Undue Influence and the Meaning of ''Advantage'' in California Marital Transaction

It is settled that the predicate for applying a presumption of undue influence in an interspousal transaction is that one spouse has obtained an advantage over the other in the transaction. (In re Marriage of Haines (1995) 33 Cal.App.4th 277 at p. 297.) The presumption of undue influence is regularly applied in marital transactions in which one spouse has deeded property to the other, as in Haines. As long ago as 1894, the Supreme Court stated that: "The moment it appears ... that 'an unfair advantage' has been obtained, the presumption that it was procured by undue influence arises out of the existence of the confidential relation of husband and wife ... ." ( Dimond v. Sanderson (1894) 103 Cal. 97, 102 37 P. 189 (Dimond).) Almost a century later, the principle of unfair advantage was codified by the predecessor to Family Code section 721 (former Civil Code section 5103), which expressly defines the fiduciary duties of spouses in transactions with each other. The existence of unfair advantage--or lack of consideration--as a predicate to the presumption of undue influence in a marital transaction has been frequently suggested in precedents over the years, both before and after the enactment of section 721 and its predecessor. Thus: --In Estate of Cover (1922) 188 Cal. 133, 144 204 P. 583 (Cover), the Supreme Court said that the "mere existence of the marriage relation alone will not, in and of itself, suffice to initiate and support the presumption of undue influence where the transaction between husband and wife is prima facie, or, from all of the circumstances thereof, shown to be fair and free from any material advantage to the husband from and over the wife." --In In re Marriage of Baltins (1989) 212 Cal. App. 3d 66, 88 260 Cal. Rptr. 403, the court observed: "The marriage relationship alone will not support a presumption of undue influence by one spouse over the other where the transaction between them is shown to be fair." --In Haines, supra, 33 Cal.App.4th 277, the court expressly stated that the presumption of undue influence arises under Family Code section 721 "where one spouse has taken advantage of another" in the transaction. (Haines at p. 301.) The word "advantage," in this context, plainly does not mean merely that a gain or benefit has been obtained. Taking "advantage of another" necessarily connotes an unfair advantage, not merely a gain or benefit obtained in a mutual exchange. -- In re Marriage of Delaney (2003) 111 Cal.App.4th 991, 996 4 Cal. Rptr. 3d 378 (Delaney) stated that "when any interspousal transaction advantages one spouse to the disadvantage of the other, the presumption arises that such transaction was the result of undue influence." Again, a mere benefit is not enough; the advantage must operate "to the disadvantage" of the other spouse. --In In re Marriage of Saslow (1985) 40 Cal.3d 848 221 Cal. Rptr. 546, 710 P.2d 346, the Supreme Court, while it did not discuss the presumption issue, likewise emphasized the necessity for a showing of unfairness: "To support a finding of undue influence, 'the evidence, in addition to a showing of marriage relationship, must also show such unfairness of the transaction as will tend to establish that the wrongful spouse made use of the confidence reposed for the purpose of gaining an unreasonable advantage over the mate.' " ( Id. at pp. 863-864, quoting Snyder v. Snyder (1951) 102 Cal. App. 2d 489, 492 227 P.2d 847.) --Finally, numerous cases apply the presumption of undue influence when the marital transaction is one in which one spouse deeds his or her interest in community property to the other spouse, for no consideration or for clearly inadequate consideration. (E.g., Weil v. Weil (1951) 37 Cal.2d 770, 787-789 236 P.2d 159 husband who secures a property advantage from his wife has the burden to show the absence of undue influence; wife's deed to husband was voluntary where the wife was aware that the spouses' interests were in conflict and she had ample opportunity to obtain independent advice.) Cases such as Weil and Haines, involving property transfers without consideration, necessarily raise a presumption of undue influence, because one spouse obtains a benefit at the expense of the other, who receives nothing in return. The advantage obtained in these cases, too, may be reasonably characterized as a species of unfair advantage. In short, both Family Code section 721 and case precedents support the conclusion that in a contractual exchange between spouses, a presumption of undue influence arises only if one of the spouses has obtained an unfair advantage over the other.