By Michael Bertin
The Legal Intelligencer
June 9, 2009
It is understood by family law practitioners that child support generally terminates upon the emancipation of the child or the death of the payor. Pursuant to Pennsylvania caselaw, parents do not have a duty to provide for minor children in their estate. However, pursuant to the recent Pennsylvania Superior Court case of In re Estate of Johnson , a party may, by contract, bind his or her estate to pay child support after his or her death.
The facts of the Johnson case are as follows: Mr. and Mrs. Johnson entered into a marital dissolution agreement when they divorced in 1993. The parties' agreement contained a provision for child support. Mr. Johnson died testate Feb. 21, 2002. At that time, Mrs. Johnson was "the guardian" of the couples' two minor children. "Mrs. Johnson filed objections to the Executor's proposed First and Final Account, alleging that the Estate was bound by the terms of the 1993 Marital Dissolution Agreement to continue to provide child support and cover other expenses on behalf of the minor children. The Executor disputed those obligations and noted that the children began receiving $929.00 per month in Social Security benefits after their father's death."
The Orphan's Court of Dauphin County issued an order directing the following: "(1) The Estate was liable for child support payments of $700.00 per month to the minor children until they reached age 18, pursuant to the MDA (Marital Dissolution Agreement); (2) The Estate was not entitled to use the Social Security benefits as a credit against the child support obligation; (3) The Estate was not obligated to contribute to the children's college expenses, as there was no enforceable agreement on that point in the MDA; and (4) The Estate was obligated to cover certain of the children's medical expenses pursuant to the MDA." The executor filed a timely appeal, and Mrs. Johnson filed a cross-appeal.
The executor raised four issues on appeal. Her first issue was with regard to the estate being required to pay child support after Mr. Johnson's death claiming that the agreement did not specifically provide for such payments but instead provided a life insurance option that Mr. Johnson failed to exercise and Mr. Johnson did not make a provision for the minor children in his Last Will and Testament. The executor's second matter on appeal was whether the lower court erred in failing to give a credit for the Social Security payments received by the children against any post-mortem child support obligations. The executor's third issue on appeal was whether the lower court erred in interpreting the agreement to require reimbursement from the estate for medical expenses incurred by one of the children after Mr. Johnson's death. The final issue raised on appeal by the executor was whether the lower court erred in awarding prejudgment interest to Mrs. Johnson with respect to unpaid installments of child support, though the agreement did not provide a provision for payment of same, and the lower court specifically found that the executor's failure to continue making payments of child support after Johnson's death did not constitute a breach of the agreement.
Mrs. Johnson raised two arguments in her cross-appeal. Her first argument was whether the trial court "erred in declining to enforce the deceased's alleged agreement in the MDA to provide for the children's college expenses." Mrs. Johnson's second argument was whether the trial court erred in failing to award attorney fees against the estate for breaching the agreement.
When reviewing a decree by the Orphans' Court, the reviewing court must determine whether the record is free from legal error and the court's factual findings are supported by evidence.
In addressing the executor's first argument on appeal regarding whether an estate may be required to pay child support, the Superior Court stated: "Pennsylvania courts have held, however, that parents may contractually bind their estates to continue to make support payments in the event of the parent's death." The Superior Court then analyzed two specific paragraphs contained in the parties' agreement. Paragraph 22, titled "Child Support," provides, in part: "[Mr. Johnson] hereby agrees to pay to [Mrs. Johnson] the sum of Seven Hundred ($700) Dollars a month per child as support … The parties hereto agree that any obligation of child support shall terminate upon the eighteenth (18) birthday of each respective child." Paragraph 30 of the parties' agreement provides: "This Agreement shall be binding and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors, and assigns."
The executor argued that under Pennsylvania law, the parties' support obligation ends with the parent's death. However, the Superior Court stated: "The unambiguous language of the MDA, however, binds the Executor to continue to pay child support until the children reach age 18. The parties could have included language in paragraph 22 providing that the obligation would terminate upon the death of the Deceased, but they did not." Finding that the clear language of the agreement supported the trial court's decision to bind the estate to pay child support until the children reach age 18, the Superior Court held that the trial court did not make an error of law in enforcing the child support provision of the parties' agreement against the estate.
With regard to the executor's second issue on appeal, the Superior Court held that a credit should be given for the Social Security payments received by the children against the child support obligation of the estate. Because the Social Security benefit received by the children is greater than the estate's monthly support obligation, the Superior Court found that no money was due under the agreement from the estate to the children. Likewise, the Superior Court vacated the trial court's order directing the payment of child support from the estate. In making its ruling regarding the Social Security credit, the Superior Court focused on its prior ruling in the case of Children and Youth Servs. of Allegheny County v. Chorgo . In Chorgo , the Superior Court "explained that Social Security benefits are earned over the course of time by virtue of a person's employment and payment of taxes. Likewise, direct payment of Social Security benefits to children simply alters the source of payment while satisfying the purpose of the support obligation." Though Chorgo pertained to retirement benefits, the Superior Court in Johnson held that death benefits are tantamount to retirement benefits in that death benefits are also a product of the deceased's employment and payment of taxes. The Superior Court held that "the death benefits are merely a different source of money from which the support obligation can be fulfilled." The lower court distinguished Chorgo and declined to apply a credit against the estate's child support obligation for the Social Security benefits, holding that Chorgo involved court-ordered support as opposed to a contractual agreement to provide support. The Superior Court did not find a distinction between the two, and, therefore, reversed the trial court and ordered the credit to be applied.
With regard to the executor's third issue on appeal pertaining to the repayment of unreimbursed medical expenses by the estate, the Superior Court analyzed the parties' agreement that provided, in part, as follows: "Husband shall be solely responsible for the payment of all non-reimbursed expenses for reasonably required medical care." The Superior Court applied the same rules of contract interpretation that it applied to the child support provision in the parties' agreement and held that the clear language of the agreement binds the estate to reimburse Mrs. Johnson for the remaining balance of non-reimbursed medical expenses that she had incurred for the children. As such, the Superior Court affirmed the trial court's order regarding same.
The executor's final issue on appeal pertained to the prejudgment interest on the award of unpaid child support. Because the Superior Court vacated the estate's obligation of child support because of the Social Security credit, the issue of prejudgment interest became moot.
Mrs. Johnson's first issue on appeal regarding college expenses is an interesting issue. The parties' agreement provided the following language regarding college expenses: "Husband does agree to contribute to each child's college education pursuant to and in accordance with the agreement of the parties or applicable law." Mrs. Johnson argued that the parties' agreement bound Mr. Johnson's estate to contribute toward the children's college expenses. However, the Superior Court held that Mrs. Johnson's argument fails, since the college provision in the agreement "clearly does not contain sufficient specific terms to constitute an enforceable agreement in and of itself." The provision in the agreement provides two areas where husband would be required to contribute to college education: "in accordance with the agreement of the parties," and under "applicable law." The Superior Court found that the Johnsons never entered into "an agreement" with specific terms regarding college payments, and reiterated that Pennsylvania law does not impose an obligation on parents to provide for college expenses for their children pursuant to the case of Blue v. Blue and Curtis v. Kline . Therefore, the Superior Court affirmed the lower court's decision of not ordering the estate to contribute to each child's college education.
The Superior Court denied Mrs. Johnson's second and final argument on appeal regarding attorney fees, holding that Mrs. Johnson failed to cite any law governing awarding attorney fees and also found that the executor's conduct was not "dilatory, obdurate, or vexatious."
This case is important for the family law practitioner as it can be used to bind a child support payor's estate to pay child support if the payor's property settlement agreement provides that the child support shall remain until the children are 18 and does not contain language that it should terminate upon the payor's death. With regard to the credit issue raised in the Johnson case, the current child support guidelines provide a formula for taking into account a child receiving a derivative benefit when calculating a child support award. Chorgo was decided prior to the enactment of the Pennsylvania Child Support Guidelines. However, because the Johnsons agreed to an amount of support in their MDA, the Superior Court used the Chorgo analysis in deciding to apply a credit against the support obligation. It is important to note that Chorgo held that the obligor's entitlement to a credit is a rebuttable presumption. However, the Superior Court was quick to add that Chorgo does not give guidance as to "what sort of evidence might rebut the presumption."
Michael E. Bertin is an associate in the Philadelphia law firm of Obermayer Rebmann Maxwell & Hippel. He is co-chairman of the custody committee and a member of the executive committee of the family law section of the Philadelphia Bar Association, and a member of the executive committee and council of the family law section of the Pennsylvania Bar Association.
This article is reprinted with permission from the June 9, 2009, issue of The Legal Intelligencer. © 2009 Incisive Media US Properties, LLC. Further duplication without permission is prohibited. All rights reserved
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