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No. 98-558
IN THE SUPREME COURT OF THE STATE OF MONTANA
1999 MT 214
295 Mont. 511
985 P.2d 1176
MARLENE R. WILEY,
Petitioner and Appellant,
v.
SHERI L. IVERSON,
Personal Representative and Respondent.
APPEAL FROM: District Court of the Fourth Judicial District,
In and for the County of Missoula,
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The Honorable Ed McLean, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Patrick G. Frank, Gail M. Haviland, Worden, Thane & Haines, Missoula, Montana
For Respondent:
Jack Jenks, Phillips & Bohyer, Missoula, Montana
Submitted on Briefs: January 28, 1999
Decided: September 14, 1999
Filed:
__________________________________________
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Clerk
Justice William E. Hunt, Sr. delivered the Opinion of the Court.
1. ¶Marlene R. Wiley (Marlene) appeals from the Findings of Fact, Conclusions of
Law & Order of the Fourth Judicial District Court, Missoula County, upholding the
validity of an antenuptial agreement between Marlene and her deceased husband,
Walter William Wiley (Bill). We affirm.
2. ¶The sole issue on appeal is whether the District Court properly determined that the
antenuptial agreement was valid and enforceable.
Factual and Procedural History
1. ¶On May 5, 1984, Bill and Marlene were married on the "spur of the moment." On
May 4, 1984, one day prior to their marriage, Bill urged Marlene to execute a
document entitled "Antenuptial Agreement" prepared by Bill's attorney. That
agreement provided in relevant part:
1. Representations of Husband: Husband hereby represents that the items listed on
Schedule "A," which is attached hereto, are all of the property and assets in which he has
any interest whatsoever as of the date of execution of this Agreement.
....
3. Release of Marital Rights: . . . . Wife hereby waives and releases all right and interest,
statutory or otherwise, including, but not limited to, dower, widow's allowance, statutory
allowance, distribution in intestacy, and right of election to take against the will of
Husband which she might acquire as the wife, widow, heir at law, next of kin, or
distributee of Husband, in his property, owned by him at the time of the marriage or
acquired by him at any time thereafter, and in his estate upon his death.
4. Separate Property: Each of the parties shall have the absolute right to manage, dispose
of, or otherwise deal with any property now separately owned, or hereafter separately
acquired, in any manner whatsoever, and all the property brought into the marriage by
each of the parties shall remain the sole property of the party who brought it into the
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marriage.
1. ¶Bill's first wife died in March of 1984. Thereafter, Bill executed a will and a
codicil to that will leaving everything in his estate in twelve equal shares to his four
children, seven grandchildren, and Marlene. Bill died on August 21, 1997. He was
survived by Marlene, his four daughters, and seven grandchildren. Upon Bill's
death, Marlene received, due to joint tenancy ownership, a 1990 Lincoln Towncar
and a 1997 Ford pickup. She also received numerous items of personal property and
all of the assets and accounts of the "Touch of Life" nutritional and lifestyle
consulting business, even though the estate held a one-half interest in that business.
Marlene will receive a one-twelfth share of Bill's estate upon probate.
2. ¶In early 1998, Marlene, as Bill's surviving spouse, filed two petitions requesting
supervised administration, a homestead allowance, an exempt property allowance, a
family allowance, and an elective share of Bill's estate. The personal representative
of Bill's estate, his daughter, Sheri L. Iverson (Sheri), responded to Marlene's
petitions by asserting that the Antenuptial Agreement of May 4, 1984, constituted a
valid waiver by Marlene of her rights.
3. ¶A hearing was held on the validity of the Antenuptial Agreement on July 16, 1998.
At that hearing, Marlene's deposition was received into evidence and the court heard
testimony from four witnesses on behalf of the estate. That evidence showed that
Bill and Marlene first met at a clinic in Mesa, Arizona in 1978. Later, Marlene
worked as a nutritional and lifestyle consultant for Bill at the Carefree Clinic in
Carefree, Arizona, a business in which Bill held an interest. Prior to the marriage,
Marlene had visited Sheri and the rest of Bill's family in Montana on several
occasions, both by herself and with Bill.
4. ¶Marlene testified that she was aware of Bill's ownership interest in two nursing
homes in Oregon, that she had visited those homes with Bill prior to their marriage,
and that she knew that Bill's main source of income was from the two nursing
homes. In addition, Marlene had knowledge of Bill's interests in the Carefree Clinic
and a home in Arizona.
5. ¶Prior to the marriage, Marlene also knew that Bill was attempting to purchase a
piece of real estate known as the "Lolo property." Bill's involvement with the Lolo
property began in November of 1983, prior to his marriage to Marlene. At that time,
the owners of the Lolo property were in bankruptcy and were purchasing the
property on a contract for deed. Bill negotiated and financed a purchase of the
sellers' interest in the contract for deed, completing the transaction on April 2, 1984,
at which time the sellers assigned their interest in the contract for deed to Bill. Thus,
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Bill held the sellers' interest in the Lolo property prior to his marriage to Marlene.
However, due to the delay of bankruptcy proceedings, Bill did not complete his
purchase of the Lolo property until May 8, 1985, when he purchased the buyers'
interest in the contract for deed from their bankruptcy estate.
6. ¶Before his marriage to Marlene, Bill told Sheri that he desired an antenuptial
agreement because "he wanted to keep everything separate, before and after the
marriage." Bill's stated intention was that the Lolo property should pass to "his girls"
upon his death. In April of 1984, Bill requested that his attorney in Montana prepare
the Antenuptial Agreement. Bill told his attorney that both he and Marlene had been
previously married and had children of their own, and that he wanted to keep his
property separate from his marriage so that it would pass to his children.
7. ¶One day prior to their marriage, Bill presented Marlene with the Antenuptial
Agreement while she was finalizing some paperwork at the Carefree Clinic, told her
to sign it, and then left. Marlene filled in her name, address, and the date. Bill's and
Marlene's signatures on the Antenuptial Agreement were notarized. Marlene
acknowledged in her deposition that she signed the agreement voluntarily and that
she was not pressured into signing it. Although Marlene admitted that she could
have read the agreement, she stated that she did not read the agreement prior to
signing it.
8. ¶Marlene further testified that she had observed that the document was captioned
"Antenuptial Agreement," but did not understand what that meant. Nor did Marlene
understand the legal significance of the agreement or consult an attorney about the
legal consequences of signing the document. According to Marlene, Bill had told
her that the agreement was necessary to protect him from the creditors of Marlene's
daughter, who had declared bankruptcy. Except for Bill telling Marlene that the
agreement was to protect him from creditors, Bill and Marlene never discussed the
agreement or its legal consequences. Nor did Bill and Marlene discuss Bill's
finances or assets at the time he presented the Antenuptial Agreement to Marlene.
Apparently, the schedules showing Bill's assets were not attached to the Antenuptial
Agreement at the time that Marlene signed that agreement. The first time that
Marlene observed the schedules was after Bill's death.
9. ¶A close friend of the couple testified that after executing the agreement, Marlene
had stated on at least ten occasions that, "if [Bill] died before she did, [Marlene]
would get nothing." Although English is Marlene's second language, she speaks
English, French, German, and some Spanish. She has traveled extensively
throughout Australia, Switzerland, the United States, Canada, England, the Middle
East, and India. Marlene holds a Bachelor of Science degree. She has also attended
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college courses at Barry College in Florida, Duffy College in Australia, Brigham
Young University in Utah, and the Utah Technical College. In 1962, Marlene passed
the National Teacher's Examination in Fort Lauderdale, Florida. In 1976, she passed
the English Proficiency Examination. Marlene has authored several books, including
a remedial reading textbook published in 1978.
10. ¶Marlene had several years experience as a nurse, had some experience in business
bookkeeping and management, and had previously owned a large maintenance
company in Florida. She also had extensive teaching experience in various
elementary schools, had been a principal for a private school in Orem, Utah, and had
even worked as a substitute teacher at Brigham Young University.
11. ¶The District Court concluded that the parties voluntarily entered into the
Antenuptial Agreement on May 4, 1984. Furthermore, the court concluded that the
agreement was valid and, therefore, that Marlene had "released and waived her
rights to a homestead allowance, exempt property allowance, family allowance and
her right to petition for an elective share from Bill Wiley's estate." Marlene appeals.
Discussion
1. ¶Did the District Court correctly conclude that Marlene waived her rights to Bill's
estate by virtue of the Antenuptial Agreement?
2. ¶The question of whether there was fair disclosure of Bill's assets prior to execution
of the Antenuptial Agreement by Marlene was a factual determination to be made in
the first instance by the District Court. See In re Estate of Thies (1995), 273 Mont.
272, 279, 903 P.2d 186, 190. We review a district court's findings of fact regarding
an antenuptial agreement to determine if they are clearly erroneous. Thies, 273
Mont. at 279, 903 P.2d at 190; see also Interstate Prod. Credit Ass'n v. DeSaye
(1991), 250 Mont. 320, 323, 820 P.2d 1285, 1287 (setting forth the three-part test
for making a clearly erroneous determination). We review a district court's
interpretation of the law as to whether it is correct. Scott v. Scott (1997), 283 Mont.
169, 173, 939 P.2d 998, 1000.
3. ¶Marlene raises several challenges to the District Court's order: (1) that the court
applied the wrong standard of proof; (2) that the court erred in finding that there was
fair disclosure; and (3) that the court erred in finding that she knowingly waived her
rights and in finding her testimony that she did not know the value of the rights she
waived to be not credible. We determine, as discussed below, that the District Court
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applied the correct standard of proof to this dispute and properly found that there
had been fair disclosure to Marlene resulting in a knowing waiver of her rights.
4. ¶We disagree with Marlene that the burden of proof is on the party seeking to
enforce an antenuptial agreement. The statute in effect at the time the Antenuptial
Agreement was entered into was § 72-2-102, MCA (1983), which provided:
Waiver of Rights by Spouse. The right of election of a surviving spouse and the rights of
the surviving spouse to homestead allowance, exempt property, and family allowance or
any of them may be waived, wholly or partially, before or after marriage, by a written
contract, agreement, or waiver signed by the party waiving after fair disclosure. Unless it
provides to the contrary, a waiver of "all rights" (or equivalent language) in the property or
estate of a present or prospective spouse or a complete property settlement entered into
after or in anticipation of separation or divorce is a waiver of all rights to elective share,
homestead allowance, exempt property, and family allowance by each spouse in the
property of the other and a renunciation by each of all benefits which would otherwise
pass to him [or her] from the other by intestate succession or by virtue of the provisions of
any will executed before the waiver or property settlement.
Section 72-2-102, MCA (1983). The statute clearly imposes a requirement of "fair
disclosure" as a precondition to the validity of a waiver in an antenuptial agreement,
however, it is silent as to which party bears the burden of proving fair disclosure. We note
in passing that § 72-2-102, MCA, was renumbered in 1993 as § 72-2-224, MCA, and
amended to provide that the "surviving spouse" bears the burden of proving that the
"waiver is not enforceable." See § 72-2-224(2), MCA (1999).
1. ¶Although this Court has not had occasion to expressly address the burden of proof
under § 72-2-102, MCA, we implicitly suggested in the Thies decision that the
surviving spouse should bear the burden of proof. In Thies, we reasoned that the
Colorado Supreme Court's decision in In re Estate of Lopata (Colo. 1982), 641 P.2d
952, "represents the better interpretation of the language in § 72-2-102, MCA
(1979)." Thies, 273 Mont. at 277, 903 P.2d at 189. In Lopata, the Colorado Supreme
Court stated that:
It is well settled that once the proponent of an antenuptial agreement has established the
existence of the agreement itself, the party contesting the validity of the antenuptial
agreement has the burden of proving fraud, concealment or failure to disclose material
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information.
Lopata, 641 P.2d at 955; see also Lopata, 641 P.2d at 955 n.7 (citing cases from other
jurisdictions in accord with this rule). Here, there is no question that Sheri has established
the existence of the Antenuptial Agreement.
1. ¶More importantly, placing the burden on the surviving spouse to prove an invalid
waiver is consistent, as Sheri suggests, with § 26-1-401, MCA. That statute provides:
The initial burden of producing evidence as to a particular fact is on the party who would
be defeated if no evidence were given on either side. Thereafter, the burden of producing
evidence is on the party who would suffer a finding against him [or her] in the absence of
further evidence.
Section 26-1-401, MCA; see also § 26-1-402, MCA (generally parties bear the burden of
persuasion as to each fact the existence or nonexistence of which is essential to the claim
for relief or defense asserted). Under § 26-1-401, MCA, the party asserting a right in any
case bears the burden of proving each of the material allegations of his or her cause of
action. See McDonald v. Peters (1954), 128 Mont. 241, 243, 272 P.2d 730, 731. Generally
speaking, an antenuptial agreement is valid and enforceable between two consenting
parties in Montana if the agreement meets the requirements of a contract. See In re
Marriage of Feisthamel (1987), 227 Mont. 321, 325-26, 739 P.2d 474, 477.
1. ¶"Thus, antenuptial agreements receive the same scrutiny as any other contract
except that there is the additional requirement of fair disclosure imposed upon both
parties in recognition of the confidential relationship existing between them."
Lopata, 641 P.2d at 956. Marlene, as the petitioner seeking relief from the
Antenuptial Agreement, bears the burden of proving that the contractual waiver is
invalid. We hold that the surviving spouse bears the burden of proof on the absence
of fair disclosure under § 72-2-102, MCA (1983).
2. ¶In interpreting the requirement of fair disclosure pursuant to § 72-2-102, MCA, we
have observed that:
"Fair disclosure contemplates that each spouse should be given information, of a general
and approximate nature, concerning the net worth of the other. Each party has a duty to
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consider and evaluate the information received before signing an agreement since they are
not assumed to have lost their judgmental faculties because of their pending
marriage." [Emphasis added.]
Thies, 273 Mont. at 278, 903 P.2d at 190 (quoting Lopata, 641 P.2d at 955).
1. ¶The duty to inquire prior to signing an antenuptial contract is consistent with the
general rule in Montana that:
One who executes a written contract is presumed to know the contents of the contract and
to assent to those specified terms, in the absence of fraud, misrepresentation, or other
wrongful act by the other contracting party. Absent incapacity to contract, ignorance of the
contents of a written contract is not a ground for relief from liability.
Quinn v. Briggs (1977), 172 Mont. 468, 476, 565 P.2d 297, 301.
1. ¶There is no allegation by Marlene that the Antenuptial Agreement is ambiguous. It
is undisputed that Marlene signed the Antenuptial Agreement, in which she
acknowledged, in writing, that Bill had "disclosed to [her] the nature and extent of
his various property interests and of his sources of income." Marlene admitted that
she voluntarily signed the Antenuptial Agreement that was presented to her by Bill.
There is simply nothing in the record to indicate that she was coerced into signing
the Antenuptial Agreement, that she requested more time to consider and study the
agreement, or that she was precluded from retaining independent counsel to review
the agreement and advise her as to the legal consequences of signing it. See Thies,
273 Mont. at 280, 903 P.2d at 191.
2. ¶Although Marlene claims that she did not understand the agreement, we agree with
the District Court that her self-serving testimony is not credible given the strong
evidence that she was a relatively experienced businesswoman, was well educated,
had more than a cursory understanding of the English language, and could have read
the Antenuptial Agreement but declined to do so. Were we to accept Marlene's
contentions and hold that she should be excused from the Antenuptial Agreement
because she did not read and understand its terms, we would place all antenuptial
agreements on flimsy ground and thereby undermine the freedom of prospective
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spouses to contract with each other. "The integrity of written contracts would be
destroyed if contracting parties, having admitted signing the instrument, were
allowed to rescind the contract on the basis they neither read nor understood the
expressed agreement." Quinn, 172 Mont. at 476, 565 P.2d at 301.
3. ¶Moreover, we also agree with the District Court that even assuming that Marlene
did not observe the schedules of Bill's assets at the time of signing the Antenuptial
Agreement, she had sufficient general knowledge of his assets and sources of
income to support a finding of fair disclosure. Marlene and Bill had worked together
for years before deciding to marry and Marlene was close with Bill's family even
prior to the marriage. It is clear from the record that Marlene knew of Bill's interests
in the two nursing homes in Oregon and in the Carefree Clinic and home in Arizona.
Marlene was also aware of the fact that Bill was in the process of acquiring the Lolo
property at the time of marriage.
4. ¶In actions in equity, "this Court will accept the findings of the District Court unless
there is a 'decided preponderance of the evidence against them,' and . . . where
issues of fact are close, we defer to the District Court because it is in a better
position to determine the facts." Johnson v. Estate of Shelton (1988), 232 Mont. 85,
88, 754 P.2d 828, 830 (quoting Peterson v. Taylor (1987), 226 Mont. 400, 403, 735
P.2d 1120, 1122). We hold that the District Court's findings of fact on the question
of fair disclosure are not clearly erroneous: the findings are supported by substantial
credible evidence, and the court neither misapprehended the effect of that evidence
nor committed a mistake warranting reversal. DeSaye, 250 Mont. at 323, 820 P.2d
at 1287. Therefore, we hold that the court correctly concluded that Marlene waived
her rights to Bill's estate by virtue of the Antenuptial Agreement.
5. ¶In conclusion, the District Court did not err in determining that the Antenuptial
Agreement between Marlene and Bill was valid, thus precluding Marlene from
collecting a homestead allowance, an exempt property allowance, a family
allowance, or an elective share from Bill's estate.
6. ¶Affirmed.
/S/ WILLIAM E. HUNT, SR.
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We Concur:
/S/ TERRY N. TRIEWEILER
/S/ KARLA M. GRAY
/S/ JAMES C. NELSON
/S/ W. WILLIAM LEAPHART
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