Justia Contracts Opinion Summaries

Minnesota law provides that “the dissolution or annulment of a marriage revokes any revocable . . . beneficiary designation . . . made by an individual to the individual’s former spouse,” Minn. Stat. 524.2–804. If an insurance policyholder does not want that result, he may rename the ex-spouse as beneficiary. Sveen and Melin were married in 1997. Sveen purchased a life insurance policy, naming Melin as the primary beneficiary and designating his children from a prior marriage as contingent beneficiaries. The marriage ended in 2007. The divorce decree did not mention the insurance policy. Sveen did not revise his beneficiary designations. After Sveen died in 2011, Melin and the Sveen children claimed the insurance proceeds. Melin argued that because the law did not exist when the policy was purchased, applying the later-enacted law violated the Contracts Clause. The Supreme Court reversed the Eighth Circuit, holding that the retroactive application of Minnesota’s law does not violate the Contracts Clause. The test for determining when a law crosses the constitutional line first asks whether the state law has “operated as a substantial impairment of a contractual relationship,” considering the extent to which the law undermines the contractual bargain, interferes with a party’s reasonable expectations, and prevents the party from safeguarding or reinstating his rights. If such factors show a substantial impairment, the inquiry turns to whether the state law is drawn in a “reasonable” way to advance “a significant and legitimate public purpose.” Three aspects of Minnesota’s law, taken together, show that the law does not substantially impair pre-existing contractual arrangements. The law is designed to reflect a policyholder’s intent and to support, rather than impair, the contractual scheme. The law is unlikely to disturb any policyholder’s expectations at the time of contracting, because an insured cannot reasonably rely on a beneficiary designation staying in place after a divorce. Divorce courts have wide discretion to divide property upon dissolution of a marriage. The law supplies a mere default rule, which the policyholder can easily undo. View "Sveen v. Melin" on Justia Law

The common law governs provisions of an antenuptial agreement that do not fall within the safe harbor of Minn. Stat. 519.11(1), and the multifactor Kinney test is the common-law test applicable to antenuptial agreements. See In re Estate of Kinney, 733 N.W.2d 118 (Minn. 2007).Wife petitioned for dissolution and moved to set aside the antenuptial agreement she signed just before her marriage. The district court invalidated the agreement, concluding that it was procedurally unfair because Wife did not have an adequate opportunity to meet with legal counsel of her own choice and that it was substantively unfair and the time it was made and executed. The court of appeals affirmed on different grounds, concluding (1) to the extent the district court relied on Minn. Stat. 519.11 for evaluating procedural fairness, the court erred; (2) agreements that purport to distribute marital property, such as the agreement in this case, must be evaluated under the common law; and (3) the agreement was procedurally unfair. The Supreme Court affirmed after applying the Kinney factors to the entire agreement, holding that this agreement did not satisfy the common law test for procedurally fairness, and therefore, the agreement was invalid and unenforceable. View "Kremer v. Kremer" on Justia Law

The Supreme Court affirmed the order of the circuit court ordering Eryn Winegeart to sell real estate she owned jointly with her former spouse, Weston Winegeart, holding that the court did not err by ordering Eryn to sign a purchase agreement signed by a third party.After the parties underwent mediation, Weston signed an agreement with a real-estate agent to list the jointly owned real estate, and the listing agreement included a commission for the realtor. After the third party signed the purchase agreement, Eryn refused to sign it, asserting that during mediation Weston had orally agreed to sell the property without paying for a realtor. The circuit court found that the parties had not entered into an enforceable oral agreement in regard to realtor fees and ordered Eryn to sign the purchase agreement. The Supreme Court affirmed, holding that the circuit court did not err by entering its order requiring Eryn to sign the purchase agreement. View "Winegeart v. Winegeart" on Justia Law

The Supreme Court affirmed in part and remanded in part the final decree of divorce entered by the district court in this case.Before Wife filed for divorce from Husband, the parties executed a stipulated judgment and decree of divorce establishing property distribution, child support, child custody and visitation, and alimony. The Supreme Court held (1) the district court correctly found that the stipulated decree was a valid agreement between Husband and Wife that was supported by consideration, and the stipulated decree was not unconscionable; (2) the district court appropriate enforced the order in the divorce decree with respect to the property, debt distribution, and alimony; but (3) the district court erred in enforcing the order with respect to child custody, visitation, and child support. View "Long v. Long" on Justia Law

The Supreme Court affirmed in part and remanded in part the final decree of divorce entered by the district court in this case.Before Wife filed for divorce from Husband, the parties executed a stipulated judgment and decree of divorce establishing property distribution, child support, child custody and visitation, and alimony. The Supreme Court held (1) the district court correctly found that the stipulated decree was a valid agreement between Husband and Wife that was supported by consideration, and the stipulated decree was not unconscionable; (2) the district court appropriate enforced the order in the divorce decree with respect to the property, debt distribution, and alimony; but (3) the district court erred in enforcing the order with respect to child custody, visitation, and child support. View "Long v. Long" on Justia Law

Before marrying Claudia, Mathew downloaded a form and drafted a premarital agreement, describing Claudia's rights in real property owned by Matthew. Matthew retained attorney Chernick to represent Claudia. Chernick advised Matthew to seek independent legal counsel. Matthew stated he would represent himself. Chernick spoke to Claudia outside Matthew’s presence, revised the agreement and, on March 5, sent a red-lined version to both, containing additional provisions and stating that each party had had more than seven days to review the agreement before executing it. The parties signed a final version on March 6. Matthew executed a waiver of legal counsel. The parties separated. Claudia sought enforcement of the agreement. The court of appeal affirmed that the agreement was unenforceable under Family Code 1615(c)(2), because Matthew was not presented with the final version of the agreement at least seven days before its execution and, under Family Code 1615(c)(3), because Matthew had not been provided with a written advisement of the rights he was relinquishing and did not execute a waiver of those rights. When the evidence shows an unrepresented party to a premarital agreement was not provided with the seven-day review period, the agreement’s recitation that the review period was provided is not binding. Section 1615(c)(3) applies to an agreement that was initially generated by the unrepresented party. View "Marriage of Clarke & Akel" on Justia Law

The Supreme Court affirmed the decision of the district court requiring Wife to return certain personal property Husband after the divorce decree’s ninety-day deadline.On appeal, Wife argued that, by allowing Husband to recover property after the divorce decree’s ninety-day deadline, the district court improperly modified the parties’ property settlement without the required written agreement. The settlement declared that no modification or waiver of the terms of the agreement shall be valid unless in writing. The Supreme Court affirmed, holding that the district court did not modify the parties’ agreement, but rather, the parties modified the agreement on their own, and the district court approved the modification. View "Acton v. Acton" on Justia Law

Plaintiff filed suit challenging the constitutionality of Arizona's revocation-on-divorce (ROD) statute after she remained the beneficiary of her ex-husband's IRA account when he died. The Ninth Circuit held that the district court correctly determined that an Arizona state court would disregard the choice-of-law provision in the Plan and instead apply Arizona's ROD statute; the application of the ROD statute was not preempted by federal statutes and regulations governing IRAs; the district courts erred when they denied plaintiff standing; and the California district court did not abuse its discretion in transferring the case to Arizona under 28 U.S.C. 1406(a) on the grounds that it lacked personal jurisdiction over the Estate. Although it disagreed with the district court's holding that plaintiff lacked standing, the panel affirmed the dismissal of the constitutional challenge to the application of Arizona's ROD statute in the allocation of the proceeds of the ex-husband's IRA. View "Lazar v. Kroncke" on Justia Law

Upon their divorce, Wife and Husband entered into a marital dissolution agreement (MDA) that contained a provision entitling the prevailing party to an award of appellate attorney’s fees in subsequent legal proceedings. The MDA was incorporated into the parties’ final divorce decree. Wife later filed a relocation motion seeking to modify the parties’ parenting plan. Wife then filed a motion for judgment against Husband for reimbursement of uncovered medical expenses. After a hearing, the trial court granted both motions filed by Wife and awarded Wife attorney’s fees based on the MDA. The court of appeals affirmed but declined Wife’s request for an award of fees and costs on appeal. Wife appealed, arguing that she was entitled to appellate attorney’s fees. The Supreme Court reversed, holding that Wife was entitled to an award of appellate attorney’s fees incurred before the court of appeals under the parties’ MDA. View "Eberbach v. Eberbach" on Justia Law

Prior to their marriage in 1993, Wife and Husband entered into a pre-marriage agreement (PMA) listing their assets and liabilities. In 2012, Husband sued Wife for divorce in Minnesota. The Minnesota court determined that Butte County, South Dakota, was the proper venue to determine the issues regarding the validity and enforceability of the parties’ PMA. Wife filed a declaratory judgment action against Donald in Butte County requesting a judgment declaring the PMA valid and enforceable and asking the court to construe the rights and interests of the parties under the PMA. The circuit court declared the PMA valid and enforceable and interpreted the PMA. The Supreme Court affirmed, holding (1) the circuit court did not err when it interpreted the PMA to permit tracing of earnings or property through the joint marital account and applied the marital loan concept; (2) the circuit court did not err when it adopted Wife’s expert’s report; and (3) Wife was not entitled to appellate attorney’s fees. View "Charlson v. Charlson" on Justia Law