Neilson v. Neilson

780 P.2d 1264, 117 Utah Adv. Rep. 21, 1989 Utah App. LEXIS 153, 1989 WL 113177
CourtCourt of Appeals of Utah
DecidedSeptember 14, 1989
Docket870591-CA
StatusPublished
Cited by20 cases

This text of 780 P.2d 1264 (Neilson v. Neilson) is published on Counsel Stack Legal Research, covering Court of Appeals of Utah primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Neilson v. Neilson, 780 P.2d 1264, 117 Utah Adv. Rep. 21, 1989 Utah App. LEXIS 153, 1989 WL 113177 (Utah Ct. App. 1989).

Opinion

OPINION

JACKSON, Judge:

In this appeal, Carleen Neilson challenges the trial court’s ruling that the parties’ premarital agreement was void and unenforceable as controlling property division upon divorce. We affirm.

FACTUAL BACKGROUND

At the time of the parties’ divorce, Alfred Neilson was a sixty-seven-year-old retired business executive whose primary source of income was dividends from his shares in Texas Eastern Corporation. Car-leen Neilson was a thirty-one-year-old bank employee with a college degree in finance and accounting. They met and began dating in December 1985. On January 18, 1986, she was evicted from her apartment. Upon her request and his agreement, she moved into a private bedroom in his home three days later. On February 25, 1986, they executed a document entitled “Prenuptial Agreement,” which was prepared by Alfred’s attorney at his request.

Paragraph 9 of the prenuptial agreement provides:

At the time of executing this- Agreement, ALFRED owns 25,440 shares of Texas Eastern Corporation stock. It will be necessary to sell certain shares of said stock to pay the taxes arising as a result *1266 of prior stock sales, and it may be necessary in the future to sell additional shares of said stock. Nevertheless, ALFRED agrees to transfer to CAR-LEEN five percent (5%) of said stock (or any asset into which it may be converted) in each year for a period of nine (9) years with the intention that at the end of nine (9) years, each of them will own an equal number of shares of said stock. On the date of marriage, ALFRED shall transfer to CARLEEN five percent (5%) of said stock. On each anniversary of their marriage thereafter, ALFRED will transfer the fraction of the shares then owned by him as indicated on the following chart:
Fraction of Texas Eastern Shares Anniversary Then Owned by Alfred to be Date of Marriage Transferred to Carleen
l/19th H
l/18th N)
l/17th CO
l/16th ⅛
l/15th CR
1/14& OJ
l/13th l/12th CO-3
1/llth or such lesser amount as necessary to give CARLEEN the same number of shares as ALFRED. tO
In the event the parties are subsequently divorced in a divorce action initiated by CARLEEN, it is understood and agreed that the only assets she shall be entitled to receive from the separate property owned by ALFRED are the shares of Texas Eastern Corporation stock which [have] theretofore been transferred to her. On the other hand, if the parties are divorced in an action initiated by ALFRED, CARLEEN shall be entitled to receive, as the only property to be transferred by the divorce to her from the separate property of ALFRED, sufficient shares of Texas Eastern Corporation stock so that she will own at the time of the divorce the same number of shares of said stock as will then be owned by ALFRED.

The wedding took place on March 1, 1986, and the marriage was consummated. In accordance with the agreement, Alfred transferred 1,272 shares of stock to Car-leen at that time. Four and one-half months later, he filed a complaint for annulment of the marriage, based on allegations of fraud, and for a declaratory judgment of their respective rights under the prenuptial agreement. She answered with general denials and affirmative defenses. She also requested the court to declare his complaint to be one for divorce and to enforce their premarital agreement, claiming that the last sentence of paragraph 9 entitled her to half (worth approximately $400,000) of the Texas Eastern Corporation stock because Alfred had initiated an action that would result in divorce.

After a six-day trial, the court found that Alfred had paid off $8,200 worth of Car-leen’s premarital debts, purchased $12,592 in wedding jewelry for her, paid $9,600 for a 1978 Corvette and another $2,000 for a watch purchased by Carleen, and paid another $5,000 for miscellaneous benefits for her. Carleen was found to have expended excessive sums of Alfred’s money for her own use and benefit, without Alfred’s knowledge or authorization. These unauthorized purchases overdrew Alfred’s checking account by $14,000 after completely consuming his quarterly dividend check in the amount of $16,000, requiring him to sell some stock to pay those expenses and the taxes owed for the sale of the stock. While this action was pending, Carleen sold 372 shares of the stock she had received when the parties married. At the time of the decree, the proceeds from that sale consisted of $2,000 in cash and a $10,000 time certificate of deposit in her name.

The trial court denied Alfred’s petition for annulment and, with no objection from either party, 1 treated his complaint as one for divorce, which it awarded to him on the basis of mental cruelty and irreconcilable differences. Although the trial court specifically found that the prenuptial agreement was entered into without any fraud, duress, or undue influence, it nonetheless concluded that the entire agreement was *1267 void and unenforceable as violative of public policy “for the reason that it encourages conduct designed to facilitate the breakup of a marital relationship.” Alternatively, the court concluded that consideration for the prenuptial contract, a “normal marital relationship,” had failed. The court then, in the exercise of its equitable powers, made a distribution of property. In addition to personal property she brought to the marriage, Carleen was awarded the following $35,600 worth of property she received during the marriage: the jewelry; the 1978 Corvette; the certificate of deposit; and the $2,000 in cash remaining from her sale of stock. 2 Alfred was awarded his remaining personal property, including the 900 stock shares previously transferred to Carleen that she did not sell during the parties’ separation. Finally, Carleen was ordered to pay her attorneys $20,000 as reasonable attorney fees.

ISSUES

On appeal, Carleen challenges as erroneous the trial court’s refusal to enforce the parties’ prenuptial agreement because consideration for the contract failed or because the contract terms violate public policy. She also contends that the trial court had no power to order her to pay her attorney fees.

This court has previously held that prenuptial agreements should be construed in the same manner as other contracts. Berman v. Berman, 749 P.2d 1271, 1273 (Utah Ct.App.1988). In interpreting a contract, a court looks first to the four corners of the agreement to determine the intentions of the parties. Ron Case Roofing & Asphalt Paving Co. v. Blomquist, 773 P.2d 1382, 1385 (Utah 1989).

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Cite This Page — Counsel Stack

Bluebook (online)
780 P.2d 1264, 117 Utah Adv. Rep. 21, 1989 Utah App. LEXIS 153, 1989 WL 113177, Counsel Stack Legal Research, https://law.counselstack.com/opinion/neilson-v-neilson-utahctapp-1989.