Some cases just don’t go away…

In family law, cases can come back, again and again. Child support and child custody cases can come back repeatedly as the children get older and the situation changes for all involved. What some people don’t realize is that prenuptial agreement cases can come back – and when they do, it is usually a bad situation for the attorney involved.

In a prenuptial agreement, the parties are agreeing how they want to change their respective rights in the event of the end of the relationship due to death and/or divorce. Under Pennsylvania law, in most situations, so long as their has been a full and fair disclosure of assets and debts, a court is not going to second guess the agreement of the parties. So, how do these cases come back to haunt counsel?
It is not uncommon that, once the marriage ends by death or divorce, one of the parties challenges the validity of the prenuptial agreement. This case result in two (2) additional law suits – the suit involving the parties regarding the validity of the prenuptial agreement and the law suit by the losing party against his or her attorney in a legal malpractice case.

It was recently reported at law.com that the now-defunct Philadelphia law firm of Wolf Block has been sued over a prenuptial agreement that was prepared about twenty-seven years ago in 1983. At that time, the firm of Wolf Block represented Alan H. Potamkin, an owner of luxury car dealerships, in various business and personal matters. The firm was hired to prepare a prenuptial agreement incident to Potamkin’s wedding to Claudia Forman, which was to take place in the fall of 1983. The firm was to prepare the prenuptial agreement so that it would be upheld under Florida law. It was Potamkin’s intent that the prenuptial agreement limit what Forman would receive in the event of divorce. Further, it was supposedly Potamkin’s instructions to his counsel that, according to the complaint, they were to draft an “iron clad” prenuptial agreement such that no court could later interpret it to impose greater or lesser financial burden on Potamkin in the event of divorce.

In December 2006, twenty-three years after Potamkin and Forman married, they decided to divorce. In January 2007, Forman’s lawyers claimed that the prenuptial agreement did not limit Potamkin’s financial exposure. Despite the efforts of Potamkin’s divorce lawyers and Wolf Block’s attorneys, the Florida judge in the divorce action ruled that the prenuptial agreement did not preclude Forman from obtaining equitable distribution of the marital estate acquired during their 20+ year marriage. The prenuptial agreement was set aside and was as if they never had such an agreement.

In the papers recently file by Potamkin in the legal malpractice case against Wolf Block, Potamkin claims the agreement didn’t take into account any potential changes in Florida law or necessary waivers that should have been included, according to the complaint. The agreement was drafted before Florida adopted an equitable distribution law.

Although the divorce litigation is not yet over, once that case ends and the distribution of assets is determined, the difference between what Potamkin must pay Forman in the court case and what he would have owed her under the invalidated prenuptial agreement will determine the amount of Potamkin’s damages in the malpractice case. It is anticipated that this damage amount could be several millions of dollars.

Without getting in to the merits of any claim by Potamkin nor any defense by Wolf Block, it should be noted that the decision in a case like this could have a chilling effect of whether attorneys are going to be willing to prepare prenuptial agreements. I suspect that the amount Potamkin paid in 1983 for the preparation of the prenuptial agreement pales in comparison to what Potamkin is going to assert his damages are based on the alleged malpractice of Wolf Block.

Twenty-three years after a prenuptial agreement was signed, new litigation against counsel for one of the parties is now pending. That’s longer than most child support cases.