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Feb. 8 — A clause in an unwed couple's private custody agreement under which the father will pay the mother $10,000 every time he seeks to modify it is enforceable, the en banc Pennsylvania Superior Court decided Feb. 5.
Disagreeing with a trial judge that the clause offends public policy by allowing the parents to “bargain away” custody, the court pointed out that parents are only barred from making deals regarding their child's right to support. Custody and visitation rights, on the other hand, belong to parents, it explained.
The court also said that on remand, the mother may pursue her claims of fraud and negligent misrepresentation against the attorney father, who drafted the voluntary agreement and allegedly had provided her with legal advice.
The father is a lawyer who had previously furnished the mother with “legal representation in various matters.” They became romantically involved, and in late 2008 he and a colleague drafted the agreement at issue.
The agreement recognized that the real estate agent mother was “capable of earning large commissions,” and that the attorney father was “capable of earning a large salary.” It provided that if their relationship resulted in the birth of a child, she would have primary physical custody and he would have specific visitation rights.
It further stated that if the father sought to modify the agreement's custody or visitation provisions, he would pay the mother $10,000 “for each modification or amendment sought.”
The agreement also provided that the parties understood its provisions and executed it “freely and voluntarily, without coercion or other compulsion.”
The parents apparently became embroiled in litigation upon their son's birth in November 2010, and in December the father petitioned for custody. The mother then filed a breach of contract claim, alleging that he had failed to abide by his promise to make the $10,000 payment. In response, the father asserted that the “$10,000 clause” violated public policy.
The trial judge agreed with him. A three-judge panel of the superior court reversed (2014 BL 295226, 40 FLR 1613 (Pa. Super. Ct. 2014)). That opinion was withdrawn when the father was granted reargument before the court en banc.
“Contrary to the decision reached by the trial court, we have not identified any `dominant public policy' grounded in governmental practice, statutory enactments, or violations of obvious ethical or moral standards, which provides a basis for declaring the `$10,000 clause' in the Agreement to be unenforceable as against public policy,” Presiding Judge Emeritus John T. Bender said.
Noting that the trial court based it analysis on the long line of cases providing that parents may not bargain away their child's right to adequate support payments (see e.g., Ruth F. v. Robert B., 690 A.2d 1171, 23 FLR 1215 (Pa Super. Ct. 1997)), Bender pointed out, however, that “no similar appellate authority exists with respect to agreements between parents regarding custody and visitation.”
“While custody and visitation agreements are always subject to modification by the courts in the best interests of the child [ ], we are unaware of any cases in which Pennsylvania courts have declared such contracts to be unenforceable as against public policy,” he stated.
The reason for this distinction, Bender added, “would appear to be obvious, since the right to child support belongs to the child, and thus cannot be `bargained away' by the parents.” See Kesler v. Weniger, 744 A.2d 796, 26 FLR 1149 (Pa. Super. Ct. 2000).
Rights to custody and visitation, on the other hand, belong to the parents, he explained, also noting that custody/visitation agreements are always subject to court review and adjustment in the bests interests of the child.
“In no way, however, do custody and visitation agreements involve the bargaining away of the rights of the children, and accordingly they are not unenforceable as against public policy on the same basis as are agreements regarding child support,” Bender said.
Turning to the trial court's finding that the $10,000 clause violated public policy by impairing the “court's power and the Commonwealth's duty” to determine what is in the child's best interests, he emphasized that the “issue of whether a provision in a custody/visitation contract that places a serious impediment on either party's ability to seek court modification in the best interests of the child is not presently before this court.”
Nevertheless, Bender observed that the agreement did not provide that the clause was intended to discourage the father from seeking court intervention or indicate that the payment would act as an impediment to his ability to do so.
This latter point “would depend, first and foremost,” upon the father's financial ability to pay it, he said, noting the father “plainly acknowledged” in the agreement that he was “capable of earning a large salary.”
Going on to determine that the record did not support a finding that the $10,000 clause encumbered the father's ability to seek court modification of the agreement, Bender also said it was unclear whether, as claimed by the mother, that the clause was intended as a “defense fund” in the event of litigation regarding the agreement.
(In a footnote, he observed, however, that her claim was “strengthened” by the principle of contract interpretation that ambiguities are to be construed against the drafter.)
In thus concluding that the trial court erred in ruling that the $10,000 clause was unenforceable as against public policy, Bender reiterated that the record “does not reflect that this provision constitutes any limitation on [the father's] ability to seek court intervention to modify the custody and/or visitation provisions [ ] in the best interests of the child.”
He also noted that the trial court had dismissed with prejudice the mother's claims against the father for fraud and negligent misrepresentation because “she cannot point to any real damages.”
However, Bender said that because the $10,000 clause was not against public policy, damages for the father's breach of the clause might be available to her.
(The mother had claimed that the father, as her legal advisor, either negligently or intentionally misrepresented to her that she should enter the agreement (which “she in fact did not wish to enter”) and never indicated a belief that its provisions were against public policy.)
President Judge Susan Peikes Gantman, and Judges Jack A. Panella, Anne E. Lazarus, Paula Francisco Ott, and Victor P. Stabile concurred. Jacqueline O. Shogan concurred in the result.
Judge Mary Jane Bowles filed a concurring opinion, joined by Shogan, Lazarus and Stabile. While agreeing that “the agreement is not contrary to public policy per se,” Bowles contended that “it is premature to opine as whether the [$10,000] provision is enforceable in this case” without first reviewing the parties' intent.
Judge Sallie Updyke Jenkins dissented. She argued that “a contractual provision that potentially hinders or chills an interested party's ability to ensure a custody arrangement that is in the child's best interest is against public policy and unenforceable.”
The mother was represented by Charles E. Kurowski, and the father by Tamora L. Reese. Both are from Washington, Pa.
To contact the reporter on this story: Julianne Tobin Wojay in Washington at email@example.com.
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