The meaning of "advantage" in a marital transaction.[2] It is settled that the predicate for applying a presumption of undue influence in an interspousal transaction is that one spouse has obtained an advantage over the other in the transaction. (Haines, supra, 33 Cal.App.4th at p. 297; see Bonds, supra, 24 Cal.4th at p. 27.) The presumption of undue influence is regularly applied in marital transactions in which one spouse has deeded property to the other, as in Haines. In such cases, it is evident one spouse has obtained an advantage -- the deeded property -- from the other. In other more comprehensive marital transactions involving the division of community assets, the nature of the "advantage" required to raise a presumption of undue influence has not been much discussed in the cases. However, the language of Family Code section 721 is clear, prohibiting either spouse from taking "any unfair advantage of the other." (Fam. Code, § 721, subd. (b).) Section 721, together with our analysis of the case authorities, leads us to conclude that the "advantage" which raises a presumption of undue influence in a marital transaction involving a contractual exchange between spouses must necessarily be an unfair advantage.
As long ago as 1894, the Supreme Court stated that:
"The moment it appears . . . that 'an unfair advantage' has been obtained, the presumption that it was procured by undue influence arises out of the existence of the confidential relation of husband and wife . . . ." (Dimond v. Sanderson (1894) 103 Cal. 97, 102 (Dimond).)
Almost a century later, the principle of unfair advantage was codified by the predecessor to Family Code section 721 (former Civil Code section 5103), which expressly defines the fiduciary duties of spouses in transactions with each other. The existence of unfair advantage -- or lack of consideration -- as a predicate to the presumption of undue influence in a marital transaction has been frequently suggested in precedents over the years, both before and after the enactment of section 721 and its predecessor. Thus:
In Estate of Cover (1922) 188 Cal. 133, 144 (Cover), the Supreme Court said that the "mere existence of the marriage relation alone will not, in and of itself, suffice to initiate and support the presumption of undue influence where the transaction between husband and wife is prima facie, or, from all of the circumstances thereof, shown to be fair and free from any material advantage to the husband from and over the wife." [139 Cal.App.4th 731]
In In re Marriage of Baltins (1989) 212 Cal.App.3d 66, 88, the court observed: "The marriage relationship alone will not support a presumption of undue influence by one spouse over the other where the transaction between them is shown to be fair."
In Haines, supra, 33 Cal.App.4th 277, the court expressly stated that the presumption of undue influence arises under Family Code section 721 "[w]here one spouse has taken advantage of another" in the transaction. (Id. at p. 301.) The word "advantage," in this context, plainly does not mean merely that a gain or benefit has been obtained. Taking "advantage of another" necessarily connotes an unfair advantage, not merely a gain or benefit obtained in a mutual exchange.
In re Marriage of Delaney (2003) 111 Cal.App.4th 991, 996 (Delaney) stated that "when any interspousal transaction advantages one spouse to the disadvantage of the other, the presumption arises that such transaction was the result of undue influence." Again, a mere benefit is not enough; the advantage must operate "to the disadvantage" of the other spouse.
In In re Marriage of Saslow (1985) 40 Cal.3d 848, the Supreme Court, while it did not discuss the presumption issue, likewise emphasized the necessity for a showing of unfairness: "To support a finding of undue influence, '[the] evidence, in addition to a showing of marriage relationship, must also show such unfairness of the transaction as will tend to establish that the wrongful spouse made use of the confidence reposed for the purpose of gaining an unreasonable advantage over the mate.'" (Id. at pp. 863-864, quoting Snyder v. Snyder (1951) 102 Cal.App.2d 489, 492.)
Finally, numerous cases apply the presumption of undue influence when the marital transaction is one in which one spouse deeds his or her interest in community property to the other spouse, for no consideration or for clearly inadequate consideration. (E.g., Weil v. Weil (1951) 37 Cal.2d 770, 787-789 [husband who secures a property advantage from his wife has the burden to show the absence of undue influence; wife's deed to husband was voluntary where the wife was aware that the spouses' interests were in conflict and she had ample opportunity to obtain independent advice].) Cases such as Weil and Haines, involving property transfers without consideration, necessarily raise a presumption of undue influence, because one spouse obtains a benefit at the expense of the other, who receives nothing in return. The advantage obtained in these cases, too, may be reasonably characterized as a species of unfair advantage. [139 Cal.App.4th 732]
In short, both Family Code section 721 and case precedents support the conclusion that in a contractual exchange between spouses, a presumption of undue influence arises only if one of the spouses has obtained an unfair advantage over the other. The Supreme Court's language in Bonds -- that the advantaged spouse bears the burden of demonstrating that the agreement was not obtained through undue influence -- is in no way inconsistent with this conclusion. Bonds involved a premarital agreement and, in its discussion contrasting premarital agreements with marital settlement agreements, expressly posits a transaction which "advantages one spouse" (Bonds, supra, 24 Cal.4th at p. 28) -- not a transaction in which both spouses obtain advantages. Bonds had no occasion to elucidate the meaning of "advantage" in a contractual exchange between spouses where both spouses obtain different advantages from the agreement. We discern no incongruity between Bonds and our conclusion that a spouse is presumed to have induced a transaction through undue influence only if he or she, in the words of Family Code section 721, has obtained an "unfair advantage" from the transaction.
Burkle (2006) 139 CA 4th 712 at p. 730-732
