The other party (Petitioner) sought to validate the pre-petition, post-nuptial agreement that purported to transmute the parties’ separate property into marital, or community property. Prior to marriage, the parties entered, into a “cohabitation agreement” and thereafter they recorded a “registered domestic partnership.”
The Court held that the Agreement was rescinded and unenforceable. The Court’s reasoning is stated in part:
The Basic Law
The agreement was entered into during the marriage. Family Code section 721 provides that spouses in an on-going marriage may enter into any valid contractual agreement. General principles of contract law apply. Family Code section 850, subdivision (b), provides that “married persons may by agreement with or without consideration transmute separate property of either spouse to community property.” However, Family Code section 852, subdivision (a), provides that any transmutation “is not valid unless made in writing by an express declaration that is made, joined in, consented to, or accepted by the spouse whose interest in the property is adversely affected.”
The post-nuptial agreement here was in writing. It clearly stated that its purpose, and it purported to list the properties that would be subject to the change and purported to list the value of those properties. However, Family Code section 721, subdivision (b), also states that a “confidential relationship” exists between spouses and they “are subject to the general rules governing fiduciary relationships.” This relationship “imposes a duty of the highest good faith and fair dealing on each spouse, and neither shall take any unfair advantage of the other.” (See In re Marriage of Burkle (2006) 139 Cal.App.4th 712, 729.) The key is whether one party took unfair advantage over the other in the transaction.
Attorney Castaneda Proved that the Respondent (her client) Met His Burden
The court finds that Attorney Castaneda’s client met his initial burden to show that the other party (Petitioner) had taken unfair advantage of him. Reduced to its essence, the agreement provided that Respondent was transmuting substantial assets. To be sure, the value of the assets does not have to be equivalent. But the fact there was such a significant difference in value suggests an initial unfairness. The court further finds Respondent met his burden to show he did not consent to the transmutation of his separate property into community property.
The Petitioner (the other Party) Did Not Establish the Contrary.
The Petitioner unsuccessfully tried to suggest Attorney Castaneda’s client also obtained an advantage under the agreement. To the extent Petitioner attempted to assert in response to rebut the presumption that the post-marital agreement was the product of undue influence, she failed.
The Agreement Violated Public Policy
In addition to the above, the court holds that the “agreement is unenforceable because it violated public policy favoring no-fault divorce.” (In re Marriage of Mehren and Dargan (2004) 118 Cal.App.4th 1167, 1169 [Mehren].)
While the case has not reached the “finish line,” her client has overcome a major obstacle in his case. If you have any comments or questions, please email Attorney Castaneda directly at [email protected] or call her office at 310-601-7144.
