Austin v. Austin

¶1In this appeal from a divorce judgment ending his twelve and one-half year marriage to Donna Austin, Craig Austin challenges the award of alimony to Donna, arguing that the waiver of alimony provision contained in the parties’ antenuptial agreement (agreement) was valid when made and must be enforced.1 We conclude that, on the facts of this case, the *720Probate Court judge’s decision invalidating the premarital waiver of alimony was not erroneous.

¶21. Background facts and proceedings. When the parties met in 1984, Donna was employed in the fragrance department of a department store and Craig was working in his family produce business, Sun Valley Produce Co., Inc. (Sun Valley). Eventually, Donna and her daughter from a prior marriage moved in with Craig. In 1988, concerned that the relationship would not result in marriage, Donna and her daughter moved out. Donna and Craig continued to see each other, however, and in January, 1989, they became engaged.

¶3Not long before the May, 1989, wedding date, Craig informed Donna that he wanted her to sign an antenuptial agreement as a condition of his offer of marriage, expressing concern about “his business interests with his family.” Donna and Craig exchanged financial statements, which then became exhibits to the agreement. Craig’s financial statement disclosed assets, on which he placed a total value of close to one million dollars, that included a fifty percent interest in Sun Valley; his condominium; an interest in two other real estate parcels; a fifty percent interest in two businesses owned with his brother Steven — Austin Sportswear, Inc. (established in 1984), and T"Shirt Academy of Nantucket (which commenced operation in 1989); as well as bank accounts and other liquid investments, two expensive automobiles, furniture, and furnishings. Donna had a modest net worth (a ten year old car, jewelry and furs, and a small bank account).

¶4The agreement contains waivers of alimony by both parties.2-3 The agreement usurped no rights of the parties with respect to any children that might be bom to them. The parties agreed that *721Craig would retain all of his separate property, as well as any “increase in value of property acquired in exchange” for his separate property. Any other property that might be acquired by the parties was subject to division under applicable divorce laws, including appreciation in value to the marital home.

¶5Donna was thirty-seven and Craig thirty-five years old when they were wed; each had been married once before. Following their marriage, the parties lived for a time in the Jamaica Plain section of Boston where, in April, 1991, their daughter was bom. In July, 1995, the family moved into a home they had built in East Sandwich on Cape Cod. This was the marital home at the time of the divorce. See note 2, supra. Craig continued to work at Sun Valley, but he also purchased and renovated a restaurant on the Cape, which commenced operation in December, 1999, as Amari’s Bar & Ristorante.

¶6Donna was employed outside the home for a brief period after the marriage. Following the birth of their daughter, the parties were in agreement that Donna should leave the workforce and become the primary caretaker of their daughter and a full-time homemaker.

¶7Donna initiated divorce proceedings in May, 2001, seeking an end to the marriage, custody of the parties’ minor child, support and alimony, and an equitable share of the marital estate. In his counterclaim, Craig sought enforcement of the parties’ agreement, custody of the minor child, and child support.

¶8A judge of the Probate and Family Court conducted a bifurcated trial, first considering evidence on the issue of the validity and enforceability of the antenuptial agreement. He concluded that provisions relating to property were valid but that the waiver of alimony provision was unfair and unreasonable when made and therefore not valid. The matter then proceeded to a trial on the merits of the divorce. Under the divorce judgment, Craig was assigned his separate property; the *722marital assets were apportioned between the parties.4 In addition, Donna was awarded child support in the amount of $500 per week and alimony in the amount of $1,000 per week. Craig appeals from the provisions of the judgment awarding alimony to Donna and providing for specified visitation between Craig and the minor child.

¶92. Discussion, (a) Visitation. Under the divorce judgment, the parties have joint legal and shared physical custody of the minor child, “although the child shall reside primarily with [Donna] during the school year.” The judgment includes detailed orders governing the times the child will spend with each parent and provides that during the school year, she is to reside with Craig from Sunday at 9:00 a.m. to Monday at 7:00 p.m.; during the summer, the period is extended to Tuesday at 9:00 p.m. Holidays and school vacation periods are likewise provided for. Describing this arrangement as a “minimal visitation arrangement,” Craig argues that the findings do not support the custodial arrangements ordered by the judge.

¶10A trial court’s broad discretion to fashion an appropriate custody or visitation arrangement will not be disturbed on appeal unless clearly wrong. See Rolde v. Rolde, 12 Mass. App. Ct. 398, 391 (1981) (judge ruling on custody and visitation has opportunity to observe and appraise both parents; discretionary order awarding sole custody to wife was not “clearly wrong”). See also Youmans v. Ramos, 429 Mass. 774, 787 (1999) (best interests standard applicable to child custody arrangements is classic example of discretionary decision). As we discern no abuse of that discretion here, we affirm those portions of the judgment relating to the custodial arrangements of the child.

¶11(b) Validity of alimony waiver. Although the right to vary the property rights of spouses by premarital contract has long existed at common law, see French v. McAnarney, 290 Mass. *723544, 547 (1935),5 until relatively recently most jurisdictions considered provisions in antenuptial agreements limiting liability for spousal support (whether during marriage or upon divorce) to be void as against public policy.6 This was, in part, because such agreements were seen as facilitating divorce. See id. at 548, and cases cited. Beginning in the 1970’s, however, courts began to uphold antenuptial agreements containing limitations on alimony noting that, with the increase in the rate of divorce and the advent of no-fault divorce laws in many States, there was no longer a strong public policy basis for voiding such agreements. See Clark, Jr., Domestic Relations in the United States § 1.9, at 48-49 (2d ed. 1987). See also Posner v. Posner, 233 So. 2d 381, 385 (Fla. 1970) (prenuptial limitation on alimony upheld subject, however, to same “change in circumstances” test applicable after divorce to postnuptial agreements), and other cases cited in Osborne v. Osborne, 384 Mass. 591, 597 (1981). Some courts regarded antenuptial agreements as ordinary contracts and concluded that such agreements should be enforceable to the same extent as, and subject only to limitations applicable to, commercial contracts.7 See, e.g., Simeone v. Simeone, 525 Pa. 392 (1990). That approach is reflected in the Uniform Premarital Agreement Act (UPAA), 9C U.L.A. 35 (Master ed. 2001), promulgated in 1983 by the National Confer*724ence of Commissioners on Uniform State Laws. Under the UPAA, an antenuptial agreement will be enforced unless it was entered into involuntarily or “unconscionable when it was executed.” UPAA § 6(a)(2), 9C U.L.A. 49.8

¶12Massachusetts decisional law has consistently adhered to the view that “[mjamage is not a mere contract between two parties, but a legal status from which certain rights and obligations arise.” DeMatteo v. DeMatteo, 436 Mass. 18, 31 (2002), citing Frenchv. McAnarney, 290 Mass. at 546.9 See Osbornev. Osborne, 384 Mass. at 599 (the freedom to limit or waive legal rights in the event of divorce “is not appropriately left unrestricted”). Rejecting the unconscionability standard that was contained in the UPAA, in part because it is used in commercial law, the Supreme Judicial Court observed that “[ajntenuptial agreements by their nature concern confidential relationships, and a standard for testing the validity of a business agreement seems to us inappropriate in this context.” DeMatteov. DeMatteo, supra at 33. See American Law Institute Principles of the Law of Family Dissolution: Analysis and Recommendations (ALI) § 7.04, Reporter’s Notes to comment g, at 982 (2002) (agreements about marriage are more likely than commercial agreements to involve special facts that test the limits of the bargain principle; effect of UPAA is “to narrow significantly the ability of courts to police extremely unfair agreements, even as compared to the ambit of judicial review in *725the commercial context”).10 Compare Wilcox v. Trautz, 427 Mass. 326, 334 (1998) (“agreement between [unmarried partners] is enforceable so long as it conforms with the ordinary rules of contract law, and a court is no more entitled to inquire into its fairness and reasonableness than it is in respect to contracts generally”).

¶13Instead, whether an antenuptial agreement is valid will depend upon whether it was “fair and reasonable” when it was executed, in addition to factors not at issue here, such as whether it was voluntarily made or based upon full disclosure. DeMatteov. DeMatteo, supra at 32-33. In the context of assessing the validity of an antenuptial agreement, the provisions for alimony need not approximate an award made pursuant to factors set forth in G. L. c. 208, § 34, applicable upon divorce. DeMatteov. DeMatteo, supra at 31. Rather, the test is whether an agreement “essentially strips the contesting spouse of substantially all of her marital interests.”11Id. at 37. As the court noted in its discussion of the enforceability of such agreements, chief among the marital rights to which a spouse is entitled upon marriage is the right to maintenance and support. Ibid.See Clark, Jr., Domestic Relations in the United States § 1.9, at 29 (1968) (support regarded “as an essential obligation of the marital relation, one having greater significance than property rights”).12

¶14Alimony by its nature is a right that does not exist prior to *726marriage; in many cases, it also does not derive from the separate property of a wealthy spouse, compare Osbornev. Osborne, supra,but from income earned during the marriage. Such income, and any asset purchased with that income, is an asset of the marriage. See Yousif v. Yousif, 61 Mass. App. Ct. 686, 698 (2004). As such, alimony is unlike premarital property, and a waiver of the right to receive alimony is a waiver not of a present, known right, but of a future right, the value of which may not be ascertainable for many years to come.13 In this respect, it is akin to property that may be acquired during the marriage by the joint efforts of the domestic partners: both may accumulate in value over time as the parties contribute to the marital enterprise, amassing both assets and increased earning power.

¶15Because enforcement of a valid antenuptial agreement may not occur until long after it was entered into, it is all the more important that parties entering into such agreements make appropriate provision for support if, in the light of the known and anticipated circumstances, it would be fair and reasonable to do so should the marriage end in divorce.14 It is for these reasons that, where an agreement seeks to deprive one party of interests *727that may accrue to the spouses through their combined efforts during their marriage, we will scrutinize the challenged provision to determine whether it was fair and reasonable when made.

¶16In so doing, we do not consider the circumstances at the time of the divorce, including whether either party has accumulated additional assets since the agreement was made. That inquiry occurs during the “second look” stage, when a court deciding whether and to what extent to enforce a valid term of the agreement must assess if it is “conscionable” to do so. DeMatteov. DeMatteo, 436 Mass. at 38.

¶17Whether a limitation on spousal support made prior to marriage was fair and reasonable when made must be determined with reference to the known circumstances of the parties at the time, as well as those circumstances reasonably foreseeable. See DeMatteov. DeMatteo, supra at 30, quoting from Rosenberg v. Lipnick, 377 Mass. 666, 672 (1979) (“the reasonableness of any monetary provision in an antenuptial contract cannot ultimately be judged in isolation”). See also note 14, supra.

¶18This is not to suggest that alimony waivers are per se unreasonable.15 Indeed, the alimony waiver in the Osbornecase was upheld by the court as valid at the time of execution on evidence that supported the determination that the waiver was fair and reasonable when it was made. The wife in that case *728was the heiress to a large family fortune, mostly held in trust; her trust income was $540,000 per year. 384 Mass. at 594. The husband had few assets. The parties met and became engaged while both attended medical school. Their antenuptial agreement included the statement that “[the wife] now has sufficient property to provide adequate means for her own support and [the husband], by reason of his becoming a member of the medical profession, contemplates that he will have adequate earning power for his own support.” Ibid.It was not unreasonable to anticipate that the husband would be able to support himself as a medical doctor, and not unfair to agree that he would not look to his wife’s trust income to supplement his earnings in the event of divorce.

¶19Unlike the husband in Osborne, however, here there was nothing in the evidence to suggest that Donna would be in a position to reasonably support herself in the event of a divorce occurring well into the future. In this respect, the circumstances are more like those in DeMatteo, where (in relation to the husband’s wealth) the wife had been earning only a modest income of $25,000 a year as a secretary just prior to marrying the husband. 436 Mass. at 19-20. Under the terms of the De-Matteo antenuptial agreement, the wife was to receive one-half of the jointly held property at the time of divorce as well as housing and transportation; in addition, the husband was obligated to continue to provide for the wife’s health insurance and her support until her death or remarriage ($35,000 per year when the parties married in 1990, subject to annual cost of living adjustments to 1998, the date the husband filed for divorce). Id. at 20-21. The agreement took into account the wife’s age (forty-one years) and limited earning capacity, and anticipated that the wife would in all likelihood not be working during the marriage and thus would not be in a position to provide reasonably for her own support in the event of divorce. The agreement made reasonable provision for the wife’s support in the event of divorce, including alimony, in amounts that exceeded what she had been earning before the marriage; it fairly provided for cost of living increases to the alimony amount, adjusted annually to the date either party sought to end the marriage, to account for the effects of inflation. Id. at 22.

¶20*729Here, the judge assessed both the agreement’s validity as well as whether it was enforceable. These are distinct assessments to which, as clarified in DeMatteo, supra,different standards are applicable.16 In assessing the validity of the alimony waiver, the probate judge correctly considered whether it was fair and reasonable when made.17 While Craig incorrectly ascribes findings relating to enforceability to the judge’s determination of the validity of the agreement, he does not claim that the judge’s subsidiary findings have no basis in the evidence. Rather, he argues that the judge used the wrong standard when concluding that the alimony waiver was invalid.

¶21*730The judge in this case determined that under the circumstances known and reasonably to be anticipated by the parties at the time of the execution of the agreement, the waiver of alimony provision was, as to Donna, neither fair nor reasonable when it was made. As reflected in the judge’s findings and the evidence from which they are drawn, the agreement strips Donna of all alimony rights despite the fact that she had no education beyond high school, had only been employed in entry level jobs when the parties met, and owned no property of value. That her contribution to the marriage would primarily be in the form of homemaking and child-rearing is evidenced by the fact that, immediately after the marriage, Donna commenced a year-long treatment for infertility that required Craig to give her injections on a regular basis, and as the probate judge found, it was by agreement of the parties that, after giving birth to their daughter, Donna became her primary caretaker and a full-time homemaker. In contrast, Craig was a business entrepreneur and had completed two years of college; he had for some time been employed in the family business, had started other businesses, and by the time of the marriage had already amassed assets on which he placed a value of close to one million dollars. He disclosed no interest in any family trusts at that time, and the sole source of his income was from employment. Based on this history at the time of the marriage, Craig’s reasonably anticipated role in the partnership was as the primary income-earner.

¶22As the judge found, it was reasonable for Craig to seek to protect his assets, including his interest in the family-owned business, from claims by Donna in the event of divorce (claims that might potentially also affect the interests of other family members). It was, however, unreasonable to expect that his spouse, who then had no assets and negligible earning capacity, would contribute to the marriage by raising his child and by supporting his ability to work outside the home, with no expectation of future support no matter how long the marriage, and regardless whether she might never acquire assets of her own.

¶23The probate judge applied the appropriate standard, and his conclusion that the waiver of alimony was neither fair nor *731reasonable at the time it was made is supported by the evidence. The judge did not err in concluding that the provision waiving alimony was invalid.

¶24(c) The alimony award. Having invalidated the alimony waiver as to Donna, the judge was next called upon to decide whether and in what amount Craig should pay alimony. The judge was not constrained, in these circumstances, to limiting the alimony award to an amount sufficient only to prevent her from “becom[ing] a public charge,” DeMatteov. DeMatteo, 436 Mass. at 35. Instead, factors found in G. L. c. 208, § 34, apply and, as these factors were considered by the judge and his findings are amply supported by the evidence, we will uphold the judgment as to alimony.

¶25Corrected judgment of divorce nisi affirmed.