Schlaefer v. Financial Management Service, Inc.

Christopher Schlaefer (defendant) and Shelley Schlaefer entered into a premarital agreement stating that all income either spouse earned would remain that spouse’s separate property and that all debts incurred by either spouse would remain the debtor-spouse’s separate debt. The only debts classified as community debts were debts incurred for joint obligations, if any. Shelley incurred medical debt payable to Columbia Paradise Valley Hospital (CPVH). Christopher did not sign off on or otherwise accept any liability for Shelley’s CPVH debt. Christoper and Shelley subsequently divorced. In the final divorce decree, the divorce court held that there were no community debts; Shelley’s CPVH debt was specifically classified as Shelley’s separate debt. After entry of the divorce decree, Financial Management Service, Inc. (FMS) (plaintiff) filed an action to collect Shelley’s CPVH debt from Christopher. Christopher moved for summary judgment, arguing that he was not liable for Shelley’s debt pursuant to the terms of the premarital agreement. FMS countered, arguing that, as a third-party creditor, it was not bound by the terms of the Schlaefers’ premarital agreement. The trial court ruled for FMS, holding that the premarital agreement was unconscionable and unenforceable because it purported to sign away the Schlaefers’ liability for each other’s debts. Christopher appealed.