Essex County Divorce Attorneys

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In the midst of our ongoing quest for guidance as to how and when to apply the 2014 cohabitation statute, comes the Appellate Division’s recent unpublished (not precedential) decision in J.S. v. J.M.  While the decision does not reveal much in the way of noteworthy substance beyond what we have already seen in other post-statute decisions, the Appellate Division did opine on a couple of points that this author found interesting, one of which is addressed herein.

Briefly, the parties were divorced in 2010, with a cohabitation provision contained in the subject settlement agreement providing that alimony would “[t]erminate upon [defendant’s] cohabitation . . . with an unrelated male in lieu of remarriage for a period of [thirty] days or more.”  The payor ex-husband moved to terminate in alimony in September 2015 on the basis that the former wife was cohabiting with the payor’s brother.  While somewhat salacious in and of itself, the payor’s request to terminate support was ultimately denied by way of order and decision following a hearing.  Thereafter, the payor filed a motion for reconsideration of the order and decision, as well as an application to set aside same under Rule 4:50-1, each of which was denied.  The payor then only appealed the trial court’s order denying the motions for reconsideration and for relief under 4:50-1 (and not the original order following trial).

The first interesting point in the Appellate Division’s decision focused on the trial judge’s hypothetical question posed during oral argument: “whether it was necessary for [payor] to have filed his motion to terminate [alimony] during [payee’s] relationship with [the alleged cohabitant].”  In other words, from my interpretation of the trial court’s question that was not the central issue on appeal and, thus, not fully fleshed out in the decision, is whether the payor can procure relief if he files his application after the alleged cohabitation comes to an end, rather than during the relationship.  Briefly referencing the Supreme Court of New Jersey’s 2016 decision in Quinn v. Quinn, the Appellate Division here provided:

In Quinn, 225 N.J. at 39, the court held that if a PSA provided for the termination of alimony upon the dependent spouse’s cohabitation, the court should enforce the terms of the agreement and terminate alimony, rather than suspend it during the period of cohabitation.  Again, even if we assume the judge’s question evidenced a palpably wrong understanding of the issue, and we do not think it did, Quinn has no application to this case because the judge found there was no cohabitation.

Does the Appellate Division’s indication, provided as dicta, renew or revive the argument that, but for an agreement calling for the termination of alimony upon cohabitation, an alimony obligation may be suspended during the period of cohabitation and then restored should the relationship come to an end?  Was this argument dead at all, and was Quinn limited to its facts?  For a reminder, the Supreme Court held in Quinn:

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.

While this holding primarily focused on the fact that the subject agreement provided that alimony would terminate upon cohabitation (regardless of when the cohabitation occurred), did the Supreme Court more broadly find inconsequential that the cohabitation period ended in determining whether alimony should be reduced?  In other words, can a payee litigant still argue: (1) alimony should only be impacted, if at all, during the period of cohabitation; and (2) the payor has to file the application during the period of alleged cohabitation in order for it to have any merit?

Family law practitioners recently heard one of our State’s most esteemed (and now retired) Appellate Division judges opine that once cohabitation occurs, a modification/termination of support application should be considered even if the cohabitation came to an end, just as it would not matter if a payee remarried and then divorced the new spouse.  It is uncertain whether Quinn closed the door on this issue, and certain arguments perhaps thought dead may still exist, especially since no court has yet to interpret what the word “suspend” truly means in the confines of the cohabitation statute, and whether a suspension of support should be implemented beyond what may be a suspension, or partial suspension during the cohabitation proceeding itself.

In other words, as we await a more definitive interpretation and application of the cohabitation statute, practitioners will continue to creatively and zealously argue on behalf of litigants embroiled in such disputes.

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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.

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While we await guidance from the Appellate Division on how to interpret that portion of the amended alimony statute’s cohabitation provision, N.J.S.A. 2A:32-23n, indicating that alimony may be “suspended or terminated” in the event of a payee former spouse’s cohabitation, and whether the pre-statute “economic benefits” test remains alive and well, we are seeing newer cases that address the issue of cohabitation under the statute, rather than under pre-statute case law.

In Gille, Jr. v. Gille, an unpublished decision from the Appellate Division released in January, the Appellate Division affirmed the trial court’s Order denying the payor former spouse’s motion to terminate alimony to his former wife based on her cohabitation.  There, wife was receiving $130,000 in base alimony, subject to an upward adjustment based on whether the husband’s annual income exceeded $500,000 annually.

As to cohabitation, the parties settlement agreement provided that cohabitation would be a basis for modification or termination of the alimony obligation, “governed by the existing law at the time the application is made.”

During a 90-day period from February 9, 2015 to April 4, 2015, the husband paid a private detective to observe the wife’s home.  The detective recorded his observations over 29 days.  On 13 of those occasions, the wife’s boyfriend was present overnight.  He was also observed retrieving mail, assisting with snow removal, and entering the home when the wife or children were not present.  Immediately prior to oral argument on the motion, the husband had not obtained an update of the detective’s report immediately prior to filing his motion.

In denying the husband’s motion to terminate alimony, the trial court made the following findings:

Wife and boyfriend had no intertwined finances, did not share living expenses, and although they were dating, they did not even refer to themselves in conversation as “boyfriend and girlfriend.”  Also, the court found that instances of the boyfriend helping around the home were limited instances of “chivalry” – not the performance of household chores on a continuous basis.  It was ultimately deemed a dating relationship, but “nothing more.”

In analyzing the statutory cohabitation factors on appeal, the Appellate Division deferred to the trial court’s findings that the husband’s evidence did not meet the statutory elements required for him to fulfill his initial (prima facie) burden that would entitle him to relief and/or a future hearing to determine what, if anything, should happen to alimony.  In so affirming, the Appellate Division noted how the husband only managed to demonstrate that the boyfriend spent a limited number of nights at the wife’s home.

Since the husband failed to fulfill even his initial burden based on his limited proofs, the court did not need to address “suspend or terminate” language, or the question of whether the economic benefits test still applies.  Notably, the trial judge also made no mention of the fact that the new statute does not require the cohabitant to live full-time with the payee in order for cohabitation to exist.  These cases are always highly fact-sensitive and could depend, in part, on the judge deciding the issue.  To that end, the Appellate Division interestingly noted how the same trial judge had previously presided over post-Judgment litigation where the husband had engaged in misconduct with respect to his income, the disclosure thereof to the wife, and, in connection therewith, any upward adjustment of alimony.

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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.

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One of the most common questions posed by clients is – how is alimony determined?  Unfortunately, there is no easy answer to that question, and it is often dependent upon the facts and circumstances of a given matter.  The law does not provide for a formula, even in the final version of the amended alimony statute that passed in late 2014, and requires that trial judges consider each of the factors outlined in New Jersey’s alimony statute (N.J.S.A. 2A:34-23(b)) in rendering an award.

As seminal New Jersey case law provides, the standard of living established during the marriage serves as the “touchstone” for alimony, with, whenever possible, the alimony award to be set at an amount that will “enable each party to live a lifestyle ‘reasonably comparable’ to the marital standard of living.”  The amended alimony statute confirms that both parties are entitled to such a lifestyle, which is often determined based on a review of the parties’ Case Information Statements, testimony and supporting financial documentation.  Experts may even be utilized to prepare what is commonly referred to as a “lifestyle analysis” to help provide a more accurate indicator of what the marital lifestyle actually was, and how expenses were divided between the parties and children, if any.

When negotiating an alimony resolution, however, practitioners often employ a so-called “rule of thumb” whereby the ultimate alimony figure is based on a certain percentage of the difference between the parties real/imputed levels of income.  Debate between practitioners in applying this approach remains alive and well, especially in high income cases where utilizing a formula may undermine the notion of ensuring that the marital lifestyle is taken into consideration.  Additionally, the formulaic approach oftentimes utilized in negotiating an alimony resolution takes into consideration the alimony deduction to be received by the payor on his or her tax returns.  With the new tax law eliminating the deduction for alimony agreements/awards reached after December 31, 2018, even this approach will likely undergo significant changes.

To that end, case law confirms that a trial judge cannot employ an income-based formula when determining an initial alimony award or modifying one previously established (even if the initial alimony award was reached in settlement based on a formula).  This principle was recently affirmed in Waldbaum v. Waldbaum, wherein the Appellate Division reversed a trial judge’s use of a formula in determining alimony in a post-divorce proceeding.  Specifically, despite generally describing the lifestyle as one of “high-class”, and analyzing the alimony factors, the trial court employed a formula utilized in the parties’ settlement agreement when alimony was first agreed upon.  In reversing the trial court, the Appellate Division held that “by setting alimony using a formula the alimony became untethered from the marital lifestyle and defendant’s needs.”  The resulting alimony amounts had “no reasonable correlation to the evidence adduced regarding the marital lifestyle or needs.”

Thus, while reaching an alimony resolution provides parties with great flexibility in determining the award, a trial judge must follow the above-detailed requirements to ensure that the lifestyle is not only taken into consideration, but that all statutory factors are considered in rendering a final decision.

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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.

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With Chanukkah almost behind us and Christmas rapidly approaching, the time for being jolly is unfortunately also a peak time for parental conflict in divorcing and divorced families.  What one would think (hope) would be a relatively simple discussion between adults in an effort to resolve such issues often turns into something far worse.  Court applications often result where judges are called upon to make last minute decisions about where the children should be, who they should be with, and for what amount of time.

With that being said, here are a few things to keep in mind as a parent mired in such a conflict….

“It’s Christmas All Over Again” – Parents should do their best to resolve holiday conflicts amongst themselves, without involving the children.  Unfortunately, all too often the kids are brought into the picture, with one parent telling them how the other parent is a bad person, is at fault for some reason regarding the holidays, and worse.  Parents often believe it is necessary to justify/defend their actions to sway the kids to his or her side, but the impact on them is immeasurable.  Over time, kids who simply want to enjoy what is one of the best times of the year end up dreading its arrival because they know that there will always be some argument between mommy and daddy to tarnish the occasion.

“Wonderful Christmastime” – One way to ensure a merry holiday season is to address parenting time issues well in advance of when the time arrives.  This is not just limited to Chanukkah or Christmas parenting time, but all holiday parenting time.  Oftentimes, these issues are addressed during a divorce matter in a piecemeal or triage fashion, for a variety of reasons that may or may not be within your control.  The result is often less than ideal, and may become yet another dispute to address in the context of an ongoing matter.  Try to reach a resolution in advance, if possible, for the best interests of the kids and, quite frankly, everyone else involved.

“I Saw Mommy Kissing Santa Claus” – If you are considering bringing a significant other to the holiday dinner, it goes without saying that it should not be done in a manner that negatively impacts upon the kids.  More importantly (and obviously), do not do so in violation of a court order that imposes restrictions on your ability to introduce or involve a significant other in the kids’ lives.  Such an order oftentimes issues in the midst of a divorce matter.  The situation can often be very delicate, and should be approached with care.  If a child is in therapy, consider whether to discuss with the therapist how to best bring/introduce a new person to such an occasion.

“Happy Xmas (War is Over)” – While John Lennon’s famous holiday song carried heavier political overtones, there is always a way to apply it to a family law blog post.  If you are going to file an application with the court to address holiday parenting time issues, please do not wait until the last minute to do so.  Seeking relief for these issues should not be an ambush.  It should not leave in flux for the kids what is going to happen.  It should be done with notice to the other party so that he or she can properly respond.  Judges have more than enough going on and if he or she sees that you could have brought the application several days, if not weeks prior, oftentimes they will be less than pleased with having to address the situation under such circumstances.

With these tips in mind, hopefully you are able to not only avoid or properly address the sort of holiday parenting time conflict that comes our way year in and year out, but also that your kids will be able to enjoy the season with a sense of calm and peace of mind.

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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.

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Amicably settling your divorce matter is almost always better than taking your chances at a trial before a trial judge who knows almost nothing about your life. Not only can settling save you substantial time and expense as compared to continued litigation, but also it provides you with the opportunity to end the case on your terms while removing the risk associated with an uncertain trial decision.

Spiderman in Lego formTo that end, settling also means potentially agreeing to terms that are not necessarily what the law may provide. As Uncle Ben once said to a young Peter Parker, “with great power comes great responsibility.”  It is critical that you are not only entering into your agreement voluntarily, but also that you actually know what you are agreeing to.  Sounds simple enough, but litigation oftentimes follows when disputes as to the terms of an agreement arise.  This was the situation in T.L.H. v. M.H., wherein the parties’ definition of cohabitation as an alimony-modification event was more expansive than that provided by law. Specifically, the subject settlement agreement there provided that alimony would terminate:

[U]pon the death of either party, or the marriage or cohabitation of [plaintiff]. The term “cohabitation[,”] in addition to its meaning as construed by New Jersey courts, shall also incorporate the scenario if [plaintiff] should take up residence with any family members (other than the children of the parties) or friends.

Solidifying the parties’ respective understanding as to the terms of the agreement, it also provided therein:

In arriving at this agreement both [plaintiff] and [defendant] had an opportunity to obtain the assistance of separate legal counsel and to be advised regarding the legal and practical effects of this [a]greement. . . . The parties have read this agreement in its entirety and each of them has entered voluntarily into this agreement. They have consented to and assume all of the covenants herein contained, having read the same and having fully understood them. They both acknowledge that it is a fair, just and reasonable agreement and [is] not the result of any fraud, duress, or undue influence exercised by either party upon the other or by any other person and that there have been no representations, warranties, covenants, or undertaking other than those as set forth herein.

Post-divorce, the wife moved in with her sister after she was forced out of the former marital home due to a sheriff’s sale. The husband, as a result, stopped paying alimony, which caused the wife to file a motion to enforce the agreement. In response, the husband moved to terminate alimony based on the wife’s cohabitation as defined by the parties’ agreement.

While not necessarily relevant to addressing the unambiguous language of the agreement, the husband argued that he negotiated the cohabitation provision because he knew the wife would ultimately move out of the former marital home and in with family. The wife argued that she negotiated a higher level of alimony because she knew her expenses would increase after she left the home. At the core of the wife’s argument was her position that living with someone is different than cohabitation. Specifically, she argued her understanding that cohabitation meant someone else was, at least to a significant extent, “supporting” her.

Relying on the language of the parties’ agreement, and both public policy and case law supporting the reaching and enforcement of private agreements, the trial court enforced the cohabitation provision and terminated alimony.

On appeal, the wife argued that: (1) a plenary hearing should have been held to address a genuine issue of fact regarding the parties’ intent in agreeing upon the cohabitation provision; (2) the trial court improperly failed to addressed existing economic circumstances at the time enforcement was sought. In affirming the trial court, the Appellate Division reiterated public policy favoring settlement and the enforcement of unambiguous language, while noting how a court cannot rewrite an agreement to provide for terms better than that bargained for by the parties. The Court also referenced cohabitation jurisprudence wherein the voluntarily agreed upon language of an agreement as to such issue can be subject to enforcement even when differing from that provided by law (as to what cohabitation is, the impact of cohabitation on alimony, and the like).

In so holding, the Court noted as to the facts at hand:

Here, there were no compelling reasons to depart from the clear, unambiguous, and mutually understood terms of the MSA. The agreement was voluntary, knowing and consensual, and the alimony-termination event upon cohabitation was fair under the circumstances of the case. We agree with the court’s finding that, while residing with her sister does not rise to the level of cohabitation under Konzelman, supra, plaintiff understood that residing with her sister was an event that could trigger termination of alimony under the description of cohabitation specified in her MSA. In our view, the explicit terms in the MSA obviated the need for a plenary hearing. Accordingly, we find no error in the court deciding the cross-motion on the papers.

The takeaway from this case is that while a litigant has great power to settle a case as the preferred approach over litigation, with great power comes great responsibility to know and understand that to which you have agreed.

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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

Sometimes, the location of a case – for one reason or another – can be just as important as anything else.  Perhaps the law is different and more beneficial to one side in a particular location; possibly, one place is simply more convenient for purposes of introducing evidence at a trial or merely having all parties be present in court.

In my practice, I have seen this issue come up more and more.  With our increasing mobility, the questions of where a case should be conducted and what court has jurisdiction has become increasingly complex.  This is especially so in cases involving children who reside with the primary parent in another state from the other parent.  Often, this can result in a tug of war between the courts in both states over where post-judgment issues related to the children should be addressed.

One recent case out of the trial court in Essex County squarely addressed this issue.  In B.G. v. L.H., the parties were divorced in New Jersey, but had specifically agreed when they divorced that the mother and children could relocate to Massachusetts, which they did.  The agreement also called for a parenting time schedule which afforded the father parenting time in Massachusetts and in New Jersey, which he exercised.  Significantly, the agreement did address the question of jurisdiction quite clearly, stating:

Each of the parties hereby irrevocably consents and submits to the jurisdiction of the courts of the State of New Jersey for any future custody and parenting time disputes, so long as one parent resides in New Jersey.

After the wife and children relocated to Massachusetts, the husband continued to reside in New Jersey and, as noted above, to exercise parenting time with the children in New Jersey. Eventually, issues arose regarding the children and their time with their father.  This included two complaints to the Massachusetts Department of Children and Family by one child’s teacher and the other child’s doctor.  The Massachusetts DCF conducted an investigation and concluded that the allegations were unsubstantiated.  However, this prompted the Mother to institute proceedings regarding custody and parenting time in the Probate and Family Court for the Commonwealth of Massachusetts.

And so the basic question arose:  Should the custody and parenting time issues that arose be decided by a Massachusetts Court, or a New Jersey Court?  In this particular case, the answer may seem obvious.  The parties agreed, “irrevocably,” that as long as either of them resided in New Jersey, the courts of the State of New Jersey would have jurisdiction over custody and parenting time disputes.  It was not disputed that the Father continued to reside in New Jersey.  Therefore, based on their agreement, it would seem that New Jersey should continue to have jurisdiction over custody and parenting time issues.

However, the trial court judge went further and conducted an analysis of the issue as though there was no provision in the parties’ Matrimonial Settlement Agreement which addressed this issue.  This is because only the Court can determine if it should relinquish jurisdiction, even where an agreement exists (although the existence of an agreement is an important factor the court must consider, as discussed below).  Judge Passamano’s opinion provides a good overview of how the question of jurisdiction over custody and parenting time issues should be addressed under New Jersey’s Uniform Child Custody Jurisdiction and Enforcement Act (NJUCCJEA):

  1.  Did New Jersey acquire continuing, exclusive jurisdiction over child custody issues?
  2. If so, have circumstances changed so as to divest New Jersey of continuing, exclusive jurisdiction?
  3. And, if circumstances have not changed, then is New Jersey no longer a convenient forum to decide these issues, and is the other state the appropriate forum?

Notably, this procedure prevents a party from doing what the Mother in B.G. v. L.H. tried to do – simply filing an application to modify custody/parenting time in another state’s court.  The state court which originally had jurisdiction must conduct this analysis and affirmatively relinquish its jurisdiction.

Part 1:  Continuing and Exclusive Jurisdiction

Generally speaking, a Court acquires continuing and exclusive jurisdiction as to custody issues when it makes an initial custody determination, or when it modifies a custody determination made by another state as authorized by law.  In B.G. v. L.H., the initial custody determination was made in New Jersey, by a New Jersey Court.  Therefore, the Court proceeded to the next question.

Part 2:  Change of Circumstances

According to the NJUCCJEA, circumstances will have changed so as to divest New Jersey of jurisdiction when either of the following occur.

  1.  A NJ court determines that neither the child, the child and one parent, nor the child and a person acting as a parent have a significant connection with New Jersey and that substantial evidence is no longer available in New Jersey concerning the child’s care, protection, training, and personal relationships; or
  2. A court of NJ or a court of another state determines that neither the child, nor a parent, nor any person acting as a parent presently resides in New Jersey

The question of whether there is a significant connection with the state cannot merely be based on whether one party continues to reside in NJ.  Instead, it goes to the relationship between the child and the parent that remains in NJ.  This is where the distinction between what the parties in B.G. v. L.H. contracted for and what the law dictates lies.  The agreement between the parties called merely for the continued residency of one parent in New Jersey, but absent an agreement, the Court must look deeper at the relationship between the parent and the child.  The judge in B.G. v. L.H. opined that, since the children in that case exercised parenting time with the Father in NJ, there existed the requisite significant connection in any event.

Part 3:  Which is the Convenient Forum?

Having decided in favor of New Jersey on the first to issues, a New Jersey Court can still determine that it should relinquish jurisdiction if it finds that it is not a convenient forum, AND that the other state is the appropriate forum.  Pursuant to N.J.S.A. 2A:34-71(b), the factors that the Court considers in answering this question are:

  1. Whether domestic violence has occurred and is likely to continue in the future and which state could best protect the parties and the child;
  2. The length of time the child has resided outside of the State;
  3. The distance between the court in this State and the court in the state that would assume jurisdiction;
  4. The relative financial circumstances of the parties;
  5. Any agreement of the parties as to which state should assume jurisdiction;
  6. The nature and location of the evidence required to resolve the pending litigation, including the testimony of the child;
  7. The ability of the court of each state to decide the issue expeditiously and the procedures necessary to present the evidence; and
  8. The familiarity of the court of each state with the facts and issues of the pending litigation.

Again, in B.G. v. L.H., Factor 5 makes it impossible to ignore the fact that the parties explicitly, knowingly, and voluntarily, entered into an agreement that New Jersey would continue to have jurisdiction over custody and parenting time disputes so long as either of the parents (obviously, the Father in this case) merely resided in New Jersey.  Although the Court must give some due consideration to the other factors, so long as the best interests of the children – which must always be paramount – are not deleteriously affected by jurisdiction remaining in New Jersey, it would be hard to argue that there should be any other result in the face of such clear cut language in the agreement.

Practice Issues

The B.G. v. L.H. case provides a good lesson to practitioners about the importance of addressing this issue in agreements, especially if one parent’s relocation to another state may be on the horizon.  If you are on the side of the potentially relocating custodial parent, know that a provision like the one the parties entered into in this case may make it more difficult for your client in the event he or she wants New Jersey to relinquish jurisdiction.  By the same token, if you represent a party who may eventually be defending against an attempt to remove jurisdiction to another state, language like that included in the agreement in B.G. v. L.H. will be helpful to your client.

headshot_diamond_jessicaJessica C. Diamond is an associate in the firm’s Family Law Practice, resident in the Morristown, NJ, office. You can reach Jessica at (973) 994.7517 or jdiamond@foxrothschild.com.

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What rights do people have to an equitable distribution of assets stemming from a period prior to the marriage itself?  If there is no right to equitable distribution under those circumstances, then what rights exist and what remedies can be implemented to protect those rights?  In Thieme v. Aucoin-Thieme, a post-Judgment dispute involving several interesting issues including the equitable distribution of marital assets, distribution of assets pursuant to equitable principles stemming from a pre-marital cohabitation period, and the remedy of a constructive trust in connection with an ex-husband’s receipt of a bonus, the Supreme Court of New Jersey primarily held that:

  1. said bonus received by the ex-husband (Michael) was subject to equitable distribution to the extent it was earned during the parties’ marriage; and
  2. the matter’s “extraordinary circumstances” merited imposition of a constructive trust to protect the ex-wife’s (Bernice) claim of unjust enrichment and request for a portion of the bonus earned during the parties’ pre-marital cohabitation period.

Before even getting into the details of what happened, what is, perhaps, most interesting about this matter is not the very specific facts and circumstances at issue and how such circumstances led to an understandably fair result but, rather, how this case addresses the sort of equitable claims that may arise in connection with a palimony claim that were kept alive in Maeker v. Ross.  While the 2010 amendment to the statute of frauds requires that all post-amendment palimony agreements be in writing, this case also provides a window to argue around the amendment in certain cases if no writing exists – in other words, even without a written palimony agreement for a post-amendment case, the equitable arguments discussed in Maeker can still be made to procure relief.  The case certainly is not limited to that sort of analysis, and, in because of the unique circumstances at issue it even seems to overcome prior case law suggesting that the rights of cohabitants come to an end once the marriage occurs.  With that being said, let’s take a look into what happened…

Here are the unique facts you should know:

  • Michael and Bernice cohabited for eight years and were then married for a brief time.
  • During the cohabitation period and marriage, Michael was an employee of a company called IBG.  He had no ownership interest in IBG, but the company’s principals made a written commitment to Michael that IBG would compensate him for his contributions to the company if it sold.  A written Statement of Understanding was executed, and Bernice’s knowledge as to same was the subject of dispute at the subject post-Judgment trial.
  • Based on that commitment, Michael and Bernice “made personal and financial decisions” with the expectation of such future compensation including, but not limited to, Michael working and traveling extensively for the company, Bernice foregoing employment to devote her time to the parties’ child, and the parties purchasing a new home.
  • The parties divorced and the resulting settlement agreement distributed their assets.
  • During the divorce negotiations, the parties discussed Michael’s potential receipt of deferred compensation or some form of ownership stake in the company, with Michael representing that it “may never happen,” and that he did not anticipate a “big cash payment.”  He further indicated to Bernice that they could revisit the issue in the future should something transpire with the company.
  • Three months after the divorce concluded, IBG was sold and paid Michael $2.25 million (described as a “closing bonus”) for his contributions to the company.  The bonus was paid in accordance with the earlier Statement of Understanding and was paid “to show our appreciation for [Michael’s] contributions in helping [IBG] grow into the successful organization that it is today.”  During a deposition, a company representative testified that the bonus was based on Michael’s contribution to the company over thirteen years and that Michael did not know about the sale before its completion.
  • Bernice first learned of the bonus payment when Michael deposited the money into a bank account that, unknown to Michael, remained a joint account despite the divorce.  Bernice, without notice to Michael, withdrew the funds from the account.
  • Bernice then filed an application for a share of the closing bonus.
  • The trial held that Bernice was entitled to distribution of the bonus, but only that portion stemming from Michael’s work during the marriage.  The Appellate Division affirmed the trial court.

In affirming in part and reversing in part, the Supreme Court, in a decision authored by Justice Anne Patterson, held as follows:

  • It would contravene New Jersey’s equitable distribution statute to find that the portion of the bonus earned prior to the marriage was a marital asset subject to distribution.  As a result, the Court held that the trial court properly allocated the pre-marital and marital periods in determining what portion of the bonus was subject to equitable distribution.  While arguments can be made that this component of the trial court’s decision should not have been upheld based on how the marital portion of the bonus was calculated, that is not the primary focus of the case or this blog post.
  • As Justice Patterson noted, however, the story was not over.  As for that portion of the bonus earned during the parties’ cohabitation period, the Court addressed whether Bernice had made a claim of unjust enrichment.  Addressing a claim for unjust enrichment and its related remedies, the Court provided:

To prove a claim for unjust enrichment, a party must demonstrate that the opposing party ‘received a benefit and that retention of that benefit without payment would be unjust.’

  • Bernice would also have to show that she “expected remuneration” from Michael at the time she “performed or conferred a benefit” on Michael and that “the failure remuneration” enriched Michael “beyond [his] contractual rights”.
  • In the event of unjust enrichment, a court may impose the remedy of a constructive trust to prevent such enrichment.  Legally speaking, a constructive trust is “the formula through which the conscience of equity finds expression.  When property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest, equity converts him into a trustee.”  More generally, such a trust is a remedy designed to protect a party harmed by another party’s receipt or retention of property procured through unjust enrichment or some other wrongful means (fraud, mistake, undue influence, and the like).
  • Relying on its prior decision in Carr v. Carr, wherein the trial court equitably imposed a constructive trust awarding a wife a share of the marital assets controlled by the husband’s estate where the husband died during the divorce proceedings, the Court here held:

As the evidence presented at trial made clear, the prospect that [Michael] would be generously compensated was a significant factor in the parties’ personal and financial planning from the early stages of their relationship.  [Michael] and [Bernice] each relied on the expectation of deferred compensation if IBG were sold as they made important decisions for themselves and their family.

The parties’ shared anticipation that [Michael] would be paid deferred compensation was more than wishful thinking.  Given IBG’s written commitment to [Michael], and its owners’ genuine desire to reward their valued employee, both parties had reason to anticipate a significant payment in the event of a sale.

. . .

[I]t is clear that on multiple occasions [Michael] advised [Bernice] about his expectation that any sale of IBG could generate a substantial financial reward for their family.

. . .

[I]BG’s commitment to reward him was an important consideration in the decisions made by the parties throughout their cohabitation and marriage . . . In short, as they planned their finances and personal lives, [Michael] and [Bernice] anticipated that they might someday share in the proceeds of the company’s sale.

During the parties’ eight years of cohabitation, and for most of their brief marriage, [Bernice] undertook significant efforts to support [Michael’s] challenging career.

. . .

Indeed, [Michael] himself recognized that [Bernice’s] contributions to their family should be rewarded.

. . .

Accordingly, the record supports the conclusion that [Bernice’s] decision not to seek further education and employment was made, at least in part, in reliance on [Michael’s] financial commitment to her.

As family law practitioners, Thieme v. Aucoin-Thieme provides guidance as to how to not only bring an equitable claim stemming from a period when parties were not married, but also the sort of appropriate remedy that can be imposed in the event of a viable claim.  In a way, despite its specific factual scenario, it also opens the door to creative lawyering as to when these types of equitable claims could come into play.  Especially in the context of a palimony matter where other related equitable claims are raised, there is, perhaps, more opportunity to overcome an adverse party’s argument that all of the equitable claims are simply palimony claims dressed in different clothes.

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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.

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As a matrimonial litigant, you never want to feel that your lawyer does not know how best to take you through the divorce or post-divorce process.  After spending substantial sums of money on an advocate to aid you through a difficult and emotional process, let’s just say that “the blind leading the blind” is not the vibe that you want to be left walking away with.

Unfortunately, however, it happens way too often and I cannot tell you how many times I have had consults with potential clients during which I am told about how disappointed he or she was with prior counsel.  I have had several recent cases where I am left baffled and scratching my head at the inability of a matter to move forward to a trial or settlement – not because of difficult parties or issues of complicated substance, but, rather, a lawyer on the other side who simply does not seem to know what he or she is doing.

The experiences to which I allude are all the more reason to heed the following points when selecting your divorce lawyer:

  • Does the lawyer practice exclusively in the area of matrimonial law? You want a lawyer who knows the law, right?  You also want a lawyer who knows how the law has been applied, how it fits to the facts of your case, and how and when it may be changing.  While no lawyer is going to concede to you that he or she does not know the law, or that acting on your behalf will be a new experience, always do your due diligence before meeting with the attorney to see what you are really dealing with.  Aside from discussing with your referral source, perhaps review the attorney’s online profile to see what articles he or she has written, or what presentations he or she has given on family law topics.
  • Is your lawyer familiar with the judges, lawyers, mediators and experts who may be involved in your matter? This point coincides with the first point.  A lawyer who is well versed in or only practices in the area of family law will more likely be familiar with the people you will come across in the course of your matter.  Knowing how your spouse’s lawyer operates, knowing which mediator may be good or bad for your case, and knowing which expert can best address your financial or custodial needs is of great importance in properly presenting and proceeding in your case.
  • Do you feel comfortable in communicating with your advocate about the law and the facts of your case? You are going to get to know your lawyer very well.  You want to be able to confide in that person all of the good and the bad that may have happened during your marriage, as well as anything that may impact upon your divorce proceeding.  Providing your lawyer with such information and allowing him or her to best address such issues is one of the reasons why you retained that lawyer in the first place.
  • Do you strategize with your lawyer in a way that addresses many different potential approaches while also taking litigation costs into consideration? There are many, many…many different types of divorce lawyers.  There are lawyers who prefer the path of least resistance to get you to a resolution, lawyers who are always aggressive, and so many others in between.  The lawyer you retain should fit your goals and motivations of what you want or believe your divorce matter should be.
  • Is your lawyer responsive to your needs? Responsiveness is one of the issues that I hear about most often from clients who have had prior counsel.  You want to ensure that your attorney gets back to you in a reasonable time to address any issues that you may have.

These are just a few of the critical points that you should consider in retaining matrimonial counsel.  Every lawyer is different, as is every client.  Finding the right match for you is not a decision to be taken lightly, and should be based on a consideration of several factors.  Your attorney is someone who you are going to confide in more than most other people in your life, including, on occasion, your family and friends.  Trust and comfort in your lawyer’s ability to advocate on your behalf is a critical, if not the most critical decision that you may make during the entire divorce process.

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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.

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Many parents want to believe their children are “gifted,” but do they know that this “giftedness” may increase their child support obligations?

Judge Jones’ new published (precedential) opinion, P.S. v. J.S. highlighted the distinction between a regular old “extra-curricular activity” and the pursuits of a “gifted” child, reaffirming that, where a child is “gifted,” the Court may deviate from the Child Support Guidelines to award supplementary child support in order to foster that child’s talents and providing some guidance on how the Court might assess whether a child is “gifted” in a particular area.

38681136 - child with graduation robe

In many cases, the issue of extra-curricular activities is a big one.  Parents want their children to be able to enjoy sports, dance classes, acting lessons, singing lessons, and so on and so forth.  Most parents agree that such activities are important for a child’s enrichment and development.  However, there is often a question over whether the child support payor should contribute to these activities over and above his or her basic child support payment.

In P.S. v. J.S., the parties acknowledged that their daughter loved to act and that they wanted to support her theatrical endeavors.  The only question was whether the non-custodial parent’s child support payment already covered the cost of the daughter’s acting activity, or whether there should be an additional contribution over and above the child support payment.

In his opinion, Judge Jones began by recognizing that the Child Support Guidelines do, in fact, contemplate that the guidelines-based child support award will cover “entertainment expenses,” defined by law to include:

…fees, memberships and admissions to sports, recreational or social events, lessons or instructions, movie rentals, televisions, mobile devices, sound equipment, pets, hobbies, toys, playground equipment, photographic equipment, film processing, video games, and recreational, exercise or sports equipment.

Thus, “extra-curricular” activities are technically covered by a child support award calculated under the Child Support Guidelines.

But just when you think Judge Jones is going to “zig,” he “zags.”  Judge Jones went on to note that Comment 9(d) of the Child Support Guidelines

…expressly provides that the Court may in fact add supplemental funds to guideline-level support to help defray expenses for the development and special needs of a “gifted” child.  Under the guidelines, if a court deems a child to be “gifted” regarding a particular field or discipline, then it may be financially fair, equitable and appropriate for a court, upon application of a parent, to add a reasonable additional earmarked stipend onto both parents’ basic support obligation to help defray the costs of developing, enhancing and encouraging growth of a the child’s giftedness in a specific area.

The Court further held that the supplemental funds awarded to advance a gifted child’s development  “must be economically reasonable, with significant deference to each parent’s financial situation and actual ability to pay.”  In other words, there must be limits commensurate with the parents’ financial abilities.

The question, then, became whether the child at the center of the case was merely interested in acting as an extra-curricular activity, or whether she is a “gifted” actress.  Judge Jones opined that a child’s giftedness will generally relate “to a child’s aptitude , abilities and/or achievements” in one of four areas:  Academics, Athletics, Technology, or The Arts (though he did not foreclose other areas of “giftedness” outside these general categories).  In the particular case before Judge Jones, he found that the child in question was in fact “gifted” at acting.  As a basis for this ruling, he seemed to primarily rely upon two (2) interviews he had with the child approximately two years apart, and his observation that her dedication to and enthusiasm for acting had only seemed to grow in that time.  His decision did not, however, rest upon any sort of evaluation of her acting skills, as he acknowledged in his opinion that he had not observed her perform.  The decision suggests that a determination of a child’s giftedness may not rest upon his or her actual skill level alone.  In my opinion, the criteria for determining whether a given child is gifted will be tested and refined by further cases addressing this distinction between an extra-curricular activity and a gifted child’s pursuit.  Stay tuned…

headshot_diamond_jessicaJessica C. Diamond is an associate in the firm’s Family Law Practice, resident in the Morristown, NJ, office. You can reach Jessica at (973) 994.7517 or jdiamond@foxrothschild.com.

Mark Ashton, a partner in our Exton (Chester County), Pennsylvania office and former editor of our Pennsylvania Family Law Blog wrote an interesting post entitled “Listening to Your Kids During Traumatic Times” .

In this post, Mark, from a child’s perspective, lists 15 things that parents going through this process should consider, as follows:

  1. As your kid, I want to love both of you fairly and equally and not have you think that my love for you diminishes my love for the person you once promised to love “forever.”

  2. Moving from one house to another sucks and it’s made even worse when you get all stressed about my leaving. I will be back, just like the court order says.

  3. You are not responsible for everything that happens to me and I realize that when parents disagree, it gets disagreeable. But please don’t make it worse by making yourself crazy. If you feel trapped, try being in my place with two powerful adults wrangling over me.

  4. Please don’t share with me what you and my other parent are fighting about. And, oh yes, I did tell you each something different about what sport I want to play because I didn’t have the courage to stand up to either of you and feel your disappointment.

  5. Let me figure out whether I like the other parent’s new significant other. I am stressed with conflicting loyalty issues already.

  6. It really, really hurts when you don’t show up for something we have scheduled.

  7. Yes, gifts and trips are great but I can tell when the motivation is “Love me more.”

  8. When I’m with you, I do miss my other parent and that does not diminish my love for you.

  9. I am not staying with you to provide information about what the other parent is doing.

  10. Understand that when you share your animosity for the other parent or the frustration you have with them, I have just about no ability to help you with that. I am just the child which usually means all I can really do is channel your stress together with mine.

  11. You may have “moved on” emotionally and found the man or woman of your dreams. Please don’t ask me to share your dream until I am ready. I also know when your “friend” is a lot more than a friend.

  12. If I score a goal or play Dorothy in the “Wiz” I would like you both there sharing my joy. If I hug the other one first afterward, it is not a judgment.

  13. I don’t need to know your side of what happened. I don’t have the coping abilities of an adult and I have never been an adult. If money (or its absence) means you can’t say yes to me, that is something you can tell me without feeling that you failed me.

  14. If there is bad news, please don’t ask me to be the courier.

  15. Over time, I may judge the other parent harshly either with justification or without. I may be asking you to listen. I do want you to listen but I’m not ready to sign up permanently for the “Hate the Other Parent” team.

I recommend that everyone take a minute to read the entirety of this very thoughtful piece.

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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.

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