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HomeMy WebLinkAbout2009-5736 BRIAN M. CRUM, : IN THE COURT OF COMMON PLEAS OF Plaintiff, : CUMBERLAND COUNTY, PENNSYLVANIA : v. : NO. 09-5736 : HORACE M. CRUM, Sr., : CIVIL ACTION - LAW EXECUTOR OF THE ESTATE OF : HORACE M. CRUM, JR., : Defendant. : JURY TRIAL DEMANDED IN RE: CROSS MOTIONS FOR SUMMARY JUDGMENT BEFORE HESS, P.J. AND EBERT, J. OPINION AND ORDER The parties at the above captioned docket have filed cross Motions for Summary Judgment, each pursuant to Pennsylvania Rule of Civil Procedure 1035. (Defendant’s Motion for Summary Judgment, filed Jun. 13, 2011) (Plaintiff’s Motion for Summary Judgment, filed Jul. 22, 2011). Plaintiff has sued the Executor of his Father’s estate for the proceeds of two life insurance policies that Plaintiff alleges are due and owed to him by the Estate. Plaintiff avers that his Father was contractually obligated to maintain these policies by way of a Separation Agreement signed by his Father and Mother with Plaintiff designated as a third-party beneficiary. The parties have filed cross Motions for Summary Judgment, which both present the issue of contract interpretation as to the Separation Agreement. The facts of this case may be summarized as follows. On August 18, 2009, Plaintiff filed a Complaint against Horace M. Crum, Sr., the named representative in the Estate of Horace M. Crum, Jr. (Complaint, filed Aug. 18, 2009). Decedent, Horace M. Crum, Jr., was married to Judith Crum, now known as Judith Uber (hereinafter “Judith”), from March 11, 1972, until their divorce on December 8, 1976. Judith and the decedent had one child, Plaintiff Brian M. Crum, born May 26, 1972. Prior to their divorce, the decedent and Judith executed a Separation Agreement, dated December 11, 1975, which is the subject of the present matter. The decedent died testate on October 1, 2008, and his Will was filed with the Register of Wills in Cumberland County, Pennsylvania on October 10, 2008. Plaintiff was, therefore, approximately 35 years of age at the time of the decedent’s death. Plaintiff filed the Complaint against the Estate of the Decedent, alleging a breach of the Separation Agreement. Paragraph 9 of the Separation Agreement is the relevant section and provides as follows: 9. Husband agrees to maintain in force the insurance policies listed below of which the Wife and minor child are beneficiaries and to pay the premiums thereon. This provision shall continue in effect as long as Wife is living and remains married to Husband. In the event that the Husband and Wife do become divorced the Husband agrees to maintain in force the same insurance policies and pay the premiums thereon, at which time the beneficiary shall be solely the minor child. The policies are: (a) Whole life insurance policy with State Farm Mutual Insurance Company, the face amount being $20,000. (b) Whole life insurance policy with Lutheran Brotherhood Insurance Company, the fact [sic] amount being $5,000. (Defendant’s Motion for Summary Judgment, Ex. A). Plaintiff avers in his Complaint that the decedent breached the Separation Agreement by failing to maintain Plaintiff as the beneficiary of the whole life insurance policies, and by failing to pay the premiums thereon until the decedent’s death. (Complaint, ¶ 15). As a result, Plaintiff seeks to recover the proceeds of both policies that would have been paid at the time of the death of the decedent as if he had continued to pay the premiums thereon. Additionally, Plaintiff seeks to recover any additional amount that would have been added to the face value of those policies through the payment of premiums, accrual of interest, dividends, or other items that would have added value had the policies been maintained with Plaintiff as the designated beneficiary. Defendant contends that Plaintiff is not entitled to the requested relief as a result of the language of the Separation Agreement; specifically, Defendant asserts that the Agreement 2 obligated the decedent to retain the insurance policies for the benefit of “solely the minor child” only so long as Plaintiff was a “minor child.” In other words, it is the position of Defendant that the decedent had no contractual duty to maintain the aforementioned life insurance policies beyond the date when Plaintiff became an adult. Pursuant to Rule 1035.2 of the Pennsylvania Rules of Civil Procedure, the court may grant summary judgment after the relevant pleadings are closed and whenever there is no genuine issue of any material fact as to a necessary element of the cause of action or defense that could be established by any additional discovery or expert report, or if, after the completion of discovery relevant to the motion, including the production of expert reports, an adverse party who will bear the burden of proof at trial has failed to produce evidence of facts essential to the cause of action or defense, which in a jury trial would require the issues to be submitted to a jury. Pa. R. Civ. P. 1035.2(1); Estate of Borst v. Edward Stover Sr. Testamentary Trust, 2011 PA Super 222, 2011 WL 4963100, 3. Summary judgment shall be granted whenever “the material facts are undisputed,” or the facts are insufficient “to make out a prima facie cause of action or defense.” McCarthy v. Dan Lepore & Sons Co., 724 A.2d 938, 940 (Pa. Super. Ct. 1998); Pa. R. Civ. P. 1035.2(1). We view the record in the light most favorable to the non-moving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party. Abrams v. Pneumo Abex Corp., 602 Pa. 627, 634, 981 A.2d 198, 203 (2009). Furthermore, summary judgment is proper when “the uncontroverted allegations in the pleadings, depositions, answers to interrogatories, admissions of record, and submitted affidavits demonstrate that no genuine issue of material fact exists, and that the moving party is entitled to judgment as a matter of law.” Reliance Ins. Co. v. IRPC, Inc., 2006 PA Super 150, ¶ 8, 904 A.2d 912, 915. 3 The motions sub judice raise the issue of contract interpretation; specifically, the parties disagree over the meaning of the term “minor child” as used by the signatories to the Separation Agreement. Separation agreements are to be construed according to the well-established rules of contract construction. Kohn v. Kohn, 242 Pa. Super. 435, 442, 364 A.2d 350, 353 (1976). It is fundamental that when construing the terms of a contract the court is to ascertain and give effect to the intent of the contracting parties. Mace v. Atlantic Refining Mktg. Corp., 567 Pa. 71, 80, 785 A.2d 491, 496 (2001). When interpreting a contract, the trial court must first decide whether the term at issue is ambiguous. If no ambiguities are found, the court may regard the interpretation to be a question of law. Considine v. Reliance Ins. Co., __ A.3d. __ (Pa.Cmwlth. 2011), 2011 WL 3209095, 7; Lapio v. Robbins, 1999 PA Super 106, ¶ 7, 729 A.2d 1229, 1232. As such, when the terms of the contract are clear and unambiguous, the intent of the parties “is to be ascertained solely from the writing, as a matter of law without reference to any external testimony or other evidence.” Considine, 2011 WL 3209095, 7. Conversely, a term is ambiguous “if it is reasonably susceptible of different constructions and capable of being understood in more than one sense.” Genaeya Corp. v. Harco Nat. Ins. Co., 2010 PA Super 33, ¶ 7, 991 A.2d 342, 346-47. There are two types of ambiguity: patent and latent. In re Estate of Beisgen, 387 Pa. 425, 431, 128 A.2d 52, 55 (1956); Krizovensky v. Krizovensky, 425 Pa. Super. 204, 624 A.2d 638, 643 (1993). The difference between patent and latent ambiguity has been described as follows: A patent ambiguity appears on the face of the [document] and is a result of defective or obscure language. A latent ambiguity arises from collateral facts which make the meaning of a written [document] uncertain, although the language appears clear on the face of the [document]. To determine whether there is an ambiguity, it is proper for a court to hear evidence from both parties and then decide whether there are objective indications that the terms of the [document] are subject to differing meanings. 4 Krizovensky, 624 A.2d at 643; See also In re Estate of Schultheis, 2000 PA Super 50, ¶ 14,, 747 A.2d 918, 923. Latent ambiguities arise, therefore, in the application and execution of otherwise seemingly clear contractual language. See Berry v. Anderson, 348 Pa. Super. 618, 622, 502 A.2d 717, 719 (1986). “A contract is not rendered ambiguous by the mere fact that the parties do not agree upon the proper construction.” Metzger v. Clifford Realty Corp., 476 A.2d 1, 5 (Pa. Super. 1984). Latent ambiguities are not simply those disagreements between parties over the meaning of a certain term; rather, a latent ambiguity exists where the implementation of a contractual term 1 leads to a confusing result. Where there exists a latent ambiguity, parol evidence is admissible to “explain or clarify the ambiguity, irrespective of whether the latent ambiguity is created by the language of the [document] or by extrinsic or collateral circumstances.” In re Estate of Schultheis, 2000 PA Super 50, ¶ 14 (citing Beisgen, 387 Pa. at 431, 128 A.2d at 55). Turning to the Separation Agreement at issue, we find that Paragraph 9 is not ambiguous under either theory. As such, we determine the intent of the contracting parties solely from the language contained within the Agreement itself. Paragraph 9 provides that, in the event that the decedent and Judith were to divorce, the beneficiary of the State Farm Mutual Insurance Company whole life insurance policy and the Lutheran Brotherhood Insurance Company whole life insurance policy was to be “solely the minor child.” We find that the phrase “minor child” was clearly and unambiguously used in Paragraph 9 to describe Plaintiff until he attained the age of 18. While it is true there is no other limiting language contained in Paragraph 9, we find that the term “minor child” is self-limiting. The Pennsylvania Domestic Relations Code, 23 Pa.C.S.A. §5322(a), defines the term “child” as, “an unemancipated individual under 18 years of age.” 1 For example, a will which by its terms provides that X leaves his residence to his “Cousin A” is not ambiguous on its face. If, however, X does not have a Cousin A, but instead has a Brother A and a Cousin B, the ambiguity arises in the application of the term, rather than simply because Brother A and Cousin B disagree over who is the rightful recipient of the residence. 5 Thus, we are satisfied that the phrase “minor child” as used in the Agreement obligated the decedent to maintain the policies for the benefit of his minor son prior to “the minor child” attaining the age of 18. We also find that our conclusion is strengthened by a plain reading of the remainder of the Separation Agreement. Paragraph 6 of the Agreement also utilizes the term “minor child” and provides as follows: 6. In addition to the aforesaid covenants of monetary support, Husband agrees to maintain in force and payable Blue Cross, Blue Shield, or comparable medical health insurance for the aforesaid minor child and wife, said coverage for the wife shall terminate upon the happening of the following events: (a) Husband or Wife’s death; (b) divorce of the parties; (c) mutual agreement of the parties; or (d) by court order. To find, as Plaintiff would have us, that “minor child” is simply another way of restating the name “Brian M. Crum” would lead to the absurd result that the decedent was obligated to provide health insurance coverage for Plaintiff for the remainder of Plaintiff’s life. Viewing the Separation Agreement as a whole, we find that the term “minor child” as used in both Paragraphs 6 and 9 was intended by the decedent and Judith as a means of providing support to their “minor child.” Based on Plaintiff’s date of birth, he would have attained the age of 18 on May 26, 1990, well prior to the decedent’s passing. Because we find that the term “minor child” as used in Paragraph 9 of the Separation Agreement was clearly and unambiguously intended by Judith and the decedent to obligate the decedent to maintain the two whole life insurance policies so long as Plaintiff was a minor child, Defendant’s Motion for Summary Judgment will be granted. Plaintiff’s Motion for Summary Judgment will be denied. The following order will be entered: ORDER 6 AND NOW, this day of November, 2011, upon consideration of Plaintiff’s Motion for Summary Judgment, Defendant’s Motion for Summary Judgment, the responses filed thereto, and after oral argument by the parties heard on October 7, 2011, Plaintiff’s Motion for Summary Judgment is DENIED, and it is hereby ordered that Summary Judgment is GRANTED in favor of the Defendant and against the Plaintiff. Plaintiff’s Complaint is hereby dismissed with prejudice. BY THE COURT, ___________________________ Kevin A. Hess, P.J. 7 BRIAN M. CRUM, : IN THE COURT OF COMMON PLEAS OF Plaintiff, : CUMBERLAND COUNTY, PENNSYLVANIA : v. : NO. 09-5736 : HORACE M. CRUM, Sr., : CIVIL ACTION - LAW EXECUTOR OF THE ESTATE OF : HORACE M. CRUM, JR., : Defendant. : JURY TRIAL DEMANDED IN RE: CROSS MOTIONS FOR SUMMARY JUDGMENT BEFORE HESS, P.J. AND EBERT, J. ORDER AND NOW, this day of November, 2011, upon consideration of Plaintiff’s Motion for Summary Judgment, Defendant’s Motion for Summary Judgment, the responses filed thereto, and after oral argument by the parties heard on October 7, 2011, Plaintiff’s Motion for Summary Judgment is DENIED, and it is hereby ordered that Summary Judgment is GRANTED in favor of the Defendant and against the Plaintiff. Plaintiff’s Complaint is hereby dismissed with prejudice. BY THE COURT, ___________________________ Kevin A. Hess, P.J. Dennis R. Sheaffer, Esquire For the Plaintiff Neil Warner Yahn, Esquire For the Defendant :rlm