Dealing With The Fallout From
In Re Marriage of Facter
By Brian J. Kramer, CFLS
Date: September 23, 2013
After the California Supreme Court decided the two seminal cases of In re Marriage of Bonds and Marriage of Pendleton and Fireman involving the validity of premarital agreements in 2000, there was a relative paucity of reported cases involving either the Uniform Premarital Agreement Act (UPAA), the amendments to the UPAA that became effective in 2002 (the “Anti-Bonds Legislation”), or premarital agreements in general. In retrospect, the California family law bench and bar will likely view this time period as the calm before the Facter storm.
After the Fourth District California Court of Appeal decided In re Marriage of Howell in 2011, there was a flurry of cases interpreting provisions of the UPAA, and the retroactive application of the Anti-Bonds Legislation. For the most part, those cases addressed whether the amendments to the UPAA (i.e., the Anti-Bonds Legislation) apply retroactively to premarital agreements that were entered into before these amendments came into law. The holding from Facter in January 2013, however, is the most remarkable case involving premarital agreements to come along in over a decade, and the family law bench and bar are going to be dealing with the fallout from it for years to come.
For lawyers who either draft premarital agreements or handle contested proceedings in which the validity of premarital agreements is at issue, Facter is plainly the most important decision to come down since Pendleton created a sea change in the law by holding that premarital agreements could be used to limit and/or waive spousal support. Among the reasons Facter is of such import is because it is the first reported decision to interpret what the Legislature meant in Family Code Section 1612(c) when it stated that “[a]ny provision in a premarital agreement regarding spousal support, including, but not limited to, a waiver of it, is not enforceable if . . . the provision regarding spousal support is unconscionable at the time of enforcement.”
I recall the first time I came across this ambiguous language in Section 1612(c). After going to work for a family law firm in 2005, one of my first assignments was to assist a partner in drafting a premarital agreement. After stumbling upon the language in Section 1612(c), I asked the partner what “unconscionable at the time of enforcement” meant, and his response was memorable. After shrugging his shoulders, he confidently echoed back Justice Potter Stewart’s oft-cited phrase: He could not really tell me what an unconscionable spousal support waiver was, “but he knew it when he saw it.” The partner said this with such conviction that I felt embarrassed for having asked the question; I could not help but think that experienced family law attorneys like him must be part of some fraternal brotherhood that have secret handshakes.
Having come to family law after working for a decade as a civil trial lawyer, I naively thought that certainly there must be a well-developed body of case law as to what the word “unconscionable” meant in the context of Section 1612(c). I recall going to Westlaw, shepardizing the statute, and thinking that certainly something must be amiss with Westlaw when it brought back no cases shedding any light on the subject. After all, if premarital agreements are “highly favored” agreements that are supposed to bring certainty to those who enter into them, how could the legislature have created such a minefield of ambiguity by using terms like “unconscionable” in the UPAA, as amended?
One of the most interesting things about California family law is that notwithstanding the large volume of high-conflict cases, there remains wide swaths of the Family Code (including provisions such as Section 1612(c)) that do not have a sufficiently developed body of case law to guide the bench and bar. Facter is significant because it is the first reported case in which an appellate court has reviewed a trial court’s finding that a premarital agreement “contained an invalid, unconscionable waiver of spousal support.”
Typically parties enter into contracts to allocate risk and to bring order, certainty and predictability to their mutual affairs. (I suppose it should have been a tip off that our family law professors did not use the same sort of glowing adjectives to describe the institution of marriage). All kidding aside, lawyers get paid well to write unambiguous contracts, including premarital agreements, so that the intentions of the parties can be memorialized and our clients can take recourse if their intentions are not fulfilled.
The Supreme Court pointed out in Bonds marriage is a “highly regulated institution.” It also pointed out that unlike commerce, when it comes to marriage “there are many limitations on the ability of persons to contract with respect to it, or to vary its statutory terms.” Thus, premarital agreements are “highly regulated contracts.” While on the one hand, they are treated like other commercial contracts (e.g., the general rules of contract interpretation apply to them), on the other hand, they remain subject to statutory restrictions, which make them entirely unique. For example, how many other contracts are presumptively unenforceable under California law unless both parties have attorneys representing them?
The Facter decision points out that although “the Supreme Court in Pendleton did not set a precise standard for when a spousal waiver is deemed unconscionable,” “the opinion is instructive.” The Facter Court then quotes the following language from Pendleton:
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, ps. 53–54, fn. omitted, italics added.)
After analyzing Pendleton’s facts, the Facter decision goes on to offer the following comments:
(u)nlike the wife in Pendleton, Nancy [Facter] 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, p. 1080), an inference that is further supported by the fact that Jeffrey not only drafted the Agreement himself but also told 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, p. 53.) The marriage in the present case lasted 16 years, during which Nancy [Facter], with Jeffrey [Facter‘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. 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.” (Emphasis added.)
Let’s play that back in slow motion: According to Facter, if a waiver or limitation of spousal support in a premarital agreement would result in the out spouse being unable to “come close to replicating the marital standard of living,” it could be construed as “unconscionable.” Wow. Talk about turning the Pendleton holding that premarital agreements may be used to waive or limit spousal support into Swiss cheese. One cannot help but wonder if the Justices who decided Facter were not aware of such basic human frailties that may drive affluent people to marry those who may be indigent and penniless. In fact, premarital agreements are frequently used in exactly such circumstances. And while some of the cases are as preposterous looking as say wheel chair bound J. Howard Marshall marrying Playboy Playmate Ms. Anna Nicole Smith, they come in all different shades of grey in between.
As the family law bench and bar digests Facter, we cannot help but ponder what would happen if the Legislature passed a law that said commercial contracts were valid unless at the time of execution they are found to be “very unfair to one of the parties.” The only winners in such a scenario would be the trial lawyers. In all fairness to the Justices who decided Facter, their job is to interpret the law and not create it. The Justices are not the individuals who are responsible for penning the phrase “unconscionable at time of enforcement” into Section 1612(c). The Legislature, in its infinite wisdom, is responsible for choosing those words — and it did so in response to Pendleton and Bonds.
After Facter came down, I fully expected that our family law-related professional associations (e.g., the Association of Certified Family Law Specialists) would have their amicus committees jump to action by requesting the California Supreme Court de-publish it (or at least portions of the holding). But the cavalry of galvanized CFLS and the legion of affluent California residents who are party to premarital agreements and have ordered their affairs in reliance on them never materialized. Instead, the response to Facter from the bar was a mere whimper, which manifested itself in the form of a single brief —albeit a well written one— from Peter Walzer, a partner with the San Fernando Valley firm of Walzer & Melcher, LLP. Surprisingly, the throngs of wealthy California residents who have paid small fortunes to obtain premarital agreements had no lobby step up to do their bidding other than Mr. Walzer.
I was surprised that not more lawyers got on the Facter de-publication bandwagon, so I read with great interest Mr. Walzer’s piece which ran in May 2013 in Los Angeles Lawyer entitled “The Gender Factor of Marriage of Facter”. In that article, Mr. Walzer (who refers to himself as “Dr. Prenup” on his website),explained that when he tried to seek support from various amicus committees to support a request to depublish Facter that “the women members” on such committees voted against requesting to depublish. According to Mr. Waltzer, at the same time that the women attorneys on such committees voted against filing a request to depublish Facter, the male attorneys on such committees voted in favor of such a request. Mr. Waltzer expressed his view that this was a case of a “battle of the sexes” and that “the viewpoints” of the attorneys serving on such amicus committees were “divided along gender lines.” Mr. Waltzer stated the “female faction wanted to make it easier for parties to void an agreement that waives spousal support.”
Evidently unable to persuade any amicus committees to file a request for depublication, Mr. Waltzer ultimately resigned himself to sending a letter from his own San Fernando Valley-based law firm to the Supreme Court setting forth his reasons why portions of the case should be depublished. While I have the greatest of professional respect for Dr. Prenup and found his letter to the Supreme Court to be extremely persuasive, I do not buy into his theory that the gender of the attorneys in our family law amicus committee interest groups (i.e., Mr. Waltzer’s “battle of the sexes” theory) dictated their willingness to back a request to de-publish Facter.
In retrospect, the relatively muted and tame response from the family law bar to Facter should have been predicted. After all, Facter will assuredly positively impact the top and bottom lines of every family law attorney —male or female— who must litigate cases in which the validity of such premarital agreements are at issue. Indeed, contested cases involving the validity of premarital agreements in the wake of Facter can and will easily run into the hundreds of thousands of dollars (if not more in cases where vast sums of money could be hanging in the balance). This is because the Facter holding has managed to single-handedly turn cases involving challenges to premarital agreements from what could have been the mundane stuff that summary judgment motions are made of into a subjective horse race.
For family law attorneys who enjoy going to trial, Facter will keep things interesting for years to come. Hopefully, our overtaxed family law courts can figure out how to make capacity to handle such cases, because if my recent experience trying such a case post-Facter is any sign of things to come, these cases will take weeks, if not months, to try to completion.
There is an old saying among trial lawyers: “bad facts make for bad law.” Family law attorneys who must try cases involving the validity of prenuptial agreements that contain waivers and/or limitations on spousal support post-Facter must come up with creative ways to distinguish the facts presented in their own case from those in Facter. Of course, Pendleton still stands for the basic proposition that waivers or limitations of spousal support may be enforceable. But when you go back and read what the Supreme Court said in Pendleton we are reminded just how equivocal the Court was on that subject. Plainly, Pendleton did not result in any bright line rules about when spousal support waivers or limitation may be enforceable. To the contrary, the Court went out of its way to leave open for the lower courts to decide under what circumstances waivers of spousal support might be found to be “unjust” and/or “unconscionable.” Again, Facter is significant because it is the first reported case affirming a trial court’s holding that a waiver on spousal support was unconscionable.
Fortunately, based on the unique and colorful facts presented in Facter there is a lot of fodder for skilled family lawyers to play with here. For starters, while Halley’s Comet zips by the earth only every 75 years, it is a pretty safe bet that it will take just as long for another Harvard Law School grad and transactional lawyer to ignore the legal profession’s adage that is older than Harvard itself: “A fool for a client.” Although family law reminds us that truth is stranger than fiction on a daily basis, odds are low that another Harvard Law School grad who has been foolish and frugal enough to have drafted his own premarital agreement — and a shoddy one at that – will walk into one of our offices.
Even a cursory review of the holding from Facter makes it painfully clear that Mr. Facter’s imprudent decision to draft his own premarital agreement played prominently in the outcome of the case. Had Jeffrey Facter been a contractor (instead of a Harvard Law School educated corporate transactional lawyer masquerading as a family law attorney only for purposes of his own prenup), it is highly unlikely that Facter would have been decided the way it was. By the way, Jeffrey Facter wised up because he hired our colleague, Mr. Garrett Dailey, to handle his appeal (instead of handling his appeal on his own). 
As usual, Mr. Dailey did an outstanding job briefing Mr. Facter’s side of the appeal. In his brief, Mr. Dailey presented a number of compelling arguments as to why Family Code Section 1612(c)’s use of the term “unconscionable” should not be given the expansive interpretation that the trial court and Court of Appeal ultimately gave to it. Mr. Dailey also made this compelling observation:
“[M]ost premarital agreements are objectively unfair. Many are simple “mine is mine and yours is yours” agreements, often accompanied by spousal support waivers. The weaker party gets nothing upon divorce.
Virtually every published opinion, at least in recent history, involves agreements where the less well off spouse received nothing in the event of a divorce. (See, e.g., In re Marriage of Bonds . . . In re Marriage of Dawley . . . In re Marriage of Higgason; DeLorean v. DeLorean (1986) 211 N.J.Super. 432, 511 A.2d 1257.) In each of these cases, an agreement that provided that the non-earner spouse received zero property upon divorce was upheld. (Citations Omitted.)
Relying on Marriage of Howell, supra, Mr. Dailey was able to successfully argue Section 1612(c) should not be applicable to premarital agreement pre-dating its promulgation. However, the Court of Appeal in Facter expansively interpreted the holding from Pendleton to give a trial court wide latitude under common law principles in deciding whether such waivers of spousal support should be struck down as “unjust” at the time of enforcement.
Mr. Facter could have hired a hundred Garrett Daileys to work on his appeal, but his fate was sealed when he was penny wise and pound foolish enough to fail to hire an experienced family law attorney to prepare his premarital agreement. Recent reported family law cases are replete with examples of how our family law courts give deference to matrimonial agreements where both parties were advised by independent counsel. Besides, Ms. Facter plainly had powerful friends in high places too, which is readily apparent given she had appellate attorney Bernard Wolf in her corner representing her on appeal. Any time you see Mr. Dailey in one corner and Mr. Wolf in the other, you know you are in for a hard-fought and interesting family law appeal. As I personally learned the hard way a few years back in In re Marriage of Gehr (in which I represented appellant in a meritorious appeal and Mr. Wolf represented respondent), Mr. Wolf is to family law appeals what Floyd Mayweather, Jr. is currently to boxing.
In any event, in the post-Facter era when family law attorneys must try cases disputing the validity of a premarital agreement that contains a spousal support waiver or limitation, they will need to be creative in coming up with ways to distinguish Facter from the facts presented in their respective cases. By the way, I suspect one interesting angle of attack of which we will start to see more is how the victims of domestic violence (who have gotten findings under the DVPA in their favor) might try to avoid spousal support waivers. Battered spouses could argue a waiver or restriction on spousal support in a premarital agreement is unconscionable because they leave the victim of such abuse stuck between a rock and hard place in that he or she must choose between staying in an abusive marriage or getting stuck with squat under a premarital agreement. So, be on the lookout if you are in a case in which your client has a premarital agreement and it starts out with one of those “no-notice ex parte DVPA applications,” of which we are all so fond of being on the receiving end. The real agenda may not be as much about getting restraining orders in place, as it is to set the stage to challenge a premarital agreement that has an onerous spousal support waiver.
Very soon after Facter was decided, I represented a gentleman who was seeking to have his premarital agreement enforced before Department 60 in LASC in the matter of In re Marriage of Slotkin. After a very hard-fought and protracted three-month trial, the trial court fully affirmed my client’s premarital agreement – but it took an awful lot of creative lawyering and bobbing and weaving around the facts from Facter to accomplish that result on behalf of my client. The one learning lesson I will share with my colleagues from the family law bar is whatever you do in this post-Facter era, do not agree to a fixed fee in handling a bifurcated trial involving the validity of a premarital agreement. Such cases are no longer the slam-dunks we once thought them to be prior to Facter.
 (2000) 24 Cal.4th 1 (Bonds).
 (2000) 24 Cal.4th 39 (Pendleton).
 (2013) 212 Cal.App.4th 967, 981 (Facter)
 See e.g., In re Marriage of Howell (2011) 195 Cal.App.4th 1062; In re Marriage of Hill and Dittmer (2011) 202 Cal.App.4th 1046; In re Marriage of Melissa (2012) 212 Cal.App.4th 598.
 Bonds, supra, 24 Cal.4th 1, 16-17 (“The language adopted of the UPAA 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….”)
 The rules applicable to the interpretation of contracts have been applied generally to premarital agreements. See Barham v. Barham (1949) 33 Cal.2d 416, 422; In re Marriage of Garrity and Bishton (1986) 181 Cal.App.3d 675, 683.
 Bonds, supra, 24 Cal.4th 1, at p. 25.
 Facter, supra, 212 Cal.App.4th at p. 982.
 See www.prenupdoc.com.
 Mr. Waltzer’s “battle of the sexes” theory fails to take into account that female attorneys are just as likely as male attorneys to be advocating for a client who desires to have his or her premarital agreement specifically enforced.
 I recently co-authored a Petition to the California Supreme Court in a family law case with Mr. Dailey, which unfortunately for family law attorneys, who rely on FLARPLs, was not granted. See In re Marriage of Turkanis & Price (2013) 213 Cal.App.4th 332.
 See e.g., Marriage of Burkle (2006) 139 Cal.App.4th 712 (The parties’ acknowledgments in their matrimonial agreement, along with certifications therein by their separate counsel, that they understand the agreement’s provisions and its legal effect and that neither has obtained an unfair advantage over the other, is persuasive evidence in rebuttal of a presumption of undue influence); Estate of Cover (1922) 188 Cal. 133; Weil v. Weil (1951) 37 Cal.2d 770.
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