Property settlement agreements incorporated but not merged into divorce decrees are considered independent contracts, interpreted according to the law of contracts. A fundamental rule in construing a contract is to ascertain and give effect to the intent of the contracting parties. It is firmly settled that the intent of the parties to a written contract is contained in the writing itself. When the words of a contract are clear and unambiguous, the meaning of the contract is ascertained from the contents alone.
A daughter filed a petition to intervene as a party to her mother's action for support. The trial court granted the petition because the daughter was a third-party intended beneficiary under the mother and appellee father's property settlement agreement. The Superior Court affirmed. The father appealed and the appellate court's judgment was reversed.
Was the daughter an intended third party beneficiary?
The courts reasoned that the daughter could do so because she was a third-party intended beneficiary of that property settlement agreement. On appeal, the state supreme court found that those rulings had to be reversed. It so concluded because it found that the mother, not the daughter, was the signatory to the property settlement agreement and that the property settlement agreement designated the mother, not the daughter, as the recipient of the child support payments. It further reasoned that the mother was placed in a position of deciding how best to spend that money, whether it be for the direct benefit of the daughter or whether it be for the benefit of the family that would incidentally benefit the daughter. As a result, the state supreme court concluded, it was not an intention of the parties to grant a legally enforceable interest in the parties' property settlement agreement.