Mary Ann Rudie v. Kevin Paul Rudie ( 2024 )

COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
January 18, 2024
A party may file with the Supreme Court a
Samuel A. Christensen petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10
and RULE 809.62.
Appeal No. 2021AP1892 Cir. Ct. No. 2018FA124
STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT III
IN RE THE MARRIAGE OF:
MARY ANN RUDIE,
JOINT-PETITIONER-APPELLANT,
V.
KEVIN PAUL RUDIE,
JOINT-PETITIONER-RESPONDENT.
APPEAL from a judgment of the circuit court for Marathon County:
SUZANNE C. O’NEILL, Judge. Affirmed.
Before Stark, P.J., Hruz and Gill, JJ.
Per curiam opinions may not be cited in any court of this state as precedent
or authority, except for the limited purposes specified in WIS. STAT. RULE 809.23(3).
No. 2021AP1892
¶1 PER CURIAM. Mary Ann Rudie1 appeals the debt allocation
portion of a judgment dissolving her marriage to Kevin Rudie. Mary Ann argues
that the circuit court erred by nullifying both a prenuptial and postnuptial
agreement as unenforceable. Mary Ann also contends that the court erroneously
exercised its discretion by deeming her responsible for all of the debt incurred
during the marriage. We reject Mary Ann’s arguments and affirm the judgment.
BACKGROUND
¶2 In early 2014, Mary Ann was granted a judgement of divorce from
her previous husband and, in May of the same year, Mary Ann purchased a home
in Marshfield with $240,000 in cash that she had been awarded from the divorce
settlement. Kevin moved into the home, and that fall, Mary Ann and Kevin
discussed marriage, but Mary Ann was reluctant to marry so soon after having
been divorced. Using a form from a legal forms website, Mary Ann drafted a
prenuptial agreement in an attempt to secure her individual interest in the property
she brought to the marriage. The prenuptial agreement provided, in part, that in
the event of the parties’ separation/divorce: (1) the property belonged to Mary
Ann, and Kevin would not make any claim on the property; (2) Kevin would pay
half of all bills, including property taxes on the property, until its sale; and (3) “all
monies from the sale [of the property would] belong to Mary Ann.”
¶3 The couple married on February 14, 2015. In November 2015,
Kevin sustained serious injuries in a car accident. He did not have health
1
The individuals involved in this appeal share the last name “Rudie.” To avoid
confusion, after the first reference to each individual, we will refer to that individual by his or her
first name.
2
No. 2021AP1892
insurance at the time of the accident and, as a result, he accumulated significant
medical debt. Mary Ann mortgaged the Marshfield home, took out a home equity
loan, and used her credit card to pay off the medical debt.
¶4 The parties jointly petitioned for divorce in March 2018. In July
2018, Mary Ann drafted a letter “to whom it may concern,” outlining the medical
debt incurred as a result of Kevin’s accident and the actions she took to satisfy the
medical debt. The letter provided, in part, that Kevin agreed to: (1) pay Mary
Ann $750 per month, representing half of the mortgage; (2) maintain Mary Ann as
his social security representative, thus allowing her to deduct the monthly payment
from his social security check; (3) obtain a life insurance policy naming Mary Ann
as the sole beneficiary; and (4) obtain full-time employment in the event that his
social security benefits were terminated. The document was signed by both
parties before a notary public, though Kevin claimed he only reviewed it for a
“couple of minutes” prior to signing it.
¶5 Kevin subsequently moved for a declaratory judgment to nullify the
“alleged prenuptial and postnuptial agreements.” Following two evidentiary
hearings, the circuit court nullified the agreements, concluding that they were
inequitable and unenforceable. After a contested divorce hearing, the court
granted the parties a judgment of divorce. With respect to property division,
Kevin was awarded a car and bank accounts worth a combined total of
approximately $1,900. The court awarded Mary Ann a bank account, a car, and
the Marshfield home, with an estimated value of $222,800, resulting in combined
assets totaling approximately $248,896. All of the marital debt, totaling almost
$151,000—which included the home loan, car loan, and credit cards—was also
assigned to Mary Ann. This appeal follows.
3
No. 2021AP1892
DISCUSSION
¶6 Mary Ann argues that the circuit court erred by nullifying the
prenuptial and postnuptial agreements. Our supreme court has determined that a
marital property agreement will be considered “equitable,” and therefore
enforceable, when all three of the following requirements are met: (1) each spouse
has made a fair and reasonable disclosure of his or her financial status to the other
spouse; (2) each spouse has entered into the agreement voluntarily and freely; and
(3) the substantive provisions of the agreement dividing the property upon divorce
are fair to each spouse.2 See Button v. Button, 131 Wis. 2d 84, 89, 388 N.W.2d
546 (1986).
¶7 The circuit court’s determination of equitableness requires the court
to exercise its discretion. See id. at 99. We will sustain a discretionary act of the
circuit court if the court examined the relevant facts, applied a proper standard of
law, and, using a demonstrated rational process, reached a conclusion that a
reasonable judge could reach. Loy v. Bunderson, 107 Wis. 2d 400, 414-15, 320
N.W.2d 175 (1982). Further, the circuit court’s findings of fact will not be set
aside unless clearly erroneous. WIS. STAT. § 805.17(2).
2
Similarly, WIS. STAT. § 766.58(6) (2021-22), provides that a marital property
agreement executed before or during marriage is not enforceable if the spouse against whom
enforcement is sought proves any of the following: (1) the agreement was unconscionable when
made; (2) that spouse did not execute the marital property agreement voluntarily; or (3) before
execution of the agreement, that spouse did not receive fair and reasonable disclosure of the other
spouse’s property or financial obligations and did not have notice of the other spouse’s property
or financial obligations.
All references to the Wisconsin Statutes are to the 2021-22 version unless otherwise
noted.
4
No. 2021AP1892
¶8 Here, the circuit court concluded that neither agreement satisfied the
Button requirements. First, the court determined that the motion hearing
testimony did not support a finding that the parties fairly and reasonably shared
their individual financial status with one another before executing the documents.
Although the court acknowledged that the parties had “some general knowledge of
each other’s income and assets,” it found that this knowledge was limited, adding
that “[t]here is no indication that the parties had actual knowledge of each other’s
financial status or … the net worth of each other’s income, assets and liabilities.”
¶9 With respect to the second requirement—i.e., that each spouse
entered into the agreement freely and voluntarily—the circuit court recognized
that when analyzing this requirement, some factors it should consider include
“whether each party was represented by independent counsel, whether each party
had adequate time to review the agreement, whether the parties understood the
terms of the agreement and their effect, and whether the parties understood their
financial rights in the absence of an agreement.” Button, 131 Wis. 2d at 95-96.
¶10 The circuit court recounted Kevin’s testimony that he signed the
documents without consulting an attorney, an accountant, or a financial planner
and that he did not fully understand the terms of the agreements. The court also
noted that Kevin testified he was reliant on Mary Ann for housing and support,
and he signed the prenuptial agreement because he was afraid Mary Ann would
not consent to marry him without his signature. With respect to the postnuptial
agreement, Kevin stated his belief that Mary Ann would not allow him to continue
to reside in the Marshfield home if he did not sign the agreement. Based on the
record, the court found that Kevin did not enter into either agreement voluntarily
or freely.
5
No. 2021AP1892
¶11 Turning to the third requirement—that the substantive provisions of
the property agreement are fair to each spouse—the circuit court found that neither
agreement was substantively fair. The court concluded that it was inequitable for
the agreement to require Kevin to pay half of all bills associated with the house
indefinitely, but then be entitled to no proceeds upon the sale of the property. The
court further noted that while the agreement allowed Kevin to live at the home
following the parties’ separation, it was “not realistic that the two parties would
want to continue to cohabitate following a divorce.” The court determined that the
postnuptial agreement expanded upon the inequities of the prenuptial agreement,
as it required Kevin to pay $750 per month toward the mortgage, which could be
deducted by Mary Ann as Kevin’s social security representative. The court
concluded that “the inherent imbalance of financial power given to [Mary Ann] as
[Kevin]’s representative payee … further renders the agreement inequitable.”
¶12 On appeal, Mary Ann takes issue with the circuit court’s
determinations on each of the three Button requirements. She claims that the
agreements adequately identified the parties’ assets and that she and Kevin
nevertheless knew about each other’s respective finances. Mary Ann further
claims that the parties entered the agreements voluntarily and that there was no
evidence that Kevin was forced to sign either agreement. Finally, Mary Ann
claims the agreements were equitable to both parties, given the significant asset
Mary Ann brought to the marriage and the relatively short duration of the
marriage. Despite her arguments, Mary Ann fails to show that any of the court’s
findings were clearly erroneous or that its application of the facts to the standard
set forth in Button constituted an erroneous exercise of discretion.
¶13 Mary Ann also argues that the circuit court erred by making her
responsible for all of the marital debt. The division of the marital estate upon
6
No. 2021AP1892
divorce is within the sound discretion of the circuit court. Schumacher v.
Schumacher, 131 Wis. 2d 332, 337, 388 N.W.2d 912 (1986). Property division
is governed by WIS. STAT. § 767.61, which establishes a presumption in favor of
equal division of marital property. A court may deviate from the presumption of
equal property division, but only after considering a lengthy and detailed list of
statutory factors. Jasper v. Jasper, 107 Wis. 2d 59, 68, 318 N.W.2d 792 (1982).
The statutory list contains twelve enumerated factors, plus a catch-all provision.
Although the court is directed to consider all of the factors before altering the
presumption of equal property division,3 there is nothing precluding the court from
3
WISCONSIN STAT. § 767.61(3) provides:
The court shall presume that all property not described in
sub. (2)(a) [gifts and inheritances] is to be divided equally
between the parties, but may alter this distribution without regard
to marital misconduct after considering all of the following:
(a) The length of the marriage.
(b) The property brought to the marriage by each party.
(c) Whether one of the parties has substantial assets not subject
to division by the court.
(d) The contribution of each party to the marriage, giving
appropriate economic value to each party’s contribution in
homemaking and child care services.
(e) The age and physical and emotional health of the parties.
(f) The contribution by one party to the education, training or
increased earning power of the other.
(g) The earning capacity of each party, including educational
background, training, employment skills, work experience,
length of absence from the job market, custodial responsibilities
for children and the time and expense necessary to acquire
sufficient education or training to enable the party to become
self-supporting at a standard of living reasonably comparable to
that enjoyed during the marriage.
(continued)
7
No. 2021AP1892
giving one statutory factor greater weight than another or from concluding that
some factors may not be applicable at all. LeMere v. LeMere, 2003 WI 67, ¶25,
262 Wis. 2d 426, 663 N.W.2d 789.
¶14 In making its decision, the circuit court considered the applicable
statutory factors. It took into account the short duration of the marriage and the
significant asset—namely, the house—that Mary Ann brought to the marriage.
The court also considered the parties’ ages and health, acknowledging that both
parties had limited income and lacked any significant future earning capacity. The
court also recognized that Kevin’s car accident resulted in significant medical debt
being incurred during the marriage. Although Kevin contributed to the mortgage
and general upkeep of the home, the court denied Kevin’s request for half of the
(h) The desirability of awarding the family home or the right to
live therein for a reasonable period to the party having physical
placement for the greater period of time.
(i) The amount and duration of an order under [§] 767.56
granting maintenance payments to either party, any order for
periodic family support payments under [§] 767.531 and whether
the property division is in lieu of such payments.
(j) Other economic circumstances of each party, including
pension benefits, vested or unvested, and future interests.
(k) The tax consequences to each party.
(L) Any written agreement made by the parties before or during
the marriage concerning any arrangement for property
distribution; such agreements shall be binding upon the court
except that no such agreement shall be binding where the terms
of the agreement are inequitable as to either party. The court
shall presume any such agreement to be equitable as to both
parties.
(m) Such other factors as the court may in each individual case
determine to be relevant.
8
No. 2021AP1892
proceeds from the sale of the home. The court noted: “For [Kevin] to leave this
marriage with significantly more than he had coming in and to leave [Mary Ann]
with incredibly less than what she had coming into a three-year marriage would be
a windfall [to Kevin].” The court awarded Mary Ann sole possession of the home,
but it made her responsible for the marital debt.
¶15 Given the short duration of the marriage and Kevin’s nominal
contributions to it financially, coupled with the significant nondischargeable
medical debt he incurred, Mary Ann claims the circuit court should have offset the
property division in her favor and held Kevin responsible for one-half of the
marital debt.
¶16 Ultimately, Mary Ann received property with a net value of
approximately $97,900, and Kevin received property with a net value of
approximately $1,900. While Mary Ann deems the decision unfair, that assertion
does not establish an erroneous exercise of the circuit court’s discretion.
By the Court.—Judgment affirmed.
This opinion will not be published. See WIS. STAT.
RULE 809.23(1)(b)5.
9