Court of Appeals Concludes Premarital Agreement was Unconscionable Since Wife was 16, Pregnant & Not Represented

Case: Julie M. Fetters v. Jay M. Fetters 
by Mike Kohlhaas, Bingham Greenebaum Doll

HELD: Indiana Court of Appeals concludes that a premarital agreement was unconscionable at the time of its execution where the Wife was then sixteen years old, pregnant, could not read very well, and was not represented by counsel.

FACTS AND PROCEDURAL HISTORY:
Prior to their marriage, Husband and Wife began a sexual relationship in 1994. Wife was only fourteen years old at the time, while Husband was 29. The next year, Wife became pregnant by Husband. Police began investigating the parties’ relationship, and Husband concluded he could avoid prosecution if the parties married. Wife agreed.

Before getting married, Husband had his attorney prepare a premarital agreement. The premarital agreement would essentially keep all property separate as it is titled. Wife and her mother went to Husband’s attorney’s office and signed the premarital agreement. The parties later married.

Wife filed a petition for dissolution in 2011. Over Wife’s objection, the trial court upheld the premarital agreement and, implementing its terms, awarded to Husband assets of $108,500 and to Wife assets of $13,900. Wife appealed.

In its review, the Court of Appeals readily found the premarital agreement to be unconscionable based upon the totality of the circumstances surrounding its execution. [Notably, the opinion places considerable emphasis on Wife’s lack of representation by counsel at the time the agreement was signed, and on the one-sided nature of the agreement’s terms, though it’s unclear how much weight those factors deserve beyond the unusual facts of this case.]  The Court also rejected various arguments by Husband on appeal, such as that Wife was barred by laches for asserting the invalidity of the premarital agreement fifteen years after it was signed, and long after Wife had reached the age of majority.

[Note: The opinion also includes a lengthy footnote in which the Court of Appeals observes that it is unclear whether a premarital agreement can be contested based upon being unconscionable at the time of divorce. The Court noted that some prior case law (e.g., Pond) indicated that a premarital agreement may be contested based upon being unconscionable at the time of its execution, or unconscionable at the time of divorce (e.g., it leaves one spouse completely destitute). The Court noted that the UPAA seems to envision contesting a premarital agreement for being unconscionable only at the time of execution, not at the time of divorce. The Court expressly declined to resolve this question since the instant case could be resolved based upon unconscionable circumstances at the time of execution.]

The trial court’s decree was reversed and remanded for further proceedings consistent with the premarital agreement being set aside and applying the statutory rules of equitable distribution.

To view the text of this opinion in its entirety, click here: Julie M. Fetters v. Jay M. Fetters

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James A. Reed and Michael R. Kohlhaas of Bingham Greenebaum Doll represent clients in a wide spectrum of relationship transition and wealth planning matters, including premarital agreements, estate planning, cohabitation, separation, divorce (especially involving high net worth individuals and/or complex asset issues), custody, parenting arrangements, adoption, and domestic partnerships. Bingham Greenebaum Doll, a multidisciplinary law firm serving regional, national, and international clients, is the fourth-largest law firm in Indiana. The firm’s main practices include corporate, property, litigation, labor, government law, and personal services law. Visit the firm’s website at www.bgdlegal.com.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

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