Drake v. Drake

• Decision Date: 29 October 1982
• Citation: 455 N.Y.S.2d 420,89 A.D.2d 207
• Parties: Dorothy E. DRAKE, Respondent-Appellant, v. Richard E. DRAKE, Appellant-Respondent.
• Court: New York Supreme Court — Appellate Division

Page 420

455 N.Y.S.2d 420

89 A.D.2d 207

Dorothy E. DRAKE, Respondent-Appellant, v. Richard E. DRAKE, Appellant-Respondent.

Supreme Court, Appellate Division Fourth Department.

Oct. 29, 1982.

Antell & Harris, Rochester, for appellant-respondent (James Hinman, Rochester, of counsel).

Pogal & Nessler, Rochester, for respondent-appellant (Gregory Dolan, Rochester, of counsel).

Before SIMONS, J.P., and HANCOCK, DOERR, BOOMER and SCHNEPP, JJ.

DOERR, Justice.

The question presented on this appeal is whether a child of the parties to a separation agreement has standing, as a third party beneficiary, to enforce the terms of the agreement insofar as it relates to periodic support payments. Under the facts of this case we hold that she may not.

In 1963 plaintiff's parents, Winifred B. Drake and Richard E. Drake, entered into a separation agreement later incorporated, but not merged, in a divorce decree. The agreement required the husband to make periodic payments to the wife for the support of five children, whose custody remained in the wife, according to a fixed schedule tied to the husband's then earnings. The agreement also provided for escalated payments of child support as the husband's earnings increased. Payments were to continue until each child reached the age of 21 years, died, became self-supporting, or married and were to be reduced according to a fixed schedule upon the happening of the expressed contingency. Plaintiff is the only child who has not reached the age of 21 years and is presently a full-time college student.

Defendant made the required fixed payments throughout the intervening years, but never made any escalated payments under the agreement and was never called upon by the wife in any judicial proceeding to make such payments. In February 1981, while still a high school senior, plaintiff moved from her mother's house to that of a friend and requested defendant to send the support payments directly to her. Upon learning that plaintiff no longer resided with her mother, defendant concluded that she was emancipated and ceased making any support payments. Plaintiff thereupon learned for the first time of the terms of her parents' separation agreement, including the escalation clause, and commenced the instant action seeking back payments for the preceding six years, escalated to reflect defendant's earnings which were now substantially greater than in 1963. She also sought an order directing defendant to make support payments to her as required by the agreement until she reaches the age of 21, marries, dies, or becomes self-supporting.

On cross-motions for summary judgment Special Term held that plaintiff could not recover sums due prior to the commencement of the action, but that she may recover sums falling due thereafter, including sums due pursuant to the escalation clause in the agreement. Both parties appeal.

The issue here is concerned with the contractual rights of the parties insofar as they flow from the separation agreement of plaintiff's parents and is not to be confused with a child's statutory rights to be supported by its parents (Family Court Act, § 413; Domestic Relations Law, § 32, subd. 1 and § 240, subd. 1).

It is familiar law that a contract entered into between two parties may be enforced by a third party if the contracting parties intended the contract for the third party's direct benefit (Airco Alloys Div. v. Niagara Mohawk Power Corp., 76 A.D.2d 68, 79, 430 N.Y.S.2d 179; see generally 2 Williston, Contracts § 347-403; 22 N.Y.Jur.2d, Contracts, § 271-281). Where performance is rendered directly to the third party, it is presumed that the contract was for his benefit (Goodman-Marks Assoc. v. Westbury Post Assoc., 70 A.D.2d 145, 148, 420 N.Y.S.2d 26). It is not enough that the contract benefit the third party incidentally; the agreement must express an intent to assume a duty directly to the third party (Resinol v. Valentine Dolls, 14 A.D.2d 853, 220 N.Y.S.2d 884). In ascertaining the rights of an asserted third party beneficiary, the intention of the promisee is of primary importance, since the promisee procured the promise by furnishing the consideration therefor (Goodman-Marks Assoc. v. Westbury Post Assoc., supra).

Applying these principles to separation agreements, New York courts long ago concluded that a child could not enforce the support provisions of the agreement, although it could enforce other provisions, such as a promise to set up a trust fund. The seminal case is Kendall v. Kendall, 200 App.Div. 702, 193 N.Y.S. 658 & 200 App.Div. 706, 193 N.Y.S. 661). In Kendall the child, relying on her parents' separation agreement, sued her father in two separate lawsuits (1) to recover monthly support arrearages (Kendall I) and (2) to require him to set up a trust fund (Kendall II). The Appellate Division held that the child could enforce the trust fund provision, since she was the sole beneficiary of it, but that she could not enforce the support provisions of the agreement. The court reasoned that the support money was payable to the mother, who had discretion in how the money was spent. Unlike the trust fund, which benefited the daughter exclusively, payment of the support money was an obligation running to the child's mother. Therefore, the court concluded that the mother was the proper party to enforce the support provision of her contract. This distinction has been recognized repeatedly (see Ben Ami v. Ben Ami, 9 A.D.2d 646, 191 N.Y.S.2d 369, affd. 8 N.Y.2d 885, 203 N.Y.S.2d 924, 168 N.E.2d 723 Magrill v. Magrill, 16 Misc.2d 896, 900-901, 184 N.Y.S.2d 516 but see Weiss v. Weiss, 190 Misc. 687, 73 N.Y.S.2d 568, affd. 274 App.Div. 788, 81 N.Y.S.2d 197, ).

In 1966 the Court of Appeals decided what has become the leading case on this issue. In Forman v. Forman, 17 N.Y.2d 274, 270 N.Y.S.2d 586, 217 N.E.2d 645 the court addressed at length the standing of a child to enforce his parents' separation agreement. The question of periodic support was not at issue in Forman, since the mother had breached the separation agreement by moving the children out of state. The Court of Appeals noted that the Forman children "concede" that they could not enforce the support provisions. Instead, the Forman children sought specific performance of their father's promise to make them equal and irrevocable beneficiaries of a life insurance policy in the face amount of $10,000. The Court of Appeals, citing Kendall I, noting that the general rule in New York is that ordinarily "children for whose support a provision is made in a separation agreement between their parents, payable to the mother, are usually not able to enforce the agreement directly in an action against their father ... such a suit ordinarily should be maintained by the mother" (Forman v. Forman, supra, p. 280, 270 N.Y.S.2d 586, 217 N.E.2d 645). The court then approved of this general rule, noting that "there are probably good enough policy reasons to hold to the usual rule that it is preferable to have a mother, who is a direct party to a separation agreement and to whom payments for the support of infant children in her custody are to be made, enforce it" (Forman v. Forman, supra, p. 280, 270 N.Y.S.2d 586, 217 N.E.2d 645). The court then held, however, that in some cases children should have standing as third party beneficiaries to enforce the agreement. The court stated:

"But children are often the actual third party beneficiaries of provisions in separation agreements between the parents; and in cases of disability of one kind or another of one spouse to enforce his own...