The law in New Jersey regarding palimony continues to incrementally evolve, as I have blogged about in the past. A few years ago, I argued the Maeker v. Ross case in the New Jersey Supreme Court. That was the first Supreme Court case after the legislature passed a statute, signed by Governor Corzine on his way out of office, that required palimony agreements to be in writing. It took more than 7 years for the Supreme Court to opine on a palimony issue again, which it did when it decided the case of Moynihan v. Lynch today.
In this case, the parties actually had a signed palimony agreement. However, the Appellate Division set it aside because the parties did not have attorneys, which was one of the prerequisites to a valid palimony agreement pursuant to the 2010 statute which amended the Statute of Frauds with regard to palimony contracts. That agreement “…provided that, within five years of vacating their jointly owned home, Lynch would pay off the mortgage, deed it over to Moynihan, pay her $100,000, and pay the real estate taxes on the property for two years after his departure.” After the relationship ended, Lynch tried to renege on the agreement claiming that it was unenforceable because neither party had counsel review the agreement before it was signed, as required by the statute. When the issue was raised in Court, Moynihan argued that “… that the provision compelling the parties to secure the assistance of counsel to enter into a written palimony agreement violates the constitutional prohibition on impairing contracts. The trial court determined that the agreement was not a palimony agreement, but rather, “… more akin to an “orderly removal” in a landlord/tenant matter and enforced the agreement according to its terms.” The trial court also found that the couple did not enter an enforceable oral palimony agreement .
The Appellate Division reversed holding that the parties’ agreement was clearly a palimony agreement, thus, was unenforceable because the parties did not receive the independent advice of counsel before signing the agreement. The Appellate Division also rejected Moynihan’s claims for equitable relief, including partial performance and specific performance, on the ground that Moynihan did not satisfy the traditional elements necessary for such relief. It further found that accepting Moynihan’s partial performance claim, based on an alleged “oral agreement between the parties, would essentially permit enforcement of a contract the Legislature has expressly prohibited.” This essentially gave the moneyed partner the windfall of not having to comply with the parties written agreement and not having to face the argument of oral agreement, or other equitable remedies.
The Supreme Court reversed, finding that while the Agreement was a palimony agreement, the “… attorney-review requirement contravenes the substantive due process guarantee of Article I, Paragraph 1 of the New Jersey Constitution.” In doing so, the Court noted that:
Article I, Paragraph 1 limits the power of the State to control individual decision-making in certain fundamental areas concerning a person’s life and livelihood. N.J.S.A. 25:1-5(h) compels individuals to retain attorneys before they can enter a palimony agreement — a contract no more complicated than other family law or commercial contracts that do not require attorney review. N.J.S.A. 25:1-5(h)’s attorney-review requirement interferes with an individual’s right of autonomy, singles out written palimony agreements from among all other agreements for differential treatment , and has no parallel in the legislative history of this state.
The State generally cannot compel a person to accept counsel in a criminal or civil case. Because individuals generally have a constitutional right to represent themselves in our criminal and civil courts, it follows that generally they can enter a contract no more complex than others without an attorney. The attorney-review requirement also unduly burdens those who
cannot afford counsel — those with little or no income — denying them the opportunity to enter contracts available to their more affluent counterparts. No sound reason has been given for the public need to compel attorney review of palimony agreements to the exclusion of all other agreements. …
In so holding, the Supreme Court noted that no other law in this state conditions enforceability of an agreement between private parties on attorney review. Moreover, they noted that no other jurisdictions that enforce palimony agreements require that parties consult with attorneys before entering into palimony agreements. The Court also noted that the “… original Statute of Frauds, passed in England in 1677 and from which N.J.S.A. 25:1-5 is derived, did not require a person to consult with an attorney before entering into a contract.”
Contrasting Palimony agreements to other family law agreements, the Supreme Court noted:
Of all the agreements in a family law setting, only a palimony agreement requires that, for its enforcement, the parties must have secured the independent advice of counsel. Without the advice or participation of attorneys, a married couple in a divorce action can reach an agreement on custody and parenting time, child support and alimony, equitable distribution,
and other important issues. See N.J.S.A. 2A:34-23.1(e). Even premarital agreements under the Uniform Premarital and Pre-Civil Union Agreement Act permit the parties to “voluntarily and expressly waive, in writing, the opportunity to consult with independent legal counsel.” N.J.S.A. 37:2- 38(c)(4).
The Court further noted that:
… We cannot ignore the potential disparate impact of the statute — the reality that a financially dependent partner who is a
party to a palimony agreement may be unable to afford counsel. Nor can we ignore the irony that, under N.J.S.A. 25:1-5(h), the parties cannot enter a palimony agreement without counsel, but can stand in a courtroom and argue for the enforcement of such an agreement without counsel. …
To be sure, attorney review would protect a party — particularly a dependent party — from potential overreaching. But attorney review presents another hurdle for parties who want to enter into palimony agreements and almost certainly will result in fewer such agreements, putting aside the impact on those who cannot afford counsel.
As to the issue of equitable remedies, in Maeker , the court punted on this issues, holding, “In light of our holding that oral palimony agreements predating the 2010 Amendment to the Statute of Frauds are not extinguished by the new law, we choose not to decide whether equitable forms of relief would be available in the absence of such an agreement.” In Moynihan, they punted again holding that “In light of our holding that the written palimony agreement is enforceable, we need not address any of the equitable remedies pressed by Moynihan for enforcement of that agreement. In a sense, the existence of the written, enforceable agreement related to the house, precluded the right to raise the other issues as to support, etc. Maybe, having an attorney would have helped after all.
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 email@example.com.