Background
Darren Lemon (Husband) and Andrea Smerski (Wife) married in Oregon in March 2017. In November 2018, the parties entered into a postnuptial agreement that contained a choice of law provision specifying Oregon law would govern disputes about the distribution of property under the agreement. Wife filed for divorce in Wyoming in August 2024.
The postnuptial agreement organized the parties’ property in several ways. Paragraph 2, titled “Separate Property,” stated that all property each party owned at the time of the marriage, and property later acquired in their sole name, would remain separate property — with one express exception: “[w]ith the exception of retirement benefits and entitlements owned by either party, either now or in the future.” The agreement also stated at the end of Paragraph 2 that “[t]he parties decline to characterize retirement benefits and entitlements as separate or joint property.” Paragraph 5(g) then provided a specific formula for dividing retirement accounts: all balances, contributions, and interest prior to June 1, 2017 (the approximate date of marriage) would be treated as separate property, while all contributions, earnings, and interest on or after June 1, 2017, would be treated as joint property subject to division. Exhibits A and B, attached to the agreement, listed four retirement accounts — three belonging to Wife and one Thrift Savings Plan belonging to Husband.
After a bench trial, the district court entered a 51-page divorce decree. For retirement accounts not listed in Exhibits A and B, the court correctly applied Paragraph 5(g) and divided them by the June 1, 2017 cutoff. But for the four accounts listed in Exhibits A and B (the “Subject Retirement Accounts”), the court ruled differently: finding Paragraph 2 unambiguous, it awarded Wife the entire value of all three of her listed accounts and Husband the full value of his Thrift Savings Plan — treating all of those accounts as entirely separate property regardless of post-June 2017 contributions. Wife appealed.
The Court’s Holding
The Wyoming Supreme Court reversed. Justice Jarosh’s opinion holds that the district court misread the postnuptial agreement by applying Paragraph 2’s “separate property” label to the Subject Retirement Accounts, when Paragraph 2 itself expressly carved out retirement accounts from its coverage and Paragraph 5(g) provided the specific formula to govern them.
The court applied Oregon law (as specified in the choice of law provision), which, like Wyoming law, requires courts to give effect to the parties’ intent as expressed in the specific language of the agreement, read as a whole. The interpretation is straightforward: Paragraph 2 defines separate property but explicitly excludes retirement benefits and entitlements from that category. Paragraph 5(g), in the divorce-specific provisions of the agreement, establishes the governing rule for retirement accounts — the pre-June 1, 2017 portion is separate property; post-June 1, 2017 contributions and earnings are joint property subject to division under applicable legal standards. This formula applies to all retirement accounts, including the Subject Retirement Accounts.
The court found the district court’s reading was inconsistent with the agreement as a whole. The purpose of listing retirement accounts in Exhibits A and B was to satisfy the agreement’s requirement that the parties fully disclose their assets — not to designate those accounts as entirely separate property. The agreement itself explicitly declined to characterize retirement benefits and entitlements as separate or joint property and instead committed that question to the Paragraph 5(g) formula. Treating the Exhibits as an override of that formula rendered the express retirement account exclusion in Paragraph 2 and the Paragraph 5(g) formula surplusage.
Key Takeaways
- A postnuptial agreement that expressly carves retirement accounts out of its “separate property” definition and provides a specific division formula in the dissolution provisions must be interpreted consistently with that formula — listing accounts in a disclosure exhibit does not transform them into entirely separate property.
- Courts must read marital agreements as a whole; a specific provision governing a particular asset category controls over a general definitional provision, and interpreting the general provision to swallow the specific one violates the cardinal rule against rendering contract language surplusage.
- Wyoming courts will enforce choice-of-law provisions in postnuptial agreements and apply the specified state’s substantive law to interpret the agreement, so long as doing so is not contrary to Wyoming law, public policy, or the general interests of Wyoming citizens.
- Practitioners drafting postnuptial or prenuptial agreements should ensure the treatment of pre-existing retirement accounts is addressed in a single, internally consistent provision; reliance on an exhibit disclosure to establish separate property status — without explicit language linking the exhibit to the separate property characterization — creates ambiguity that may not be resolved in the drafter’s favor.
Why It Matters
Smerski v. Lemon is a practical reminder for Wyoming family law practitioners drafting or litigating marital agreements: when retirement accounts are involved, the dispositive question is not whether an account appears on a disclosure exhibit, but what the agreement says about that account’s characterization. Here, the parties’ postnuptial agreement took the unusual — and clearly deliberate — step of expressly excluding retirement accounts from the general separate property definition and substituting a date-based division formula. A district court that ignores that structure in favor of a simpler “it was in the exhibit” reading will be reversed.
The decision also reinforces Wyoming’s willingness to apply foreign state law under a valid choice of law clause, and confirms that the same contract interpretation principles apply whether the court is applying Wyoming or Oregon law. For litigants, the practical lesson is that the party who structured the agreement — here, the party who had accounts listed in Exhibit A — may have inadvertently created a less favorable outcome for herself by including language that cut off separate property treatment for post-marital contributions to those accounts.