2024 S.D. 34
S.D.2024Background
- Julie and Gary Liebel were married in 2010 and divorced in 2022 after both had been previously married and divorced twice.
- Prior to marriage, they executed a premarital agreement (the “Agreement”), waiving interests in each other's separate property.
- During the marriage, premarital funds were used to acquire and improve joint property, particularly the marital home.
- Julie filed for divorce on grounds of extreme cruelty; Gary counterclaimed on grounds of extreme cruelty and adultery, and was granted the divorce based on adultery.
- In property division, the circuit court applied the Agreement, treating most assets as nonmarital except jointly held property, notably the marital home.
- Julie appealed, challenging the application of the Agreement and the method of property distribution.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Application of Premarital Agreement | Agreement doesn’t apply to divorce since it lacks explicit reference to divorce | Agreement unambiguously waives rights to separate property for any reason | Agreement applies to divorce even absent explicit term |
| Voluntariness and Unconscionability | Agreement was not entered voluntarily and is unconscionable | Agreement was voluntarily entered with sufficient financial disclosures | Lower court found Agreement voluntary; Julie didn’t appeal this finding |
| Division/Classification of Marital Property | Marital home and certain vehicles should be marital; court disregarded contributions | Gary contributed most premarital funds; large share should be nonmarital | Court upheld greater share to Gary based on contributions |
| Valuation of Personal Property | Court’s figures on vehicles and other property were inconsistent | Assets at issue were paid for with nonmarital funds, correctly excluded | Errors, if any, were harmless and do not merit reversal |
Key Cases Cited
- Ryken v. Ryken, 440 N.W.2d 300 (S.D. 1989) (premarital agreement language can apply to divorce if it refers to rights in “legal proceedings”)
- Roth v. Roth, 565 N.W.2d 782 (S.D. 1997) (absence of explicit reference to divorce limits applicability of premarital agreements to divorce; criticized and partially abrogated)
- Smetana v. Smetana, 726 N.W.2d 887 (S.D. 2007) (premarital agreement that fails to mention divorce is unenforceable in divorce; criticized and partially abrogated)
- Charlson v. Charlson, 892 N.W.2d 903 (S.D. 2017) (contract interpretation focuses on the agreement's plain language)