Facts: Husband and Wife entered into a prenuptial agreement prior to their marriage that provided that if the parties were married between four and five years, Wife would be entitled to alimony in the amount of $80,000.00. However, the agreement provided that Wife would not be entitled to alimony “if Wife has a sexual affair or commits adultery during the marriage.”
The parties were married in July 2004 and separated in April 2008. Husband filed for divorce in May 2008.
During the pendency of the divorce, the parties agreed to forego responding to discovery requests. Accordingly, throughout the pendency of the divorce, Mother was never required to respond to any queries regarding whether she had engaged in an affair during the marriage. As such, Mother never made any assertions directly to Husband, his attorney, or the trial court specifically as to whether she had engaged in an affair.
The parties entered into a Marital Dissolution Agreement (“MDA”) in February 2009. The MDA provided that the parties acknowledged the terms of the prenuptial agreement and “agree to be bound by the terms and provisions thereof.” The MDA further stated that Wife was to be paid $80,000.00 in alimony “[i]n accordance with” the terms of the prenuptial agreement. The Final Decree of Divorce that incorporated the MDA was entered in February 2009.
Approximately six and a half months after the divorce decree was entered, Wife gave birth to a child. This alerted Husband to the fact that Wife must have had a sexual affair while they were still married.
Husband filed for relief pursuant to Rule 60.02 of the Tennessee Rules of Civil Procedure, asking the court to vacate the provision of the MDA requiring him to pay $80,000 to Wife, and to order Wife to return the $80,000 sum to Husband. He argued that Wife fraudulently entered into the MDA by fraudulently concealing her affair and pregnancy from him, and therefore, relief was appropriate pursuant to Rule 60.02(2).
Wife then admitted that she had a sexual affair in December 2008. She further admitted that she did not inform Husband about the affair and that he did not have knowledge of the affair. Nonetheless, Wife argued that Husband was attempting to enforce a provision of the prenuptial agreement that was no longer enforceable because the prenuptial agreement had merged into the MDA, and the MDA had merged into the order of the court.
The trial court denied Husband’s request for Rule 60 relief, finding that “[t]hese parties entered into a marital dissolution agreement which was approved by the Court and which was presumably drafted and reached with the assistance of counsel, both parties having been represented at the time. Any matters in controversy were merged into that agreement and were approved by the Court. That order is final.”
On Appeal: In a 2-1 decision, the Court of Appeals reversed the trial court.
Rule 60 of the Tennessee Rules of Civil Procedure specifically provides that otherwise final judgments tainted by fraud, misrepresentation, or other misconduct may be set aside within one year after their entry. Rule 60.02(2) permits the Court to relieve a party from a final judgment if fraud was committed in the earlier proceedings, regardless of whether the fraud is denominated extrinsic or intrinsic. Post-judgment relief pursuant to Rule 60.02(2) is warranted when the moving party proves with clear and convincing evidence the existence of conduct amounting to “an intentional contrivance by a party to keep [the] complainant and the Court in ignorance of the real facts touching the matters in litigation, whereby a wrong conclusion was reached, and positive wrong done to the complainant’s rights.” Some examples of grounds for granting post-judgment relief pursuant to Rule 60.02(2) include the withholding of evidence, or the knowing use of perjured testimony. When a timely Rule 60.02(2) motion is filed and substantiated, courts should not hesitate to set the tainted judgment aside.
After reviewing the record, a majority of the Court concluded:
We find that Husband is entitled to relief pursuant to Rule 60.02(2) under the circumstances of this case. Husband submitted clear and convincing, and in fact, undisputed proof that Wife had a sexual affair while she was married to Husband. As a result, it is clear that Wife was not contractually entitled to the $80,000 alimony payment according to the prenuptial agreement. Two months after Wife had the affair, she and Husband executed the MDA which contained a provision entitled, “PAYMENT PURSUANT TO PRENUPTIAL AGREEMENT.” It stated, “The parties acknowledge that they entered into prior to their marriage a Prenuptial Agreement dated July 23, 2004, and each agree to be bound by the terms and provisions thereof.” The MDA specifically stated that the $80,000 alimony payment to Wife was being made “pursuant to” and “[i]n accordance with” the prenuptial agreement. By executing the MDA containing these terms, we find that Wife affirmatively represented, to Husband and to the court, that she was contractually entitled to the $80,000 payment pursuant to the prenuptial agreement, when in fact she was not. Wife’s conduct amounts to “an intentional contrivance . . . to keep [Husband] and the Court in ignorance of the real facts touching the matters in litigation, whereby a wrong conclusion was reached, and positive wrong done to [Husband’s] rights.”
Accordingly, the trial court was reversed and the provision in the Final Decree of Divorce requiring Husband to pay $80,000 to Wife was vacated.
Dissent: Judge Stafford wrote a rather vigorous dissent finding that Wife made no affirmative misrepresentation and had no duty to disclose unless Husband sought the information, writing: “There is nothing in the record, however, to suggest that Wife’s failure to inform Husband of her affair prevented him from fully litigating this case. Indeed, [Husband] was well within his rights to propound discovery to Wife asking whether Wife had engaged in an extramarital affair, and to insist that the discovery be answered. Husband failed to take this action.”
K.O.’s Comment: I think the majority’s argument is persuasive. The parties executed a prenuptial agreement and then “expressly agreed to be bound by its terms” within the provisions of the MDA. In so doing, Husband justifiably relied on Wife’s affirmative representation that she was entitled to the $80,000 pursuant to the prenuptial agreement, which necessarily includes the representation that she had not engaged in a sexual affair when, in fact, she had. This case serves as a lesson for Tennessee divorce lawyers. If your client’s payment of $80,000 is conditional, the better course of action is to obtain a sworn statement from the other party showing that the condition has been satisfied. Doing so in this case would likely have prevented Husband’s lawyer from many sleepless nights.
Information provided by K.O. Herston: Knoxville, Tennessee Divorce, Matrimonial and Family Law Attorney.
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