Opinion ID: 2791274
Heading Depth: 1
Heading Rank: 1

Heading: Condition Precedent and Implied Reasonableness Requirement

Text: ¶ 20. Father argues that the language “[at] an institution acceptable to Frank Scopetti” in Paragraph 4 requires consultation and approval as a condition precedent to father’s obligation to pay any tuition, and that the magistrate improperly implied a “reasonableness” requirement with respect to father’s exercise of his right of approval or disapproval. Because these two arguments are related, we consider them together. ¶ 21. In interpreting marital-settlement agreements, Pennsylvania courts apply the law of contracts and seek to ascertain the intent of the parties. [3] Kripp v. Kripp , 849 A.2d 1159, 1163 (Pa. 2004). In accordance with Pennsylvania law, “[w]e must give effect to every word and clause” of a legal instrument, “so as not to render any provision nugatory or mere surplusage.” In re Estate of Smertz , 701 A.2d 268, 270 (Pa. Super. Ct. 1997). We must “construe the contract only as written and may not modify the plain meaning under the guise of interpretation.” Little v. Little , 657 A.2d 12, 15 (Pa. Super. Ct. 1995) (quotation omitted). ¶ 22. Pennsylvania’s intermediate appellate court has thrice considered cases similar to this case. [4] In Fina v. Fina , the divorcing spouses’ settlement agreement provided that the father “agree[d] to be responsible for twenty-five (25%) of the cost of the college tuition . . . [for the daughter], if consulted concerning the choice of an undergraduate school and provided he agrees thereto, which agreement shall not be unreasonably withheld.” 1999 PA Super 201, ¶¶ 1, 737 A.2d 760. In Fina , the trial court found that “other than general discussions . . ., [the father] was excluded from [the daughter’s] college selection process” and thus the requisite degree of consultation had not occurred. Id . ¶¶ 20-21. The appeals court affirmed, concluding that the college-tuition provision created an obligation on the part of the mother and the daughter “to seek [the father’s] consultation and agreement regarding . . . college selection.” Id . ¶ 21. Because this obligation was not met, the father’s obligation to pay 25% of the daughter’s college expenses never arose. Id . ¶ 23. Subsequently, in Wineburgh v. Wineburgh , the court considered a marital-settlement agreement requiring the father to pay for the children’s college expenses but providing that the father “will have a say in the choice of college” and that he “will have the right to approve or disapprove a particular college but will exercise that right in a reasonable fashion.” 2002 PA Super 415, ¶ 2, 816 A.2d 1105. The court concluded that this provision did not create a condition precedent that affirmatively required consultation with father as a precondition to his obligation to pay. Id . ¶ 10 (“We do not believe that having ‘a say’ equates with the requirement to ‘consult’ and, therefore, the language of the [agreement] does not place an affirmative duty on Mother that would precondition Father’s obligation to pay. ”). ¶ 24. In its most recent case, Mazurek v. Russell , which was decided three weeks after the trial-court decision in this case, the Pennsylvania court considered an agreement that provided: “[I]t is the parties’ intention that the Children attend such undergraduate institutions as are reasonable and appropriate for the Children, with the parties’ mutual consent, which consent shall not be unreasonably withheld.” 2014 PA Super 130, 96 A.3d 372, 379. The agreement provided that the father “shall pay one hundred percent (100%) of the reasonable expenses associated with the Children attending such institutions.” Id . The court found that the father’s obligation was to pay for his son’s college at an institution mutually agreed to by the parents, and that on the evidence presented, the father’s withholding of his consent for the son’s chosen college was reasonable. Id . at 381-82. ¶ 25. We draw two lessons from this review of pertinent Pennsylvania cases. First, the Pennsylvania courts have been reluctant to infer a “consultation” requirement as a condition precedent to an obligor-parent’s obligation to pay in the absence of express language. In this case, the agreement provided merely that father “agrees to provide college tuition for Francesca and Indie [at] an institution acceptable to Frank Scopetti.” Although the agreement requires that the institution be acceptable to father—a factor we consider below—it does not (in contrast to the agreement in Fina ) specifically mandate any advance consultation. We conclude that any absence of consultation with father before the daughters enrolled in college did not in itself defeat father’s obligation under the agreement. ¶ 26. Second, Pennsylvania courts have readily enforced agreements conditioning the obligor’s obligation to pay upon consent to or agreement with the child’s choice of college in cases in which the obligor expressly agreed not to unreasonably withhold such consent or agreement. Mazurek , 96 A.3d at 379, 381-82; Fina , 1999 PA Super 201, ¶¶ 1, 21. If the agreement in this case includes such a requirement, the agreement is likely enforceable under Pennsylvania law. [5] ¶ 27. In this case, we conclude that Paragraph 4’s “acceptable to [father]” language creates an implied condition that such acceptance not be unreasonably withheld. In general, when an obligor’s duty is conditioned on satisfaction with something—in this case, each child’s respective college choice—“an interpretation is preferred under which the condition occurs if such a reasonable person in the position of the obligor would be satisfied.” Restatement (Second) of Contracts § 228 (1981) [hereinafter Restatement]. The Restatement acknowledges that “ [i]f the agreement leaves no doubt that it is only honest satisfaction that is meant and no more, it will be so interpreted,” id . § 228 cmt. a, but makes it clear that “[w]hen . . . the agreement does not make it clear that it requires merely honest satisfaction, it will not usually be supposed that the obligee has assumed the risk of the obligor’s unreasonable, even if honest, dissatisfaction. In such a case, to the extent that it is practicable to apply an objective test of reasonable satisfaction, such a test will be applied.” Id . § 228 cmt b. The Restatement provides the following illustration: A contracts with B to install a heating system in B’s factory, for a price of $20,000 to be paid “on condition of satisfactory completion.” A installs the heating system, but B states that he is not satisfied with it and refuses to pay the $20,000. B gives no reason except that he does not approve of the heating system, and according to experts in the field the system as installed is entirely satisfactory. A has a claim against B for $20,000 since it is practicable to apply an objective test to the installation of the heating system. This interpretation is also preferred because it reduces A’s risk of forfeiture. Id . § 228 ill. 3. ¶ 28. T he illustrated principle applies with equal force in this context. Accordingly, we conclude that under Pennsylvania law, the condition that father is only required to pay for his daughters’ tuition if they attend institutions acceptable to him is enforceable, but only insofar as father exercises that discretion reasonably. For this reason, we reject father’s argument that the magistrate improperly implied a “reasonableness” requirement into this agreement, and we conclude that the critical question in this case is not whether father accepted the daughters’ choices, but rather whether his refusal to accept them was reasonable under the circumstances.