Penrod v. Penrod
Appeal from Circuit Court of Cape Girardeau to Missouri Court of Appeals – Eastern District
ED109069
Filed May 18, 2021
Outcome: Trial Court Ruling Affirmed
K. Penrod (hereinafter “Wife”) and W. Penrod (hereinafter “Husband”) were married on May 22, 1997 and separated on or about January 10, 2018. Prior to their marriage, the couple had been living together for one year. On May 21, 1997, a day before the wedding, Husband presented wife with a pre-nuptial agreement[1] to sign off on. Husband also provided wife with a personal finance statement.
The terms of the pre-nuptial agreement included that neither party was entitled to maintenance, support and/or alimony from the other. Additionally, any real estate not put in their joint names was not marital property. Husband also noted in the pre-nuptial agreement that he was going to transfer most of his real estate holdings into a revocable trust. The agreement also included a formula, which given the length of their marriage, grants Wife a one-time payment of $50,000 upon dissolution of their marriage.
Wife reviewed the pre-nuptial agreement with an attorney but not her regular attorney because he was not available. It is undisputed that Wife was not rushed while at attorney’s office, was aware she was signing an prenuptial agreement, and did not ask the attorney any questions. Wife signed the agreement that evening.
Wife on the other hand, did not provide Husband with a list of her assets. However, Husband acknowledged his awareness of Wife’s assets and waived any financial disclosure. During their marriage, the parties acted in accordance with the prenuptial Agreement and kept almost all of their property separate. Wife also used her own funds to create three LLCs and a revocable living trust during their marriage.
The parties separated in January 2018. In 2019 a trial was held on the dissolution of marriage and Wife’s assertion that the pre-nuptial agreement was invalid. The trial court issued its Judgment Dissolving Marriage on February 24, 2020 and found the pre-nuptial agreement to be valid.
With regards to the pre-nuptial agreement, Wife raised two points on appeal: (1) the trial court erred in finding the prenuptial Agreement to be valid because the agreement was both procedurally and substantively unconscionable and (2) the trial court erred in its division of their marital assets because it relied upon an unconscionable Pre-nuptial Agreement.
In Point 1, Wife argues that the pre-nuptial agreement was unconscionable since there was not full disclosure by both parties, she had insufficient time to review the agreement, and she was unable to secure effective counsel. Wife further contends the agreement was substantively unconscionable because she was granted a one-time payment of $50,000 in lieu of the rights she would otherwise be afforded upon dissolution of their marriage.
The Appellate Court rejected Point 1. The Appellate Court held that each party’s assets were properly disclosed since they had been living together for a year prior to the marriage during which time they had discussed their assets and husband’s desire to have a pre-nuptial agreement written up before the marriage. The Appellate Opinion also rejected that the pre-nuptial agreement was invalid since Wife never disclosed any of her assets to Husband before entering into the agreement. While Wife is correct that both parties are required to disclose their assets, the Appellate Court raised the concern of perverse consequences of one party intentionally refused to disclose their assets in an attempt to invalidate the pre-nuptial agreement later.
The Appellate Court also held that Wife had enough time to review the agreement. The parties had discussed entering a pre-nuptial agreement several times in the year preceding their marriage. The record supports the fact that Wife was offered additional time to review the document if needed, and the wedding itself could have been easily rescheduled at the courthouse.
Substantial evidence from the trial court indicates that Wife had access to counsel to review the pre-nuptial agreement with her Wife declined to waive her attorney-client privilege to allow her attorney to testify. Accordingly, the trial court could have inferred that her attorney’s testimony would not support Wife’s testimony.
Finally, the Appellate Court noted that paying Wife only $50,000 in financial settlement at the time of the divorce was not substantially unconscionable. “Pre-nuptial have been found to be unconscionable when “the agreement attempts to totally take from one of the spouses his or her presumed right to marital property.” In the present case, the parties kept their property separate throughout the marriage and pursuant to the agreement, Wife kept her trust and three LLC’s as her separate property.
With regards to Point 2, Wife argued that the marital property should not have been divided pursuant to RSMO 452.330 rather than according to the terms of the pre-nuptial agreement. The Appellate Court noted that: “Section 452.330.2(4) states marital property does not include property excluded by valid written agreement of the parties.” The Appellate ruling also emphasized that since the pre-nuptial agreement was found to be valid, the statute would not apply.
[1] Referred to as “ante-nuptial agreement” in the appellate opinion.
