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Pennsylvania Family Law

Updates, Events & Useful Tips Surrounding Family Law Issues

CAN GRANDPA BECOME PA? THE EVOLVING PENNSYLVANIA FAMILY

Posted in Adoption, Custody, Practice Issues

The recent Superior Court decision In re Adoption of M.R.D. and T.M.D. offers a new challenge in the context of who can be an adoptive parent.  While in her early 20s a young woman ventured to South Dakota to teach school.  She met a young man in 2002 and when she returned to Pennsylvania in 2003, he briefly followed her back here.  Just before he returned to South Dakota, it would appear that Mother became pregnant with twins.  They were born in Pennsylvania in October, 2004.  At the time Mother was living with her own Father.  The Father of the children did visit Pennsylvania to visit shortly after the children were born but he then returned to South Dakota and did not come back until 2006.  That trip was also a brief one and the Father did not encourage any visits in South Dakota by mother and children.  Later in 2006, Mother and the children moved into a rental home owned by her father.  South Dakota Father was aware of this move but little else changed and Father was last heard from in January, 2007.

In January 2013, Mother filed to terminate Father’s parental rights.  This appears to have been in response to Father’s action requesting an award of custody.  At the time Father had not seen the children in seven years.  His last written communication with the children had been in January, 2007.  It would appear that he provided little to no financial support since their birth.  And aside from the first two visits, Mother did not try to make the children aware of the identity of their Father.

What made this adoption unusual was the fact that for the second time in recent Pennsylvania history, the proposed adopting parent was Mother’s own father.  It appears undisputed that this gentleman had effectively provided the same kinds of parenting support that a natural Father is expected to provide.

The first part of the case was easy.  Father provided the textbook facts typical of parental abandonment such as would justify termination of his rights in an adoption.  The more difficult question was whether the children’s grandfather was an eligible adoptive parent.

In the 2-1 decision Judges Donohue and Stabile answered in the negative. They held that the purpose behind the statute remains “to foster a new parent-child relationship.” Absent such a relationship, the purpose is likely to provide disagreeable parents with a “new….dangerous, tactic” to employ in the world of child custody litigation; cross petitions to terminate. Accordingly, they reversed the Lycoming County ruling terminating Father’s parental rights.

The pinion properly observes that grandfather is functioning in many ways as a substitute parent. But the greater challenge here is that in a world where families are evolving as a matter of fact, if not necessarily as a matter of law, what does it take to qualify for the appellation “parent” besides biology or residence while married to a woman who has become pregnant?

We are commonly asked by clients:  “If my spouse has had no contact nor provided support for a period of six months or more, can’t I terminate his/her parental rights?” Under the Adoption law, that is true but most people miss the fact that the termination is part of an adoption that offers the child a substitute parent. If you have no player to sub for the parent who is not playing, you don’t have a basis to terminate parental rights.  And per this ruling (to which there was a length dissent) granddad is deemed an “ineligible receiver.”

 

 

WHOSE KID ARE YOU ANYWAY; DEDUCTIONS/HEADS OF HOUSEHOLD/DAY CARE & CHILD CREDITS

Posted in Alimony, Divorce, Practice Issues

Yes, it is tax time once again and the struggles over who got Christmas morning in December now give way to “who gets the deductions and credits” associated with the minor child.  Here is the primer which is offered subject to the advice of income tax preparers.

In ancient times, which is to say, before 1984, the Internal Revenue Service used a support test to decide who got the deduction for a child.  But that is not the archaic view and we today assign the deduction to the parent who has custody more than half the time, no matter who pays what support.  If time is equally allocated the deduction goes to the parent with the higher adjusted gross income.  That may not seem fair but it is the law.  Many parents like to fight over whether mom or dad really had more than 50% but on that subject, chances are the IRS is going to say: “Send us the custody order; we don’t care what really happened.”

So, you couldn’t take living with Mr. or Mrs. Always Right anymore and you packed up the truck and move back with your parents on July 1, 2014.  What is your filing status?  The answer appears to be found in the Tax Code at Section 7703(b). Spouses “legally separated” under a decree of “separated maintenance” are not considered married for tax purposes.  Wofford, 515-2d T.M. Divorce and Separation, p A-70.  Unfortunately, Pennsylvania does not really define “legal separation” in the sense that it issues some decree of separation.  And it appears that a garden variety order of spousal support or alimony pendente lite or a separation agreement does not meet the test.

There is something called the abandoned spouse test.  If a taxpayer files a separate return and maintains a separate home where a child resides for more than half the year such that the child can be claimed as a dependent and that taxpayer provides more than half of the cost of maintaining the household occupied by that child, that taxpayer can claim to be unmarried. Bear in mind that the spouse cannot have been a resident of that taxpayer’s independent household during the last six months of the year. Costs of maintaining the household include rent, mortgage, taxes, utilities, insurance, maintenance and repairs and food consumed in the household.  These abandoned spouses qualify as heads of household, even though they may have been the spouse who departed.

There is a tax credit for care expenses required in order for the taxpayer to work.  The Dependent Care credit applies where the expense is to care for a child not older than 12 or a spouse or dependent who is physically or mentally unable to care for himself.  In order to claim the credit the person who needs the care must live principally with the taxpayer claiming the credit.  The credit starts out at 35% of the cost of the care but is reduced by 1% for each dollar of adjusted gross income over $15,000 per annum.  The phase out does not go below 20%.  Meanwhile the maximum credit is $3,000 per individual or $6,000 if filing jointly.

In addition to Dependent Care credits there is the Child Tax Credit.  This ties to who has the dependency exemption.  Bear in mind, the law presumes it goes to the parent having primary custody but the exemption can be assigned to the parent having less than 51% custody.  The credit is $1,000 per qualifying child.  The child must be 16 or younger and must have his/her principal abode with the person claiming the credit.  It phases out at $110,000 for joint filer, $75,000 for single and $55,000 for those filing married/separate.

THE PERIL OF THE OFFICE SERVER

Posted in Divorce, Practice Issues

We learned this week that former Secretary of State Hillary Clinton may have used personal email accounts to transact State Department business.  Chances are you may have read the article and quickly turned back to your office computer to confirm your Saturday night dinner plans or to email your attorney about filing a joint tax return for 2014.

Perhaps your electronic musings don’t have the importance of communications from the Secretary of State, but you should know that the law is clear.  You are entitled to no expectation of privacy if you use an office computer to carry your personal mail.  Zero.  Now some offices do not retain emails that have been sent/received using private accounts such as msn, Comcast or AOL.  But that appears to be a function of how the server works rather than office policy.

Chances are, your employer really doesn’t care if you plan your next vacation on the office computer.  But, there are folks out there who do want to know these things.  People like a former or estranged spouse.  If he or she should decide to subpoena your email account either at the office or otherwise, there is a reasonable chance that the information will be published.  Under Pennsylvania law, if the material is sought pre-trial you will get notice of the request and a chance to object.  But if the information is subpoenaed for trial, you may be learning about this stuff in the courtroom.

Another thing.  Clients commonly email us from office servers (i.e. brendak@bigcompany.com) with information they probably intend to be confidential.  If you are using your office email address, it probably has no protection from discovery in your family law case. On the other hand if sent or received on a personal account, you have a strong basis to contend that this was as private as a telephone conversation and therefore protected from discovery.

So be aware of what account you are using when you email. Don’t permit Ms. Clinton’s problem to become yours.

A TRANSCRIPT DOES NOT A CUSTODY ORDER MAKE; R.L.P. v. R.F.M, 2015 Pa. Super. 29 (2/11/15)

Posted in Custody, Practice Issues

Superior Court appeals relating to child custody are supposed to be “fast tracked” in recognition of the fact that in the life of a child, a year is a long time.  But, a land speed record was attained on February 11 when the Superior Court affirmed a Montgomery County Common Pleas order entered less than four months earlier.  The ruling by Judges Panella and Olson with Senior Judge Fitzgerald offers some more insight into what appellate courts are asking trial courts accomplish when conducting trials in custody cases.

The key ruling of the case is procedural.  The trial was conducted in April, 2014. The judge ordered the parties to return the following day for the Court’s ruling.  The Court spoke at length (44 pages) analyzing the factors under the custody statute and then concluding with an oral Order based on that analysis.  The judge directed his ruling to be transcribed so that the Order portion of the transcript would function as the final order in the case.  When the child’s mother appealed the Court’s ruling the Trial Court held that its oral Order was not appealable since it was not recorded on the docket.  This created an issue in its own right because Pa. R.C.P. 1915.10(a)-(b) says, in part, that “The Trial Court shall state the reasons for its decision either on the record in open court, in a written opinion or in the order.”

The rule is ambiguous and the Superior Court clearly saw the problem. The “ruling” is 46 pages and at least 27 are identified as part of the order.  It includes exchanges with counsel where clarification is sought, including a colloquy directed to what nights Father will have if he can work his schedule out.  At one point in the transcript the trial judge candidly admits that his own order is somewhat confusing.  As the Superior Court recites, much of this colloquy is aspirational and far from definitive.  The three judge panel held that a case is not concluded until a written order is prepared and placed on the docket.  Analysis of the custody factors may invite a judicial soliloquy, but the Order itself needs to be quite clear as to who has what responsibilities and when.  To the point, there must be an “Order” docketed in contrast to a direction to make a transcript an order.  Parenthetically the Court notes that the sixteen factor analysis must be completed and, in some form, articulated before the appeal period lapses.  See C.B. v. J.B., 65 A.3d 946 (Pa. Super. 2013) app. den. 70 A. 3d 808 (Pa. 2013).

The ruling by Judge Jack Panella with Judge Fitzgerald approving is noteworthy.   A fundamental premise of appellate law is that an Order is not an Order until it is filed on the docket whether entered in open court on a transcript or in a written form by the judge.  Absent a bright line test, an order would be “entered” not based upon a judge’s signature but a court reporter’s filing of the transcript.   Litigators know that depending upon county and circumstances, a transcript may not see the docket in the Prothonotary’s office for weeks or months following a proceeding.   Judges are clear that when they send an Order to be docketed, parties and or counsel need to be notified.  The Court reporter is not under that same duty which can cause precious appeal periods to be abbreviated or lost.

While the Appellant/Mother’s position was sustained procedurally in the explicit ruling that custody “orders” need to be drafted by Judges and not uttered to court reporters, her case fell apart quickly after that.  Mother raised eleven issues on appeal.  However, with respect to eight of her issues, the Superior Court found that the brief did not develop these issues except to conclude that the Trial Court ignored the testimony and reached the wrong result.  Quoting from  Lackner v. Glosser¸ the panel states: [A]rguments …where the party has failed to cite any authority in support of a contention…” are waived. 892 A.2d 21,29-30 (Pa. Super. 2006).  See also Chapman-Rolle v. Rolle,  893 A.2d 770, 774 (Pa. Super, 2006).

Two smaller points merit consideration.  In this case, some custody was awarded to a non-party step-mother.  Mother objected but the trial court noted that during this time, neither parent was otherwise available to provide care.  The appellate court buttressed this by stating that the step mother was in loco parentis based upon 23 Pa. C.S. 5324.  Mother made an issue of step-mother’s ingestion of anti-anxiety medications.  But the Superior Court found that the issue of how this affected the child was not developed. Similarly, Mother complained that the child was not interviewed. The Trial Court responded that it assumed that had either parent thought the views of the seven year old merited consideration, they would have offered the child’s testimony.  The panel concludes that it was not the duty of the Court to insist on an interview of a seven year old.  Lastly, the court dealt with the age old bane of all trial lawyers and judges; Appellant said the Court failed to consider the evidence the Mother forgot to bring to the trial.  You can guess how that turned out.

The substantive lessons are worthy of note.  It appears a non-party can have partial custody without becoming a party.  This is not earth shattering because otherwise every day care provider in America would be made a party.  Second, bring your evidence to trial if you expect it to be considered. Don’t assume the Court will take it upon itself to interview a child, although this is a topic that seems to have authority going both ways (Court needs to make record versus parties have responsibility to make the record).  And perhaps most importantly, a brief needs to cite cases or at least segments of the record where the Appellant believes error has occurred. Without one if not both of those legs, there is no appeal to stand on.

 

Protecting Health Information in the Context of Divorce Proceedings and Domestic Relations

Posted in Divorce

My colleagues Michael Kline and Elizabeth Litten recently co-wrote a series of blog posts for the firm’s HIPAA, HITECH and HIT blog containing valuable information for individuals either undergoing divorce proceedings or navigating other domestic relations issues.

In their series, Michael and Elizabeth explore complex issues arising from the November 2014 ruling by the Connecticut Supreme Court in Byrne v. Avery Center for Obstetrics and Gynecology, P.C. The case has significant implications for individual health information (“IHI”) privacy in the context of domestic relations – both in the divorce or legal separation context and even in a less confrontational domestic environment.  While settlement agreements and divorce decrees often address healthcare and health insurance issues, especially where there are custodial children involved, addressing IHI issues is much less common. Michael and Elizabeth also discuss practical tips for individuals dealing with situations involving their domestic relationships.

I invite you to read all three parts of their series. Here are Part I, Part II and Part III.

THE FORGOTTEN TAX DEDUCTIONS

Posted in Alimony, Divorce, Equitable Distribution, Practice Issues

The general rule is that personal expenses are almost never deductible by taxpayers on Schedule “A” (Itemized Deductions) of their personal returns.  But all rules have exceptions and almost everyone is familiar with the deductions available for medical and dental expenses.  These are great deductions but with this hitch.  You only get to deduct the amount that exceeds 7.5% of Adjusted Gross Income.  Thus, it takes some pretty catastrophic medical expenses to get past the threshold.

But there are two lesser known deductions that merit some attention.  Under Section 212(1) of the Internal Revenue Code, a taxpayer may deduct expenses directly attributable to the production or collection of income that is taxable.  Spousal support and alimony is taxable income and both the Tax Court and the Internal Revenue Service agree that counsel fees attributable to the determination and collection of spousal support and alimony are proper deductions under Section 212.  This includes proceedings to collect arrearages (overdue amounts) and to increase alimony payments.  The deductions apply only to the payee.  The payor does not qualify for a similar deduction in defending these claims.

The fees must be reasonable for the goal sought.  Thus a $10,000 deduction to secure a $9,000 increase may be subject to challenge.  The deductions for legal fees are also limited to those greater than 2% of adjusted gross income.  Thus if an otherwise unemployed spouse incurred $10,000 in fees to secure an award of $3,000 a month in alimony, her adjusted gross income of $36,000 per year means that the first $720 (2%) of counsel fees are not deductible.  The deduction is taken on Schedule “A” under “Job Expenses and Certain Miscellaneous Deductions” (lines 21-27 for 2014).

The second and more nebulous area where deductions may be taken is for “Tax Advice.”  Section 212 (2) of the Internal Revenue Code allows deductions for “the management, conservation or maintenance of property held for the production of income.”  This is a far trickier deduction as there are no Treasury Department regulations directly addressing it.  The regulations under Section 212(1) inform us that investment management fees and custodian fees associated with investments are deductible.  The same costs for a personal residence are not. Expenses of estate litigation are afforded deductibility even though not directly related to production of income.  Expenses incurred in asserting rights to property are non-deductible.  But if the property produces income and the claim is related to collection of a portion of it, that “income” portion is deductible.  Expenses associated with preparing tax returns are deductible but again the deduction is for expenses beyond 2% of Adjusted Gross Income.  The general view (not found in the regulations) is that “tax advice” secured for purposes of managing one’s investments is deductible and many divorce practitioners sometimes freely “allocate” a substantial portion of their invoice to “tax advice” to help a client out.  But, this is a slippery slope for both the adviser and the tax payer because unlike the alimony deduction, there is no real means to measure what is reasonable and what is not and to a large degree, the assets being allocated in the divorce are not income producing.

PROPOSED NEW LAW CLOSES CUSTODY LOOPHOLE FOR CHILDREN CONCEIVED BY RAPE

Posted in Child Abuse, Custody

Pennsylvania’s child custody code requires the submission of a criminal record and abuse history affidavit which is designed to identify whether a party to a custody action or a member of their household has been accused or convicted of a criminal offense. The crimes are almost all violent crimes or crimes of a sexual nature such as rape, luring, exploitation and other offenses. Obviously, the existence of these crimes in a parent’s background can have a significant effect on their custodial situation.

A loophole, however, existed which will hopefully be put to an end by a bill introduced in the Pennsylvania state house and senate designed to prevent a rapist from ever seeking custody of the child conceived from a rape. While it may seem inconceivable that a rapist could ever obtain custody of a child, the fact remains that under the black letter of the law, the rapist would have both a support obligation and standing to seek custody of the child they fathered.

The affect such litigation would have on the victim must be devastating and no woman should have to endure confronting their rapists in family court, let alone work out custodial exchange times. So while the child custody code may be able to use the criminal record affidavit to help justify precluding the rapist from having custody, nothing presently exists which precludes him from bringing the action and dragging his victim to court.

The Rape Survivor Child Custody and Support Act is being introduced by State Senator Randy Vulakovich (R-Allegheny) and Representative Joe Hackett (R-Delaware).  The new law would allow for the termination of the rapists parental rights, but preserve the obligation to pay support. Under the current law, the only way to sever a rapist’s parental rights would be through the adoption of the child. Doing so, however, would also alleviate any support obligation by the rapist.

As quoted by Kaye Burnet of Pittsburgh’s National Public Radio, Kristin Houser of Pennsylvania Coalition Against Rape admits that the number of women effected by this law may be small, but it is nevertheless a worthwhile and necessary piece of legislation: “[this] isn’t necessarily the result of egregious things happening on a regular basis here in Pennsylvania, but it doesn’t matter if it’s happening to a lot of people or just a few. It shouldn’t be happening at all.”

AN HOUR ON THE TEENAGE BRAIN

Posted in Custody, Divorce, Practice Issues

The January 28 edition of Terry Gross’ Fresh Air distributed by National Public Radio featured an interview with the chair of the University of Pennsylvania Neurology Department, Frances Jensen.  The subject was a relatively in depth discussion of the teenage brain. At one level a lot of this is news that has been available. The front of the brain, where judgment is processed, is a part that does not really fully develop until an adult enters his or her early 20s. But Jensen’s interview reveals more than the sound bites that we have become used to accepting as substantive information. I listened to the interview while driving so that I cannot profess to have absorbed this accurately but here were some of the information I was able to absorb.

High levels of stress inflicted on teenagers can contribute to depression that can afflict them throughout adulthood.

High rates of teenage suicide correlate to the fact that teenagers can’t really evaluate what suicide means.

The marijuana of today is far more effective than that of olden times and teenage brain receptors for this substance physically absorb more of its most dangerous components than the brains of fully formed adults. In other words, the stuff is more dangerous and the teenager is more vulnerable.  Kids who smoke these drugs on weekends have cognitive impairment that goes on for days after the “smoke” was ingested.

In addition to the fact that they have not formed the ability to process risk in the same way as a fully matured adult, teenagers can often lack the brain processing power to experience and express empathy for another’s loss or sadness. So that’s why your kid seemed ambivalent about your auto accident or the death of grandma.

The interview with Dr. Jensen also revealed some things about us. Yes, we are struggling to keep up in a world where technology can now carpet bomb our brains with information. The studies she has examined show that our ability to juggle multiple tasks apexes in our mid to late 30s. The editor of this blog is in his late 30s and as a former editor I am resigned to employing old age and treachery to overcome his youth and skill.

The interview is well worth the time if you have a child in the nightmare years. It might be well worthwhile to listen to with that child. As most of us know, teenagers think they know everything anyway so perhaps even if they don’t credit their parents, they might give some deference to a professor of neurology.

EVIDENCE OF MISTAKEN IDENTITY REVERSES SUPPORT ORDER

Posted in Support

Enforcing out of state support orders is controlled by the Interstate Family Support Act (23 Pa.C.S.A. § 8101 et al.  It may seem like the most obvious of steps, but imperative in successfully obtaining and enforcing a support order is correctly identifying the individual subject to the support order. Such was the case in Worley v. Effler in which a fourteen year old North Carolina child support order was registered in Centre County, Pennsylvania for the purposes of enforcement.

The matter was heard by the Superior Court on the basis that the trial court did not adequately allow the purported payor to present evidence demonstrating that she was not, in fact, the individual against whom the order was entered. Mistaken identity is not something that happens merely in movies or on television. Here, Kelly Richards Webster, also known as Kelly Lynn Effler, found herself subject to $24,309 in unpaid child support based on the North Carolina support order.

At the trial level, having immediately requesting a hearing to contest the entry of the support order against her, Webster was barred from presenting evidence that she was not the person named in the order. The trial court believed it was obligated to give the North Carolina support order full faith and credit and the trial court is not wrong on that position.  However, by entering the order without allowing Webster to present evidence contesting her identification as the payor was deemed an abuse of discretion by the Superior Court. Webster is to be afforded the opportunity to demonstrate that North Carolina does not have personal jurisdiction over her to make the underlying order valid against her.

This case offers an interesting analysis of the rules governing the validity and enforcement of foreign orders, but it also prompts one to consider how Worley and/or North Carolina concluded that Webster was the payor. The North Carolina order appears to have laid dormant from an enforcement standpoint for over a decade. Either the payee or the North Carolina domestic relations unit (or both) did not find the arrears to be important enough to enforce the order earlier. I would surmise that at some point the over $20,000.00 arrearage caught someone’s attention and a public records search was made based on names, age range, and other information to track down the payor. Webster was caught in that net. Absent more conclusive information, Worley/North Carolina may have reasonably believed that Kelly Webster of Centre County was their delinquent payor.  Unfortunately for them, they were wrong and a deadbeat parent continues to avoid her child support obligation.

IT TURNS OUT THE STATUTE OF LIMITATIONS DOES AFFECT DIVORCE AGREEMENTS.

Posted in Divorce, Practice Issues, Support

A panel decision of the Pennsylvania Superior Court on December 23, 2014 informs us that despite recent decisions refusing statute of limitation defenses in actions to enforce property settlement agreements, the defense still lives.  It comes down to the nature of the obligation for which enforcement is sought.

We start with the older cases.  In a 2006 decision Crispo v. Crispo,  909 A.2d 308 (Pa. Super, 2006) the parties concluded their property agreement in 1995.  In 2004 Wife sued to enforce the agreement and after a hearing at which Husband asserted the statute of limitations as a defense held him in contempt subject to purge upon obtaining life insurance in the amount of $300,000.00 paying a Sears charge in the amount of $2,048.49 and a MasterCard bill in the amount of $4,662.76 plus the sum of $22,500 to Appellee.  The agreement had called upon husband to maintain the life insurance until his children reached 22 and to pay off Wife’s credit card debt.  It also required him to pay the $22,500 for his interest in a business he owned.  Under the terms of the agreement the lump sum was due in 1997.  He appealed stating that the credit card and cash payment provisions were beyond the four year statute of limitations.

In Crispo, the Superior Court held that these were continuing obligations and therefore not subject to the statute of limitations.  The authority cited for this proposition was a Monroe County Common Pleas case.  Jenkins v. Jenkins, 2004 WL 3406186 (Pa.Com.Pl. Oct. 25, 2004), 71 Pa. D. & C. 4th 205.  According to the case decided on by the Superior Court on December 23, 2014 if an agreement does not contain a specific deadline, the contract is continuing. K.A.R. v. T.G.L. 2014 Pa. Super. 285.

In 2009, the Superior Court decided Miller v. Miller, 983 A.2d 736 (Pa. Super. 2009).  That was an agreement to continue to pay mortgage payments associated with a marital residence.  In November, 2005, Wife sued to recover payments she made because Husband had not.  He asserted that statute of limitations with respect to any amounts due for more than four years. Again, the Superior Court held this was a continuing contract because there was no deadline for payments nor was the amount specified.

Last month’s ruling has a decidedly different flavor.  Husband and wife formed an agreement in August, 2003 related to payment to Wife of certain sums defined by formula if and when Husband’s stock or warrants in his business were sold.  In March, 2011 Wife sued to enforce the agreement alleging that Husband sold a portion of the stock in January, 2004.  In 2004 and 2005 husband did make payments to Wife of $450,000 for her business interest but he retained part of the business and morphed it twice before selling it without additional compensation to her. Husband answered that she was beyond the statute of limitations on the 2004 transaction and that the portion of the business that she claimed he retained in the 2004 sale was “completely distinct.”

As one might expect from reading this far, Wife asserted this was a continuing contract.  She cited Crispo and Miller.

The trial court found that husband sold all of his stock in the business in January 2004.  Thus, that was the date Wife was entitled to her payments.  It turned out that in addition to the sales piece of the transaction husband received something the court deemed a “stay” bonus for remaining with the acquiring purchaser of his business.  So this contract that called for a fixed payment in January, 2004 and the statute ran in January 2008 per 42 Pa.C.S. 5528(a)(8).  Wife argued that she had stayed the statute by filing a writ of summons in 2005.  Apparently this was done because she was already unhappy with the payments she had received.  The Superior Court held that filing a civil action does not preserve claims brought under 23 Pa.C.S. 3105 to enforce agreements.  She argued that she did not discover the claim until she secured copies of tax returns filed in 2011 and 2012.  The response of the court is that husband did provide closing binders for the 2004 sale within a year of the transaction and that even back then she was asserting in writing that she was still due money.  The Superior Court opined that for purposes of the discovery rule the statute would have run from the date the closing binders were delivered, a date one year after the sales transaction.  Wife’s argument that they were negotiating during this time was dismissed under the well established principle that negotiations do not stay a statute of limitation.

The Court held that this was not a continuing contract and said this case is distinguishable from Crispo and Miller.

At one level, this writer is happy to see the statute of limitations brought back to a field where we are told time and again that contract law governs.  But, this ruling does not really reconcile with either Crispo or Miller.  In this case, the Superior Court cites Crispo for the proposition that even in the case of continuing contracts, “the statute of limitations will run either from the time the breach occurs or when the contract is terminated.”  It further states that a continuing contract is one with no definite time for payment or where there are several separate contracts.”

So let’s get the chains out and measure these cases.  In Crispo, the parties divided their credit card debt and each agreed to pay some.  Husband did not pay.  Wife knew that Husband didn’t pay as the opinion states that she began making the payments he had due under the agreement on his behalf.  So, clearly he defaulted and just as clearly, she knew it.  Using what I will call the Crispo standard, the breach occurred for statute of limitation purposes the moment she knew that he had not paid.  As for the $22,500 amount to be paid for the business interest it was to be deferred to 2001 unless Husband filed a petition to modify support in which case the payment was due on filing of the modification.  Again the opinion states that in 1997 Husband decided to seek modification of support.  Under the contract this made the $22,500 due immediately.  Her enforcement claim was filed in 2004, seven years after the default.  Despite what the opinion says, these are not continuing obligations.  They are clear defaults known to the innocent party.

Miller is much the same.  Per the contract, Husband was to pay the mortgage.  He did not.  Wife knew this because she began paying the mortgage herself.  So we have a breach and it is known to the innocent party.  The argument that there was no deadline for the payments just doesn’t hold water.  Promissory notes associated with mortgages are pretty clear about what is required and when.

There are facts buried in the K.A.R. opinion from which one gets the impression that the Plaintiff did not get a fair shake from her settlement agreement.  But, the facts are equally clear that she knew her spouse had sold the business because she got $450,000 in payments and a settlement binder from the transaction within twelve months of the closing on the business sale.  The facts also show that she was not happy about the amount she got and was vocal about it.  So imposition of the four year statute of limitations made perfect sense.  But, it would have made perfect sense in Crispo and Miller as well.  It just didn’t turn out that way.

Viva la K.A.R.  If property settlement agreements in divorce are contracts, it would seem that the laws affecting contracts, including statutes of limitation, should be invoked as well.