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Silverman v. Silverman

Supreme Court of Delaware, En Banc

February 28, 2019

DAVID SILVERMAN [1], Respondent Below, Appellant,
v.
MICHELLE SILVERMAN, Petitioner Below, Appellee.

          Submitted: January 16, 2019

          Court Below-Family Court of the State of Delaware File No. CS15-01396 Petition No. 15-06696

         Upon appeal from the Family Court of the State of Delaware: REVERSED and REMANDED.

          David C. Gagne, Esquire (argued), and Achille C. Scache, Esquire, GIORDANO, DELCOLLO, WERB & GAGNE, LLC, Wilmington, Delaware, for Appellant, David Silverman.

          Shawn Dougherty, Esquire, WEIK, NITSCHE & DOUGHERTY, LLC, Wilmington, Delaware, for Appellee, Michelle Silverman.

          Before STRINE, Chief Justice; VALIHURA, VAUGHN, SEITZ, and TRAYNOR, Justices, constituting the Court

          SEITZ, JUSTICE

         On February 19, 1997, David Silverman ("Husband") and Michelle Silverman ("Wife") signed a premarital agreement covering their financial affairs if they divorced or died. They married in 1997 and divorced in 2015. In the post-divorce property settlement, Husband sought to enforce the premarital agreement. The Family Court applied the statute governing premarital agreements and found that, although Wife voluntarily entered into the agreement, the disparity in wealth made the agreement unconscionable. Also, according to the Family Court, Husband failed to provide a fair and reasonable disclosure of his property or financial obligations before Wife signed the agreement. The court refused to enforce the agreement. We accepted Husband's interlocutory appeal from the Family Court's order.

         Under the premarital agreement statute, unconscionability alone does not invalidate a premarital agreement. Wife also had to prove that Husband did not provide a fair and reasonable disclosure of his property or financial obligations. Because the Family Court erred when it found Husband's financial disclosure insufficient, we reverse and remand to the Family Court to enforce the premarital agreement.

         I.

         Wife has a bachelor's degree in communications. Before Husband and Wife married in 1997, Wife was employed using her communications degree and lived with her parents. She planned to quit her job and move to Colorado. Husband has an associate's degree and worked in his family's business. A few months after they became romantically involved, in the spring of 1996 Wife moved in with Husband to live in Husband's apartment attached to his parents' home.

         Husband and Wife planned a secret wedding in Las Vegas, Nevada. About a month before the wedding Husband gave Wife a premarital agreement with terms favorable to Husband, who had more assets and income potential in the family business than Wife. Under the agreement, each party waived alimony and agreed to retain separate "title, management, and control of the estates owned by them" and "all increases or additions thereto."[2] They also agreed that upon death neither party would make a claim against the other or their estate "by inheritance, descent, dower, curtesy, or maintenance," including any claim to increases to the estates during their lifetimes.[3] Further, any property that either party acquired after marriage would be "held by the respective party as though this respective party had acquired it before the solemnization of the said marriage."[4]

         Husband suggested that Wife consult an attorney at his expense to review the agreement. Wife retained an attorney from a list of attorneys provided by Husband. Wife does not argue he was conflicted. Wife's attorney explained the downsides to Wife of entering into the agreement and asked Husband's attorney for substantive changes to benefit Wife, [5] but Husband's attorney refused all changes except a provision relieving Wife of any debts incurred by Husband before or during the marriage.[6]

         The day before the couple planned to leave for their Las Vegas wedding, Wife met with her attorney to review the agreement. The same day, before Wife met with her attorney, Husband gave Wife a summary of his assets and liabilities.[7] The record is unclear when Wife's attorney received Husband's disclosure, but the attorney had a copy when he met with Wife to review the agreement.[8] In the disclosure Husband and Wife summarized their assets and liabilities.[9] Wife's attorney advised her the agreement was not in her best interests and she should not sign it. Anticipating this day might come, her attorney also requested she sign an acknowledgement which provided as follows:

I, [Wife], on this 19th day of February, 1997, hereby understand and acknowledge that I will be signing an Ante-Nuptial Agreement on this day, affecting statutory rights regarding alimony, property division, debt allocation, my elective share in my future husband's estate in the event of his death, as well as any other lawful right arising from my intended marriage to [Husband].
I have sought the assistance of [Wife's Attorney] in explaining these rights and my waiver pursuant to the aforementioned AnteNuptial Agreement. I have been advised by [Wife's Attorney], that I will be waiving most of my statutory rights to property acquired during the marriage, any right to alimony, the right to have my Husband be responsible for any debt incurred in my sole and individual name during the marriage, as well as my statutory rights to my husband's estate in the event of his death.
[Wife's Attorney] has advised me that this Ante-Nuptial Agreement is not in my best interests. After careful consideration of the Ante-Nuptial Agreement, I have no further questions, concerns, or revisions regarding said Agreement.[10]

         Against her attorney's advice, Wife signed the premarital agreement and the acknowledgement on February 19, 1997.

         The couple married on February 23, 1997 in Las Vegas without telling friends or family. According to Wife, the plan to keep the wedding a secret was Husband's, and Wife was "a little hesitant" to have a secret wedding.[11] Wife testified that Husband forbade Wife from discussing the marriage or the premarital agreement with anyone other than her attorney before the marriage.[12] Wife also testified that Husband had assured her the agreement was only a formality and that he would still take care of her either way.[13] Wife did not pursue significant employment during the marriage, devoting her time to the important task of raising their children and taking care of a large home and property.

         II.

         In 2015, Wife petitioned for divorce. She asked the court to set aside the premarital agreement, and claimed she entered into the agreement involuntarily after being pressured by Husband. She also argued the agreement was so one-sided it was unconscionable, and her counsel did not competently represent her before signing the agreement. Finally, she claimed that Husband did not provide a fair and reasonable disclosure of his property or financial obligations before signing.

         The Family Court found that Wife entered into the agreement voluntarily because she consulted with a lawyer before signing-who advised her not to sign- and she signed the acknowledgement confirming his advice.[14] For the same reason the court dismissed Wife's claim that counsel should have given her better advice before she signed the agreement.[15] But, the Family Court found the agreement so one-sided it was unconscionable based on the disparity in wealth between Husband and Wife.[16] It also found that Husband failed to adequately disclose his property or financial obligations because of errors and omissions in his financial disclosure involving a car, a life insurance policy, and how Husband described his ownership interest in about 200 acres of land.[17] Further, according to the Family Court, Wife did not have sufficient time to understand Husband's financial disclosure before signing the agreement.[18] Thus, the Family Court found the agreement unenforceable. Husband has appealed from the Family Court's interlocutory order invalidating the premarital agreement.

         III.

         "When reviewing a Family Court order our standard and scope of review involves a review of the facts and law, as well as inferences and deductions made by the trial judge."[19] Questions of law are reviewed de novo.[20] Findings of fact are reviewed to assure that they are supported by the record and not clearly erroneous.[21]The unconscionability of the agreement is a question of law reviewed de novo.[22] What "fair and reasonable disclosure" of property and obligations requires is a question of statutory interpretation we review de novo.

         A.

         The parties have accepted the Family Court's ruling that Wife voluntarily entered into the premarital agreement. Thus, voluntariness is no longer at issue. Husband argues that the Family Court erred when it found the agreement unconscionable because the agreement's obligations were mutual, Wife had the advice of an independent attorney, and the Family Court failed to assess unconscionability at the time the parties signed the agreement. Husband also argues that the Family Court erred because any errors or omissions in Husband's financial disclosure were immaterial and did not mislead Wife in understanding the extent of Husband's wealth. Husband also argues in the alternative that Wife had sufficient knowledge of his property or financial obligations before marriage, and Wife waived the right to any disclosure according to the premarital agreement.

         Wife responds that, although the statute requires the court to assess unconscionability at the time of execution, Husband already had substantially more assets at the time of execution and thus it was foreseeable that the imbalance would grow over time. Wife also argues that the Family Court correctly found that Husband's financial disclosure came too close in time to the execution of the agreement, had inaccuracies, and thus did not fairly and reasonably disclose Husband's property and financial obligations. Finally, according to Wife, she was not fully aware of Husband's finances, and the premarital agreement did not provide for a waiver of her right to a fair and reasonable financial disclosure.

         For the reasons explained below, under the premarital agreement statute, we need only address one issue to decide this appeal-whether Husband met the statutory standard for "fair and reasonable" disclosure of his property or financial obligations before signing the premarital agreement. After our review of the record, we find that Husband's financial disclosure met the ...


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