In Re The Marriage Of: Doris Berg, Res/cross-app. v. Louis Berg, App/cross-res.

CourtCourt of Appeals of Washington
DecidedNovember 12, 2013
Docket67817-5
StatusUnpublished

This text of In Re The Marriage Of: Doris Berg, Res/cross-app. v. Louis Berg, App/cross-res. (In Re The Marriage Of: Doris Berg, Res/cross-app. v. Louis Berg, App/cross-res.) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re The Marriage Of: Doris Berg, Res/cross-app. v. Louis Berg, App/cross-res., (Wash. Ct. App. 2013).

Opinion

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

In the Matter of the Marriage of NO. 67817-5- t-o (Ji o ca

DORIS BERG, i*> i t '^: •^~ n .- DIVISION ONE o -.-(...

Respondent, ——

ro y-or c/in*. ^pr* "~C "?-' and .».-',.-, UNPUBLISHED OPINION vJ3 —'-CT LOUIS BERG, ro

Appellant. FILED: November 12,2013

Leach, C.J. — Lou Berg appeals the decree dissolving his marriage with

Doris Berg.1 He contends that the trial court erred by invalidating the parties'

prenuptial agreement, by excluding untimely disclosed witnesses, by awarding

Doris maintenance, and by denying his motion for reconsideratior). Doris cross

appeals, challenging the court's valuation of Lou's business assets. Both parties

request attorney fees on appeal. Because substantial evidence supports the trial

court's findings and the court did not abuse its discretion, we affirm

FACTS

Lou and Doris Berg married in March 1982. It was a second marriage for

each. Less than two weeks before their wedding, Lou took Doris to meet with his

We use the parties' first names for clarity. NO. 67817-5-1/2

attorney, Wolfgang Anderson, about a prenuptial agreement. Anderson told

Doris to "look it over." Doris met with her parents' longtime attorney, Howard

Pruzan, for a 30-minute consultation to review the document. Prupan may have

made some minor changes to the document.

The agreement purported to protect the parties' separatte assets. It

identified the assets each owned at the time they married. Doris owned a home j

on Mercer Island and an automobile; she had money in various bank accounts

and retirement savings, two term life insurance policies, and spme personal

possessions. Excluding the insurance policies, which had no cash value, her

assets totaled approximately $160,000. By contrast, the agreenrjent described

Lou's estimated net worth at over $350,000, including the value of his financial

services business, two vacation homes, investment properties, ^nd whole life

insurance investments.

When they married, Doris and Lou had a significant earning differential

that continued throughout the marriage. Doris worked as a speech therapist in

the King County School District for more than 30 years. The district paid her ict

about $60,000 the year before the dissolution proceedings began . Lou worked

for Crown Finance, a financial services company that made high interest "hard

money" loans. Eventually, he became the sole owner of the conppany n the NO. 67817-5-1/3

years before their dissolution, Lou's average salary was between $200,000 and

$250,000.

Lou and Doris's marriage lasted 27 years. In July 2009, Doris filed for

legal separation and then for dissolution. At the time that they separated, Doris and Lou both planned to retire within the next few years. The trial occurred in

May 2011 and lasted five days. Lou sought to enforce the prenuptial agreement.

The court denied enforcement, finding the agreement to be both substantively

and procedurally unfair. Instead, it awarded Lou assets valued at over $3.5

million and Doris assets valued at approximately $2.5 million, plus maintenance

of $4,000 per month for eight years. Both parties moved for reconsideration.

The court denied Lou's motion and granted Doris's motion in part. Both parties

now appeal. We discuss additional facts in the relevant sections below.

ANALYSIS

Lou raises multiple issues. He challenges the trial court's refusal to

enforce the prenuptial agreement, its exclusion of two witnesses, its valuation

and characterization of certain assets, its division of assets and liabilities, and its award of maintenance to Doris. We reject each challenge.

We first address Lou's challenge to the decision not t enforce the

prenuptial agreement. The court found,

[T]he prenuptial agreement should not be enforced as it wks both substantively and procedurally deficient at the time it was executed. -3- NO. 67817-5-1/4

The agreement was substantively unfair as it did not properly provide for the growth of community property during the marriage. Specifically, paragraphs 4-6 and paragraph 16 of the prenuptial agreement (petitioner's Exhibit 69) were unfair to the petitioner. Further, the Court concludes that the amount of time to evaluate the prenuptial agreement (30 minutes), the inadequacy of the review by petitioner's then-counsel, and the short duration between the draft prepared by respondent's counsel and the date of signing (within five days of the wedding) provide substantial evidence that the petitioner was not adequately protected nor properly irjformed of her rights under Washington law.

Courts employ a two-pronged analysis for determining th^ validity of a prenuptial agreement.2 First, the court decides whether the agreement makes

fair and reasonable provision for the party not seeking enforcement of the agreement.3 If it does, then the analysis ends, and the court yj\\\ enforce the agreement.4 If the agreement does not make a fair and reasonably provision for the opposing spouse, then the court must determine the procedurral fairness of

the agreement by answering two questions: (1) did the parties make full

disclosure of the amount, character, and value of the property involved and (2)

did they enter the agreement fully and voluntarily with independent advice and

with full knowledge of their rights.5

2In re Marriage of Bernard. 165 Wn.2d 895, 902, 204 P.3d 9p7 (2009). 3 Bernard, 165 Wn.2d at 902. 4 Bernard, 165 Wn.2d at 902. 5 Bernard, 165 Wn.2d at 902-03. NO. 67817-5-1/5

Absent a factual dispute, we review the substantive fairness of a

prenuptial agreement de novo.6 The party seeking to enforce the agreement has the burden of proving its validity.7 Washington courts examine the agreement's terms and the surrounding circumstances at the time of execution and not at the

time of enforcement.8 The factors the court may consider when determining a

prenuptial agreement's substantive fairness include (1) the proportionate means

of each party, (2) restrictions on the creation of community property, (3)

prohibitions on the distribution of separate property upon dissolution, (4)

preclusion of common law and statutory rights to both community and separate

property upon dissolution, (5) limitations on inheritance, (6) prohibitions on

awards of maintenance, and (7) limitations on the accumulation of separate

property.9

6 Bernard, 165 Wn.2d at 902 (citing In re Marriage of Foran 67 Wn. App. 242, 251 n.7, 834 P.2d 1081 (1992)). 7In re Estate of Crawford, 107 Wn.2d 493, 496, 730 P.2d 675 (1986). 0 Bernard. 165 Wn.2d at 904. 9See, e.g.. Bernard. 165 Wn.2d at 905 ("[A]n agreement disproportionate to the respective means of each spouse, which also limits the accumulation of one spouse's separate property while precluding any claim to the cither spouse's separate property, is substantively unfair."); In re Marriage of Matsdn , 107Wn.2d 479, 486, 730 P.2d 668 (1986) (holding that a prenuptial agreement was "grossly disproportionate" where all value, income, and earnings from sepiarate property would remain separate upon dissolution); Foran. 67 Wn. App.

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