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Abigail Adams and John Adams met in college but did not develop a romantic relationship until the year after they graduated when both moved to San Francisco. They were married two years later in 1992. John Adams came from a wealthy family and his parents insisted that he encourage Abigail to sign an antenuptial agreement waiving the benefits of California’s community property law. John did not feel strongly about it but spoke to Abigail about their concerns. Neither John nor Abigail anticipated ever getting divorced; they were very much in love. They agreed to sign a contract to mollify his parents because it would make them happy and they did not anticipate ever having to resort to enforcing the contract. The agreement provided that each party would keep separate bank accounts and would own separately the property and income each earned during the marriage and that, on divorce, neither party would have any right in property acquired by the other during the marriage. The contract also contained the following clauses:
The parties agree that if either of them sues the other for divorce, suit shall be filed in California courts. The parties waive any objections they may have to such a lawsuit based on alleged lack of personal jurisdiction; each party voluntarily consents to have suit brought in California.
This agreement is governed by California law.
At the time they signed the contract, John was in medical school and Abigail was enrolled in classes to get a teacher’s certificate to teach in high school in California. A few months after their marriage, Abigail got her certification and was lucky to land a job in Santa Clara, California. The couple had two children. Then John was offered a job at the oncology department of a major New York hospital. The couple decided to move to the east coast. They purchased a house in Englewood, New Jersey, from which John could commute to work in New York City. Two years later, after a twelve year long marriage, the relationship started to sour. John moved out of the house and Abigail sued John for divorce based on irreconcilable differences in Family Court in New Jersey. John then moved back to California.
John moves in the New Jersey Family Court to have the complaint dismissed on the ground that the parties agreed to have such a lawsuit heard in California and that the choice-of-forum clause is enforceable in New Jersey. In the alternative, if the choice-of-forum clause is not enforced, John argues that the choice-of-law clause should be enforced and the court should apply California, rather than New Jersey, law to the question of how to distribute property owned by the parties on divorce.
The trial court held that the choice-of-forum clause is not enforceable because it is fundamentally unfair and would work a severe hardship on Abigail Adams. The court also found that the choice-of law clause for California law is enforceable and that under California law the antenuptial agreement is enforceable in accordance with its terms (except for the choice-of-forum clause). Under that agreement, the parties keep the property they earned during the marriage and their property will not be divided or shared with each other. Under California law, the agreement is presumed to be voluntary in the absence of clear evidence of fraud (active misrepresentation rather than failure to reveal relevant facts) or duress. New Jersey law, in contrast, reviews the agreement to determine whether it is fair to both parties (as defined by statute) and considers the agreement not to be sufficiently voluntary to enforce in the absence of evidence that the parties fully disclosed to each other, prior to signing the agreement, the full extent of their assets, something that concededly did not happen in this case. New Jersey law also requires the parties to have had aid of counsel before signing the agreement for it to be enforceable.
Under New Jersey's modified version of the Uniform Premarital Agreement Act, N.J. Stat. §§ 37:2-31 to 37:2-41, (passed after a lower court ruling on the question in DeLorean v. DeLorean, 511 A.2d 1257 (N.J. Super. Ct. 1986)), the parties are free to agree on the "choice of law governing construction of the agreement," N.J. Stat. §37:2-34(g), as well as "any other matter…not in violation of public policy," N.J. Stat. §37:2-34(h). However, premarital agreements are not enforceable if they are "unconscionable at the time enforcement [is] sought." N.J. Stat. §37:2-38. It also provides that agreements are not enforceable unless prior to executing the agreement, the parites provided each other "full and fair disclosure of the earnings, property and financial obligations of the other party," N.J. Stat. §37:2-38(c)(1) and "consult[ed] with independent legal counsel," N.J. Stat. §37:2-38(c)(4). The trial court holds that the choice-of-law clause is enforceable in New Jersey and that California law, rather than New Jersey law governs the validity and enforceability of the contract.
On appeal, Abigail Adams argued that the trial court correctly refused to enforce the choice-of-forum clause because it would create a severe financial hardship for her, on a high school teacher’s salary, to litigate in California while living in New Jersey. She further argued that New Jersey law should apply to the property division issue, noting that, under California law, John would be able to live in luxury with his current salary and his inheritance (which devolved from a trust to his full control several years after they got married), while Abigail would be entitled only to child support payments and no alimony or property distribution. If that is true, she would be forced to move from their spacious home to a small apartment in a different town, forcing her children to leave their school and their friends. She argues that the agreement is not enforceable under New Jersey law since she was neither provided full and fair disclosure of her husband's assets before signing; nor did she have advice of counsel. Absent a valid premarital agreement, New Jersey's equitable distribution statute would grant the wife in a long-term marriage of more than ten years (like her) roughly 50% of the property earned during the marriage. Thus, if the premarital agreement is not enforceable, then New Jersey law would give Abigail a substantial share of the property acquired by the couple during the marriage on the basis of numerous factors, including Abigail’s contribution to the family partnership and the lifestyle to which the family became accustomed during the marriage. If New Jersey law applies, she could afford to stay in the family home in Englewood with the two children.
John Adams argues in contrast that the trial court erred in not enforcing the choice-of-forum clause on the ground that it is not unreasonable for the case to be heard in California now that he has moved back there. He also argues that the trial court correctly upheld the choice-of-law clause. He notes that both states allow premarital agreements to waive the statutory property distributions on divorce and thus California law does not violate New Jersey public policy.
The Appellate Division ruled that the choice-of-forum clause is enforceable and dismissed the complaint.
Abigail appealed to the Supreme Court of New Jersey which accepts certification on the following two questions:
π = Abigail Adams
∆ = John Adams
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