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Stewart v. Stewart

Court of Special Appeals of Maryland

October 3, 2013


Krauser, C.J., Matricciani, Moylan, Charlie E., Jr. (Retired, Specially Assigned), JJ.


Krauser, C.J.

Before appellant, Barbara Ann Stewart, married appellee, James Edward Stewart, in 1988, she signed a prenuptial[1] agreement, prepared by Mr. Stewart's attorney. In that agreement, she waived any interest she had in certain enumerated items of property owned by Mr. Stewart. Twenty-one years later, Mr. Stewart filed a divorce action in the Circuit Court for Charles County, requesting, among other things, the enforcement of the prenuptial contract. In response, Ms. Stewart filed an answer questioning the validity of that agreement together with a counter complaint for divorce.

A hearing was ultimately held to address the question whether the parties' prenuptial agreement was valid and enforceable. When the Charles County circuit court held that it was both, the Stewarts entered into a property settlement and separation agreement that incorporated the terms of the prenuptial. But that did not resolve all of the matters in dispute between the parties as, in the parties' settlement agreement, Ms. Stewart had reserved the right to appeal the circuit court's validation of the prenuptial agreement.

After the circuit court granted Mr. Stewart a divorce, Ms. Stewart predictably noted this appeal, challenging the lower court's decision to uphold the parties' prenuptial agreement. That agreement, she alleges, was neither valid nor enforceable, because of Mr. Stewart's failure to fully and frankly disclose all of his property interests and assets and because he presented the agreement to her so close in time to their impending marriage that she had no opportunity to consult with counsel before signing it. She further contends that it was unconscionable, because it was "clearly one-sided" and because she signed it "without valuable consideration or understanding of what rights she was waiving."

We find no merit to any of Ms. Stewart's claims. The prenuptial agreement was valid and enforceable, and, furthermore, it was not, from either a procedural or substantive perspective, unconscionable.


Ms. Stewart was a single, twenty-six-year-old woman when, in 1986, she met and engaged in an affair with Mr. Stewart, a married, twenty-four-year-old father of three. At that time, she worked at a daycare center for minimum wage, while, in stark economic contrast, Mr. Stewart owned a successful construction business. What began as an affair ultimately developed into a relationship, and the parties began to live together.

Planning to marry, once Mr. Stewart obtained a divorce from his current wife, the parties selected a wedding date of October 22, 1988. Because, at that time, he had approximately $2 million in assets and his pending bride had practically none, Mr. Stewart informed the future "Mrs. Stewart, " that he would not marry her unless she agreed to sign a prenuptial agreement, waiving any and all interest in his assets. His attorney thereafter drafted such an agreement, and Mr. Stewart presented it to Ms. Stewart for her consideration and signature before the wedding.

As to the date on which that occurred, the parties do not agree. At the hearing below, Mr. Stewart claimed that he first gave Ms. Stewart a copy of the prenuptial agreement in "the last part of September 1988, " while Ms. Stewart maintained that she did not receive it until the day she signed it. But the parties do agree that Ms. Stewart did sign the prenuptial agreement four days before their wedding date and that Mr. Stewart signed it, either the same day or the next. At the time Ms. Stewart signed the agreement, she was not represented by counsel and would later claim that she had no opportunity to consult with counsel, as she was presented with the prenuptial just four days before the parties' wedding. But there is no indication in the record as to whether her impending wedding or any event or circumstance would have impeded an effort to consult with counsel.

The prenuptial agreement began with a preambular statement declaring: "WHEREAS, both parties have been afforded the opportunity to retain, advise, and consult with independent counsel of their own choice[.]" It then went on to avow that each party "hereby waives, releases, and relinquishes all right, title, estate, and interest" in any "property owned by [the other] at the time of the marriage . . . and in [the other's] estate upon . . . death."[2] The agreement thereafter listed the following items of property owned by Mr. Stewart or his company, Waldorf Concrete, Inc., that is: Waldorf Concrete itself; fifty acres of real property located near Maryland Route 231 and subject to a $190, 000 deed of trust; four condominium units in Waldorf Business Square; a lot in West Virginia; and "[s]tock ownership and interest" in Brandywine Building Supply, Inc.

The agreement omitted, however, any mention of Mr. Stewart's individual retirement account ("IRA"), which was then worth, according to him, "around $60, 000" or three percent of his $2 million worth of premarital assets. It also failed to mention any property owned by Ms. Stewart, though that omission was, to be sure, inconsequential, as, at the time Ms. Stewart signed the prenuptial agreement, the only property that she owned was a used Ford Maverick, which was worth, as she put it, "maybe" $500.

The agreement reserved for each party "the right to transfer or convey to the other any property or interest therein which may be lawfully conveyed or transferred during his or her lifetime or by Will" and further provided that "neither party intend[ed] by this Agreement to limit or restrict in any way the right and power . . . to receive any such transfer or conveyance from the other, " but added that "no representations or promises of any kind whatsoever have been made" by either party as to "any such transfer or conveyance."

Paragraph 5 of the agreement then declared that each party

covenants and represents to the other that he or she has disclosed to the other the nature and extent of his or her various property, interest and sources of income, as disclosed herein, fully and fairly reflect the said property, interests and sources of income of each party, respectively.

Paragraph 6 added that Ms. Stewart

declares that she fully understands the terms and provisions of the Agreement, that she has been fully informed of her legal rights and liabilities, that she believes that the provisions of this Agreement are fair, just and reasonable and that she signs this Agreement freely and voluntarily, acting under the advice of independent legal counsel.

A substantively identical provision, paragraph 7, applied to Mr. Stewart.

After the parties were married, Ms. Stewart left her daycare job and, less than seven months later, gave birth to the first of the parties' three children. To provide a residence for his new family, Mr. Stewart subdivided the fifty-acre parcel near Maryland Route 231 and built, on a nine-acre plot, a large house with a "big pool." He then titled the home in both his name and Ms. Stewart's, as tenants by the entireties. To pay off the mortgage on the parties' home, he later sold a number of the assets he had listed in the prenuptial agreement.

In addition to their marital home, the Stewarts acquired, during their marriage, two other properties, one near their home and the other in upstate New York. Both Stewarts were listed on the titles of the two properties, as tenants by the entireties. By the date of the hearing below, the Maryland property was worth a "minimum" of $800, 000, while the New York property was worth a "minimum" of $625, 000. Neither property was encumbered by a mortgage.

When he was in his mid-forties, Mr. Stewart "closed up" his company, Waldorf Concrete, Inc., and retired. But his marriage did not survive his retirement. Amid cross-accusations of adultery, Mr. Stewart filed a complaint for divorce in the Charles County circuit court, which, among other things, sought enforcement of the parties' prenuptial agreement. In response, Ms. Stewart filed an answer ...

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