Archives: Modification

My colleague Aaron Weems reported this case on April 12. In the spirit of our U.S. Supreme Court, I offer the following concurrence with his blog but spirited dissent from what the Superior Court ruled.

In this published decision, a panel led by former President Judge Bender decides that so long as a reference is made in the pleading to custody modification it does not matter how the pleading is captioned. The problems presented by such precedent are worth some examination.

Contempt in custody is a statutory creature. 23 Pa.C.S. 5323(g). It offers five very specific remedies, none of which involve modification, In many Pennsylvania counties, the procedure for contempt is entirely different than that for custody modification. Scheduling is also handled in a very different way because the issues are typically quite limited.  The Court personnel who schedule these matters do not customarily read beyond the caption of the petition to gather what the petitioner really wants.  So it would be fairly common for a court administrator to direct a contempt petition to a hearing list where several matters are scheduled for disposition in a single day.  A custody modification requires a pretrial statement under Rule 1910.4-3.  Request modification under the contempt rules and you can skip that step.

The next question involves what goes on in the Courtroom. Most judges are going to look at a petition such as the one in this case and tell the petitioner that he or she will hear the contempt but not the modification. But pity the poor litigant who finds himself defending a contempt with a request for modification in a setting where the judge has the time to hear a custody case.  That litigant better walk into contempt court ready to try a modification and to cover the sixteen factors that must be evaluated under 23 Pa C.S. 5328. See S.W.D. v. S.A.R. 2014 Pa. Super. 146 (2014). In the case decided here, the case was remanded because the contempt court failed to cover all of the enumerated factors.

So what have we accomplished? A party can effectively sandbag the opponent if the trial judge permits it.  Both bench and bar face the prospect of stepping into court not knowing what issues will be tried on the date that a “contempt” hearing is scheduled.  Obviously a judge can stop this but it seems clear, that is not required.

The opinion correctly observes that the right to due process was not wholly violated. As the opinion notes, the request for a change in custody was written into the petition filed by the Father. But both the legislature and the judiciary have made it very clear that child custody matters require a full exposition of the facts before any modification is made.  The idea that modification can be “bootstrapped” into a petition premised upon violation of an existing order works against the very principles both the laws and the rules espouse to promote.  And the defense that contempt can be a springboard for a wholesale modification of custody because it is in the “best interests of the child” to do so, is not a strong one.  The opinion goes to some length to describe “signals” that the trial was going to be addressing modification and not merely a contempt petition. The difficulties presented, especially to pro se litigants by reliance on signals rather than the plain caption of the pleadings presents its own problems.  We have published volumes of statutes and rules intended to make clear what judicial avenue a court is taking.  We reported a decision in November, 2012 where a panel of the Superior Court affirmed the concept that modification was a distinct proceeding from contempt.  See P.H.D. v. R.H.D. The idea that a parent suffered a significant change in custody of a child where there are clearly marked legal procedures which distinguish contempt from modification and where there was a “right” way to go about it which was not heeded, creates a disturbing trend.  Moreover, it opens the door to more appeals where the Superior Court will be asked whether the notice of intention to change custody pursuant to contempt powers is “enough”.  This will be fertile ground for appeal but not productive ground. Ironically, from the opinion it appears that the contempt that had been filed was never disposed of, which begs the question of whether this case was appealable in the first instance.

In sum, we have an opinion where substance triumphed over procedure, leaving procedure badly mauled and wondering “What next?”

2016 Pa. Super. 40 (2/18/2016)

 

 

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.

 

It is well established in Pennsylvania that it is against public policy to allow parents to bargain away child support for their children, but what about “taxing” themselves whenever they file a custody action? That is essentially the question raised in the Huss v. Weaver case before the Pennsylvania Superior Court.

The Superior Court ruled in favor of the enforceability of a $10,000.00 payment due to the mother each time the father filed a custody modification action. It is pointed out in an article written by Gina Passarella of the “The Legal Intelligencer” (registration required) that no appellate court had previously deemed a contract addressing custody and visitation to be unenforceable as against public policy. This case blurred the lines at the trial level, however, and while not a child support issue, the trial court nevertheless found that it was similarly against public policy as contracts limiting child support and an unenforceable element of the agreement.

Without knowing the provisions of the custody agreement, any number of explanations can be made for this type of seemingly restrictive aspect of the agreement. It is clearly designed to disincentivize the father from seeking modifications and “lock-in” the terms of the parties’ custody agreement against future efforts to modify, though the court could find no specific language in the agreement articulating that intent. Realistically, the amount is significant enough to discourage frivolous petitions to modify, but not a significant enough obstacle to father (an attorney) to seek modification in the event a modification was absolutely necessary.

The Superior Court could not find any justification to determine the provision to be so restrictive as to prevent the father from bringing an action in court. In fact, the agreement specifically states that the father was an attorney and capable of high level of income and that agreement included language specifically stating that both sides viewed the agreement as “fair, just and reasonable.”

As a consequence of the Superior Court’s overruling the trial court on the enforceability of the clause, they did not explore the merits of her second basis of appeal: that the father was estopped from contesting the enforceability of the agreement when he participated in the drafting and advised the mother that it was legal and enforceable. This would have been an interesting analysis for the court to make since it is a common occurrence for parties to reach agreements on custody without attorneys only to litigate the terms of those agreements months or years later.

This case continues Pennsylvania’s legal tradition of applying contract principles to family law agreements. Notwithstanding provisions that do, in fact, violate public policy, the court is going to give considerable deference to the wishes of the parties as they are articulated in their agreements. Here, the father negotiated and agreed to a clause which cost him $10,000.00 every time he filed a custody petition. Whether that has a chilling effect on his legal rights is a consideration for another time, but in this case, the court was not going to “fix” the agreement that the father co-authored with the mother.

(Photo Credit: www.vibshifting.com)

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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 a recent custody case, the Court denied Father contact with his children except for supervised visits while they underwent therapy.  Mother filed a contempt petition asserting that Father violated the custody order when he went to a school concert and videotaped both the Mother and the child while there.

The trial court correctly dismissed the contempt petition after Father testified that he understood no contact to mean no physical contact or conversation with the children. But, as sometimes happens, the Court used the contempt proceeding to “clarify” what the order was meant to accomplish.  Specifically, the trial judge told the Father that he could not appear at the children’s activities.  Father appealed and in P.H.D. v. R.R.D. the Superior Court vacated the

“clarification.”

 

This is an important decision because trial court judges are frequently charged with the duty of managing unruly families who like to push the envelope when asserting their parental rights.  It may well be in this case that this was precisely what Father was trying to do.  In contempt court, however, the sole question is whether an explicit order was violated.  Period.  It is not an opportunity to “fix” an otherwise imperfect order by changing its terms.  And Superior Court judges Wecht, Bowes and Musmanno have served a purpose in reminding trial judges that if they want to amend an order, all parties need to have notice of the fact that an amendment is being considered so that they can prepare for such a hearing.  This is in accord with longstanding precedent that contempt court is not a place to modify custody orders.

 

Lest it appear that we are siding with Father, we note that there may well be a solid ground to amend the order.  For Father to have appeared at a recital and videotaped his child is clearly not a contempt of a no contact order.  But when we read that Father also videotaped Mother (assuming she was not part of the child’s performance) one questions whether the motivation was to record or to harass.  But if that is the issue, the P.H.D. case makes clear that everyone needs to have due process notice what the issue is so each party can prepare and bring witnesses who might show how the videotaping was either innocent or menacing.  If menacing perhaps a modification was in order.  We also note that the judge may have been trying to do the right thing but the opinion clearly points out that he skipped a procedural step (notice and hearing) which the principles of jurisprudence demand.

 

N.B. A curious event is reported in the case.  The guardian ad litem asserted a procedural irregularity on Father’s part that could have resulted in this appeal being quashed. Query: Is that part of a guardian’s role?

 

P.H.D. v. R.H.D. 2012 Pa. Superior. 246 (Nov. 13. 2012)