Lead Opinion
Thе major area of controversy in this divorce action concerns an antenuptial agreement that was executed in 1973. In an action filed in the Circuit Court for Baltimore County, the wife claimed that the agreement was invalid, reasoning that the husband did not make a full disclosure of his income and assets at the time the agreement was signed; that the agreement was not the wife’s voluntary
Judge J. William Hinkel carefully considered each of the wife’s contentions concerning the alleged invalidity of the agreement, following the guidelines established by this Court in Frey v. Frey,
The Court of Special Appeals upheld the trial judge’s holding that the antenuptial agreement was valid, but held that the wife’s claim for a monetary award was not barred by the terms of the agreement. Herget v. Herget,
At the time of execution of the antenuptial agreement, petitioner was a bachelor. Respondent, on the other hand, had been previously married, and had custody of her two daughters, who were seven and five years of age. Petitioner’s assets at that time were valued at $1,604,000. Respondent’s assets, consisting mainly of an investment portfolio, were valued at $690,000. Petitioner enjoyed an income of $50,039 and respondent received $28,650 in annual unearned income. Petitioner is a college graduate, who owned his own business. Respondent has a high school education and
The agreement, recites thе intent of the parties to: waive, relinquish and bar ... all ... rights and interests which she and he, respectively, as wife [or] husband ... may become entitled to, except as in this Agreement provided, with respect to any property, real or personal, now owned or hereafter acquired by the other party.
Further, it provided, in paragraph two, that:
Mary Elizabeth Schaefer releases and surrenders any and all claims she may have, now, or at the time of any termination of the proposed marriage between the parties, by divorce, death or otherwise, in any estate or property of Charles Edward Herget, Jr., now owned or hereafter acquired by him, including all rights to support, dower, thirds and halves, and all other rights and interests of every kind therein that shall arise out of the relation of the parties as husband and wife, and whether such rights and interests shall accrue during the lifetime of either of the parties, or at the time of or after her or his death, other than as specifically provided for herein or by will, trust agreement or other instrument.
Paragraph three contained a reciprocal agreement on the part of the husband. Paragraph four then provided:
Except as above provided, each of the parties hereby waives and releases unto the other party, her or his heirs, next of kin, personal representatives and assigns, all of her and his respective rights, interests and claims in and to said property of the other, to the end that neither of the parties shall obtain any right or interest to or in any property of the other by virtue of their marriage, but each, during her or his lifetime shall own or dispose of her or his property in thе same manner as if the parties had never been married; and upon the death of either of the parties, the property of the deceased party shall be*470 distributed and title thereto shall devolve in the same manner as if the parties had never been married.
As we have noted, the trial judge found this agreement to be valid, and that issue is not before us. The sole issue with which we are concerned is whether the agreement bars the wife’s claim for a monetary award.
An antenuptial agreement is a contract, subject to the general rules of contract interpretation. In Re Marriage of Garrity/Bishton,
In Maryland, under the objective law of contracts, a court, in construing an agreement, must first determine from the language of the agreement itself, what a reasonable person in the position of the parties would have meant at the time it was effectuated. Where the language of the contract is unambiguous, its plain meaning will be givеn effect. There is no need for further construction. (Citations omitted).
In the particular context of the case before us, our task is perhaps most aptly stated by the language of Judge Boyd in Joffe v. Niagara Fire Ins. Co.,
Courts have no right to make new contracts for the parties, or ignore those already made by them simply to avoid seeming hardships.
The monetary award that the wife seeks is authorized by Maryland Code (1984,1989 Cum.Supp.) Family Law Article, § 8-201 et seq. The concept of a monetary award is relatively new in Maryland, having been first adopted in
In rejecting the husband’s contention that the antenuptial agreement in this case was sufficiently broad to encompass a release of the future right to a monetary award, the Court of Special Appeals held that “the right to a monetary award ... is not an interest in the estate or property of one’s spouse,” and therefore is not covered by the language of the agreement. Herget, supra,
This second line of reasoning, that one cannot release a right that is unknown to that person at the time of the execution of the agreement, was at least mentioned, and may have been relied upon, by the Court of Special Appeals in this case.
This lack of contemplation of such a concept, however, is the very reason why appellant did not surrender her right to seek a monetary award which did not exist at the time she entered the antenuptial agreement. Falise v. Falise, supra,63 Md.App. at 581 ,493 A.2d 385 , citing Smith v. Smith,72 N.J. 350 ,371 A.2d 1 , 5-6 (1977).
Herget, supra,
[I]n general, claims arising after the date of delivery of the instrument are not covered by it unless explicitly mentioned, since they would not appear to have been within the contemplation of the parties. Bilotti v. Accurate Forming Corp.,39 N.J. 184 , 203-05,188 A.2d 24 (1963).
The holding in Smith was not, however, grounded on this reasoning. Rather, the New Jersey Supreme Court, following the established law of that state that a contract between husband and wife is unenforceable at law and may be enforced in equity only if found to be fair and equitable,
In any event, the language of Smith relied upon by the Court of Special Appeals is contrary to established Maryland law. In Bernstein v. Kapneck,
While it is true that a growing number of courts (despite a сlear and unambiguous release for consideration of all known and unknown, as well as foreseen and unforeseen, claims for personal injuries) permit repudiation by a releasor when unanticipated injuries surface subsequent to the contract’s execution, we do not believe these decisions can withstand critical analysis and decline to follow them.
Id.
We reject the notion that the parties in the case before us were incapable of releasing a right that did not then exist. We also reject the argument thаt general language cannot effect a full release of a specific right, even a right that is unknown at the time the agreement is drawn.
The language of the release and waiver portions of the agreement was very broad. As the trial judge noted rhetorically, “what other anticipatory language could be used when the parties to an agreement wish to relinquish all future rights and interests known and unknown?”
In a preliminary paragraph of the agreement, the parties stated their intention to relinquish all rights and interests that each might subsequently acquire or become entitled to “with respect to any property, real or personal, now owned or hereafter acquired by the other party.”
In paragraph two of the agreement, the wife released “any and all claims” she might then or thereafter have in any estate or property then owned or thereafter acquired by her husband, including “all ... rights and interests of every kind therein that shall arise out of the relation of the parties as husband and wife” except as otherwise provided in the agreement.
In paragraph three, the parties noted their intention to purchase a home, and agreed that their ownership rights in the equity value of the property would be in proportion to the funds each invested in the property, notwithstanding that they would hold it as tenants by the entirety.
In paragraph four, each party again released “all of her and his respective rights, interests and claims in and to [the] property of the other, to the end that neither of the parties shall obtain any right or interest to or in any property of the other by virtue of their marriage____”
In reversing the trial judge, the Court of Special Appeals reasoned that the agreement effected a release only of “an interest in the estate or property of one’s spouse,” and that the right to a monetary award is not such an interest. Herget, supra,
In one sense, the Court of Special Appeals was correct in finding that the right to a monetary award does not carry with it a “legal interest” in the other party’s property. Nor does the right to a monetary award confer a specific “property right” in the sense of title. See Head v. Head,
In another sense, however, the approach taken by the Court of Special Appeals may be viewed as overly narrow. Certainly, under a Fourteenth Amendment due process analysis, the right to a monetary award properly would be characterized as a “property interest.” See generally, L. Tribe, American Constitutional Law § 10-9 (2d ed. 1988). Within the specific context of the Maryland marital property act, this Court has approved a broad definition of the term “property”:
The term property, “when considered in a broad sense, is a term of wide and rather comprehensive signification---- It has been stated that the term embraces everything which has exchangeable value or goes to make up a man’s wеalth — every interest or estate which the law regards of sufficient value for judicial recognition.”
Deering v. Deering,
In practical terms, a claim for a monetary award is a claim against the property of the person from whom the award is sought. The very purpose of a monetary award is to equitably distribute the property of the parties — a point that is made clear by the following passage from the report of the commission recommending the adoption of the marital property act:
The Commission’s approach, in summary, has been to establish the concept of “marital property” as being all that property which was acquired by the parties during their marriage and giving the Court the power to consider its total value in disposition of the property of the parties, to recognize that special consideration from a family point of view needs to be given to the real property which constitutes the family home and the personal property which is devoted primarily to family use, to recognize non-monetary as well as monetary contributions of the parties to the marriage, and by these measures to accomplish a truly equitable disposition of property upon divorce or annulment without the turbulent upheaval that would come with a total disregard of title. (Emphasis added).
Report of The Governor’s Commission on Domestic Relations Laws, at 5 (January, 1978).
Had the General Assembly decided to follow a different course, to permit equitable distribution of property by the actual division of that property, it is doubtful that anyone would suggest that the agreement in this case did not
We conclude that the intent of the parties manifested by their antenuptial agreement was to prevent the very type of claim that is now being made. The trial judge properly found that the wife’s claim for a monetary award was barred.
JUDGMENT OF THE COURT OF SPECIAL APPEALS REVERSED; CASE REMANDED TO THAT COURT WITH INSTRUCTIONS TO AFFIRM THE JUDGMENT OF THE CIRCUIT COURT FOR BALTIMORE COUNTY; COSTS IN THIS COURT AND IN THE COURT OF SPECIAL APPEALS TO BE PAID BY RESPONDENT.
Notes
. In 1986, trial courts were given authority to transfer ownership of an interest in certain pension, retirement, profit sharing, and deferred compensation рlans from one party to another. Chapter 765, Laws of Maryland 1986, codified at Family Law Article, § 8-205(a).
. Carlsen v. Cartsen,
Dissenting Opinion
dissenting.
The majority holds that Mary Elizabeth Herget’s claim for a monetary award from her former husband, Charles E. Herget, Jr., is barred by an antenuptial agreement. In the course of reaching that result it recognizes that “ ‘a court, in construing an agreement, must first determine from the language of the agreement itself, what a reasonable person in the position of the parties would have meant at the time it was effectuated.’ ” Maj. op. at 470 (quoting Aetna Cas. & Sur. v. Ins. Comm’r,
any and all claims she may have, now, or at the time of any termination of the proposed marriage between the parties, ... in any estate or property of [Mr. Herget], now owned or hereafter аcquired by him, including all rights to support, dower, thirds and halves, and all other rights and interests of every kind therein that shall arise out of the relation of the parties as husband and wife____
There was a reciprocal undertaking on the part of Mr. Herget. Each party also waived and released “unto the other party ... all of her and his respective rights, interests and claims in and to said property of the other____”
The plain language of the agreement dealt with property and interests in property; those words are repeated numerous timеs. There is also a release or surrender of “rights to support.” But the agreement does not address the possibility of a then non-existent equitable monetary adjustment between the parties, which is something quite different from conventional “support” or conventional alimony. Nor does it purport to waive any possible remedy one spouse-to-be might have against the other.
Almost two-and-a-half years after the antenuptial agreement was signed, the Governor’s Commission on Domestic Relations Laws was created. Some twо years after that, in January, 1978, the Commission submitted its report, in which it recommended the creation of the concept of marital property and the remedy of a monetary award as a means of curing “the perceived existing inequity in present Maryland law governing the disposition of real and personal property upon divorce or annulment____” Report of the Governor’s Commission on Domestic Relations Laws, at 2 (1978). That recommendation was embodied in Chapter 794, Laws of 1978. It is now set forth in §§ 8-201 et seq. of the
Marital property is not property in the conventional sense. Falise v. Falise,
What is more to the point,
the right to a monetary award ... is not an interest in the estate or property of one’s spouse. Rather, it is a remedy provided to divorcing spouses to seek financial compensation to cure inequity in the distribution of property acquired during the marriage according to how that property is titled.
Watson v. Watson,
When the majority decides that the Hergets’ antenuptial agreement bars a monetary award, it rewrites the contract for the parties, despite the majority’s recognition that “ ‘[cjourts have no right to make new contracts fоr the parties.’ ” Maj. op. at 470 (quoting Joffe v. Niagara Fire Ins. Co.,
When this contract was executed, as I have pointed out, the conceрt of “monetary award” was unheard of in Maryland. How could the Hergets have intended an antenuptial agreement dealing with property interests to bar a then non-existent remedy? See Globe American Casualty v. Chung,
Since the concept of the monetary award was not introduced in this State until 1978 ... it is understandable that the parties to the antenuptial agreement in the case subjudice did not contemplate a monetary award in 1973. This lack of contemplаtion of such a concept, however, is the very reason why [Ms. Herget] did not surrender her right to seek a monetary award which did not exist at the time she entered the antenuptial agreement.
Herget v. Herget,
This analysis in no way runs afoul of Bernstein v. Kapneck,
The Bernstein rule is a harsh one, but not necessarily unfair. When one releases claims for injuries “known or unknown, and which have resulted or may in the future develop” one does so in the light of one’s experience. It is reasonably foreseeable that one may be giving up a presently unknown claim; the language of the Bernstein release expressly so stated.
Thus, had Mr. Herget suddenly and unexpectedly undergone a vast increase in wealth, as by winning a large lottery jackpot, Ms. Herget would not be heard to say that she could assert some claim against the unanticipated new property. That sort of eventuality is also foreseeable, as we know from human experience.
It is foreseeable, too, that a legislature may change the law. But a waiver based on factual matters within a party's reasonable contemplation is entirely different from one based on the extent to which a lay person’s imagination may be held to predict future legislative ingenuity.
It asks too much to assume that a lay person in 1973 could reasonably foresee the creation of the monetary award concept in 1978. “What the parties did not know at the time of execution may illuminate their intent at that time.” Morgan v. Cohen,
I do not believe the antenuptial agreement covered the monetary award remedy. I would affirm the judgment of the Court of Special Appeals.
