VICTORIA WOOD FRIEZO v. DAVID FRIEZO
(SC 17456)
Supreme Court of Connecticut
Argued October 17, 2005—officially released February 6, 2007
281 Conn. 166
Sullivan, C. J., and Borden, Norcott, Katz, Palmer, Vertefeuille and Zarella, Js.1
Gary I. Cohen, for the appellee (plaintiff).
Opinion
ZARELLA, J. The defendant, David Friezo, appeals from the judgment of the trial court2 dissolving his marriage to the plaintiff, Victoria Wood Friezo, and issuing certain financial orders following a determination that the parties’ prenuptial agreement was unenforceable. The defendant claims that the trial court improperly: (1) concluded that the parties’ prenuptial agreement was unenforceable; (2) presumed that the parties were entitled to an equal distribution of the marital property; (3) included in the defendant‘s income $3,846,029 in management fees and $4,922,645 in performance fees associated with the defendant‘s interest in certain hedge funds when no such income existed; (4) concluded that the defendant‘s testimony lacked credibility; and (5) awarded the plaintiff $125,000 in attorney‘s fees even though she received a substantial lump sum property award. We conclude that the prenuptial agreement was enforceable and, accordingly, reverse the judgment of the trial court.
FACTS
The trial court made the following specific findings and conclusions. The plaintiff, a citizen of the United Kingdom with a high school education, began working in London, England, for Bankers Trust as a trader‘s assistant and personal aide in 1994. “The plaintiff worked under the direction of the defendant3 . . . [and] [t]he parties began dating within one week of the plaintiff‘s new employment. Six or eight weeks later, the parties became sexually intimate. The plaintiff moved out of her mother‘s house two weeks later to live with the defendant in his . . . apartment. . . . The parties maintained their finances separately. The defendant paid the shelter costs but did not provide any cash, credit card or bank account access to the plaintiff. . . . The plaintiff paid her own expenses. Prior to their marriage, the parties never had any conversation about the defendant‘s income or assets. The plaintiff never inquired; the defendant never offered any information.4
“The parties traveled together to New York City in December, 1994, and stayed at the defendant‘s apartment on 65th Street. They traveled to Florida in January, 1995, where the plaintiff met the defendant‘s parents. For the next two years, the plaintiff flew with the defendant frequently on his business and personal trips to the
“The plaintiff continued at Bankers Trust uneventfully for three years. As a trader‘s assistant, she entered and recorded stock transactions that the traders had done. As a personal aide to the defendant, she booked his travel to Hong Kong and Tokyo, made hotel and dinner reservations, and helped plan his workday. She did not decide upon the defendant‘s meetings, but she did organize them. She was responsible for keeping a log as to the defendant‘s whereabouts and appointments. She submitted the defendant‘s expense account receipts and bills to Bankers Trust. On at least one occasion, the defendant directed the plaintiff to photocopy certain of the defendant‘s financial documents for him to give to his accountant.5 The plaintiff denies that she made any attempt to peruse the documents to determine their content. She did not know the defendant‘s income or his net worth. . . .
“In the summer of 1997, the defendant asked the plaintiff to go to the United States to oversee renovations and furnishing of the Westport house. The plaintiff . . . readily agreed to his request . . . [and] took an unpaid leave of absence from the Bankers Trust job. In October, 1997, the plaintiff received notice that her employment at Bankers Trust was terminated because of the extraordinary length of her leave of absence. She continued to look after the renovations at the Westport house. Because her tourist visa allowed her to stay in the United States only ninety days at a time, the plaintiff traveled home to London every three months for a stay of a week before returning to Westport. . . . As in Lon-
“In 1998, the plaintiff discovered that she was entering the [United States] on a tourist visa for the last time. The . . . trip to Westport [in the summer of 1998] would be her last unless her immigration status changed. The parties went together to see an immigration lawyer in August, 1998. The plaintiff‘s marriage to an American citizen would change her immigration status and allow her to stay in the United States. The defendant proposed marriage to the plaintiff on August 20, 1998. The parties needed to marry by the latter part of November, 1998, in order for the plaintiff to remain legally in the United States. Shortly after proposing marriage, the defendant informed the plaintiff that a premarital agreement would be necessary. The plaintiff was not familiar with the concept of a premarital agreement but expressed a willingness to sign one if that is what the defendant wished. The parties set Friday, November 6, 1998, as the wedding date. The plaintiff arranged for a justice of the peace to preside.
“The plaintiff heard nothing more about the possible premarital agreement until Monday, November 2.6 At that time, the defendant informed the plaintiff that the wedding could not take place on November 6 because the premarital agreement was not ready. There was no
“Both parties were in New York City at the defendant‘s apartment on Thursday evening, November 5, when the defendant handed . . . the plaintiff a facsimile copy of a draft premarital agreement . . . . He told her to look it over and get it signed.”
The record also reveals the following undisputed facts. The draft agreement consisted of nineteen articles. Article one, entitled “Acknowledgment of Present Situation: Changes in Circumstances,” included the following language: “Each party acknowledges for himself or herself that both parties have substantial assets and that each would be able to adequately support himself or herself.” Articles ten and eleven, entitled “Husband‘s Representations”8 and “Wife‘s Representa-
Foley first asked the plaintiff to sign a conflict of interest waiver, which she did. The two then met for approximately one-half hour. Because Foley already had a copy of the draft, the plaintiff did not show him her copy.13 When Foley asked the plaintiff if she had any questions, she posed the questions that had come to mind during her weekend review of the draft. Foley stated that her points were well taken and that he would look into them. During the consultation, Foley also made notes on his own copy of the draft and asked the plaintiff to provide him with a list of her assets.
According to the plaintiff, Foley did not show or discuss with her a facsimile copy of the defendant‘s assets and liabilities that the defendant‘s attorney had sent to him on Friday, November 6, one day after the defendant presented the draft to the plaintiff and suggested that she seek legal advice. The document listed assets with a total value of $6,576,000. These assets included two mutual fund/money market accounts, 2541 shares of common stock in Softime, Inc., the West-
In describing her meeting with Foley, the plaintiff testified that Foley did not ask her whether she understood the draft and did not voluntarily explain any portions of the draft that she did not bring up. She admitted, however, that she understood the meaning of a release of rights and claims and that she knew that the purpose of the agreement was to protect the defendant‘s assets in the event of a divorce. She also testified that she had not discussed the defendant‘s income or assets with Foley at any time during their meeting and that it did not matter to her how much money the defendant made either prior to or following their marriage.
On November 12, twenty-four hours before the wedding, the parties met in the offices of the defendant‘s attorney and signed the final agreement. The defendant had faxed the agreement in its final form to Foley earlier that day with no schedules attached. The agreement presented to the plaintiff for signature, however, contained all of the financial information absent from the original draft. This included figures indicating the parties’ respective annual incomes and the completed schedules A and B. The plaintiff testified that this was the first time that she had seen a statement of the defendant‘s assets and liabilities and a figure representing the defendant‘s income.
The trial court determined that the plaintiff had reviewed the final agreement in a separate room for at least twenty minutes prior to its signing, during which time she “looked at” schedule A and the income provisions.16 The agreement in its final form contained most
The parties married on November 13, 1998. On July 2, 2002, the plaintiff filed for dissolution, claiming an irretrievable breakdown of the marriage. The plaintiff requested equitable distribution of the parties’ assets pursuant to
In its memorandum of decision dated August 27, 2004, the trial court concluded that the parties’ premarital agreement was unenforceable because the plaintiff had met her burden of proving lack of adequate financial disclosure by the defendant and lack of a reasonable opportunity to consult with independent counsel. The
II
STANDARD OF REVIEW
The trial court concluded that the parties’ prenuptial agreement was unenforceable because the defendant did not provide the plaintiff with a “fair and reasonable” disclosure of the amount, character and value of his property, financial obligations and income, and because the plaintiff was not afforded a reasonable opportunity to consult with independent counsel. See
III
“FAIR AND REASONABLE” DISCLOSURE19
The principles that govern statutory construction are well established. “When construing a statute, [o]ur fundamental objective is to ascertain and give effect to the apparent intent of the legislature. . . . In other words, we seek to determine, in a reasoned manner, the meaning of the statutory language as applied to the facts of [the] case, including the question of whether the
Prenuptial agreements in Connecticut have been governed since October 1, 1995, by the Connecticut Premarital Agreement Act,
Although § 46b-36g does not expressly define “fair and reasonable” financial disclosure, a plain reading of the statute indicates that the term was intended to be understood in the context of the phrase that directly follows, namely, “the amount, character and value of
During the committee hearings that preceded legislative debate on the proposed bill,21 Edith F. McClure, an attorney who represented the family law section of the Connecticut Bar Association and who was a member of the committee that drafted the act, explained that the committee had been influenced by three things; see generally Conn. Joint Standing Committee Hearings, Judiciary, Pt. 7, 1995 Sess., pp. 2237, 2492-93; the first being a 1980 decision of this court, McHugh v. McHugh, 181 Conn. 482, 436 A.2d 8 (1980), in which we addressed whether a prenuptial agreement was enforceable in a dispute involving the disposition of the family residence. Id., 484-85; see Conn. Joint Standing Committee Hearings, supra, p. 2492. McClure noted that, although McHugh was the principal Connecticut decision on pre-
The bill initially required the party against whom enforcement is sought to prove not only that he or she was not provided a “fair and reasonable disclosure of the amount, character and value of property, financial obligations and income of the other party,” but that he or she “[d]id not voluntarily and expressly waive, in writing, any right to disclosure of the property, financial obligations and income of the other party beyond the disclosure provided” and “[d]id not have, or reasonably could not have had, an adequate knowledge of the property, financial obligations and income of the other party, and of the legal rights which that party would relinquish under the agreement . . . .” Substitute House Bill No. 6932, § 6 (1995 Sess.). An amendment, however, eliminated the second and third requirements. See Substitute House Bill No. 6932, § 6 (1995 Sess.), as amended by House Amendment Schedule A. The amendment thus made it easier to prove lack of a “fair and reasonable” financial disclosure and demonstrated the legislature‘s intent that the disclosure requirement focus on the information to be disclosed rather than on the party to whom disclosure is made.
Although the legislative history is helpful in understanding the drafters’ general intent, it does not provide a definitive answer to the question of what constitutes “fair and reasonable” disclosure. It is therefore necessary to review McHugh23 and the decisions of other
In McHugh, this court articulated the principle that, because the parties to a prenuptial agreement stand in a relationship of mutual confidence, “[t]he duty of each party to disclose the amount, character, and value of individually owned property, absent the other‘s independent knowledge of the same, is an essential prerequisite to a valid antenuptial agreement containing a waiver of property rights. . . . The burden is not on either party to inquire, but on each to inform, for it is only by requiring full disclosure of the amount, character, and value of the parties’ respective assets that courts can ensure intelligent waiver of the statutory rights involved.” (Citations omitted; internal quotation marks omitted.) McHugh v. McHugh, supra, 181 Conn. 486-87. McHugh thus makes three significant points. First, the purpose of disclosure is to ensure that each party has sufficient knowledge of the other party‘s financial circumstances to understand the nature of the legal rights being waived.24 See id. In other words, a party cannot know what is being waived unless he or she is privy to all of the relevant facts, in particular, for all practical purposes, the same. Moreover, as McClure herself explained to the legislature, the proposed statute was intended to clarify McHugh, not to supplant the legal principles espoused therein. See Conn. Joint Standing Committee Hearings, supra, p. 2492; see also Dornemann v. Dornemann, 48 Conn. Sup. 502, 511, 850 A.2d 273 (2004) (“[t]he [Connecticut Premarital Agreement] [A]ct endorses, clarifies and codifies the McHugh standards“).
McHugh is the only Connecticut case that has examined, even tangentially, the meaning of fair and reasonable disclosure.25 We therefore turn to the case law of
Our review of this case law indicates that when a party‘s independent knowledge is insufficient and the other party must disclose financial information in a prenuptial agreement, the extent of the required disclosure depends on how the court views the relationship. Courts in the majority of jurisdictions regard the parties as involved in a confidential relationship of mutual trust that demands the exercise of the highest degree of good faith, candor and sincerity in all matters bearing on the proposed agreement. See, e.g., In re Marriage of Drag, 326 Ill. App. 3d 1051, 1056, 762 N.E.2d 1111 (2002); Cannon v. Cannon, 384 Md. 537, 556, 570-71, 865 A.2d 563 (2005); Rosenberg v. Lipnick, 377 Mass. 666, 670, 389 N.E.2d 385 (1979); Wiley v. Iverson, 295 Mont. 511, 517, 985 P.2d 1176 (1999); In re Estate of Hollett, 150 N.H. 39, 42-43, 834 A.2d 348 (2003); Tiryakian v. Tiryakian, 91 N.C. App. 128, 132, 370 S.E.2d 852 (1988); Fletcher v. Fletcher, 68 Ohio St. 3d 464, 466, 628 N.E.2d 1343 (1994); Griffin v. Griffin, 94 P.3d 96, 99-100 (Okla. App. 2004); Randolph v. Randolph, supra, 937 S.W.2d
Jurisdictions that treat the parties as involved in an arm‘s-length relationship “on the theory that parties who are not yet married are not presumed to share a confidential relationship“; (internal quotation marks omitted) DeLorean v. DeLorean, supra, 211 N.J. Super. 441, quoting In re Marriage of Dawley, 17 Cal. 3d 342, 355, 551 P.2d 323, 131 Cal. Rptr. 3 (1976); impose a duty on each spouse to inquire and investigate the financial condition of the other, and, consequently, the disclosure requirement is less demanding. DeLorean v. DeLorean, supra, 438;26 see, e.g., In re Marriage of Bonds, 24 Cal. 4th 1, 27, 5 P.3d 815, 99 Cal. Rptr. 2d 252 (2000); Eckstein v. Eckstein, 129 App. Div. 2d 552, 553, 514 N.Y.S.2d 47 (1987). Connecticut regards the parties to a prenuptial agreement as involved in a confidential relationship. See McHugh v. McHugh, supra, 181 Conn. 486-87. Accordingly, we must apply the more stringent standard.
The overwhelming majority of jurisdictions that apply this standard do not require financial disclosure to be exact or precise. See, e.g., Nanini v. Nanini, 166 Ariz. 287, 290, 802 P.2d 438 (App. 1990) (applying Illinois law and concluding that “exact dollar value” of parties’ property need not be shown at time of execution of
In the present case, the defendant‘s disclosure was more than adequate to ensure that the plaintiff would be able to make an intelligent waiver of her statutory rights. See McHugh v. McHugh, supra, 181 Conn. 486-87. Article ten of the agreement provided that the defendant‘s gross income from all sources for 1997, excluding capital gains, was $2,300,000. In addition, schedule A set forth a list of the defendant‘s assets and liabilities, most of which were valued individually, for a total net worth of $6,576,000. These assets, as we previously noted, included money market accounts, mutual funds, checking accounts, investments, real and personal property, stocks, various employee and equity participation plans, United States savings bonds, and four
Moreover, the plaintiff acknowledged in article eleven of the agreement that she had examined the list of assets and liabilities provided in schedule A and clearly understood and consented to all of the agreement‘s terms. See footnote 9 of this opinion. Significantly, the plaintiff did not allege at any time during the proceedings, nor did the court conclude, that the defendant‘s disclosure was inaccurate or incomplete. Instead, the court, in effect, validated the defendant‘s disclosure by relying in part on the statement of net worth provided in schedule A when calculating its financial orders. Thus, the defendant‘s disclosure would have been adequate even under the standard employed in New Jersey, which requires that a written list of assets and income be appended to the prenuptial agreement. See DeLorean v. DeLorean, supra, 211 N.J. Super. 438 (“we can ascertain with complete certainty whether there was a full and complete disclosure only by requiring a written list of assets and income [to] be attached to the [ante]nuptial agreement“). We therefore conclude that the defendant‘s disclosure was “fair and reasonable” because it provided the plaintiff with an accurate representation, in writing, of his income and financial assets at the time the agreement was executed.
The trial court determined that the defendant‘s disclosure failed to comply with
IV
VOLUNTARY EXECUTION OF THE AGREEMENT
The trial court further concluded that the defendant had failed to comply with the disclosure requirement because the plaintiff had insufficient time to review the final agreement and the disclosures contained therein. We treat this issue separately because such a conclusion is lacking in legal support and reflects a misunderstanding of the law. It is well established that the amount of time available to review a prenuptial agreement is relevant in assessing whether the agreement was voluntary or signed under duress, but not in determining whether the parties made a “fair and reasonable” disclosure of their financial circumstances. See, e.g., 41 Am. Jur. 2d 102, Husband and Wife § 101
The trial court disregarded a crucial piece of evidence in the record pertaining to this issue, namely, the copy of schedule A listing the defendant‘s assets and liabilities that was faxed to Foley by the defendant‘s attorney six days before the agreement was executed. Although there is no evidence in the record as to why Foley did not show this information to the plaintiff during their meeting on November 10, the same trial judge observed in Dornemann v. Dornemann, 48 Conn. Sup. 502, 850 A.2d 273 (2004), with respect to a claim alleging insufficient financial disclosure, that “[t]he knowledge and admissions of an attorney are imputed to his client“; (internal quotation marks omitted) id., 511, quoting Lafayette Bank & Trust Co. v. Aetna Casualty & Surety Co., 177 Conn. 137, 140, 411 A.2d 937 (1979); and, therefore, the plaintiff in that case, who had not seen the relevant financial documents, possessed “the imputed knowledge of her attorney as to the defendant‘s finances . . . .” Dornemann v. Dornemann, supra, 511; see also Lebowitz v. McPike, 157 Conn. 235, 242, 253 A.2d 1 (1968); Sweeney v. Pratt, 70 Conn. 274, 282, 39 A. 182 (1898). Consequently, in the present case, as in Dornemann, the plaintiff possessed the imputed knowledge of her attorney regarding the contents of schedule A before she executed the agreement.
There appear to be only two reasons why the trial court did not make a factual finding regarding Foley‘s
To the extent that the court‘s determination of misconduct represents a finding that the defendant perpe-
Insofar as the trial court found that Foley had perpetrated a fraud on the plaintiff, that finding, too, lacks evidentiary support. Indeed, there was no evidence presented at trial to indicate that Foley knew the defendant, or even that he had conspired with him, or with anyone else, for that matter, to perpetrate a fraud on the plaintiff. Nor was there any evidence that Kristen Friezo discussed the prenuptial agreement with Foley or attempted to influence him in any way on behalf of the defendant. The only reasonable inference that can be drawn from the evidence is that Foley agreed to represent the plaintiff as a professional courtesy to his colleague, Kristen Friezo, who, apparently, thought that she was doing a favor for the plaintiff.27
The trial court‘s principal factual findings on the issue of fraud were that Foley worked in the same law firm
Even if Foley‘s knowledge of schedule A is not imputed to the plaintiff, the record establishes, unequivocally, that the plaintiff had actual knowledge of the defendant‘s financial circumstances when she signed the agreement. The plaintiff conceded that she had “looked at” the entire document, including schedule A
The trial court‘s conclusion that the plaintiff had insufficient time to digest and understand the disclosure on the day she signed the agreement is also unsupportable because it is the party‘s responsibility to delay the signing of an agreement that is not understood. See, e.g., Simeone v. Simeone, supra, 525 Pa. 400 (“[c]ontracting parties are normally bound by their agreements, without regard to whether the terms thereof were read and fully understood and irrespective of whether the agreements embodied reasonable or good bargains“); Standard Venetian Blind Co. v. American Empire Ins. Co., 503 Pa. 300, 305, 469 A.2d 563 (1983) (failure to read contract does not warrant “avoidance, modification or nullification” of its provisions). In the present case, the plaintiff had the opportunity to read the agreement carefully and has not claimed duress. In fact, the trial court specifically observed that there was “no sign” of duress.28 If the plaintiff felt she did not have sufficient
time to understand the agreement‘s terms, she could have rescheduled the wedding, which did not involve extensive planning, for a later date. A formal wedding ceremony to which families and friends would be invited was scheduled for the following July. The only other persons expected to attend the November ceremony were the justice of the peace and his wife, and the plaintiff testified that the wedding could have been rescheduled for any date prior to the end of November without jeopardizing her immigration status. The date had been postponed at least once before, and another delay would not have resulted in embarrassment or humiliation. Thus, the plaintiff could have declined to sign the agreement and requested additional time to review it. The plaintiff should not now be allowed to claim that the agreement is unenforceable and take advantage of her failure to seek a delay in its signing when she easily could have obtained the additional time she claims was needed to review the income and disclosure provisions. For all of the foregoing reasons, we cannot subscribe to the trial court‘s conclusion that the plaintiff had insufficient time to review the defendant‘s financial disclosure.
Insofar as the trial court concludes that the plaintiff lacked the financial experience necessary to understand the agreement and thus did not sign it knowingly; see, e.g., In re Marriage of Gonzalez, 561 N.W.2d 94, 97 (Iowa App. 1997) (prenuptial agreement invalid for lack of knowing and voluntary waiver because wife did not understand agreement); we also disagree. The notion that the plaintiff was financially unsophisticated merely because she possessed no more than a high school education, was not familiar with Connecticut law on marriage and divorce and did not discuss financial issues with the defendant prior to their marriage
The record also indicates that the plaintiff demonstrated excellent judgment in conducting her personal financial affairs. She saved significant portions of her salary and was responsible for all of her own expenses, excluding housing and utilities, while living with the defendant. She had established separate savings and checking accounts, owned 580 shares of stock, invested $3000 in an endowment policy and had incurred no debt. Her total net worth was $22,000 at the time of the marriage. It is therefore clear that the plaintiff knew how to save, invest and manage her own money.
Additionally, we do not believe that parties require a detailed understanding of Connecticut law on marriage and divorce to validly waive their statutory rights in a prenuptial agreement, nor is it necessary to have a college degree in order to understand the concept of net worth. In the present case, the plaintiff herself applied the practical financial skills that she had acquired as a working woman when she filled out schedule B, apparently without assistance. The plaintiff thus knew exactly what the schedules were intended to describe and was aware that the defendant would be completing schedule A in similar fashion. Moreover, the plaintiff testified that she understood the meaning of a “release” of rights and claims and that she knew that the purpose of the agreement was to protect the defendant‘s assets
At least one jurisdiction has explicitly noted that the time has come for paternalistic presumptions and protections to be discarded. See Simeone v. Simeone, supra, 525 Pa. 399 (presumption that women not knowledgeable enough to understand nature of contracts they enter is no longer valid). The Supreme Court of Pennsylvania stated more than one decade ago that “[s]ociety has advanced . . . to the point where women are no longer regarded as the ‘weaker’ party in marriage, or in society generally. Indeed, the stereotype that women serve as homemakers while men work as breadwinners is no longer viable. Quite often today both spouses are income earners. Nor is there viability in the presumption that women are uninformed, uneducated, and readily subject to unfair advantage in marital agreements. Indeed, women nowadays quite often have substantial education, financial awareness, income, and assets.
“Accordingly . . . [p]aternalistic presumptions and protections that arose to shelter women from the inferiorities and incapacities which they were perceived as
In the present case, the trial court ignores facts in the record that portray the plaintiff, a woman who supported herself for several years by working in a business involving sophisticated financial transactions, as knowledgeable, experienced and even savvy in practical financial matters, and thus able to understand, interpret and ask intelligent questions about the prenuptial agreement if she had so desired. In fact, her written notations on the draft agreement indicate that she had a sharp and inquiring mind. Accordingly, in considering the record in its totality, we conclude that it does not support the conclusion that the plaintiff was so lacking in financial experience or sophistication that she did not execute the agreement knowingly and voluntarily.
V
INDEPENDENT COUNSEL
The trial court concluded that the plaintiff was not afforded a reasonable opportunity to consult with independent counsel as required by
With respect to whether the plaintiff had a “reasonable opportunity” to consult with legal counsel, there is no requirement that a party actually seek or obtain the advice of counsel, only that he or she be afforded a reasonable opportunity to do so. See, e.g., Cannon v. Cannon, supra, 384 Md. 578 (upholding prenuptial agreement when wife had several days to review agreement and, therefore, sufficient time to consult counsel had she been so inclined); id. (“[i]t was enough for [the husband] to demonstrate that [the wife] had the opportunity to seek counsel and that she was not discouraged to do so“); Black v. Powers, 48 Va. App. 113, 141, 628 S.E.2d 546 (2006) (“the fact that [the wife]
With respect to whether Foley was in fact “independent” of the defendant, there is absolutely nothing in the record, other than the trial court‘s conclusory allegations of fraudulent misconduct; see part III of this opinion; to suggest that Foley was not independent. The fact that Foley‘s colleague, Kristen Friezo, was the defendant‘s sister-in-law is insufficient to support the trial court‘s conclusion that Foley was not independent from the defendant within the meaning of
provides that “[a] lawyer related to another lawyer as parent, child, sibling or spouse shall not represent a client in a representation directly adverse to a person who the lawyer knows is represented by the other lawyer except upon consent by the client after consultation regarding the relationship.” Moreover, the commentary to
The judgment is reversed and the case is remanded for further proceedings according to law.
In this opinion SULLIVAN, C. J., and BORDEN, KATZ, PALMER and VERTEFEUILLE, Js., concurred.
NORCOTT, J., dissenting. I disagree with the majority‘s conclusion that the trial court improperly determined that the parties’ prenuptial agreement (agreement) was unenforceable. I also conclude that the trial court improperly presumed that the parties were entitled to an equal distribution of the marital property. Accordingly, I respectfully dissent, and would
I
Like the majority, I begin with the first claim of the defendant, David Friezo, namely, that the trial court improperly concluded that the agreement executed by the parties on November 12, 1998, was unenforceable. I do so because, if enforceable, the agreement would have controlled the financial disposition of the case. Under the agreement, the recovery of the plaintiff, Victoria Wood Friezo, would have been limited to $400,000, plus the use of a residence for herself and the parties’ child.1 The trial court found, however, that the plaintiff had not been afforded fair and reasonable financial disclosure prior to executing the agreement. The trial court further found that the plaintiff‘s attorney, Eamonn Foley, had acted under a “clear conflict of interest” and had failed to offer independent advice. Accordingly, it concluded that the agreement was unenforceable pursuant to
Generally, “[a]n antenuptial agreement is a type of contract and must, therefore, comply with ordinary
I begin by setting forth the applicable standard of review, which “depends upon the proper characterization of the rulings made by the trial court. To the extent that the trial court has made findings of fact, our review is limited to deciding whether such findings were clearly erroneous. . . . A finding of fact is clearly erroneous when there is no evidence in the record to support it . . . or when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” (Internal quotation marks omitted.) Carmel Hollow Associates Ltd. Partnership v. Bethlehem, 269 Conn. 120, 149, 848 A.2d 451 (2004).
I turn first to the trial court‘s finding, pursuant to
ples set forth in McHugh v. McHugh, supra, 181 Conn. 482. Compare
“When a statute does not define a term, it is appropriate to look to the common understanding expressed in the law . . . .” State Medical Society v. Board of Examiners in Podiatry, 208 Conn. 709, 721, 546 A.2d 830 (1988). Despite the lack of definition in this context, the terms “fair” and “reasonable” are familiar to our jurisprudence.5 For example, we have, in the context
of the removal of the chairman of a municipal board of education, stated: “What constitutes reasonable notice in any given legal context depends on the facts and circumstances of the case . . . including the purpose for which the notice is required.” (Citation omitted; internal quotation marks omitted.) LaPointe v. Board of Education, 274 Conn. 806, 814, 878 A.2d 1154 (2005); see also Cahn v. Cahn, 225 Conn. 666, 674, 626 A.2d 296 (1993) (“[w]hat is reasonable notice [for the purposes of a deposition] must depend largely upon the facts and circumstances of each case” [internal quotation marks omitted]); E. M. Loew‘s Enterprises, Inc. v. Surabian, 146 Conn. 608, 612, 153 A.2d 463 (1959) (” ‘[r]easonable’ is a relative term which varies in the context in which it is used, and its meaning may be affected by the facts of the particular controversy“). In this particular context, we have noted that, “[u]nder ordinary circumstances, parties to an ante-nuptial agreement do not deal at arm‘s length; they stand in a relationship of mutual confidence that calls for the exercise of good faith, candor and sincerity in all matters bearing upon the agreement.” (Internal quotation marks omitted.) McHugh v. McHugh, supra, 181 Conn.
The financial disclosure document attached to the agreement lists several assets that purportedly comprised the defendant‘s property. It does so, however, in cursory terms that fail to describe the nature of the property in any way whatsoever. As the trial court noted, the disclosure document simply lists thirty-one ambiguously labeled assets, giving no indication of how they were valued or, in some cases, what they truly are. For example, the disclosure document, which indicates the value of the defendant‘s holdings in “ESTIMATED VALUE (000‘s),” lists, inter alia, the following assets of the defendant: “Ornstein Leyton Reality, Inc. Real Estate Venture,” to which is assigned a value of “85,” and “Rosehill Capital Management Rosehill Japan Fund L.P.,” to which is assigned a value of “350.” Similarly, under the broad category of “Bankers Trust Co. Employee Plans,” the defendant‘s disclosure document lists three assets totaling “430” without explaining what those assets, which are labeled “BT Partnershare Account,” “BT Coinvestment Plan” and “BT Partnership Equity Plan,” actually constitute. The disclosure document is similarly vague with regard to the defendant‘s
Furthermore, although the final agreement signed by the plaintiff listed the defendant‘s income for the year 1997 as $2,300,000, the draft agreement and the defendant‘s financial disclosure document that had been received by the plaintiff‘s attorney on November 6, 1998, did not contain any statement regarding the defendant‘s income. Additionally, the income stated on the final agreement was not itemized, and provided the plaintiff with no way of assessing its source or consistency. To the extent that the agreement can be construed as having disclosed the defendant‘s income, it did so only twenty-four hours before the wedding took place, leaving the plaintiff little time to evaluate that disclosure or take any other action to protect her interest.6
Additionally, the trial court made significant findings regarding the plaintiff‘s financial inexperience.7 Specifi-
cally, the trial court found that the plaintiff possessed only a high school education, “had no knowledge of Connecticut marriage and divorce laws, inheritance rights, spousal share upon death, forms of joint or sole real property ownership, qualified domestic relations orders, tax-deferred annuities, individual retirement plans, etc.” The trial court further found that the parties “kept their finances completely separated,” and “did not talk of money issues.” I acknowledge that the plaintiff is charged with knowledge of the financial information sent to her attorney on November 6, 1998. See Lafayette Bank & Trust Co. v. Aetna Casualty & Surety Co., 177 Conn. 137, 140, 411 A.2d 937 (1979) (“[t]he knowledge and admissions of an attorney are imputed to his client“); see also Dornemann v. Dornemann, 48 Conn. Sup. 502, 511, 850 A.2d 273 (1979) (“[t]he actual review of the financial disclosure by each party is not mandated by the statute“). Even if we were to assume, for the sake of argument, its effectiveness with regard to the defendant‘s assets and liabilities, the disclosure made on that date did not contain any statement regarding the defendant‘s income.
Furthermore, even if the financial disclosure document the defendant sent to Foley on November 6, 1998, had contained this information, it is unlikely that the plaintiff would have been able adequately to evaluate it in the short time provided. Accordingly, given the
Similarly, with regard to the second aspect of the clearly erroneous test, namely, whether “although there is evidence to support [the trial court‘s finding], the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed“; (internal quotation marks omitted) Carmel Hollow Associates Ltd. Partnership v. Bethlehem, supra, 269 Conn. 149; I also cannot conclude that the trial court‘s finding of unreasonable financial disclosure was clearly erroneous. Indeed, the record does contain some evidence supporting the defendant‘s contention that the plaintiff received adequate financial disclosure. Specifically, the total net worth listed on the financial disclosure document attached to the agreement presented a facially accurate portrayal of the defendant‘s assets at the time of the marriage, and both it and the agreement were in Foley‘s possession four days before the plaintiff consulted him. Additionally, the defendant presented evidence at trial that the plaintiff had worked with the defendant, was familiar with his compensation, had observed his income tax information on several occasions, and oversaw the renovation of his considerable Westport home.
Nevertheless, it is well established that, on appeal, “[w]e cannot retry the facts or pass on the credibility of the witnesses.” (Internal quotation marks omitted.) Greco v. Greco, 275 Conn. 348, 359, 880 A.2d 872 (2005). Consequently, although evidence exists in the record supporting both parties’ positions, considering the
Because a signatory to a prenuptial agreement relinquishes significant legal rights, it is imperative that the “terms and the circumstances surrounding [the agreement‘s] execution are such as to demonstrate that the parties were aware of their legal rights and their respective assets and liabilities, and proceeded by the agreement to alter those rights in a fair and voluntary manner.” McHugh v. McHugh, supra, 181 Conn. 488. I, therefore, conclude that, under the facts of the present case, in which an unsophisticated plaintiff facing the looming prospect of illegal-alien status was presented with an ambiguous financial disclosure document shortly before her wedding, the trial court‘s finding of unreasonable financial disclosure was not clearly erroneous.8 The trial court, therefore, correctly determined that the agreement was unenforceable under
II
Because I would conclude that the agreement is unenforceable, I must consider the merits of the defendant‘s second claim with respect to the trial court‘s orders regarding the distribution of marital property. Specifically, the defendant contends, despite the statutory criteria governing the distribution of marital property; see
“[LCA] is the general partner of [Lydian Asset Management, L.P. (LAM)] and has a 14.32 percent capital ownership interest in [LAM]. The defendant has a direct 64.04 percent capital ownership interest in [LAM]. . . . [T]he defendant‘s current capital ownership interest in [LAM] is $1,684,584. . . .
“In addition to his capital ownership interest in [LAM], the defendant has deferred performance fees for the years 2000, 2001, 2002 and 2003. The amount deferred in 2000, was $4,200,000; in 2001, $10,475,721; in 2002, $3,739,537; and in 2003, $5,023,107. The deferred compensation investments have increased in value to
“The defendant [also] owns 75 percent of [Frisa I, LLC (Frisa)]. The sole asset of [Frisa] is commercial property in Westport, Connecticut. The fair market value of the property is $3,800,000. With a mortgage of $3,312,920, the net value is $487,080. [Frisa] also has cash on hand of $166,035 and miscellaneous small assets and debts. . . . [T]he defendant‘s current equity value in [Frisa] is $397,835.”
The trial court concluded its findings regarding the defendant‘s assets, stating: “The defendant owned assets valued at $6,576,000 at the outset of the marriage. Although certain stock options and equity participation assets totaling almost one million dollars were sacrificed when the defendant left employment at Bankers Trust [International PLC], a portion of the defendant‘s lump sum separation package in 1999, recognized the loss of those benefits. The current after-tax value of the defendant‘s interest in the three hedge fund entities totals $17,137,613. The value of the real property at 9 Brookside Drive, Westport, Connecticut is $3,500,000. The apartment at 315 East 68th Street in New York City is worth $800,000. The condominium unit in Fort Lauderdale, Florida has a net equity of $100,000. Bank accounts total $40,164. Cars, motorcycles, the yacht and a snowmobile are valued at $88,041. Securities and bonds are worth $1,145,560. The defendant has 401(k)
The trial court continued, stating: “The court has considered all the criteria of
Additionally, at the conclusion of the trial, the court engaged in the following colloquy with defense counsel:
“[The Court]: . . . Isn‘t it all relative? I mean, let‘s say that, during the marriage, all that they saved was forty thousand dollars and it was all in his IRA. Wouldn‘t she be entitled to twenty thousand of it?
“[Defense Counsel]: No. It‘s not a community property state, Your Honor. This is equitable distribution. The court has to consider all--
“[The Court]: And a contract, which is essentially a fifty-fifty deal. Marriage.
“[The Court]: It‘s not community property, but why don‘t we start with that as a marriage between equals and a contractual arrangement in which they have their different roles that they each perform?
“[Defense Counsel]: Your Honor, I think that‘s the legislature to make that finding. That is not the law. Equitable distribution is not the same as community property. In a short-term marriage--
“[The Court]: I agree, but what makes for equitable distribution? You‘re saying that--
“[Defense Counsel]: The statute criteria
“[The Court]: Possibly a travesty. You‘re dealing with a different judge. . . .
“[The Court]: And you have to convince me that the work that--in this case for example--the wife has done in the household is worth less than half of the assets, and I haven‘t heard that argument--I mean, I haven‘t heard anything convincing as to why her efforts--you said, that isn‘t worth so many millions, and I‘m not sure I heard why.” On the basis of the foregoing findings, the trial court ordered that the defendant pay the plain-
I note that “[o]ur standard of review in domestic relations cases is a very narrow one,” and, generally, “[w]e will not reverse a trial court‘s rulings with regard to custody and financial orders unless the court incorrectly applied the law or could not reasonably have concluded as it did.” Blake v. Blake, 207 Conn. 217, 225, 541 A.2d 1201 (1988). Nevertheless, “[a]lthough it is well established that trial courts have broad equitable remedial powers regarding marital dissolutions . . . it is equally well settled that [c]ourts have no inherent power to transfer property from one spouse to another; instead, that power must rest upon an enabling statute. . . . Thus, the court‘s authority to transfer property appurtenant to a dissolution proceeding requires an interpretation of the relevant statutes. Statutory construction, in turn, presents a question of law over which our review is plenary.” (Citations omitted; internal quotation marks omitted.) Smith v. Smith, 249 Conn. 265, 272, 752 A.2d 1023 (1999). Accordingly, because the trial court‘s judgment was predicated upon its construction of
The distribution of marital property is governed by
Furthermore, although this court has not previously had occasion to discuss the present issue, the Appellate Court addressed it comprehensively in Wendt v. Wendt, 59 Conn. App. 656, 680-88, 757 A.2d 1225, cert. denied, 255 Conn. 918, 763 A.2d 1044 (2000). Notwithstanding the trial court‘s negative characterization of Wendt, which constituted binding precedent on it, I find the Appellate Court‘s reasoning therein highly persuasive. In Wendt, the Appellate Court stated: “It is well settled that a statute must be applied as its words direct. . . . [Section]
The plaintiff agrees that there is no presumption, under
In light of the trial court‘s oral statements and memorandum of decision, however, the plaintiff‘s first contention is untenable. Moreover, the plaintiff does not ask this court to disavow Wendt, and I would apply the Appellate Court‘s persuasive reasoning in Wendt as the governing law in the present case.12
Additionally, the plaintiff‘s alternative argument, that the trial court‘s improper presumption was harmless, also lacks merit. In a civil case, an error is harmful if it likely affected the outcome at trial. Pagano v. Ippoliti, 245 Conn. 640, 651, 716 A.2d 848 (1998). The trial court‘s memorandum of decision and dialogue with defense counsel indicate that the court considered the presumption significant and based its decision, at least in part, on the defendant‘s inability to rebut the presumption. Under the circumstances, “[w]e cannot say, with any certainty, whether the trial court would have ruled the way that it did in the absence of such [a presumption] . . . .” In re Samantha C., 268 Conn. 614, 675, 847 A.2d 883 (2004) (trial court‘s improper drawing of adverse inference for failure to testify in termination of parental rights case was not harmless error). Furthermore, it is
Accordingly, I respectfully dissent from the majority opinion in this case. For all of the foregoing reasons, I would, therefore, reverse the judgment as to the financial orders only and remand the case for a new hearing on the remaining issues according to law.
RENAISSANCE MANAGEMENT COMPANY, INC., ET AL. v. CONNECTICUT HOUSING FINANCE AUTHORITY
(SC 17593)
Borden, Katz, Palmer, Zarella and Mack, Js.
Notes
The majority opinion provides only the text of
“(1) Such party did not execute the agreement voluntarily; or
“(2) The agreement was unconscionable when it was executed or when enforcement is sought; or
“(3) Before execution of the agreement, such party was not provided a fair and reasonable disclosure of the amount, character and value of property, financial obligations and income of the other party; or
“(4) Such party was not afforded a reasonable opportunity to consult with independent counsel.
“(b) If a provision of a premarital agreement modifies or eliminates spousal support and such modification or elimination causes one party to the agreement to be eligible for support under a program of public assistance at the time of separation or marital dissolution, a court, notwithstanding the terms of the agreement, may require the other party to provide support to the extent necessary to avoid such eligibility.
“(c) An issue of unconscionability of a premarital agreement shall be decided by the court as a matter of law.”
The majority opinion provides only the text of subsection (a) of § 6 of the uniform act. See footnote 22 of the majority opinion. I believe that the remainder of the section, and particularly subsection (c), is relevant to determining the applicable standard of review. Section 6 of the uniform act provides: “(a) A premarital agreement is not enforceable if the party against whom enforcement is sought proves that:
“(1) that party did not execute the agreement voluntarily; or
“(2) the agreement was unconscionable when it was executed and, before execution of the agreement, that party:
“(i) was not provided a fair and reasonable disclosure of the property or financial obligations of the other party;
“(ii) did not voluntarily and expressly waive, in writing, any right to
“(iii) did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the other party.
“(b) If a provision of a premarital agreement modifies or eliminates spousal support and that modification or elimination causes one party to the agreement to be eligible for support under a program of public assistance at the time of separation or marital dissolution, a court, notwithstanding the terms of the agreement, may require the other party to provide support to the extent necessary to avoid that eligibility.
“(c) An issue of unconscionability of a premarital agreement shall be decided by the court as a matter of law.”
“[The Plaintiff‘s Counsel]: Did [the defendant] discuss with you any aspect whatsoever of his finances during the time that you and he were living together?
“[The Plaintiff]: No.
“[The Plaintiff‘s Counsel]: Did you ever ask?
“[The Plaintiff]: No.
“[The Plaintiff‘s Counsel]: Was it of any interest to you?
“[The Plaintiff]: No.” I note that the genealogy and history of
The majority acknowledges the lack of definition in this context, and then proceeds directly to the case law of sister jurisdictions that have enacted similar provisions based on the uniform act. Although ordinarily it may be proper to turn to such decisions; see Hill v. Blake, 186 Conn. 404, 408, 441 A.2d 841 (1982) (“[when an] act is a uniform law, decisions from other states are valuable for the interpretation of its provisions“); I do not find it proper in this instance, wherein our legislature has adopted a modified version of the uniform act.
I acknowledge that, when analyzing claims of unfair financial disclosure, sister state courts often have confined their inquiry to whether the information disclosed was accurate, rather than the circumstances under which it was made available. See, e.g., In re Estate of Lopata, 641 P.2d 952, 955
As the majority indicates in part IV of its opinion, the trial court was not entirely clear in its reasons for invalidating the agreement. Although the trial court specifically quoted from the language of subdivisions (3) and (4) of
I disagree, however, with the majority‘s conclusion that the trial court improperly considered the timing of the signing of the agreement when it performed an analysis under
“(B) The Husband acknowledges that he has examined Schedule ‘B’ annexed hereto which sets forth the Wife‘s assets and liabilities. He also acknowledges that the Wife‘s assets and liabilities may increase or decrease. He further acknowledges that he has weighed all of the factors, conditions and circumstances likely to influence his judgment herein, that the provisions of this Agreement have been fully and satisfactorily explained to him and all of his questions pertinent thereto have been fully and satisfactorily answered by counsel of his own selection, that he is aware that, by executing this Agreement, he is giving up valuable rights in and to the Wife‘s Property, including, without limitation, all benefits under all present and future Plans resulting from services heretofore or hereafter performed and/or from contributions made principally (as between the parties) by or on behalf of the Wife (except as expressly and voluntarily otherwise provided by the Wife), that he has given due consideration to such matters and questions, that he clearly understands and consents to all of the provisions of this Agreement, and that he is entering into this Agreement freely, voluntarily and with full knowledge.” (Emphasis added.) I need not address the question of whether the plaintiff was afforded an adequate opportunity to consult with independent counsel pursuant to
“(B) The Wife acknowledges that she has examined Schedule ‘A’ annexed hereto which sets forth the Husband‘s assets and liabilities. She also acknowledges that the Husband‘s assets and liabilities may increase or decrease. In addition, she acknowledges that the Husband has informed her that he is a participant in or owner of one or more Plans the present death benefits of which aggregate in excess of ____ Dollars, that such benefits may increase or decrease, that such Plans also have non-death benefits, and that he may also be a participant in or owner of one or more other Plans in the future. She further acknowledges that she has weighed all of the factors, conditions and circumstances likely to influence her judgment herein, that the provisions of this Agreement have been fully and satisfactorily explained to her and all of her questions pertinent thereto have been fully and satisfactorily answered by counsel of her own selection, that she is aware that, by executing this Agreement, she is giving up valuable rights in and to the Husband‘s Property, including, without limitation, all benefits under all present and future Plans resulting from services heretofore or hereafter performed and/or from contributions made principally (as between the parties) by or on behalf of the Husband (except as expressly and voluntarily otherwise provided by the Husband), that she has given due consideration to such matters and questions, that she clearly understands and consents to all of the provisions of this Agreement, and that she is entering into this Agreement freely, voluntarily and with full knowledge.” (Emphasis added.)
“(c) In fixing the nature and value of the property, if any, to be assigned, the court . . . shall consider the length of the marriage, the causes for the annulment, dissolution of the marriage or legal separation, the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities and needs of each of the parties and the opportunity of each for future acquisition of capital assets and income. The court shall also consider the contribution of each of the parties in the acquisition, preservation or appreciation in value of their respective estates.”
“The plaintiff had no experience with attorneys except the parties’ consultation with the immigration lawyer in August [1998]. She did not know that she was being set up. The premarital agreement in its final form was revised on several of the pages where the plaintiff had raised questions to Foley. It was also revised in one way that the plaintiff had not suggested—the addition of language [providing that] the plaintiff waived any claim of conflict of interest occasioned by the employment of Kristen Friezo‘s law firm. The plaintiff‘s execution of documents waiving any claim to conflict of interest does not alter the fact that the attorneys of [Kristen Friezo‘s law firm] did have a clear conflict of interest. Foley was either incredibly incompetent in his representation of the plaintiff or he was not, in fact, representing her at all. The plaintiff did not have the sophistication to realize what was going on. Perhaps, the most telling indication of Foley‘s true loyalties and obligations in connection with his lack of advice to the plaintiff was his failure to secure any retainer agreement, exact a consultation fee, or tender any bill for services. After the parties married, the defendant told the plaintiff to deliver two bottles of wine to [Foley] to thank Foley for his help. The plaintiff followed the defendant‘s instructions. The defendant paid his own attorneys more than $5000 for the preparation of the premarital agreement and advice to the defendant.
“The waivers and concessions in the premarital agreement were not contracted knowingly by the plaintiff. She did not have the benefit of independent legal counsel nor a reasonable opportunity to secure such representation. She did not know the defendant‘s income or the value of his assets. Despite the cohabitation of the parties for more than four years prior to the marriage, the parties kept their finances completely separated. They did not talk of money issues. The plaintiff did not have any financial disclosure prior to the meeting in the offices of the defendant‘s attorneys when she executed the premarital agreement. The timing of the disclosure rendered it inadequate to provide any possibility of actual knowledge by the plaintiff. . . . The plaintiff has met her burden of proving lack of adequate financial disclosure and lack of a reasonable opportunity to consult with independent counsel. The premarital agreement will not be enforced.” (Citation omitted.)
“(1) that party did not execute the agreement voluntarily; or
“(2) the agreement was unconscionable when it was executed and, before execution of the agreement, that party:
“(i) was not provided a fair and reasonable disclosure of the property or financial obligations of the other party;
“(ii) 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; and
“(iii) did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the other party.” Unif. Premarital Agreement Act § 6 (a), 9C U.L.A. 48-49 (2001).
Thereafter, in Winchester v. McCue, supra, 91 Conn. App. 721, the Appellate Court considered whether the failure of the parties to include their incomes in a prenuptial agreement signed prior to the enactment of