Marital Agreements: Can You Really Contract Out of Family Court Jurisdiction?, 13 SCBJ, SC Lawyer, July 2013, #4

Author:Jonathan W. Lounsberry
 
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Marital Agreements: Can You Really Contract Out of Family Court Jurisdiction?

Vol. 25 No. 1 Pg. 20

South Carolina Bar Journal

July, 2013

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0 Jonathan W. Lounsberry

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0The determination of jurisdiction over a marital agreement can affect valuation and equitable division of property and assets. In the early 1980s, the S.C. Supreme Court (herein “Supreme Court”) held in Moseley v. Mosier that parties could contract out of family court jurisdiction when entering into marital agreements; however, parties cannot contract out of family court jurisdiction regarding any issues concerning children (e.g., child support, child custody, etc.).1 Within the past year, the S.C. Court of Appeals (herein “Court of Appeals”) revisited this issue in Hammer v. Hammer.2 Although Hammer dealt with a marital settlement agreement, the holding illustrates the family court's subject matter jurisdiction over marital agreements, including pre- or post-nuptial agreements.

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0Hammer v. Hammer

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0In June 2012, the Court of Appeals published its opinion in Hammer, in which Appellant argued the circuit court incorrectly dismissed his complaint for lack of subject matter jurisdiction since the parties’ "contract clearly demonstrated the parties' intent that the family court not have exclusive jurisdiction over the contract...and sections 20-3-690 and 63-3-530 of the South Carolina Code do not provide for exclusive family court jurisdiction ..."3 The Court of Appeals affirmed "the circuit court's dismissal of Appellant's complaint for lack of subject matter jurisdiction."4

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0In affirming the circuit court’s ruling, the Court of Appeals reiterated the holding in Moseley, stating: “… we find the May 2008 contract does not evidence intent by the parties that the family court not have jurisdiction over the contract … under Moseley, the family court has continuing subject matter jurisdiction over the claims raised in Appellant's amended complaint."5 Without an explicit, clear statement of the parties’ intent to remove jurisdiction from the family court, the family court under Moseley retains jurisdiction over the parties and their marital agreement.6 As stated above, the facts in Hammer indicate the parties intended for the family court to retain jurisdiction.

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0Additionally, Appellant argued the circuit court had the power to interpret and enforce the parties’ marital settlement agreement under S.C. Code Ann. §§ 15-53-20, 15-53-30 and 15-53-90.7 Nonetheless, the Court of Appeals held “[t]he May 2008 contract was part of the parties' divorce proceeding. Pursuant to section 20-3-690, the family court has exclusive jurisdiction over contracts relating to property in a divorce proceeding;" and, without jurisdiction over the marital agreement, the circuit court could not “declare the rights and status” of the parties under the marital agreement.8 Since the family court had the statutory authority to enforce and interpret the marital agreement under S.C. Code Ann. § 20-3-690, the correct court to “declare the rights and status” of the parties under the marital agreement was the family court. Falling in line with the holding of Moseley, Hammer demonstrates when the family court retains jurisdiction over the parties and their marital agreement.

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0Moseley v. Mosier

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0Before 1983, the family court’s subject matter jurisdiction over marital agreements depended on the interpretation of "words of art.” The Supreme Court's ruling in Moseley v. Mosier abandoned this tradition, holding:

"Today, we overrule those cases which hold that words of art make a major distinction in the operation of divorce law. Furthermore, jurisdiction for all domestic matters, whether by decree or by agreement, will vest in the family court. In all decrees entered after this decision, the parties may contract concerning their property settlement and alimony, but the submitted agreement must be approved by the family court. The parties may specifically agree that the amount of alimony may not ever be modified by the court; they may contract out of any continuing judicial supervision of their relationship by the court; they may agree that the periodic payments or alimony stated in the agreement shall be judicially awarded, enforceable by contempt, but not modifiable by the court; they may agree to any terms they wish as long as the court deems the contract to have been entered fairly, voluntarily and reasonably. With the court's approval, the terms become a part of the decree and are binding on the parties and the court."9

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0Moseley is the guidepost for interpretation and enforcement of marital agreements. As illustrated in Hammer, the family courts of this state return to Moseley when faced with issues surrounding marital agreements. In addition to Moseley, the family court is given statutory authority to review and enforce marital agreements.

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0The family court’s statutory authority over marital agreements

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0A year following the Moseley decision, the legislature enacted Article 5, Chapter 3, Title 20 of the South Carolina Code of Laws, which included §§ 20-3-690 and 20-3-630 (discussed below). Both S.C. Code Ann. §§ 20-3-690 and 63-3-530(B), coupled with Moseley and its progeny, grant the family court subject matter jurisdiction to interpret and enforce marital agreements (pre-nuptial, post-nuptial and settlement agreements).10 While the family court is granted this power, both through common and statutory law, does this power extend to the interpretations and enforcement of marital agreements dealing with non-marital property?

\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0\xA0The family court cannot apportion non-marital property. S.C. Code Ann. § 20-3-630, states, in pertinent part:

“The term "marital property" as used in this article means all real and personal property which has been acquired by the parties during the...

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