COA: Postnuptial agreement is enforceable

It is not a requirement that one party in a marriage must initiate divorce proceedings in order for the parties to later enter into a valid and enforceable reconciliation agreement, the Indiana Court of Appeals held Wednesday.

Michael O. Hall appealed the division of property upon his divorce with Susan Hall, in which the trial court concluded that a written agreement between the Halls providing for certain property rights in the event of a divorce constituted a valid and enforceable reconciliation agreement.

Eight months after getting married, husband was incarcerated. Wife told him that she intended to dissolve the marriage based on his untruthfulness regarding his finances and criminal history. Husband did not want the marriage to be dissolved so he suggested an agreement where the parties agreed to keep separate any properties or assets that they each brought to the marriage or incurred during the marriage in a separate name or business name. They would not lay claim to the other’s property or assets in the event of divorce, separate or legal action against the individuals.

Husband signed the agreement while incarcerated and it was notarized.  Wife then signed it, but did not have her signature notarized.

The two remained married for eight more years, but wife filed for divorce in November 2013. The trial court determined the agreement was a valid and enforceable reconciliation agreement made in contemplation of and in exchange for reconciling the parties’ marriage.

Husband claimed that caselaw supports the position that one party must have legally separated or filed for divorce in order to create a valid reconciliation agreement. He argued wife’s mere contemplation of dissolving the marriage was not sufficient.

“We acknowledge the language used in (Gaskell v. Gaskell, 900 N.E.2d 13, 17 (Ind. Ct. App, 2009)),  and (Flansburg v. Flansburg, 581 N.E.2d 430, 433 (Ind. Ct. App. 1991)), and recognize that, most often, the initiation of dissolution proceedings will in fact precede the execution of a reconciliation agreement as it did in those cases. Nevertheless, we disagree with Husband that such is a condition precedent to a valid and enforceable reconciliation agreement,” Judge Terry Crone wrote. “The proper inquiry is whether the agreement was executed in order to preserve and extend a marriage that otherwise would have been dissolved but for the execution of the agreement, regardless of whether formal separation has already occurred or legal proceedings initiated.”

The trial court concluded the parties were sufficiently separated, which was supported by the court’s finding of facts.

The COA affirmed the lower court in all respects in Michael O. Hall v. Susan M. Hall, 30A01-1407-DR-311.