Michael Bertin, Obermayer Rebmann Maxwell & Hippel

The interplay between the statute of limitations for contracts and property settlement agreements has been debated and appeared in numerous appellate opinions over the years. 42 Pa.C.S. Section 5525(a)(8) provides that generally an action upon a contract must be commenced within four years. When parties divorce, there is often a property settlement agreement (also referred to as a marital settlement agreement) executed by the parties resolving the economic aspects of their divorce. Over the years, the courts have analyzed whether property settlement agreements (or provisions contained therein) are continuing contracts. When a contract is a “continuing contract,” the question becomes when does the four-year statute of limitations begin.

The recent case of Weber v. Weber, ___ A.3d ___, 2019 PA Super. 133 (April 26, 2019), addresses this issue. The facts of the Weber case are very intricate and reflect a case with quite resiliency to reach a final result. When one reads the opinion, visions of a boxer continually coming back from his corner to re-engage for one more punch appear. This case has reached the Pennsylvania Superior Court two times. The first time that it appeared before the Superior Court the issue pertained to standing. The present appeal was between the husband in a divorce matter and his son. In the first appeal, the Superior Court reversed the trial court's dismissal of the matter due to the son's lack of standing and remanded the case. This most recent decision arises from the trial court's disposal of the case on the remand.

The pertinent facts of the Weber matter are as follows: Mr. and Mrs. Weber executed a property settlement agreement in 1999 and were divorced in 2000. In their agreement there contained a provision (paragraph 18) that was titled: “post-secondary education.” Paragraph 18 stated: “parents shall share equally the reasonable costs of an appropriate undergraduate college or other post-secondary education for the children.” Approximately seven years later, when the parties' son was a freshman at Florida State University (FSU), the wife filed a petition to enforce the agreement because the husband failed to pay his share of the son's tuition. In that matter, the son was granted intervenor status but the matter was later withdrawn by the wife.

When the son was approximately 28 years old, in 2016, he filed a petition for special relief asserting that he graduated from FSU and incurred a total cost for his education of $166,148.71, one-half of which is $79,988.44, plus interest on his student loans of approximately $24,000.  According to the opinion, the husband only paid $9,085.92. The son's petition was dismissed for lack of standing where the trial court reasoned that because the wife withdrew her petition years earlier he lacked standing. The Superior Court thereafter reversed that decision and remanded the matter. On remand, the husband filed a motion for summary judgment where he argued that the “son's 2016 petition was time-barred by the statute of limitations.”

The opinion goes to great lengths to discuss the argument by the son that he in fact did not earn an undergraduate degree at FSU but instead had earned sufficient undergraduate credits to begin pharmacy school. It is to be noted that after the son attended FSU he enrolled at Palm Beach Atlantic University (PBAU). It is to be further noted that the son orally moved to amend his petition to include the graduate school expenses for PBAU. The son's argument was that the plain language of the property settlement agreement required the husband to pay half of his pharmacy education expenses because the phrase “post-secondary” includes any education after high school.

The trial court agreed with the husband's position and granted his motion for summary judgment dismissing the son's petition for special relief finding that the parties' agreement did not create a continuing obligation “and thus son's petition was subject to the statute of limitations.” The trial court also found that the son's pharmacy school education was graduate-level and not included in husband's obligations under the parties' property settlement agreement. As part of the trial court's reasoning, it held that the “'son's contractual relationship with [the father] ended in 2011 when he completed his studies at FSU,' and concluded that the  son's petition was time-barred by the statute of limitations.” The son then filed a timely appeal. The crux of the appeal focused on whether the provision in the agreement was a continuing obligation and what was the inter-play with the statute of limitations.

The Superior Court disagreed with the trial court's holding that the obligation was not a continuing obligation. But, the Superior Court did agree that the pharmacy costs were not covered by paragraph 18 in the parties' property settlement agreement. The Superior Court focused on the word “or” in the provision contained in paragraph 18. The Superior Court held that they were bound to give “or” its normal disjunctive meaning. Therefore, the Superior Court agreed with the trial court's determination that “or” meant “either college or another type of post-high school education, but not both.” The focus then became when did the four-year statute of limitations start to run. Because the court did not find that the pharmacy school education was part of the education to which the parties were obligated to contribute, the clock began to tick upon the son's completion of his education at FSU. According to the opinion, “when a contract is continuing, the statute of limitations will run either from the time when the breach occurs or when the contract is in some way terminated.”

The Superior Court found that any breach of paragraph 18 of the parties' agreement would have occurred at the latest when the son completed his studies at FSU in 2011. Therefore, the Superior Court affirmed the trial court as it held that the son's petition for special relief “filed in 2016, was thus out of time.”

The Weber opinion is a very important opinion and should be read closely by the bench and the bar. There is a terrific analysis of the seminal cases addressing this issue. One of those cases is the case of K.A.R. v. T.G.L., 107 A.3d 770 (PA Super. 2014). In that case, it was held that a provision in a party's property settlement agreement was not a continuing contract. The language analyzed in that case pertained to the wife receiving a percentage of the net proceeds from the sale of stock. The important language in that provision was that the wife would receive the payment “if and when” the husband sold the stock. The Superior Court held, in that case, that there was a definitive time fixed for payment that occurred if and when the stock was sold and, therefore, created a clear window of time in which such a provision could be enforced (the four-year statute of limitations). The other seminal case applied in the Weber matter was the case Krispo v. Krispo, 909 A.2d 308 (PA. Super. 2006). Krispo pertained to, inter alia., an obligation to pay credit card balances with no specific deadlines. The Superior Court in that case held that the obligation was not barred by the statute of limitations. Then, finally, the case of delCastillo v. delCastillo, 611 A.2d 26 (PA. Super. 1992) was heavily analyzed in the Weber case as well.  delCastillo pertained to an education provision in a property settlement agreement that was interpreted by the court to be limited to undergraduate education.

The dissenting opinion in the Weber case by Judge Jacqueline Shogan is powerful. Shogan agreed with the majority that the agreement is a continuing contract but disagreed with the application of the statute of limitations. Shogan states: “the instant agreement contains no provision mandating that any payments from mother or father are due at any stated time, and it specifically lacks any requirement that mother's and father's obligations are limited to four years. Paragraph 18 obligates both mother and father to pay equally for their children's college or other post-secondary education. Here, that includes the entirety of son's Pharm.D. degree.” Shogan states that she would reverse the granting of summary judgment in favor of the husband.

Michael E. Bertin is a partner at the law firm of Obermayer Rebmann Maxwell & Hippel. Bertin is co-author of the book “Pennsylvania Child Custody Law, Practice, and Procedure.” Bertin is a Fellow of the American Academy of Matrimonial Lawyers, the chair elect of the family law section of the Pennsylvania Bar Association, former chair of the family law section of the Philadelphia Bar Association, and the current co-chair of its custody committee. He can be reached at 215-665-3280 or [email protected].