Post-Settlement Reconciliation Does Not Abrogate Settlement Agreement

In Semulka v. Semulka, No. 1302 WDA 2014 (August 31, 2015), the Superior Court in a non-precedential opinion considered whether a marital settlement agreement could be enforced after a former husband and wife reconciled their marriage, and then broke up again.

More specifically, Husband and Wife signed an agreement after Wife filed a divorce action, and in that agreement, Husband was obligated to pay $40,000 cash to Wife in three payments over four years. Before the divorce was finalized, Husband and Wife resumed cohabitation for nearly a year. Still, their decree in divorce was issued shortly before the end of the four year period in which Husband’s payments came due.

Husband made none of the contractually-required payments. Wife filed an enforcement action, seeking payment of the $40,000, half of the children’s college expenses, and legal fees (which were authorized by the settlement agreement). The trial court granted Wife’s request, giving Husband 90 days to comply. Husband filed an appeal to the Superior Court.

In his appeal, Husband argued that Pennsylvania should adopt the equitable doctrine of “abrogation,” which renders the unexecuted portion of a marital settlement agreement void when the parties reconcile. The Superior Court declined the invitation, noting that our courts already distinguish between separation agreement and postnuptial (settlement) agreements. The subject agreement in this case contained the hallmarks of a final settlement agreement, and under our case law (Vaccarello, Carosone), settlement agreements are not extinguished by a subsequent marital reconciliation.

Clearly, the marital reconciliation in this case was different from that in Vaccarello. In that case, Husband and Wife resumed cohabitation six months after signing their agreement, and they lived together harmoniously for twelve years before their final separation. The divorce was filed after the subsequent separation, and in the divorce action, Wife raised claims for division of marital property contrary to the terms of the “Separation and Property Settlement Agreement” signed by the parties twelve years earlier. There were 12 days of hearings to determine the validity of the agreement, after which the trial court held that it was enforceable.

The Superior Court reversed the finding of enforceability, holding that the agreement was a mere separation agreement and lacked full and fair disclosure. The Supreme Court eventually reversed the Superior Court and restored the trial court’s decision. Central to the Supreme Court’s analysis was Ray’s Estate, a 1931 precedent involving a separation agreement. The Supreme Court held that an agreement which is comprehensive in scope is more likely to be a final settlement agreement that cannot be abrogated by a subsequent marital reconciliation.

Examining the Vaccarellos’ agreement, the Supreme Court held that it was comprehensive in scope; and it was compelling evidence that Husband had subsequently made a will while cohabiting with Wife in which he referenced her waiver of testamentary rights under the settlement agreement. Similarly, the agreement of the Semulkas was comprehensive.

The Supreme Court in Semulka disagreed with the Superior Court’s reliance on Carosone, another reconciliation case. In Carosone, the Superior Court had voided an agreement that provided a temporary reconciliation would not void the agreement. The parties in that case cohabited for over six years after signing the agreement. The Superior Court in Carosone inferred that a long term reconciliation would void the agreement – and in Semulka, the Superior Court held that the parties had experienced a long term reconciliation (11 months).

The Supreme Court disagreed, finding that the Semulkas’ agreement did not require them to live separate and apart, but merely authorized them to do so. Accordingly, the Court could not reasonably infer that a long term separation was intended to abrogate the agreement.