Chen v. Chen

Brief Fact Summary.

Theresa (Daughter of Richard Chen (Father (D)) (D)) intervention in a support action brought against Richard Chen (D) by his former wife and Mother (P) of his Daughter, Wheamei Chen (P) was contended by Richard Chen (D) on the ground that his Daughter was only an incidental beneficiary, not an intended beneficiary of the property settlement agreement (Agreement) at issue.

Synopsis of Rule of Law.

An action to enforce support provisions of a parent’s property settlement agreement, where the support payments are to be made to the custodial parent is at the option of the child.

Facts.

Richard Chen (Father (D)) (P) and Wheamei Chen (Mother (P)) (P) divorced when their children were still kids. They had a son and a Daughter together. The Daughter’s name was Theresa. The property settlement agreement (Agreement) entered into stipulated that Father (D) was to pay $25 per week for the upkeep of his Daughter, who at this time was just a year old. The condition attached to this was that the Father (D) would increase this amount upon obtaining regular employment and as his salary increased in accordance with the county’s domestic relations guidelines. This Agreement was not merged with the divorce decree but was incorporated just as a reference.
The Father (D) made payment of $25 for his Daughter’s upkeep as stipulated in the Agreement until she was 18 but did not increase this payment in accordance with obtaining regular employment and salary increase. As Theresa clocked 18, her Mother (P) was informed by the county that support payments would stop. In response to this, a petition on findings of contempt of court and enforcement of property settlement was filed by the Mother (P) against her former husband. The Mother (P) sought to enforce the Agreement provisions on the increase in child support arising from obtaining regular employment and increase in salary for the past 18 years and to collect the shortfalls of payment over the years.
Her Daughter also filed a petition to intervene as a third party intended beneficiary under the Agreement as she turned 18. The trial court, applying case law that relied on Restatement (Second) of Contracts S 302 which stipulates that” a beneficiary is an intended beneficiary if recognition of a right to performance in the beneficiary will effectuate the intentions of the parties and the circumstances indicate that the promisee intended to give the beneficiary the benefit of the promised performance”, held that the Daughter had the right to intervene in the case.
Subsequently, Mother (P) withdrew from the case as a party, leaving Daughter and Father (D) as party-opponents. In giving judgment, the court held that the Father (D) breached the contract and asked him to pay $59,000 in arrearages due under the agreement to his Daughter. On appeal, the state’s intermediate court ruled in favor of the Daughter and affirmed the ruling of the trial court on the ground that the Father (D) breached the support provisions of the Agreement. Therefore, the Father (D)’s argument that his Daughter had no direct right to the payment but only to her parents’ support was rejected by the court. However, the state’s highest court granted review.

Issue.

Does a child have the option of intervening or bring suit in an action to enforce support provisions of a parents’ property settlement agreement where the support payments are to be made to the custodial parent?

Held.

(Baer, J.) No. An action to enforce support provisions of a parents’ property settlement agreement, where the support payments are to be made to the custodial parent is at the option of the child. The contention of the Father (D) was that at the time the Agreement was made, both parties did not view Daughter as an intended beneficiary, but as an incidental beneficiary. The Father (D) based is argument that his Daughter was not meant to be receiving the payment and that permitting children to intervene in their parents’ support agreement will open a lacuna for a child to sue his/her parent by equating the right to be supported with the right to support payments.
It is however clear that both parents intended to provide support for their Daughter but did not intend that their Daughter to receive the payments directly. Although the Agreement gave the Mother (P) the levity to exercise her discretion as a parent to determine how best to use the support funds provided by the Father (D) and to care and control their Daughter. Accordingly, Daughter is not an intended beneficiary under S 302 and so the judgment in favor of the Daughter was reversed because her right to performance is not “appropriate to effectuate the intention of the parties”.

Concurrence.

(Cappy, C.J.) the court did not err in its decision on relying on the view of majority on contract law principles. However, the majority should not have widened the scope of the issue to include discussion of policy issues and other matters.
(Castille, J) the case should have been limited to the application of contract principles alone and this clearly spells it out that Daughter was not an intended beneficiary under S 302 because the Agreement stipulated that the Father (D) would make payment to the Mother (P) for Daughter’s benefit and not for Daughter to claim direct payment.
(Saylor, J.) Since the Agreement was basically to support; Daughter was an intended beneficiary during her minority. Minor children should not be given that right to initiate legal actions absent express statutory authority.

Discussion.

This case typifies that the court supports children seeking to enforce provisions of their parents’ separation agreements’ express provisions that provide benefits to flowing directly to them. This clearly show that the children are intended rather than intended beneficiaries and so, resolving cases of this nature can be accomplished through contract principles alone without having recourse to policy considerations.