Prenup Interpretation is Controlled by Context
January 20, 2014 | Court Decisions, Legal Perspective, Prenuptial Agreements
A non-precedential decision of the Superior Court, Morabito v. Morabito, No. 878 WDA 2013 (January 17, 2014) might provide a little window into the minds of our judiciary when interpreting prenuptial agreements. The marriage in this case lasted nearly twenty years before the wife filed a complaint in divorce. Wife initially challenged the validity of the prenup, but soon conceded that it was valid and enforceable.
What Husband and Wife did not agree upon was an interpretation of the prenup’s provisions for dividing “joint property.” In paragraph 3, the agreement provided that: “Any and all property acquired by either of the parties from and after the date of this Agreement shall be considered to be Joint Property.” In paragraph 7, the prenup provided: “Any property acquired by the parties and titled to them jointly, either as tenants by the entireties, joint tenants or tenants in common, shall be divided equally between the parties.”
The trial court ordered the parties to file inventories of all property, however titled, that was acquired after the date of the Agreement. Husband objected, arguing that only property acquired after the agreement and titled in joint names by written instrument was distributable under the prenup. The trial court adopted Wife’s broader interpretation and certified the question for an interlocutory appeal.
The Superior Court affirmed, holding that husband’s interpretation would create a category of property not addressed by the prenup: property that was acquired during the marriage without a written title instrument. (I can hear Professor Cyril Fox saying: “The law abhors a forfeiture as nature abhors a vacuum.”) Notably, the prenup provided that the increase in value of separate property would be divided equally by the parties. In the minds of the Superior Court, this context signaled the intent of the parties to divide property acquired during the marriage equally, whether or not a written instrument of joint title existed. Why would the parties agree to divide the increase in value acquired during the marriage, and jointly titled property, but not property acquired during the marriage that lacked a written title instrument? The Superior Court rejected Husband’s narrow interpretation of the word “title” in paragraph 7, finding that “title” is defined as a bundle of rights, of which a written instrument is merely evidence. In other words, property may be titled jointly even if no written instrument exists.