#24045-aff in pt & rev & rem in pt-DG
2007 SD 5
IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA
* * * *
JOYCE A. SMETANA, Plaintiff and Appellee,
v.
ROBERT D. SMETANA, Defendant and Appellant.
* * * *
APPEAL FROM THE CIRCUIT COURT OF
THE FIRST JUDICIAL CIRCUIT
DAVISON COUNTY, SOUTH DAKOTA
* * * *
HONORABLE RONALD K. MILLER
Judge
* * * *
RICHARD A. JOHNSON
GREGORY T. BREWERS of
Strange, Farrell & Johnson, P.C.
Sioux Falls, South Dakota Attorneys for plaintiff
and appellee.
E. STEEVES SMITH of
Tinan, Smith and Bucher
Mitchell, South Dakota Attorneys for defendant
and appellant.
* * * *
CONSIDERED ON BRIEFS
ON NOVEMBER 27, 2006
OPINION FILED 01/10/07
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GILBERTSON, Chief Justice
[¶1.] Robert D. Smetana appeals the property division in a judgment and
decree of divorce from Joyce A. Smetana. He contends that the trial court
erroneously invalidated the antenuptial agreement between the parties and
improperly awarded Joyce attorney fees. We affirm in part and reverse and remand
in part.
FACTS AND PROCEDURE
[¶2.] Robert and Joyce were married on September 8, 1978. At the time of
marriage, Robert was fifty-two years old and Joyce was forty-four years old. This
was a second marriage for both parties. Prior to the marriage, Joyce had obtained a
bachelor’s degree in Psychology and Elementary Education and a master’s degree in
Special Education and Reading. She worked at Delmont Public Schools and later
the Mental Healthcare Center in Mitchell and Dakota Wesleyan University. After
the marriage, Joyce continued to work outside of the home until 1986. She also
assisted in the farming operation by disking, combining and acting as a “gopher” for
Robert. In addition, Joyce attended to the gardening, cleaning, cooking and
laundry. The farming operation incorporated in 1980, and in 1988, Joyce assumed
the duties of bookkeeper for Smetana Farms, Incorporated.
[¶3.] Robert owned and operated farms in North Dakota until 1967 when
the machinery and equipment were sold. Thereafter, the North Dakota farmland
was rented out. The trial court did not include any of the North Dakota land as
marital property. Robert moved to South Dakota in 1957 and began purchasing
land there. In 1963, Robert purchased land from E.F.Colfax on a fifteen-year
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contract for deed. This contract, however, was not paid off until October 1988, ten
years after the marriage. Although a portion of the value of this land was deemed
pre-marital, approximately forty percent was included in the marital estate.
[¶4.] Also, in 1973, Robert purchased 17 acres from Melvin Potthast by
warranty deed. He completely paid for this parcel before the marriage. However,
eighty percent of the value of the Potthast land was included in the marital portion.
Robert acquired another 233.94 acres of land in South Dakota by two contracts for
deed from William and Joe Hank in 1974. One contract, for 155.87 acres, was paid
in full in 1976, about two years before Robert and Joyce married. The other
contract, for 78.07 acres, extended until March 1, 1981. The record reflects that
half of this contract for 78.07 acres was paid before the marriage. However, eighty-
four percent of the value of the entire 233.94 acres was included in the marital
estate as Robert’s property. At the time of the marriage, Robert owned and
operated this land in South Dakota. After the marriage, Robert acquired another
163 acres of land, which was all included in the marital estate as Robert’s property.
[¶5.] Two days before their marriage the parties entered into an antenuptial
agreement prepared by Joyce’s attorney. The entire antenuptial agreement
consisted of the following language:
This antenuptial contract entered into this 6th day of
September, 1978, between Robert D. Smetana of Fulton, South
Dakota, hereinafter for convenience referred to as Husband, and
Joyce Funkhauser King of Mitchell, South Dakota, hereinafter
for convenience referred to as Wife, Witnesseth:
I. Husband and Wife intend to marry each other soon, and it
is agreed that after such marriage, all of the properties of any
name or nature, real, personal or mixed, wherever they may be
found, belonging to Husband before marriage shall be and
remain forever his personal estate, and that this shall include
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all interest, rents, and profits which may in time accrue or result
in any manner from increase in value, or be collected for the use
of the same in any way.
II. All properties of any name or nature, real, personal or
mixed, wherever the same shall be found which belong to Wife
before marriage shall be and remain forever her personal estate,
and this shall include all interest, rents, and profits which may
in time accrue or result in any manner from increase in value, or
be collected for the use of the same in any way.
III. Each party agrees to sign with the other, all title paper,
deeds or other papers necessary to transfer property when sold
to a purchaser, in any event, it is necessary that such title
papers be executed by a man and wife, either in the State of
South Dakota or any other State, and this courtesy shall be
prompt at any time and in any place.
IV. Husband agrees to, from his own personal estate, assume
necessary expense of support and maintenance of Wife.
V. Nothing herein shall be construed to be a bar to either
party to this agreement, giving any property of which they may
be possessed to the other party by will or otherwise. Each party
to this agreement shall control their personal estate as described
herein, and do with the properties thereof whatsoever they wish
and will, by his or her orders or directions or by will, the same as
either could or would do if no marriage existed between them.
That upon the demise of each party, their personal estates shall
pass by their individual Wills, or by law to their individual
heirs, and each party waives any claim participation they may
otherwise be entitled to by law in the estate of the other.
The antenuptial agreement did not set forth in detail or even list what Joyce and
Robert each owned prior to the marriage. After receiving briefs from both parties,
the trial court found that the agreement was ineptly drawn and did not adequately
disclose the nature and extent of either Joyce’s or Robert’s assets or liabilities. The
court further found that Joyce did not have a reasonable approximation of the
magnitude of Robert’s wealth and the agreement did not contain adequate
provisions for Joyce in the event of divorce. Therefore, the court concluded that the
antenuptial agreement was invalid as unconscionable. The court further mentioned
that “the values to be received by the parties would make little if any difference at
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all in any final division if the court were to hold the antenuptial agreement valid or
invalid.”
[¶6.] After twenty-five years of marriage, Joyce filed for divorce on June 21,
2003. During the course of the trial, the court made rulings on several disputed
property issues. At the conclusion of the trial, the court awarded Joyce one fourth
of her attorney’s fees, approximately $6,600. Robert appeals:
1. Whether the trial court erred when it invalidated the antenuptial
agreement.
2. Whether the trial court abused its discretion when it awarded
Joyce attorney fees.
STANDARD OF REVIEW
[¶7.] “An issue of unconscionability of a premarital agreement shall be
decided by the court as a matter of law.” SDCL 25-2-21(b). “We review question[s]
of law under the de novo standard.” Sanford v. Sanford, 2005 SD 34, ¶12, 694
NW2d 283, 287 (citations omitted). “Findings of fact, reviewed under the clearly
erroneous standard, will not be overturned unless the reviewing court is left with a
firm conviction that a mistake has been made.” Godfrey v. Godfrey, 2005 SD 101,
¶11, 705 NW2d 77, 80 (citation omitted). “An award of attorney fees is reviewed
under the abuse of discretion standard.” Crisman v. Determan Chiropractic, Inc.,
2004 SD 103, ¶24, 687 NW2d 507, 513 (citing City of Sioux Falls v. Johnson, 2003
SD 115, ¶6, 670 NW2d 360, 362).
ANALYSIS AND DECISION
[¶8.] 1. Whether the trial court erred when it invalidated the
antenuptial agreement.
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[¶9.] It must first be noted that “antenuptial agreements are favored in law
since they allow parties to protect the inheritance rights of their respective children
by prior marriages and thus prevent subsequent strife over the disposition of their
respective estates.” Schutterle v. Schutterle, 260 NW2d 341, 347 (SD 1977),
superseded by statute on other grounds, SDCL 19-13-3, as recognized in State v.
Catch the Bear, 352 NW2d 640, 645 (SD 1984) (citations omitted). Taking this fact
into consideration, this Court first set forth the criteria for determining the
enforceability of antenuptial agreements in Schutterle when it stated,
[s]ome courts appear to have established a hard and fast rule
that there must have been a full and frank disclosure by the
prospective husband to his prospective wife concerning the
nature and extent of his property before an antenuptial
agreement will be held to be valid and binding as against the
wife. We conclude, however, that the better rule is that under
which an antenuptial agreement will be held valid if the
prospective spouse can be said to have had adequate knowledge
of the nature and extent of the other party’s property, either as a
result of disclosure by the other party or through the
independent knowledge, however acquired, of the prospective
spouse, or if the prospective spouse has been adequately
provided for by the agreement.
260 NW2d at 348 (citations omitted). In Schutterle, “the trial court found that
although Ralph had made no disclosure to Edna of the exact extent and value of his
estate prior to their marriage, Edna had learned during their courtship that Ralph
owned land, livestock and farm machinery in South Dakota.” Id. This Court was
persuaded by the totality of the circumstances that Edna “had sufficient knowledge
of the nature and extent of Ralph’s property to satisfy the alternative tests of
disclosure or independent knowledge.” Id. at 349.
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[¶10.] “The validity of an antenuptial agreement is to be decided on the basis
of the facts of each case.” Ryken v. Ryken (Ryken II), 461 NW2d 122, 125 (SD 1990)
(citing Ryken v. Ryken (Ryken I), 440 NW2d 300, 304 (SD 1989); Schutterle, 260
NW2d at 348). This is so because each decision involving the validity of antenuptial
agreements “depends upon the circumstances peculiar to the parties, factors such as
the respective age of the parties, their prior marital status, the number and ages of
children from prior marriages, [and] the nature and extent of the property owned by
the parties . . . .” Schutterle, 260 NW2d at 348.
[¶11.] This Court has “address[ed] what constitutes a ‘fair and reasonable
disclosure’ in the context of SDCL 25-2-21.” Sanford, 2005 SD 34, ¶42, 694 NW2d
at 294. However, this statute did not come into existence until after the parties’
marriage. In 1989, South Dakota enacted the Uniform Premarital Agreement Act
(UPAA), which is codified as SDCL 25-2-16 through 25-2-25. Robert contends that
these statutes do not apply retroactively to the agreement in this case. He claims
the validity of the antenuptial agreement must be reviewed only under case law in
existence at the time the agreement was executed. Joyce argues, however, and this
Court agrees, that enactment of the UPAA did not alter the legal analysis
concerning the validity of antenuptial agreements. Instead, enactment of the UPAA
codified previous precedent. The statute relevant to enforcement of antenuptial
agreements is SDCL 25-2-21, which provides in pertinent part:
(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:
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(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.
Much of this language and analysis is contained in the earlier cases of Schutterle
and Ryken I. 260 NW2d at 347-50; 440 NW2d at 304. Thus, for purposes of this
appeal, precedent established after the enactment of the UPAA is relevant and
useful in determining the validity of the antenuptial agreement.
[¶12.] On those occasions where this Court analyzed what constitutes a “fair
and reasonable disclosure,” “we held the burden of disclosure rests with each
spouse, rather than placing an obligation on one spouse to determine the extent of
the assets of the other spouse.” Sanford, 2005 SD 34, ¶42, 694 NW2d at 294 (citing
Ryken II, 461 NW2d at 125). “It does not fall upon a spouse to assume the role of
detective in an attempt to ferret out the existence and value of the other spouse’s
assets.” Id. This Court further stated:
It is not necessary, given the language in SDCL 25-2-21, for a
spouse to provide a detailed and exact valuation of his or her net
worth in a prenuptial agreement. It is sufficient for a spouse to
provide, within the best of his or her abilities, a list of assets and
liabilities with approximate valuations. The listing must be
sufficiently precise to give the other spouse a reasonable
approximation of the magnitude of the other spouse’s net worth.
Id.
[¶13.] In the instant case, Robert did not supply any list of assets or
liabilities at any time. Robert claims, however, that Joyce became aware of his
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assets during their fourteen-month courtship. Although Joyce admits to knowing
Robert owned land in both South Dakota and North Dakota, a home, grain bins and
farm machinery, this does not establish that she was aware of Robert’s net worth.
Moreover, she was not aware of any of Robert’s liabilities. However, according to
Schutterle, an antenuptial agreement may still be valid despite a prospective
spouse’s lack of knowledge concerning the nature and extent of the other spouse’s
property. If the prospective spouse is adequately provided for in the agreement,
then a lack of knowledge concerning the other spouse’s property is immaterial, and
the antenuptial agreement is still valid. Schutterle, 260 NW2d at 348.
[¶14.] The agreement in this case made no provision for Joyce in the event of
divorce. In fact, the agreement did not even mention divorce. This fact raises
another issue concerning the validity of the antenuptial agreement and its
applicability to a divorce proceeding.
[¶15.] “This Court addressed whether an antenuptial agreement applied to a
divorce action in [Ryken I].” Roth v. Roth, 1997 SD 75, ¶15, 565 NW2d 782, 786
(citing Ryken I, 440 NW2d at 304). “The trial court [in Ryken I] held the agreement
was inapplicable to divorce proceedings because it failed to mention divorce.” Id.
This Court reversed, concluding that a divorce action was contemplated where the
language of the agreement provided for applicability during legal proceedings. Id.
However, unlike the agreement in Ryken I, the antenuptial agreement in this case
does not mention divorce, legal proceedings, or anything of that nature. This Court
has stated that “settled law elsewhere clearly indicates ‘an agreement that did not
contain any reference to divorce, and recited that it only affected the parties’ rights
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during marriage or upon death, could not be employed by a divorce court as if it
were the property settlement in the dissolution proceedings.’” Id. ¶13 (citations
omitted).
[¶16.] Robert urges this Court to consider the parties’ intent that the
agreement was executed in contemplation of divorce. However, “[t]his Court looks
‘to the language that the parties used in the contract to determine their intention.’”
Pauley v. Simonson, 2006 SD 73, ¶8, 720 NW2d 665, 667-68 (quoting Ziegler
Furniture and Funeral Home, Inc. v. Cicmanec, 2006 SD 6, ¶16, 709 NW2d 350, 355
(citations omitted)). “If that intention is clearly manifested by the language of the
agreement, it is the duty of this Court to declare and enforce it.” Id. Further,
“there is a presumption that a written agreement proclaims the ultimate intention
of the parties.” Roth, 1997 SD 75, ¶17, 565 NW2d at 786 (citation omitted). “Parol
and extrinsic evidence may be used for clarification” only when “the contract is
‘uncertain or ambiguous.’” Pauley, 2006 SD 73, ¶8, 720 NW2d at 668 (citing Jensen
v. Pure Plant Food Intern., Ltd., 274 NW2d 261, 263-64 (SD 1979)). With regards to
ambiguity, this Court has clearly stated:
“A contract is not rendered ambiguous simply because the
parties do not agree on its proper construction or their intent
upon executing the contract.” Rather, a contract is ambiguous
only when “it is capable of more than one meaning when viewed
objectively by a reasonably intelligent person who has examined
the context of the entire integrated agreement.”
Roth, 1997 SD 75, ¶16, 565 NW2d at 786 (internal citations omitted). A
review of the four corners of the document reveals the antenuptial agreement
between Robert and Joyce fails to mention divorce or separation in any
manner. Therefore, we conclude that the antenuptial agreement in this case
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is unambiguous as a matter of law as it clearly applies to the distribution of
property upon the death of one of the parties, not to divorce.
[¶17.] For all of the reasons set forth above, we conclude the trial court
was correct in concluding that the antenuptial agreement was invalid.
[¶18.] 2. Whether the trial court abused its discretion when it
awarded Joyce attorney fees.
[¶19.] Robert objects to the award of attorney fees to Joyce for several
reasons. First, Robert contends that Joyce’s complaint requested, in the wherefore
clause, that each party pay their own attorney fees. Robert also claims the court
abused its discretion in awarding attorney fees without a hearing and without
entering findings of fact and conclusions of law respecting attorney fees. This Court
has stated:
The award of attorney fees is authorized by SDCL 15-17-38.
Whether an award is warranted, however, is left to the sound
discretion of the court. When making this determination, the
court must first decide whether the fees are reasonable; then,
using our standard factors, it must establish whether an award
is necessary. The elements a court should consider are “the
property owned by each party, their relative incomes, whether
the property of the parties is in fixed or liquid assets, and
whether the actions of either party unreasonably increased the
time spent on the case.”
Keller v. Keller, 2003 SD 36, ¶18, 660 NW2d 619, 624 (internal citations omitted).
Additional factors to be considered are: (1) the intricacy and
importance of the litigation; (2) labor and time involved; (3) the
skill required to draw the pleadings; (4) discovery procedures
utilized; (5) existence of complicated legal problems; (6) the time
required to try the case; (7) whether written briefs were
required; and (8) whether an appeal to this court is involved.
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Grode v. Grode, 1996 SD 15, ¶38, 543 NW2d 795, 804 (citing Garnos v. Garnos, 376
NW2d 571, 575 (SD 1985)); see also, Crisman, 2004 SD 103, ¶29, 687 NW2d 507,
514.
[¶20.] Furthermore, “[t]his Court has consistently required trial courts to
enter findings of fact and conclusions of law when ruling on a request for attorney
fees.” Crisman, 2004 SD 103, ¶30, 687 NW2d at 514 (citing Hoffman v. Olsen, 2003
SD 26, ¶10, 658 NW2d 790, 793). “The trial court is required ‘to make specific
findings based upon the factors.’” Id. (quoting Duffy v. Cir. Ct., Seventh Jud. Cir.,
2004 SD 19, ¶18, 676 NW2d 126, 134).
[¶21.] In this case, the trial court made a finding in its judgment and decree
of divorce and in its findings of fact and conclusions of law that “Robert shall pay to
Joyce the sum of $6,600.00 for and as attorney fees.” This fails to comply with our
requirements set forth above. Thus, we reverse and remand for reconsideration of
the attorney fees issue in accordance with our settled procedure.
[¶22.] Robert and Joyce each submitted a motion for appellate attorney fees,
supported by itemized statements of services performed and costs. We award Joyce
the sum of $3,000 in appellate attorney fees.
[¶23.] Robert has also raised various other issues concerning the trial court’s
division of marital property. We have reviewed them and find them to be without
merit.
[¶24.] Affirmed in part and reversed and remanded in part.
[¶25.] SABERS, KONENKAMP, ZINTER, and MEIERHENRY, Justices,
concur.
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