Contracts Keyed to Knapp
Chen v. Chen
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Richard Chen (Father (D)) (P) and Wheamei Chen (Mother (P)) (P) divorced when their children were still kids. They had a son and a Daughter together. The Daughter’s name was Theresa. The property settlement agreement (Agreement) entered into stipulated that Father (D) was to pay $25 per week for the upkeep of his Daughter, who at this time was just a year old. The condition attached to this was that the Father (D) would increase this amount upon obtaining regular employment and as his salary increased in accordance with the county’s domestic relations guidelines. This Agreement was not merged with the divorce decree but was incorporated just as a reference.The Father (D) made payment of $25 for his Daughter’s upkeep as stipulated in the Agreement until she was 18 but did not increase this payment in accordance with obtaining regular employment and salary increase. As Theresa clocked 18, her Mother (P) was informed by the county that support payments would stop. In response to this, a petition on findings of contempt of court and enforcement of property settlement was filed by the Mother (P) against her former husband. The Mother (P) sought to enforce the Agreement provisions on the increase in child support arising from obtaining regular employment and increase in salary for the past 18 years and to collect the shortfalls of payment over the years.Her Daughter also filed a petition to intervene as a third party intended beneficiary under the Agreement as she turned 18. The trial court, applying case law that relied on Restatement (Second) of Contracts S 302 which stipulates that” a beneficiary is an intended beneficiary if recognition of a right to performance in the beneficiary will effectuate the intentions of the parties and the circumstances indicate that the promisee intended to give the beneficiary the benefit of the promised performance”, held that the Daughter had the right to intervene in the case.Subsequently, Mother (P) withdrew from the case as a party, leaving Daughter and Father (D) as party-opponents. In giving judgment, the court held that the Father (D) breached the contract and asked him to pay $59,000 in arrearages due under the agreement to his Daughter. On appeal, the state’s intermediate court ruled in favor of the Daughter and affirmed the ruling of the trial court on the ground that the Father (D) breached the support provisions of the Agreement. Therefore, the Father (D)’s argument that his Daughter had no direct right to the payment but only to her parents’ support was rejected by the court. However, the state’s highest court granted review.
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