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Lynch v. Lynch

Court of Appeals of Georgia, Third Division

June 13, 2019

LYNCH
v.
LYNCH.

          DILLARD, C. J., GOBEIL and HODGES, JJ.

          Dillard, Chief Judge.

         Otis O. Lynch filed a complaint for divorce from Kaihra G. Lynch and a motion to enforce an antenuptial agreement. Kaihra filed responsive pleadings, and, ultimately, the trial court granted Otis's motion and issued a final judgment and decree of divorce, in which it awarded Otis attorney fees under OCGA § 9-15-14. On appeal, Kaihra contends that the trial court erred in enforcing the antenuptial agreement because it failed to disclose material facts and in awarding attorney fees without specifying any sanctionable conduct or determining the reasonableness of such fees. For the reasons set forth infra, we affirm the trial court's enforcement of the antenuptial agreement but vacate its award of attorney fees and remand the case for reconsideration consistent with this opinion.

         Enforcement of an antenuptial agreement is "a matter of public policy."[1] In determining whether to enforce an antenuptial agreement, the trial court has "discretion to approve the agreement in whole or in part, or refuse to approve it as a whole."[2] Consequently, we evaluate a trial court's ruling regarding the enforceability of an antenuptial agreement under "the familiar abuse of discretion standard of review."[3] And under this standard, we review the trial court's legal holdings de novo, and "uphold the trial court's factual findings as long as they are not clearly erroneous, which means there is some evidence in the record to support them."[4]

         So viewed, the record shows that Otis owns several moving and storage businesses and that Kaihra was an employee of one of those businesses when they began dating. Approximately two and a half years before they married, Otis and Kaihra moved into the same home, and Kaihra continued working for one of Otis's businesses.

         In 2004, the couple made plans to marry in Hawaii. And not long before leaving, Otis provided Kaihra with an antenuptial agreement that he wanted her to execute, advised her to retain legal counsel to review the document, and provided her with funds to retain such counsel. Kaihra retained counsel and provided her attorney with a copy of the antenuptial agreement just prior to her departure for Hawaii in late October 2004. But for some reason, she was not able to thoroughly discuss the agreement with her counsel, and, ultimately, she received no advice as to whether she should execute it. Nevertheless, on October 30, 2004, Kaihra and Otis executed the antenuptial agreement in Hawaii, and two days later, they married.

         The antenuptial agreement provided a list of properties and businesses owned by Otis and stated that they would remain separately owned by Otis despite any contributions made by Kaihra during the marriage. The agreement further provided that both parties waived any claims to alimony. In addition, paragraph 11 of the agreement, titled "Full Disclosure," provided that Otis's net worth was between $9, 923, 400 and $12, 128, 600 and that his annual income was $210, 000. In the same paragraph, it noted that Kaihra's net worth was between $300, 000 and $400, 000, and that her annual income was $57, 200.

         Nearly fifteen years later, on September 12, 2017, Otis filed a complaint for divorce in the Superior Court of DeKalb County, asserting that the marriage was irretrievably broken. And a few weeks later, after Kaihra filed responsive pleadings, Otis filed a motion to enforce the antenuptial agreement, attaching the agreement as an exhibit. Kaihra filed a response, and the trial court held a hearing on the motion, during which both Otis and Kaihra testified. At the conclusion of the hearing, the trial court ruled that the antenuptial agreement was enforceable, and a few weeks later, it issued an order granting Otis's motion, specifically finding, inter alia, that the agreement's financial disclosures were sufficient.

         A few months later, the trial court conducted a short trial to finalize the parties' divorce, during which Otis argued that he should be awarded $30, 000 in attorney fees based on Kaihra's contesting the enforceability of the antenuptial agreement. Finding that the antenuptial agreement was "a pretty sound legal document," the trial court awarded Otis $15, 000 in attorney fees. And in its final judgment and decree of divorce, issued on July 3, 2018, the trial court stated that "having reviewed all pleadings, evidence and applicable law, the Court hereby Orders that [Kaihra] pay to [Otis] the amount of $15, 000.00 in attorney fees pursuant to OCGA § 9-15-14." This appeal follows.

         1. Kaihra contends that the trial court erred in enforcing the antenuptial agreement, arguing that the agreement was unenforceable because it failed to disclose material facts pertaining to Otis's financial status. We disagree.

         In Scherer v. Scherer, [5] the Supreme Court of Georgia established criteria for determining whether an antenuptial agreement is enforceable, [6] and under that three-part test

the party seeking enforcement bears the burden of proof to demonstrate that: (1) the antenuptial agreement was not the result of fraud, duress, mistake, misrepresentation, or nondisclosure of material facts; (2) the agreement is not unconscionable; and (3) taking into account all relevant facts and circumstances, including changes beyond the parties' contemplation when the agreement was executed, enforcement of the antenuptial agreement would be neither unfair nor unreasonable.[7]

         The first prong of the Scherer test, and the only prong of the test at issue here, [8]requires the party seeking enforcement to "show both that there was a full and fair disclosure of the assets of the parties prior to the execution of the antenuptial agreement, and that the party opposing enforcement entered into the agreement freely, voluntarily, and with full understanding of its terms after being offered the opportunity to consult with independent counsel."[9] And Georgia law, like that of virtually every other state, "imposes an affirmative duty of pre-execution disclosure on parties to an antenuptial agreement."[10] Indeed, mutual disclosure of the material facts is "a precondition for entering into an antenuptial agreement that accords with Georgia public policy."[11]

         Here, the antenuptial agreement provided a list of the several properties and businesses owned by Otis prior to the marriage, an estimation of Otis's net worth, which was between $9, 923, 400 and $12, 128, 600, and his annual income at the time of the marriage, which was $210, 000. The agreement did not include an attached financial statement or other formal documentation of Otis's financial status, and as our Supreme Court has noted, "though not required, a fairly simple and effective method of proving disclosure is to attach a net worth schedule of assets, liabilities, and income to the antenuptial agreement itself."[12] Indeed, attaching to the antenuptial agreement financial statements showing both parties' assets, liabilities, and income, while not necessary, is "the most ...


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