Opinion ID: 895787
Heading Depth: 2
Heading Rank: 2

Heading: Substantive Enforceability

Text: [¶ 39] Even if a premarital agreement has been validly and voluntarily obtained, its substantive effect may be unconscionable and thus unenforceable. Under NDCC 14-03.1-06(3), the substantive enforceability of these premarital agreements is a matter of law to be decided by the court. [¶ 40] Lavilla contends these premarital agreements were substantively unconscionable for their harshness and one-sidedness. Lavilla values the decreed distribution to her of the right of occupancy of residence-main floor unit[ ] of the duplex at $30,000, the household goods at $3,000, their joint bank account at $2,000, and the auto at $400, for a total of $35,400. Lavilla compares her estimated $35,400 distribution to the $280,000 in assets Emanuel disclosed to her in 1987. Lavilla contends this is less than 13% of Emanuel's estate and is certainly a low percentage based on the length of marriage and time that Lavilla committed to the marriage in caring for Emanuel and providing companionship. Lavilla thus argues the trial court should have declined to enforce the premarital agreements because they will violate public policy by allowing Emanuel's heirs to take an estate worth approximately $300,000 (or larger because of appreciated value) and leave Lavilla with only a life estate in the home, household belongings, a small bank account and a used car. [¶ 41] Emanuel's children question the $30,000 value Lavilla places on her lifetime occupancy of the residence-main floor unit[], but we observe it was not separately evaluated in the filed inventory and appraisement, nor was the value determined by the trial court. Anyway, the children insist, a court need not determine the appropriate values to determine whether this agreement is unconscionable as a matter of law. The children say that Lavilla and Emanuel were only married for six years at the time of his death and ... after Emanuel had acquired all the assets that are the subject of this estate, and that Lavilla knew that it was a condition of their marriage for his property to go to his children and grandchildren. [¶ 42] Lavilla mainly contends her outlined financial circumstances will force her onto public assistance. NDCC 14-03.1-06(2) authorizes, [i]f ... a premarital agreement modifies or eliminates spousal support and that modification ... causes one party ... to be eligible for support under a program of public assistance at the time of separation or marital dissolution, a court, notwithstanding... the agreement, may require the other party to provide support to the extent necessary to avoid that eligibility. [5] Without any conflicting evidence, Lavilla's affidavit would permit an inference of her need for public assistance in the near future. [¶ 43] Lavilla's affidavit said, based upon the reduced amount of my social security and lack of other substantial assets received from Emanuel[] Lutz's estate, I expect to soon have to seek some type of public assistance. The children did not submit any affidavit or other evidence to dispute Lavilla's, but simply argue here that NDCC 14-03.1-06(2) does not apply because [t]his subsection only applies if a party to a premarital agreement is eligible for public assistance `at the time of separation or marital dissolution,' and [t]here is no reference in this section to death. [¶ 44] However, the Prefatory Note to the Uniform Premarital Agreement Act, the identically worded source of NDCC 14-03.1-06(2) explains: [I]f a provision of a premarital agreement modifies or eliminates spousal support, and that modification or elimination would cause a [spouse] to be eligible for support under a program of public assistance at the time of separation, marital dissolution, or death, a court is authorized to order the other party to provide support to the extent necessary to avoid that eligibility. 9B U.L.A. 370 (1987)(our emphasis). In view of her undisputed affidavit, whether Lavilla's financial circumstances will actually make her eligible for public assistance is a factual inquiry that precludes summary judgment in this case. While unconscionability of a premarital agreement is a matter of law to be decided by the court, NDCC 14-03.1-06(3), a conclusion of unconscionability necessarily turns on factual findings about the relative property values, Lavilla's other financial circumstances, and her ongoing needs. [¶ 45] Also, [n]otwithstanding the other provisions of NDCC ch. 14-03.1, if the trial court finds that the enforcement of [these] premarital agreement[s] would be clearly unconscionable, the trial court may refuse to enforce the agreement[s], enforce the remainder of the agreement[s] without the unconscionable provisions, or limit the application of an unconscionable provision to avoid an unconscionable result. NDCC 14-03.1-07. This additional standard for when premarital agreements are clearly unconscionable, supplements the standards in NDCC 14-03.1-06 and, together, they require complete factual findings about the relative property values, Lavilla's other resources, and her foreseeable needs. [¶ 46] We remand for trial of whether Lavilla procedurally executed these premarital agreements voluntarily and whether they are unconscionable in their substantive application to her.