February 2012 Archives

Antenuptial Agreements in Tennessee Require Full Disclosure

February 9, 2012 by The McKellar Law Firm, PLLC

The case of Stancil v. Stancil, No. E2011-00099-COA-R3-CV, held that an antenuptial agreement without adequate disclosure and a spouse who was misled into signing was not valid and unenforceable. Tennessee divorce attorneys should note the disclosure requirements reviewed in this case.

The testimony showed that before the parties married, Husband stated Wife needed to sign a document allowing her to "not be on his property" due to her bad credit and his need to obtain future loans. Wife testified that Husband stated that although the document was similar to a prenuptial agreement, its only purpose was for him to secure a loan. Wife also testified that Husband stated he would omit a parcel of property, which would serve the purpose of invalidating the agreement. The property Husband claimed to be omitting he referred to as "St. Elmo", which Wife believed to be a street name. However, in the agreement she signed, a property at Twelfth Avenue was listed. That property was located in the St. Elmo district in Chattanooga, although those words never appeared in the document. Wife had a witness testify who corroborated Husband's explanation of the credit score and St. Elmo theories. The attorney who prepared the agreement testified, stating Wife had opportunity to ask him questions and he had received a letter from Husband's attorney that he would be liable to Husband if the agreement was invalidated. The trial court held the antenuptial agreement was valid. Wife appealed.

T.C.A. § 36-3-501 covers antenuptial agreements, and the Tennessee Supreme Court has stated that the spouse seeking enforcement must show by a preponderance of evidence that a full and fair disclosure of the nature, extent, and value of his or her holdings was provided to the spouse seeking to avoid the agreement or that disclosure was unnecessary because the spouse seeking to avoid the agreement had independent knowledge of the full extent of the value of the holdings.

Here, the Husband failed to meet that burden. Statements by the Wife and witnesses contradicted the Husband's version of events in leaving out a piece of property to invalidate the agreement on purpose. Also, Wife did not know she was signing away her rights to alimony under the agreement. Wife believed she was signing an agreement which only assisted Husband in securing loans. The Husband's bad faith undermines the foundation of the agreement. Along with misleading Wife and the bad faith, the Court found there was not full disclosure by Husband.

The necessity of full disclosure and good faith depends on the exercising of candor and good faith, which leads to a leveling of the playing field in bargaining power. The parties entering the agreement should do so with full knowledge of the other person's holdings. The factors considered for full and fair disclosure are: "the relative sophistication of the parties; the apparent fairness or unfairness of the substantive terms of the agreement; and finally, any other circumstances unique to the parties and their specific situation." Here, Wife was clearly at a disadvantage and was misled by Husband. Therefore, the trial court erred in upholding the antenuptial agreement and the Appeals court reversed, finding the agreement invalid.

Material Change Required for Change of Custody in Tennessee

February 7, 2012 by The McKellar Law Firm, PLLC

The case of Gray v. Jeans, No. E2011-00692-COA-R3-CV (Tenn. Ct. App. Jan. 25, 2012) shows Tennessee divorce and custody attorneys that when filing to modify a Permanent Parenting Plan if no material change in circumstances has been proven, the court is not required to make a best interests determination and must deny the change of custody.
In 2005, the parties (never been married), entered into a Permanent Parenting Plan ("PPP") allowing shared custody. The Father was designated primary residential parent coparenting rotating every two weeks and no child support.

In 2010, Mother filed a Petition for Contempt and to Modify Permanent Parenting Plan allowing her to be the primary residential parent and to relocate to Rutherford County. Mother alleged Father failed to provide appropriate medical care and was abusive to her and the children. Mother also alleged Father exhibited inappropriate behavior towards her in the presence of the children. The trial court denied Mother's requests. Mother appealed.

The Trial was held in February 2011. On cross-examination, Mother acknowledged that, in the two year period in which she lived with Father, she did not call the police over Father's alleged instances of abuse. Mother also acknowledged that in 2010 - 2011 both Children did well in school. Mother also acknowledged spending time with Father in 2010, including shopping and meals. Mother stated her current Fiancé was the fourth man she had planned to marry, but stated he was the only one she was "serious" about.
Father denied any abuse towards Children and acknowledged he hit Mother once after she had hit him in the nose. Father stated the Children did very well in Hamblen County schools and that any relocation would be detrimental. Father confirmed he used corporal punishment but denied any threats toward Mother.

The Trial Court found the evidence did not show a material change of circumstances justifying a change of the PPP. The Appellate Court held, "Existing custody arrangements are favored because children thrive in stable environments." Hoalcraft v. Smithson, 19 S.W.3d 822, 828 (Tenn. Ct. App. 1999). A custody decision, once made and implemented, is considered res judicata upon the facts in existence or those which were reasonably foreseeable when the decision was made. Steen v. Steen, 61 S.W.3d 324, 327 (Tenn. Ct. App. 2001). However, our Supreme Court has held a trial court may modify an award of child custody 'when both a material change of circumstances has occurred and a change of custody is in the child's best interests." Kendrick v. Shoemake, 90 S.W.3d 566, 568 (Tenn. 2002). Further the Trial Court's implicit finding was a clear rejection of Mother's abuse contentions. The Appellate Court quoted, "It necessarily follows that if no material change in circumstances has been proven, the trial court 'is not required to make a best interests determination and must deny the request for a change of custody." Caudill v. Foley, 21 S.W.3d 203, 213 (Tenn. Ct. App. 1999). Appellate Court affirms the Trial Court's finding and decision that no material change in circumstances has occurred.