Prenuptial Agreements

Post Nuptial Agreement Is Unforeceable For Lack Of Consideration And Failure To Comply With Uniform Written Obligations Act

In the family law, equitable distribution, divorce case of Echevarria v. Echevarria, PICS Case No. 15-0511 (C.P. Monroe, Jan. 26, 2015), the Honorable Jennifer Harlacher Sibum ruled that the parties’ post-nuptial agreement remained in effect where a later purported agreement lacked consideration and did not comply with the requirements of the Uniform Written Obligations Act.

On March 11, 2006, Carmen and Ramon Echevarria entered into a post-nuptial agreement outlining the rights and obligations incident to their divorce. Three properties were distributed under the 2006 agreement—the marital residence, business premises in Bronx, New York and a building in Bronx, New York. The 2006 agreement provided that plaintiff would relinquish her interest in the marital residence and the business premises contingent upon defendant’s cash payments of $37,500 and $25,000, subject to a payment schedule in the agreement.

In her first petition for special relief, plaintiff alleged that defendant failed to make timely payments of the $37,500 owed to her under the 2006 agreement. While defendant paid the principal sum over time, plaintiff contended she is entitled to interest on the unpaid balance from the date of the 2006 agreement.

In her second petition, plaintiff alleged that defendant failed to make timely payments toward the $25,000 owed to her under the 2006 agreement. Plaintiff alleged the $25,000 became due on March 11, 2011 and plaintiff failed to pay the amount in full. Plaintiff argued that she was entitled to the unpaid principal, interest, attorney fees and costs.

Defendant argued that the terms of the 2006 agreement were modified on Sept. 18, 2013 pursuant to a notarized letter agreement. Defendant asserted that under the agreement, certain of his obligations would be fully satisfied following a no-interest payment of $10,000, to be paid in 32 monthly installments. Additionally, defendant would provide a vehicle to plaintiff and would receive credit for its cost.

Here, the intent of the parties expressed in the 2006 agreement was clear and unequivocal. In dividing their financial obligations and property rights, the parties intended that defendant would retain the parties’ marital premises, as well as the business premises and building in the Bronx. In consideration for plaintiff’s relinquishment of her rights with respect to those properties, plaintiff was entitled to two payments of $37,500 and $25, 000.

Thus, the issue was whether the 2013 letter agreement modified the parties’ 2006 agreement.

Here, the court concluded that the letter agreement was unenforceable for lack of consideration. The letter agreement modified defendant’s payment obligations under the 2006 agreement by lowering the balance and setting forth a monthly installment payment schedule. It did not, however, contain a provision pertaining to any consideration passing to plaintiff in exchange for the modification.

The court further found that the letter agreement did not meet the requirements under the Uniform Written Obligations Act to rectify the lack of consideration. The act requires words sufficient enough to show that the signatory did in fact “intend to be legally bound.” Here, the phrase “correctly expresses your understanding of the terms reached during our negotiations” in the letter agreement did not sufficiently convey the parties’ intent to be legally bound by the agreement. The court concluded that the 2006 agreement remained unmodified and enforceable.

The court found that under the 2006 agreement defendant was obligated to pay $37,500 on or before March 11, 2008. However, plaintiff failed to present sufficient evidence concerning the periodic payments that defendant made to her and the court was unable to calculate any interest due. Accordingly, plaintiff’s first petition for special relief was denied.

As to plaintiff’s second petition for special relief, the court found the payment of $25,000 was due on March 11, 2011. The court found that defendant was obligated to pay the principal amount of $15,000 to be held in trust for plaintiff’s mother plus interest from March 11, 2011. Because defendant made several payments totaling $8,823.98 towards the $10,000 amount due to plaintiff, he was obligated to pay the remaining balance of $1,176.02, plus interest from March 11, 2011 and attorney fees of $500 and costs.

Reference: Digest of Recent Opinions, Pennsylvania Law Weekly; 38 PLW 329 (April 7, 2015)

Filed Under: Family Law: Divorce Law; Post Nuptial Agreement; Uniform Written Obligations Act

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