I have seen this more than one time in my career.  One party (or his/her family members) really wants there to be a prenuptial agreement but, either due to lack of time, fear/cowardice, not having your act together, or any other reason, the prenup never gets done.  Some I have seen signed just after the wedding, with a clause that says something like “we really meant this to be done before the wedding, but didn’t get around to it, but want this agreement to be treated as if it was signed before the wedding.”  I have seen other signed weeks, months or years later with similar disclaimers and so-called “statements of intentions.”  Given that post-nuptial agreements are disfavored in New Jersey (more on that later), these attempts to claw back prenup treatment for agreements signed after the wedding have always given me cause for pause, and I figured that one day there would be a case where this was disallowed.  Today is that day.

Specifically, on April 30, 2021, the Appellate Division released a reported (precedential) opinion, authored by Judge Enright (a former matrimonial attorney) in the case of Steele v. Steele  where the prenuptial agreement was signed more than 7 months after the wedding, while the wife was pregnant with the parties’ first child.  While the trial court in this case, relying (improperly so it seems) on a similar unreported (non-precedential) decision enforced the prenuptial agreement as a marital agreement, the Appellate Division reversed in a 41 page opinion.

The factual background in the decision is quite long but I will try to boil it down to the essential facts.  The parties were both previously married and divorced.  The wife had a child from her prior marriage, but little else in terms of income and assets.  The husband apparently was the beneficiary of family wealth, in the nature of business interests, interests in trusts, retirement, assets, etc. valued at millions of dollars (and the value was different in different disclosures over time.)  The motion of the prenup can up, at least from the husband’s perspective, almost two years prior to the parties’ wedding – even pre-proposal.  Specifically, the husband retained a law firm and started the process of the drafting and preparing his financial disclosures approximately 2 years before the wedding, but did not first tell the wife he wanted an agreement until after they were engaged, several months after.  The evidence was pretty clear that the husband never shared the draft prenuptial agreement or financial disclosures with the wife prior to the wedding.  The evidence was also pretty clear, as the wife testified, that she would have signed agreement anyway – pretty much no matter what it said or if the disclosures were accurate, because the parties were “madly in love.”

The wife got pregnant in October 1991 and the parties then decided to get married in Paris in November 1991.  After the wedding, the issue of the prenup came up again and the wife retained the attorney recommended for her by the husband’s attorney.  She never felt that that attorney was really looking out for her interests, though some of the provisions were re-negotiated to be somewhat more favorable to her than as originally drafted, but perhaps, unfavorable given all of the facts and circumstances, even at that time.  The parties’ first child was born in July 1992, but the prenup was not signed until the following month, when the wife was sleep deprived, having been on a 2 hour, on-demand, breast feeding schedule.  Curiously, when her lawyer was deposed in the divorce action, the lawyer was unaware that the was pregnant or had the child and said she wouldn’t have let her enter into the agreement if she knew that.  The agreement did not address issues related to the child (e.g. support, custody, life insurance.)  Despite the husband’s massive wealth and significant income at the time of the marriage, the agreement provided for nominal equitable distribution and only $5,000 per month in alimony for each month of the marriage if the parties stayed married for 5 years.

After substantial and interesting pre-judgment litigation which included motions for leave to appeal that limited discovery to the time of the agreement, ultimately, the trial judge entered declaratory judgment and enforced the agreement.  Of note, the judge found the agreement was akin to a prenup and enforceable as a prenup, “[d]espite the signing of the agreement subsequent to the date of marriage.”  The judge then analyzed the definition of a premarital or pre-civil union agreement, as defined by the 2013 version of the Uniform Premarital and Pre-Civil Union Agreement Act, despite the fact that that version of the act was not in effect as of the signing of the prenup.  The judge then distinguished this from the Pacelli case which disfavors because it wasn’t presented  on a “take it or leave it” basis and that here “some form of a marital agreement was contemplated” by defendant prior to the parties’ marriage, and she was able to negotiate an “upward adjustment in her entitlement” under the MA.   The judge also compared the wife circumstances to those set forth in an unpublished appellate decision, which he found to be “extremely similar” to the instant matter.   The judge noted that in that case, the Appellate Division found the agreement to be an enforceable prenup due to the “relatively brief time which ha[d] elapsed since the parties[‘] nuptials.”  As such, he adopted the same view and found the agreement here similar to a prenup, finding:

in the present set of circumstances, the only thing that appears to have prevented these parties from entering into the agreement prior to marriage is that defendant became pregnant with their first child. Subsequent to the birth of the child, almost immediately thereafter, the parties signed and entered into the Marital Agreement.

Also, while finding that the husband’s financial disclosures were not accurate, they were not intentionally inaccurate and thus, it was not held against the husband.  Rather, blame was shited to the wife, as the the judge determined that she ailed to “ask questions or retain a financial expert” so the impact of plaintiff’s disclosures was “significantly offset by her lackluster desire” to ascertain the true extent of plaintiff’s finances.  Moreover, the judge concluded defendant did not demonstrate she relied on plaintiff’s disclosures, since she admitted in her deposition she read very little of the agreement, including the disclosures.  The judge further found that the wife signed the agreement “endorsing her support that whatever disclosure was provided was sufficient to her,” and he concluded her previous counsel “obtained positive results” for her, including “more favorable alimony and equitable distribution” provisions in the agreement.

As noted above, the Appellate Division reversed the decision and remanded the matter for further discovery and a trial.  First, they found that the agreement was not a prenup because the Act defines a premarital agreement as “an agreement between prospective spouses … made in contemplation of marriage … and to be effective upon marriage.”   This clearly did not happen in this case and what followed in the opinion was a long discussion on how the circumstances were actually unlike a typical prenuptial agreement.

Judge Enright then noted that even if the agreement qualified as a prenup, which it did not and the court held:

the 2013 iteration of the Act would not have governed its enforceability, given its effective date; instead the 1988 version of the Act would have applied to a prenup (sic) executed in 1992. The language of the 1988 version allowed for a separate determination of whether a premarital agreement is  unconscionable, apart from reasons established in its subsections. By comparison, the 2013 version of the statute only allowed for a determination of unconscionability for the reasons established in its subsections.

The Appellate Division then found that the agreement did not qualify as a property settlement agreement either, as it was not executed in contemplation of a divorce where each party’s economic rights would be fixed upon the entry of a divorce judgment.  They also found that it was unlike a mid-marriage agreement referenced in the Pacelli case where the husband use the threat of a divorce to improperly obtain an agreement whereby the wife gave up her rights – an agreement that was found to be unenforceable.  While factually unlike Pacelli, the wife in Steele did feel pressured to sign and that the husband would never let it go. In that way, the circumstances were similar to Pacelli and the court held:

Under these circumstances, we have little difficulty concluding the parties’ Agreement (sic) is in the nature of a mid-marriage agreement and deserves heightened scrutiny. Certainly, just as in the Pacelli case, there was a marriage and a family to preserve. Moreover, though the purported pressure placed on defendant differs from the tactics employed by the husband in Pacelli, plaintiff’s insistence on having defendant execute the agreement (sic)  months after the marriage, so soon after the birth of the parties’ daughter and while she was unemployed, appears to be “inherently coercive.” At that point, defendant was not free to just walk away.

The Court then found that though they were not persuaded that the wife was under duress when she signed the agreement, they found that based upon their review of the agreement and the circumstances surrounding its signing, that it might have  been unfair, if not unconscionable, when
it was executed, and when the husband moved to enforce it.   The Appellate Division pointed to 3 areas of concern;  (1) the adequacy of plaintiff’s financial disclosures before the parties signed the agreement; (2) the circumstances surrounding the agreement’s negotiation and execution; (3) and the adequacy of the settlement itself.

Interestingly, when discussing the whether or not the wife cared about the adequacy of the disclosures because she would have married him anyway, the court said that that may not matter.  Rather:

Ultimately, to the extent defendant had a limited understanding of the terms of the  agreement (sic)  or its consequences once she was married, we are satisfied her mindset did not relieve plaintiff of his obligation to treat defendant fairly.  To hold otherwise would effectively lead to ignoring defendant’s contributions as a spouse, parent,  homemaker and helpmate” and inequitably “preclude her participation in post-agreement wealth.” (citation omitted)(emphasis added).

As to the adequacy of settlement, without passing on the issue, the Court noted:  “The record is devoid of any indication she can enjoy any semblance of the marital lifestyle, notwithstanding the taxable and non-taxable distributions due her under the agreement (sic).”

The take away of this case is that is you want to be sure that your prenup holds up, get it done before the wedding and follow the statutory requirements without fail.  If you try to get an agreement, post-wedding, good luck because it is an uphill fight in light of Pacelli and now Steele.

                                                                         

Eric S. Solotoff, Partner, Fox Rothschild LLP

Eric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Morristown, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973) 994-7501, or esolotoff@foxrothschild.com.

 

 

There used to be a family judge, who, with his law clerk, spent a lot of time on Google, looking up property records, Zillow “values” and other information regarding the parties and their property.  While most of the time it proved harmless, I was always concerned about the court relying on evidence that was not in the records – that is, not contained in the motion papers if it was a motion, or in the trial testimony or evidence at a trial.

Now judges are permitted to take what is called “judicial notice” of both the law and of certain facts.  In fact, New Jersey Evidence Rule 201(b) provides:

(b) Notice of Facts. The court may judicially notice a fact, including:
(1) such specific facts and propositions of generalized knowledge as are so universally known that they cannot reasonably be the subject of dispute;
(2) such facts as are so generally known or are of such common notoriety within the area pertinent to the event that they cannot reasonably be the subject of dispute;
(3) specific facts and propositions of generalized knowledge which are capable ofimmediate determination by resort to sources whose accuracy cannot reasonably be questioned; and
(4) records of the court in which the action is pending and of any other court of this state or federal court sitting for this state

So as to my prior comments, looking up property records is probably ok – Zillow probably not so much.

But what happens when a judge relies upon facts or information that is not in the record in order to make a decision.  Well, on April 19, 2021, the Appellate Division answered this question in and unreported (non-precedential) opinion in the case of S.T.T. v. M.T.M.  This case happened to be an domestic violence case. Immediately prior to the start of trial, the judge addressed an incident that occurred at a prior court proceeding where “[t]here were discussions about [a] potential adjournment of the proceeding” but that during a “break” in the proceeding, “defendant left due to a medical emergency and the matter was” rescheduled.  The judge demanded an explanation and the Defendant’s counsel explained defendant suffered from a condition that had been recently diagnosed and defendant “had an episode just outside the courtroom” during the break in the prior proceeding.  Defendant’s counsel further advised that defendant brought “medical records [showing] what actually took place” and the records were provided to the judge.

Without getting into the facts of the domestic violence other than to say that there was conflicting testimony of the parties and that the police did not note any injuries when they arrived, the trial judge used defendant’s leaving the prior proceeding against him as it related to his credibility and granted the plaintiff a Final Restraining Order.  In doing so, the judge stated:

And perhaps most significantly, the [c]ourt takes note of what took place in court the last time this matter was heard . . . during which time the parties were seeking to work out an adjournment in order for the defendant to engage in some discovery, that it became evident that an agreement was not going to be able to be reached at that point in time, and it was only during a recess following the determination that it became clear that the case was going to proceed and would not be adjourned, that the incident in which the defendant sought medical attention . . . came to pass.

Now, certainly, there’s been documents that have been presented that explain both—or purport to explain . . . defendant’s medical condition and the episode that occurred . . . . However, the [c]ourt, taking in consideration the totality of the  circumstances and the situation that preceded the alleged medical emergency, concludes that . . . defendant’s testimony lacks credibility for those reasons.
[(Emphases added) in original.]

The Appellate Division reversed.  In doing so, the court noted that Appellate Court’s should typically defer to the trial courts’ credibility findings that are often influenced such as observations of the character and demeanor of witnesses and common human experiences that are not transmitted by the record.  That said, the reason for the reversal was that the trial judge relied on things outside of the testimonial record of the hearing in making it’s credibility determination.  Specifically, the Appellate Division held:

The court erred in making its credibility determination because it relied on information and events outside the trial record. Prior to the start of the trial, the court focused on defendant’s purported medical emergency at the previous proceeding, and the court’s preoccupation with the purported emergency continued through the end of the FRO trial. There was no testimony or evidence concerning the emergency during the FRO trial, but the court relied on defendant’s claimed medical emergency to support its finding defendant’s trial testimony was not credible. Indeed, the court relied on its apparent disbelief that defendant suffered a medical emergency necessitating an adjournment of the prior proceeding as “perhaps” the “most significant[]” fact supporting its finding defendant was not credible, and the court took into “consideration
the . . . circumstances and the situation that preceded the alleged medical emergency” to conclude “defendant’s testimony lack[ed] credibility for those reasons.”

The court’s reliance on the medical emergency to support its credibility determinations was in error. The court’s consideration of facts and circumstances “that were not part of the hearing record should not have played any part in the judge’s decision. Because matters outside of the hearing record were considered and relied upon in reaching [its] conclusions,” the court’s credibility findings lack adequate support in the evidentiary record. In re Forfeiture of Pers. Weapons & Firearms Identification Card belonging to F.M., 225 N.J. 487, 513-14 (2016). Indeed, the court’s findings based on defendant’s
actions in proceedings prior to the FRO trial suggest the court improperly prejudged defendant’s credibility before the trial began. “A judge’s suspicions about a litigant’s veracity . . . can never stand in the stead of a fair process, founded on an impartial consideration of evidence by a fair and impartial judge.” McGory v. SLS Landscaping, 463 N.J. Super. 437, 457-58 (App. Div. 2020).

As a result, the FRO was vacated and the matter remanded for a trial before a new judge.

The take away is that if if a court is going beyond the record in a prejudicial way, that can, and where appropriate, it should be challenged.

                                                                                   

Eric S. Solotoff, Partner, Fox Rothschild LLPEric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Morristown, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973) 994-7501, or esolotoff@foxrothschild.com.

Can one attorney represent both spouses in a divorce? This issue presents itself in a multitude of scenarios: the proverbial “simple divorce” or merely reviewing a settlement agreement prepared by both spouses. As my colleague noted, if prospective clients request that you represent them both, even if it’s “simple” or merely reviewing their agreement, “[t]he answer is a resounding, no.”

On April 14, 2021, the Appellate Division approved for publication a decision which took up the task of answering a similar, yet more nuanced question: can an attorney who had an initial consultation with a prospective client now represent the party adverse to that prospective client? The Appellate Division’s answer was similarly a resounding, no. However, the reasoning behind the decision to affirm the trial court’s order disqualifying the attorney is an important lesson for family law attorneys. Indeed, it offers important caveats for when the answer could be “it depends.”

Greebel v. Lensak

We often have consultations without being retained thereafter.  In Greebel v. Lensak, that is precisely what happened. Nine years prior to being retained by the Defendant to file a motion to vacate a judgment and set aside the parties’ settlement agreement, the attorney had an initial consultation with the Plaintiff. They discussed the prospects of filing a complaint for palimony.

Palimony involves matters where the parties are not married, but in a long-term, romantic relationship and there is a promise of continued support.

Here are the facts:

  • During an initial consultation, the prospective client raised concerns she had about the parties’ finances, lifestyle, assets and income.
  • The attorney gave advice to the Plaintiff not to marry the Defendant due to the potential for pre-marital assets, debts, income or lifestyle not being considered in any future divorce proceedings.
  • The attorney calculated what the Plaintiff’s potential relief would look like in the event she moved forward with requesting palimony.
  • Nine years later: Plaintiff filed a complaint for palimony using a different attorney and eventually a settlement agreement was entered into and incorporated into a final judgment.
  • Five years later: Defendant hired the attorney that Plaintiff originally consulted with and filed a motion to vacate the final judgment, set aside the agreement, and re-open discovery pursuant to Rule 4:50-1.
  • The Defendant alleged that Plaintiff intentionally misrepresented and concealed her finances during the settlement negotiations.
  • Plaintiff moved to have the motion dismissed and disqualify the attorney, relying upon her certification and a 2013 e-mail to her current attorney where she specifically mentioned the consultation and how she followed the attorney’s advice not to marry Defendant.

Trial Court

The trial court found that there was sufficient evidence that a consultation took place based upon Plaintiff’s certification and the e-mail. Defendant’s attorney was disqualified since Plaintiff disclosed “significantly harmful information” about the parties’ finances and Defendant’s continued promises of support—all of which were “substantially related” to the current issues in Defendant’s motion to vacate. The pleadings prepared by that attorney were dismissed and sealed. Defendant was barred from sharing them with any new counsel.

Appellate Division

On appeal, Defendant raised several issues. Pertinently, that the trial court erred in disqualifying his attorney. The Appellate Division disagreed. Disqualification decisions are reviewed de novo pursuant to City of Atl. City v. Trupos, 201 N.J. 447, 463 (2010). It was Defendant’s contention that Plaintiff failed to provide the information disclosed to his attorney in the consultation with specificity and that the same information would have been discoverable. The Appellate Division disagreed.

The Appellative Division recited the provisions of R.P.C. 1.18(a) and (b):

  1. Plaintiff consulted with the attorney with the end goal of forming a client-lawyer relationship and was therefore a prospective client under R.P.C. 1.18(a).
  2. The lawyer learned information during the consultation with the prospective client and therefore had a duty not to use or reveal any of that information under R.P.C. 1.18(b).

Next, the Appellate Division turned to O Builders & Assocs., Inc. v. Yuna Corp. of N.J., 206 N.J. 109 (2011). There, the Supreme Court of New Jersey laid out a two-step analysis to determine whether disqualification is justified:

  1. The information disclosed during any consultation must be the same or substantially related to the present lawsuit; and,
  2. The disclosed information must be significantly harmful to the former client in the present lawsuit.

Additionally, the former client—or, in this case, the former prospective client—must make more than “bald and unsubstantiated assertions” regarding her disclosures. Attorneys and clients should pay close attention to the Supreme Court’s definition within the two-step analysis:

  • Substantially related: if the lawyer for whom disqualification is sought received confidential information from the former client that can be used against that client in the subsequent represent of parties adverse to the former client or if the facts relevant to the prior representation are both relevant and material to the subsequent representation.
  • Significantly harmful: if the information is prejudicial in fact to the former prospective client within the confines of the specific matter in which disqualification is sought.

Applying the facts of the underlying matter to the two-step analysis, the Appellative Division concluded that significantly harmful information substantially related to the current litigation was disclosed to Defendant’s attorney by Plaintiff. The information about the parties’ relationship, finances, lifestyle, assets and income was at the heart of Plaintiff’s claim for palimony—the crux of the pending litigation. Indeed, it covered the first four years of the parties’ relationship.

Even more concerning is the fact that the disclosed information could be used against Plaintiff in this litigation. The Appellative Division opined that the information provided insight into Plaintiff’s motivations in the parties’ relationship and could be used against Plaintiff to challenge her palimony award and any future settlement negotiations.

The Appellate Division affirmed the dismissal without prejudice and permitted Defendant to refile. However, the Appellate Division reversed insofar as the pleadings were sealed and Defendant was barred from sharing the pleadings since the trial court made no factual findings or conclusions of law and the information was not the basis of Defendant’s underlying motion to vacate. Rather, it was based upon public records of property transfers that occurred long after the consultation.

Conclusion

I am often asked by clients whether their filings are accessible by the public. The answer is a resounding, yes as there is a presumption of public access. It is important to inform clients that, in order to rebut that presumption, it needs to be shown that disclosure will cause a clearly defined and serious injury to any person and that the person’s interest in privacy substantially outweighs the need for public access.

While it may seem rare, future litigation in family law matters is not uncommon. One need not look further than the post-judgment dockets in virtually every county in New Jersey. The family bar is vast, but simultaneously small enough where mere consultations and actual retainers within the same matter are not only conceivable, but rather abundant.

A lot of people believe that COVID has caused divorce cases to drag and the legal system to be ground to a halt – or at least, to lag behind.  While that is certainly the case in some counties and more particularly, with some Judges, for the most part, the courts are acting efficiently, and in some respects more efficiently, than in the past.  In fact, a few months ago, I wrote a post on this blog entitled NJ Divorce Court State of Play After 6 Months of Covid 19 Restrictions.  If anything, in the almost since months since that time, people have gotten even more used to Zoom motions, meetings, Case Management Conferences, mediations and even trials.

That said, last week I read that one in six judicial seats (approx. 17%) are vacant. In some counties, those number seem worse because when a trial judge gets moved up to the Appellate Division, it is my understanding that that judge counts toward that county’s roster and not a vacancy.  Either way, the number of vacancies has to contribute to backlog and delay.

The system has mandatory alternative dispute resolution (ADR) at various points.  Early on in the case, there is mandatory custody and parenting time mediation, with courthouse staff, and usually without attorneys.  That is not to say that attorneys should not be involved to prepare their client for the process.  That said, they are generally not part of the actual mediation.  For finances, there is also mandatory Early Settlement Panels (ESP or MESP) which is a process where the matter is submitted to a panel of 2 or 3 experienced matrimonial attorneys who are donating their time to make recommendations as to how the financial aspects of case can settle.  If the matter doesn’t settle at ESP, then there is mandatory economic mediation where the mediators typically give 2 free hours (one of which is preparation) to help assist in facilitating a negotiated agreement.  If cases still aren’t settled, many judges schedule Intensive Settlement Conferences (ISC) either with themselves or another matrimonial judge (some judges or parties don’t want the ultimate trier of fact knowing their settlement positions).

Now there is no reason that parties cannot agree to begin the mediation process before it is “mandatory.”  Parties are free to mediate whenever they want though it usually makes sense to do so once each side has enough information so that they feel comfortable that they know enough about the income, assets, etc. to make a knowing and reasoned decision.  Often, in complicated cases, people even seek to bypass ESP completely and go right to mediation.  Some judges/counties allow this – other do not or cannot.

There are some cases that simply cannot settle, either because of the difficulty of the issues and/or the difficulty of one or both parties.  At that point, people can wait for a trial date.  That said, I have heard some judges say that they are scheduling now for 2022.  I have one matter that I have been waiting for a trial date to be assigned since the summer of 2019 – pre-Covid.

If you don’t want to wait for a trial date but want the matter concluded, the parties can agree (they cannot be compelled) to go to binding arbitration, with or without a right of appeal.  We have talked about arbitration a lot on this blog, and in a lot of ways, it can be very much like a trial, with testimony of witnesses, presentation of evidence, strict adherence (or less so if you agree) to the Rules of Evidence, a court reporter taking a verbatim records, etc.  And when it’s done, its done.  Even people who want a right of appeal can build in an appellate arbitration process into their arbitration agreement which will be light years faster than trying a case in the Family Part and then appealing it to the Appellate Division.

Personally, I have arbitrated many cases and last summer, completed the AAML Arbitration course allowing me to serve as an arbitrator.  Many in our group, myself included, have completed the 40 hour mediation training as well.  In this day an age, we are nimble enough to litigate, mediate and/or arbitrate cases, either representing a party or as the neutral.  Quite frankly, given the backlog and the shortage of judges, all of these tools should be considered to try to bring cases to conclusions.

Eric S. Solotoff, Partner, Fox Rothschild LLPEric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Morristown, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973) 994-7501, or esolotoff@foxrothschild.com.

palimony graphic
palimony graphic

Many people think that palimony is just alimony with a “P” and that the mere existence of a long term unmarried relationship, where the people live together, is enough to convey some right of support.  Having argued the landmark Maeker v. Ross case regarding palimony in the New Jersey Supreme Court, I have made clear on this blog in the past that that is not the case.  Rather, for relationships that existed before 2010, their had to be a promise, express, or implied by conduct, made by the supporting party that he/she intended to support the other person for life.  After 2010, a palimony agreement had to be in writing, which, for all intents and purposes have eliminated palimony for post-statute relationships.

That said, we still see cases after the end of long term relationships that predated the 2010 statute, where the parties lived together, and litigation ensues after the relationship ends.  One of those cases in the unreported case of Lernihan v. Revolinsky, an unreported (non-precedential) Appellate Division decision released on February 22, 2021.  Remarkable about the decision is it’s brevity, a mere 6 1/2 pages.  Notwithstanding the brevity, there are interesting things that can be gleaned from the the case.

Here are the relevant facts.  The parties met in 1996, later became engaged, but never got married.  They lived together in a marital-type relationship from 2002 to 2016 and had two children. They bought and sold two houses, each contributing to the deposit from his or her own earnings and savings. Both worked during the majority of the years they lived together and the only time that the plaintiff was financially dependent on defendant was for the brief periods of time  after the birth of their children.  That said, even then, she paid from her own funds a portion of the children’s expenses as well as her own.  Other than jointly owning their homes, the parties did not commingle their assets. Rather, they maintained separate bank accounts and made defined contributions to their joint expenses.  In fact,  other than jointly owning their homes, they never commingled their assets or  their earnings.  At the time of the proposal, the plaintiff was earning approximately $49,250 and the defendant was earning $57,083 – less than an $8,000 difference.  By the time of the trial, plaintiff, who obtained a graduate degree while engaged to defendant, was earning approximately $104,301 and defendant was earning $174,147.  The only thing in the opinion relative to the promise of support for life that would be required to sustain a claim for palimony was plaintiff’s testimony that she interpreted the engagement   “… to mean defendant had committed to support her financially for life.”

The trial court rejected this interpretation finding that plaintiff was not entitled to palimony and the Appellate Division affirmed.  The Appellate Division noted the trial court’s rationale, as follows:

Judge Espinales-Maloney found defendant’s denial that he ever committed to support plaintiff for life more credible than plaintiff’s assertion that he had. Indeed, the judge opined that plaintiff was a self-sufficient professional who could “support herself in a reasonable degree of comfort.” In the judge’s view, the facts necessary to establish a successful claim for palimony were entirely absent. Not only was plaintiff defendant’s financial equal when the relationship began, any belief she may have had regarding defendant’s alleged commitment to support her for life was entirely refuted by the manner in which the parties lived and managed their money.

The Appellate Division gave a brief primer on the law on palimony – at least it existed pre-statute, as follows:

The palimony right to support “does not derive from the relationship itself but rather is a right created by contract.” In re Estate of Roccamonte, 174 N.J. 381, 389 (2002). The promise of support can be express, “implied by conduct[,] or both.” Id. at 394. The existence of a contract is determined primarily by the parties’ “acts and conduct in the light of the subject matter and the  surrounding circumstances.” Kozlowski v. Kozlowski, 80 N.J. 378, 384 (1979).

For a palimony claim, “there must be a showing of economic inequality and an inability by the party seeking palimony to live independently at a reasonable level of support.” Bayne v. Johnson, 403 N.J. Super. 125, 142 (App. Div. 2008); see also Roccamonte 174 N.J. at 393-94. Courts may also consider other factors, such as whether a party detrimentally relied on the express or implied promise, or whether a party’s decision to move in with their partner was primarily motivated by financial support. Bayne, 403 N.J. Super. at 141-42. However, “palimony is not an economic substitute for opportunities that may have been lost or expectations that were unfulfilled.” Id. at 143.

Plaintiff’s additional requests for relief based upon certain equitable theories –  partial performance, unjust enrichment and quantum meruit, quasi-contract, estoppel, specific performance of implied contract, fraud/misrepresentation, and joint venture – also failed because the judge found that defendant never made promises of lifetime support to plaintiff, and plaintiff was financially independent. Thus, the equitable claims
based on alleged promises had no merit.  Now too often, I have seen these claims fail because, instead of pleading the specific element of each of these causes of action, parties typically tie them to the alleged promise or implied promise , making them one and the same.  Essentially, all of the relief comes down to the alleged promise, as opposed to the conduct/facts necessary to establish each cause of action.  That seemingly is what happened in this case.

The take away from this case is that while palimony and equitable remedies still exist for pre-statute relationships, however, the facts need to be there.  Before engaging in an expensive and potential fruitless litigation, critical analysis of all of the facts are required.

____________________

Eric S. Solotoff, Partner, Fox Rothschild LLPEric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Morristown, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973) 994-7501, or esolotoff@foxrothschild.com.

One thing this pandemic has taught me about my fellow lawyers: we are adaptable.

Just take the lawyer trapped in a cat filter as an example. Despite his adorable faux pas, his reaction was not to jump off the Zoom call in shame. No – he said to the judge that he was willing to proceed with his case. AS. A. CAT. (If you ask me, the most astounding part was that opposing counsel and the kept their composure the entire time). If that doesn’t tell you what you need to know about this profession, I don’t know what will.

In New Jersey, within weeks of the pandemic hitting, a full system was put in place to keep us all moving forward. From criminal arraignments, to child support hearings, the Court system just picked up where it left off, albeit with some changes that we’ve needed to quickly adapt to as lawyers.

The family part, in particular, rose to the occasion. Whereas our prior filings were all paper-based, we now can simply upload our filings to the Judiciary Electronic Document System (JEDS). We engage with email and our cell phones. We haven’t missed a beat.

Our motions are now heard via Zoom, with even the most seasoned judges and lawyers having become familiar with the program (although apparently some still get stuck in the kitten filter). I’ve even participated in several Zoom trials.

While remote proceedings are not without their pitfalls, the rate and fluidity with which our courts have adapted is astounding. At this point, almost 11 months in to the pandemic, we can file a complaint via JEDS, attend a Case Management Conference via Zoom, have a conference call with opposing counsel on our cell phones, email motions to the judge’s staff from our home computers, attend mediation without ever shaking hands with the mediator, and get you divorced never having stepped foot in to a courthouse.

So while the pandemic has brought many industries to a grinding halt, lawyers are still here, adapting in ways we never thought possible. And yes, we are even prepared to move forward when we get stuck in a kitten filter.

————————————————————————————————————————————————————————————-

Eliana T. Baer is a contributor to the New Jersey Family Legal Blog and a partner in the Family Law Practice Group of Fox Rothschild LLP. Eliana practices in Fox Rothschild’s Princeton, New Jersey office and focuses her state-wide practice on representing clients on issues relating to divorce, equitable distribution, support, custody, adoption, domestic violence, premarital agreements and Appellate Practice. You can reach Eliana at (609) 895-3344, or etbaer@foxrothschild.com.

We made too many wrong mistakes.

–Yogi Berra

What happens when you make a mistake? You correct it and move on.

What happens when you make a mistake in your divorce settlement agreement? Can you correct it and move on? Well, maybe not.

There is a mechanism provided by Court rule that allows you to correct a settlement agreement that is incorporated in to a Final Judgment of Divorce, but only under certain circumstances.

There are times where a mistake is one that the parties just have to live with depending on certain factors. Other times, a mistake will merit the Court’s attention and correction.

The operative rule for this event is New Jersey Court Rule 4:50-1, which provides that a party can gain “relief” from a judgment or order under the following circumstances.

(a) mistake, inadvertence, surprise, or excusable neglect;

(b) newly discovered evidence which would probably alter the judgment or order and which by due diligence could not have been discovered in time to move for a new trial;

(c) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party;

(d) the judgment or order is void;

(e) the judgment or order has been satisfied, released or discharged, or a prior judgment or order upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment or order should have prospective application; or

(f) any other reason justifying relief from the operation of the judgment or order.

While the terms of the Rule are fairly clear that a mistake or other circumstance can be corrected by a court, it is not always so easy to gain relief. For one, there is a timing component to the rule. For parts (a), (b) and (c), the request for relief must be made within one year after the judgement or order. All other bases for relief (parts (d), (e) and (f)) must be made “within a reasonable time.”

Then there is always the possibility that relief may be denied improperly by the trial court. In that event, a party may find themselves in the Appellate Division, the trial court’s reviewing court, to address the issues.

This was recently illustrated in a recent Appellate Division decision, Goethals v. Goethals. In that case, the divorce agreement provided for equitable distribution of 13,293 shares of stock paid to the husband as part of his compensation as an executive of Ross Stores.

Thereafter, during a meeting with a forensic accountant, it was discovered that there was a stock split before the parties’ agreement was signed and there were actually 26,586 shares subject to equitable distribution. This would have entitled the wife to an additional $350,695.26 above what the wife was set to receive under the settlement agreement.

When the forensic accountant advised the husband of this, he indicated “it must have been a mistake.”

Given this clear acknowledgement from the husband that the stocks appeared to have been inadvertently omitted, the wife attempted to settle the issue with her former husband. When those efforts proved unsuccessful the parties ended up in court and the wife asked the court to address the mistake and correct it.

Despite the husband’s statements that there must have been a mistake when he first learned of the issue, he opposed the wife’s request that the court correct, stating that “there was absolutely no mistake or fraud.” After all, both parties were represented by counsel, both had forensic accountant, and both parties signed an agreement stating that “both parties were satisfied with the full disclosure of each of the accounts as provided herein and both have reviewed all account statements and other documentation necessary relative to the balances distributed and amounts not even subject to equitable distribution.”

The husband further stated that the issue of the stock was already resolved with his payment of $244,687.59 in full satisfaction of the stock issue.

The trial court denied the wife’s application, stating that she was too late. Despite filing her application within one year following the discovery of the mistake, the trial court said it was not soon enough. A request for redress on the grounds of mistake requires a filing within one year of the judgment; not within a year of her discovery.

The wife, dissatisfied with the result she obtained in court, asked the judge to reconsider the denial of her application. In so requesting, she cited to the “catch-all” provision of the Rule, subpart (f). That subpart, she stated, was not time-barred and must be brought only “within a reasonable time”; it was not bound by the one-year time constraint.

That request was also denied by the trial court. The wife appealed.

The Appellate Division reviewed the trial court’s decisions and found that the trial court was wrong. Rule 4:50-1, “is designed to reconcile the strong interests in finality of judgments and judicial efficiency with the equitable notion that courts should have authority to avoid an unjust result in any given case.”

As a result, the trial court should have granted relief under subpart (f) which is specifically designed to avoid results that are unjust, oppressive or inequitable. This catch-all provision has been used many times to reform settlement agreement where there is any showing of inequity or unfairness. Furthermore, even if the motion was brought alleging fraud or mistake (subparts that require a filing within the one year timeframe) subpart (f) could be invoked and an application brought within a reasonable time.

In reversing the trial court’s decision, the Appellate Division noted that there was no dispute between the parties that there was an undisclosed stock split, doubling the number of Ross stocks. This occurred between the filing of the divorce complaint, but before the settlement agreement was signed. As a result, whether or not there was fraud or mistake was irrelevant; all that mattered in this case was that the undervaluing of the wife’s share of stocks was “unjust, oppressive or inequitable.”

In sending the case back to the trial court for further proceedings, the Appellate Division issued a specific mandate to the trial court to correct the number of Ross stocks, which could be determined after discovery and a plenary hearing where the court would hear testimony and make a determination as to which party was more credible on the issue.

Correcting a settlement agreement is not always an easy feat. However, when a large sum of money is at stake, like in the Goethals case, it is certainly beneficial to explore your options and obtain an opinion from a lawyer as to the remedies available to you.

————————————————————————————————————————————————————————————-

Eliana T. Baer is a contributor to the New Jersey Family Legal Blog and a partner in the Family Law Practice Group of Fox Rothschild LLP. Eliana practices in Fox Rothschild’s Princeton, New Jersey office and focuses her state-wide practice on representing clients on issues relating to divorce, equitable distribution, support, custody, adoption, domestic violence, premarital agreements and Appellate Practice. You can reach Eliana at (609) 895-3344, or etbaer@foxrothschild.com.

For many divorce attorneys, the busy season starts after the first of the year. For the last several years, I have posted on the phenomenon of the New Year’s Resolution Divorce. For whatever reason, this post has struck a chord and has been both well received and cited by other bloggers. As such, given that the new year is near, I thought I would share that piece again, updated slightly for the new year.

Over the years, I have noted that the number of new clients spikes a few times of the year, but most significantly right after the new year. Before writing this article for the first time, out of curiosity, I typed “New Years Resolution Divorce” into Google and got 540,000 results in .29 seconds. There are even more results when you do the same search now. While not all of the search results are on point, many were extremely interesting. It turns out that my intuition about this topic was right and that there are several reasons for it.

One article on Salon.com put divorce up there with weight loss on New Years resolution lists. Also cited in this article was that affairs are often discovered around the holidays. Another article linked above attributed it to “new year, new life”. Another article claimed that the holidays create a lot of pressures at the end of the year that combine to put stress on people in unhappy or weak relationships. Family, financial woes, etc. associated with the holidays add to the stress. Turning over a new leaf to start over and improve ones life was another reason given. This seems to be a logical explanation for a clearly difficult and perhaps heart wrenching decision.

In my experience, people with children often want to wait until after the holidays for the sake of the children. There is also the hope, perhaps overly optimistic, that the divorce will be completed by the beginning of the next school year. These people tend to be in the “improving ones life” camp.

So as divorce lawyers, we hope to avoid or at least resolve in advance the holiday visitation disputes that inevitably crop up, then relax and enjoy the holiday as we await the busy season to begin.

In the last several years, the phenomena started early for us and many other attorneys. We were contacted by more people in December in the last few years than in any years in recent memory. In some recent years, the calls started in November at a pace more robust than in prior years.  Note however, that due to Covid 19, many people’s resolutions have come early this year. Moreover, we have heard of more people telling their spouse it “is over” before the holidays in the past few years. I suspect that in some, it was the discovery/disclosure of a new significant other or perhaps pressure being exerted by that person that was the cause. In other cases, the person just didn’t want to wait until the new year to advise their spouse.

Last year I said:

Those who divorce in 2020 may still enjoy a booming economy and not the  slowing economy that many predicted for 2019 and some still predict for 2020.  Bad economies historically mean more divorces, either because of the stress it creates or because one or both parties is being opportunistic.  On the other hand, someone who might be a support recipient might be opportunistic on the other end of the spectrum – getting out while incomes and asset values are high.

When I wrote that in late 2019, of course, I hadn’t heard about COVID. which has impacted people financially and in other ways (the phrase familiarity breeds contempt comes to mind.)

Whatever the reason, we await those who see 2021 as a chance for happiness or a fresh start. Happy New Year?!?!

Eric S. Solotoff, Partner, Fox Rothschild LLPEric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Morristown, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973) 994-7501, or esolotoff@foxrothschild.com.

Victims of abuse have many reasons for not reporting prior acts of domestic violence – either to friends, family, co-workers, etc. or the police.  Logically, the failure to report does not negate the fact that the abuse happened.  One would think that judges hearing domestic violence, more so than most people, would not that given the domestic violence training that they receive, as well as their training in the law.

Yet this is exactly what happened in the trial court as noted in the unreported (non-precedential) Appellate Division decision in the matter of I.E.A. v. M.A., released on December 16, 2020.  In this case, the Appellate Division reversed the denial of an FRO (Final Restraining Order), because among other reasons, the trial judge found significant that prior abuse was not previously reported or that she thought that the defendant was joking was certain incidents started (before escalating.)  While I will not get into the weeds regarding the facts of the case, the Appellate Division gave us all some solid reminders regarding these issues.  As to the disclosure issue, the Appellate Division noted:

We are not aware of any precedent requiring the victim of domestic violence to have disclosed the abuse to another in order to establish a predicate act of domestic violence under the Act. Nor do we agree that a failure to disclose before seeking judicial relief casts doubt on the credibility of a claim of abuse. There are a number of reasons why a victim of domestic violence might be
reluctant to disclose the abuser’s behavior. Some of those reasons may well be applicable here. For example, cultural and religious norms may strongly discourage the disclosure of marital affairs. The record suggests the parties’ close ties to the Sudanese Muslim community and culture may have influenced plaintiff not to disclose defendant’s abuse. In addition, where the party alleging
abuse is a new arrival to the country and dependent on the abuser for support and shelter, disclosure may be a difficult and risky proposition.

As to the fact that the trial court gave less weight/credibility to the plaintiff because she initially thought defendant was joking before an incident escalated, the Appellate Division wisely held:

We also disagree with the proposition that plaintiff’s testimony was undermined because on two occasions she thought defendant was joking when he initiated what she alleged turned into abusive behavior. The complaint does not allege defendant engaged in an uninterrupted campaign of physical abuse. It is not uncommon for a couple to have periods of relatively amicable relations between incidents of domestic violence. A domestic abuser’s calm demeanor may suddenly turn violent. Plaintiff’s testimony suggested that she and defendant sometimes engaged in playful physical interactions, stating that one incident of domestic abuse started when she tapped defendant on his behind. A victim of domestic violence need not prove that she was in constant fear to
establish the predicate acts necessary for issuance of an FRO.

Also, without making proper fact findings, or for that matter, there being any credible evidence in the record to support that plaintiff’s complaint was filed for immigration purposes, the trial court implied that that was the case in denying the FRO.  A concerned Appellate Division panel held:

We are also troubled by the trial court’s reference to the timing of the filing of the complaint with relation to plaintiff’s immigration status. Although the court made no specific findings, it is difficult to avoid the implication in the court’s opinion that plaintiff may have filed a meritless complaint in order to remain in the country. The record, however, contains no evidence establishing
the impact, if any, the filing of a domestic violence complaint has on the status of someone, like plaintiff, who has overstayed her visa. Without a more developed record on the subject, it was error for the court to imply that plaintiff’s FRO application was unfounded and motivated by immigration concerns.

Courts need to be careful in breathing things to why a party did or did not report prior acts of violence or in their motivation for filing the domestic violence complaint, particularly if their is evidence of actual abuse in the record.

Eric S. Solotoff, Partner, Fox Rothschild LLPEric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Morristown, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973) 994-7501, or esolotoff@foxrothschild.com.

Prior to the walk down the aisle for the happiest day of their lives – to that point – many hopeless romantics decide (or are required by their parents) to get a prenuptial agreement which set forth many of their rights and responsibilities in the event of death or divorce.  Typically, a prenuptial agreement has provisions wherein one or both parties knowingly waive rights that they would otherwise have upon death or divorce if there was no prenup.  Put another way, a person may get no or less alimony, may get less equitable distribution, may not share in family businesses or trusts and/or the trust income wont factor into an alimony calculation, etc.   We have blogged many times about what prenuptial agreements do, and who should get them and why, so this post wont really get further into that.

Rather, I am sure that most people, after they have gone through the trouble of entering into the prenup (at least the party with something /more to protect), believe that at the time of the divorce, it will go smooth and easy, at least with regard to the issues covered by the prenup.  And yet, that is seldom the case.  There are two major reasons for that?  The person on the short end of the prenup, almost reflexively moves to set aside the prenuptial agreement.  More importantly, instead of dealing with this threshold issue as soon as it is raised, many judges will kick the can down the road and deal with it during a final adjudication of the case, or at least many months or years down the road forcing the parties to engage in potentially wasteful discovery, mediation, etc..

In many cases, the difference in the outcome of the case can be tremendous based upon whether the prenuptial agreement is enforced or not.  Worse yet, parties are forced to spend money on legal and expert fees, doing discovery and evaluating businesses and/or other property that is not subject to equitable distribution if he agreement is enforced.

In a typical case where a prenup is involved, the parties initial pleadings seek to enforce the prenup on one side and to set it aside on the other.  Now the standard to set aside a prenuptial agreement is difficult.  statute provides that a premarital agreement is enforceable unless the party seeking to set aside the agreement proves by clear and convincing evidence that:

  1. the party execute the agreement involuntarily; or
  2. the agreement was unconscionable at the time enforcement was sought (though for pre-Amendment prenups, the court must look at unconscionability at the time of enforcement too); or
  3. that party, before execution of the agreement:

(1) was not provided full and fair disclosure of the earnings, property and financial obligations of the other party;

(2) did not voluntarily and expressly waive, in writing, any right to disclosure of the property or the financial obligations of the other party beyond the disclosure provided;

(3) did not have, or reasonably could have had, an adequate knowledge of the property or financial obligations of the other party; or

(4) did not consult with independent legal counsel and did not voluntarily and expressly waive, in writing, the opportunity to consult with independent legal counsel.

        4. the issue of unconscionability of a premarital agreement shall be determined by the court as a matter of law.

Moreover, an agreement is unconscionable, if the agreement would:  (1) leave the spouse without the means of reasonable support; (2) would make the spouse a public charge; or (3) would provide a standard of living far below that which was enjoyed before the marriage.

Very rarely do you see the initial pleading to set aside a prenup plead the issue with any particularity.  In fact, most of the the time, you see the request to set the agreement aside as part of the “Whereas” clause with the other prayers for relief (alimony, child support, equitable distribution, resumption of maiden name, fees, etc.)  In fact, under New Jersey law, if you are alleging fraud, it must be plead with particularity.

Often, at the first Case Management Conference or otherwise when this is raised to the court, I hear “I need discovery to determine if there was full disclosure, or determine if there is fraud” though I don’t really believe that that is the standard.  How can a party on one hand plead to set aside an agreement, and on the other hand, say that they require discovery to decide if they can prove that the agreement should be set aside?  But it happens all of the time and judges allow it even though the agreements often include waivers on getting valuations or business appraisals, waivers of getting further discovery, waivers of getting proofs regarding the values included in the balance sheet provided with the agreement.

When there are businesses involved, this gets worse because parties have to spend tens if not hundreds of thousands of dollars evaluating a business for nothing.  Not only that, they have to evaluate it at two dates – the date of the marriage and the date of Complaint, to determine the increase in value that may not even be subject to distribution if the agreement is upheld.

Now, I am not saying that there shouldn’t be discovery regarding the enforceability of the agreement.  If the court is going to have a plenary hearing to determine the validity of the agreement, there probably must be some discovery as to the issues pertinent to the agreement – though not a hail mary, fishing expedition – to mix metaphors – trying a find any little thing that might justify calling the agreement into doubt to force the party relying on the agreement to pay more.

Aside from the cost of discovery, often you will see pendente lite support motions made and entertained when the agreement specifically provides a waiver of both pendente lite support and alimony.  In those cases, if the pendente lite support exceeds what is payable under the agreement, the case never settles because why would the person receiving the support that they may not be entitled to want to give it up?  While the judge will typically say that the the support is “without prejudice” and the payor will be entitled to a credit if the agreement is enforce, good luck with actually getting that credit – especially if the credit exceeds the ultimate payout to the other side.

In my opinion, when the issue is joined, the court should immediately address it at a case management conference and either order discovery and a plenary hearing, or require the party objecting to file a motion to set the agreement aside, pleading the reasons with particularity.  Once the judge hears that motion, she/he could decide whether discovery and to what extent discovery is proper.  Otherwise, the process can become one where the parties can spend tens or hundreds of thousands of dollars over non-issues, as well as wasting the parties’ and the court’s time.

Eric S. Solotoff, Partner, Fox Rothschild LLPEric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Morristown, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973) 994-7501, or esolotoff@foxrothschild.com.