A Marital Settlement Agreement Signed Under Duress Will Result in a Rescission of the Contract

The Court of Appeal held that the husband’s conduct toward the wife in connection with the execution of the settlement agreement constituted duress sufficient for rescission of the contract; the Orange County divorce court did not abuse its discretion in awarding the wife attorney’s fees in connection with the rescission action even though the wife’s Orange County divorce attorney presented no evidence that she was in need of funds to pay her attorney; and that the Orange County divorce court did not abuse its discretion in making an award of attorney’s fees in connection with the services to be rendered at the future trial of the dissolution proceedings.

Thomas Gonzalez’s Orange County divorce attorney seeks review of a judgment and an order made during a dissolution proceeding initiated against him by Virginia Thorpe Gonzalez. The judgment set aside the Marital Settlement Agreement executed by the parties on August 25, 197, on the grounds that Virginia had signed it as a result of duress, mistake of fact, and mistake of law. The Orange County divorce court’s order directed that Thomas pays on account of services already rendered and services to be rendered in connection with a prospective trial of the property rights of the parties, $9,832,17 in attorney’s fees and accountant’s fees and costs on behalf of the Virginia.

Thomas’ Orange County divorce attorney argued that he did nothing that approximates duress as defined in Civil Code section 1569 because Virginia was not confined unlawfully or against her will, nor was her property unlawfully detained. However, Thomas’ Orange County divorce attorney’s interpretation of duress as defined by section 1569 is far too limited and does not take into consideration decisional law that has interpreted its language to apply to facts similar to this. Actual confinement of a person or his property, as argued by Thomas’ Orange County divorce attorney is not required. Menace is (1) a threat of unlawful confinement of the persons specified in the section, (2) a threat of unlawful and violent injury to the person or property of any such person. (1 Witkin, Summary of Cal.Law (8th ed. 1973) Contracts, §339, p.287.) Appellant’s acts fall within both a tort and a crime, and the decisional concept of duress. Furthermore, “the question in each case is, whether the person so acted upon by threats of the person claiming the benefit of the contract, for the purpose of obtaining such contract, as to be bereft of the quality of mind essential to the making of a contract, and was the contract thereby obtained? Hence, under this theory duress is to be tested, not by the nature of the threats, but rather by the state of mind induced thereby in the victim.” (17 Am.Jur., Duress and Undue Influence, pp. 882-885.) In Gross v. Needham, 184 Cal.App.2d, 446, the court states: “Duress, which includes whatever destroys one’s free agency and constrains him to do what is against his will, may be exercised by threats, importunity or any species of mental coercion.”

The power of a reviewing Court begins and ends with a determination of whether there is in the record substantial evidence, contradicted or uncontradicted, which supports the result reached; and this Court must assume in favor of the determination below the existence of every fact which the trier of fact could have reasonably deduced from the evidence. A summary of Virginia’s testimony reveals that Virginia “was extremely distraught and worried about the possibility of losing her children the next day, and [she] would have signed a pact with the Devil.” Virginia’s Orange County divorce attorney testified that “there was so much emotion and so many hassles… going on between Mr. and Mrs. Gonzalez all during this period of time.” The testimony of Virginia’s Orange County divorce attorney corroborated Virginia’s emotional stress and the fact that the Thomas had a very strong influence over her. However, Thomas’ Orange County divorce attorney argued that the evidence merely established that Virginia signed the agreement because she wanted to avoid the child custody hearing which Thomas and his Orange County divorce attorney’s, acting within their legal rights, had scheduled, and this is simply a classic example of a threat to institute suit on the basis of a good faith belief in one’s claim, which is not duress. Other findings support the conclusion that Virginia signed under duress and that her execution of the agreement was not just a trade-off of legal rights and obligations. Unquestionably, the Orange County divorce court could have reasonably interpreted Thomas’ threats as menacing statements that he would unlawfully take the children to Mexico so that she would never see them again unless she signed the Agreement. Here, Thomas’ Orange County divorce attorney’s argument cannot stand as a matter of law.

Moreover, Thomas’ Orange County divorce attorney argues that the award of attorney’s and accountant fees and costs was an abuse of discretion on the party of the trial court. First, the California Civil Code section 4370 provides that attorney’s fees and costs pendente lite should be awarded only in such amounts as may be reasonably necessary for the cost of maintaining or defending the proceeding. However, here there is ample evidence in the file to demonstrate Respondent’s need for attorney’s fees and other appropriate costs up to the time of the hearing and in the future. Second, Thomas’ Orange County divorce attorney argues that Virginia’s Orange County divorce attorney did not show that the services performed by him were reasonably necessary to the prosecution or maintenance of the dissolution action. Virginia’s Orange County divorce attorney testified that he recorded, in connection with this case, 152 hours exclusive of court time. Here, a reviewing Court is not authorized to revise the lower court’s judgment even if it should be of the opinion that it would have made a different award had the matter been submitted to its judgment in the first instance, in the absence of clear abuse of discretion. The discretion was that of the Orange County divorce court not ours; and this Court can only interfere if it finds that under all the evidence, viewed most favorably in support of the trial court’s action, no judge could reasonably have made the order that he did. Finally, Thomas’ Orange County divorce attorney argues that the fees should not have been awarded while the appeal as pending as there had been a previous award that should have covered the services rendered by Virginia’s Orange County divorce attorney up to the rescission action. However, it is within the court’s discretion to award fees for the rescission action as well as for other services connected with the myriad of problems raised by the dissolution proceeding. If the settlement agreement is declared valid, the Court will reverse jurisdiction to hereafter order Virginia to reimburse Thomas for all or part of said fees to represent services in connection with the rescission of the Agreement. Based on a review, this Court concluded that there was no abuse of discretion, and the trial court’s order on fees and costs is proper.

The judgment of the Orange County divorce court setting aside the Marital Settlement Agreement, and the order entered for fees and costs are affirmed.

In re Marriage of Gonzalez, 57 Cal.App.3d 736 (1976).