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586 Pa. 297

893 A.2d 87

Chen v. Chen

Supreme Court of Pennsylvania

Decided March 20, 2006

Supreme Court of Pennsylvania · decided 2006-03-20

Cited by 23 later decisions — most recently August 2017

2 federal appellate · 11 state decisions

Key passage — most relied on by later courts

“[u]nless otherwise agreed between promisor and promisee, a beneficiary of a promise is an intended beneficiary if recognition of the right to performance in the beneficiary is appropriate to effectuate the intention of the parties.” Restatement (Second) of Contracts § 302(1). The terms intended and incidental beneficiary used by the Restatement are more specific terms for”

quoted by 1 later decision, including Katz v. Township of Westfall

Relies on Guy v. Liederbach · Murray v. Murray · Hurlbut v. Scarbrough

Good law ✅— No negative treatment on recordhow we know

Decided 2006-03-20

View the full empirical analysis of this case →

Chief Justice CAPPY,

¶1Concurring.

¶2I join the Majority Opinion insomuch as it resolves this matter on principles of contract law. I, however, respectfully disassociate myself from the Majority’s reliance on principles outside of contract law and its consideration of issues outside the scope of the issue to which this Court limited its review. See, e.g., Maj. Op. at 586 Pa. 308-11, 893 A.2d at 94-95 (discussing competing policy considerations); id. at 302-03, n. 8, 893 A.2d at 90, n. 8 (commenting on the trial court’s calculation of child support).

Justice CASTILLE,

¶3Concurring.

¶4I concur in the result since I believe that Theresa Chen (“Daughter”) was not an intended beneficiary of her parents’ property settlement agreement. I am in agreement with Chief Justice Cappy’s Concurring Opinion that the Majority unnecessarily relies on principles outside of contract law in disposing of the issue presented, see Maj. op. at 586 Pa. 308-11, 893 A.2d at 94-95, and considers extraneous issues unrelated to the limited issue upon which this Court granted review, see id. at 302-03 n. 8, 893 A.2d at 90 n. 8; id. at 308 n. 15, 893

¶5*314A.2d at 94 n. 15; id. at 312-13 n. 19, 893 A.2d at 96 n. 19. In my opinion, the issue presented in this case is easily resolved by a straightforward application of the two-part test presented in the Restatement (Second) of Contracts § 302, as adopted by this Court in Guy v. Liederbach, 501 Pa. 47, 459 A.2d 744 (1983).

¶6Like the Majority, I agree that Daughter satisfies the second prong of the § 302 test because Wheamei Jenq Chen (“Mother”), as promisee, intended to give Daughter the benefit of the promised performance, i.e., the $25.00 weekly child support payments from Richard Chen (“Father”). See Restatement (Second) of Contracts § 302(l)(b). I also agree that the central issue in this case concerns the first prong of the § 302 test — whether recognition of a right to performance in Daughter is appropriate to effectuate the intention of the parties. See id. § 302(1). In actually resolving this issue, however, the Majority, rather than applying this prong to the underlying facts, needlessly considers competing policy considerations in concluding that, “strong public policy favors denying a child standing to seek the specific dollars one parent owes the other for the child’s generalized support pursuant to a separation agreement, absent special circumstances.... ” Maj. op. at 586 Pa. 309-11, 893 A.2d at 95.

¶7I believe that, based on the unambiguous words of the property settlement agreement, Mother and Father clearly intended for Mother to receive the child support payments for the benefit of Daughter, not for Daughter to be the direct recipient of the payments. Accordingly; Daughter is not an intended beneficiary under § 302; rather, she is an incidental beneficiary. That is enough to decide this case and require reversal.

Justice SAYLOR,

¶8Concurring.

¶9Because the contract at issue is a child support agreement, it seems evident to me that Daughter was the intended beneficiary, at least during her minority. See generally Holmes v. Wooley, 792 A.2d 1018, 1021 (Del.Super.2001) (noting that, under Delaware law, a child support obligee has a *315duty to use child support monies on behalf of the children involved and that the children are thus “the intended beneficiaries of such funds” with “an equitable interest in them”); Murray v. Murray, 128 Ohio App.3d 662, 716 N.E.2d 288, 292 (1999) (requiring an expansive definition of income for child support calculation purposes, so as to “ensure that the best interests of the children, the intended beneficiaries of child support awards, are protected” (internal quotation marks omitted)); Blaikie v. Mortner, 274 A.D.2d 95, 713 N.Y.S.2d 148 (N.Y.App.Div.2000) (detailing that New York’s domestic relations code “establishes a baseline level of support for children, who are its intended beneficiaries”); Hurlbut v. Scarbrough, 957 P.2d 839, 842 (Wyo.1998) (“Unpaid child support is not an asset of the parent but is the children’s money which the parent administers in trust for the children’s benefit.”); accord In re Poffenbarger, 281 B.R. 379, 388-89 (Bkrtcy.S.D.Ala.2002). Therefore, I am not as certain as the majority that it is appropriate to rely exclusively upon ordinary contract principles to resolve the specific question of whether Daughter had standing to sue Father to enforce the contract’s terms. It seems to me that that essential question amounts to one of public policy resolvable even in the absence of the overlay provided by Section 302 of the Restatement of Contracts. Because I agree that, as a policy matter, minor children should not be accorded standing to initiate such legal actions absent express statutory authority, see Majority Opinion at 586 Pa. 308-13, 893 A.2d at 94-96, I join the majority opinion subject only to the above thoughts.

Justice EAKIN joins this concurring opinion.
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