Monday, February 18, 2019

Sturm v. Moyer (Cal. Ct. App. - Feb. 15, 2019)

They say that law reviews are too theoretical these days, and don't actually help shape the actual development of the law.  I'm somewhat sympathetic to that view.

But this opinion talks at length about a particular law review article.  One published in the San Diego Law Review, no less.

So that's one exception.

Ultimately, the Court of Appeal decides to reject the arguments advanced by Professor Reppy in the relevant law review article.  But that doesn't mean the piece is irrelevant.  It still frames the debate and assists the court in deciding what to do.

The underlying merits are also worth discussing as well.  The Court of Appeal holds that a prenup can validly be attacked under the Uniform Voidable Transactions Act; e.g., as an agreement that defrauds creditors.  I'm a bit suspicious of that result.  And it also has immense practical significance.  If your potential spouse has a huge judgment against him/her, and you've got assets, of course you're going to do a prenup.  Otherwise the creditor's just going to grab your assets after the marriage. But after today's opinion, the creditor might still be able to take your stuff, on the theory that the prenup was a transaction that defrauded creditors.  That's a pretty darn huge deal.  And one that may well deter people from getting married to their suitor of choice.

Now, there's a reason, I think, the Court of Appeal came out the way it did here.  Because the prenup here was a particularly abusive one.  It said that the spousal assets would remain separate until the underlying judgment against the husband was no longer valid.  Then everything would be community property.  You can see why that sort of arrangement might lead the Court of Appeal to decide that some prenups might be voidable since they defraud creditors.

Still.  Bad cases make bad law.  I wonder if it wouldn't make more sense to just say, as a categorical matter, that prenups aren't subject to the statute.  If only because they made the creditor no worse off than it was before the marriage.  Before, it could only go after the husband.  Ditto for after.  No blood no foul.

But, now, that's no longer the law.  At least in California.  And at least as long as this opinion lasts.