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Premarital Agreements: What to Cover, Uncover, Protect & Provide Co-sponsored by CCCBA and its Family Law Section Speakers: Terence Daniel Doyle, Esq. Doyle Quane Family Law Group. Diana Richmond, Esq. Sideman & Bancroft, LLP, San Francisco. Virginia Palmer, Esq. Wendel, Rosen, Black & Dean LLP, Oakland. Moderator: Anne Freeman, Esq. Sideman & Bancroft, LLP, San Francisco. Premarital Agreements are now understood more as marriage contracts to suit individual needs and less tools to maintain the “haves” from the “have-nots.” Experienced family law and estate planning attorneys discuss the premarital agreements process: drafting and negotiating methods, strengthening vs. undermining clients’ marriages, marital finances, addressing Marvin rights, “unconscionability” concerns, and estate planning cross over issues. Topics for Discussion: - Why we do premarital agreements - Who are the clients - Traditional drafting and negotiating methods vs. ‘outside-the-box’ processes - Spousal support waivers, limitations, and unconscionability concerns - The So-Called “7-Day Rule” - Whether one can waive fiduciary duties in a premarital agreement - Probate waivers - Special issues in same-sex premarital agreements - Premartial agreements/estate plan overlap - Severability - Disclosures: what constitutes full disclosure and what can be waived? - Premarital agreements and litigation

Author: Genieve Ruskus, Palo Alto Mediator

Default Legal Rules During the Marriage

Proposed Premarital Agreement Provisions During Marriage:

Separate Property Assets Owned Prior to Marriage: Any property owned by a party prior to marriage is presumptively the separate property of that party and continues to be separate property after marriage. Each spouse has the right to manage and invest his or her separate property, subject to certain fiduciary rules.

Separate Property Inheritances/Gifts During Marriage:

Any property acquired by gift or inheritance during the marriage is presumptively the separation property of that party. Each spouse has the right to manage and invest his or her separate property, subject to certain fiduciary rules.

Separate Property Debts Incurred Prior to Marriage:

After marriage, the community is liable for debts incurred by both spouses both before and during the marriage, as is the separate property of the incurring spouse.

Separate property of one spouse is not liable for the separate property debts of the other spouse (except for the necessities of life while spouses living together).

Growth of Separate Property During Marriage: During marriage, the income from separate property presumptively remains separate property and the increase in value of separate property presumptively remains separate property. There are some California cases that have held that when the increase of value, profits, or extraordinary income results specifically from the efforts of a spouse during marriage, a portion of the increase in value, profits, or income can be apportioned to the community.

Community Property: All property, real or personal, wherever located, acquired or earned by a married person during the marriage is community property unless it qualifies for one of the separate property exceptions.

Community Liability: All debts incurred during the marriage, with very limited exceptions, are considered to be the obligation of the community (joint).

Fiduciary Duties: Spouses have the right of sole management and control over their own separate property. There is joint/equal management and control as to community property and strong fiduciary duties apply, including the duty to account to your spouse and the duty to offer investment opportunities to the community before taking the opportunity for your


separate estate.

Living Expenses During Marriage:

Community property is normally used to pay the living expenses of the couple.

If no community property, at a minimum, the separate property of either spouse is liable for the “necessities of life” of the other spouse while the spouses are living together.

How much detail should be provided in the agreement about what expenses are to be paid from what sources?

Ability to Make Gifts:

As between spouses, a separate signed writing is normally required, preferably with advice of counsel, to change the character of property from separate to community (or from community to separate or from the separate of one to the separate of the other), unless the gift is not of significant value.

Either spouse is able to make gifts from his or her own separate property to third parties, but gifts from the community (or the payment of non-legal obligations) would require joint consent under the fiduciary rules.

Default Rules In the Event of Death

Proposed Premarital Agreement Provisions In the Event of Death:

Prenup vs. Estate Plan?

Because a contract to make a will is enforceable in California, careful thought should be given to whether estate planning provisions should be included in the premarital agreement itself or dealt with in separate estate planning documents (such as a will or trust).

Division of Assets on Death:

Under California law, each spouse has the right to designate who shall receive his or her one-half share of his/her community property on death as well as all of his or her own separate property.

Default Spousal Rights on Death:

There are many default rights provided to spouses at death – such as the right to inherit as an omitted spouse, the right to be an executor in the absence of an express provision to the contrary, etc.

Tax Considerations:

There are special estate tax advantages for community property, such as stepped up cost basis, that should be discussed and considered with qualified tax professionals. It is not possible, under the current form of California law, to “have your cake and eat it too” by characterizing assets as community property for death purposes but separate property for divorce purposes.


Default Rules in the Event of Divorce

Proposed Premarital Agreement Provisions In the Event of Divorce:

Division of Assets on Divorce:

Under California law, and in the absence of a contrary divorce settlement, each spouse receives one-half the community property on divorce. If spouses cannot agree regarding who gets what, assets are typically liquidated (sold) and the proceeds divided.

Each spouse receives 100% of his/her separate property provided that the assets are documented and traced.

Reimbursement Rights for Community or Separate Property Use: In general, if community property is used for a separate purpose, or visa versa, reimbursements may be available. For example, default family rules provide that, if community or one person’s separate property is used to pay down principal on a mortgage or to make improvements to the value of the other party’s separate property, reimbursement or even a share of appreciation in the property may be available.

How much detail should be provided in the agreement about what expenses are to be paid from what sources?

Reimbursement Rights for Separate Property Used to Acquire Community Property: Family Code section 2640 provides that in the event of a divorce, contributions from separate property to the acquisition of jointly held property will be reimbursed to the contributing party without interest or adjustment for change in value. This rule may be waived or changed but requires a specific waiver or change to be in writing.

Support at Divorce:

Child support provisions are not includable in a premarital agreement because of California public policy.

Spouses in the State of California may be entitled to receive spousal support after separation in order to allow them to maintain the marital standard of living for a reasonable period of time.

In marriages that last less than 10 years, the duration of support is generally limited to one-half the length of marriage. If the marriage is over 10 years, the duration of support depends on the circumstances.

The calculation of the amount and duration of support amount can be very complex and contentious, and depends on numerous items such as income, earning capacity, assets, debts, health, etc.

Spouses are permitted to enter into agreements that alter their spousal support rights, provided that the agreement itself was entered into voluntarily, with the advice of counsel, and the terms are not “unconscionable” at the time that enforcement is sought (i.e., at time of divorce).

Options Include:

- Don’t address the topic at all

-Waive spousal support for one or both parties on the grounds that you believe you each will be self-supporting

-Pre-negotiate the spousal support amount (either in the form of a monthly payment formula or set amount)


Rights Arising from Premarital Relationship:

Although California does not recognize common law marriage, which means that no rights to support or community property arise simply by virtue of living together before marriage, under the Marvin case, oral promises between non-marital partners can be enforceable under some circumstances.

Other:

You should also review any specific legal considerations in your case, including special rules on divorce regarding businesses, stock options, houses, etc.


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Telephone: (415) 392-1960

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IF YOU ARE CONSIDERING A PREMARITAL AGREEMENT….

There are some things you should know and consider even before you see an attorney.

First, don’t assume there is a formula premarital agreement; the terms are as individualized as the people getting married. Second, consider that this agreement may provide for what happens if your marriage lasts a lifetime and your spouse survives you, as well as for the contingency of a divorce. Third, in California it is very important to complete a thorough financial disclosure as part of a premarital agreement, and you will help your attorney by bringing in at least the outline of a statement of assets and debts to your first meeting.

BASICS OF CALIFORNIA FAMILY LAW

California is a community property state, in which spouses have equal ownership in all community property. All money or property acquired during marriage is presumed to be community property. Money or property owned prior to marriage, gifts and inheritances regardless of when received, and post-separation earnings are separate property, as are all earnings, rents, appreciation and accumulations on separate property. If and to the extent that a spouse devotes personal effort during marriage to the management or improvement of separate property, a community property interest can be created in the separate property. On the death of a spouse, the surviving spouse owns one-half of all community property and is entitled to inherit a statutory portion of the deceased spouse’s separate property and share of community property, in the absence of a will or trust providing otherwise.

On dissolution of marriage in California, community property is divided equally between the spouses (in the absence of an agreement providing otherwise); and separate property is confirmed to its owner spouse. In a premarital agreement, you can contract freely regarding the separate, community or mixed character of property. If you obtain a divorce in another state or country, that jurisdiction may or may not honor your premarital agreement and different rules may apply to the division of property. For example, in many U.S. states, property (including some that California would consider separate property) is equitably divided; some people create a premarital agreement in order to avoid the application of equitable division if they divorce in another state.

It is contrary to public policy to provide for parentage, child custody or child support in a premarital agreement.

On dissolution of marriage, either spouse may owe spousal support (alimony) to the other spouse, based on need, ability to pay, marital standard of living, the length of the marriage and a variety of other more detailed factors. California statutes provide that generally spousal support lasts for one-half the length of a marriage if a marriage is short-term (less than ten years) and lasts until death of either spouse, the remarriage of the supported spouse or further order of court after a lengthy marriage (ten years or more); but these rules build in considerable discretion for a judge to make other orders. Within certain bounds, you can provide for a waiver or modification of these rules for spousal support in a premarital agreement. A premarital agreement with terms for spousal support that are found to be unconscionable at

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the time of enforcement (i.e., upon divorce) is unenforceable. Often, it is unpredictable what circumstances might be at the time of enforcement.

A premarital agreement that is made with inadequate financial disclosure and that is unconscionable is not enforceable in California. An agreement made through coercion or undue influence will not be enforced. A premarital agreement must be signed not less than seven days from when it was first presented to the other party or that party’s attorney.

It is essential that you and your prospective spouse have separate, independent attorneys.

These principles are very basic. You may expect that we will discuss many refinements to them when we meet. Below are several organizing questions that may help you to decide whether you think you need a premarital agreement and, if so, what you want to include in it.

ORGANIZING QUESTIONS

1. Do you plan to live in California all of your marriage?

If you do not plan to become a California resident, you should consider consulting an attorney in the jurisdiction where you plan to reside. If you are a California resident but think you may relocate to another state during your marriage, you may want to contract to avoid equitable division of property.

2. Are you and your prospective spouse both U.S. citizens?

Certain tax laws apply differently for non-citizens.

3. Do you want marital earnings to be separate or community property?

This is perhaps the most important organizing question. Will you and your spouse want to accumulate community property together? Will all earnings be community property or will you want to protect only certain kinds of earnings as separate property? If you have certain property now that may acquire a community component through earnings during marriage (such as stock options, restricted stock or premarital business interests), do you want to provide separately for these assets?

4. Do you want to make special provisions for any particular property or kind of property?

Some couples want to make special provisions for the ownership of a personal residence or a business or some other particular kind of property particular to them. Does this apply to you?

5. Do you want to modify your obligations for spousal support if your marriage is dissolved?

Many prospective spouses want to eliminate or limit their potential obligation for spousal support if their marriage ends in divorce. Whether you can or should do so depends on many factors, including whether you can foresee what your and your spouse’s circumstances might be, and the overall fairness of the agreement.

6. Do you want to make special provisions for your spouse if your marriage ends in your death or from your spouse if your marriage ends in your spouse’s death?

Some prospective spouses want to create life insurance or other property to provide for their own security or the security of their spouse in the event of death. Many prospective spouses create estate plans in conjunction with their premarital agreements.

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UNIFORM PREMARITAL AGREEMENT ACT California Family Code Sections 1600-1617

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1610. As used in this chapter: (a) "Premarital agreement" means an agreement between prospective spouses made in contemplation of marriage and to be effective upon marriage. (b) "Property" means an interest, present or future, legal or equitable, vested or contingent, in real or personal property, including income and earnings. 1611. A premarital agreement shall be in writing and signed by both parties. It is enforceable without consideration. 1612. (a) Parties to a premarital agreement may contract with respect to all of the following: (1) The rights and obligations of each of the parties in any of the property of either or both of them whenever and wherever acquired or located. (2) The right to buy, sell, use, transfer, exchange, abandon, lease, consume, expend, assign, create a security interest in, mortgage, encumber, dispose of, or otherwise manage and control property. (3) The disposition of property upon separation, marital dissolution, death, or the occurrence or nonoccurrence of any other event. (4) The making of a will, trust, or other arrangement to carry out the provisions of the agreement. (5) The ownership rights in and disposition of the death benefit from a life insurance policy. (6) The choice of law governing the construction of the agreement. (7) Any other matter, including their personal rights and obligations, not in violation of public policy or a statute imposing a criminal penalty. (b) The right of a child to support may not be adversely affected by a premarital agreement. (c) Any provision in a premarital agreement regarding spousal support, including, but not limited to, a waiver of it, is not enforceable if the party against whom enforcement of the spousal support provision is sought was not represented by independent counsel at the time the agreement containing the provision was signed, or if the provision regarding spousal support is unconscionable at the time of enforcement. An otherwise unenforceable provision in a premarital agreement regarding spousal support may not become enforceable solely because the party against whom enforcement is sought was represented by independent counsel. 1613. A premarital agreement becomes effective upon marriage.


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1614. After marriage, a premarital agreement may be amended or revoked only by a written agreement signed by the parties. The amended agreement or the revocation is enforceable without consideration. 1615. (a) A premarital agreement is not enforceable if the party against whom enforcement is sought proves either of the following: (1) That party did not execute the agreement voluntarily. (2) The agreement was unconscionable when it was executed and, before execution of the agreement, all of the following applied to that party: (A) That party was not provided a fair, reasonable, and full disclosure of the property or financial obligations of the other party. (B) That party did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided. (C) That party did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the other party. (b) An issue of unconscionability of a premarital agreement shall be decided by the court as a matter of law. (c) For the purposes of subdivision (a), it shall be deemed that a premarital agreement was not executed voluntarily unless the court finds in writing or on the record all of the following: (1) The party against whom enforcement is sought was represented by independent legal counsel at the time of signing the agreement or, after being advised to seek independent legal counsel, expressly waived, in a separate writing, representation by independent legal counsel. (2) The party against whom enforcement is sought had not less than seven calendar days between the time that party was first presented with the agreement and advised to seek independent legal counsel and the time the agreement was signed. (3) The party against whom enforcement is sought, if unrepresented by legal counsel, was fully informed of the terms and basic effect of the agreement as well as the rights and obligations he or she was giving up by signing the agreement, and was proficient in the language in which the explanation of the party's rights was conducted and in which the agreement was written. The explanation of the rights and obligations relinquished shall be memorialized in writing and delivered to the party prior to signing the agreement. The unrepresented party shall, on or before the signing of the premarital agreement, execute a document declaring that he or she received the information required by this paragraph and indicating who provided that information. (4) The agreement and the writings executed pursuant to paragraphs (1) and (3) were not executed under duress, fraud, or undue influence, and the parties did not lack capacity to enter into the agreement. (5) Any other factors the court deems relevant.


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1616. If a marriage is determined to be void, an agreement that would otherwise have been a premarital agreement is enforceable only to the extent necessary to avoid an inequitable result. 1617. Any statute of limitations applicable to an action asserting a claim for relief under a premarital agreement is tolled during the marriage of the parties to the agreement. However, equitable defenses limiting the time for enforcement, including laches and estoppel, are available to either party.

California Probate Code Sections 140-147

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140. As used in this chapter, "waiver" means a waiver by the surviving spouse of any of the rights listed in subdivision (a) of Section 141, whether signed before or during marriage. 141. (a) The right of a surviving spouse to any of the following may be waived in whole or in part by a waiver under this chapter: (1) Property that would pass from the decedent by intestate succession. (2) Property that would pass from the decedent by testamentary disposition in a will executed before the waiver. (3) A probate homestead. (4) The right to have exempt property set aside. (5) Family allowance. (6) The right to have an estate set aside under Chapter 6 (commencing with Section 6600) of Part 3 of Division 6. (7) The right to elect to take community or quasi-community property against the decedent's will. (8) The right to take the statutory share of an omitted spouse. (9) The right to be appointed as the personal representative of the decedent's estate. (10) An interest in property that is the subject of a nonprobate transfer on death under Part 1 (commencing with Section 5000) of Division 5. (b) Nothing in this chapter affects or limits the waiver or manner of waiver of rights other than those referred to in subdivision (a), including, but not limited to, the right to property that would pass from the decedent to the surviving spouse by nonprobate transfer upon the death of the decedent, such as the survivorship interest under a joint tenancy, a Totten trust account, or a pay-on-death account. 142. (a) A waiver under this chapter shall be in writing and shall be signed by the surviving spouse. (b) Subject to subdivision (c), a waiver under this chapter is enforceable only if it satisfies the requirements of subdivision (a) and is enforceable under either Section 143 or Section 144. (c) Enforcement of the waiver against the surviving spouse is subject to the same defenses as enforcement of a contract, except that: (1) Lack of consideration is not a defense to enforcement of the waiver. (2) A minor intending to marry may make a waiver under this chapter as if married, but the waiver becomes effective only upon the marriage.


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143. (a) Subject to Section 142, a waiver is enforceable under this section unless the surviving spouse proves either of the following: (1) A fair and reasonable disclosure of the property or financial obligations of the decedent not provided to the surviving spouse prior to the signing of the waiver unless the surviving spouse waived such a fair and reasonable disclosure after advice by independent legal counsel. (2) The surviving spouse was not represented by independent legal counsel at the time of signing of the waiver. (b) Subdivision (b) of Section 721 of the Family Code does not apply if the waiver is enforceable under this section. 144. (a) Except as provided in subdivision (b), subject to Section 142, a waiver is enforceable under this section if the court determines either of the following: (1) The waiver at the time of signing made a fair and reasonable disposition of the rights of the surviving spouse. (2) The surviving spouse had, or reasonably should have had, an adequate knowledge of the property and financial obligations of the decedent and the decedent did not violate the duty imposed by subdivision (b) of Section 721 of the Family Code. (b) If, after considering all relevant facts and circumstances, the court finds that enforcement of the waiver pursuant to subdivision (a) would be unconscionable under the circumstances existing at the time enforcement is sought, the court may refuse to enforce the waiver, enforce the remainder of the waiver without the unconscionable provisions, or limit the application of the unconscionable provisions to avoid an unconscionable result. (c) Except as provided in paragraph (2) of subdivision (a), subdivision (b) of Section 721 of the Family Code does not apply if the waiver is enforceable under this section. 145. Unless the waiver or property settlement provides to the contrary, a waiver under this chapter of "all rights" (or equivalent language) in the property or estate of a present or prospective spouse, or a complete property settlement entered into after or in anticipation of separation or dissolution or annulment of marriage, is a waiver by the spouse of the rights described in subdivision (a) of Section 141. 146. (a) As used in this section, "agreement" means a written agreement signed by each spouse or prospective spouse altering, amending, or revoking a waiver under this chapter. (b) Except as provided in subdivisions (c) and (d) of Section 147, unless the waiver specifically otherwise provides, a waiver under this chapter may not be altered, amended, or revoked except by a subsequent written agreement signed by each spouse or prospective spouse. (c) Subject to subdivision (d), the agreement is enforceable only if it satisfies the requirements of subdivision (b) and is enforceable under either subdivision (e) or subdivision (f). (d) Enforcement of the agreement against a party to the agreement is subject to the same defenses as enforcement of any other contract, except that:


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(1) Lack of consideration is not a defense to enforcement of the agreement. (2) A minor intending to marry may enter into the agreement as if married, but the agreement becomes effective only upon the marriage. (e) Subject to subdivision (d), an agreement is enforceable under this subdivision unless the party to the agreement against whom enforcement is sought proves either of the following: (1) A fair and reasonable disclosure of the property or financial obligations of the other spouse was not provided to the spouse against whom enforcement is sought prior to the signing of the agreement unless the spouse against whom enforcement is sought waived such a fair and reasonable disclosure after advice by independent legal counsel. (2) The spouse against whom enforcement is sought was not represented by independent legal counsel at the time of signing of the agreement. (f) Subject to subdivisions (d) and (g), an agreement is enforceable under this subdivision if the court determines that the agreement at the time of signing made a fair and reasonable disposition of the rights of the spouses. (g) If, after considering all relevant facts and circumstances, the court finds that enforcement of the agreement pursuant to subdivision (f) would be unconscionable under the circumstances existing at the time enforcement is sought, the court may refuse to enforce the agreement, enforce the remainder of the agreement without the unconscionable provisions, or limit the application of the unconscionable provisions to avoid an unconscionable result. (h) Subdivision (b) of Section 721 of the Family Code does not apply if the agreement is enforceable under this section. 147. (a) Subject to subdivisions (c) and (d), a waiver, agreement, or property settlement made after December 31, 1984, is invalid insofar as it affects the rights listed in subdivision (a) of Section 141 unless it satisfies the requirements of this chapter. (b) Nothing in this chapter affects the validity or effect of any waiver, agreement, or property settlement made prior to January 1, 1985, and the validity and effect of such waiver, agreement, or property settlement shall continue to be determined by the law applicable to the waiver, agreement, or settlement prior to January 1, 1985. (c) Nothing in this chapter affects the validity or effect of any premarital property agreement, whether made prior to, on, or after January 1, 1985, insofar as the premarital property agreement affects the rights listed in subdivision (a) of Section 141, and the validity and effect of such premarital property agreement shall be determined by the law otherwise applicable to the premarital property agreement. Nothing in this subdivision limits the enforceability under this chapter of a waiver made under this chapter by a person intending to marry that is otherwise enforceable under this chapter. (d) Nothing in this chapter limits any right one spouse otherwise has to revoke a consent or election to disposition of his or her half of the community or quasi-community property under the will of the other spouse.

In Re Marriage of Cadwell-Faso & Faso 191 Cal.App.4th 945 (2011)

IN RE MARRIAGE OF CADWELL-FASO & FASO No. A126524. 191 Cal.App.4th 945 (2011)

In re the Marriage of CARI LYNN CADWELL-FASO and JOSEPH P. FASO. CARI LYNN CADWELL-FASO, Appellant, v. JOSEPH P. FASO, Respondent.

Court of Appeals of California, First District, Division Four.

January 11, 2011.

Garrett C. Dailey for Appellant.

Law Offices of Bernard N. Wolf, Bernard N. Wolf; Law Offices of Hakeem, Ellis & Marengo and Albert M. Ellis for Respondent.

OPINION

REARDON, J.—

Family Code1 section 1615, subdivision (c) (section 1615(c)), as amended effective January 1, 2002, creates a presumption "that a premarital agreement was not executed voluntarily" unless the court makes five designated findings. (See Stats. 2001, ch. 286, § 2; In re Marriage of Friedman (2002) 100 Cal.App.4th 65, 72 [122 Cal.Rptr.2d 412].) These include the finding that the party against whom enforcement is sought had at least seven calendar days between the date he or she was "first presented" with the agreement and advised to seek independent counsel, and the time he or she signed the agreement. (§ 1615(c)(2).) The trial court ruled that because seven days did not elapse between the time respondent Joseph P. Faso (Faso) was presented with the final draft addenda (the Addendum) to the premarital agreement and the time he signed it, his execution was deemed involuntary and the Addendum was unenforceable. Appellant Cari Lynn Cadwell-Faso (Cadwell-Faso) urges that where, as here, multiple drafts of a document are exchanged, the Legislature did not intend to erect an absolute seven-day waiting period between presentation of the last draft, and its execution. Alternatively, she charges that Faso should be estopped from relying on the seven-day rule.

We conclude, after receiving supplemental briefing and applying the rules of statutory interpretation, that section 1615(c)(2) simply does not pertain in the current situation where the party against whom enforcement is sought was represented by counsel from the outset of the transaction. Accordingly, we reverse the judgment.

http://www.leagle.com/decision/In%20CACO%2020110111005/IN%20RE%20MARRIAGE%20OF%20CADWELL-FASO#fid1

http://www.leagle.com/cite/100%20Cal.App.4th%2065

http://www.leagle.com/cite/122%20Cal.Rptr.2d%20412


I. FACTUAL BACKGROUND

A. The Parties

Faso and Cadwell-Faso met in 2003 or 2004. He was 21 years her senior. Cadwell-Faso owned and operated her own business in Alameda. Faso was a wealthy, retired businessperson residing in Stockton.

The parties married on May 27, 2006, and separated less than 18 months later, on November 2, 2007.

B. The Premarital Agreement and Addenda

Prior to their marriage, the couple discussed having a premarital agreement; both parties wanted such an agreement. In December 2005, Faso's attorney, James Dyke, drafted a premarital agreement. Faso presented it to Cadwell-Faso and advised her to seek independent counsel. Cadwell-Faso hired Attorney Dan Godeke. She was not satisfied with the agreement and asked Godeke to prepare an addendum. Between March and May 2006, Godeke drafted five addenda. Faso did not agree to the terms of the first four drafts.2 On May 17, 2006, Cadwell-Faso faxed Faso a "goodbye" letter along with the four unsigned draft addenda, saying she loved him but was calling off the wedding in light of their inability to reach an agreement. Thereafter the parties spoke by phone. Faso said, "Let's get married, let's get this thing done." At that time they discussed their disagreements, and, on the basis of those discussions, Cadwell-Faso directed Godeke to prepare a fifth draft addenda.

On May 18, 2006, Godeke faxed his client the fifth draft, which draft became the Addendum; on May 19 she faxed it to Faso, and he had it forwarded to his attorney on May 22. The parties met in Dyke's office on May 25, 2006. Dyke inserted the word "reasonable" in front of the phrase "actual health care needs" of Cadwell-Faso, which the Addendum obligated Faso to pay during her lifetime. With that, the parties executed the premarital agreement and the Addendum. They married two days later.

The premarital agreement recited the parties' intention to waive California community property laws. Therein Cadwell-Faso estimated that the net fair market value of her estate exceeded $1 million without taking into account the liabilities detailed on an attached exhibit.3 Faso estimated that the net fair market value of his estate exceeded $30 million. In the event the marriage terminated, the parties generally agreed to waive community property and spousal support claims against each other.

The Addendum begins with these recitals: "During her adult life until now, CARI has attended to her own financial affairs. She owns and operates her own business, she owns a residence with a mortgage of meaningful proportions, and she has made investments toward a retirement which she has anticipated would be a quarter century away. [¶] An aspect of the plan for this marriage is that CARI will dispose of her business, and, substantially, withdraw from her life of independent earning and support, at age 43 years. She will move to Stockton with JOE, they expect to travel widely, and generally they expect to lead lives associated with at least semi-retirement. [¶] CARI is not in a financial position to retire, nor will she become so, independent of JOE, in the life style anticipated for this marriage. JOE has acquired and developed a very substantial asset base during his working life."




Substantively, the Addendum provided that within 10 years following the marriage, Faso would pay off the mortgage of approximately $400,000 on Cadwell-Faso's Sea Ranch property, an obligation that was binding even if the marriage terminated. As well, the Addendum restricted Faso's ability to alienate certain real property holdings, and gave Cadwell-Faso certain rights in those holdings should he sell them during the marriage, or predecease her while still married. Further, Faso undertook to provide for Cadwell-Faso's reasonable health care needs, for life, even if the marriage terminated or he predeceased her. In the event of a dissolution, Faso agreed to pay Cadwell-Faso spousal support in the amount of $1,000 per month for each year of the marriage, up to a maximum of $5,000 per month, for a period equal to one-half the length of the marriage.

C. Legal Proceedings

Cadwell-Faso petitioned for legal separation on November 13, 2007. The next month Faso sought dissolution of marriage. Thereafter Cadwell-Faso moved for temporary spousal support and attorney fees. Among other responses, Faso moved to set aside the Addendum, arguing that the document was invalid because he did not have seven days between the time of presentation and execution, as required by section 1615(c)(2). The matter proceeded to trial in two phases, the first phase concerning enforceability of the premarital agreement and the Addendum, the second addressing the matter of spousal support.

1. Phase One

a. Hearing. Cadwell-Faso testified that she had no knowledge or communication with Joe "about the validity of the agreement based on when it was being signed." The issue "never came up." She believed that as long as "it was signed . . . prior to the time" they exchanged vows, "that was appropriate." Cadwell-Faso did, however, concede that the terms varied in each draft addendum.

Additionally, Cadwell-Faso stated that prior to the marriage, she earned between $10,000 and $20,000 per month and lived a very comfortable life. Although the tax returns presented at trial reflected that the business "actually had a loss," she explained: "[W]hen you're a sole proprietorship, you run everything through your business. So what you make comes in—you basically live through the business." As well, Cadwell-Faso was adamant that she kept her part of the bargain: She moved to Stockton and sold her ad specialty business. Cadwell-Faso acknowledged that Faso provided funds for her to purchase a second Sea Ranch property. Moreover, since their separation Faso continued to make the $2,700 monthly mortgage payments on her first Sea Ranch property, which she rented for around $1,800 a month. According to Faso, he also gave her an American Express credit card, paid the charges on it, and bought her a car.

Faso also testified that he did not want to sign the Addendum, but did so because Cadwell-Faso indicated "her attorney said that we had already passed the time of limitation between when you agree upon the agreement and when you sign the agreement and when you get married." His own attorney confirmed that notion. When the parties were in Dyke's office, he told them both that the Addendum was not a binding agreement "and the only way that it's going to be is if you come back and sign a post-nuptial."

b. Ruling. On the matter of enforceability, the trial court made the following findings and rulings: "On May 25th H was advised by his attorney prior to signing that, as the final draft of the


Addenda had [not] been presented within seven days of the day that they were signing, the Addenda was unenforceable. They did not advise W of this or discuss the possibility of waiting one more day so as to obviate that problem. In reliance on his attorney's opinion regarding the agreement's unenforceability, H signed the agreement. W, on the other hand, signed the agreement on the 25th because she believed that she and H had in fact reached an agreement."

As well, the court found there was "strong evidence that H, a sophisticated business executive, was . . . playing `hardball.' He was refusing to negotiate with W and, at the very end when she threatened to call the wedding off, he agreed to sign only because the matter had come to a head within the seven day window and he had legal advice that he could sign with impunity. Rather than being a `victim' of circumstances, H shrewdly maneuvered W to the alter [sic] in a manner that frustrated her desire to reach a mutually acceptable agreement."

Notwithstanding this behavior, the court concluded that the seven-day rule applied. First, contrary to Cadwell-Faso's position, the statute applied to both represented and unrepresented parties. The court reasoned that the statutory language "does not say that" it pertained only to unrepresented parties, and the drafters "clearly [know] how to insert such a limitation when it was intended," citing the language of section 1615(c)(3). Further, although the seven-day rule arguably was intended to allow the unrepresented party time to seek out counsel and made little sense when counsel was already onboard, the court concluded it was "equally plausible that the Legislature intended to allow even represented parties time to consult with counsel and avoid a last minute rush that might leave one party with insufficient time to consult and consider complicated revisions."

Second, the seven-day clock did not begin to run from the presentation of the first draft of the addenda. The court said: "The first draft presented may have no relationship to the draft that is eventually signed, and it [is] unlikely that the legislative purpose was simply to ensure that there was an advisement at the outset. The initial draft, [after all], might be quite innocuous, and then months later on the eve of the wedding, complicated and burdensome terms might be inserted. To construe the requirement of this subsection as only attaching to the initial draft without consideration of the abuses such a construction might enable would do violence to the clear legislative intent."

The court held that the seven-day rule was mandatory, and the statute as drafted did not limit the rule to the unrepresented. Because presentation of the Addendum ran afoul of the seven-day rule in this case, Faso's execution of the document was deemed involuntary and the Addendum was unenforceable.

As to the matter of estoppel, the court explained that because the Legislature mandated a seven-day waiting period, promissory estoppel principles could not be used to enforce an agreement executed prior to the close of that period. Nonetheless, the court conveyed that in weighing the statutory factors affecting the issue of spousal support, Cadwell-Faso's reliance on the premarital agreement to press forward with marriage and sell her business, coupled with Faso's conscious decision to sign the agreement in reliance on its unenforceability, were factors it could consider under the section 4320, subdivision (n) catchall, "[a]ny other factors the court determines are just and equitable."


2. Phase Two

a. Hearing. At the outset Faso abandoned his claim for reimbursement of funds paid to Cadwell-Faso and her business, as well as the approximately $140,000 down payment on a second Sea Ranch property.

Cadwell-Faso testified that prior to 2003 when she became involved with Faso, her business generated between $10,000 and $20,000 per month.

[191 Cal.App.4th 955]

However, revenue declined when she began travelling with Faso and did not work as much. Her accountant represented that the business sold in 2007 for $450,000.4 He opined the business was worth $593,000 at that time, although he admitted that it sustained net losses of $16,754 and $24,479 in 2006 and 2005 respectively. Faso's accountant declared that the purchase price "appears to be several multiples above and beyond what the owner's discretionary cash flow was prior to the sale" and "would far [exceed] the indicated value of the business based on the earnings reported on the tax returns." For each of the years 2004 through 2006, the business reported net annual losses. Just looking at the gross profit (sales minus cost of sales), he did not see how Cadwell-Faso could pull $10,000 per month for living expenses.

Faso calculated that during the marriage, gifts of funds to Cadwell-Faso totaled $496,000.

b. Decision. The trial court denied permanent spousal support to Cadwell-Faso, concluding there was no basis to award spousal support on a restitutionary theory by restoring her to the economic position she enjoyed prior to selling the business. The best evidence of the value of the business was its sale price of $450,000. Cadwell-Faso had repossessed the business and was working to restore it in the present economic climate. The court found it impossible to ascertain how the business would have fared had she continued to operate it through the economic downturn. Additionally, given that Faso made significant financial contributions to Cadwell-Faso during the marriage and paid spousal support through the date of trial, the court decided he had "paid enough" by way of spousal support in the short-term marriage. Finally, the court awarded Cadwell-Faso $45,000 in attorney fees.

II. THE ADDENDUM IS ENFORCEABLE UNDER SECTION 1615

A. Legal Background; Governing Principles

Prior to 2001, section 1615 provided that a premarital agreement is not enforceable if the party against whom enforcement is pressed proves that (1) he or she did not execute the agreement voluntarily, or (2) the agreement was unconscionable when entered into and the party did not have actual or constructive knowledge of the other party's assets and obligations, and did not waive disclosure of such assets and obligations. (Former § 1615, subd. (a); Stats. 1992, ch. 162, § 10.) In 2000, our Supreme Court decided In re Marriage of Bonds (2000) 24 Cal.4th 1 [99 Cal.Rptr.2d 252, 5 P.3d 815] (Bonds). There, the fiancée of Barry Bonds, whose native languish was Swedish, received a premarital agreement prepared by Bonds's attorney on the eve of their wedding. The fiancée signed the agreement without the benefit of independent counsel and was subsequently held to it in litigation. The issue was whether she entered the agreement voluntarily. The trial court said she did, and the Supreme Court determined that finding was


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supported by substantial evidence, reversing the Court of Appeal holding that premarital agreements are subject to strict scrutiny where the less sophisticated party does not have independent counsel. (Id. at pp. 6, 37-38.) Rather, the circumstance that one of the parties was not represented by independent counsel is but one of several factors that courts must consider in deciding whether a premarital agreement was entered into voluntarily. (Id. at p. 6.) The statute in effect at the time did not define the term "voluntarily" and placed the burden on the party seeking to block enforcement to prove that he or she did not execute the agreement voluntarily. (Id. at pp. 15, 24.)

(1) The Legislature responded swiftly with amendments to section 1615. (Stats. 2001, ch. 286, § 2.) Among other matters, the amendments added subdivision (c), which codifies the set of circumstances which, together, will defeat the default presumption that a premarital agreement was not executed voluntarily. Although under section 1615, subdivision (a), the party challenging enforceability of a premarital agreement bears the burden of proving involuntary execution or unconscionability, subdivision (c) lightens that burden when the contest centers on the issue of voluntary execution. The law now deems that a premarital agreement is not voluntarily executed unless the court makes all of the five designated findings. With the five findings, the presumption of involuntary execution is overcome as a matter of law. As explained in a family law treatise, the statute "places an evidentiary burden upon the party seeking to enforce a premarital agreement: He or she must be prepared to present evidence sufficient for the court to make the Fam.C. § 1615(c)(1) through (5) findings; otherwise, the premarital agreement must be held unenforceable as having been involuntarily executed." (Hogoboom & King, Cal. Practice Guide: Family Law (The Rutter Group 2010) ¶ 9:152.1, p. 9-41 (rev. # 1, 2007).)

On appeal the parties have focused on whether the seven-day period is mandatory and absolute, and the companion question of when the seven-day period commences. However, we are concerned with the threshold matter addressed below, namely does section 1615(c)(2) apply to parties such as Faso who, from the outset, are represented in the transaction by independent counsel, or does it apply only to unrepresented parties? Having requested and received supplemental letter briefing on this issue, we conclude subdivision (c)(2) does not apply in the present situation. The question, of course, is one of statutory interpretation.

(2) The rules governing statutory interpretation are clear. Our fundamental job is to ascertain the intent of the lawmakers in order to effect the statute's purpose. (Code Civ. Proc., § 1859; Munson v. Del Taco, Inc. (2009) 46 Cal.4th 661, 666 [94 Cal.Rptr.3d 685, 208 P.3d 623].) We look first to the actual language of the statute. "If the terms are unambiguous, we conclude the lawmakers meant what they said and the plain meaning of the language prevails." (San Mateo County Dept. of Child Support Services v. Clark (2008) 168 Cal.App.4th 834, 841 [85 Cal.Rptr.3d 763].) As well, we must give effect to statutes according to the usual, ordinary import of the language used in framing them, and construe words and phrases in context, keeping in mind the nature and obvious purposes of the statute. (Civ. Code, § 13; Phelps v. Stostad (1997) 16 Cal.4th 23, 32 [65 Cal.Rptr.2d 360, 939 P.2d 760].) And, if possible, we give meaning to every word of a statute, thus avoiding rendering any word surplusage. (Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1118 [81 Cal.Rptr.2d 471, 969 P.2d 564].) And finally, we garner legislative intent from the statute as a whole rather than from isolated phrases or words. (Id. at pp. 1118-1119.)








(3) On the other hand, if the meaning of the statutory language is not clear, we may enlist extrinsic aids, including the legislative history of the statute, to divine the legislative intent. But if neither the words of the statute nor its history expose a clear meaning, "we apply reason and practicality, and interpret the statute in accord with common sense and justice, and to avoid an absurd result." (In re Marriage of Campbell (2006) 136 Cal.App.4th 502, 506 [38 Cal.Rptr.3d 908].) Thus we will not sacrifice the legislative purpose to a literal construction of a statute. (Slatkin v. White (2002) 102 Cal.App.4th 963, 970 [126 Cal.Rptr.2d 54].)

B. Legislative History

Section 1615(c)(2) is ambiguous. We cannot ascertain from its face whether the seven-day rule is confined to unrepresented parties, or whether it also covers those represented from the outset by independent counsel. Although the statute does not specify that it only applies to unrepresented parties, an ambiguity arises from the conjunctive phrase stating there must be at least seven days between the time the party "was first presented with the agreement and advised to seek independent legal counsel . . . ." (§ 1615(c), italics added.) While the legislative history does not entirely resolve the ambiguity, it does make it abundantly clear that the Legislature was concerned about the presumed voluntariness of premarital agreements in situations such as Bonds, where one party is not represented by independent counsel. The Bonds decision was handed down on August 21, 2000. Less than five months later, on January 11, 2001, Senator Sheila Kuehl introduced Senate Bill No. 78 (2001-2002 Reg. Sess.). The initial Senate Judiciary Committee analysis of the bill specifically referenced the Bonds decision and a companion case, indicating that the proposed legislation was "in specific response" to those cases. (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 78 (2001-2002 Reg. Sess.) Apr. 24, 2001, p. 3 (hereafter Senate Bill Analysis).) Highlighting Bonds, the analysis focused on the Supreme Court's holding "that a party's lack of representation by independent counsel in the executing of a premarital agreement was only one factor to consider in determining whether the agreement was entered into voluntarily, as opposed to being unenforceable under California's version of the [Uniform Premarital Agreement Act (UPAA)]." (Senate Bill Analysis, at p. 2.)

Further, the analysis described the proposed changes to existing law as follows: "This bill would provide that a court shall find that a premarital agreement was not executed voluntarily unless the court finds that the party against whom enforcement is sought (1) either was represented by counsel when the agreement was signed, or waived representation in writing; (2) had at least seven days between the presentation and the signing of the agreement to seek legal advice; (3) if not represented by counsel, was fully informed as to the terms and effect of the agreement, was proficient in the language used in the explanation and the agreement, and signed a statement confirming receipt of the information before signing the agreement; and (4) neither lacked the capacity to enter the agreement nor did so under duress, fraud, or undue influence." (Senate Bill Analysis, at p. 4, italics added.) Later, in the comment section entitled "Requiring legal counsel or written waivers for voluntary agreements," the analysis stated: "In the Bonds case, after holding that lack of legal representation was only one factor to be considered in determining whether execution of a premarital agreement was voluntary, the Supreme Court nevertheless observed that, `obviously, the best assurance of enforceability is independent representation for both parties.' [Citation.] [¶] The author agrees. This bill would amend the enforceability provision of the UPAA to require, for a finding of voluntariness, that the party against whom enforcement was sought either was represented by counsel at the signing of the agreement or







waived representation in writing, was proficient in the language used, had adequate time to seek and be advised by counsel, and if counsel was waived, was fully informed about the nature and effects of the agreement and signed a statement to that effect before executing the agreement." (Senate Bill Analysis, at p. 7.) The description of proposed changes, quoted above, might suggest that the seven-day waiting period was intended to apply to any party, i.e., that even a represented party would have seven days to seek out legal advice. As Faso points out, in Bonds the Supreme Court mentioned that the cases cited in a comment to the UPAA's enforcement provision directed attention to the impact of various factors on the parties, including "the presence or absence of independent counsel or of an opportunity to consult independent counsel. . . ." (Bonds, supra, 24 Cal.4th at p. 18, italics added.)

Conversely, the specific comment on requiring legal counsel or waivers seems to suggest an either/or situation—either the party must be represented by counsel or waives representation, with the various requirements, including the seven-day waiting period, intended to assure that the unrepresented party understood what she or he was entering into.

Subsequent bill analyses and reports by various legislative committees tracked the actual language of section 1615(c),5 and some also emphasized in the synopsis the particular enumerated condition requiring representation by independent counsel, or an express waiver.6

C. Analysis

(4) Scrutinizing the statute as a whole as we must, we are mindful that both section 1615(c)(1) and (3) make distinctions between represented and/or unrepresented parties, thus demonstrating that the drafters knew how to place limitations on the party against whom enforcement was sought. Specifically, subdivision (c)(1) distinguishes between a party represented by independent legal counsel and a party who, after being advised to seek counsel, waives representation; subdivision (c)(3) concerns solely unrepresented parties. On the other hand, subdivision(c)(2) contains no such explicit limitations or distinctions. However, we cannot avoid the glaring fact that the seven-day waiting period is measured from the time the party against whom enforcement is sought "was first presented with the agreement and advised to seek independent legal counsel," and the moment of execution. (§ 1615(c)(2), italics added.) The conjunctive phrase, requiring both presentment and advice, implies that the waiting period is for the benefit of a party not represented by counsel at the time the agreement is presented, thereby affording time to obtain counsel and enjoy the benefit of counsel's review of the agreement and advice prior to signing it. We also point out that this requirement follows directly from the subdivision (c)(1) language specifying that the party to be held to the agreement is either independently represented by counsel or expressly waives counsel in writing "after being advised to seek independent legal counsel. . . ." (§ 1615(c)(1), italics added.) In other words, the flow and sense of the statute is that section 1615(c)(2) is a continuation of the requirements pertaining to an unrepresented party.

(5) From a practical and commonsense perspective, it would be absurd to require a party pursuing enforcement to advise the other party to seek independent legal counsel when that party is already represented in the transaction by independent counsel. In other words, were we to interpret subdivision (c)(2) as applying to represented parties, the advisement requirement becomes meaningless surplusage. Yet, when applied to an unrepresented party, the advisement proviso is critical.




Moreover, the seven-day period makes sense as a necessary condition to finding voluntary execution on the part of an unrepresented party because the requirement affords a reasonable period of time to obtain and consult with independent counsel prior to signing a premarital agreement. On the other hand, when a party is already represented by counsel in the transaction, obtaining the requisite advice can occur very quickly and no purpose is served by imposing a statutory waiting period. Retained counsel can control the timeline. If not available straight away to review a document, any competent attorney would advise the client not to sign it until he or she reviewed the document and consulted with the client. Whether this occurred within the seven-day period or beyond it, the client is protected. The same cannot be said for the unrepresented party.

Further, as we have shown, the legislative history reveals that the Legislature was concerned with protecting unrepresented parties. The seven-day rule allows time for the unrepresented party to locate and consult with independent counsel, or time to consider the agreement after receiving it. Faso cautions that interpreting section 1615(c)(2) as limited to unrepresented parties would produce absurd results. His reasoning does not persuade us.

(6) First, citing In re Marriage of Falcone & Fyke (2008) 164 Cal.App.4th 814, 830 [79 Cal.Rptr.3d 588], he claims this interpretation would favor unrepresented parties over parties represented by counsel. Faso reasons that if section 1615(c)(2) applied only to unrepresented parties, this means the statute would grant a seven-day waiting period to self-represented parties in all circumstances, but deny the same period to represented parties under all circumstances, in direct contravention of the rule of Falcone & Fyke that self-represented parties are entitled to no greater consideration than other litigants. This is a rule governing how courts treat parties once they are involved in litigation at the trial or appellate level. Section 1615(c) is a legislative enactment addressing the unique law and policy issues that bear on the enforceability of an agreement between prospective spouses. The Legislature, as a separate branch of government, is free to impose standards and protections in the premarital context, including protections for unrepresented parties. It can, for example, take into account and address the realities of entering a premarital agreement, including the potential for coercion, the possible long-lasting negative impacts of unequal bargaining power or lack of full knowledge of one's rights, and the like.

(7) Next, Faso maintains that limiting the applicability of section 1615(c)(2) to unrepresented parties could deny a party who obtains counsel the effective representation of such counsel if the party is presented with a premarital agreement with insufficient time to consult his or her lawyer and consider complicated provisions or revisions. We are not sure what Faso means. Certainly nothing in section 1615(c)(2) prevents a party from taking as much time as needed, beyond seven days from presentment, to consult with counsel, mull over troubling provisions, etc., prior to signing the agreement.

Finally, Faso posits that confining section 1615(c)(2) to unrepresented parties would render the statute ambiguous in the following situation: An unrepresented party signs the agreement before the seven-day period elapses, and then obtains counsel three days later, still within the seven-day period. Under this hypothetical, because the seven-day period had not elapsed, the premarital agreement would be unenforceable. But, Faso argues, if the sole purpose of the statute is to allow the unrepresented party seven days to obtain counsel, that purpose would have been served and the parties' consent to the agreement would be deemed voluntary. But of course the sole purpose



is not simply to allow the unrepresented party seven days to obtain counsel; the purpose is to allow seven days to seek and obtain legal advice prior to execution.

III. CONCLUSION AND DISPOSITION

(8) For all these reasons, we conclude that section 1615(c)(2) does not pertain to Faso, a party who was represented in the transaction from the outset. Hence the trial court erred in deeming that his execution of the Addendum was involuntary and therefore unenforceable. The Addendum is enforceable.

The judgment is reversed. Costs are awarded to Cadwell-Faso on appeal.

Ruvolo, P. J., and Sepulveda, J., concurred.

FootNotes 1. Unless otherwise noted, all statutory references are to the Family Code. Section 1615, subdivision (a) provides in part: "A premarital agreement is not enforceable if the party against whom enforcement is sought proves either of the following: [¶] (1) That party did not execute the agreement voluntarily. [¶] (2) The agreement was unconscionable when it was executed . . . ." Subdivision (c) states: "For the purposes of subdivision (a), it shall be deemed that a premarital agreement was not executed voluntarily unless the court finds in writing or on the record all of the following: [¶] (1) The party against whom enforcement is sought was represented by independent legal counsel at the time of signing the agreement or, after being advised to seek independent legal counsel, expressly waived, in a separate writing, representation by independent legal counsel. [¶] (2) The party against whom enforcement is sought had not less than seven calendar days between the time that party was first presented with the agreement and advised to seek independent legal counsel and the time the agreement was signed. [¶] (3) The party against whom enforcement is sought, if unrepresented by legal counsel, was fully informed of the terms and basic effect of the agreement as well as the rights and obligations he or she was giving up by signing the agreement, and was proficient in the language in which the explanation of the party's rights was conducted and in which the agreement was written. The explanation of the rights and obligations relinquished shall be memorialized in writing and delivered to the party prior to signing the agreement. The unrepresented party shall, on or before the signing of the premarital agreement, execute a document declaring that he or she received the information required by this paragraph and indicating who provided that information. [¶] (4) The agreement and the writings executed pursuant to paragraphs (1) and (3) were not executed under duress, fraud, or undue influence, and the parties did not lack capacity to enter into the agreement. [¶] (5) Any other factors the court deems relevant." (§ 1615(c).) 2. The first draft provided that Faso would pay off the mortgage on Cadwell-Faso's Sea Ranch property within one year; she would become an equitable owner of his Florida residential property; if they were still married at Faso's death, Cadwell-Faso would receive specified income from his estate; and if they divorced, she would have the right to claim spousal support. The second version added that Cadwell-Faso would sell her business and move to Stockton and that her retirement accounts would remain her separate property. Draft number three stated Faso would pay off the Sea Ranch mortgage within two years; provided for Cadwell-Faso's equitable ownership in properties in Mexico, Costa Rica and Fort Worth, Texas, but not Florida; called for


provisions of health care for Cadwell-Faso for life; inserted specific spousal support provisions in her favor should they divorce; and eliminated any income stream to Cadwell-Faso upon Faso's death during the marriage. The fourth draft extended to 10 years the time to pay off the Sea Ranch mortgage and changed provisions regarding Cadwell-Faso's rights in Faso's real property. 3. This exhibit does not appear in the record. 4. Cadwell-Faso stated she only received $250,000 before the buyer defaulted, but received some commissions through 2009 because she continued to work for the company part time. 5. See, for example, Senate Rules Committee, Office of Senate Floor Analyses, 3d reading analysis of Senate Bill No. 78 (2001-2002 Reg. Sess.) as amended May 1, 2001, pages 2-3; Assembly Committee on Judiciary, Analysis of Senate Bill No. 78 (2001-2002 Reg. Sess.) as amended June 21, 2001, page 3; Assembly Committee on Judiciary, Analysis of Senate Bill No. 78 (2001-2002 Reg. Sess.) as amended June 21, 2001, pages 2-3. 6. See, for example, Assembly Committee on Judiciary, Analysis of Senate Bill No. 78 (2001-2002 Reg. Sess.) as amended June 21, 2001, page 2; Assembly Committee on Judiciary, Analysis of Senate Bill No. 78 (2001-2002 Reg. Sess.) as amended June 21, 2001, page 1.

In Re Marriage of Facter 212 Cal.App.4th 967 (2013) 152 Cal. Rptr. 3d 79

IN RE MARRIAGE OF FACTER No. A134191. 212 Cal.App.4th 967 (2013)

152 Cal. Rptr. 3d 79

In re the Marriage of NANCY and JEFFREY FACTER. NANCY FACTER, Respondent, v. JEFFREY FACTER, Appellant.

Court of Appeals of California, First District, Division One.

January 14, 2013.

Garrett C. Dailey for Appellant.

Law Office of Lance A. Russell, Lance A. Russell; and Bernard N. Wolf for Respondent.

OPINION

DONDERO, J. —

In 1994, Jeffrey and Nancy Facter1 executed a premarital agreement providing, among other things, that none of the property acquired during the marriage would be deemed community property. Sixteen years later the parties separated and divorce proceedings were initiated. After contested proceedings, the trial court declared the premarital agreement invalid in its entirety. Jeffrey appeals, contending the trial court erred in nullifying the contract instead of severing any illegal terms and preserving the balance of the agreement. We agree and reverse.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

I. Background and Pretrial Proceedings

The parties entered into the premarital agreement (the Agreement) on November 7, 1994. The Agreement itself consists of four pages and has three sections entitled "Property Rights," "Child Support," and "Other Provisions." Attached to the Agreement are two exhibits setting forth Jeffrey's separate property (then totaling approximately $3 million), and his earnings of between $475,000 and $700,000 in each of the prior five years. Paragraph No. 1, under the Property Rights section, states that none of the property acquired during the marriage would be community property.2 This section also purports to limit Jeffrey's postmarital financial obligations to Nancy. Paragraph No. 2 of the Agreement sets forth the property she is to receive from Jeffrey in the event of permanent separation or divorce. In it, he promised to give her $100,000, plus an additional $100,000 if the marriage lasted at least 15 years and he was a partner at his law firm for at least seven years.3 She is also to receive: (1) "One half of any sum earned from the sale of the marital residence ... after the return to [Jeffrey] of the downpayment [sic] that he made ... and less any expenses, fees and taxes incurred in connection with that sale," (2) all of that home's furnishing, and (3) a Jaguar automobile. The Child Support section seeks to

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limit his future child support obligations. The parties married the day after they signed the Agreement. The marriage produced a son, who was born in March 1996.

On December 5, 2010, the parties separated.

On February 4, 2011, Jeffrey filed a response to Nancy's petition for dissolution of marriage. In the response, he requested a confirmation of the property rights as set forth in the Agreement.

On April 13, 2011, Nancy filed a motion for temporary support and fees. In a declaration accompanying the motion, she stated Jeffrey had told her he did not believe he had to pay her any spousal support.4 He also said his obligation to pay child support was limited by the terms of the Agreement. She reported that during the entirety of their marriage she never worked outside the home, as Jeffrey's income allowed them "to live a life completely free of any financial stress or worry." She expressed concern that Jeffrey would rely on the Agreement in opposing her motion, and reserved the right to assert the unenforceability of the entire contract. Her attorney also filed a declaration, stating, in part, his view that the enforceability of the Agreement's property provisions were not presently before the court. He affirmed, however, that his client was not waiving her right to challenge the Agreement. He also claimed the Agreement's provisions regarding child support were invalid, and argued that the document did not contain a waiver of spousal support.

Also on April 13, 2011, Jeffrey filed a memorandum of points and authorities in response to Nancy's motion for temporary support and fees. He asserted the Agreement contains a waiver of spousal support that was "contemplated and mutually agreed to." He relied, in part, on language contained in Paragraph No. 6 in the Child Support section, which provides that nothing in his conditional commitment to continue to pay the mortgage, taxes, and insurance on the marital home "shall give rise to any other obligations to pay for the housing of [Nancy], spousal support, or additional sums for child support." (Italics added.) He also relied on a provision in Paragraph No. 3 of the Property Rights section, which states, in part, that the assets enumerated in Paragraph No. 2 (noted above) would "constitute [Nancy's] sole right to property acquired during the marriage and to support...." (Original italics & boldface.)

On June 6, 2011, the trial court filed its temporary orders for spousal and child support, attorney fees, and costs. The issue of the validity of the Agreement was ordered bifurcated for early resolution.

On August 4, 2011, Jeffrey filed a "notice of limitation of claims at trial." In this pleading, he conceded the Agreement's provisions relating to child support were unenforceable.5 Backing away from his earlier position, he also indicated that he would not assert the Agreement as a bar to spousal support or to payment of Nancy's attorney fees.6 Finally, he stated he would not rely on a provision in Paragraph No. 2 as grounds for reimbursement of money spent on improvements made to the marital home.7 He warned he would seek sanctions if Nancy were to attempt to litigate the issues he was conceding.

On August 17, 2011, Jeffrey filed his trial brief. He again conceded the Agreement was unenforceable with respect to child support and attorney fees. He also clarified that although he had drafted the Agreement with the intent to provide for a waiver of spousal support, he would






not seek to enforce that waiver. His stated intention in making these concessions in his August 4, 2011 pleading was to avoid trial on the validity of the remainder of the Agreement. As that effort had proved unsuccessful, he focused his arguments on Paragraph No. 1, the provision stating that none of the property acquired during the marriage would be deemed community property. He further argued that the severability clause in the Agreement required the property provisions of the contract to be honored, notwithstanding the admittedly invalid provisions concerning child support and attorney fees.

On August 18, 2011, Jeffrey filed a motion in limine in which he claimed the issues of the spousal support waiver, child support, and attorney fees were "irrelevant" because they had been removed "from the case."

The trial on the bifurcated issue of the validity of the Agreement was heard on August 22 and 23, 2011.

II. The Trial

A. Nancy Facter

Nancy testified that she met Jeffrey in 1990. At that time, she had a part-time job at Nordstrom's and Jeffrey was working at a law firm. As their relationship progressed, Jeffrey gave her financial support including buying her a used car and giving her money to take a real estate licensing course. When she stopped working shortly before their marriage, he paid all the living expenses for her and for her two children from a prior marriage. He never asked to be reimbursed for any of these expenses. They decided to purchase a home together in the spring of 1994, prior to their marriage. Both of their names are on the title to the property.8

Jeffrey wanted to have a child but Nancy told him she would not do so outside of marriage. Around the time they purchased their home, he told her he was afraid of marriage because he had worked hard all his life, had earned a lot of money, and wanted all that he had earned prior to marriage to be protected. He asked if she would sign a prenuptial agreement. She said she understood that he needed to protect his prior earnings, but told him she would not enter into a marriage unless the union was a "partnership" without separate finances. He assented and said he would prepare an agreement. When he gave her the draft of the Agreement he told her to take it to a family law attorney who would explain it to her, but advised her that absolutely no changes could be made to the document. He did not discuss any of its provisions with her.

Nancy showed the draft Agreement to an attorney in San Francisco whose name she could not recall, as well as an attorney in San Rafael named Charlotte Huggins. Huggins took a few minutes to review the document and told her the child support section was contrary to California law because any decisions regarding child support would be determined by the court. She advised Nancy that the Agreement did not contain a waiver of spousal support or attorney fees. She also noted that if the marital home was sold in the event of a divorce, Jeffrey would receive a refund of his downpayment, as well as any expenses relating to the sale of the house. After that, they would split the profits from the sale. She also told Nancy any earnings or funds that were put into joint accounts would be considered joint funds. Nancy paid Huggins a fee and never saw her again. The entire meeting took less than 30 minutes.



Nancy and Jeffrey signed the Agreement just before their wedding. They never discussed the Agreement's terms.9 She signed it because she believed it protected her interests in that if the marriage failed she would receive spousal support and half of the value of the marital home, and would have a joint interest in the money he had earned during marriage because she understood all his earnings would be held jointly. Had she known Jeffrey would claim all his earnings during marriage were his sole and separate property, she would not have signed the Agreement. She also would not have signed it if she had known he was going to claim it entitled him to reimbursement for the almost $2 million spent on remodeling the marital home. Nancy testified the parties agreed their marriage would be "very traditional" in that she would be a stay-at-home mom, take care of the house, and support him in his career. Jeffrey told Nancy he made more than enough money to provide for the family and she would never have to worry about money again. During the marriage, he controlled their finances. Whenever she asked him if he was keeping any of his earnings as separate property he would deny doing so. He always said his money was "our money." They also had several joint accounts.

On cross-examination, Nancy admitted she read the entire Agreement before she signed it. With respect to her understanding of Paragraph No. 1, she testified she was advised that any earnings held jointly would be owned jointly. Since the parties had agreed Jeffrey's income would be held jointly during marriage, she understood that she would have a joint interest in all of his earnings. She acknowledged they did not have a written agreement that he would deposit all of his earnings into joint accounts. She testified her attorneys did not tell her the Agreement's integration clause would make any oral promises unenforceable.10 She agreed no undue influence was placed on her to sign the Agreement. She also knew the Agreement could only be modified in writing, and that it contained a severability clause, which she also read and understood.

B. Charlotte Huggins

Attorney Charlotte Huggins testified she had no recollection of having consulted with Nancy, and had no notes or files from 1994. If a client had asked her to review a prenuptial agreement in 1994, she would have gone over the document with the client and explained the legal meaning of its provisions. As to whether she would have advised a client to refrain from telling his or her prospective spouse that any part of the agreement was legally invalid, Huggins testified she had no recollection of what she would have done in 1994.

C. Jeffrey Facter

Jeffrey graduated from Harvard Law School and has been a partner at his current law firm since 1989. His areas of concentration are securities and corporate governance litigation. When the couple first met, Nancy was selling shoes at Nordstrom's. She did not like that job and wanted to get a real estate license. He paid for her to take a course and she passed the exam and obtained her license. She later decided she did not want to be a real estate agent. During this time, she was involved in divorce litigation with her prior husband. For a layperson, she was very savvy about the laws on community property, support, and support arrearages. She also knew about things like DissoMaster, which he had never heard of before.11





Before they married, they purchased a home in Mill Valley. Title to the house was taken in joint tenancy, though Nancy did not contribute any money towards the purchase. When they discussed getting married, Jeffrey explained to her that he had worked hard to get where he was in his career and could not go forward with a marriage unless his earnings would be legally his. He also told her he did not want to have any continuing financial obligations to her if their marriage ended. However, he reassured her that as long as they were married she could spend his earnings as she chose. He would not have any rules about spending and would not be watching her. When she assented, he was relieved and told her he would write something up. He thus had two goals in drafting a prenuptial agreement: "First, I needed an agreement that the earnings during the marriage would be legally mine." He wanted Nancy to promise that all property acquired during the marriage, including profit distributions from his firm and investment earnings, would not be community property. He sought to convey this concept in Paragraph No. 1 of the Agreement. Secondly, he wanted to preclude any postmarital payments to Nancy, apart from those set forth in the Agreement.

When he drafted the Agreement, Jeffrey had no family law expertise and he did not consult with a family law attorney. He also did not do any legal research on family law because he wanted only a very basic agreement that would cover his two primary issues. He thought the language of the Agreement was simple and straightforward, and he assumed if anything was amiss Nancy's attorney would bring it to his attention. When the trial judge asked Jeffrey whether he would have entered into the marriage had he known he would later have to abandon the spousal support waiver, he answered, "I would not have, your Honor. The spousal support waiver was hugely important to me. Not as important as my earnings during the marriage, but this sort of open-ended paying money to someone who walked out on me, or may walk out on me, that was a nightmare to me. And I would not have done that."

After Jeffrey drafted the Agreement, he gave it to Nancy and told her to get independent legal advice from a family law attorney. He denied telling her the document could not be modified, but he did tell her two aspects of it could not be altered. Specifically, Paragraph No. 1 was nonnegotiable. Paragraph No. 2, while negotiable, would set forth all that Nancy would receive in lieu of community property and spousal support in the event the marriage failed. He denied promising her at that time that he would put all of his earnings into joint accounts. He also denied telling her the only purpose of the Agreement was to protect his existing separate property. He understood it is not necessary to have a prenuptial agreement to protect property that is separately owned prior to marriage. Instead, such agreements are used to clarify whether earnings acquired during marriage are going to remain separate property. She never indicated to him that she did not believe the Agreement was binding.

Jeffrey affirmed that, with his assent, Nancy never worked for compensation during the marriage. He told her he would take care of her financially for as long as they were together. For the first four years of their marriage, the parties had separate bank accounts. Beginning in 1998, they opened a few joint accounts. One of the accounts was used to pay for the home remodeling project. They made it a joint account so that Nancy would be able to write checks to the contractors.12 They also opened a joint checking account to cover day-to-day household expenses. Around 2007, Nancy started pressuring him to put more assets into joint accounts. This was when she first said she wanted to feel more like an economic partner in the marriage.



They talked it over and he agreed to put everything he earned into joint accounts. She took over paying all of their bills. In his mind, all his earnings were still his separate property, but he put the money into joint accounts because it was important to her that she run the household finances.

III. The Trial Court's Ruling

On October 14, 2011, the trial court orally announced its tentative decision, declaring the spousal support waiver to be unconscionable and finding the Agreement inseverable and unenforceable in its entirety.

On October 28, 2011, Jeffrey filed his objections to the trial court's tentative decision.

On November 28, 2011, the trial court filed its statement of decision, affirming its tentative ruling. This appeal followed.

DISCUSSION

On appeal, Jeffrey contends the allegedly invalid spousal support waiver provided no legal basis for the trial court's refusal to enforce the property-related provisions of the Agreement. Although we disagree in some respects with the court's analysis, we agree the Agreement contains an invalid, unconscionable waiver of spousal support. We concur with Jeffrey, however, that the court erred in refusing to sever the Agreement's invalid provisions from the balance of the contract.

The Spousal Support Waiver

A. The Agreement Contains a Waiver of Spousal Support

We first address Jeffrey's claim that the trial court erred in presuming the Agreement contains a waiver of spousal support. His argument is based on the assertion that there is no waiver because the document does not contain a "legally effective waiver of spousal support." (Italics added.) He also asserts the court predicated its ruling on "an impermissible application of the doctrine of judicial estoppel" because, by the time of trial, he had reversed his earlier position and decided he would no longer seek to enforce the waiver against Nancy. His arguments lack merit.

(1) We first observe that the trial court's duty was to interpret the Agreement itself, not Jeffrey's 180-degree turn away from his prior position. "The interpretation of a written instrument is essentially a judicial function to be exercised according to the generally accepted canons of interpretation so that the purposes of the instrument may be given effect." (In re Marriage of Smith (2007) 148 Cal.App.4th 1115, 1120 [56 Cal.Rptr.3d 341].) In interpreting a written agreement, we "look first to the language of the contract ... to ascertain its plain meaning or the meaning a layperson would ordinarily attach to it." (Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 18 [44 Cal.Rptr.2d 370, 900 P.2d 619].) "A contract must be so interpreted as to give effect to the mutual intention of the parties as it existed at the time of contracting, so far as the same is ascertainable and lawful." (Civ. Code, § 1636.) The intent is to be inferred, if possible, solely from the written provisions of the contract. (Civ. Code, § 1639.) Language in a contract must be interpreted as a whole and in the circumstances of the case, and cannot be







deemed ambiguous in the abstract. (Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1264-1265 [10 Cal.Rptr.2d 538, 833 P.2d 545]; see Civ. Code, §§ 1641, 1647.)

As noted above, Paragraph No. 2 spells out what Nancy is to receive in the event of divorce, including cash and half the profits from the sale of the marital home. Paragraph No. 3 contains the spousal support waiver: "The provisions of paragraph 2, supra, constitute [Nancy's] sole right to property acquired during the marriage and to support, and replace or supersede any entitlement to such property that [Nancy] might otherwise have under law." (Italics added.) Jeffrey contends his use of the word "support" rather than "spousal support" created "some ambiguity as to the meaning of `support.'" Relying on In re Marriage of Vomacka (1984) 36 Cal.3d 459, 469 [204 Cal.Rptr. 568, 683 P.2d 248] ["where there is an ambiguity in the language of a marital property agreement it must be decided in favor of the right to spousal support."], he further asserts that opinion "precludes finding that there is a waiver of spousal support in the Agreement."13 However, as he admits, he not only "intended to achieve a waiver of spousal support" when he drafted the Agreement, he initially asserted this waiver in opposition to Nancy's motion for temporary spousal support.

Even if the word "support" as it appears in Paragraph No. 3 is ambiguous, we would interpret it as referencing spousal support. In general, an ambiguous or uncertain provision of a contract "must be interpreted in the sense in which the promisor believed, at the time of making it, that the promisee understood it." (Civ. Code, § 1649.) "`[W]here the language of the contract is ambiguous, it is the duty of the court to resolve the ambiguity by taking into account all the facts, circumstances and conditions surrounding the execution of the contract.'" (Frankel v. Board of Dental Examiners (1996) 46 Cal.App.4th 534, 544 [54 Cal.Rptr.2d 128], quoting Floystrup v. City of Berkeley Rent Stabilization Bd. (1990) 219 Cal.App.3d 1309, 1318 [268 Cal.Rptr. 898].) If extrinsic evidence is admitted to interpret an ambiguous contract but that evidence is undisputed and the parties draw conflicting inferences, a reviewing court independently draws inferences and interprets the contract. (City of El Cajon v. El Cajon Police Officers' Assn. (1996) 49 Cal.App.4th 64, 71 [56 Cal.Rptr.2d 723]; Richeson v. Helal (2007) 158 Cal.App.4th 268, 276 [70 Cal.Rptr.3d 18]; Frankel, supra, at p. 546.)

The only other meaning that could be ascribed to the word "support" in Paragraph No. 3 would be that it references child support. However, the Agreement specifically addresses child support in another section.14 Moreover, Paragraph No. 3 appears under the heading "Property Rights," which clearly is intended to define the property rights as between Jeffrey and Nancy. Paragraph No. 2, which is cross-referenced in Paragraph No. 3, pertains entirely to Nancy's property rights. Thus, we have little difficulty in concluding the word "support" in Paragraph No. 3 represents a waiver of spousal support.15

B. Spousal Support Waivers Executed in 1994 Are Not Illegal

Jeffrey asserts the trial court erred in concluding the spousal support waiver was illegal as a matter of law when the Agreement was executed in 1994. We agree the court's analysis on this point is flawed.

The trial court found that when the Agreement was signed, "the spousal support waiver was illegal" per In re Marriage of Higgason (1973) 10 Cal.3d 476 [110 Cal.Rptr. 897, 516 P.2d 289]




http://www.leagle.com/cite/36%20Cal.3d%20459


http://www.leagle.com/cite/204%20Cal.Rptr.%20568




http://www.leagle.com/cite/219%20Cal.App.3d%201309











(Higgason) "and dicta" in In re Marriage of Dawley (1976) 17 Cal.3d 342 [131 Cal.Rptr. 3, 551 P.2d 323] (Dawley).16 Our Supreme Court has described Higgason as follows: "At issue in Higgason was an agreement in which both husband and wife waived all interest in the property of the other party as well as the right to support. The court concluded that a purported waiver was invalid as against public policy insofar as the agreement sought to alter the wife's statutory obligation to support the husband during marriage. The court also held that the agreement did not preclude exercise of the court's discretionary power to award postdissolution support. [Citation.] Although the basis for the latter holding is not made clear in the opinion, it appears to be that married persons assume, by means of the marriage contract, an obligation for support that continues throughout the lifetime of the parties regardless of whether they live together or apart, and any agreement to waive that obligation is also unenforceable." (Pendleton, supra, 24 Cal.4th 39, 46.)

(2) In Pendleton, our Supreme Court essentially overruled Higgason and held that spousal support waivers in premarital agreements are not invalid per se. (Pendleton, supra, 24 Cal.4th 39, 53.) The court noted that the Uniform Premarital Agreement Act (Fam. Code, § 1600 et seq.; UPAA) was enacted in California in 1985 (12 years after Higgason was decided), and that its provisions expressly apply to premarital agreements. (Pendleton, supra, at pp. 43, fn. 3, & 44; Fam. Code, § 1610 et seq.)17 The premarital agreement at issue in Pendleton was executed in 1991 (Pendleton, supra, at p. 41), three years before Nancy and Jeffrey entered into the Agreement. Thus, under the trial court's reasoning, the Supreme Court should have held the waiver of spousal support contained therein was illegal under Higgason. Instead, the Supreme Court held that waivers of spousal support are not invalid per se:18 "[W]hen entered into voluntarily by parties who are aware of the effect of the agreement, a premarital waiver of spousal support does not offend contemporary public policy. Such agreements are, therefore, permitted under section 1612, subdivision (a)(7), which authorizes the parties to contract in a premarital agreement regarding `[a]ny other matter, including their personal rights and obligations, not in violation of public policy or a statute imposing a criminal penalty.'" (Pendleton, supra, at p. 53, italics added.) Thus, the trial court in the present case erred in relying on Higgason as the basis for invalidating the Agreement's spousal support waiver.

C. Whether the Spousal Support Waiver Is Unconscionable

We turn to whether the Agreement's spousal support waiver is unconscionable. We apply a de novo standard of review. (See former § 1615, subd. (b) ["An issue of unconscionability of a premarital agreement shall be decided by the court as a matter of law."].) The trial court found the spousal support waiver to be unconscionable under section 1612, subdivision (c), and Pendleton.19 We observe the appellate court in In re Marriage of Howell (2011) 195 Cal.App.4th 1062 [126 Cal.Rptr.3d 539] (Howell) issued an opinion on May 24, 2011, holding that the 2002 amendment to section 1612, subdivision (c), does not apply retroactively.20 (Howell, supra, at p. 1077.) As noted, the trial in the instant case was held in August 2011 and the statement of decision was filed on November 28, 2011. Accordingly, per Howell, the court's reliance on section 1612, subdivision (c), was misplaced.We note the Supreme Court in Pendleton did not set a precise standard for when a spousal waiver is deemed unconscionable.21 However, the opinion is instructive: "We need not decide here whether circumstances existing at the time enforcement of a waiver of spousal support is sought might make enforcement unjust. It is



















enough to conclude here that no public policy is violated by permitting enforcement of a waiver of spousal support executed by intelligent, well-educated persons, each of whom appears to be self-sufficient in property and earning ability, and both of whom have the advice of counsel regarding their rights and obligations as marital partners at the time they execute the waiver. Such a waiver does not violate public policy and is not per se unenforceable...." (Pendleton, supra, 24 Cal.4th 39, 53-54, fn. omitted, italics added.)

In Pendleton, the wife, who held a master's degree and was an aspiring writer, sought spousal support in spite of a waiver of such support contained in the parties' premarital agreement. At the time the dissolution petition was filed, each party had a net worth of approximately $2.5 million. (Pendleton, supra, 24 Cal.4th 39, 42.) Our Supreme Court found the waiver to be valid, observing that the premarital agreement contained an acknowledgement that "each party had been represented by independent counsel in the negotiation and preparation of the agreement, that counsel had advised each of the meaning and legal consequences of the agreement, and that each party had read and understood the agreement and its legal consequences. Their respective counsel certified that this had been done and that their clients understood the meaning and legal consequences of the agreement and executed it freely and voluntarily." (Id. at p. 41.)

Similarly, in Howell, the parties had comparable net incomes when they executed their premarital agreement in 1999. (Howell, supra, 195 Cal.App.4th 1062, 1065.) The trial court had ruled that the wife failed to prove the agreement was unconscionable, finding the parties had made "`fair, reasonable and full'" (id. at p. 1069) disclosures of property within the premarital agreement. Additionally, the trial court in that case had found there was not a great disparity in the income of the parties and their respective assets at the time they entered into the premarital agreement, which established there was not "any significant inequality of bargaining power." (Id. at p. 1080.) The appellate court affirmed the trial court's conclusion that the spousal support waiver contained in the agreement was not unconscionable.22

(3) Unlike the wife in Pendleton, Nancy was not a "well-educated person, self-sufficient in property and earning capacity," at the time that she entered the Agreement. Rather, she was a recently unemployed high school graduate with two minor children, living rent free in the home Jeffrey had financed for them. In contrast, Jeffrey was an accomplished attorney, a graduate of Harvard Law school who earned roughly half a million dollars a year and had $3 million of separate property at the time of the marriage, including a home in Tiburon. Nancy had no property of her own. Thus, unlike circumstances in Howell, here there was a great disparity in the parties' respective incomes and assets at the time they entered into the Agreement. This factor also suggests a "significant inequality of bargaining power" (Howell, supra, 195 Cal.App.4th 1062, 1080), an inference that is further supported by the fact that Jeffrey not only drafted the Agreement himself but also told that her the spousal support waiver could not be negotiated.

The Supreme Court in Pendleton also suggested that circumstances existing at the time of the enforcement of a spousal support waiver "might make enforcement unjust." (Pendleton, supra, 24 Cal.4th 39, 53.)23 The marriage in the present case lasted 16 years, during which Nancy, with Jeffrey's assent, did not pursue her education or seek gainful employment. Instead, she devoted her efforts to child rearing and maintaining the family home, while Jeffrey continued to successfully pursue a financially rewarding career. Without reasonable spousal support, the evidence supports the conclusion that Nancy will never come close to replicating the marital










standard of living. As noted above, under Paragraph No. 2 of the Agreement, she will receive a cash payment of $200,000, half of which Jeffrey has the option of paying in undefined increments over a five-year period. In addition, she will receive half of the net proceeds from the sale of the marital home (an amount that cannot be determined at this time), along with the home's furniture and a Jaguar automobile. Compared to what she is likely to receive in court-ordered spousal support, these assets are manifestly inadequate.24 Given that Jeffrey's self-reported separate property is now in excess of $10 million and his earnings $1 million per year, whereas Nancy amassed no separate property during the marriage and has no income at all, we have little difficulty in concluding that the Agreement's spousal support waiver is presently unconscionable.25

D. Whether the Spousal Support Waiver Renders the Agreement Unenforceable

Jeffrey claims the trial court erred in concluding that the unconscionable spousal support waiver renders the entire Agreement unenforceable. We agree.

Because the agreement was executed in 1994, we apply the version of section 1615 that was in effect at that time. Former section 1615, subdivision (a), provides: "A premarital agreement is not enforceable if the party against whom enforcement is sought proves either of the following: [¶] (1) That party did not execute the agreement voluntarily. [¶] (2) The agreement was unconscionable when it was executed and, before execution of the agreement, all of the following applied to that party: [¶] (A) That party was not provided a fair and reasonable disclosure of the property or financial obligations of the other party. [¶] (B) That party did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided. [¶] (C) That party did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the other party." (Italics added.)

(4) As Jeffrey correctly notes, unconscionability upon execution does not, standing alone, render a premarital agreement unenforceable under former section 1615. To render an agreement unenforceable, the contesting spouse also must have lacked actual or constructive knowledge of the assets and obligations of the other party, unless that spouse waived knowledge of such assets and obligations. Pursuant to former section 1615, "a premarital agreement will be enforced unless the party resisting enforcement of the agreement can demonstrate either (1) that he or she did not enter into the contract voluntarily, or (2) that the contract was unconscionable when entered into and that he or she did not have actual or constructive knowledge of the assets and obligations of the other party and did not voluntarily waive knowledge of such assets and obligations." (In re Marriage of Bonds (2000) 24 Cal.4th 1, 15 [99 Cal.Rptr.2d 252, 5 P.3d 815] (Bonds); see former § 1615, subd. (a)(2).)

Nancy does not claim she entered into the Agreement involuntarily. Accordingly, former section 1615, subdivision (a)(2), applies and the trial court had to find both unconscionability and an absence of fair and reasonable disclosure of Jeffrey's premarital assets in order to deem the entire Agreement unenforceable. The trial court concluded that Jeffrey violated this provision by failing to list the jointly held marital home as his separate property.26 We do not view this circumstance as constituting a failure to provide fair and reasonable disclosure. In the first place, it would have been rather odd to list a home held in joint tenancy as one's separate property. In








any event, the Agreement specifically discloses the existence of the home in Paragraph No. 2, including the fact that Jeffrey had paid the downpayment, and that he would be entitled to reimbursement of that payment. There is nothing in the record to suggest Nancy was unaware of these facts, and she does not claim that Jeffrey failed to disclose any other asset. Thus, there was no evidence that she lacked "an adequate knowledge" of Jeffrey's property and financial obligations within the meaning of former section 1615, subdivision (a)(2)(C). Accordingly, as Jeffrey's property interests were fully disclosed to her, the dual requirements of former section 1615, subdivision (a)(2), have not been satisfied and the agreement as a whole is not unenforceable.

E. Severance

(5) Jeffrey claims the trial court erred in refusing to sever the Agreement's invalid provisions from those affecting the parties' property rights, particularly from the provision stating that none of the property acquired during the marriage would be community property. As noted above, the Agreement contains a severability clause: "If any clause or provision of this agreement should be determined to be wholly or partly unenforceable, that determination shall not affect the enforceability of the other clauses and provisions of this agreement." In general, severability clauses "evidence the parties' intent that, to the extent possible, the valid provisions of the contracts be given effect, even if some provision is found to be invalid or unlawful." (Baeza v. Superior Court (2011) 201 Cal.App.4th 1214, 1230 [135 Cal.Rptr.3d 557].)

We review the trial court's ruling on severability under an abuse of discretion standard: "`If a contract is capable of severance, the decision whether to sever the illegal portions and enforce the remainder is a discretionary decision for the trial court to make based on equitable considerations. [Citation.]' [Citation.]" (Fair v. Bakhtiari (2011) 195 Cal.App.4th 1135, 1157 [125 Cal.Rptr.3d 765] (Bakhtiari).) "In deciding whether severance is available, [our Supreme Court has] explained `[t]he overarching inquiry is whether "`the interests of justice ... would be furthered'" by severance.' [Citation.] `Courts are to look to the various purposes of the contract. If the central purpose of the contract is tainted with illegality, then the contract as a whole cannot be enforced. If the illegality is collateral to the main purpose of the contract, and the illegal provision can be extirpated from the contract by means of severance or restriction, then such severance and restriction are appropriate.' [Citations.]" (Marathon Entertainment, Inc. v. Blasi (2008) 42 Cal.4th 974, 996 [70 Cal.Rptr.3d 727, 174 P.3d 741] (Marathon).)

Civil Code section 1598 provides: "Where a contract has but a single object, and such object is unlawful, whether in whole or in part, or wholly impossible of performance, or so vaguely expressed as to be wholly unascertainable, the entire contract is void." (Italics added.) This section must be read in conjunction with Civil Code section 1599, which provides: "Where a contract has several distinct objects, of which one at least is lawful, and one at least is unlawful, in whole or in part, the contract is void as to the latter and valid as to the rest." (Italics added.) Here, the Agreement had three primary objects: (1) to waive community property rights, (2) to limit Nancy's postdissolution right to support, and (3) to limit Jeffrey's child support obligations. As we have seen, the later two objects are invalid in that they are either unconscionable or contrary to established law. This leaves the waiver of community property rights, which, based on Jeffrey's testimony, was the central purpose of the contract.








(6) "By its terms, [Civil Code section 1599] applies even — indeed, only — when the parties have contracted, in part, for something illegal. Notwithstanding any such illegality, it preserves and enforces any lawful portion of a parties' contract that feasibly may be severed." (Marathon, supra, 42 Cal.4th 974, 991.) "Civil Code section 1599 grants courts the power, not the duty, to sever contracts in order to avoid an inequitable windfall or preserve a contractual relationship where doing so would not condone illegality." (Id. at p. 992.) Here, the trial court concluded the property rights section was inseverable from the rest of the Agreement, finding that "The purported waiver of spousal support is inextricably wrapped up in the property rights section of [the Agreement] and in the child support section of the document. It is a package, all interrelated." It also found the Agreement's attorney fee waiver to be illegal and inseverable from the balance of the contract. We conclude the court abused its discretion in failing to sever the invalid provisions pertaining to spousal support, child support, and attorney fees from the property rights section of the Agreement.27

We first observe "California cases take a very liberal view of severability, enforcing valid parts of an apparently indivisible contract where the interests of justice or the policy of the law would be furthered." (Adair v. Stockton Unified School Dist. (2008) 162 Cal.App.4th 1436, 1450 [77 Cal.Rptr.3d 62].) "The purpose of severing or restricting illegal terms rather than voiding the entire agreement is twofold: `"to prevent parties from gaining undeserved benefit or suffering undeserved detriment ... particularly when there has been full or partial performance of the contract [and,] more generally, ... to conserve a contractual relationship if to do so would not be condoning an illegal scheme. [Citations.] ... [Citation.]"' [Citation.]" (Bakhtiari, supra, 195 Cal.App.4th 1135, 1157.)

(7) Here, the trial court relied heavily on Civil Code section 1670.5, which provides: "(a) If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result. [¶] (b) When it is claimed or appears to the court that the contract or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose, and effect to aid the court in making the determination." (Italics added.) As shown by the language of subdivision (b), this statute is intended to apply to contracts in a "commercial setting" and not to post-UPAA premarital agreements.

Our Supreme Court has contrasted premarital agreements with commercial contracts: "A commercial contract most frequently constitutes a private regulatory agreement intended to ensure the successful outcome of the business between the contracting parties — in essence, to guide their relationship so that the object of the contract may be achieved. Normally, the execution of the contract ushers in the applicability of the regulatory scheme contemplated by the contract and the endeavor that is the object of the contract. As for a premarital agreement (or clause of such an agreement) providing solely for the division of property upon marital dissolution, the parties generally enter into the agreement anticipating that it never will be invoked, and the agreement, far from regulating the relationship of the contracting parties and providing the method for attaining their joint objectives, exists to provide for eventualities that









will arise only if the relationship founders, possibly in the distant future under greatly changed and unforeseeable circumstances." (Bonds, supra, 24 Cal.4th 1, 24-25.)

Our research has disclosed no reported appellate decisions in which a court has relied on Civil Code section 1670.5 in deciding whether to limit the enforcement of a prenuptial agreement that contains an unconscionable provision. In fact, our Supreme Court has suggested the authors of the UPAA believed statutes like Civil Code section 1670.5 are inconsistent with the purposes served by prenuptial agreements. (Bonds, supra, 24 Cal.4th 1, 19, fn. 7.) Code of Civil Procedure section 1859 states that "when a general and [a] particular provision are inconsistent, the latter is paramount to the former. So a particular intent will control a general one that is inconsistent with it." Here, the applicable provision, former section 1615 of the Family Code, specifically applies to premarital agreements and is inconsistent with Civil Code section 1670.5 because, as we have already explained, such agreements are unenforceable under Family Code former section 1615 only if they are unconscionable and there is an inadequate property disclosure. Accordingly, the trial court erred in relying on Civil Code section 1670.5 as grounds for refusing to enforce the property rights portion of the Agreement.

(8) It is well established that parties may lawfully waive their rights to community property. In the context of the present case, we find the Supreme Court's opinion in Dawley to be instructive. In that case, the court noted it had upheld a waiver of property rights in Higgason, even while holding the spousal support waiver to be void against public policy: "Although our opinion in Higgason asserted that a valid antenuptial agreement must be made in contemplation of a marriage lasting until death, we did not attempt to determine what the parties actually contemplated at the time of the execution of the agreement. Instead, the opinion proceeds directly to examine the terms of the contract. Upholding the husband's waiver of property rights, we stated that `Insofar as an antenuptial agreement relates to the disposition of the property of the respective parties, and does not seek to alter support obligations imposed by law, it will be upheld. [Citations.] Accordingly, the provisions relating to property rights in the antenuptial agreement entered into between the husband and the wife herein are valid.' [Citation.] Relying, however, on decisions invalidating a wife's waiver of support rights because it promoted divorce, we held the same principle barred enforcement of the husband's waiver of support rights." (Dawley, supra, 17 Cal.3d 342, 351.) The Dawley court then turned to cases preceding Higgason, observing no decision had struck down a contract that "merely provided that the earnings and accumulations of each spouse will be held as separate property." (Ibid.)

Nancy contends Paragraph No. 1 is ambiguous, unintelligible and unenforceable because "it does not state therein, or anywhere else in the Agreement, what property acquired during marriage will be if it is not community property." To the contrary, this provision effectively constitutes a waiver of community property rights.28 If the property acquired during marriage is not community property, it must be the separate property of the acquiring spouse. There is no other plausible alternative. Further, unlike Nancy, we see nothing in the language of this provision that would suggest it does not apply equally to both parties.29 We also do not agree that the document is fatally ambiguous because it does not address property held in joint tenancy. The status of the marital home, the parties' primary joint asset, has yet to be addressed in these proceedings and we express no opinion on that issue.







Nancy also relies on Yoo v. Robi (2005) 126 Cal.App.4th 1089 [24 Cal.Rptr.3d 740] and Chiba v. Greenwald (2007) 156 Cal.App.4th 71 [67 Cal.Rptr.3d 86] in arguing the trial court did not abuse its discretion in deciding the document was inseverable. Both cases involve commercial contracts and the California Talent Agencies Act, not premarital agreements. Thus, the two decisions were driven by public policy considerations that are absent from the present case. For example, in Yoo the appellate court upheld the lower court's refusal to sever the invalid contractual provisions, holding that "the public policy underlying the [Talent Agencies Act] is best effectuated by denying all recovery, even for activities which did not require a talent agency license." (Yoo, supra, at p. 1105.) Needless to say, the Agreement at issue here does not involve the Talent Agencies Act or any other public policy that would thwart the parties' reasonable expectations regarding the characterization of property acquired during the marriage. In sum, we conclude the offending provisions of the Agreement are severable from those found in the property rights section. While Paragraph No. 3 contains the invalid spousal support waiver, it easily can be excised from the property rights section.30

Further, we find the trial court abused its discretion when it found equitable considerations overcame the general rule in favor of promoting severance. It appears the primary reason for the court's decision was its conclusion that it is "inescapable that [Jeffrey] intended to award the joint tenancy house to himself as his separate property." Nothing in the Agreement supports this "inescapable" conclusion. The provision in question specifically states that Nancy is to receive half the net proceeds from the sale of the marital residence.

We also disagree with the trial court's assumption that total invalidation of the Agreement is nevertheless equitable as Jeffrey will not be deprived of all the assets he accumulated during the marriage, but is only required to give Nancy half (an amount likely to approach several million dollars). In our view, this represents an inequitable windfall to Nancy that clearly was not contemplated by the parties when they entered into the Agreement. Even Nancy testified that she believed she would only be entitled to share in Jeffrey's earnings to the extent they were placed in joint accounts. Thus, the Agreement, standing alone, gave Nancy no cause to expect that she would be entitled to any of Jeffrey's marital earnings in the event of a divorce. Further, the trial court's result causes Jeffrey to suffer an undeserved detriment in that he clearly intended for his earnings and accumulations during marriage to remain his separate property and, in drafting the Agreement, he did nothing to hide this intention from Nancy.

(9) We also question the trial court's reliance on its perception that the Agreement, as a whole, is "disingenuous, one-sided, and unfair." In the context of prenuptial agreements, fairness, for better or worse, is not the touchstone. Instead, the focus is on disclosure of assets. As the Supreme Court noted in Bonds, in drafting the UPAA, "it was settled that the party against whom enforcement of a premarital agreement was sought only could raise the issue of unconscionability, that is, the substantive unfairness of an agreement, if he or she also could demonstrate lack of disclosure of assets, lack of waiver of disclosure, and lack of imputed knowledge of assets. The language adopted [in section 1615] was intended to enhance the enforceability of premarital agreements and to convey the sense that an agreement voluntarily entered into would be enforced without regard to the apparent unfairness of its terms, as long as the objecting party knew or should have known of the other party's assets, ..." (Bonds, supra, 24 Cal.4th 1, 16-17, original italics omitted, italics added.)









In sum, we conclude the court abused its discretion in concluding the Property Rights section is incapable of being severed from the Agreement: "`A discretionary order that is based on the application of improper criteria or incorrect legal assumptions is not an exercise of informed discretion, and is subject to reversal even though there may be substantial evidence to support that order.' [Citation.]" (Jacob A. v. C.H. (2011) 196 Cal.App.4th 1591, 1599 [127 Cal.Rptr.3d 611].)

DISPOSITION

The judgment is reversed and the matter is remanded to the trial court with orders to enter a new judgment not inconsistent with this opinion. The parties are to bear their own costs on appeal.

Margulies, Acting P. J., and Banke, J., concurred.

FootNotes 1. For clarity, "we refer to the parties by their first names, as a convenience to the reader. We do not intend this informality to reflect a lack of respect." (In re Marriage of Balcof (2006) 141 Cal.App.4th 1509, 1513, fn. 2 [47 Cal.Rptr.3d 183].) 2. The Agreement begins as follows: "In consideration of their sharing a home, and of their marriage, and of the promises contained in this agreement, Jeffrey Facter (`H[']) and Nancy Riter (`W') agree as follows: [¶] ... [¶] 1. None of the property acquired during their marriage shall be community property." 3. It appears the payment here would be $200,000 total as the marriage lasted 16 years and Jeffrey was a partner at his law firm for more than seven years during the marriage. 4. The right to spousal support is statutory. Family Code section 4330, subdivision (a), provides: "In a judgment of dissolution of marriage or legal separation of the parties, the court may order a party to pay for the support of the other party an amount, for a period of time, that the court determines is just and reasonable, based on the standard of living established during the marriage, taking into consideration the circumstances as provided in Chapter 2 (commencing with Section 4320)." 5. The Agreement purports to limit Jeffrey's monthly support payments to $900 per child, regardless of timeshare percentage, and also states that his child support obligations are nonmodifiable. A child's rights to future support cannot be barred by contractual agreement between parents. (Krog v. Krog (1948) 32 Cal.2d 812, 817 [198 P.2d 510].) 6. The Agreement contains a provision stating that each party shall pay his or her own attorney fees, costs, and legal expenses incurred in connection with any issue regarding the dissolution of the marriage or any litigation over the Agreement. 7. As noted above, Paragraph No. 2 of the Agreement states that in the event of permanent separation or divorce Nancy would receive a specified lump sum as well as half the profits from the sale of the marital home, less Jeffrey's downpayment and "any expenses, fees and taxes incurred in connection with that sale." (Italics added.) 8. The deed to the home reflects that the parties hold the property as joint tenants. 9. In his trial brief, Jeffrey accused Nancy of having committed fraud when she signed the Agreement because she failed to disclose her knowledge that it contained some unenforceable








provisions. He claimed evidence of Nancy's alleged fraudulent intent both impugned her credibility and proved she signed the Agreement voluntarily. 10. The integration clause provides: "This agreement is fully integrated and sets forth the entire understanding of the parties. Neither party has made any representation to, or relied upon any representation by, the other party except those representations set forth in this agreement." 11. Nancy testified that her previous marriage had lasted for eight years. When she got divorced, she and her former husband went through the court system. During the proceedings, there were disputes regarding support and attorney fees. 12. At trial, Jeffrey denied asserting that the word "expenses" in Paragraph No. 2 of the Agreement entitled him to recoup the costs of improvements made to the marital home. However, he believed reimbursement would be authorized under Paragraph No. 1 because the improvements had not been funded with community property. 13. In any event, Vomacka is inapposite. That case concerned the interpretation of a stipulated separation agreement that was incorporated into the parties' interlocutory judgment of dissolution of marriage. Thus, it did not concern waivers of spousal support in premarital agreements. 14. As noted previously, spousal support is also referenced in Paragraph No. 6, which is contained in the section on child support. 15. Candidly, the language on this point in the Agreement is less than ideal. We note a much more straightforward waiver is found in the case of In re Marriage of Pendleton and Fireman (2000) 24 Cal.4th 39, 41 [99 Cal.Rptr.2d 278, 5 P.3d 839] (Pendleton): "`[B]oth parties now and forever waive, in the event of a dissolution of the marriage, all rights to any type of spousal support or child support from the other....'" 16. In Dawley, the parties had agreed before marriage that the earnings and property acquired during marriage would be held as separate property. The high court concluded Higgason had erred in stating that premarital agreements must be made in contemplation that the marriage will continue throughout the lifetime of the parties. (Dawley, supra, 17 Cal.3d 342, 352.) 17. All further statutory references are to the Family Code except as otherwise indicated. 18. We note the trial court's statement of decision also references Pendleton. 19. The trial court's statement of decision references both section 1612, subdivision (c), and section 1615, subdivision (c). It appears the court intended to rely on current section 1612, subdivision (c) only, as former section 1615 does not contain a subdivision (c), and subdivision (c) of current section 1615 pertains to voluntariness, not to unconscionability. 20. Section 1612, subdivision (c), currently provides: "Any provision in a premarital agreement regarding spousal support, including, but not limited to, a waiver of it, is not enforceable if the party against whom enforcement of the spousal support provision is sought was not represented by independent counsel at the time the agreement containing the provision was signed, or if the provision regarding spousal support is unconscionable at the time of enforcement. An otherwise unenforceable provision in a premarital agreement regarding spousal support may not become enforceable solely because the party against whom enforcement is sought was represented by independent counsel." 21. Former section 1615 (pertaining to unenforceable premarital agreements) applies to premarital agreements as a whole and does not specifically reference spousal support waivers. Accordingly, we rely primarily on case law in evaluating whether the waiver in the Agreement is unconscionable. (See Pendleton, supra, 24 Cal.4th 39, 48-49 ["The most reasonable understanding of the Legislature's purpose when it omitted [the UPAA's spousal support







language from section 1612's list of permissible objects of a premarital agreement] is that it was satisfied with the evolution of the common law governing premarital waivers of spousal support and intended to permit that evolution to continue."].) 22. The waiver provided: "`The parties mutually waive any right to receive future spousal support, maintenance or alimony from the other in the event of a Dissolution of Marriage or Legal Separation.'" (Howell, supra, 195 Cal.App.4th 1062, 1066-1067.) 23. The appellate court in Howell held that former section 1615, subdivision (a)(2), requires unconscionability to be evaluated solely at the time of the waiver's execution as section 1612, subdivision (c), was not intended to apply retroactively and the later statute specifies that unconscionability of a spousal support waiver is to be evaluated at the time of enforcement. (Howell, supra, 195 Cal.App.4th 1062, 1078, fn. 11.) We observe, this holding was based primarily on the revised statute's requirement that a party be represented by counsel, not on the provision allowing for evaluation of unconscionability at the time the waiver is to be enforced. (Id. at p. 1077.) 24. On June 6, 2011, the trial court ordered monthly temporary guideline spousal support in the amount of $21,757 per month, along with temporary child support of $5,983 per month. 25. We note Jeffrey arguably forfeited this issue when he stated in his "notice of limitation of claims at trial" that he would not claim that the Agreement waived spousal support. 26. To the extent the trial court's decision was based on Jeffrey's claim that Paragraph No. 1 entitles him to reimbursement for the approximately $1.8 million the parties spent on remodeling the home, we note that issue is not before us. 27. In a footnote in his opening brief, Jeffrey claims the trial court's "unsupported conclusion that the attorney fee waiver was not enforceable with respect to non-child-related fees was erroneous," citing to In re Marriage of Joseph (1990) 217 Cal.App.3d 1277 [266 Cal.Rptr. 548]. We note in his "notice of limitation of claims at trial," he specifically stated he would "not allege that [the paragraph containing the fee waiver] is a bar to awards of attorney fees to petitioner." This concession was reiterated in his closing argument below. As he has explicitly conceded the issue, we are not inclined to address it in this opinion. It is axiomatic that "A party is not permitted to change his position and adopt a new and different theory on appeal. To permit him to do so would not only be unfair to the trial court, but manifestly unjust to the opposing litigant." (Ernst v. Searle (1933) 218 Cal. 233, 240-241 [22 P.2d 715]; accord, In re Marriage of Karlin (1972) 24 Cal.App.3d 25, 33 [101 Cal.Rptr. 240], disapproved on other grounds in In re Marriage of Brown (1976) 15 Cal.3d 838, 851, fn. 14 [126 Cal.Rptr. 633, 544 P.2d 561].) 28. There is no evidence Nancy was surprised by anything contained in the relatively succinct provisions in the property rights section of the Agreement. She read the document before signing it, consulted with attorneys of her own choosing, never communicated any lack of understanding about its terms before or during the marriage, was not under duress, and voluntarily agreed to the terms in the agreement without any evidence of fraud or deceit by Jeffrey. Further, she had some understanding of principles governing family law in that she had been through divorce proceedings before. 29. Paragraph No. 3 states, in part, that both parties "waive, relinquish and release any claim that each may have to the separate property of the other except as provided...." 30. Unlike the trial court, we do not believe the Agreement must be rewritten in order to be salvaged. Paragraph No. 3 can easily be modified as follows: "The provisions of paragraph 2, supra, constitute W's sole right to property acquired during the marriage and to support, and











replace or supersede any entitlement to such property that W might otherwise have under law. H and W waive, relinquish and release any claim that each may have to the separate property of the other except as provided in paragraph 2, supra." The entire invalid Child Support section can be easily deleted, as well as Paragraph No. 20, which contains the invalid attorney fee waiver.

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