PRENUPTIAL AGREEMENTS AND LEPIS
published in New Jersey Family Lawyer (March, 2002 Ed.)
by: Charles C. Abut, Esq.

When clients sign a prenuptial agreement, they have an understandable expectation that it will “stick”. It is, after all, a contract, is it not? Yes, in that the agreement should be enforced and not subject to modification. No, in that continued attacks on prenuptial agreements have become the norm. Indeed, prenuptial clients must be cautioned that “marital agreement” may have become oxymoronic under New Jersey family law.

Lepis v. Lepis, 83 N.J. 139 (1980) rendered the panorama of New Jersey support law a slippery slope built on shifting sands. Twenty years of post-judgment litigation have spawned a vast array of modification motions, the predicate for which is supposed to be the substantial, unanticipated and non-temporary “change in circumstance” required by Lepis. Why? Because Lepis stated [in what may well be the most dangerous sentence in New Jersey family law] “Contract principles have little place in the law of domestic relations”, 83 N.J. at 148. This dizzying proposition was supposedly based on the authority of Smith v. Smith, 72 N.J. 350 (1977), with specific citation to page 360. Yet, the reader will search page 360 and the rest of Smith in vain for the explicit source. Instead, Smith merely holds that divorce judgments are to be held to the same standard of modifiability as divorce agreements.

In any event, 5 “antenuptial” points have become clearer in the aftermath of Lepis.

First, a properly drawn prenuptial agreement enjoys a presumption of validity. Hawxhurst v. Hawxurst, 318 N.J. 72 (App. Div. 1998): “...it is for the parties themselves to decide what is fair and equitable.”, 318 N.J. Super. at 80. Under the Uniform Premarital Agreement Act (“the Act”) (enacted in New Jersey in 1988 under N.J.S.A. 37:2-31 et seq.), “properly drawn” means at least a “fair” agreement, where the parties were represented by independent counsel, with appropriate financial disclosures, and an absence of coercion or duress. Unless a litigant can prove “unconscionability” [with the burden of proof falling on the party seeking to avoid enforcement], the prenuptial agreement should be sustained.

Second, with regard to the “standard of living” showing
required under Crews. v. Crews, 164 N.J. 11 (2000), the Act is
clear that a prenuptial agreement will not be deemed “unconscionable”, unless that “standard of living” is “far below that which was enjoyed before the marriage.” [N.J.S.A. 37:2-32 9 (c)(3). [emphasis added]

Third, to “inoculate” against Lepis, family lawyers created and implemented “anti-Lepis” clauses. Actually, a prenuptial agreement can itself be seen as a more detailed “anti-Lepis” device, at least as far as the attempt to bar alimony or other spousal support is concerned. Furthermore, “anti-Lepis” provisions may themselves be subject to modification. Sometimes they are binding, sometimes not:

“As this court finds no public policy to support prohibiting the inclusion of an ‘anti Lepis’ clause in a voluntary property settlement agreement, no modification shall be granted.” Finckin v. Finckin, 240 N.J. Super. 204(Ch. Div. 1990); “This court
respectfully disagrees with the conclusion reached in Finckin, supra, and, for the reasons set forth below, holds that an ‘anti Lepis’ clause...is contrary to the public policy of this State...Smith v. Smith, 261 N.J. Super. 198 (Ch. Div. 1992); “There is a conflict between two Chancery Division opinions concerning whether an anti Lepis clause is enforceable... Smith v. Smith, 261 N.J. Super. 198 (Ch. Div. 1992), Finckin v. Finckin, 240 N.J. Super. 204 (Ch. Div. 1990)... we must give an equivocal answer to the question of whether an anti Lepis clause is enforceable. It is both yes and no.” Morris v. Morris, 263 N.J. Super. 237 (App. Div. 1993).

Fourth, a litigant seeking modification of a prenuptial agreement will rely --- at least in part --- on Marschall v. Marschall, 195 N.J. Super. 16 (Ch. Div. 1984). In footnote 3 of Marschall, it was suggested that:

“Antenuptial agreements should, of course, be regarded as subject to modification by reason of ‘changed circumstances’ in the same manner as property settlement agreements. Cf. Lepis v. Lepis, 83 N.J. 139 (1980).” [195 N.J. Super. at 28]

“Of course”? Is this dictum of Marschall necessarily such an unquestionable ipse dixit? After all, it was a trial court opinion and therefore not binding on any other trial court. Moreover, it was decided four years before the Act and precedes both its statutory mandates, as well as its underlying legislative intent. Most importantly, it predates by almost a decade the Appellate Division decision in Morris, supra, the wisdom of which is that “anti-Lepis” clauses may be sustained under appropriate circumstances. By analogy, therefore, and a fortiori, prenuptial agreements should also be similarly protected from modification attempts, all other attendant circumstances considered.

Fifth, the Appellate Division has also offered indirect guidance in this area with its decision in Pacelli v. Pacelli, 319 N.J. Super. 185(App. Div. 1999). Pacelli involved a “mid-nuptial” agreement, i.e., one that was executed 11 years after the parties had married and had 2 children (119 N.J. Super. at 189-190). In a case of first impression, the Appellate Division refused to enforce the “mid-nuptial” agreement, finding that it was unfair in 1986, when it was signed, as well as in 1994, when enforcement was sought. Notably, however, the Court observed as follows:

“We are persuaded that placing a mid-marriage agreement in the same category as a pre-nuptial agreement is inappropriate....the dynamics and pressures involved in a mid-marriage context are qualitatively different.” [319 N.J. Super. at 195]

In other words, when a prenuptial agreement is executed under circumstances devoid of coercion or duress [such as the “dynamics and pressures” of Pacelli, for example] and where the requirements of the Act are met, Lepis should not apply and the agreement should not be modified. The only exception would be under the “unconscionability” standard of the Act. Ironically (and fittingly), that is exactly the same standard that was used for modification of New Jersey matrimonial agreements prior to Lepis, under Schiff v. Schiff, 116 N.J. Super. 546 (App. Div. 1971), certif. den. 60 N.J. 139 (1972). Sometimes, the old ways are the best ways.

“ ‘[P]eople are not inexorably together in this life’ and... ‘[t]here does come a time when people even go beyond the scope of Lepis.’ This may well be correct. However, nothing ... suggests that the limits of Lepis have been approached.” Adler v. Adler, 229 N.J. Super. 496, 500 (App. Div. 1988).

So when does the broad reach of Lepis go too far? In the case of prenuptial agreements, should not time-tested principles such as the doctrine of repose, the social and economic value of predictability, the expectancy of contractual stability and the public policy favoring enforcement of agreements finally rein Lepis in?

Charles C. Abut has been certified by the Supreme Court of New Jersey as a Civil Trial Attorney from 1984 through 1997 and as a Matrimonial Attorney since 1998. He is a Fellow of the American Academy of Matrimonial Attorneys and a graduate of Columbia University (B.A. cum laude) and Cornell Law School (J.D.), practicing in Springfield and Hackensack, New Jersey.