Love And Baseball And Premarital Agreements
These may be three things that do not go together. But a dispute between the owners of the Los Angeles Dodgers, and the property agreement they signed during their divorce proceedings, sheds considerable light on these issues.
Before the Uniform Premarital and Marital Agreements Act, there were essentially no uniform laws on this subject. The rules about making and breaking premarital agreements varied widely among different jurisdictions in North Carolina, and interstate enforcement was even more unpredictable. But the UPMAA standardized the rules. So now, anyone who has been married before probably needs a premarital agreement.
In a nutshell, these pacts can cover almost any financial, property, and inheritance matters that do not concern child support or child custody. North Carolina law contains a very strong presumption in favor of these and other agreements. They are difficult, but not impossible, to break, as this story shows.
A Brief Background
After winning the World Series in 1988, the Dodgers fell on hard times for over twenty years. Years of underachieving teams deflated fan interest and drove down revenues. As a result, the team filed bankruptcy in June 2011. Supposedly, owners Frank and Jamie McCourt would run out of money to cover payroll expenses before the season ended at the end of September.
While the team was in bankruptcy court, the McCourts were in divorce court. Since the team was almost literally worthless at the time, Jamie gave up her ownership half for about $200 million in cash and property.
Over the next couple of years, the team’s on-the-field performance improved dramatically, and so did its financial picture. Frank then sold the team for a then-record $2.2 billion.
Challenging the Property Agreement
Jamie tried to convince a judge to overturn the property agreement under both of the grounds which the UPMAA recognizes:
- Involuntary: Jamie argued that Frank withheld financial documents regarding the team’s potential value, so she did not know what she was signing.
- Unconscionable: The property agreement she signed left her about $900 million short of a 50-50 split. By almost any definition, she argued, such a grossly uneven division of the sale proceeds shocked the consciousness.
However, she lost on both points. As for involuntariness, the judge pointed out that Jamie was a co-owner at the time. As such, she had access to all the documents she wanted. Moreover, the agreement was not unconscionable when it was made. At the time, it was actually a very good deal for Jamie and a bad one for Frank. North Carolina and California are both UPMAA states, so the result would have been roughly the same in either jurisdiction.
Jamie lost the case, but since it is Hollywood, there was still a rather happy ending. President Donald Trump tapped her as ambassador to France in 2017.
Count on Experienced Lawyers
Most couples should have premarital agreements just like most people should have life insurance policies. For a free consultation with an experienced family law attorney in High Point, contact McAllister, Aldridge & Kreinbrink PLLC. Convenient payment plans are available.