SCRUTINY AND REVIEW OF MARITAL TRANSMUTATION AGREEMENTS:
UNDUE INFLUENCE: DURESS & UNDUE INFLUENCE
BACKGROUND CASE BRIEF
Balcoff (2006) 141 CA 4th 1509
FACTS:
"In this case, Kathleen secured an advantage through the October 1999 writing, because she obtained a 20 percent interest in Ralph's separate property corporation as well has his share of the marital residence. (See In re Marriage of Delaney, supra, 111 Cal.App.4th at pp. 995-997.) Therefore, the statutory presumption arose that she exercised undue influence against Ralph in obtaining his signature on the October 1999 writing, and that the writing should be set aside. (In re Marriage of Mathews, supra, 133 Cal.App.4th at pp. 628-629; In re Marriage of Delaney, supra, 111 Cal.App.4th at pp. 996-997.)"
[4] "The burden of rebutting the presumption of undue influence [was] on [Kathleen, as] the spouse who acquired an advantage or benefit from the transaction. [Citation.]" (In re Marriage of Mathews, supra, 133 Cal.App.4th at p. 630.) [141 Cal.App.4th 1520] "Consequently, it was [her] burden to establish [Ralph's] signing of the [October 1999 writing] was freely and voluntarily made, with full knowledge of all the facts, and with a complete understanding of its effect of making the [shares of stock and the marital residence] separate property. [Citation.]" (Ibid.) It was her burden to rebut the presumption by a preponderance of the evidence. (Id. at p. 631.)
HOLDING:
Substantial evidence supports the trial court's implied finding that Kathleen did not rebut the presumption (of undue influence) by a preponderance of the evidence.
RATIONALE FOR HOLDING: Undue Influence
In its statement of decision, the trial court held that "[Kathleen] exerted undue influence on [Ralph] in order to obtain the [October 1999] writing." Ralph asserts that this holding was correct. We agree.
....The trial court found that "[t]he writing was a transaction between the parties, which arose out of their confidential relationship as spouses and was not made at arms length." It also found that "[Kathleen] gained an advantage over [Ralph] by virtue of the writing, in that it transferred assets to her which she did not previously own." In addition, the court stated, in its statement of decision: "4. [Kathleen] threatened [Ralph] with divorce and the obstruction of his relationship with their children if he did not prepare the writing. [¶] 5. [Kathleen] harangued and berated [Ralph] during the marriage in an effort to force him to modify the parties' prenuptial agreement to provide more security for [her]. The berating included several incidents where [Kathleen] physically struck [Ralph]. [¶] [Kathleen] screamed at [Ralph] for at least 45 minutes immediately preceding his writing the October 1999 writing, which screaming included threats of divorce and obstructing [Ralph's] relationship with the minor children if he did not make the writing. [Ralph] reasonably believed [Kathleen's] threats, and that she intended to follow through with her threats. These threats alone or coupled with his state of mind resulting from the many prior episodes of verbal and physical abuse, constituted duress which resulted in his making the writing. [¶] Further, [Kathleen] subjected [Ralph] to a continuous barrage of yelling and threats of divorce and obstructing [Ralph's] relationship with the minor children in the parties' hotel room from the time he started the writing until he was initially finished. Thereafter, [Kathleen's] barrage of threats continued until [Ralph] wrote an additional penalty clause, which he did at her insistence. [¶] Coupled with the prior history of [Kathleen's] haranguing and berating [Ralph] concerning the prenuptial agreement, the threats to take his children away from him immediately before he made the writing, unless he made the writing, constituted duress."
[5] The threats also constituted undue influence, inasmuch as his execution of the document was not "freely and voluntarily made." (In re Marriage of Mathews, supra, 133 Cal.App.4th at p. 630; see also In re Marriage of Baltins (1989) 212 Cal.App.3d 66, 83 [consent is not [141 Cal.App.4th 1521] "free" when obtained through duress, menace, or undue influence].) He executed the document as a reaction to Kathleen's continued yelling and screaming and out of fear that she would otherwise block him from having a continued relationship with his children.
