert on literally every aspect of husband's business. Such a statement would not only be hard to justify, it would add nothing to our decision. The sole reason for requiring a disclosure of assets is to advise the prospective spouse of the nature and amount of property that the antenuptial agreement will affect. Because husband's only substantial holdings were his business enterprises, wife's ongoing employment in those ventures provided her with an adequate disclosure. Accordingly, we find that she had a good understanding of the nature of husband's assets and realized that the assets had substantial value, although she may not have known his precise net worth.
We acknowledge that husband had more to gain from enforcing the agreement, and we agree with the dissent that he was subject to a fiduciary duty, but more than husband's duty is involved here. Wife had an obligation to take steps to protect her own interests. She was reminded of the importance of the agreement each time she was readvised to seek counsel. In spite of that, according to her, she never once even attempted to read the agreement or seek counsel during the seven months from the time the agreement was presented to her and the time she signed it. And yet, she now cries "foul" because she claims that she did not understand the full impact of the agreement. Intentional ignorance, if there was ignorance, should not be a basis for voiding the agreement; to do so would allow her to profit from her own neglect and would only encourage others to enter into antenuptial agreements blindly.
Wife relies heavily on the Kosik case to support her position. There, the parties were married only eight days after their first date. The wife had virtually no time to think over the agreement she was asked to sign, and she had not been advised to see a lawyer before signing the antenuptial agreement. Furthermore, she was completely unaware of Mr. Kosik's holdings. 253 Or at 17. This case is much closer factually to Coward and Coward, supra. Consistent with that case, we hold that the antenuptial agreement is valid.
Reversed and remanded for further proceedings not inconsistent with this opinion. Costs to appellant on the appeal. No costs to either party on the cross-appeal.
Wife raises other issues by cross-appeal, but we find it unnecessary to address them, given our disposition of the case.
The text of the antenuptial agreement was approximately seven typed pages and can be summarized as follows: Each party retained complete control of and responsibility for all separately owned property acquired before the marriage and all property acquired after the marriage by either party in his or her individual capacity, including debts incurred in connection with the property, as well as proceeds, rents and profits derived therefrom. Neither party acquired any rights of inheritance, dower, curtesy, homestead or other benefits provided for surviving spouses in the property of the other by virtue of marriage. Each party agreed to execute, on request, all necessary instruments to enable the other party or other party's heirs to bargain, sell or otherwise dispose of the other party's separate property, and each party acknowledged that he or she had given to and received from the other, a full, complete and satisfactory disclosure of assets.
Although this court's review is de novo, we choose to remand this case rather than modify the property division ourselves. Having invalidated the antenuptial agreement, the trial judge based his decree on an erroneous premise, which accordingly tainted the property division. Now that the status of the agreement has been determined, we find it appropriate in this case to remand, thus allowing the trial judge to make a different property division consistent with this holding.