Enforcement of a prenuptial agreement (PNA); Reed v Reed; Division of property; Balancing the equities; MCL 552.23(1); MCL 552.401; Spousal support

The court concluded that the trial court erred as a matter of law by disregarding the parties’ PNA when dividing their property, even after determining it was a valid and enforceable agreement. Also, revisiting the division of the property may affect the trial court’s determination as to the amount and length of any spousal-support. Thus, it vacated both the property and spousal-support awards and remanded for further proceedings. Defendant-husband argued “the trial court failed to enforce the plain, unambiguous language of the PNA when dividing the parties’ property, and the spousal-support award impoverished him.” Plaintiff-wife claimed “in the trial court that the PNA should be voided, citing some of the grounds in Reed[.]” Defendant asserted “the trial court erred as a matter of law because following its decision that the PNA was not void under Reed, [it] disregarded the PNA when dividing the parties’ property and debts.” The court agreed with him in this regard. “After deciding the PNA was a valid and enforceable contract, the trial court needed to enforce its terms—dividing property into marital and separate property based on their definitions in the PNA, before resorting to equitable considerations. It did not do so, instead resorting to equitable considerations right away and dividing property into marital and separate property based on its own judgment.” The court held that this was an abuse of discretion. It found that “the trial court’s failure to enforce the PNA as written impacted the trial court’s overall decision concerning equitable division of the parties’ property.” And while the court acknowledged “the parties agreed in the PNA that neither would ever seek spousal support, defendant’s[] challenge to the very fact the trial court awarded plaintiff[] spousal support” was misplaced. Case law makes it “clear that the trial court’s equitable authority to ensure neither party is impoverished by a property settlement overrides the parties’ ability to contract around spousal support.” The court noted that once “the trial court has devised a property settlement following the procedure outlined” by the court, “it may, on remand, determine whether a spousal-support award is equitable and award one accordingly.”