Does a Breach of a Prenuptial Agreement Create a Right of Rescission? Part I
February 28, 2007 | Legal Perspective, Prenuptial Agreements
Earlier this week I posted the introduction to this post, in which I examined the cases from Pennsylvania and other jurisdictions that lead me to believe that a breach does not create a right of rescission unless the breach is so substantial that it cannot be remedied through money damages. The Pennsylvania cases are not conclusive, but lend their support to this theory.
Estate of Barilla, 535 A.2d 125 (Pa.Super.1987). Widow of a decedent alleged that the executors of the decedent’s estate, his children, breached the prenuptial agreement by padlocking the entrance to the marital residence in violation of a contractual provision that granted the widow a life estate in the property. Trial court found no breach because the executor of the decedent’s estate was neither a party to the contract nor an intended third party beneficiary. Furthermore, it was held that the widow’s right to a life estate was conditional upon her occupancy of the marital residence at the time of decedent’s death and continued payment of real estate taxes. The widow did not occupy the residence for 17 years after the decedent’s death and did not pay the taxes. Since these conditions failed, the widow’s right to a life estate did not attach. Affirmed.
Estate of Cummings, 493 Pa. 11, 425 A.2d 340 (1981). In this pre-Simeone case, the parties conceded that the prenuptial agreement executed by the decedent and his widow was valid and binding. The widow alleged, however, that the decedent’s failure to perform contract provisions, which required him to leave his wife a life estate in his cottage on leased premises and a lifetime income interest in a trust fund in the principal amount of $30,000.00, rendered the agreement invalid. The trial court held that the decedent breached the contract by conveying the cottage to his wife during his lifetime and leaving her the furniture in his will (rather than conveying the life estate to her in his will) and granting her a life estate in stock worth $29,440.00. The trial court allowed the widow to elect against the decedent’s will, despite the contractual waiver of such election. The Supreme Court of Pennsylvania reversed the trial court’s decision, holding that the decedent had complied to the best of his ability with the former provision; and that the estate of the decedent could cure the breach of the latter provision by supplementing the income that the widow would receive from the trust fund. The Supreme Court rejected the estate’s argument that the $560.00 deficiency was de minimus, but held that the breach neither negated the essential fairness of the agreement nor altered the promise for which she bargained. Since the widow had an adequate remedy at law, the Supreme Court refused to rescind the entire contract.
Estate of Harrison, 456 Pa. 356, 319 A.2d 5 (1974). In another pre-Simeone case, the decedent failed to comply with a provision of the parties’ prenuptial agreement that required him to make a new will prior to his death, in which he was to create a $150,000.00 trust for his wife. Notably, there were no other covenants in the parties’ agreement except for mutual waivers of their testamentary rights. When the husband died without having made a new will, more than a year after signing the prenuptial agreement, his widow made a claim against his estate for family exemption. The trial court dismissed the widow’s claim, holding that the decedent’s breach of the prenuptial agreement could be cured by creating a trust for the widow out of the decedent’s estate. The trial court also held that there had been substantial performance of the prenuptial agreement because the parties had been married as provided by their agreement. The Supreme Court of Pennsylvania reversed, holding that “Were we to accept appellees’ contention, once two persons married, their antenuptial agreement would be enforceable even if neither performed any of the terms of the agreement.” Thus, in Pennsylvania, the parties’ marriage itself is not adequate consideration to uphold a prenuptial agreement that is not otherwise performed by the parties. This decision was subsequently limited to its facts by the Supreme Court of Pennsylvania in Cummings, supra, wherein the Supreme Court held that a technical breach of a prenuptial agreement is not grounds for total rescission, where other provisions were substantially performed and a remedy at law existed. Furthermore, the precedential value of this decision may have been weakened by the Supreme Court’s subsequent decision in Simeone v. Simeone, 525 Pa. 392, 581 A.2d 162 (1990), which relaxed the standards for enforceability of prenuptial agreements by eliminating the requirement that such agreements must make a reasonable provision for the dependent spouse.