Reese v. Weis, A-5557-10T2; Appellate Division; opinion by Lihotz, J.A.D.; decided and approved for publication May 7, 2013. Before Judges Lihotz, Ostrer and Kennedy. On appeal from the Chancery Division, Family Part, Essex County, FM-07-0583-93. [Sat below: Judge Leath.] DDS No. 20-2-9867 [46 pp.]

A 1996 judgment of divorce ended the 13-year marriage of plaintiff Ronald Reese and defendant Rebecca Weis. Among other things, the JOD required Reece to pay Weis permanent alimony of $100,000 per year.

Defendant, with the parties’ three children, began cohabitating with William Stein and his two children in 1998.

In 2008, plaintiff filed a motion to terminate his obligation to pay alimony, citing defendant’s cohabitation. The trial evidence focused on the financial arrangements between defendant and Stein from 2006 to 2008.

The trial judge determined that defendant’s open, 10-year cohabitation afforded her a significant economic benefit such that alimony was no longer warranted. Defendant appeals from the termination of Reese’s obligation to pay alimony. Plaintiff cross-appeals the judge’s decision making the termination effective as of the emancipation of the parties’ oldest child, rather than the date he filed his motion.

Held: The inquiry regarding whether an economic benefit arises in the context of cohabitation must consider not only the actual financial assistance resulting from the new relationship, but also should weigh other enhancements to the dependent spouse’s standard of living that directly result from cohabitation. A trial judge may properly evaluate the duration of the new relationship and assess its similarities to the fidelity associated with marriage when determining whether to modify or terminate alimony.

The panel notes that alimony is a claim arising on divorce, which is rooted in the interdependence during the parties’ marital relationship. The Legislature delineated considerations to be weighed when reviewing a claim for alimony that emphasize facts reflecting need and the ability to pay.

An award of alimony remains subject to review and, if warranted, modification, when either party experiences a substantial change in financial circumstances. The cohabitation of a dependent spouse is a changed circumstance that requires further review of the economic consequences of the new relationship and its impact on the support obligation. To rebut the presumption that the living arrangement is tantamount to marriage and has reduced or ended the need for alimony, a dependent spouse must prove she remains dependent on the former spouse’s support.

The panel says that prior to this case, courts have not had occasion to define what constitutes an economic benefit or when such a benefit warrants termination rather than modification of alimony.

Recognizing that whether a dependent spouse receives a benefit from cohabitation is a fact-sensitive determination, the panel says Family Part judges must make findings regarding whether the aid provided by a cohabitant has altered or obviated the need for support, and exercise reasonable discretion to reset or eliminate alimony.

Thus, a trial judge starts with a review of the parties’ financial arrangements, to discern whether the cohabitant actually pays or contributes toward the dependent spouse’s necessary expenses. If so, the cohabitant provides the dependent spouse with a direct economic benefit. The panel rejects defendant’s claim that her monthly contribution to a joint account she held with Stein, in an amount equal to what she received as support from plaintiff, coupled with proof of annual expenses exceeding the provided support, proved she paid her own way, without Stein’s economic assistance.

The panel says indirect economic benefits to the dependent spouse also must be considered. This includes the cohabitant’s payment of his own expenses, as when the cohabitant pays for housing costs, thus relieving the dependent spouse of this need. More subtle economic benefits also may result from the parties’ intertwined finances.

The panel rejects defendant’s claim that the gifts and luxuries Stein provided do not equate to an economic benefit. It holds that the provision of emoluments, which enhance a dependent spouse’s lifestyle, equates to a tangible economic benefit from the new living arrangement. Thus, it is fair and equitable for the trial judge to consider lifestyle enhancements realized from the new relationship that raise the dependent spouse’s standard of living above that enjoyed during the marriage.

The panel says that here, testimonial evidence failed to support defendant’s suggestion that she and Stein separated their respective financial obligations. Rather, it supports the trial judge’s findings of an intertwined, ill-defined system of expense allocation and payment, resulting in Stein paying more than his share. Further, documentary and expert evidence amply demonstrated Stein’s provision of expenses that enhanced defendant’s lifestyle above that enjoyed during the marriage.

The panel rejects defendant’s contention her annual expenditures justify the continued need for support. The level of her annual spending does not negate the fact that she received an economic benefit from cohabitation.

Alternatively, defendant argues that a remand is necessary because the judge failed to find the amount of Stein’s economic support. The panel says the court’s struggle to more precisely quantify the amount of the benefit defendant received resulted from a deficit in defendant’s proofs.

The panel also says that the determination to modify or terminate alimony is informed by more than the objective calculation of the specific monies provided by the cohabitant. The court must consider the characteristics of the relationship of the dependent spouse and the cohabitant, including the length of cohabitation; the duration of receipt of the economic benefits, particularly in light of the length of the prior marriage; and whether the cohabiting relationship exhibits the indicia of marriage.

Here, defendant and Stein’s relationship has surpassed the length of the marriage. Throughout this time, Stein paid her expenses and augmented her standard of living. The combined families operated as a single household, with defendant and Stein committed to each other economically, devoted to each other emotionally, and faithful to their monogamous union. Considering the totality of the evidence, there was no error in terminating alimony.

The panel then rejects defendant’s claim that the trial court erred by rejecting the application of laches to bar plaintiff’s motion, because she failed to prove she changed her position based on a belief plaintiff accepted an obligation to continue her support regardless of changes in facts or circumstances.

Finally, the panel holds that the court did not abuse its discretion in making the termination order effective as of the date of the oldest child’s emancipation or in denying defendant’s request for attorney fees.

For appellant/cross-respondent — Gary Newman (Newman, McDonough, Schofel & Giger; Newman and Alison M. Schmieder on the briefs). For respondent/cross-appellant — Bonnie C. Frost (Einhorn, Harris, Ascher, Barbarito & Frost).