Archives: Alimony

As avid readers of this blog know, New Jersey’s recently amended alimony statute has been the inspiration for many blogs posts as cases interpreting same are coming down the pike. Under the amended statute, a party may seek to terminate or modify his or her spousal support obligation based upon an actual or “prospective” retirement. While this was seemingly good news for those seeking to retire, the question many practitioners had was what does “prospective” actually mean?

In the case of Mueller v. Mueller, Judge Lawrence Jones provides some insight as to this very question. The facts in Mueller are simple. The parties were married for twenty (20) years, divorcing in 2006. Under the parties’ Marital Settlement Agreement, the obligor was to pay $300.00 per week in permanent alimony and their agreement did not expressly address retirement or its relationship to the alimony obligation.

The obligor filed a post-judgment motion, under New Jersey’s amended alimony law, seeking a determination that his alimony would end in five (5) years. At the time of the hearing, the obligor was 57 years old. In five years, he would be 62 and entitled to receive his full employment-related pension benefit. The obligor asserted that if his alimony does not end at that time, that he will be unable to retirement at that age.

Judge Jones provides a thorough analysis of the obligor’s claim, specifically discussing the distinction of a pre-September 2014 agreement modification/termination analysis (where the burden is on the obligor to demonstrate why alimony should terminate) vs. a post-September agreement modification/termination analysis (where there is a rebuttable presumption of termination with the burden on the recipient).

He also notes that the amended statute covers the situation where an obligor wishes to retire earlier than “full retirement age” as defined by the receipt of full social security benefits”, which in this particular case would be 66 years and 8 months for the obligor. The rationale behind this provision is to avoid the proverbial “Catch-22” financial situation.

Specifically, if an obligor is considering the possibility of retirement in the near future, he or she logically benefits from knowing in advance, before making the decision to actually leave the workforce, whether the existing alimony obligation will or will not change following retirement. Otherwise, if the obligor first retires and unilaterally terminates his or her primary significant stream of income before knowing whether the alimony obligation will end or change, then the obligor may find him/herself in a precarious financial position following such voluntary departure from employment if the court does not terminate or significantly reduce the existing alimony obligation.

When applying the new law to the facts of the Mueller case, Judge Jones held:
• The spirit of the statute inherently contemplates that the prospective retirement will take effect within reasonable proximity to the application itself, rather than several years in advance.
o Thus, in this specific case, the request for an order prospectively terminating alimony five (5) years in advance does not lend itself to the Court being able to reasonably analyze and consider all relevant information. The Court warns about how an application too far in advance of prospective retirement could in essence be nothing more than an attempt to summarily change the terms of an alimony settlement agreement.

• An order for prospective termination or modification of alimony based upon reaching a certain retirement age inherently contemplates that the obligor not only reaches retirement age, but actually retires at that point. If the obligor reaches the age, but does not actually retire, the “retirement age” provisions do not trigger until such time as the obligor actually retires or submits an application regarding a prospective retirement in the future.

o Here, the obligor did not provide a specific plan but merely stated a desire to potentially retire in five (5) years, without anything more. While this case does not create a bright-line for when such applications should be brought, Judge Jones notes that a prospective retirement application brought, 12-18 months before prospective retirement, may be more appropriate.

The takeaway from this case is that while the amended alimony statute permits a degree of reasonable prospective adjudication by the court for a prospective rather than actual retirement, an attempt to engage in the necessary statutory analysis several years in advance of such retirement would likely be replete with long-term guesswork. Any such effort would essentially ignore the practical reality that the parties’ economic situations, health and other relevant factors may radically change over such a lengthy period of time, before an actual retirement ever takes place. If you are paying alimony and are within 12-18 months of retirement, you should think about consulting with an experienced professional to discuss your options regarding the termination or modification of your alimony obligation.

I’m not usually one to place a lot of stock in celebrity gossip, but I couldn’t help but take notice of the fact that it has been rumored that Amber Heard’s monthly income is $10,000, yet she spends $44,000 a month on shopping, dining out and vacations. Her ask for spousal support: $50,000 per month, based upon the parties’ marital lifestyle.

45351836 - champagne bottle in ice bucket and two full glasses realistic vector illustration
45351836 – champagne bottle in ice bucket and two full glasses realistic vector illustration

Amber Heard may not be only one spending beyond her means. This phenomenon applies to us common folk as well.

Particularly during the economic downturn, we have seen many cases where parties have splurged during times of plenty and then failed to scale back when the economic downturn hit. As a result, the parties are living on credit or perhaps not paying their bills. It, in effect, creates an artificial lifestyle which neither party really has the ability to maintain.

This puts the Court in a tough spot. On the one hand, the Supreme Court explained in Crews, “the standard of living experienced during the marriage . . . serves as the touchstone for the initial alimony award.” On the other hand, what happens when the marital standard of living is based on nothing more than irresponsible spending?

An unpublished case was just recently decided by the Appellate Division that touched on this issue. Although the crux of the case really focused on the reversal of a judge’s suspension of alimony as a discovery sanction, what peaked my interest was how the judge dealt with what he classified as an “artificial lifestyle,” marked by the parties’ “irresponsible spending and outlandish behavior, whether going on expensive vacations to South America and Europe, or purchasing fancy cars” when awarding alimony.

In Ponzetto v. Barbetti, decided on June 28, 2016, the parties had a nineteen year marriage which ended in a contentious divorce when the parties were in their mid-forties. The parties did not have any children and the only issues in the case were equitable distribution and alimony, both of which were hotly litigated during the course of a lengthy trial.

The husband had started a sound system business when he was a teenager, for which the wife kept the books. At one point, the business was so lucrative, that it generated revenue of $500,000 per year. These were the times of plenty.

Unfortunately, the business suffered during the economic downturn. The parties’ lifestyle, however, did not. They continued to spend lavishly. By the time of the divorce, they had two Ferraris, a Harley Davidson, Pontiac Fiero and two hummers.

While typically a judge would look at the parties’ spending during the last several years of the marriage to determine lifestyle, in this case, the trial judge found that it would not be appropriate to do so in this situation, where the lifestyle was not based on income or need.

As a result, the judge declined to use “the parties’ irresponsible spending from 2006 through 2008 in determining marital lifestyle” and instead determined to “kindly” utilize the marital lifestyle from 1990 through 2006, which the judge determined to be $14,500 per month. Ultimately, the wife was awarded $400 per week in alimony.

This is just one example of how a judge has dealt with this increasingly common situation. However, judges are frequently placed in these precarious situations, where the parties have exceeded a reasonable lifestyle based upon their income as compared to their expenses. In the case of Ponzetto v. Barbetti, the judge crafted a remedy that was equitable given the specific circumstances of the case.
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Eliana Baer, Associate, Fox Rothschild LLPEliana T. Baer is a contributor to the New Jersey Family Legal Blog and a member of 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.

If I’ve heard it once, I’ve heard it a million times: “why don’t judges enforce their own orders or take hard lines against obstructers?” Many times, litigants feel powerless. Powerless to change anything; powerless to have courts take a firm position in favor of those aggrieved; and, powerless to be heard. Clients and attorneys alike feel this frustration.

This is despite the fact that there are specific rules in New Jersey that apply to non-compliance in the family part. Rule 5:3-7 provides for very specific types of relief in specific actions:

Non-Compliance with Custody or Parenting Time Orders:

(1) compensatory time with the children;
(2) economic sanctions, including but not limited to the award of monetary compensation for the costs resulting from a parents failure to appear for scheduled parenting time or visitation such as child care expenses incurred by the other parent;
(3) modification of transportation arrangements;
(4) pick-up and return of the children in a public place;
(5) counseling for the children or parents or any of them at the expense of the parent in violation of the order;
(6) temporary or permanent modification of the custodial arrangement provided such relief is in the best interest of the children;
(7) participation by the parent in violation of the order in an approved community service program;
(8) incarceration, with or without work release;
(9) issuance of a warrant to be executed upon the further violation of the judgment or order; and
(10) any other appropriate equitable remedy.

Non-Compliance with Alimony or Child Support Orders:

(1) fixing the amount of arrearages and entering a judgment upon which interest accrues;
(2) requiring payment of arrearages on a periodic basis;
(3) suspension of an occupational license or drivers license consistent with law;
(4) economic sanctions;
(5) participation by the party in violation of the order in an approved community service program;
(6) incarceration, with or without work release;
(7) issuance of a warrant to be executed upon the further violation of the judgment or order; and
(8) any other appropriate equitable remedy.

27249354 - symbol of sanctions as a clamps

In other words, with most family part actions, the sky is the limit in terms of what remedies can be utilized to secure compliance. Moreover, in other instances of non-compliance not covered by the family part rules, for instance, filing frivolous motions to harass the other party, or failing to make discovery, other rules apply that should serve to get a litigant to do the right thing.

So why the disconnect?

Well, it appears that some judges are beginning to take a hard stance against people who just feel like marching to the beat of their own drums, people without any regard for Orders of the Court, or resultant victimization to the other party.

For example, in August, a New Jersey couple was hit with a $543,000 sanction by a Manhattan judge for interfering with their son’s divorce. Justice Ellen Gesmer said that the couple “orchestrated the litigation” between their son and his wife, caused extensive delays, and launched a legal battle designed to “intimidate” their daughter in law.

The parties were married in 2005, and had one child in 2007. Tragically, the husband suffered a brain aneurysm in 2008, rendering him disabled. The wife initially cared for the husband, but was ultimately pushed out of the picture by his parents, who actually took him to a facility and hid him from the wife for several months in 2009.

When the divorce was filed in 2010, the grandparents ran the show on behalf of the son, and directed the son’s lawyers to delay the custody hearing for as long as possible so that they could pursue 50% custody of their grandchild, based upon the pretense that it was on their son’s behalf. By the end of the litigation, the wife’s legal bills were in excess of $928,000.

The judge ultimately found that the parents “willfully interfered with (their granddaughter’s) development of a positive and loving relationship with her father…(and) purposefully engaged in frivolous litigation.”

The judge also came down hard on the father’s lawyers, ruling that they engaged “in frivolous conduct by repeatedly making misrepresentations and knowingly false statements and claims to the court.” She ordered the lawyers to contribute $317,480.67 toward the wife’s legal bills.
The in-laws were ordered to pay, in total, a whopping $543,000.

Back on the other side of the river, in a recent Somerset County case, two opposing litigants were both ordered to perform community service for what the judge found was their willful non-compliance with their marital settlement agreement. The judge also warned them that they were to comply or face the possibility of sanctions.

It appears that judges are “getting real” about compliance. Whether it means the imposition of counsel fees against an overly litigious party or community service, a more clear message is being sent by these judges that non-compliance will not be tolerated.
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Eliana Baer, Associate, Fox Rothschild LLP Eliana T. Baer is a contributor to the New Jersey Family Legal Blog and a member of 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.

Too often in family law practice, the discovery process by which one litigant is supposed to procure information from the other litigant becomes a frustrating and costly game where the non-compliant party hopes that the other party will simply give up rather than continue the chase down the rabbit hole of information.  Long-term readers of this blog may, in fact, remember Eric Solotoff’s post about the Discovery Dance, where parties can, in fact, “dance if they want to and leave their friends behind”.  Information is deliberately withheld, or incomplete, or ignored, etc.   As opposed to standard civil litigation, however, it often seems that a non-compliant litigant does not pay the price for such misconduct.  While perhaps this simply goes along with family law’s often mis-characterized “Wild West” reputation, what is one party who simply can’t get information from the other party to do when discovery motions are commonly frowned upon as a waste of the court’s limited resources?

Hide and seek

This is especially true in cases where one party seeks to modify an alimony or child support obligation.  Trying to get the full financial picture, especially from the party seeking the modification, is often the most difficult challenge of litigating such a matter.  It often becomes even more difficult in cases where either party is remarried and the new spouse has assets, income and the like that the remarried litigant does everything he or she can to shield from the court’s consideration.  This becomes a problem when one party is, perhaps, providing the new spouse with money to hold in a separate account, or the house is solely in the new spouse’s name, and the like.  In other words, the financial picture can be manipulated a dozen different ways and roadblocks structured so that the court never has all of the relevant facts and circumstances upon which to render a determination.

In Null v. Null, a recently unpublished (not precedential) decision from the Appellate Division, an ex-husband’s application seeking a termination of his alimony obligation was dismissed – with prejudice – because of his repeated refusals to comply with discovery requests and related court orders.  Here is a brief recitation of the relevant facts:

  • After a lengthy post-judgment procedural history wherein the payor sought to terminate his alimony obligation, the court – in November 2010 – found that he had made an initial showing of “changed circumstances” sufficient to warrant a plenary hearing on his motion to reduce alimony.  Notably, payee claimed that payor had entirely stopped making alimony payments at that point.
  • The judge directed that payor produce certain forms of discovery including, but not limited to, his current wife’s most recent three pay stubs.  Payor objected, moving to bar discovery of his new wife’s assets.  The motion was denied because payor was claiming to be employed by a business owned by new wife, and payee claimed that payor had placed businesses and assets he owned in new wife’s name.
  • Payor subsequently moved again to block discovery of his new wife’s financial information and was denied.  Payor was ordered to pay counsel fees – the first of many consequences to the payor for his misconduct.  New wife was also ordered to sit for her deposition.
  • At her deposition, new wife failed to produce tax returns or pay stubs as previously ordered.  She also failed to produce documents relating to the dry cleaning business payee claimed was owned by her.
  • With scheduled trial dates having come and gone, and payor still having failed to comply with discovery, the trial court denied payor’s motion to depose payee and compel her to undergo an employability evaluation.  In so doing, the judge noted that payor took no issue with violating discovery orders, and “unreasonably delayed” payee’s ability to effectuate litigation.  Counsel fees were again awarded for payee.
  • In October 2013 – three years after the initial changed circumstances burden was fulfilled – a third trial judge entered an order rescheduling the plenary hearing, and appointing an expert to examine businesses allegedly owned by new wife and operated by payor.  Payee was permitted to depose new wife as to whether payor maintained an equitable ownership of the businesses registered to new wife.  Payee was again awarded counsel fees for a third time.  Payor sought reconsideration and a stay of the October 2013 orders.
  • On April 3, 2014, the trial judge dismissed payor’s motions to modify alimony – with prejudice – pursuant to Rule 4:23-2(b) based on payor’s “failure to cooperate with the court’s expert, his failure to file complete Case Information Statements, and his extensive history of failure to timely respond to [payee’s] discovery requests and comply with court orders.”  Payor was also ordered to resume alimony payments at $6,000 per month, and to pay $201,000 in alimony arrears from November 2010 (when the hearing was first scheduled) through March 2014.

While noting that dismissing an action “with prejudice” (a final determination on the merits of the case that precludes further litigation of the matter) because of a party’s failure to comply with discovery is a drastic sanction “generally not to be invoked except in those cases in which the order for discovery goes to the very foundation of the cause of action, or where the refusal to comply is deliberate and contumacious,” the Appellate Division affirmed the trial court’s decision to do so in this case.

In so doing, the Court analyzed the differences between Rules 4:23-2 and 4:23-5 of the New Jersey Court Rules because payor argued that the trial court engaged in an abuse of discretion under 4:23-5 by failing to first dismiss the case “without prejudice” (a dismissal without a decision on the merits that leaves the parties able to litigate the matter in a subsequent action) and then only dismissing “with prejudice” if he failed to thereafter comply.  Disagreeing with payor, the Appellate Court found that while 4:23-5 does, in fact, require the initial without prejudice dismissal, 4:23-2 does not.

Here, payor even acknowledged that he had not been compliant with all discovery demands made, and his position that he and his new wife had provided timely and relevant information was unsupported by the record.  After more than five years of continuous litigation, there was still no clear picture of payor’s earnings, and the trial court found that his “willful and deliberate violations of court orders across a period of more than five years justified dismissal.”  Five years of delay.  At least ten court orders directing payor to provide payee with discovery to which she was entitled.  Still no end in sight.

The Appellate Division concluded, in light of such facts:

  • “[T]he trial court reasonably concluded that it was unfair to plaintiff to be interminably delayed in resolving the alimony dispute.”
  • “Because the judge’s decision was prompted by defendant’s blatant and continuous defiance of several court orders, we perceive no abuse of discretion in her decision to dismiss defendant’s claim with prejudice.”

While there will always be litigants who believe that the discovery rules and obligations are not worth more than the paper on which they are written with the belief that playing games will provide the optimal result, the trial court’s implementation of available sanctions shows that, at least in some cases, there is a price to pay for such non-compliance.

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Robert A. EpsteinRobert Epstein is a partner in Fox Rothschild LLP’s Family Law Practice Group and practices throughout New Jersey.  He can be reached at (973) 994-7526, or repstein@foxrothschild.com.

Connect with Robert: Twitter_64 Linkedin

*image courtesy of Stuart Miles.

As regular readers of this blog may know, cohabitation has been a hot topic of discussion in recent months with several new cases addressing the subject within and beyond the context of the amended alimony law.  With new case law to consume, one question remains constant – how does a payor spouse fulfill his or her initial burden of proving cohabitation so as to justify a period of discovery and a future hearing as to how and whether alimony should be modified (or suspended, or terminated, etc.).

threes company

In Robitzski v. Robitzki, another recently issued cohabitation decision from the Appellate Division, the Court affirmed the lower court’s findings that the ex-husband/payor spouse failed to present sufficient evidence of a prima facie claim of cohabitation.  Here are the facts that you need to know:

  • The parties were divorced in 2004.  The property settlement agreement required that the ex-husband pay the ex-wife $2,500 in monthly permanent alimony.
  • The agreement also provided that alimony “shall be modified or terminated pursuant to New Jersey statutes and case law” in the event it was proven that the ex-wife was cohabiting with another.  The PSA did not define cohabitation, nor did it specify whether applicable “New Jersey statutes and case law” to be analyzed in such a claim would be those existing at the time of the divorce or those existing if and when the ex-husband filed a motion to address the issue.
  • From the time of the divorce through the subject motion practice, the ex-wife admittedly maintained a lengthy relationship with a significant other.
  • The ex-husband filed his motion after the alimony law was amended in late 2014.  He claimed that the parties were cohabiting under the amended law.
  • The ex-wife cross-moved for a declaration that the 2014 amendments did not apply to the alimony obligation at issue.
  • In support of his motion, wherein the ex-husband claimed the ex-wife and significant other were interdependent upon each other, he claimed that they held themselves out as the “equivalent” of spouses, and provided various items posted publicly on Facebook by the significant other containing photos and commentary of various family and social activities that the significant other engaged in with the ex-wife and her children.  The children referred to the significant other as “Pap Thom.”
  • In opposing the motion, the ex-wife certified that the significant other only spent approximately 100 nights out of the year overnight with her, and they maintained separate finances and assets.  She provided copies of bank statements and bills for 2013 and most of 2014 showing the ex-wife paid her bills from her bank account balances, and that there were no deposits from any unaccounted for sources.
  • The trial judge denied the ex-husband’s motion, finding that he failed to provide proof of financial interdependency, and the court did not consider the Facebook postings (which the judge deemed inadmissible hearsay and substantially unauthenticated).  The judge also denied application of the amended law to the present matter.
  • Notably, however, limited discovery was granted ordering the significant other to provide a certification addressing his independent living arrangements – including the length of his lease or whether he owns the home, whether he and the ex-wife are co-owners or co-tenants, and whether he lives alone and how he pays for his current living arrangements.  The judge also ordered the ex-wife to provide an accounting of her household expenses, including how such expenses were paid for in 2012.

In addressing whether the amended law or pre-amended law applied, the court declined to resolve the issue for multiple reasons including that the settlement agreement language was ambiguous as to what law should apply.  In language that practitioners thirst for, even if an unreported (not precedential) decision, the Court notably provided:

          We recognize that the new statute eliminates the modification of alimony as a remedial alternative to termination or suspension upon a finding of cohabitation.

This language will surely provide some degree of guidance, although it is not likely the end of what we will hear about whether modification can still occur.

Ultimately, the court held that whether the new or old law applied, the ex-husband still failed to fulfill his initial burden.  The reasoning was as follows:

  • The ex-wife attested to spending essentially a weekend of overnights each week with the significant other – “far less than the majority of days of the year.”  In so doing, the court noted:

          Although we do not treat the frequency of overnights as a dispositive “litmus test” for cohabitation, (and are mindful that subsection (n) of the new statute, if it applied, expressly disallows such per se reasoning) their infrequency here is certainly a significant consideration that bolsters the trial court’s conclusion that a prima facie case has not been presented.

  • The Court acknowledged that the Facebook postings reflected that “he and the ex-wife take part with one another in a variety of social and family activities, go on vacations together, and attend graduation ceremonies, family gatherings and other such events together.”  The Court noted, however, the postings – even had they been considered by the trial court – were not enough.
  • The Court, added, however, “Even so, the present record lacks any evidence that the couple’s finances are intertwined or that the ex-wife is financially dependent upon the significant other.”  No proof of joint bank accounts or other joint asset holdings or liabilities.  No proof of shared living expenses.  No proof of any enforceable promise of support.  Little proof of shared household chores with “the exception of occasional snow removal”.  Notable, however, is the level of potential difficulty in the ex-husband establishing financial inter-dependency on his initial motion without discovery beyond the limited documents provided by the ex-wife.
  • Concluding its opinion, the Court commented that the ex-husband could make a future application with supplemental proofs that the couple resides together more frequently, or that their lives and finances are “actually more intertwined than what the present record suggest[ed].

Robitzski presents an interesting dilemma for practitioners and litigants looking to fulfill the initial burden of proof associated with a cohabitation claim.  How much is enough?  What is enough?  Every judge will look at the case differently.  Each case has its own set of facts where one component may weigh more heavily than another.  Only time will tell if a valid claim has been raised.

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Robert A. EpsteinRobert Epstein is a partner in Fox Rothschild LLP’s Family Law Practice Group and practices throughout New Jersey.  He can be reached at (973) 994-7526, or repstein@foxrothschild.com.

Connect with Robert: Twitter_64 Linkedin

*image courtesy of Google free images.

The amended alimony law that went into effect in late 2014 raised many questions as to the meaning of its terms and how such terms will be applied, especially as to how a payor’s retirement impacts upon an existing alimony obligation.  As we have previously discussed, the law provides that a payor former spouse may even file an application to terminate or modify alimony based on a future, prospective retirement, at which point a court may establish under what conditions same should occur.  So doing allows the payor and payee to plan accordingly by providing an indication as to whether and how alimony will end/change.

Golfer

This was the topic addressed in Mueller v. Mueller, a new unpublished (not precedential) decision from the Honorable Lawrence Jones in the Ocean County Family Part.  Judge Jones held as follows:

  1. While the amended alimony law does not set a specific minimum or maximum time period for obtaining an advance ruling on a prospective retirement and its effect upon an existing support obligation, Judge Jones concluded that the statute contemplates that the prospective retirement will take effect “within reasonable proximity” to the application itself, rather than several years in advance.  Notably, the judge referenced “approximately twelve to eighteen months” as an appropriate proximity.  Otherwise, the application is more akin to a motion to modify a permanent alimony obligation to one of limited duration without a basis under Rule 4:50-1 or the requisite change in circumstances.
  2. As a result, the payor’s application to terminate alimony based on a prospective retirement date to occur five years later was not considered within a reasonable proximity because “reasonably current information” relative to the time period of the proposed retirement itself could not be considered.
  3. An order for prospective termination or modification of alimony based upon reaching a certain retirement age “inherently contemplates” that the obligor reaches a specific age and actually retires at that point.  A specifically detailed proposed plan for an actual retirement must be provided, as opposed to a “non-specific, general desire to someday retire.”  The specifics may include, but are not limited to, a particular retirement date, and details of the payor’s plan for economic self-support following retirement.

Here are the facts that you need to know:

  • The parties were married in 1986 and divorced in 2006.
  • The settlement agreement provided that husband would pay wife $300 per week in permanent alimony.
  • The agreement contained no provision expressly addressing retirement and/or its relationship to husband’s permanent alimony obligation.
  • Husband filed a motion under the amended alimony statute to terminate his alimony in five years from the date of his application, asserting that he was 57 years old and planed to retire in five years (at which time he was entitled to retire and receive his full employment-related pension benefit).

Analyzing the relevant facts, the court found the husband failed to provide a specific plan to retire in the near future, and that he was nowhere near even an early retirement age.  Rather, he testified about a “general wish to potentially retire and terminate alimony at age 62 . . . .”  Filing so far in advance was found to preclude the court from engaging in a practical analysis of the parties’ economic circumstances that would exist at the time of the termination/change, the parties’ health and other relevant factors that could dramatically change before the retirement ever occurred.  As a result, the husband’s application was denied without prejudice based on his request to retire five years later.

Decisions addressing the provisions of the amended alimony law continue to emerge, and Judge Jones’ decision makes practical and logical sense when considering the retirement provisions and a payor’s ability to seek a termination/modification in light of a future, anticipated retirement date.  The decision will help both litigants and practitioners in framing future applications and oppositions for such relief

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Robert A. EpsteinRobert Epstein is a partner in Fox Rothschild LLP’s Family Law Practice Group and practices throughout New Jersey.  He can be reached at (973) 994-7526, or repstein@foxrothschild.com.

Connect with Robert: Twitter_64 Linkedin

*image courtesy of Google free images.

The impact of cohabitation on alimony is often one of the most difficult clauses to negotiate in a marital settlement agreement.  The payor always wants the agreement to read that alimony shall terminate upon cohabitation, while the recipient, if they are allowed to agree to anything, might agree to allow the payor to seek to modify alimony “in accordance with the law”.  Generally, “the law” would be an economic benefits test – i.e. is the alimony recipient receiving an economic benefit by virtue of the cohabitation and/or is she providing one to her cohabitant.

That said, at least since 1999, when the Konzelman case came was decided by the Supreme Court, that agreements to terminate alimony based upon cohabitation are enforceable if cohabitation is proven and the “the cohabitation provision of the marital settlement agreement [sic] was voluntary, knowing and consensual.”

17790572_s

But what happens in a case with a clear cohabitation clause requiring termination, where the cohabitation ends, perhaps because of the litigation, or simply because the relationship ran its course?  Should the alimony recipient be entitled to start receiving alimony again?  Today, the Supreme Court answered that question in the negative in the case of Quinn v. Quinn.  Put another way, the law is now clear that if you have a termination clause and you cohabit, alimony is over, even if the cohabitation ends.

In Quinn, the parties divorced in 2006 after a 23 year marriage.  Per their Property Settlement Agreement (PSA), the wife was to receive permanent alimony of approximately $68,000 per year plus Cost of Living Increases.  The PSA stated that “alimony shall terminate upon the Wife’s death, the Husband’s death, the Wife’s remarriage, or the Wife’s cohabitation, per case or statutory law, whichever event shall first occur.”  The wife started cohabiting in January 2008.  The cohabitation included all of the usual indicia of cohabitation – including the fact that the cohabitant maintained his own home – apparently for appearances only.  PRACTICE NOTE:   Finally a case that seemingly looks past the fiction of a separate residence that the cohabitant has access to but really doesn’t live at.

About a month after the motion to terminate alimony was filed, the cohabitation allegedly ended.  Though cohabitation was found to occur, the trial court’s decision deviated from the PSA.  Specifically,

Having determined that Cathleen and Warholak had cohabited, the trial court invoked its equitable powers and suspended alimony for the period of cohabitation — from January 2008 until April 2010 — but declined to terminate alimony permanently. The trial court based its decision on the great difference in incomes between Cathleen and David, concluding that Cathleen was “entirely dependent on her alimony for her support.”

 

However, because the court found her not credible in her testimony, that she had litigated in bad faith, and that she had falsely denied cohabitation, the payor was awarded $145,536.74 in legal fees.  Both parties appealed but the Appellate Division affirmed.  Both parties sought Certification from the Supreme Court but only the payer’s Petition was granted on the issue of “whether the trial court properly invoked its equitable power to modify the clear and unequivocal terms of a PSA entered knowingly and voluntarily by both parties.”

The Supreme Court reversed deciding:

In sum, we reiterate today that an agreement to terminate alimony upon cohabitation entered by fully informed parties, represented by independent counsel, and without any evidence of overreaching, fraud, or coercion is enforceable. It is irrelevant that the cohabitation ceased during trial when that relationship had existed for a considerable period of time. Under those circumstances, when a judge finds that the spouse receiving alimony has cohabited, the obligor spouse is entitled to full enforcement of the parties’ agreement. When a court alters an agreement in the absence of a compelling reason, the court eviscerates the certitude the parties thought they had secured, and in the long run undermines this Court’s preference for settlement of all, including marital, disputes. Here, there were no compelling reasons to depart from the clear, unambiguous, and mutually understood terms of the PSA. We therefore reverse the judgment of the Appellate Division.

In noting that Courts have greater discretion in interpreting marital agreements, the Supreme Court reiterated that, “An agreement that resolves a matrimonial dispute is no less a contract than an agreement to resolve a business dispute.”  Of course, the court failed to correlate this statement with the famous quote from the landmark Lepis case that “contract principles has no place in the law of domestic relations” but I digress.

The Supreme Court was clear to point out that this case was decided based upon the law in effect at the time of the Agreement, not the 2014 amendments to the alimony statute.  It bears repeating that under the new statute, alimony may be suspended or terminated if there is cohabitation.

In equating this to remarriage, the Supreme Court noted:

Furthermore, Cathleen continued to cohabit with Warholak after David filed the motion to terminate alimony and still cohabited with him when the trial commenced. This record presents a situation no different from a remarriage that terminates by death or divorce. In light of the parties’ agreement that alimony would terminate upon cohabitation, the circumstances here do not call for a different result.

The Supreme Court rejected the notion that this type of provision allows a payor to control the alimony recipient, holding:

Finally, we reject the suggestion that enforcement of this cohabitation agreement permits a former spouse to control the post-marital conduct of the other spouse. Such a contention misconstrues the purpose of identifying cohabitation as an alimony-termination event and also misconstrues this record. When parties to a matrimonial settlement agreement have agreed to permit termination of alimony on remarriage or cohabitation, they have recognized that each are equivalent events. In each situation the couple has formed an enduring and committed relationship. In each situation, the couple has combined forces to mutually comfort and assist the other. The only distinction between remarriage and cohabitation is a license and the recitation of vows in the presence of others. When the facts support no conclusion other than that the relationship has all the hallmarks of a marriage, the lack of official recognition offers no principled basis to treat cohabitation differently from remarriage as an alimony-terminating event.

We do not today suggest that a romantic relationship between an alimony recipient and another, characterized by regular meetings, participation in mutually appreciated activities, and some overnight stays in the home of one or the other, rises to the level of cohabitation. We agree that this level of control over a former spouse would be unwarranted and might violate the no-obligation clause found in many divorce agreements.  However, the romantic relationship described above is not the long-term relationship presented in this voluminous record.

Finally, this case is unusual in that Justice Albin filed a strong dissent (which will be the subject of a separate post on this blog), about the harsh result on the recipient here.  The majority responded:

Our dissenting colleagues highlight the financial consequences of this decision to Cathleen. To be sure, those consequences are serious. Yet the record demonstrates that she knew that cohabitation would risk the loss of her primary source of income and, recognizing the consequences, she proceeded to cohabit with Warholak. She, not the Court or her former husband, exacerbated her financial situation by quitting her job and fashioning a defense that was found baseless by the trial court.  (Emphasis added)

In rejecting the dissent’s feeling that an economic benefit test should always be applied, the majority noted:

We also cannot subscribe to the view advanced by our dissenting colleagues that applying the Gayet economic reliance or dependence rule is somehow less intrusive in the personal life of the former spouse. There are few exercises more intrusive than the need to identify every expenditure and the source of the funds for each expenditure. Such an inquiry reveals a vast amount of personal information about the daily life of the former spouse that is of no concern to the obligor spouse. Moreover, sixteen years ago in Konzelman, this Court declined to import the Gayet economic dependence or reliance rule when the parties have agreed in a marital settlement agreement that cohabitation is an alimony-termination event. We discern no basis to depart from that determination. (Emphasis added)

In the past, and maybe even currently, far too many cases settled with vague language requiring termination in accordance with the law – without setting forth which law.  Quinn evidences that that was a dangerous practice for the recipient.

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Eric SolotoffEric 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 Roseland and Morristown, New Jersey offices though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com. Connect with Eric: Twitter_64 Linkedin

Photo credit:  Copyright: <a href=’http://www.123rf.com/profile_myvector’>myvector / 123RF Stock Photo</a>

Suffice it to say, the issue of cohabitation under the amended alimony statute has been a hot topic of late in New Jersey family law. With several recent notable seminars on the topic, and two recently issued Appellate Division decisions (one published and the other unpublished) addressing when the amended law applies, practitioners and potential litigants hungrily consume these new cases looking for any morsel of guidance on how the statutory language will work.

Back when the law originally passed, I wrote an article for the New Jersey Law Journal analyzing cohabitation law past, present and future. A year and a half later, I am not only unable to confirm how a trial judge would apply the new statute, but if the discussions from each of those recent seminars are any indication, different judges may and will likely apply the statute very differently.  In other words, some trial judges may favor applying the pre-amendment legal analysis, some may strictly apply the new statutory language, and some may even implement some sort of combination of the two.

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Thus, as a very strong introductory caveat – We have no idea how the new will be applied given what we have heard judges say about it, and the fact that there is no law to guide us.  Now, with that being said…

Just to briefly refresh, what did the old law say? Well, cohabitation was described by the Supreme Court of New Jersey as:

  • An “intimate,” “close and enduring” relationship that requires “more than a common residence” or mere sexual liaison. The relationship “bears the generic character of a family unit as a relatively permanent household,” is “serious and lasting,” and reflects the “stability, permanency and mutual interdependence” of a single household.
  • It involves conduct whereby “the couple has undertaken duties and privileges that are commonly associated with marriage.”

Indicia may include, but is not limited to, long-term intimate or romantic involvement; living together, intertwined finances such as joint bank accounts, shared living expenses and household chores, and recognition of the relationship in the couple’s social and family circle.  The so-called “economic benefits” test would come into play after the payor made an initial showing of cohabitation, at which time the court would determine if the third party contributed to the dependent spouse’s support, or if the third party resided in the dependent spouse’s home without contributing anything to household expenses.

Now what does the new law have to say? The law defines cohabitation as involving 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.” A trial judge presented with a cohabitation allegation is required to consider: (1) Intertwined finances such as joint bank accounts and other joint holdings or liabilities; (2) Sharing or joint responsibility for living expenses; (3) Recognition of the relationship in the couple’s social and family circle; (4) Living together, the frequency of contact, the duration of the relationship, and other indicia of a mutually supportive intimate personal relationship; (5) Sharing household chores; (6) Whether the recipient of alimony has received an enforceable promise of support from another person within the meaning of subsection h. of R.S. 25:1-5; and – of course, since this is family law that we are dealing with – (7) All other relevant evidence. So we now know that, at the very least – under the amended law – cohabitation does not require the couple to live together on a full time basis, which was unresolved pre-amendment.

Also to clarify what I indicated earlier, some trial judges have suggested that because the family part is one tasked with imparting an equitable result, they may still apply the economic benefits test and potentially modify – rather than suspend or terminate as the statute says – an existing alimony obligation. Notably, as I wrote for the Law Journal, those amended portions of the law addressing an alimony change in the event of the payer’s retirement or down income use the word modify as a possible option, but that word is nowhere to be found in the cohabitation section. Was that deliberate, favoring the notion that the law is more payor friendly, or was it unintentional and not meant to wipe away the old law?  We do not yet know the answer.  Also notable is how a recent case addressing the retirement language section of the amended statute relied upon statutory interpretation and construction, rather than a broader interpretation that perhaps some practitioners were expecting. This does not mean, however, that the cohabitation portion of the statute will be similarly analyzed and applied.

Other trial judges have indicated that the statute requires a suspension or termination, although a separate question exists as to when a suspension would occur. Perhaps as a sign of rulings to come or, perhaps, also inadvertently, the Appellate Division in one of those two cases I mentioned above indicated that alimony “shall” terminate upon cohabitation by the payee. This, however, was neither an issue or holding in the case, and even the statute uses the word “may” rather than “shall.” Also, when should a so-called suspension of alimony even occur? Should it only occur during a cohabitation proceeding and potentially be reinstated if cohabitation is ultimately unproven? Should it occur as a final result and be subject to reinstatement if the cohabitation ends?  The answers are unknown at this point.

What about making the initial cohabitation showing?  As is true with any case, judges are going to look at the same set of facts differently from each other. For instance, while one judge may find it sufficient for the payor to establish that the couple has been living together at least four days per week for a month, another judge may want more. While one judge may deem sufficient intertwined finances via a single joint bank account and the couple holding themselves out as in a relationship on occasion, another judge may disagree. All judges present at the seminars seem to agree, however, that the more information and evidence of cohabitation to be considered in the initial filing, the better. We even discussed a good old fashioned garbage inspection, where you never know what kind of gems may turn up in a payee’s trash bin – in other words, one payee’s trash may be one payor’s Exhibit A to a Certification.

Thus, no matter how the law is to apply once cohabitation is established (suspension, terminate or modify), the process by which a payor spouse is to gather information for a motion to “address” alimony due to cohabitation seems to remain the same. Private investigators will often still be a potentially key part of the puzzle, and, to the extent the couple somehow cannot manage to keep themselves from discussing the relationship on social media, such evidence is often, but not always, the equivalent of the goose that laid the golden egg – in other words, the online version of the garbage can.

It was those recent seminars that really brought back to the forefront for me how much has yet to be determined under the amended law and, perhaps more importantly, how each case leaves unanswered the question of what gets a moving party passed that first litigation hurdle, and what a payee spouse can do to successfully fend it off. For both sides, the picture remains cloudy in some ways and crystal clear in others, and that is without any of the sort of guidance that we have recently seen with the retirement portion of the amended law.  We will all continue to stay tuned as to what this portion of the new law can do once tested.

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 Robert Epstein is a partner in Fox Rothschild LLP’s Family Law Practice Group and practices throughout New Jersey.  He can be reached at (973) 994-7526, or repstein@foxrothschild.com.

Connect with Robert: Twitter_64 Linkedin

*Photo courtesy of mondspeer (Google free images).

When we all think of insurance, we often think of medical insurance, car insurance and homeowner’s insurance as these seem to be the necessary and everyday types of insurance. Life insurance, which for some can be synonymous with high premiums, is one of the first costs to go when seeking to reduce your budget. I often find that the issue of life insurance is something that typically does not cross a person’s mind when they are getting divorced, whether they are the supporting spouse or the supported spouse, especially if the parties did not maintain life insurance during the marriage.

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Often times however, when a supporting party has an ongoing alimony and/or child support obligation, a court may order (or the parties will agree) that a life insurance policy will continue (or be implemented) as a method of financially protecting a dependent party and/or child in the event of the supporting party’s premature death.

In other words, the same reasons an intact family would procure life insurance, remain after the divorce. All too often however, an obligation to maintain life insurance is the forgotten provision of a divorce settlement agreement in that either 1) it is noticeably absent from the agreement, or 2) it is not being maintained. Obviously, either of these scenarios is troublesome for the supported spouse and could ultimately cause substantial financial ruin should a situation that life insurance seeks to protect against come to fruition.

In the recent case of Ashmont v. Ashmont, Judge Lawrence Jones recently released an unpublished (non-precedential) yet persuasive opinion on how to deal with the issue of life insurance between divorced parties. In Ashmont, the parties’ Marital Settlement Agreement required that the wife would receive permanent alimony and child support for the parties’ children. In order to secure same, the parties agreed that the husband would carry life insurance as a means to protect against the loss of financial support in the event of an untimely death.

Several years after the parties were divorced, wife brought an enforcement action against the husband for a breach of their agreement for his failure to provide proof that he was maintaining life insurance as well as for sanctions for his past and alleged ongoing violations of his life insurance obligations. At the time of the hearing, husband admitted that he had been in violation of this obligation, but had recently brought himself into compliance by securing a new policy, consistent with the terms of the parties’ agreement.

Although wife acknowledged that husband was now compliant, she still sought sanctions against the husband for his prior failure to maintain the policy and for allowing his dependents to go uninsured for such a long period of time. It was clear that husband only complied with the obligation after wife was forced to bring litigation and wife feared that husband would simply fail to pay the next scheduled premium.

In his opinion, Judge Jones lays out four tips regarding life insurance and divorce:

• The court may direct that the supported spouse or other parent be named as the owner of the policy, if permitted by the insurance company. This option is particularly relevant when the supporting spouse has a history of failing to adhere to his or her court-ordered life insurance obligations. Being the “owner” of the policy, rather than the “beneficiary” or the “insured”, allows for the party to receive any and all notices and communications from the insurance company regarding the status of the policy, including invoices, notices of proposed cancellation, change in policy terms and renewal dates;

• When a party willfully breaches a court-ordered obligation to carry life insurance, the court may issue multiple forms of relief, including but not limited to ongoing financial sanctions, until such time as the defaulting party complies with the obligation;

• When a party violates a court order, but ultimately complies prior to the conclusion of enforcement litigation, such compliance does not completely erase or negate the violation. Nonetheless, remedial and corrective conduct is equitably relevant on the issue of mitigating sanctions and penalties which might otherwise be imposed under the circumstances. In this case, the wife had asked for a sanction of $7,440.00, the amount of money that husband had saved over the years by failing to comply with his obligation. Finding it a mitigating factor that husband ultimately did cure the defect and that wife was not financially harmed, husband was sanctioned $2,500.00 and was ordered to reimburse wife her $50.00 filing fee for the enforcement motion; and

• As life insurance is an ongoing financial obligation intrinsically related to spousal and/or child support, an insurance provision in a judgment of divorce or settlement agreement is potentially subject to post-judgment modification upon a showing of a substantial change of circumstances, pursuant to Lepis v. Lepis 83 N.J. 139, 145-46 (1980). This situation may occur when a term policy naturally expires and the insurance is either much older or less healthy than at the time of divorce, meaning the cost of the policy could be substantially increased and thus revisited by the Court.

While no one wants to think about the consequences associated with an untimely death, the takeaway from this case is that as the supported spouse/parent, it is imperative that you are “in the know” regarding the insurance policies that could very well dictate your financial security (and your children’s) for the rest of your life. If your ex-spouse has an obligation to secure their support payments with life insurance and you have not seen recently seen a copy of the policy, it might be time to reach out and connect with them to ensure the policy is current.

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LLauren Koster Beaver, Associate, Fox Rothschild LLP
Lauren K. Beaver is a contributor to the New Jersey Family Law Blog and an attorney in Fox Rothschild LLP’s Family Law Practice Group. Lauren practices out of the firm’s Princeton, New Jersey office representing clients on issues relating to divorce, support, equitable distribution, custody, and parenting time. Lauren also offers mediation services to those looking to procure a more amicable divorce. Lauren can be reached at (609) 844-3027 or lbeaver@foxrothschild.com.

While the Appellate Division has yet to address the substantive application and meaning of the cohabitation provisions of the amended alimony law, it has now determined twice when the law may apply.

In October, I wrote about how the Appellate Division in Spangenberg v. Kolakowsi, a reported (precedential) decision, held that the cohabitation portion of the amended law does not apply to post-Judgment Orders finalized prior to the amendment’s September 10, 2014 effective date.  On March 2, 2016, the Appellate Division in the unpublished (not precedential) decision of Chernin v. Chernin, similarly held that the 2014 amendments, “by the specific terms of the statute’s effective date”, are not applicable in a situation where cohabitation was previously established pre-effective date.  The primary point to be taken here is that the change in the law alone is not enough to reopen a previously concluded matter – in this case, a cohabitation matter.

alimony movie poster

Here are the undisputed facts that you need to know:

  • The parties were married in 1958 and divorced in 1992.  The property settlement agreement provided that husband would pay permanent alimony of $100,000 per year until July 1, 1997, at which time the payments would increase to $150,000 annually.
  • In 1996, husband moved to retroactively terminate his alimony based on wife’s cohabitation.  Following a five day trial, the court granted husband’s motion in part by finding cohabitation, ordering wife to reimburse husband in a sum certain for past overpayments retroactive to when alimony commenced, and reducing husband’s annual alimony obligation by $12,000 annually.  There was no modification to the alimony duration.
  • Husband appealed, arguing that alimony should have been terminated pursuant to leading case law at the time.  Husband’s argument was rejected.
  • Following passage of the amended alimony law, husband again moved to be relieved of his alimony obligation based on wife’s cohabitation.  Counsel, during oral argument, confirmed that nothing had changed in the past twenty years following the prior modification other than the amendment’s passage.
  • The trial court found that the amendment’s passage constituted a change in circumstance and terminated alimony based on the trial court’s prior finding of cohabitation.
  • Wife appealed, arguing that the court erred in failing to give effect to the “anti-retroactivity provision” of the amended statute.

In reversing the trial court in wife’s favor, the Appellate Division quoted that anti-retroactivity provision, which 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 Appellate Court determined that the parties’ post-Judgment litigation concluded in 1997 when a final Order was entered reducing the amount of alimony and leaving the permanent duration untouched based on the wife’s cohabitation.  In other words, the cohabitation issue was already addressed and the matter concluded.  As a result, husband could not simply reopen the issue based solely on the law’s amendment.  Citing Spangenberg, the Court concluded:

Because the Legislature has commanded that the 2014 amendments not be construed to modify the duration of alimony ordered or agreed upon, or to modify specifically bargained for contractual provisions incorporated into an enforceable written agreement between the parties, a judgment of divorce, or a final order concluding post-Judgment litigation, all of which applied here, the court plainly erred in relying on the amendments to modify the permanent alimony previously ordered in this case.

So there you have it.  A second decision from the Appellate Division – this one expressly following Spangenberg – addressing when the cohabitation provisions (and, more broadly, the amended law as a whole) may apply to a given set of facts and circumstances.  The new law itself is not a change in circumstances meriting a review of a previously closed case.  Similar to that case, where the Appellate Division used the word “shall” (rather than “may”) when describing whether alimony should terminate in a cohabitation situation under the statute, the Appellate Court did not address whether terminating alimony was the only appropriate measure had application of the new law been deemed appropriate.  Stay tuned for future developments.

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 Robert Epstein is a partner in Fox Rothschild LLP’s Family Law Practice Group and practices throughout New Jersey.  He can be reached at (973) 994-7526, or repstein@foxrothschild.com.

Connect with Robert: Twitter_64 Linkedin

*Photo courtesy of Google free images.