Enforcing a settlement agreement 7 years after the violation

Husband and Wife married back in 1988 and were divorced in 2003. As part of their divorce settlement, Husband agreed to pay Wife a percentage of the proceeds from the sale of stock from his business, by a certain date. In 2005, Husband made 2 payments to Wife for her cut of stock sales.

Fast forwarding to 2011, Wife petitioned to enforce the settlement, claiming that Husband failed to pay Wife all that she was owed for stock sales. Husband answered by arguing that Wife's claims were barred by thestatute of limitations (a legal claim a time limit has elapsed, barring action) and laches (an equitable claim that Wife took too much time and thus prejudiced Husband).

Judge Walko of the Allegheny County Court of Common Pleas ruled that Wife's actions were barred by both the statute of limitations and laches. Wife appealed to the Superior Court, which affirmed Judge Walko. The Superior Court found that Wife was barred by laches because she failed to exercise due diligence in pursuing her claims and that this delay prejudiced Husband. The Superior Court also found that the statue of limitations elapsed in 2008, barring Wife from seeking relief.

Interestingly, recent similar cases have reached different results. The key difference appears to be whether a specific time period is set for performance of an action. In this case, there was a specific time period and so the status of limitations ran out. In other cases,where a provision does not have a specific deadline, the obligation continues and is not subject to a status of limitations defense.

This case illustrates the need for experienced and skilled legal counsel in drafting and implementing a settlement agreement. I generally put a provision in my agreements that permits a party to enforce an agreement, regardless of the time involved. Also, it is important to implement and enforce and agreement in a timely manner, so as to avoid these issues altogether.

This case may be found at K.A.R. v. T.G.L., 107 A3d 770 (Pa. Super. 2014).