With New Jersey’s amended alimony statute becoming effective on September 10, 2014, many questions have arisen as to how the statute will apply and the meaning of many of the new terms contained therein.  The Appellate Division’s newly reported (precedential) decision in Spangenberg v. Kolakowski provides some insight from the judiciary that we have been waiting for, specifically holding that the new cohabitation provision of the amended statute does not apply to post-Judgment orders finalized before the statute’s effective date.  As detailed below, the decision makes logical and legal sense when considered with a review of the legislature’s intentions as to when the amendments apply.

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Here are the key facts you need to know:

  • The parties were divorced in June, 2012, 20 years after they married and more than 2 years before the statute was amended.
  • A settlement agreement was executed wherein the husband agreed to pay $2,200 in monthly alimony based on the wife earning $45,000 in gross annual income and the husband earning $125,000.  The agreement also provided that alimony would be reviewed “on or about June 7, 2014” based on the “expectation that the [wife’s] income will have increased by that time as a result of additional training or other factors.”
  • Wife was also required to inform husband when she was cohabiting with another, which would trigger a review of alimony “consistent with the Gayet case and evolving caselaw.”  Gayet v. Gayet is one of the seminal cases on the issue of cohabitation and its impact upon alimony in the State of New Jersey.
  • Husband moved to modify his alimony obligation, alleging that wife was cohabiting.  Wife admitted to moving into her boyfriend’s residence in August, 2013.

In an Order dated December 18, 2013, the trial judge found wife to be receiving an economic benefit from the cohabitation, thereby warranting an alimony modification.  Husband subsequently filed a motion for reconsideration of the order, seeking therein a review of wife’s need for alimony.  The motion was deemed premature, with a review to take place in June, 2014, as called for in the settlement agreement.

On July 21, 2014, husband moved to modify or terminate alimony per the settlement agreement’s 2-year review provision.  Without oral argument, the trial judge denied a further reduction in alimony, in part, because he had already reduced alimony based on the wife’s cohabitation, and because husband failed to properly and completely divulge his financial documentation/information.  Husband again filed for reconsideration, but was denied.

On appeal, husband argued, in part, that the trial court improperly ignored the adopted amendments to the alimony statute regarding cohabitation.  The Appellate Court cited to the applicable provisions of the amended statute:

l. When a self-employed party seeks modification of alimony because of an involuntary reduction in income since the date of the order from which modification is sought, then that party’s application for relief must include an analysis that sets forth the economic and non-economic benefits the party receives from the business, and which compares these economic and non-economic benefits to those that were in existence at the time of the entry of the order.

m. When assessing a temporary remedy, the court may temporarily suspend support, or reduce support on terms; direct that support be paid in some amount from assets pending further proceedings; direct a periodic review; or enter any other order the court finds appropriate to assure fairness and equity to both parties.

n. Alimony may be suspended or terminated if the payee cohabits with another person. Cohabitation involves a mutually supportive, intimate personal relationship in which a couple has undertaken duties and privileges that are commonly associated with marriage or civil union but does not necessarily maintain a single common household.

[N.J.S.A. 2A:34-23(l)-(n).]

The Appellate Court limited its review to whether the legislature intended the cohabitation portion of the amendment to apply to the subject situation.  As a potentially important aside, in so limiting, the Court stated, “Accordingly, our review is limited to whether the statute’s cohabitation amendments, requiring alimony to be terminated or suspended, apply.”  The statute’s cohabitation language, however, only provides that alimony “may” be suspended or terminated in the event of cohabitation.  Whether this was intentional is uncertain, but it is consistent with the payor-friendly nature of the amendments and, perhaps, answers one primary question as to whether the previously existing “economic benefits” test still applies (as provided in the above-referenced Gayet matter).

Back to the actual issue before the Court, it then quoted that part of the bill adopting the amendments addressing whether same would apply retroactively, or only prospectively.  Such language provides:

This act shall take effect immediately and shall not be construed either to modify the duration of alimony ordered or agreed upon or other specifically bargained for contractual provisions that have been incorporated into:

a. a final judgment of divorce or dissolution;

b. a final order that has concluded post-judgment litigation; or

c. any enforceable written agreement between the parties.

The Court found that such language “signals the legislative recognition of the need to uphold prior agreements executed or final orders filed before adoption of the statutory amendments.”  It also noted how courts generally enforce newly enacted substantive statutes on a prospective basis, “unless the laws clearly expresses a contrary intent.”

Since the trial court conducted a review and issued a final order as to the economic effect of the wife’s cohabitation prior to the enacted amendments, and alimony was reduced at such time based on the prior legal standard applicable in such matters, the new cohabitation provisions of the amended statute did not apply.

 

*Photo courtesy of freedigitalphotos.net (attributed to Stuart Miles)

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