Facts
- Paul J. Marmer co-owned and operated a family pharmacy with his father, Henry Marmer, and assumed added responsibilities as the business became more technologically oriented.
- Henry arranged certificates of deposit (CDs) held in Henry’s name as trustee for Paul; the CDs were repeatedly rolled over rather than cashed out.
- In connection with Medicaid planning, Henry transferred assets to his daughter, June S. Marmer, who later cashed the CDs and did not remit the proceeds to Paul.
- Paul sued June in the Probate and Family Court to recover the CD funds; the claim was dismissed and the dismissal was affirmed on appeal.
- June died in 2006; Richard D. Kaufman, June’s child, became administrator with the will annexed of June’s estate.
- Paul alleged that he and Richard later reached an oral settlement under which Richard would (i) pay Paul $136,000 for the CDs, (ii) give Paul half of June’s assets, and (iii) pay Henry’s nursing-home care until Henry qualified for Medicaid.
- The alleged settlement was not executed in a signed writing.
- Paul brought suit in Superior Court to enforce the alleged oral agreement; Richard moved for summary judgment, asserting lack of consideration.
Issues
- Whether the alleged oral settlement agreement was supported by legally sufficient consideration.
- Whether, assuming Paul’s account of the discussions was true, the alleged promises were enforceable when Paul did not surrender a new claim or undertake a new legal detriment.
Decision
- The Superior Court granted summary judgment for Richard, concluding the alleged agreement was unenforceable for lack of consideration.
- The Appeals Court modified the judgment to include an express declaration that the alleged agreement was unenforceable for lack of consideration and, as modified, affirmed.
- The courts treated the consideration question as a matter of law suitable for summary judgment, even crediting Paul’s version of events.
Legal Principles
- An enforceable contract requires consideration: a bargained-for exchange involving a legal detriment to the promisee or a legal benefit to the promisor.
- A promise is not supported by consideration where the promisee gives up no new right, undertakes no new obligation, and provides no forbearance of a viable claim.
- Moral or familial motivations, standing alone, do not supply consideration and do not convert a gratuitous promise into an enforceable contract.
- Settlement-type promises are enforceable only when they reflect an exchange of concessions or the release/forbearance of an arguably valid claim, not merely a unilateral commitment to pay or share assets.
Conclusion
The courts held that the alleged oral family settlement was unenforceable because Paul did not provide a bargained-for exchange—no new legal detriment or release of a viable claim—and Richard received no legal benefit beyond moral or familial reasons for making the promises.