Cohabitation remains a growing trend in the United States. According to the most recent U.S. Census (2010), cohabitating couples form approximately 7.5 million of the country’s households, a 5 percent increase from 2009. That number is likely even greater today. New Jersey is not immune to this trend. In fact, the 2010 U.S. Census shows that approximately 5.2 percent of New Jersey’s households consist of cohabitating couples; defined as those living together in a romantic relationship absent marriage, civil union or the like.
Attorneys whose practices emphasize family law should recognize that in today’s society, a growing number of romantic relationships exist outside legal definition. Because New Jersey ceased recognizing common-law marriages in 1939, palimony has often been the best redress available to those couples whose marital-type relationships exist outside a written cohabitation agreement or official licensure of the state. At the same time that the number of candidates eligible for palimony is expanding, New Jersey palimony law is in a state of flux.
This article will address recent changes in palimony law and, in particular, the recent appellate court holding in Maeker v. Ross. The Maeker decision determined whether the 2010 amendments to the statute of frauds should be applied retroactively or prospectively to palimony cases.
2010 Changes to N.J. Palimony Law
For years, palimony law in New Jersey allowed for oral or written agreements. As recently as 2008, in Devaney v. L’Esperance, the Supreme Court of New Jersey held that cohabitation was not a required element of a palimony claim. In 2010, however, the Legislature significantly modified New Jersey’s palimony law for the first time since its inception in 1979. The Legislature amended the statute of frauds (N.J.S.A. 25:1-5) to require that all valid palimony agreements be formalized in writing and entered into with the advice of independent counsel. Since the 2010 amendment, the traditionally immutable New Jersey palimony law has suddenly become a dynamic area of family law practice. Because the amendments provided no guidance as to whether these new requirements should be applied retroactively, New Jersey palimony law entered a period of abject confusion.
There arose a debate as to whether the amendments should be applied retroactively or prospectively. Family law practitioners and judges that opposed retroactive application of the amendments argued that such an interpretation would unfairly place additional requirements on contracts that were valid when entered into. Conversely, those favoring retroactive application emphasized the amendment’s legislative history.
Against Retroactive Application
In 2011, the holding in Botis v. Estate of Gary G. Kudrick appeared to provide some insight into how the appellate courts viewed the retroactive application of the statute of frauds to palimony agreements. In Botis, the parties lived together for decades until Kudrick’s passing in 2008. Kudrick did not provide for the plaintiff in his will. Various court proceedings regarding palimony and related issues continued until 2010, when the defendant estate moved to dismiss the plaintiff’s palimony complaint following enactment of the statute of fraud amendments.
The Botis court did not find a clear indication of legislative intent favoring retroactive application of the statute of frauds to palimony agreements entered into prior to 2010. The court held retroactive application of the 2010 amendments to be inappropriate in the Botis case, but did not address whether such retroactive application might be appropriate given a different fact pattern.
In Favor of Retroactive Application
The following year, in the published trial court decision of Cavalli v. Arena, the court favored retroactive application. In Cavalli, the parties began to cohabitate in 2001 and separated in 2011. The trial court held that the statute of fraud amendments barred the plaintiff’s palimony claim.
The Cavalli decision stated that: "The statute provides that ‘no action shall be brought.’ The complaint was filed July 1, 2011, after the statute’s effective date. The plaintiff’s complaint obviously seeks to bring such a claim. Accordingly, it is barred by the plain language of the statute." The trial court decision also cited legislative intent and the parties’ ability to enter into a written agreement subsequent to the amendment as further reasons for, in most instances, favoring retroactive application of the statute of frauds.
Maeker v. Ross
The appellate court decided Maeker v. Ross, the most current decision on the subject, this past February (2013). The Maeker decision largely adopted the holding and reasoning of Cavalli. The court again distinguished Botis because in the Botis case, the alleged palimony obligor passed away prior to enactment of the amendment and thus could not have remedied any palimony deficiency even if he wished to do so. Although in Maeker, a written durable power of attorney existed, the court found this writing insufficient under the statute of frauds because it did not "expressly" address palimony.
The Maeker court relied heavily upon legalistic and strict-constructionist arguments in reaching its decision. The court held that the amendments were, under most sets of facts, clearly and unambiguously in favor of retroactive application of palimony. The court held extrinsic evidence should not be considered given the perceived clarity of the amendments and legislative intent. Although a fundamental tenet of our law is that contracts validly entered into should not be overturned, the court favored a retroactive interpretation of the amendments, and thus the negation of many previously enforceable oral palimony agreements.
Although some commentators may argue a retroactive application of the law could create a disproportionately negative effect on women, those who do not wish to be married but desire financial support similar to a marriage-like relationship, and individuals that entered into a previously valid oral palimony agreement, it appears that momentum now rests with a retroactive application of the statute of frauds. At the time this article is written, however, it is unclear if the New Jersey Supreme Court will grant certiorari to hear the Maeker case.
Advising Clients With Regard to N.J. Palimony Law
Palimony law today is all about prevention. Individuals that wait until their relationship is over before seeking a written palimony agreement are unlikely to receive the support promised by their partner or the lump-sum support contemplated by previous cases such as Kozlowski v. Kozlowski. Given the current state of the law, family law practitioners should, when appropriate, advise such clients to seek a written palimony and/or cohabitation agreement(s). Such agreements are similar to premarital agreements and may address support, division of property and other appropriate issues. For obvious reasons, the current changes to palimony law disfavor those that are dependent on their partner for support.
From a societal standpoint, it is perhaps important to raise awareness about such legislative changes. Few laypeople can define the word "palimony," let alone keep pace with the machinations of how the law is applied. Many clients and former clients likely believe they are protected by the verbal promises of a partner. If their relationship ends via a breakup or even the death of the partner, however, such individuals may find themselves surprised by the current status of the law. Likewise, a high-income earner who desires to provide post-relationship support for his or her partner may fail to understand that a written agreement is now necessary to provide such protection. Absent a valid written agreement, the executor of his or her estate may fail to provide such support. A quick telephone call or letter to clients and former clients could help raise awareness of the law and provide insight into protecting the intentions of palimony obligors and obligees.
The 2010 amendments to the statute of frauds are somewhat analogous to issues individuals and courts confronted following the creation of the Civil Union Act for same-sex couples. At the time, couples that previously entered into domestic partnerships were confused as to whether they would now automatically be considered members of a civil union. Eventually, the legislature determined that couples who previously entered into civil partnerships would be provided notice and an opportunity to enter into a civil union.
The problem facing individuals believing they possess enforceable oral palimony claims is that they will not receive such systematic notice. New Jersey family law practitioners can help fill that void by raising awareness of this important issue — an issue that, at any given time, could potentially affect more than five percent of the state’s population.
New Jersey’s palimony laws are growing increasingly restrictive during a period in time when an accelerating percentage of our state’s population may desire to avail themselves of palimony or other rights and responsibilities relating to nonmarried couples. Now that the appellate division has provided guidance regarding the retroactive application of the 2010 amendments, we, as family law practitioners, should considering reaching out to assist our clients in navigating this nebulous area of the law. By raising awareness regarding the palimony law changes and other laws impacting nonmarried couples, we can assist our clients, grow our practices and provide a benefit to a significant and growing portion of our state’s citizenry. •