Chen v. Chen
893 A.2d 87 (2006)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
Absent special circumstances, a child is not a third-party intended beneficiary with standing to enforce a provision in a parents' property settlement agreement that requires one parent to make generalized child support payments to the other parent, as recognizing such a right is not 'appropriate to effectuate the intention of the parties.'
Facts:
- In 1983, Wheamei Chen (Mother) and Richard Chen (Father) entered into a property settlement agreement as part of their divorce.
- The agreement stipulated that Father would pay Mother $25 per week for the support of their child, Theresa (Daughter).
- The agreement further provided that these support payments would be increased in accordance with county guidelines if Father obtained regular employment or received a salary increase.
- Beginning in 1985, Father obtained employment and received salary increases but never increased the child support payments beyond the original $25 per week.
- Father continued to pay only $25 per week until Daughter reached the age of eighteen.
- During Daughter's minority, Mother never sought to enforce the provision requiring an increase in child support payments.
Procedural Posture:
- Wheamei Chen (Mother) filed a petition for special relief in the Northampton County Court of Common Pleas (trial court) to enforce the property settlement agreement against Richard Chen (Father).
- Theresa Chen (Daughter) filed a petition to intervene in her mother's action, claiming she was a third-party intended beneficiary.
- The trial court granted Daughter's petition to intervene.
- Mother subsequently withdrew as a party, leaving Daughter as the sole petitioner against Father.
- Following a non-jury trial, the trial court entered an order in favor of Daughter, awarding her $59,292.80 in support arrearages.
- Father (appellant) appealed the trial court's order to the Superior Court of Pennsylvania.
- The Superior Court affirmed the trial court's decision, holding Daughter was an intended beneficiary with the right to enforce the agreement.
- Father (appellant) petitioned for allowance of appeal to the Supreme Court of Pennsylvania, which granted the petition.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Is a child an intended beneficiary under the Restatement (Second) of Contracts § 302 with a legally enforceable interest in a child support provision of her parents' separation agreement that directs payments to be made to the custodial parent?
Opinions:
Majority - Justice Baer
No. Daughter is not an intended beneficiary with a legally enforceable right to performance under her parents' property settlement agreement. To determine if a third party is an intended beneficiary, the court applies a two-part test from Restatement (Second) of Contracts § 302. While the second part (the promisee intended to give the beneficiary the benefit) is met, the first part—whether recognition of the beneficiary's right is 'appropriate to effectuate the intentions of the parties'—is not. Strong public policy disfavors allowing a child to sue a parent for generalized support payments made to the other parent. Such agreements intend for the custodial parent to receive the funds and exercise discretion in using them for the child's care, not for the child to have a direct claim to the money. Granting children standing in these cases would undermine parental authority, disrupt family harmony, and open a 'Pandora's Box' of litigation, allowing children to demand an accounting from the custodial parent. Therefore, Daughter is merely an incidental beneficiary without standing to enforce the agreement.
Concurring - Chief Justice Cappy
No. I agree with the majority's conclusion based on principles of contract law but would not rely on the broader discussion of public policy considerations or comment on extraneous issues like the calculation of the support award.
Concurring - Justice Castille
No. The issue can be resolved through a straightforward application of the Restatement § 302 test without resorting to a broad public policy analysis. The unambiguous language of the agreement demonstrates that the parties intended for Mother, not Daughter, to be the direct recipient of the child support payments. Accordingly, recognition of a right to performance in Daughter is not 'appropriate to effectuate the intention of the parties,' making her an incidental beneficiary.
Concurring - Justice Saylor
No. Contrary to the majority, I believe Daughter was clearly the intended beneficiary of a child support agreement. However, the essential question is not one of contract law but of public policy. As a matter of public policy, minor children should not be granted standing to initiate legal actions against their parents to enforce support agreements absent express statutory authority. I therefore concur in the result based on these policy grounds.
Analysis:
This decision establishes a significant precedent in Pennsylvania family and contract law by limiting a child's ability to enforce parental support agreements. The court carves out a public policy exception to the standard third-party beneficiary doctrine, prioritizing parental rights and family harmony over a strict application of contract principles. The ruling distinguishes between generalized support payments made to a custodial parent (which a child cannot enforce) and specific benefits designated to be paid directly to a child, such as college tuition or life insurance proceeds (which a child may be able to enforce). This holding will likely prevent a wave of litigation by adult children seeking retroactive child support and forces the custodial parent to be the sole party responsible for enforcing such agreements during the child's minority.
Unlock the full brief for Chen v. Chen