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HomeMy WebLinkAbout01-2452 CivilELIZABETH Z. GRASSMYER, Plaintiff, Petitioner : IN THE COURT OF COMMON PLEAS : OF CUMBERLAND COUNTY, P E N N SYLVAN IA : NO. 01-02452 CIVIL TERM RANDALL S. GRASSMYER, Defendant, Respondent : CIVIL ACTION-LAW :IN DIVORCE IN RE: OPINION PURSUANT TO PETITION FOR ENFORCEMENT OF PROPERTY AND SEPARATION AGREEMENT Hoffer, P.J. The Plaintiff in this case filed a Petition seeking enforcement of a Property and Separation Agreement (hereinafter "PSA") against the Defendant, her former husband, when he failed to pay her $500.00 for the mortgage payment as stipulated in the agreement. On February 3, 2004, Husband filed Answer and Counterclaim, seeking reimbursements for amounts paid above $500.00 per month. On March 25, 2004, Wife filed an Answer to the Counterclaim. A hearing was held on April 5, 2004, and the court determined that the terms in the agreement were clear and concise and would be interpreted without parol evidence. Parties submitted briefs on the issue of whether the Husband is entitled to credit for excess payments above $500.00 per month. For reasons stated in this opinion, the Husband is entitled to restitution to recover the excess mortgage payments, and he may recover $2000.00 credit card debt owed under the PSA. STATEMENT OF FACTS The parties in this case, Elizabeth Grassmyer, Plaintiff, and Randall Grassmyer, Defendant, were divorced on October 1,2001. They have a ten- year-old son, Alexander, who resides primarily with the Wife.~ Prior to the final divorce decree, the parties executed a Property and Separation Agreement, incorporated into the divorce decree, which contained a provision mandating that Husband reimburse Wife $500.00 per month for his share of the mortgage payment until their son reaches the age of 18.2 Despite PSA provision, Husband paid the entire mortgage amount directly to the mortgage company monthly from December 2000 through August 2003 with amounts averaging over $720.00 per month. Wife did not reimburse him for the excess payments, nor did she formally agree to any modification of the agreement. 3 Husband then paid $500.00 monthly from September through November 2003. After December 2003, Husband ceased any further payments to Wife, including any child support and mortgage payments.4 The agreement also mandated that Wife reimburse Husband $2000.00, payable as $40.00 per month until paid in full, for a debt on a Mastercard.5 To date, Wife has made no payments on the Mastercard debt.6 The mortgage provision at issue appears under a section in the PSA labeled, "Alimony, Alimony Pendente Lite, Support and Maintenance," and there 1 Defendant's Memorandum in Opposition to Petition for Enforcement of Property Agreement at 1. 2 Property and Separation Agreement at 3. 3 Defendant's Mem. at 2.; Plaintiff's Mem. at 2; Court Exhibit A. 4 Defendant's Mem. at 5.; Plaintiff's Mem. at 2. 5 Property and Separation Agreement at 5. 6 Order of Court, April 5th, 2004 2 is a separate provision mandating that Husband pay $100.00 per week in child support. There is also a provision prohibiting unilateral modification of the agreement. 7 Husband indicates that he stopped making payments to Wife (and he paid directly) because that he feared she would not pay the mortgage, causing a foreclosure and a negative impact on his credit.8 Wife indicates that Husband benefited from paying entire mortgage amount by claiming the interest on his individual tax return.9 DISCUSSION The question presented is whether the Husband is entitled to recover excess payments beyond the $500.00 stipulated in their PSA. Although Husband may not recover excess payments as a credit against other provisions under the PSA, he is entitled to recover in quasi-contract. Since Wife concedes that she has made no payments on $2000.00 debt owed under the same agreement, Husband is entitled to recover that debt under the PSA. 1. The meaning of the "mortgage provision" is unambiguous, and parol evidence may not be used to modify the PSA. The Divorce Code governs the court's ability to enforce property settlement agreements, like the one involved here. Specifically, Section 3105 provides that "a provision regarding the disposition of property rights and interests.., shall not be subject to modification by the Court?° A property settlement agreement, when incorporated into the divorce decree, must be Property and Separaton Agreement at 10. Defendant's Mem. at 5. Plaintff's Mem. at 2. l0 23 Pa.C.S. § 3105(c) (2004). construed as written according to the basic tenets of contract law, and may not be modified under the guise of interpretation when its terms are clear and unambiguous.~ Husband is asking for a credit to be applied towards all payments stemming from the PSA because he overpaid the clearly stipulated mortgage amount. He argues that because the $500.00 clause appears under a heading labeled "Alimony" and Wife expressly waived her right to alimony and because payments are to cease upon Alexander's 18th birthday, this payment term is ambiguous. Then, if the term is ambiguous, parol evidence should be admitted to demonstrate that these payments were intended to be a form of child support.~2 If they were intended as child support, a credit for the excess "mortgage" payment could be applied against his child support obligations. Husband argues that he understood these payments as child support.~3 He also blames poor drafting as the reason that the $500.00 payment was not labeled as child support. Husband relies solely on Kohn v. Kohn to support his contention that parol evidence should be used to determine parties' intent as to the meaning of the $500.00 payment. In the Kohn case, the court found that a $1000.00 payment under a paragraph labeled "alimony" was ambiguous, and allowed parol evidence to demonstrate that the parties intended it to be child support.TM However, that case is distinguishable from the case at bar. Unlike the ~ See Kripp v. Kripp, 784 A.2d 158, 162 (Pa. Super. Ct. 2001), appealed, 2004 WL1175278 (Pa.) (citing Little v. Little, 657 A.2d 12, 15 (Pa. Super. Ct. 1984). 12 Defendant's Mem. at 9. 13 Defendant's Mem. at 8. 44 Kohn v. Kohn, 364 A.2d 350, 353 (Pa. Super. Ct. 1976). 4 agreement in Kohn, there is a separate provision for child support here, indicating that the parties had already negotiated the terms of child support. In the case at bar, the court determined at the April 5th hearing that the PSA terms were clear and concise, and that they would be interpreted without parol evidence concerning the parties' intent. The PSA states that the Husband shaft pay Wife $500.00 on the first of each month for his share of the mortgage until Alexander is 18, and that Husband shafl pay Wife $100.00 per week in child support. ~ 5 2. Permitting an overpayment of one provision to be used as a credit against other PSA provisions is an invalid modification. In DeMatteis v. DeMatteis, the court found that an invalid modification of a PSA occurred when the lower court permitted a party to receive credit for any amount paid towards a mortgage debt against any amount owed under the rest of the contract provisions.~6 The husband in DeMatteis paid mortgage payments to his ex-wife monthly as stipulated under their property settlement agreement. When the mortgage foreclosed, the lower court granted a credit for all past payments made by the husband towards his mortgage against all his future obligations under the PSA.~7 In the instant case, the meaning of the $500.00 per month mortgage provision is unambiguous, and cannot be interpreted as child support. In addition, there is no evidence of a written modification mutually assented to as is required for modification under this PSA. Therefore, applying such a credit for ,5 Property and Separation Agreement at 3. 46 DeMatteis v. DeMatteis, 582 A.2d 666,672. (Pa. Super. Ct. 1990) 17 Id. excess mortgage payments against a separate provision for child support would be a clear departure from the PSA payment terms. Since this would result in an invalid modification, relief on this basis will not be granted, and the agreement will continue to be enforced as written. 3. Husband is entitled to restitution for excess payments above the amount stipulated in PSA. On the other hand, a claim for restitution does not lie upon an express contract, but upon the equitable theory of unjust enrichment. Unjust enrichment occurs when a person has and retains money or benefits, which in justice and equity belong to another.~8 Where unjust enrichment is found, the law implies a contract, referred to as a quasi-contract.~9 In order to recover under quasi- contract, a plaintiff must prove that 1) a benefit was conferred upon defendant, 2) defendant appreciated the benefit, and 3) defendant accepted and retained benefits under the circumstances that it would be inequitable for him to retain them.2° In determining whether this doctrine applies, the court primarily focuses on whether a party has been unjustly enriched, not the intentions of the parties.2~ In the instant case, Husband is entitled to recover payments in excess of the $500.00 provision under quasi-contract. The first two elements are met. Husband conferred a benefit on Wife by paying the entire mortgage payment every month from October 2000 through August 2003. He relieved Wife of her burden under the agreement of paying her 18 Black's Law Dictionary 1535. 19 Schott v. Westinqhouse Elec. Corp., 259 A.2d 443,449 (Pa. 1969). 2o Mitchell v. Moore, 729 A.2d 1200, 1203 (Pa. Super. Ct. 1999) 21 Styer v. Huqo, 619 A.2d 347, 350 (Pa. Super. Ct. 1993). 6 share of the mortgage. She appreciated that benefit because she continued to live at the marital residence with the knowledge that Husband was paying entire mortgage, and she failed to reimburse him for excess payments. With regards to the third element, when a party passively receives a benefit, they become unjustly enriched when it is unconscionable for him or her to retain that benefit.22 Unconscionability is dependant on the circumstances of each case.23 The plaintiff in Schneck, an attorney, advanced $32,000 to the Commonwealth to satisfy a settlement debt for which his clients were responsible. The court found that the clients were unjustly enriched. First, benefit was conferred by the lawyer's efforts resulted in an acquittal and subsequent favorable settlement. Second, although he paid the debt without his clients' knowledge, his clients knew that they were responsible for it. Finally, the lawyer paid the fees with a reasonable expectation of reimbursement because he believed he had implied authority to do so. Because of the context of the parties' relationship as attorney-client, there is a presumption that a conferred benefit is not gratuitous.24 In this case, allowing Wife to retain the benefit of living at the marital residence without reimbursing him the difference between the entire payment and his contractual obligation is unconscionable. Both Husband and Wife were responsible for paying the mortgage and the PSA allocated the amount that each 22 Gee v. Eberle, 420 A.2d 1050, 1058 (Pa. Super. Ct. 1980) (citing Roman Mosaic and Tile Co., Inc. v. Vollrath, 226 Pa. Super. Ct. at 218, 313 A.2d at 307.); See Schneck v. K.E. David, LTD., 666 A.2d 327, 329 (Pa. Super. Ct. 1995). 23 See Id. 24 See Id. '7 was obligated to pay. She accepted the benefit by her passive receipt of it. Similar to the clients in Schneck, Wife knew that she was responsible for the remainder of the mortgage in excess of $500.00 per month, but she allowed Husband to pay for the entire amount. Husband indicates that he paid the mortgage directly to the mortgage company because he had always done so during the marriage, and that Wife had not objected to this plan. He also indicated that he was afraid of negative credit implications and harm to his son if a foreclosure resulted from Wife's non-payment.25 Similar to the Schneck lawyer, this demonstrates that Husband reasonably expected reimbursement because he believed that he had Wife's authority to continue paying the mortgage directly as he had always done. In addition, in the context of their relationship as former spouses, there is a presumption that the benefit was not gratuitous. Wife argues that Section 3105 prevents the court from granting restitution because it must first determine that she received a benefit to which she was not entitled. Specifically, the court would have to examine the PSA itself to determine if child support and alimony provisions were fair and adequate before it determines if she was unjustly enriched. Here, wife received more than she bargained for under the PSA. However, since the overpayment involves a mortgage payment, that amount is not subject to a determination by the court to determine fairness because the court cannot modify such provisions. Since Section 3105(b) expressly gives the court authority to modify a child support provision in such agreements at any time to ensure adequacy, an examination 25 Defendant's Mem. at 4. here is not necessary to determine if child support was adequate.26 This public policy exception to contract law protects a party's freedom to contract; however, if child support is inadequate, that provision is always subject to an increase in the best interests of the child.27 Granting Husband restitution for his overpayments will not interfere with court's ability to ensure adequate child support because a credit for excess mortgage payments will not be applied against any other agreement provision beyond the mortgage obligation. 2623 Pa.C.S. § 3105(b) 27 See McGou,qh v. McGou,qh, 522 A.2d 638 (Pa. Super. Ct. 1987). ELIZABETH Z. GRASSMYER, Plaintiff, Petitioner : IN THE COURT OF COMMON PLEAS : OF CUMBERLAND COUNTY, P E N N SYLVAN IA vi. : NO. 01-02452 CIVIL TERM RANDALL S. GRASSMYER, Defendant, Respondent : CIVIL ACTION-LAW :IN DIVORCE IN RE: PETITION FOR ENFORCEMENT OF PROPERTY AND SEPARATION AGREEMENT ORDER OF COURT AND NOW, this day of ,2004, upon consideration of Plaintiff/VVife's and Defendant/Husband's Memorandums in support of, and in opposition to, the Petition for Enforcement of Property and Separation Agreement, the Petition for enforcement of said Agreement is granted. Husband is ordered to pay all amounts owed as stipulated in said Agreement. However, we find in favor of Husband's claim for restitution in the amount of $8,959.47 on payments made in excess of the stipulated mortgage payment in said Agreement. We also find in favor of Husband's claim under said Agreement for the sum of $2000.00 credit card debt. By the Court, George E. Hoffer P.J. M. Lucile Longo, Esquire 15 North Lime Street Lancaster, PA 17602 For Plaintiff/Petitioner Maria P. Cognetti, Esquire 210 Grandview Avenue, Ste. 102 Camp Hill, PA 17011 For Defendant/Respondent ]0