Opinion ID: 1213750
Heading Depth: 1
Heading Rank: 4

Heading: alimony, support & attorney's fees

Text: The issue we must decide is whether a prenuptial agreement purporting to waive alimony, support, and attorney's fees is void and unenforceable as against the public policy of this state. Recent case law of this Court supports Husband's contention that parties are free to contractually alter the obligations which would otherwise attach to marriage. In Stork v. First Nat'l Bank of South Carolina, 281 S.C. 515, 516, 316 S.E.2d 400, 401 (1984), this Court held that antenuptial agreements will be enforced if made voluntarily and in good faith and if fair and equitable.... Such contracts are not opposed to public policy but are highly beneficial to serving the best interest of the marriage relationship. Similarly, in Moseley v. Mosier, 279 S.C. 348, 306 S.E.2d 624 (1983), we addressed a family court's jurisdiction over a separation agreement which had not been merged into the parties' divorce decree. This Court directly acknowledged that, although subject to family court approval, that the parties may contract concerning their property settlement, and alimony, and that they may agree to any terms they wish as long as the court deems the contract to have been entered fairly, voluntarily and reasonably. 279 S.C. at 353, 306 S.E.2d at 627. More recently, in Gilley v. Gilley, 327 S.C. 8, 488 S.E.2d 310 (1997), the husband brought an action for an order of separate maintenance and support, equitable distribution, and attorney's fees. Although the validity of the prenuptial agreement was not at issue in Gilley, this Court affirmed the family court's finding that husband's action did not belong in family court since the prenuptial agreement provided neither party could claim alimony or separate maintenance. As noted by the Court of Appeals in this case, [t]he current trend and majority rule allows parties to prospectively contract to limit or eliminate spousal support. 348 S.C. at 94, 558 S.E.2d at 269, citing Pendleton v. Fireman, 24 Cal.4th 39, 99 Cal.Rptr.2d 278, 5 P.3d 839, 845-46 (2000); Allison A. Marston, Planning for Love: The Politics of Premarital Agreements, 49 Stan. L. Rev. 887, 897-99 (1997). As noted in Richard A. Lord, 5 Williston on Contracts § 11:8 (4th ed.) (May 2003): In the past two decades ... the courts have reconsidered... public policy in light of societal changes, and today, premarital agreements, so long as they do not promote divorce or otherwise offend public policy, are generally favored as conducive to the welfare of the parties and the marriage relationship as they tend to prevent strife, secure peace, and adjust, settle, and generally dispose of rights in property. Accord Cary v. Cary, 937 S.W.2d 777, 782 (Tenn.1996) (declaring agreements waiving or limiting alimony enforceable, so long as the antenuptial agreement was entered into freely and knowledgeably, with adequate disclosure, and without undue influence or overreaching); Marriage as Contract and Marriage as Partnership: The Future of Antenuptial Agreement Law, 116 Harv. L. Rev. 2075 (May 2003) (noting that states have shifted from holding antenuptial agreements per se invalid as contrary to public policy to holding them judicially enforceable). We concur with the majority of jurisdictions which hold that prenuptial agreements waiving alimony, support and attorney's fees are not per se unconscionable, nor are they contrary to the public policy of this state. [3] The Court of Appeals adopted the following test, to determine whether a prenuptial agreement should be enforced: (1) Was the agreement obtained through fraud, duress, or mistake, or through misrepresentation or nondisclosure of material facts? (2) Is the agreement unconscionable? (3) Have the facts and circumstances changed since the agreement was executed, so as to make its enforcement unfair and unreasonable? Citing Scherer v. Scherer, 249 Ga. 635, 292 S.E.2d 662, 666 (1982); Brooks v. Brooks, 733 P.2d 1044, 1049 (Alaska 1987); Gentry v. Gentry, 798 S.W.2d 928, 936 (Ky.1990); Rinvelt v. Rinvelt, 190 Mich.App. 372, 475 N.W.2d 478, 482 (1991). See also Blue v. Blue, 60 S.W.3d 585 (Ky.App.2001); Cantrell v. Cantrell, 19 S.W.3d 842 (Tenn.App.1999); Booth v. Booth, 194 Mich.App. 284, 486 N.W.2d 116 (1992). Applying these factors to the case at hand, the Court of Appeals found the agreement had been entered after fair and full disclosure, with advice from Wife's attorney, it was not unconscionable, and that circumstances had not so changed as to render the agreement unfair and unenforceable. We adopt this test and agree with the Court of Appeals' conclusion that the prenuptial agreement in this case was enforceable. It is patent that the agreement here was not obtained through fraud, duress, misrepresentation or nondisclosure. Wife was separately represented by her own counsel, by whom she was employed, was fully aware of the extent of husband's assets, and was advised by her attorney not to sign the agreement. As to unconscionability, this Court has held that unconscionability is the absence of meaningful choice on the part of one party due to one-sided contract provisions together with terms that are so oppressive that no reasonable person would make them and no fair and honest person would accept them. Munoz v. Green Tree Financial Corp., 343 S.C. 531, 542 S.E.2d 360 (2001); Fanning v. Fritz's Pontiac-Cadillac-Buick, Inc., 322 S.C. 399, 472 S.E.2d 242 (1996). Clearly, Wife here had a meaningful choice: she could have refused to sign the agreement and opted against marrying Husband if he insisted on a prenuptial agreement. Further, Wife received some substantial benefits from being married to Husband for the five-year duration of their marriage, such as a heightened standard of living, owning several homes, and driving luxury cars. Accord Gant v. Gant, 174 W.Va. 740, 329 S.E.2d 106, 116 (1985)(noting that marriage can be of substantial economic, as well as emotional value to a financially weak party). Lastly, the inquiry is whether the facts and circumstances changed since the agreement was executed, so as to make its enforcement unfair and unreasonable? The family court found Wife totally disabled and unable to support herself; it also found Wife would be a public charge if substantial support were not given. The Court of Appeals held the facts and circumstances at the time of enforcement of the agreement had not changed to such an extent that it was unfair or unreasonable to enforce the agreement. It stated: At the time Wife signed the agreement, she had serious health problems, including diabetes and sponge kidney disease. The premarital agreement specifically noted Wife's health problems. It was completely foreseeable to Wife that her health would worsen. Wife's attorney advised Wife not to sign the agreement because of her health problems. Although it is unfortunate that Wife's health has deteriorated, we do not find that fact alone sufficient to justify nullifying a contract Wife freely and voluntarily signed, fully aware that under its terms she would not receive any spousal support. 348 S.C. at 96, 558 S.E.2d at 270. Under the circumstances of this case, we agree with the result reached by the Court of Appeals. We concur with Husband that it would be unfair and inequitable to permit a party who, fully aware of serious health issues and declining health, knowingly signs a prenuptial agreement against the advice of her attorney, to thereafter recover alimony and/or support. Accordingly, we affirm the Court of Appeals' ruling in this case. [4] Finally, Wife asserts that if this Court affirms the Court of Appeals' holding that prenuptial agreements are valid and enforceable, our opinion should be given prospective application only as it creates new substantive rights. We disagree. Judicial decisions creating new substantive rights have prospective effect only, whereas decisions creating new remedies to vindicate existing rights are applied retrospectively; prospective application is required when liability is created where formerly none existed. Osborne v. Adams, 346 S.C. 4, 550 S.E.2d 319 (2001). We find the Court of Appeals' holding in this case does not create any new substantive rights. On the contrary, the Court of Appeals' holding is simply a matter of basic contract enforcement. Moreover, in light of our prior precedents of Stork, supra, and Gilley, supra, our holding in this case is not a departure from established precedent. The Court of Appeals' opinion is AFFIRMED AS MODIFIED. TOAL, C.J., MOORE, BURNETT and PLEICONES, JJ., concur.