In re Estate of Johnson

• Decision Date: 27 March 2009
• Docket Number: No. 1836 MDA 2007,No. 1922 MDA 2007,1836 MDA 2007,1922 MDA 2007
• Citation: 2009 PA Super 54,970 A.2d 433
• Parties: In re ESTATE OF Bruce E. JOHNSON, Deceased, Appeal of Valerie S. Gaydos, Executor. In re Estate of Bruce E. Johnson, Deceased, Appeal of Deborah Rogers Johnson.
• Court: Pennsylvania Superior Court

970 A.2d 433

2009 PA Super 54

In re ESTATE OF Bruce E. JOHNSON, Deceased, Appeal of Valerie S. Gaydos, Executor.

In re Estate of Bruce E. Johnson, Deceased, Appeal of Deborah Rogers Johnson.

No. 1836 MDA 2007

No. 1922 MDA 2007

Superior Court of Pennsylvania.

Argued November 18, 2008.

Filed March 27, 2009.

Donald M. Lewis, III, Harrisburg, for Gaydost.

William H. Nast, Harrisburg, for Johnson.

BEFORE: LALLY-GREEN, GANTMAN and ALLEN, JJ.

OPINION BY LALLY-GREEN, J.:

¶ 1 Appellant/Cross-Appellee, Valerie S. Gaydos ("Executor"), executor of the Estate (the "Estate") of Bruce E. Johnson (the "Deceased"), and Appellee/Cross-Appellant Deborah Rogers Johnson ("Johnson"), appeal from the trial court's order and decree of September 21, 2007. We affirm in part and vacate in part.

¶ 2 This matter arises from the administration of the Estate. The Deceased died testate on February 21, 2002, at which point Johnson, the Deceased's ex-wife, was the guardian of the couple's two minor children. Both children reached the age of majority subsequent to the filing of this action. Johnson filed objections to the Executor's proposed First and Final Account, alleging that the Estate was bound by the terms of a 1993 Marital Dissolution Agreement ("MDA") 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 Executor argued that the Estate was entitled to use the Social Security payments as a credit against the child support obligation.

¶ 3 The Dauphin County Court of Common Pleas, Orphans' Court Division, after review of the parties' stipulated facts, issued an order directing that: (1) the Estate was liable for child support payments of $700.00 per month to the minor children until they reach age 18, pursuant to the MDA; (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.

¶ 4 The Executor filed this timely appeal, in which she raises the following issues:

A. Did the lower court err in interpreting a Marital Dissolution Agreement (between Decedent and Deborah Rogers Johnson) to require that payments of child support be made from the Estate after Decedent's death, where, under applicable Pennsylvania law, the obligation of a parent to provide financial support to a child ceases when the child reaches age eighteen (18) or when the parent dies, whichever occurs first; where the agreement did not specifically provide for such payments but instead provided a life insurance option that Decedent's former spouse failed to exercise; and where Decedent made no provision for the minor children in his Last Will and Testament?

B. Did the lower court err in refusing to allow Social Security payments received by the minor children as a consequence of Decedent's death to be credited against any post-mortem child support obligations, with the result that post-mortem child support payments amount to a windfall?

C. Did the lower court err in interpreting the Marital Dissolution Agreement to require reimbursement from the Estate of medical expenses incurred by one of the minor children after Decedent's death?

D. Did the lower court err in awarding prejudgment interest to the objector with respect to unpaid installments of child support, where the Marital Dissolution Agreement made no provision for payment of interest, where payments were not in arrears at the time of Decedent's death, and where the lower court specifically found that the executor's failure to continue making payments of child support after Decedent's death did not constitute a breach of the agreement?

Executor's Brief at 5 (emphasis in original).¹

¶ 5 We review the trial court's order according to the following standard:

When reviewing a decree entered by the Orphans' Court, this Court must determine whether the record is free from legal error and the court's factual findings are supported by the evidence. In re Estate of Rosser, 821 A.2d 615, 619 (Pa.Super.2003), appeal denied, 574 Pa. 761, 831 A.2d 600 (2003).

¶ 6 The Executor first argues that the trial court erred in concluding that the Deceased's contractual obligation in the MDA to provide $700.00 per month in child support to the children until age 18 is enforceable after the Deceased's death. We have held that parents do not have a duty to provide for minor children in their estate. Benson v. Patterson, 782 A.2d 553 (Pa.Super.2001), affirmed, 574 Pa. 346, 830 A.2d 966 (2003); Garney v. Hain, 439 Pa.Super. 42, 653 A.2d 21 (1995), appeal denied, 541 Pa. 626, 661 A.2d 873 (1995). 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. See In re Fessman's Estate, 386 Pa. 447, 126 A.2d 676 (1956) (enforcing an agreement of child support against the claims of a residual legatee under father's will); Huffman v. Huffman, 311 Pa. 123, 166 A. 570 (1933) (enforcing father's agreement to pay support "until the children were self supporting" against the administratrix); In re Stumpf's Appeal, 116 Pa. 33, 8 A. 866 (1887) (contract to provide necessary expenses to support an out-of-wedlock child binding on the father's testators); see also Benson, 782 A.2d at 555 ("While a marriage settlement agreement is a contract and may be separately enforced against the estate of a decedent [ ... ] the only basis for a court order requiring a parent to support a child arises from the imposition of a statutory duty."). Thus, Pennsylvania case law does not preclude parents from contractually obligating their estate to pay child support.

¶ 7 We will interpret the provisions of the MDA according to the law of contracts. See Melton v. Melton, 831 A.2d 646, 653 (Pa.Super.2003). Accordingly:

[W]e are mindful that the interpretation of a contract is a question of law. Therefore, our standard of review is plenary. When interpreting the language of a contract, the intention of the parties is a paramount consideration. In determining the intent of the parties to a written agreement, the court looks to what they have clearly expressed, for the law does not assume that the language of the contract was chosen carelessly. When interpreting agreements containing clear and unambiguous terms, we need only examine the writing itself to give effect to the parties' intent.

Id. at 653-654.

¶ 8 The MDA provides in relevant part as follows:

22. Child Support:

In the event that paternity has been established by agreement of the parties or by Court Order, [Deceased] hereby agrees to pay to [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.

[...]

30. Agreement Binding On Heirs:

This Agreement shall be binding and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors, and assigns.

Marital Dissolution Agreement, at ¶¶ 22, 30.

¶ 9 The Executor argues that the quoted language should be read in light of state law providing that an obligation of child support ends with a parent's death. 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. Since the clear language of the writing itself supports the trial court's decision, we conclude that the trial court did not commit an error of law in enforcing the child support provision of the MDA against the Estate.² The Executor's first argument lacks merit.

¶ 10 Next, we consider the argument that the Estate is entitled to a credit for the Social Security death benefits as against the child support obligation. As we noted above, the children began receiving $929.00 per month in Social Security benefits upon their father's death. In these circumstances, there is a rebuttable presumption that credit will be given for Social Security payments made to a child. Preston v. Preston, 435 Pa.Super. 459, 646 A.2d 1186, 1187 (1994); Miller v. Bistransky, 451 Pa.Super. 433, 679 A.2d 1300 (1996); Children and Youth Servs. of Allegheny County v. Chorgo, 341 Pa.Super. 512, 491 A.2d 1374 (1985).

¶ 11 In Chorgo,³ the father argued that Social Security retirement payments made directly to his children should be credited against his child support obligation. We analyzed the nature of the Social Security benefits and the effect of a credit on the support recipients. We explained that Social Security benefits are earned over the course of time by virtue of a person's employment and payment of taxes. Id. at 1376, citing Andler v. Andler, 217 Kan. 538, 538 P.2d 649 (1975). Likewise, direct payment of Social Security benefits to children simply alters the source of payment while satisfying the purpose of the support obligation. Id. at 1375, citing Davis v. Davis, 141 Vt. 398, 449 A.2d 947 (1982). We concluded that the father was entitled to credit:

First, since the obligor has paid in advance for these benefits over the years (albeit mandatorily), they should be recognized as the fruits of his labor. Second, since the child will still receive the same amount of support which the court has decided he should have, it does not matter to that party that the obligor is given credit.

Id. at 1377. Chorgo described the obligor's entitlement to credit as a rebuttable...