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William J. Penrod v. Karen D. Penrod
Date: 01-25-2022
Case Number: ED109069
Judge: Sherri B. Sullivan
Court:
MISSOURI COURT OF APPEALS EASTERN DISTRICT
On appeal from The Circuit Court of Cape Girardeau County
Plaintiff's Attorney: Richard G. Steele and Bradley J. LaBruyere
Defendant's Attorney:
St. Louis, MO - Divorce Lawyer Directory
St. Louis, MO - Divorce Lawyer Directory
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Description:
St. Louis, MO - Divorce lawyer represented Appellant appealing judgement filing an ante-nuptial agree to be valid.
Viewed in the light most favorable to the judgment,1 the evidence at trial showed the
following;
Prior to their marriage, Husband and Wife had been living together for over a year.
Husband, then in his 60s, was considerably older than Wife, who was in her 40s. While living
together, Husband told Wife of his desire to enter into an antenuptial agreement before they
married. Likewise, Husband told Wife he intended to put his assets into a trust before he was
willing to marry her.
On May 21, 1997, Husband asked Wife to sign the Antenuptial Agreement his attorney
had drafted. Wife, unable to secure her usual attorney, met with attorney Thomas Ludwig
(Ludwig) at Ludwig's office. Wife and Ludwig reviewed a copy of the Antenuptial Agreement.
It is undisputed that Wife was not rushed while at Ludwig's office, was aware she was signing an
antenuptial agreement, and did not ask Ludwig any questions. Wife signed the agreement that
evening. On the same day, Husband placed the majority of his real estate holdings into the
William J. Penrod Revocable Living Trust.
The Antenuptial Agreement contained numerous relevant provisions. It stated neither
party was entitled to maintenance, support, or alimony from the other. The agreement also stated
it shall be conclusively presumed that Karen has no claim against any of the assets or
property indicated generally or specifically upon the 'Financial Statement' dated
2/6/97... nor any substitutions or exchanges of said assets or additions or accretions
thereto or the proceeds thereof in whatever form and including assets after the marriage
and held in Bill's name or in any Trust which he establishes or any other entity
subsequent thereto and whether any such assets are acquired before or after the marriage
and regardless of the source of funds used to purchase or acquire said assets.
Under the agreement, any real estate not put in their joint names was not marital property. The
agreement provided that "Karen acknowledges her awareness that Bill has transferred to a trust
the great majority of his real estate holdings of which Karen has only limited financial
benefits...†The Antenuptial Provision also included a formula, which given the length of their
marriage, grants Wife a one-time payment of $50,000 upon dissolution of their marriage.
3
Alongside the Antenuptial Agreement, Husband presented Wife with a document labeled
"Personal Financial Statement.†Within this document, Husband listed his net worth, real estate,
cash on hand, securities, and motor vehicles. The three-page document provided specific values
of each of Husband's assets, including his debt for each property. The document also stated,
"Karen acknowledges her general awareness and familiarity with Bill's holdings.†Wife signed
each page of the Personal Financial Statement.
Wife did not provide Husband with a financial statement listing her assets. However, the
Antenuptial Agreement stated, "Bill acknowledges his awareness of Karen's assets and waives
any financial disclosure, and the same shall remain Karen's regardless of the current value upon
a dissolution of her marriage to Bill or by his death to dispose of as she desires.â€
Wife and Husband were married at the courthouse in Bollinger County, Missouri on May
22, 1997. During their marriage, the parties acted in accordance with the Antenuptial Agreement
and kept almost all of their property separate. Wife also used her own funds to create three LLCs
and a revocable living trust during their marriage.
Husband and Wife separated on or about January 10, 2018. A bench trial regarding the
dissolution of their marriage, including the validity of the Antenuptial Agreement, was held on
April 22, 2019, and August 8, 2019. At trial, the court heard testimony from Husband and Wife,
and received numerous exhibits regarding the parties' real estate and the Antenuptial Agreement.
Husband testified Wife knew "long before [they] got married†that he sought to enter into
an Antenuptial Agreement. He also testified Wife was aware he was placing his assets into a
trust. Husband discussed in some detail the value of shared property he owned with Wife.
Husband stated Wife put her money into a separate account, bought her own property, and
4
generally operated independently during their marriage. Husband stated he had not prearranged
an attorney for Wife and she brought the Antenuptial Agreement to the lawyer she chose.
Wife's testimony complained of her lack of knowledge regarding the agreement and her
lack of adequate counsel. When requested, Wife refused to waive her attorney-client privilege
with Ludwig so he could testify as to the counsel he provided to her.
The trial court issued its Judgment Dissolving Marriage on February 24, 2020. In the
judgment, the court found Husband made a full disclosure of his assets to Wife on May 21, 1997.
The court expressed skepticism of Wife's claim that she had not read the Antenuptial Agreement
until 2018. The court found Wife's testimony to hold little credibility and questioned how she
remembered specific details that were favorable to her, but had no idea as to the document's
terms. Accordingly, the court found the Antenuptial Agreement to be enforceable. The court also
held the property in Husband's trust to be separate, nonmarital property. Finally, the court evenly
divided any marital property not subject to the Antenuptial Agreement.
This appeal follows.
Points Relied On
Wife raises two related points on appeal. Point I claims the trial court erred in finding the
Antenuptial Agreement to be valid because the agreement was both procedurally and
substantively unconscionable. Wife contends the agreement was procedurally unconscionable
because there was not full disclosure by both parties, Wife had insufficient time to review the
agreement, and Wife was unable to secure effective counsel. Wife contends the agreement was
substantively unconscionable because she was granted a one-time payment of $50,000 in lieu of
the rights she would otherwise be afforded upon dissolution of their marriage. Similarly, Point II
5
claims the trial court erred in its division of their marital assets because it relied upon an
unconscionable Antenuptial Agreement.
Standard of Review
The standard of review in dissolution cases is governed by Murphy v. Carron, 536
S.W.2d 30 (Mo. banc 1976). See Short v. Short, 356 S.W.3d 235, 240 (Mo. App. E.D. 2011).
"[T]he decree or judgment of the trial court will be sustained by the appellate court unless there
is no substantial evidence to support it, unless it is against the weight of the evidence, unless it
erroneously declares the law, or unless it erroneously applies the law.†Murphy, 536 S.W.2d at
32.
The party challenging the trial court's judgment in a dissolution of marriage bears the
burden of demonstrating error. Fike v. Fike, 509 S.W.3d 787, 793 (Mo. App. E.D. 2016). We
view the evidence and inferences in the light most favorable to the judgment and disregard
contrary evidence and inferences. Id. We presume the trial court considered all evidence and
"believed such testimony and evidence that is consistent with its judgment.†Potts v. Potts, 303
S.W.3d 177, 184 (Mo. App. W.D. 2010) (internal quotation marks and citations omitted). We
defer to the trial court's ability to judge witness credibility, recognizing the trial court is free to
believe or disbelieve all, part, or none of the testimony of any witness. Short, 356 S.W.3d at 240.
"We exercise the power to set aside a decree or judgment on the ground that it is against the
weight of the evidence with caution and a firm belief that the decree or judgment is wrong.†Id.
Point I
In her first point on appeal, Wife claims the trial court erred in holding the Antenuptial
Agreement to be valid. Specifically, Wife contends the Antenuptial Agreement was both
procedurally and substantively unconscionable.
6
"It is well-settled law that [an antenuptial] agreement contemplating the dissolution of a
parties' marriage is not against public policy and can be valid.†Id. To be valid and enforceable,
the parties entering into an antenuptial agreement must do so freely, fairly, knowingly,
understandingly, and in good faith with full disclosure. Id. In determining whether the agreement
was entered into fairly, courts conduct a subjective evaluation of the circumstances surrounding
the agreement's execution. Id. "Factors which courts have considered relevant include the
parties' access to independent counsel; the amount of time available to revise the agreement; the
bargaining positions of each spouse in terms of age, sophistication, education, employment, and
experience; and whether their assets were fully disclosed.†Id.
Antenuptial agreements will be upheld unless they are found to be unconscionable. In re
Marriage of Thomas, 199 S.W.3d 847, 852 (Mo. App. S.D. 2006). Conscionability uses the same
standard as in commercial law, meaning protection against one-sidedness, oppression or unfair
surprise. Ferry v. Ferry, 586 S.W.2d 782, 786 (Mo. App. W.D. 1979). "A separation agreement
is unconscionable when the inequality [is] so strong, gross, and manifest that it must be
impossible to state it to one with common sense without producing an exclamation at the
inequality of it.†McMullin v. McMullin, 926 S.W.2d 108, 110 (Mo. App. E.D. 1996) (internal
quotation marks and citations omitted). Furthermore, conscionability includes two different
aspects: procedural and substantive. Procedural unconscionability involves "the contract
formation process, and focuses on high pressure exerted on the parties, fine print of the contract,
misrepresentation, or unequal bargaining position.†Funding Sys. Leasing Corp. v. King Louie
Int'l, Inc., 597 S.W.2d 624, 634 (Mo. App. W.D. 1979). Meanwhile, substantive
unconscionability involves undue harshness in the contract's terms. Id.
7
Procedural Unconscionability
Wife contends the agreement was procedurally unconscionable because there was not full
disclosure, she had limited time to review the agreement before their wedding, and she was not
adequately informed of the Antenuptial Agreement's significance by her counsel. We disagree
and address each contention in turn.
Full Disclosure
Wife maintains there was a lack of disclosure in two separate manners. First, Wife argues
Husband failed to disclose he was moving a substantial portion of his assets into a trust. Second,
Wife argues she never disclosed any of her assets, in violation of the requirement for full
disclosure.
Full disclosure "requires both parties to reveal the nature and extent of each other's
property so that each spouse may make a meaningful decision to waive all or part of those
rights.†McMullin, 926 S.W.2d at 111. However, "[f]ull disclosure does not mean absolute, strict
disclosure†and "does not require the one party know the extent of the other party's property
down to the very penny.†Darr v. Darr, 950 S.W.2d 867, 870 (Mo. App. E.D. 1997). There can
be no question that Husband fully disclosed all of his assets and their values at the time of the
Antenuptial Agreement's execution. Likewise, Wife had lived with Husband for some time
before entering into the Antenuptial Agreement and the trial court could have inferred she was
generally aware of his assets. Nonetheless, Wife argues Husband failed to disclose that he was
placing his assets into a trust.
Wife's contention is undermined by Husband's testimony, which we accept as true under
our standard of review. Significantly, Husband testified Wife "knew all about†his trust prior to
their entering into the agreement. The Antenuptial Agreement states Wife "acknowledges her
8
awareness that [Husband] has transferred to a trust the great majority of his real estate holdings.â€
Furthermore, although Husband had moved his assets to a trust, Husband still fully disclosed all
of his assets to Wife in the Personal Financial Statement so she could make an informed
decision.
Wife also argues she never disclosed any of her assets to Husband before entering into
the agreement. While Wife is correct in her contention that courts have stated "both parties†must
fully disclose their assets, McMullin, 926 S.W.2d at 111, we will not expand our interpretation of
"both parties†to allow the complaining party to argue they have not fully disclosed their assets.
First, we hold Wife's assets were properly disclosed. As stated in the Antenuptial
Agreement, Husband waived his right to full disclosure and stated he was aware of Wife's assets.
Again, because Husband and Wife had been living together for over a year prior to their
marriage, the trial court could have inferred Husband knew of Wife's assets. Second, we believe
Wife's argument could lead to perverse results, potentially providing a party incentive to
purposefully withhold disclosing some or all of their assets so they could later invalidate an
antenuptial agreement. Of course, such an outcome is not what the courts had in mind when
stating both parties must fully disclose their assets. "Courts require full disclosure so as to ensure
one party has the ability to make an informed decision about the other party's financial state
prior to signing away any rights he or she may have in that property.†In re Marriage of Thomas,
199 S.W.3d at 859. Wife has cited no cases to support her argument and our research reveals no
results. Accordingly, we will state what has likely been left unsaid: each party must fully
disclose their assets to the other party, but only the party harmed by the other party's failure to
fully disclose their assets can complain of inadequate disclosure. A party may not complain of its
own failure to fully disclose its own assets.
9
Sufficient Time for Review
Wife contends that because she first received the Antenuptial Agreement the day before
the wedding, she was not given enough time to properly review and consider the agreement.
Moreover, Wife argues she was unfairly pressured into signing the agreement to avoid facing the
humiliation and inconvenience of postponing their wedding.
The amount of time a party is given to review an antenuptial agreement goes to the
agreement's procedural conscionability. Potts, 303 S.W.3d at 189. Wife cites Potts, where,
among other reasons, the Western District found one day's notice did not provide the wife with
sufficient time to review an agreement. Id. Notably, in Potts, the trial court held the antenuptial
agreement to be unconscionable. Relying on evidence favorable to the trial court's judgment,
such as testimony that the wife had not seen the revised agreement until 7:00 p.m. on the night of
their wedding rehearsal, the court stated "there was some evidence which could support the
conclusion that the agreement was procedurally unconscionable.†Id. at 188. Accordingly, the
Western District affirmed the agreement's unconscionability.
In comparison, Husband cites Short, 356 S.W.3d 235, where this Court held an
agreement presented the day before the wedding was conscionable. In Short, the husband was
first presented with the antenuptial agreement the day before their wedding. Id. at 241. However,
the husband and wife had discussed the agreement four days earlier. Relying on this previous
discussion, alongside the parties' relatively equal bargaining positions in terms of age,
sophistication, education, employment, and experience, we held the trial court's determination
that the agreement was conscionable was supported by evidence within the record. Id.
Like in Short, viewing the evidence in the light most favorable to the trial court's
judgment, Husband and Wife had already thoroughly discussed the Antenuptial Agreement well
10
before their wedding. Husband testified to this, stating he previously explained the Antenuptial
Agreement to Wife in detail and "she [knew] everything about the document.†Accordingly, we
disregard Wife's testimony that she hadn't known of the agreement until the day before the
wedding. The record supports the fact that Wife was offered additional time to review the
document if needed, and the wedding itself could have been easily rescheduled at the courthouse.
Consequently, in light of our standard of review and Husband's testimony, we find the amount of
time Wife had to review the agreement was not procedurally unconscionable.
Assistance of Counsel
Wife also argues she did not have adequate assistance of counsel before signing the
Antenuptial Agreement. Wife claims Ludwig was not truly independent, never billed her, did not
explain the significance of the agreement's terms, and only spent ten to fifteen minutes with her.
In sum, Wife claims she did not have adequate, independent counsel and therefore this Court
must hold the Antenuptial Agreement to be procedurally unconscionable. We disagree.
First, substantial evidence was presented showing Wife received adequate, independent
counsel. Husband testified neither he nor his attorney prearranged Wife's appointment with
Ludwig. The Antenuptial Agreement also states Wife had the benefit of Ludwig's counsel in
deciding whether to enter into the agreement. Further, Wife testified Ludwig did not rush her out
of his office and she had no additional questions for him.
Likewise, the trial court was not required to adopt Wife's facts as the basis for its
decision and was free to disbelieve some or all of Wife's testimony. See J.A.D. v. F.J.D., 978
S.W.2d 336, 340 (Mo. banc 1998); In Re Marriage of Lewis, 808 S.W.2d 919, 921 (Mo. App.
S.D. 1991). The court's skepticism of Wife's testimony became apparent when the court
questioned why Wife had such a clear memory regarding details beneficial to her, such as not
11
being consulted on specific terms in the agreement, while she also claimed she had little to no
recollection of the agreement's existence and meaning.
Wife claimed her meeting with Ludwig was short and uninformative. She also claimed
she never received a bill from Ludwig. However, Wife declined to waive her attorney-client
privilege to allow Ludwig to testify. Accordingly, the trial court could have inferred Ludwig's
testimony would not support Wife's testimony.
In light of our standard of review and the record before us, we find: (1) Husband
provided full disclosure of his assets; (2) Wife was given sufficient notice of the agreement; and
(3) Wife had adequate, independent counsel. We hold the Antenuptial Agreement was not
procedurally unconscionable.
Substantive Unconscionability
Wife also claims the agreement was substantively unconscionable because she was
granted a one-time payment of $50,000 in lieu of other rights she might be entitled to upon
dissolution of their marriage. We disagree.
Antenuptial agreements have been found to be unconscionable when "the agreement
attempts to totally take from one of the spouses his or her presumed right to marital property.â€
Miles v. Werle, 977 S.W.2d 297, 303 (Mo. App. W.D. 1998). However, "[w]here a spouse
retains at least a share of marital property in the antenuptial agreement, the agreement is likely
enforceable.†King v. King, 66 S.W.3d 28, 36 (Mo. App. W.D. 2001). For example, in Miles, the
antenuptial agreement was found to be substantively conscionable when the agreement preserved
each party's rights to the accrual of marital property and "basically provided only that what each
spouse brought into the marriage as separate property would remain their own separate
property.†977 S.W.2d at 303. In contrast, in McMullin we held an antenuptial agreement to be
12
substantively unconscionable when it attempted to have the wife waive all her interests in marital
property. 926 S.W.2d at 111.
Like in Miles, the Antenuptial Agreement did not prevent Wife from obtaining marital
assets. Instead, the agreement called for the even distribution of marital property. Similar to the
Western District's holding in King, because of the even distribution of marital property, we find
the Antenuptial Agreement to be substantively conscionable although it provides the separate
property of Husband and Wife remain separate, resulting in a disparity between the property set
aside to each spouse. King, 66 S.W.3d at 36. Moreover, both parties were aware of the terms of
the Antenuptial Agreement and kept almost all of their property separate during their marriage,
including Wife who created her own trust and three separate LLCs pursuant to the agreement.
Point I is denied.
Point II
In her second point on appeal, Wife claims the trial court erred in dividing marital assets
based upon the Antenuptial Agreement. Wife contends their marital assets should have been
divided pursuant to section 452.330 RSMo.
To the extent Wife is arguing the property covered in the Antenuptial Agreement is
marital and should not have been divided according to the agreement, we disagree. Section
452.330.2(4) states marital property does not include property excluded by valid written
agreement of the parties. As stated above, we have found the Antenuptial Agreement to be
conscionable and valid. Valid antenuptial agreements "dispose of issues of property division.†In
re Marriage of Thomas, 199 S.W.3d at 852.
Insofar as Wife is challenging the division of the few assets the trial court found to be
marital, her claim has no merit. The trial court followed section 452.330 in its division of their
13
marital property. Moreover, Wife has failed to explain what marital property was divided
erroneously.
Point II is denied.
Outcome:
The judgment of the trial court is affirmed
Plaintiff's Experts:
Defendant's Experts:
Comments:
About This Case
What was the outcome of William J. Penrod v. Karen D. Penrod?
The outcome was: The judgment of the trial court is affirmed
Which court heard William J. Penrod v. Karen D. Penrod?
This case was heard in <center><h5><b>MISSOURI COURT OF APPEALS EASTERN DISTRICT </b>
<br></h5>
<font color="green"><i><h4>On appeal from The Circuit Court of Cape Girardeau County </i></font></center></h4>, MO. The presiding judge was Sherri B. Sullivan.
Who were the attorneys in William J. Penrod v. Karen D. Penrod?
Plaintiff's attorney: Richard G. Steele and Bradley J. LaBruyere. Defendant's attorney: St. Louis, MO - Divorce Lawyer Directory
Tell MoreLaw About Your Litigation Successes and MoreLaw Will Tell the World.
Re: MoreLaw National Jury Verdict and Settlement
Counselor:
MoreLaw collects and publishes civil and criminal litigation information from the state and federal courts nationwide. Publication is free and access to the information is free to the public.
MoreLaw will publish litigation reports submitted by you free of charge
Info@MoreLaw.com - 855-853-4800.
When was William J. Penrod v. Karen D. Penrod decided?
This case was decided on January 25, 2022.
St. Louis, MO - Divorce lawyer represented Appellant appealing judgement filing an ante-nuptial agree to be valid.
Viewed in the light most favorable to the judgment,1 the evidence at trial showed the
following;
Prior to their marriage, Husband and Wife had been living together for over a year.
Husband, then in his 60s, was considerably older than Wife, who was in her 40s. While living
together, Husband told Wife of his desire to enter into an antenuptial agreement before they
married. Likewise, Husband told Wife he intended to put his assets into a trust before he was
willing to marry her.
On May 21, 1997, Husband asked Wife to sign the Antenuptial Agreement his attorney
had drafted. Wife, unable to secure her usual attorney, met with attorney Thomas Ludwig
(Ludwig) at Ludwig's office. Wife and Ludwig reviewed a copy of the Antenuptial Agreement.
It is undisputed that Wife was not rushed while at Ludwig's office, was aware she was signing an
antenuptial agreement, and did not ask Ludwig any questions. Wife signed the agreement that
evening. On the same day, Husband placed the majority of his real estate holdings into the
William J. Penrod Revocable Living Trust.
The Antenuptial Agreement contained numerous relevant provisions. It stated neither
party was entitled to maintenance, support, or alimony from the other. The agreement also stated
it shall be conclusively presumed that Karen has no claim against any of the assets or
property indicated generally or specifically upon the 'Financial Statement' dated
2/6/97... nor any substitutions or exchanges of said assets or additions or accretions
thereto or the proceeds thereof in whatever form and including assets after the marriage
and held in Bill's name or in any Trust which he establishes or any other entity
subsequent thereto and whether any such assets are acquired before or after the marriage
and regardless of the source of funds used to purchase or acquire said assets.
Under the agreement, any real estate not put in their joint names was not marital property. The
agreement provided that "Karen acknowledges her awareness that Bill has transferred to a trust
the great majority of his real estate holdings of which Karen has only limited financial
benefits...†The Antenuptial Provision also included a formula, which given the length of their
marriage, grants Wife a one-time payment of $50,000 upon dissolution of their marriage.
3
Alongside the Antenuptial Agreement, Husband presented Wife with a document labeled
"Personal Financial Statement.†Within this document, Husband listed his net worth, real estate,
cash on hand, securities, and motor vehicles. The three-page document provided specific values
of each of Husband's assets, including his debt for each property. The document also stated,
"Karen acknowledges her general awareness and familiarity with Bill's holdings.†Wife signed
each page of the Personal Financial Statement.
Wife did not provide Husband with a financial statement listing her assets. However, the
Antenuptial Agreement stated, "Bill acknowledges his awareness of Karen's assets and waives
any financial disclosure, and the same shall remain Karen's regardless of the current value upon
a dissolution of her marriage to Bill or by his death to dispose of as she desires.â€
Wife and Husband were married at the courthouse in Bollinger County, Missouri on May
22, 1997. During their marriage, the parties acted in accordance with the Antenuptial Agreement
and kept almost all of their property separate. Wife also used her own funds to create three LLCs
and a revocable living trust during their marriage.
Husband and Wife separated on or about January 10, 2018. A bench trial regarding the
dissolution of their marriage, including the validity of the Antenuptial Agreement, was held on
April 22, 2019, and August 8, 2019. At trial, the court heard testimony from Husband and Wife,
and received numerous exhibits regarding the parties' real estate and the Antenuptial Agreement.
Husband testified Wife knew "long before [they] got married†that he sought to enter into
an Antenuptial Agreement. He also testified Wife was aware he was placing his assets into a
trust. Husband discussed in some detail the value of shared property he owned with Wife.
Husband stated Wife put her money into a separate account, bought her own property, and
4
generally operated independently during their marriage. Husband stated he had not prearranged
an attorney for Wife and she brought the Antenuptial Agreement to the lawyer she chose.
Wife's testimony complained of her lack of knowledge regarding the agreement and her
lack of adequate counsel. When requested, Wife refused to waive her attorney-client privilege
with Ludwig so he could testify as to the counsel he provided to her.
The trial court issued its Judgment Dissolving Marriage on February 24, 2020. In the
judgment, the court found Husband made a full disclosure of his assets to Wife on May 21, 1997.
The court expressed skepticism of Wife's claim that she had not read the Antenuptial Agreement
until 2018. The court found Wife's testimony to hold little credibility and questioned how she
remembered specific details that were favorable to her, but had no idea as to the document's
terms. Accordingly, the court found the Antenuptial Agreement to be enforceable. The court also
held the property in Husband's trust to be separate, nonmarital property. Finally, the court evenly
divided any marital property not subject to the Antenuptial Agreement.
This appeal follows.
Points Relied On
Wife raises two related points on appeal. Point I claims the trial court erred in finding the
Antenuptial Agreement to be valid because the agreement was both procedurally and
substantively unconscionable. Wife contends the agreement was procedurally unconscionable
because there was not full disclosure by both parties, Wife had insufficient time to review the
agreement, and Wife was unable to secure effective counsel. Wife contends the agreement was
substantively unconscionable because she was granted a one-time payment of $50,000 in lieu of
the rights she would otherwise be afforded upon dissolution of their marriage. Similarly, Point II
5
claims the trial court erred in its division of their marital assets because it relied upon an
unconscionable Antenuptial Agreement.
Standard of Review
The standard of review in dissolution cases is governed by Murphy v. Carron, 536
S.W.2d 30 (Mo. banc 1976). See Short v. Short, 356 S.W.3d 235, 240 (Mo. App. E.D. 2011).
"[T]he decree or judgment of the trial court will be sustained by the appellate court unless there
is no substantial evidence to support it, unless it is against the weight of the evidence, unless it
erroneously declares the law, or unless it erroneously applies the law.†Murphy, 536 S.W.2d at
32.
The party challenging the trial court's judgment in a dissolution of marriage bears the
burden of demonstrating error. Fike v. Fike, 509 S.W.3d 787, 793 (Mo. App. E.D. 2016). We
view the evidence and inferences in the light most favorable to the judgment and disregard
contrary evidence and inferences. Id. We presume the trial court considered all evidence and
"believed such testimony and evidence that is consistent with its judgment.†Potts v. Potts, 303
S.W.3d 177, 184 (Mo. App. W.D. 2010) (internal quotation marks and citations omitted). We
defer to the trial court's ability to judge witness credibility, recognizing the trial court is free to
believe or disbelieve all, part, or none of the testimony of any witness. Short, 356 S.W.3d at 240.
"We exercise the power to set aside a decree or judgment on the ground that it is against the
weight of the evidence with caution and a firm belief that the decree or judgment is wrong.†Id.
Point I
In her first point on appeal, Wife claims the trial court erred in holding the Antenuptial
Agreement to be valid. Specifically, Wife contends the Antenuptial Agreement was both
procedurally and substantively unconscionable.
6
"It is well-settled law that [an antenuptial] agreement contemplating the dissolution of a
parties' marriage is not against public policy and can be valid.†Id. To be valid and enforceable,
the parties entering into an antenuptial agreement must do so freely, fairly, knowingly,
understandingly, and in good faith with full disclosure. Id. In determining whether the agreement
was entered into fairly, courts conduct a subjective evaluation of the circumstances surrounding
the agreement's execution. Id. "Factors which courts have considered relevant include the
parties' access to independent counsel; the amount of time available to revise the agreement; the
bargaining positions of each spouse in terms of age, sophistication, education, employment, and
experience; and whether their assets were fully disclosed.†Id.
Antenuptial agreements will be upheld unless they are found to be unconscionable. In re
Marriage of Thomas, 199 S.W.3d 847, 852 (Mo. App. S.D. 2006). Conscionability uses the same
standard as in commercial law, meaning protection against one-sidedness, oppression or unfair
surprise. Ferry v. Ferry, 586 S.W.2d 782, 786 (Mo. App. W.D. 1979). "A separation agreement
is unconscionable when the inequality [is] so strong, gross, and manifest that it must be
impossible to state it to one with common sense without producing an exclamation at the
inequality of it.†McMullin v. McMullin, 926 S.W.2d 108, 110 (Mo. App. E.D. 1996) (internal
quotation marks and citations omitted). Furthermore, conscionability includes two different
aspects: procedural and substantive. Procedural unconscionability involves "the contract
formation process, and focuses on high pressure exerted on the parties, fine print of the contract,
misrepresentation, or unequal bargaining position.†Funding Sys. Leasing Corp. v. King Louie
Int'l, Inc., 597 S.W.2d 624, 634 (Mo. App. W.D. 1979). Meanwhile, substantive
unconscionability involves undue harshness in the contract's terms. Id.
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Procedural Unconscionability
Wife contends the agreement was procedurally unconscionable because there was not full
disclosure, she had limited time to review the agreement before their wedding, and she was not
adequately informed of the Antenuptial Agreement's significance by her counsel. We disagree
and address each contention in turn.
Full Disclosure
Wife maintains there was a lack of disclosure in two separate manners. First, Wife argues
Husband failed to disclose he was moving a substantial portion of his assets into a trust. Second,
Wife argues she never disclosed any of her assets, in violation of the requirement for full
disclosure.
Full disclosure "requires both parties to reveal the nature and extent of each other's
property so that each spouse may make a meaningful decision to waive all or part of those
rights.†McMullin, 926 S.W.2d at 111. However, "[f]ull disclosure does not mean absolute, strict
disclosure†and "does not require the one party know the extent of the other party's property
down to the very penny.†Darr v. Darr, 950 S.W.2d 867, 870 (Mo. App. E.D. 1997). There can
be no question that Husband fully disclosed all of his assets and their values at the time of the
Antenuptial Agreement's execution. Likewise, Wife had lived with Husband for some time
before entering into the Antenuptial Agreement and the trial court could have inferred she was
generally aware of his assets. Nonetheless, Wife argues Husband failed to disclose that he was
placing his assets into a trust.
Wife's contention is undermined by Husband's testimony, which we accept as true under
our standard of review. Significantly, Husband testified Wife "knew all about†his trust prior to
their entering into the agreement. The Antenuptial Agreement states Wife "acknowledges her
8
awareness that [Husband] has transferred to a trust the great majority of his real estate holdings.â€
Furthermore, although Husband had moved his assets to a trust, Husband still fully disclosed all
of his assets to Wife in the Personal Financial Statement so she could make an informed
decision.
Wife also argues she never disclosed any of her assets to Husband before entering into
the agreement. While Wife is correct in her contention that courts have stated "both parties†must
fully disclose their assets, McMullin, 926 S.W.2d at 111, we will not expand our interpretation of
"both parties†to allow the complaining party to argue they have not fully disclosed their assets.
First, we hold Wife's assets were properly disclosed. As stated in the Antenuptial
Agreement, Husband waived his right to full disclosure and stated he was aware of Wife's assets.
Again, because Husband and Wife had been living together for over a year prior to their
marriage, the trial court could have inferred Husband knew of Wife's assets. Second, we believe
Wife's argument could lead to perverse results, potentially providing a party incentive to
purposefully withhold disclosing some or all of their assets so they could later invalidate an
antenuptial agreement. Of course, such an outcome is not what the courts had in mind when
stating both parties must fully disclose their assets. "Courts require full disclosure so as to ensure
one party has the ability to make an informed decision about the other party's financial state
prior to signing away any rights he or she may have in that property.†In re Marriage of Thomas,
199 S.W.3d at 859. Wife has cited no cases to support her argument and our research reveals no
results. Accordingly, we will state what has likely been left unsaid: each party must fully
disclose their assets to the other party, but only the party harmed by the other party's failure to
fully disclose their assets can complain of inadequate disclosure. A party may not complain of its
own failure to fully disclose its own assets.
9
Sufficient Time for Review
Wife contends that because she first received the Antenuptial Agreement the day before
the wedding, she was not given enough time to properly review and consider the agreement.
Moreover, Wife argues she was unfairly pressured into signing the agreement to avoid facing the
humiliation and inconvenience of postponing their wedding.
The amount of time a party is given to review an antenuptial agreement goes to the
agreement's procedural conscionability. Potts, 303 S.W.3d at 189. Wife cites Potts, where,
among other reasons, the Western District found one day's notice did not provide the wife with
sufficient time to review an agreement. Id. Notably, in Potts, the trial court held the antenuptial
agreement to be unconscionable. Relying on evidence favorable to the trial court's judgment,
such as testimony that the wife had not seen the revised agreement until 7:00 p.m. on the night of
their wedding rehearsal, the court stated "there was some evidence which could support the
conclusion that the agreement was procedurally unconscionable.†Id. at 188. Accordingly, the
Western District affirmed the agreement's unconscionability.
In comparison, Husband cites Short, 356 S.W.3d 235, where this Court held an
agreement presented the day before the wedding was conscionable. In Short, the husband was
first presented with the antenuptial agreement the day before their wedding. Id. at 241. However,
the husband and wife had discussed the agreement four days earlier. Relying on this previous
discussion, alongside the parties' relatively equal bargaining positions in terms of age,
sophistication, education, employment, and experience, we held the trial court's determination
that the agreement was conscionable was supported by evidence within the record. Id.
Like in Short, viewing the evidence in the light most favorable to the trial court's
judgment, Husband and Wife had already thoroughly discussed the Antenuptial Agreement well
10
before their wedding. Husband testified to this, stating he previously explained the Antenuptial
Agreement to Wife in detail and "she [knew] everything about the document.†Accordingly, we
disregard Wife's testimony that she hadn't known of the agreement until the day before the
wedding. The record supports the fact that Wife was offered additional time to review the
document if needed, and the wedding itself could have been easily rescheduled at the courthouse.
Consequently, in light of our standard of review and Husband's testimony, we find the amount of
time Wife had to review the agreement was not procedurally unconscionable.
Assistance of Counsel
Wife also argues she did not have adequate assistance of counsel before signing the
Antenuptial Agreement. Wife claims Ludwig was not truly independent, never billed her, did not
explain the significance of the agreement's terms, and only spent ten to fifteen minutes with her.
In sum, Wife claims she did not have adequate, independent counsel and therefore this Court
must hold the Antenuptial Agreement to be procedurally unconscionable. We disagree.
First, substantial evidence was presented showing Wife received adequate, independent
counsel. Husband testified neither he nor his attorney prearranged Wife's appointment with
Ludwig. The Antenuptial Agreement also states Wife had the benefit of Ludwig's counsel in
deciding whether to enter into the agreement. Further, Wife testified Ludwig did not rush her out
of his office and she had no additional questions for him.
Likewise, the trial court was not required to adopt Wife's facts as the basis for its
decision and was free to disbelieve some or all of Wife's testimony. See J.A.D. v. F.J.D., 978
S.W.2d 336, 340 (Mo. banc 1998); In Re Marriage of Lewis, 808 S.W.2d 919, 921 (Mo. App.
S.D. 1991). The court's skepticism of Wife's testimony became apparent when the court
questioned why Wife had such a clear memory regarding details beneficial to her, such as not
11
being consulted on specific terms in the agreement, while she also claimed she had little to no
recollection of the agreement's existence and meaning.
Wife claimed her meeting with Ludwig was short and uninformative. She also claimed
she never received a bill from Ludwig. However, Wife declined to waive her attorney-client
privilege to allow Ludwig to testify. Accordingly, the trial court could have inferred Ludwig's
testimony would not support Wife's testimony.
In light of our standard of review and the record before us, we find: (1) Husband
provided full disclosure of his assets; (2) Wife was given sufficient notice of the agreement; and
(3) Wife had adequate, independent counsel. We hold the Antenuptial Agreement was not
procedurally unconscionable.
Substantive Unconscionability
Wife also claims the agreement was substantively unconscionable because she was
granted a one-time payment of $50,000 in lieu of other rights she might be entitled to upon
dissolution of their marriage. We disagree.
Antenuptial agreements have been found to be unconscionable when "the agreement
attempts to totally take from one of the spouses his or her presumed right to marital property.â€
Miles v. Werle, 977 S.W.2d 297, 303 (Mo. App. W.D. 1998). However, "[w]here a spouse
retains at least a share of marital property in the antenuptial agreement, the agreement is likely
enforceable.†King v. King, 66 S.W.3d 28, 36 (Mo. App. W.D. 2001). For example, in Miles, the
antenuptial agreement was found to be substantively conscionable when the agreement preserved
each party's rights to the accrual of marital property and "basically provided only that what each
spouse brought into the marriage as separate property would remain their own separate
property.†977 S.W.2d at 303. In contrast, in McMullin we held an antenuptial agreement to be
12
substantively unconscionable when it attempted to have the wife waive all her interests in marital
property. 926 S.W.2d at 111.
Like in Miles, the Antenuptial Agreement did not prevent Wife from obtaining marital
assets. Instead, the agreement called for the even distribution of marital property. Similar to the
Western District's holding in King, because of the even distribution of marital property, we find
the Antenuptial Agreement to be substantively conscionable although it provides the separate
property of Husband and Wife remain separate, resulting in a disparity between the property set
aside to each spouse. King, 66 S.W.3d at 36. Moreover, both parties were aware of the terms of
the Antenuptial Agreement and kept almost all of their property separate during their marriage,
including Wife who created her own trust and three separate LLCs pursuant to the agreement.
Point I is denied.
Point II
In her second point on appeal, Wife claims the trial court erred in dividing marital assets
based upon the Antenuptial Agreement. Wife contends their marital assets should have been
divided pursuant to section 452.330 RSMo.
To the extent Wife is arguing the property covered in the Antenuptial Agreement is
marital and should not have been divided according to the agreement, we disagree. Section
452.330.2(4) states marital property does not include property excluded by valid written
agreement of the parties. As stated above, we have found the Antenuptial Agreement to be
conscionable and valid. Valid antenuptial agreements "dispose of issues of property division.†In
re Marriage of Thomas, 199 S.W.3d at 852.
Insofar as Wife is challenging the division of the few assets the trial court found to be
marital, her claim has no merit. The trial court followed section 452.330 in its division of their
13
marital property. Moreover, Wife has failed to explain what marital property was divided
erroneously.
Point II is denied.
The judgment of the trial court is affirmed
About This Case
What was the outcome of William J. Penrod v. Karen D. Penrod?
The outcome was: The judgment of the trial court is affirmed
Which court heard William J. Penrod v. Karen D. Penrod?
This case was heard in <center><h5><b>MISSOURI COURT OF APPEALS EASTERN DISTRICT </b> <br></h5> <font color="green"><i><h4>On appeal from The Circuit Court of Cape Girardeau County </i></font></center></h4>, MO. The presiding judge was Sherri B. Sullivan.
Who were the attorneys in William J. Penrod v. Karen D. Penrod?
Plaintiff's attorney: Richard G. Steele and Bradley J. LaBruyere. Defendant's attorney: St. Louis, MO - Divorce Lawyer Directory Tell MoreLaw About Your Litigation Successes and MoreLaw Will Tell the World. Re: MoreLaw National Jury Verdict and Settlement Counselor: MoreLaw collects and publishes civil and criminal litigation information from the state and federal courts nationwide. Publication is free and access to the information is free to the public. MoreLaw will publish litigation reports submitted by you free of charge Info@MoreLaw.com - 855-853-4800.
When was William J. Penrod v. Karen D. Penrod decided?
This case was decided on January 25, 2022.