The prenuptial agreement between a wealthy real estate magnate and his wife is no good, the Brooklyn Appellate Court ruled recently, tearing up the contract and allowing the couple’s divorce to proceed as if it had never been signed.
Peter and Elizabeth Petrakis were married in 1998, in presumably happier times. However, there were already signs of trouble brewing when Elizabeth signed a prenup just four days before they tied the knot.
According to her, Peter threatened that if she didn’t sign he would call off the whole wedding, on which her father had already spent $40,000. On a positive note, he promised to void the agreement once the couple had kids together, according to Elizabeth. It never happened, even after their third child was born.
Peter denied both the threat and the promise, but a panel of judges found his wife’s story to be more credible and tossed the prenup, finding “fraud in the inducement” and his “credibility to be suspect.”
Elizabeth is now free to pursue whatever portion of her husband’s estimated $20 million fortune she would normally be entitled to under New York law.
The Sky is Falling
Steven J. Eisman
In the days following the decision, Elizabeth Petrakis’ attorney said that requests have come flooding in from others seeking to have their own prenuptial agreements thrown out. Pundits, attorneys and spouses stuck in suffocating marriages alike are wondering, is this the end of the prenup as an effective legal contract?
New York family law attorney Marilyn Chinitz told the New York Post the ruling was “not a good decision for those who enter into prenuptial agreements because they expect for agreements to be honored by both the courts and the parties” and suggested it would open a “floodgate of litigation.”
However, the decision isn’t as momentous as it first appears, argues Steven J. Eisman, executive partner and director of the matrimonial law department at New York-area law firm Abrams, Fensterman. “It’s hardly a death knell for prenuptial agreements,” Eisman says. “This case is limited to its facts.”
In other words, the decision did nothing to change the status of prenups as a binding contract. Any Tom, Dick or Jane could stand before the court and argue that their agreement should be invalidated, but would have to convince the judge in each case that there were some kind of extenuating circumstances.
“A prenuptial agreement is a contract. That’s all it is,” says Eisman. “There’s a presumption of validity of any agreement. If you want to claim fraud or duress, the burden is on party claiming that.”
Accusations of Coercion
Alleged threats and promises as they relate to contracts are difficult or impossible to prove if they were made orally, leaving it up to the judge to assess the credibility of each party. “It becomes a swearing contest, and the judge chose to believe the wife,” Eisman says. “The judge could have believed the husband. Then there’s no case.”
Regardless of the legal precedent, the Petrakis family set a fine example for how not to enter into an effective prenup. To unexpectedly sign a contract just days before the wedding is foolish on the bride’s part, and, as we’ve learned, reckless on the groom’s because it left him open to accusations of coercion.
Before anything is signed, Eisman recommends, make sure both parties are represented by a competent attorney, have received full disclosure of the other’s assets, and have plenty of time to think it over. “It’s hard for somebody to say there was undue pressure,” the attorney says, “when you had three months before the wedding.”
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