Email Agreements are valid in an Arizona divorce because of Ertl v. Ertl

Ertl v. Ertl, 252 Ariz. 308 (App. 2021)

Who should be aware of the Ertl case law?

Anyone who discusses family law agreements via email or anyone who is wondering if an agreement reached via email, is considered valid in a family law case.

Key findings from the Ertl ruling:

• Under Rule 69 of the Arizona Rules of Family Law Procedure, an agreement made in writing and signed by the parties is a binding agreement.
• An electronic signature counts as a signature wherever any statute or rule requires a signature.
• When parties incorporate a prenup into a final separation agreement, the prenup’s distribution is deemed fair under R.S. § 25-317(B) unless the premarital agreement is unenforceable under A.R.S. § 25-202(C).

Legal Background: Binding Agreements

From statehood through 2005, family law proceedings in Arizona fell under the Civil Rules of Procedure. In the early 2000s, the Arizona Supreme Court believed it was necessary to create separate rules of procedure for the family court. In 2005, the Arizona Supreme Court approved the Arizona Rules of Family Law Procedure. These Rules first went into effect on January 1, 2006.

From its inception, one of the most important rules has been Rule 69, which governs what counts as a binding agreement. The rule was originally based on Rule 80 of the civil rules and originally only required that agreements be in writing.

In 2019, the Supreme Court appointed a committee of family law attorneys and judges to conduct a review of the Family Law Rules and recommend changes. As a result of that study, the Supreme Court made some significant changes. To Rule 69, the Supreme Court added the requirement that the Agreement also be signed. As it was explained by some of the committee members, the signature requirement was to avoid some of the confusion that came by the parties making agreements via email. If true, though, the committee did not write that into the rule nor include a comment explaining that rule. Whether the committee was aware of A.R.S. § 44-7007 is hard to say. But if the committee’s purpose was to prevent agreements by email, A.R.S. § 44-7007, as applied here by the Court of Appeals, frustrates that purpose.

Legal Background: Prenuptial Agreements and Separation Agreement

A prenuptial agreement is an agreement made between two future spouses in contemplation of marriage. A separation agreement is an agreement made between two current spouses upon their separation. Although they sound like they may be subject to the same legal standards, the legal standards are starkly different.

For a prenuptial agreement to be valid, the parties must not only agree and reduce their agreement to writing and sign the agreement, but they must follow the correct procedure in reaching the Agreement. Specifically, they must make a full disclosure of the finances to the other party, and each party must either retain an attorney or have a chance to hire one. Additionally, the agreement must not be unconscionable.

In contrast for a separation agreement to be valid, it should be in writing and signed, but the Court must only determine that it is fair.

Simply put: the standards for a separation agreement are much easier to meet than those for a prenuptial agreement.

Ertl v Ertl Factual Background

This case reminds us of something that frequently happens in legal cases – the parties reach an agreement, and the next day, one of the parties has buyer’s remorse, and tries desperately to get out of it. In their desperation, accusations fly and these can become very contentious situations.

We do not know that’s what happened here in Ertl v. Ertl—it’s unclear whether Wife approved the Agreement before her attorney signed off on it or found out after the fact what her attorney agreed to. But whatever the case may be, she tried her darnedest to undo the Agreement.

But let’s go back to the beginning: Husband, a dermatologist, met Wife while she worked as a nurse in his practice. They married and signed a prenup. The prenup stated neither party would receive spousal support, both parties’ earnings would be considered separate, and the community could not acquire an interest, equitable or otherwise, on any separately owned property.

The couple married in 2005. Wife left the workforce for 5-6 years to raise the couple’s twin daughters. Husband filed for divorce in 2020. Parties agreed Wife would be primary residential parent of the children (meaning they’d live with her primarily). Husband submitted the agreement to the Court.

Parties’ attorneys exchanged emails regarding the outstanding issues. They reached agreements and vacated Wife’s deposition. The attorneys confirmed their agreement via email.

Wife’s attorney then withdrew. Wife denied there was an agreement. Wife contested just about everything, even prior agreements, unsuccessfully.

She appealed.

The Questions in Ertl v. Ertl

1. Does an email signature satisfy the signature requirement in a Rule 69 Agreement?
2. When a Separation Agreement incorporates the property division set forth in a Prenuptial Agreement, and a party later challenges the Agreement, what standard does the Court apply?

THE COURT OF APPEAL RULING

An electronic signature, including an email signature, counts as a signature under Rule 69 and for any other law or rule requiring a signature. Under A.R.S. § 44-7007(A), a signature in electronic form cannot be denied legal effect and enforceability simply because it’s in electronic form. See alsoR.S. § 44-7007(D) (providing that an electronic signature fulfills any law requiring a signature). The Court also found it complied with ARFLP Rule 68(c)(6)’s requirements for agreements signed by counsel.

The Court further found it met the basic requirements of a contract: An enforceable agreement requires “an offer, acceptance, consideration, a sufficiently specific statement of the parties’ obligations, and mutual assent.” On this point, Wife argued essentially that her attorney’s email signature only evidences her attorney’s agreement, not Wife’s agreement. The Court of Appeals responded that attorneys’ signatures are binding under Rule 69. Wife had the burden to show that a Rule 69-compliant agreement was defective, and she presented no evidence to the trial court that it was defective.

“When the parties incorporate a premarital agreement into a final separation agreement, distribution according to the premarital agreement is deemed fair under A.R.S. § 25–317(B) unless the premarital agreement is unenforceable under A.R.S. § 25–202(C).” The Court of Appeals felt Wife was seeking to impose the lesser standard of a separation agreement to the prenuptial agreement. To do so would disrupt the statutory standards and allow a backdoor for people to get to a lesser standard for prenuptial agreements. The parties presented the separation agreement to the Court; thus, there was no factual dispute before the Court requiring a hearing.

OTHER NOTES ABOUT ERTL

  The Court of Appeals’ opinion also notes the legal standards for two other issues:

• When a Separation Agreement includes a custody provision. The Court reviews the agreement regarding custody for reasonableness.
• When a contract includes a unilateral mistake. To escape a contractual obligation because of a unilateral mistake of fact, a party must have made a mistake of fact about a material and basic assumption of an agreement, and the other party knew of the mistake of fact and unfairly exploited the other party’s error.

RELATED CASES

Murray v. Murray, 239 Ariz. 174 (App. 2016). Emailed communications between the parties may be used as evidence to show a Rule 69 Agreement.

Buckholtz v. Buckholtz, 246 Ariz. 126 (App. 2019). When considering whether a separation agreement is fair, the court must look at what the parties had at the time the agreement was entered. Additionally, the Court may consider each party’s sole and separate property in determining whether the agreement is fair. … When looking to determine whether both parties mutually assented (i.e., both parties agreed to the terms of the agreement), the Court must look at objective evidence, not the subjective intent of the parties.

Bailey v. Bailey, 412 P.2d 480 (App. 1966). This case notes that the parties’ agreements regarding custody, while not binding on the courts, a Court will “seldom” differs from the agreement because Courts recognize the value in bringing an end to litigation.