We live in interesting times. We have recently reported on significant cases discussing who has legal standing to seek custody of a child and whether that “standing” comes with a child support obligation.  But one bedrock that has been around for a while is what is called the presumption that a husband is father unless someone proves he had no access or was incapable of procreation.

It has been a presumption which today stands despite the fact that science now allows us to show otherwise. Genetic testing has been around for about 20 years and today it is considered the standard.  But the presumption of paternity is an interesting one. “A” may sleep with “B’s” wife but if wife becomes pregnant and B decides that he wants to play dad, the fact that “A” can prove that he is the real father is of no consequence.  That’s the law of Pennsylvania although this author believes it has some constitutional weaknesses.

In M.L. v. J.G.M, a case decided on January 4, 2016, the two parties were married in 2001.  They separated in late 2011 and divorced in September 2014, they had one child together who is today 10 years old.

As is happening with some frequency, the once separated Father started to have some thoughts about whether his child was, in fact, his child. Today, paternity tests are freely available so he administered one on the child (typically it involves an oral swab) and the test came back excluding him as the father.  Almost two years after separation he filed a petition in Berks County to terminate support.  He also sought blood testing within the court system to confirm that his drugstore test was accurate.  Mother filed to prevent the test.  The Berks County Court ordered the blood test because the marriage was no longer intact and the parties having been divorced several months before the motion was heard.

But the battle did not end there. The Superior Court had to wrestle with the Supreme Court’s ruling in K.E.M. v. P.C.S., 38 A.3d 798 (2012).  There the court held that paternity by estoppel will apply only where the doctrine promotes the best interests of the child.  In that case the father continued to promote his role as father even after learning from a biological viewpoint that the facts were not with him.  The Supreme Court ruling contained an eloquent reflection on how the passage of time leaves the child with no hope of finding the actual parent and the clear harm of losing the only father the child had known.  The language is moving but, unfortunately, science “moved” faster.

In current case as well as an earlier Superior Court case decided in 2011 (R.J.K. v. S.P.K., 32 A.2d 3d 841), the matter was remanded to develop a full record including psychological testimony related to the bond between the child and the presumed father.  The opinion of Judge Lazarus does a thorough job of analyzing what courts are to look to when building that record. But, build it as you may, when the dust settles there are going to be some angry adults and a bewildered child.  Typically we assume that these children are accidents or the product of loose morals on the part of both biological parents.  But not every man who sleeps with a woman gets an honest answer about her marital status or her views on birth control even if he does inquire.

And the forgiving husband who adopts the child of the casual relationship despite the infidelity may not always remain so honorable or caring. The difficulty we face today is that anyone can buy and employ a genetic testing service.  So while a Court may rule that “B” is officially Father in the Courtroom and the schoolhouse, it can’t, in practical terms try to prevent “A” from reaching out to his child or compel “B” to maintain a physical or emotional relationship.  In this case, it appears that damage has been done as J.G.M. terminated contact with the child just after her eighth birthday.  We can label him “dad” and we can compel him to pay support for her. But we can’t make him love her or “fix up” a family for this innocent child.

Almost twenty years ago, I was appointed to a committee of the state bar association to address this presumption issue. I was and, remain in a decided minority when I suggested that there be mandatory paternity testing at the hospital before a child is released.  If that had been done in this case the cards would have been on the table.  And knowing that the testing would be required, many couples would be forced to be more honest early on.  The trouble is that far too often, a secret is kept and the longer it is kept, the more damaging it becomes to the child involved.

On September 28, 2014 Aaron Weems posted a blog in which he reported on a panel Decision of the Superior Court holding that a Father’s contractual undertaking to pay $10,000 to a Mother each time he sought to modify an agreed custody arrangement was enforceable. When the Mother sued to enforce the contract term and the Father filed objections stating that the contract was in derogation of public policy.  The Trial Court sustained his objections and Mother appealed.  The three judge panel decision reversed the trial court but the ruling was later withdrawn so that it could be considered by a full bench; nine of the fifteen commissioned judges.  The matter was argued in the Fall, 2015 and a new decision was issued on February 5.

The crux of the issue remains the same. The parties indeed made a contract containing this $10,000 modification “honorarium.”  When Mother sought to enforce Father (a lawyer) claimed that while he did sign the contract, the provision could not be enforced.  The law of contracts has long held that some provisions are against public policy and that those are unenforceable.  The typical examples are contracts involving illegal activities.  But Pennsylvania also has a long history of cases holding that agreements that limit child support are subject to being set aside where the Court determines that the arrangement does not promote the best interests of the child.  The Granddaddy of these cases is one where a Mother agreed to $5 a month in child support because she felt confident that helping the Father afford medical school would ultimately benefit their child.

The defendant in Huss v. Weaver 2016 Pa. Super. 24 tried to argue his way into the tent affording protection from his own agreement on the basis that paying the $10,000 charge was in some way bargaining the rights of the subject child.  The Superior Court was not buying that; noting that this was not money coming from support or a fund for the child, but Husband’s own resources.  The Court also found that the agreement in controversy contained a statement that Father was an attorney capable of earning “a large salary.”  It also distinguished a case where the Court voided an agreement that provided for one parent to pay the other parent’s legal fees if she later sought to modify the support agreement formed by the parties. Kraisinger v. Kraisinger 928, A.2d 333, 345 (Pa. Super, 2007).

There is language in this opinion which suggests that at hearing on this claim, the Defendant may be able to assert that he should be absolved of his contractual undertaking if he could show that the $10,000 payment was an impediment to his seeking modification of custody. See Slip opinion at p. 12. That, however, is not a basis to hold the agreement as violating public policy on the basis of the pleadings.  The case was remanded for hearing.

Four of the judges joined in a concurring opinion that cautioned the trial court that if the Defendant develops the right record, he might win. Penalty provisions that do not relate to actual damages are not favored in law.  The concurring opinion also notes that if facts were established that the $10,000 payment was impeding a bona fide action to protect the interests of the child, the court might come out with a different result.  So in the end, all we really know is that this kind of payment clause is not per se a violation of public policy but that its invocation will be viewed with suspicion even when agreed.

In a year when there have been relatively few published opinions and few of those offering much precedential value, the year ends with an important ruling by the Pennsylvania Supreme Court.

The question in A.S. v. I.S. (8 MAP 2015) revolved around the matter of when a step-parent can owe child support.  In this case, a mother gave birth to children in Serbia in 1998 and later married the Defendant. Together they brought the children to America and the Serbian father of the children lost contact by 2006.  In 2009 Mother and step-father separated.  In July 2012 Mother expressed an intention to move to California.  Step-father filed to prevent that asserting that he was in loco parentis (in the place of a parent) and as such had custody rights under the statute governing standing.  Standing was sustained and the custody case concluded with the parents being awarded shared legal and physical custody of the children.  No doubt chastened by having her plans to relocate foiled, Mother filed an action for support to which step-father objected stating that his position in loco parentis did not imply a financial duty to the children.

Father’s position was sustained by both the trial and Superior Courts. Mother petitioned the Supreme Court to hear the matter and review was granted.

The 3-1-1 decision issued on December 29, 2015 does not establish a bright line test. Fundamentally, it sustains the view found in Com. ex rel McNutt. v. McNutt that step-parents are not generally liable to support children who are neither their progeny nor their adopted children. 496 A.2d 816,817 (Pa. Super. 1985).  See also DeNomme v. DeNomme, 544 A.2d 63,65 (Pa. Super. 1988)   It also approves the holding in Drawbaugh v. Drawbaugh, holding that assertion of “minimal” continuing contact with a step-child does not trigger a duty of support. 647 A, 240,242-3 (Pa. Super. 1994).

But here, step-father’s action to prevent mother’s relocation and his pursuit of shared legal and physical custody was enough to upset the general rule.

Noting that this case was analogous to L.S.K. v. H.A.N., 813 A.2d  872 and Fish v. Behers, 741 A.2d 721 (Pa. 1999) which dealt with facts giving rise to a form of equitable estoppel, Justice Baer writes that where a party assertively hold himself out as a child’s parent, that party may be held to the correlative duties of a parent.  He notes that step-father in this case assumed and vigorously pursued parental duties in trying to halt the relocation and in pursuing shared custody.

As noted, this is not a bright line test. One can read the majority language in page 13 of the opinion as holding that a step-parent may cross the “support” line by invoking judicial remedies of any kind.  Such an interpretation appears to be inconsistent with Drawbaugh. So finding the line where support may be due from a step-parent may not be easy but it seems clear from this case that stopping relocation and then securing shared custody is “enough.”

The opinion does also present a conundrum of sorts. The parties separated in 2009.  Step-father filed for divorce in 2010.  His complaint for custody was not filed until 2012.  All we are offered about the period between the 2009 separation date and the 2012 filing date is that the parties “informally shared custody of the children.”  We don’t know what that three year “sharing” involved in a physical sense and that prompts the question of how soon after a separation must a step-parent act to assert in loco parentis before he or she loses that status. Alternatively, what kind of sharing effectively “tolls” any temporal limitation?  In an age when serial live in relationships without benefits of marriage are increasingly the “norm”, can Boyfriend 1 sue for custodial rights when mother and child now reside with Boyfriend 3.

On October 5th of this year, the Superior Court disposed of an alimony modification request that was decided by the trial court in October, 2014.  The facts and the ruling present a tale of how divorce practitioners need to pay heed to language when modifying an order of alimony.

Egan v. Egan, 2015 Pa. Super. 2013 was decided in Montgomery County, Pennsylvania but began as a divorce in Montgomery County, Maryland.  In 2002, the Maryland Court issued a divorce decree with an alimony order providing for one year of alimony at $4,000 per month and then alimony of $3,000 per month “thereafter.”   In 2004 the former husband filed to register the alimony award in Montgomery County, Pennsylvania and in April 2005, the parties formed a stipulation that transferred both the alimony and child support to Pennsylvania.  The Pennsylvania order made several modifications to alimony, child support and arrearages.  The Pennsylvania Order contained a provision that should father succeed in reducing his child support, his alimony obligation would have a corresponding increase.  We have seen these kinds of arrangements in agreements for many years, but this is the first time we have seen this discussed in an appellate case.  If Father petitioned to decrease child support, the agreed upon increase in alimony was also to render the revised alimony number, non-modifiable.  This agreement was made an order of court in April, 2005 in Pennsylvania.

In February, 2013 Husband/Father filed in Pennsylvania to modify the alimony.  Wife/Mother countered that the alimony was non-modifiable because what was submitted in 2005 was a stipulation or “agreement”.  In a ruling made without a hearing, the trial court ruled as a matter of law that the 2005 document was an agreement under Section 3105 of the Divorce Code and therefor was not subject to modification.  It also held a hearing on Wife’s counterclaim and held Husband in contempt for failure to comply with the 2005 stipulation.  Husband or rather ex-husband appealed.

Because the Maryland divorce decree mandated payment of indefinite alimony, it appears that the Pennsylvania court viewed the alimony award as modifiable as registered here in 2004.  But the “agreement” to modify the alimony and child support provisions of the Maryland decree after registration in Pennsylvania was “agreed”.  The Superior Court ruling is a determination that in resolving the modification of alimony by “agreement”, the parties took an order that otherwise was subject to modification under Section 3701(e) and converted it to an agreement under Section 3105(c).

Section 3105 (c) states that an agreement regarding disposition of existing alimony shall not be subject to modification absent “a specific provision to the contrary.”  In this case, husband argued that Section 3105 governed only those cases where there was a comprehensive agreement.  The Superior Court rejected the argument that agreements under Section 3105 need to be comprehensive, holding instead that if he wanted his 2015 modification to continue to permit further modification, that language needed to be written into the modification instrument.  His argument that alimony was modifiable because he never did seek a modification in child support was rejected for similar reasons.  By reaching the agreement embodied in the 2005 stipulation, husband took an otherwise modifiable alimony order and transformed it into a non-modifiable agreement.

The opinion discussed at length the policy reasons behind the difference in modifiability between Court ordered and agreed alimony.  In a word, the view expressed is that parties to an agreement understand that non-modifiable alimony under Section 3105 is a fundamentally different animal than agreed alimony under Section 3105, and that the parties have to understand that when they negotiate agreements.

The net of the ruling is that a party seeking to modify judicially ordered alimony needs to understand that unless the right to modify again is clearly enunciated, the right is lost where an agreement is reached.  This might be said to have a chilling effect upon such agreements, but the Superior Court found the statutes in controversy to be unambiguous.  It also found the argument that the unmodifiable alimony obligation was onerous (62% of payor’s net monthly income) to be unworthy of consideration.

To the practitioner, the lesson is to draft alimony modifications with great care. To the layperson, the lesson is, do not try to modify your own alimony orders without someone with experience looking at your modification documents.

 

 

Ashley Madison Data Breach only Slightly Less Obvious
Ashley Madison Data Breach only Slightly Less Obvious than Lip Stick on the Collar

 

When I first heard of the Ashley Madison data breach, I seem to be one of the few family law attorneys who felt somewhat cool to the idea it was going to result in a crescendo of divorce filings. First, due to Ashley Madison not having an email verification protocol, the presence of an email on the list is not in any way a confirmation that the legitimate owner of the email registered it with the website. Secondly, I had to assume that anyone with common sense was not using a “real” email and the chance for exposure would be minimal. Thirdly, I assumed that of the millions of identified users, perhaps a smaller percentage were active users and a portion were fake emails or users who registered as a goof; I imaged a much smaller pool relative to amount of registered users. Finally, I considered the other spouse and whether they would have the wherewithal or suspicion to search for their spouse’s email (emails?) among the users. Overall, I imagined a smattering of “Ashley Madison motivated divorces” being reported, but nothing that would move the needle on average filings.

If initial reports are accurate, I clearly overestimated the common sense of many Ashley Madison users and grossly underestimated their laziness in not opening anonymous, dedicated email accounts to register to the site.

Now that the data has been dumped and various websites are combing the data for notable users and email suffixes, I am much more certain that there will be some serious fall-out for relationships, certainly, but also for the employment of users. The news coverage surrounding the breach also brought to light what might end up being the most relevant aspect of the breach for any future divorce cases: the expense. Again, while the presence of an email is not dispositive of use, the credit card records are pretty conclusive.

Based on the price scaling reported, a motivated philanderer could rack up a fairly significant bill on Ashley Madison before they ever get to their first illicit rendezvous. When you factor in the costs of carrying on an affair (i.e. meals, travel, and gifts) the expenses increase exponentially. Each dollar applied to the affair is a dollar inappropriately dissipated from the marital estate.  Once the affair is exposed and a case is in litigation, a forensic accounting of bank accounts and credit cards will occur and eventually the financial scope of the affair will emerge.

The affair, in of itself, may not have a tremendous impact on a case since equitable distribution in Pennsylvania is blind to the bad actions of parties (unless those actions have a financial impact on the estate). For members of the armed forces, however, adultery is a punishable crime which could lead to dishonorable discharge and loss of financial benefits, such as pensions. Losing a pension adversely impacts not just the service member, but the service member’s spouse. Losing a retirement account due to such behavior would undoubtedly be argued as a dissipation of that marital asset and with the value of the lost pension being assigned to the service member and corresponding assets given to the spouse (assuming there are any).

Other people may be in sensitive positions involving confidential data or public positions where the appearance of impropriety from an exposed affair has a greater impact than whether the affair affects their ability to do their job. Losing a job over an affair could be interpreted as a “voluntary decrease” in income, not unlike being fired for cause or voluntarily taking a lower paying position to avoid a support obligation.

The real story about Ashley Madison data drop is not the salacious exposure of people seeking out affairs, but the breach of security for an organization relying so heavily on confidentiality – their entire business model and marketing campaign hinges on it. Go see our blog on data security for more information on such topics.

What will continue to generate news for the coming weeks, however, will be the cases where Ashley Madison data will be presented as evidence for economic loss in divorce or support cases, and the jumping off point for investigations into certain registered users. After the initial fireworks of the disclosures, this will be a slow burn story as more people are exposed and the repercussions are felt. The easy joke is that this is a boon for divorce lawyers, but I think it will be the family therapists and accountants who end up the busiest in the end.

(Photo Credit: Copyright a href=’httpwww.123rf.comprofile_toniton’toniton  123RF Stock Photoa)

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Aaron Weems is an attorney and editor of the Pennsylvania Family Law Blog. Aaron is a partner in Fox Rothschild’s Blue Bell, Pennsylvania office and practices throughout the greater Philadelphia region. Aaron can be reached at 610-397-7989; aweems@foxrothschild.com, and on Twitter@AaronWeemsAtty

In February we mentioned the introduction of a bill in the Pennsylvania state Senate which would allow the termination of a rapist’s parental rights, but preserve the victim’s (and state’s) ability to seek child support. The bill progressed through the Senate by unanimous vote recently and is now headed to the state House of Representatives for consideration. This was introduced by Republican Senator Randy Vulakovich of the 38th District (Allegheny Co.; Pittsburgh area) and is an important bill to protect the rights and dignity of rape survivors and their children. Though the number of cases this law impacts may be few in number, it should never be a possibility for even a single case. I expect this bill will be passed by the House and signed into law by Governor Wolf later this year.

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Aaron Weems is an attorney and editor of the Pennsylvania Family Law Blog. Aaron is a partner in Fox Rothschild’s Blue Bell, Pennsylvania office and practices throughout the greater Philadelphia region. Aaron can be reached at 610-397-7989; aweems@foxrothschild.com, and on Twitter @AaronWeemsAtty.

Recently the Superior Court considered a case in which a party died during the pendency of a support action. In the divorce case for Moser v. Ronald R. Renninger, et al., No. 1065 MDA 2014, the husband and wife were separated with the wife having filed for divorce and sought spousal support against the husband, receiving an interim support order of $394.10 per month plus arrears in an unspecified amount.

As an interim order, this matter was scheduled for an evidentiary hearing and designated complex which allowed the parties to conduct discovery (typically “simple” support cases do not permit discovery). Approximately two months after the interim order was entered, the husband died and, without having established grounds for the divorce, the divorce action and the husband’s estate filed a motion to terminate the support action and Support Order on the basis that without a divorce action, alimony pendente lite is not available to the wife.

While the wife agreed that the support obligation terminated upon the husband’s death, she argued that it is appropriate to apply a support order to the estate for the purposes of paying the accumulated arrearages. Basically, wife argues that she is a creditor to the estate.

At trial, the court found that wife could proceed with an arrearage-only spousal support case. On appeal, the estate asked the Superior Court to consider: 1) whether the failure to dismiss the support case is an error of law and an abuse of discretion; 2) that the record does not support finding that wife is entitled to receive spousal support; 3) error of law and abuse of discretion were committed in miscalculating (husband’s) income.

Though acknowledging that she was no longer eligible for APL, wife pursued her claim for a separately filed spousal support action and disputed that such action necessarily abates with husband’s death.  The Superior Court followed the reasoning of the trial court in finding that while a support order cannot be entered post-death, the interim order was valid and wife could continue her support action on the basis that a surviving spouse can collect unpaid support from the estate of the deceased spouse.

For the second issue, the estate attempts to argue that the husband had a defense to spousal support. Unlike APL which is a statutory entitlement to the dependent spouse, the payor in the spousal support case can offer defenses to the payee’s entitlement to spousal support. In this case, the estate points to trial court’s failure – in their opinion – to adequately consider a protection from abuse petition filed by husband and that wife voluntarily deserted husband.  The trial court, however, noted these events and cited that both parties filed PFA’s and both voluntarily withdrew them. Mutual allegations of abuse, the trial court reasoned, are inadequate defenses to a duty of support.  The Superior Court again sided with the trial court’s reasoning.

The final issue involves the calculation of husband’s income. The estate contends that the trial court improperly allowed evidence which was not authenticated and failed to consider the husband’s 2011 tax return. Basically, the estate objected to the introduction of PACSES records generated as part of the support conference on the basis that it is hearsay requiring authentication by the custodian of records. The support master found the information provided to be maintained by the Pennsylvania Department of Labor and reliable.

The trial court acknowledged the problem of authentication and that the record did not fall within an exception to hearsay evidence.  The Superior Court agreed with the trial court, however, they also cite the trial court’s reliance on corroborating evidence which established husband’s income and supported the records offered at the master’s hearing. So while an authentication and hearsay issued existed, it was not enough to justify remanding the case back to the trial court.

While the support case terminated, the wife remained a creditor to the estate. This case highlights a few issues, but the more important being that the death of a party without grounds having been established may not justify stopping all the actions in the case. Careful consideration must be made of what can abate and what requires the court’s review.

 

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.

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.

 

6089394-happy-new-year-with-calendar-highlighting-december-31st
Copyright: 123RF Stock Photo

Discussing “how to survive the holidays” during the holidays is a pretty standard article for people to write. For many clients, such articles allow for self-reflection on how they approach the holidays and their interaction with their ex-spouse; or it helps build some confidence that they will manage the uncomfortable situations which arise around extended family. The problem is, if you are a client looking for advice on how to deal with holiday-related legal issues during the holidays, it is already too late to do anything. Due to scheduling constraints, attorney or client availability, negotiations and conferences, dealing with, for example, a Christmas issue should really begin in September or October.

Consequently, now that the winter holidays are nearly behind us, the next major source of friction for many people is how they are going to handle their kids’ summer vacations and educational decisions. Which camp? How many camps? When will you take vacation? Where is the vacation and who will be there? Who will be covering the kids? Who gets priority on choosing vacation weeks? Should there be a change in schools or extracurricular activities?

Addressing any or all of these questions cannot first occur in May. The earlier they can be addressed the greater the probability they will be worked out between the parties or, failing that, allow for enough time to take the issue to Court and have a decision rendered. Do not wait too long – the court will not consider a summer issue an “emergency” and allow for an expedited hearing simply because there is little time between when the disagreement occurred and when a decision must be made. You may find that petition slotted into the non-emergency hearing list and the ultimate decision affecting your 2016 summer instead of 2015.

Many family law attorneys notice a bump in their cases right after the holidays. People often wait to address issues until they have made it through this time of year and have the time and space away from friends and family to deal with a deeply personal issue such as divorce, or address a potentially contentious custodial issue. Having survived the holidays, or perhaps as a result of what happened over the holidays, they need to discuss their options or pursue an action. It is also a good time to take stock of what may come up in the near future.

This time of year is ideal for looking at the next six months in order to alleviate some of the stress and concern they may have about summer vacations or child care coverage when the kids are out of school. If you think that there may be a legal or logistical issue over the summer or following school year, it is worth the call to your attorney to review your custody order or the applicable agreement and see whether you need to address your concern sooner rather than later. You may save yourself significant amounts of money, aggravation, and disappointment.

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Aaron Weems is an attorney and editor of the Pennsylvania Family Law Blog. Aaron is a partner in Fox Rothschild’s Blue Bell, Pennsylvania office and practices throughout the greater Philadelphia region. Aaron can be reached at 610-397-7989; aweems@foxrothschild.com, and on Twitter@AaronWeemsAtty.