A Gift of a Case from Meredith Miller: Consideration for a Post-Nuptial Agreement?

Meredith Miller (left), who for many years thrilled readers with her scintillating posts on this site, has shared with us Lloyd v. Niceta, a 2021 Maryland case that deserves legendary status.  In it, the court found that there was consideration for a husband’s promise to his wife to refrain from further marital infidelities. The court enforced the promise and ordered the husband to pay damages in the amount of $7 million, on top of the division of marital property otherwise provided for in the parties’ post-nuptial agreement.  The court rejected the husband’s argument that enforcement of the agreement was unconscionable.

The case pours the tea generously.  Mr. Lloyd and Ms. Niceta married in 2006.  They had two children.  Mr. Lloyd had a job; he made a living.  Ms. Niceta had a job; she got paid more.  She served as White House Social Secretary in the Trump Administration.  In 2010, Mr. Lloyd’s grandmother, Rachel “Bunny” Mellon, “a well-known socialite and philanthropist” gave the couple $1  million for a house.  When she died in 2014, Mr. Lloyd’s inheritance exceeded $10 million.  

Also in 2014, Mr. Lloyd had an affair.  Ms. Niceta moved out.  Before returning to her husband, Ms. Niceta demanded a post-nuptial agreement.  Represented by counsel, the parties hammered out an agreement.  They negotiated during two meetings that took a combined ten hours. In those meetings, Mr. Lloyd shared financial information about his father’s $50 million estate.  Mr. Lloyd represented that he would receive $12 million (after taxes) upon his father’s demise.  In the end, Mr. Lloyd, against the advice of his attorneys, in a 25-page agreement, promised to pay Ms. Niceta $7 million should he ever stray again.  And the ways in which he might stray are spelled out in some detail:  No adultery, no buggery, no sodomy, no sexting, no secret accounts, no fondling, and no other sexual acts, even if they do not lead to intercourse.  

The parties reconciled in 2015.  Mr. Lloyd’s father died in 2017.  In 2018, Mr. Lloyd commenced a new affair, which his wife discovered in 2019.  The court does not specify which of the listed offenses Mr. Lloyd committed.  I’m sure this will all come out in the television mini-series.  After a three-day trial, the trial court ordered enforcement of the agreement, except for certain provisions prohibiting Mr. Lloyd from spending his own money on future girlfriends, wives, or children.

Mr. Lloyd challenged the judgment, alleging that his promise to pay Ms. Niceta was not supported by consideration.  After surveying the law of several jurisdictions, the court concluded that Maryland permits the enforcement of post-nuptial agreements, given marital difficulties, when supported by a promise not to bring divorce proceedings.  Ms. Niceta committed herself promised to stay in the marriage and to work on forgiving her husband.  The court found therein sufficient consideration.

There follows a detailed discussion of Mr. Lloyds increasingly desperate attempts to assert defenses sounding in unconscionability, duress, undue influence, and public policy, or to claim that the $7 million lump payment is an unenforceable penalty clause.  Interestingly enough, it turns out there is Maryland law that specifically excludes post-nuptial agreements from the doctrine that prohibits the enforcement of penalties.  

And the cherry on top: Ms. Niceta filed counterclaims, seeking child support from Mr. Lloyd.  Because the trial court did not engage in sufficient fact-finding on that issue, the appellate court remanded the case back to the trial court for the resolution of Ms. Niceta’s counterclaims.