Law presumes fraud on the part of an individual who contracts with a person who was laboring under a disability, such as mental weakness at the time the contract was made. Constructive fraud may result from taking unfair advantage of another person's mental deficiency.
Petitioner filed an action to rescind the separation agreement he and his former wife, respondent S.I.S., executed on February 20, 1975. The separation agreement which is the subject of the current dispute was prepared by respondent's attorney and signed by petitioner on February 20, 1975 at her attorney's office, at her request. Petitioner never spoke with respondent's attorney about the contents of the agreement, nor did petitioner read it in the office prior to signing the document. Petitioner further alleged that he was undergoing medical treatment at the time the contract was executed.
Should the agreement be rescinded as a result of either constructive fraud or undue influence on the part of respondent?
The facts set forth above establish petitioner's susceptibility to influence. There can be no question that there was a confidential and fiduciary relationship between the parties in view of their long marriage and the respondent's running of the family during petitioner's periodic mental breakdowns. Furthermore, petitioner's testimony revealed that when he signed the agreement, he did so in hopes of reconciling the marriage and avoiding the divorce. In view of petitioner's mental instability and strong desire to return to the marital home, it is clear that respondent was the dominant party in the relationship at the time of the signing of the agreement. The presumption of undue influence is present where, as here, the dominant party obtains a contract. Therefore, she has the burden of proving fairness. The test in such a situation is whether the separation agreement is fair and equitable, having regard for petitioner's material interests. Respondent has failed to meet this burden. The agreement goes far beyond that which would have been ordered by this Court. By its terms, this agreement severely overreaches the obligation of the petitioner to either respondent to their children. Respondent in this situation clearly has received a benefit at the expense of the mentally ill petitioner. Her attorney drew up the agreement and she persuaded petitioner to accept its terms, or to sign it without in-depth knowledge of its import to him. The means of her control over him are not important, and it is irrelevant whether they consisted of importunities, over-persuasion, or moral coercion of any kind.