On his last day in office in January 2010, Governor Corzine signed a bill amending the Statute of Frauds to require that all palimony contracts had to be in writing. The bill was a knee jerk reaction by the legislature who were unhappy with a number of more recent court decisions liberally allowing for palimony claims including the ruling in Devaney v. L’Esperance that cohabitation was not necessary to palimony claim. We have blogged on the new statute in the past. Since that time, the debate and raged, and litigation has ensued, over whether the law applied to pending palimony claims. In fact, courts were split on whether pending claims should continue or whether they should be dismissed. The question was answered by the Appellate Division on April 21, 2011, in the case of Botis v. Estate of Kudrick et al when the court definitively held that the statute was to only be applied prospectively.
In this case, the parties met in high school in the 1950s and married other people, but commenced a relationship in the 1970s after the end of their respective marriages. They eventually moved in together and had a marriage like relationship as alleged by the plaintiff. She even claims that she invested the proceeds of the sale of her home into furnishing the defendant’s newly expanded home. They later jointly purchased a home together in Wareton which was later transferred only into the defendant’s name, allegedly for tax purposes. Plaintiff claimed that because of his superior finances, defendant promised to take care of her financially in the lifestyle they had shared together in the event of his death. However, when the defendant became stricken with cancer, plaintiff learned that she was not provided for in his will. As such, she sought palimony and transfer of title of the two homes to her. The litigation in which the man’s estate was the defendant, was characterized as "entrenched and highly adversarial" on all issues.
The trial judge decided as follows:
The judge determined as a matter of law that N.J.S.A. 25:1-5(h) applied prospectively in this case for the following reasons: (1) language in the law that "[t]his act shall take
effect immediately" indicated a legislative intent that its application be prospective; (2) our courts have "’long followed a general rule of statutory construction that favors prospective
applications of [a] statute[,]’" citing Cruz v. Central Jersey Landscaping, 195 N.J. 33, 45 (2008); (3) since plaintiff’s "claim was filed long before the statute was enacted, . . . this
is not a claim that would be barred by the enactment of this statute"; (4) "it has been the law in th[is] State . . . for [thirty] years . . . that there is a right to support and it’s found in principles of contract and those contractual rights may be either expressed or implied[,]" citing Kozlowski v. Kozlowski, 80 N.J. 378, 384 (1979); (5) "the Legislature cannot, without notice and an opportunity to cure, extinguish these well established rights"; and (6) decedent "has no ability to comply with the recently enacted statute since he is dead. Thus he can’t do that which the Legislature is mandating after his death."
The judge concluded that
the Legislature was sending a very clear message for claims that are to be brought subsequent to January of 2010. But for those individuals such as the plaintiff who have in good faith relied upon established case law for [thirty] years, a retroactive application would . . . be a manifest injustice. . . . [A]s an aside, the [c]ourt notes that an argument could be advanced on behalf of the plaintiff that partial performance itself is a defense under the statute of frauds. And here [plaintiff] has clearly performed her side of the bargain she said the parties agreed upon. And the [c]ourt finds a retroactive application here was neither intended nor would result in [anything] other than a violation of plaintiff’s due process rights and a manifest injustice to [plaintiff]. [(Emphasis added).]
The Appellate Division affirmed the trial court for essentially the same reasons. In doing so, the Court noted:
With respect to the reasonable expectations of the parties, where, as here, an amendment is enacted to a statute that mandates that "[n]o action shall be brought" unless certain conditions are satisfied, we have determined that the critical
factor in the "prospective/retroactive application" inquiry is whether the parties could have expected and, therefore, complied with the conditions.
Here, because the decedent died a year and a half before the statute, the deficiencies could not be cured when the statute was enacted and neither party could have anticipated the statute before it was enacted. Moreover, the Appellate Division made clear that curative statutes are meant to rectify or clarify statutory law, not court decisions.
We presume that this is not the last we will hear on this topic. It is our understanding that their are other cases pending in the Appellate Division regarding this issue. In addition, it would not be surprising if the defendant in this case sought review from the New Jersey Supreme Court. However, since this was a unanimous decision of the Appellate Division, the Supreme Court has to choose to hear the case – there is no appeal as of right. Stay tuned.