Dodson v. Dodson , 298 Ga. 117 ( 2015 )

In the Supreme Court of Georgia
Decided: November 16, 2015
S15A1334. DODSON v. DODSON.
MELTON, Justice.
We granted an application for interlocutory appeal to determine whether
the trial court erred when it denied enforcement of a prenuptial agreement
between Ricky Dodson (Husband) and Kelly Dodson (Wife) on the basis that
Husband failed to establish that he made a full and fair disclosure of his
financial condition. For the reasons set forth below, we affirm.
In relevant part, the record shows that the parties are pursuing a divorce,
and Wife filed a motion to deny enforcement of a prenuptial agreement entered
into by the parties. After a hearing, the trial court analyzed the prenuptial
agreement under the standard set forth in Scherer v. Scherer, 249 Ga. 635 (292
SE2d 662) (1982), and found it to be unenforceable. Scherer holds that
the trial judge should employ basically three criteria in determining
whether to enforce such an agreement in a particular case: (1) was
the agreement obtained through fraud, duress or mistake, or through
misrepresentation or nondisclosure of material facts? (2) Is the
agreement unconscionable? (3) Have the facts and circumstances
changed since the agreement was executed, so as to make its
enforcement unfair and unreasonable?
(Citation omitted.) Id. at 641 (3). “Whether an agreement is enforceable in light
of these criteria is a decision made in the trial court's sound discretion. [Cit.]”
Alexander v. Alexander, 279 Ga. 116, 117 (610 SE2d 48) (2005). “Under this
standard, we review the trial court's legal holdings de novo, and we uphold the
trial court's factual findings as long as they are not clearly erroneous, which
means there is some evidence in the record to support them.” (Citations
omitted.) Lawrence v. Lawrence, 286 Ga. 309, 310 (1) (687 SE2d 421) (2009).
“[T]he trial court essentially sits in equity and has discretion to ‘approve the
agreement in whole or in part, or refuse to approve it as a whole.’ [Cit.]”
Alexander, supra, 279 Ga. at 117-118.
Although the trial court found that the prenuptial agreement satisfied all
other parts of the Scherer test,1 it found that the agreement was unenforceable
due to the nondisclosure of material facts. In doing so, the trial court pointed to
a number of factors. First, the trial court noted that, although the prenuptial
agreement lists all of Husband’s assets, it contains no values for these assets–
including the value of Husband’s bank accounts and two closely-held businesses
owned by him. At the hearing on Wife’s motion to deny enforcement, the trial
1
Wife did not contest these findings.
2
court was presented with evidence regarding the nature and value of these
assets, and the trial court made the determination that these values were material
facts that were necessary for a full and fair disclosure. See Lawrence, supra, 286
Ga. at 313 (4) (One of the requirements that a party seeking enforcement of a
prenuptial ageement must meet in order “[t]o satisfy the first prong of the
Scherer test, . . . [is to] show . . . that there was ‘a full and fair disclosure of the
assets of the parties prior to the execution of the antenuptial agreement’”)
(citation and punctuation omitted). Second, the trial court determined that
Husband did not allow Wife reasonable access to his bank accounts in order to
ascertain their value. Specifically, the trial court pointed to evidence that, though
Wife volunteered to assist Husband with accounting work related to his
businesses, Husband declined Wife’s help and failed to disclose the values of
the business accounts to Wife. Finally, the trial court found that Wife simply did
not have information about or access to Husband’s business accounts at any
time and that “there was no evidence presented . . . that [Wife] could know the
value of [Husband’s] accounts.” (Emphasis supplied.)2 Based on these findings,
2
This fact distinguishes the present case from Spurlin v. Spurlin, 289 Ga.
818 (716 SE2d 209) (2011), in which a postnuptial agreement was enforced
where the evidence showed that the wife had unrestricted access to the financial
records of her husband. For similar reasons, it is also distinguishable from
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it cannot be said that the trial court abused its discretion in ruling that the
prenuptial agreement at issue was unenforceable.
Nonetheless, pursuant to Mallen v. Mallen, 280 Ga. 43 (622 SE2d 812)
(2005), Husband argues that the prenuptial agreement is enforceable because
Wife had a duty to inquire and investigate with regard to the value of all of his
assets, including the bank accounts. This is erroneous as both a matter of fact
and law. Factually, the trial court found that Husband did not give Wife
reasonable access to his bank accounts, and there are facts of record supporting
this conclusion. Legally, we made clear in Blige v. Blige, 283 Ga. 65 (2) (656
SE2d 822) (2008), that, in order to enforce a prenuptial agreement, the spouse
seeking enforcement must show that the agreement contained full and fair
disclosure of his or her material assets. We further clarified that, in the absence
of a full and fair disclosure, the other spouse does not have a general duty to
investigate the assets of the other party. Id.Husband also maintains that the law required only that he list all of his
material assets, not that he apprise Wife as to their values. This is an incorrect
Lawrence v. Lawrence, supra, because in that case the wife had garnered years
of familiarity with her husband’s financial dealings prior to entering into a
prenuptial agreement.
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and overly narrow interpretation of the law.3 What is absolutely required by
Scherer is a “full and fair disclosure.” See Lawrence, supra. As found by the
trial court in this case, the disclosure was neither full, because Wife had no real
knowledge of the value of Husband’s bank accounts, nor fair, because Husband
never allowed Wife to have reasonable access to those accounts. As such,
[t]he evidence supports the trial court's finding that [Husband]
failed to make a full and fair disclosure of his assets, income, and
liabilities to [Wife] prior to the execution of the antenuptial
agreement, and nothing in Mallen or [Wife’s] actions or inactions
prior to the execution of the antenuptial agreement excuses
[Husband’s] nondisclosure.
Blige, supra, 283 Ga. at 71-72 (2). Therefore, the trial court did not abuse its
discretion by determining that the prenuptial agreement failed the first prong of
the Scherer test.
Judgment affirmed. All the Justices concur, except Blackwell, J., who
concurs in judgment only.
3
We again note that “attaching to the antenuptial agreement financial
statements showing both parties' assets, liabilities, and income, while not
necessary, ‘is the most effective method of satisfying the statutory [disclosure]
obligation in most circumstances,’” Lawrence, supra, 286 Ga. at 313 (4), citing
Blige, supra, 283 Ga. at 69 n. 12.
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