April 23, 2021

US: Appeals court casts doubt on future of marriage agreements [case involves Cayman Islands]

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By Bob Collins From MPR News

One does not often find the marital intrigue contained in a decision today from the Minnesota Court of Appeals. Call it Kremer v. Kremer.

It’s the story of farmer Robbie Kremer and his wife, Michelle, who agreed to get married in 2001 after a few years of living together.

Mr. Kremer had some money — his farming assets were valued at almost $650,000. Mrs. Kremer worked at a gas station and, later, at her husband’s farm.

Back when they were living together, Mr. Kremer said he wouldn’t get married unless there was an antenuptial agreement in place. But apparently there were no further discussions and the couple planned a destination wedding in the Cayman Islands in March 2001.

Family and friends had already paid the airfare and lodging expenses to attend.

But none of them — or, apparently, Mrs. Kremer — knew that Robbie had had at least six meetings with an attorney to draw up an agreement.

Three days before they were to travel to the Cayman Islands, he gave her a signed agreement and told her to contact an attorney.

She couldn’t get an appointment with one until they day before they were to leave, but she signed the deal which “foreclosed any claims to spousal maintenance and provided that marital property would be divided “in proportion to the actual monetary consideration provided by each [party].”

Off they flew to the Caymans, where they were married on March 6.

After the wedding, Mrs. Kremer worked more part-time outside the home and less on the farm, where she mostly drove the combine, bringing seed out to the field, making meals for farm workers, and mowing the lawn. Wife also maintained the house, purchased groceries, and cared for the children.

By late 2009, the value of the farm in Nobles County was worth nearly $2 million. But by the following April, the marriage hit the rocks when the wife filed for divorce, arguing that the agreement she signed was invalid because it was presented to her under duress and coercion.

After a two-day trial in late 2014, a judge agreed, ruling the husband should pay permanent spousal maintenance and rejecting his argument that the husband had “dissipated” $1.5 million of farm assets illegally. Mrs. Kremer’s cut of the property amounted to $750,000.

Today, a divided Minnesota Court of Appeals upheld most of the ruling.

The majority on the three-judge panel said Minnesota law excludes marital-property rights from the scope of rights able to be addressed by an antenuptial agreement.

As found by the district court, husband “used the wedding deadline to create an atmosphere of pressure that resulted in the [wife] not having an adequate opportunity to negotiate any of the terms of the premarital agreement.” And the record shows that husband did so even though he had spent a month communicating with his lawyer and revising the agreement before presenting it to wife. The findings of fact supporting the district court’s determination that wife was subject to coercion and duress are supported by the record.

Certainly, the fact that wife was advised of her rights by a lawyer (even if not her preferred lawyer) weighs in favor of validity of the agreement. However, the issue of unfair influence or duress is also relevant, and the district court’s findings touching on that issue are supported by the record. Under Kinney’s multifactor procedural-fairness test, we are not left with the firm and definite conviction that the district court erred. And because a lack of procedural fairness is fatal to the validity of the agreement, we affirm the district court’s decision invalidating the antenuptial agreement.

However, the panel sent the case back to district court to include the wife’s potential earning power in the calculation for spousal maintenance.

In a dissent, however, Judge Carol Hooten said the decision undercuts Minnesota’s long history of favoring the validity of these kinds of agreements.

She said the decision would “invite parties to litigate every antenuptial agreement addressing marital property, in contravention of the legislature’s intent in enacting the statute.”

For more on this story go to: http://blogs.mprnews.org/newscut/2017/01/appeals-court-casts-doubt-on-future-of-marriage-agreements/

 IMAGE: Cayman Islands FILE
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