Appeals court casts doubt on future of marriage agreements

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  • wjc

    Headline should perhaps have been: “Appeals court casts doubt on future of coerced marriage agreements”. The opinion is reasonably long and I am not a lawyer, but aren’t they basically knocking this one down because of the coercion? That wouldn’t invalidate properly constructed and properly negotiated agreements, would it?

    • They’re knocking it down, among other things, over the question of marital property and a disagreement over the first few sentences of the law and the context in which they appear.

      It’ll go to the MN Supremes, I reckon.

      • Will

        I think wjc has some good points, this was a last minute forcing to sign a document rather than a well thought out back and forth with lawyers on both sides looking at the document (or at least allowing for time to look at it even if the potential spouse chooses not to). Maybe you’re right though, essentially the court would send the message to NEVER get actually married if you have something of massive value to lose…just have a commitment ceremony, have kids and live with each other…no need to actually get married. This reminds me, why is government even involved in marriage anyway?

        • jon

          I’m sure a good lawyer could make a good argument on a couple that has a commitment ceremony, and has kids and live with each other should split their shared wealth should they separate…

          I think the real lesson here is when you marry some one you should be planning to spend the rest of your life with them, and that includes your assets…

          • MikeB

            He sprung the agreement at virtually the last minute. his actions show he was hiding something and using the deadline to prevent a thorough review of the agreement. Not a way to treat your partner.

          • I still can’t get my head around married couples who keep their finances separate.

          • BJ

            We don’t keep or finances separate but me and my wife kind of keep things separate and combined. I have a checking and savings account and so does she, and we have a joint account. All but a few hundred buck a month of my pay checks go into the joint – with my ‘cash’ going into my personal account.

            We don’t have an atm or debit card for the joint account that usually has several thousand in it at any given time. Our debit and atm is tied to the ‘personal’ with a few hundred – maybe a grand – in it.

            All the ‘household’ bills are paid from the joint checking account . My biggest expenses in my personal – besides my walking around cash – is family vacation, and her Christmas presents are bought using my debit card.

          • joetron2030

            My wife and I have a similar set-up, we have a joint account to cover all of the household expenses and we each have separate “fun money” splurge accounts that allow us to indulge ourselves without the need to have it questioned by the other. A few hundred dollars a month split between the two fun accounts.

            She uses hers mostly to buy knitting stuff. I use mine mostly on video gaming stuff.

          • MikeB

            If you get married young, then probably not. If you get married when older you are used to separate accounts and are more finance savvy.

          • Veronica

            The discussion of separate checking accounts actually led to my now-husband and I realizing we’d decided we were getting married. There was no proposal, only a little bit of back and forth about the subject and “Did we just decide to get married?” moment. That was 17 years ago.

        • //why is government even involved in marriage anyway?

          Because marriage is a civil process.

          • Will

            Good point, that’s why many have supported the idea of civil unions.

          • BJ

            Really that is what marriage is in the eyes of the law, civil union was only words combined to try and get religious right from feeling threatened with gay marriage.

          • Will

            No, I mean using a civil union for all 2 people who want to enter that type of contract.

          • A marriage is civil contract. It’s not different from marriage. It IS marriage.

      • Laurie K.

        Agreed, particularly with Hooten dissenting. I believe she has a pretty extensive background in family law.

  • chlost

    I haven’t practiced family law for a few years, but it used to be that the agreement had to signed at least 48 hours before the marriage. Meaning if it wouldn’t be valid if signed the day before or on the day of the marriage. Maybe they changed that provision, I don’t have time to check it out. Coercion and undue influence are tough to prove, but this one sounds fairly clear, in part due to it being signed so close to the marriage date.