The Vermont Supreme Court has ruled that the Superior Court’s Family Division was wrong to dismiss claims brought by a husband related to alleged breaches of a premarital agreement, stating the lower court *does* have the necessary jurisdiction to hear these matters within the context of a divorce proceeding.
The ruling stems from a dispute between Christopher Gade (husband) and Erin Gade (wife) following their separation and subsequent divorce filing. The core issue was whether the Family Division could adjudicate the husband’s allegations that the wife had breached several provisions of their premarital contract, including claims about property damage and unpaid household expenses.
The Family Division had previously declined to consider the husband’s claims, concluding it was a court of limited jurisdiction with authority only to divide the marital estate, not to award “damages” for contract breaches. It suggested the husband would need to pursue those claims in the separate civil division. The Supreme Court disagreed, reversing the decision and sending the case back for further proceedings.
The Contract and the Dispute
Before marrying in 2018, Christopher and Erin Gade entered into a comprehensive premarital agreement. This contract categorized most assets, including anticipated inheritances, as separate property for each party. The primary exception was the marital home, which Christopher owned before the marriage.
Under the agreement, if they divorced, Erin was entitled to 50% of the *increase* in the home’s appraised value, to be paid by Christopher over time. The contract also laid out rules for contributing to household expenses based on income, specified tax responsibilities for separate property income, and included a clause holding any breaching party responsible for the other party’s reasonable legal fees incurred while enforcing the agreement.
After separating in 2021, the divorce proceeded, leading to extensive legal wrangling over the contract’s terms.
When the husband sought to enforce the agreement, he also raised counterclaims. He alleged that the wife had severely damaged the marital home *after* its appraisal, thereby complicating the equity division. He also claimed she failed to meet her obligations regarding household expenses.
The Family Court’s Narrow View of Jurisdiction
The Family Division ultimately sided with the wife on the jurisdictional issue. It granted the wife’s motion to enforce the agreement concerning the home equity payments but refused to consider the husband’s claims regarding property damage or unpaid expenses.
The court reasoned that its mandate was limited to allocating the marital estate. Because the husband’s claims appeared to seek “damages” for breach of contract—specifically relating to property damage—the court felt it lacked the statutory authority to address them, pushing him toward the civil division. The court did, however, award the wife attorney’s fees based on the contract’s fee-shifting provision, noting the husband had failed to make required payments.
Supreme Court: Jurisdiction is Plenary in Divorce
The Vermont Supreme Court, in an opinion written by Justice Eaton, firmly rejected the Family Division’s limited view of its own power in divorce cases involving premarital agreements.
The Court cited Vermont statutes, noting that the Family Division has exclusive jurisdiction over all divorce proceedings (4 V.S.A. § 33(a)(4)), and that *all* property owned by either party is subject to the court’s jurisdiction in those proceedings (15 V.S.A. § 751(a)).
The Court emphasized that premarital agreements, which govern property disposition in divorce, fall squarely within this jurisdiction.
“Contrary to wife’s suggestion otherwise,” the opinion states, “parties cannot ‘untether[] their separate property from the divorce action’ or ‘narrow[] the Family Division’s jurisdiction’ by delineating certain property as ‘separate property’ in an agreement.”
While the Court acknowledged that the Family Division is a court of limited jurisdiction, it clarified that within its scope—divorce and related property matters—that jurisdiction is “plenary.” If an agreement is integral to the divorce proceedings, as this premarital agreement clearly was (since both parties asked the court to enforce their interpretations of it), the Family Division has the authority to interpret and enforce all its provisions, including claims of breach.
The Supreme Court found the Family Division’s refusal to hear the husband’s claims inconsistent, especially since the court *did* enforce the attorney’s fee provision of the same contract.
The Court distinguished the case from prior precedent (*Allen v. Allen*), where a dispute involved a freestanding loan agreement made during the marriage, not an agreement made in anticipation of divorce concerning property division. Since the Gades’ agreement was made in contemplation of divorce and dictates property distribution, the jurisdictional rules covering premarital agreements apply.
Remand for Fact-Finding
The Supreme Court made clear that it was not deciding whether the husband’s allegations of damage or unpaid expenses were true or merit the requested relief. Instead, the issue was purely jurisdictional.
The case was reversed and remanded back to the Family Division with instructions to address the husband’s claims. The lower court must now determine if the wife materially breached the premarital contract, and if so, fashion an appropriate remedy using standard contract principles.
This decision clarifies that when a divorce involves an enforceable premarital agreement, the Family Division must handle all related claims arising from that contract, rather than splitting jurisdiction between family and civil courts based on whether the claim sounds like contract damages or property division.