New Jersey law regarding alimony continues to evolve incrementally, as I have discussed in the past. A few years ago, I argued Maeker v. Ross in the New Jersey Supreme Court. It was the first case before the Supreme Court after the legislature passed a law, signed by Governor Corzine upon leaving office, that required child support agreements to be in writing. It took more than 7 years for the Supreme Court to once again rule on an alimony issue, which it did when it today decided Moynihan v. Lynch.
In this case, the parties had in fact signed an alimony agreement. However, the Appeals Division overturned it because the parties did not have lawyers, which was one of the prerequisites for a valid child support agreement under the Statute Amendment Act 2010. alimony contract fraud. This agreement “…on the condition that, within five years of leaving their condo, Lynch will pay off the mortgage, assign it to Moynihan, pay him $100,000, and pay property taxes on the property for two years after his departure.” After the relationship ended, Lynch attempted to renege on the agreement, claiming it was unenforceable because neither party had the agreement reviewed by a lawyer before it was signed, as the requires the law.When the issue was raised in court, Moynihan argued that “…that the provision requiring the parties to obtain the assistance of counsel to enter into a written palimony agreement violates the constitutional prohibition against alter contracts.The trial court determined that the agreement was not an alimony agreement, but rather “…closer to an ‘ordered removal’ in a landlord/tenant case and applied agreement in accordance with its terms.” The court of first instance The court also found that the couple had not entered into an enforceable oral support agreement.
The Appeals Division reversed the finding that the parties’ agreement was clearly an alimony agreement, therefore unenforceable because the parties had not received independent legal advice before signing the agreement. The Appeals Division also denied Moynihan’s claims for equitable relief, including partial performance and specific performance, on the grounds that Moynihan failed to satisfy the traditional elements necessary for such relief. He further concluded that granting Moynihan’s request for partial performance, based on an alleged “oral agreement between the parties, would essentially enable the performance of a contract which the legislator expressly prohibited”. This essentially gave the financial partner the boon of not having to abide by the written agreement of the parties and not having to face the oral agreement argument or other equitable remedies.
The Supreme Court reversed, finding that if the agreement was a palimonia agreement, “…requiring review by counsel violates the substantive due process guarantee of Article I(1) , of the New Jersey Constitution”. In doing so, the Court noted that:
Article I, paragraph 1 limits the power of the state to control individual decision-making in certain fundamental areas concerning a person’s life and livelihood. NJSA 25:1-5(h) requires individuals to retain attorneys before they can enter into an alimony agreement – a contract no more complicated than other family law or business contracts that do not require the examination of a lawyer. NJSA 25:1-5(h) attorney review requirement interferes with an individual’s right to self-determination, distinguishes written palimonia agreements from all other differential treatment agreements, and does not no parallel in the legislative history of this State.
The state generally cannot compel a person to accept an attorney in a criminal or civil case. Since individuals generally have the constitutional right to represent themselves before our criminal and civil courts, it follows that they can generally enter into a contract no more complex than others without an attorney. The legal review requirement also unduly burdens those who
cannot afford a lawyer — those with little or no income — which deprives them of the possibility of concluding contracts accessible to their wealthier counterparts. No valid reason was given for the public need to compel a lawyer to review child support agreements to the exclusion of all other agreements. …
In so ruling, the Supreme Court noted that no other law in this state conditions the enforceability of an agreement between private parties upon review by an attorney. Additionally, they noted that no other jurisdiction that enforces palimonia agreements requires parties to consult with attorneys before entering into palimonia agreements. The Court also noted that “…the original Statute of Frauds, adopted in England in 1677 and from which NJSA 25:1-5 is derived, did not require a person to consult an attorney before entering into a contract.
Comparing the Palimony Agreements to other family law agreements, the Supreme Court noted:
Of all agreements in family law, only an alimony agreement requires that the parties have obtained the independent advice of an attorney in its performance. Without the advice or involvement of attorneys, a married couple in a divorce action may come to an agreement on custody and parenting time, alimony and alimony, equitable distribution,
and other important issues. See NJSA 2A:34-23.1(e). Even prenuptial agreements under the Uniform Prenuptial Agreement and Pre-Civil Union Act allow parties to “voluntarily and expressly waive, in writing, the opportunity to consult independent counsel.” NJSA 37:2-38(c)(4).
The Court further noted that:
… We cannot ignore the potential disparate impact of the law – the reality that a financially dependent partner who is a
party to a child support agreement may not be able to afford a lawyer. We also cannot ignore the irony that according to NJSA 25:1-5(h), parties cannot enter into a child support agreement without an attorney, but can stand in a courtroom and plead. for the execution of such an agreement without a lawyer. …
Certainly, review by counsel would protect a party – especially a dependent party – from possible abuse of power. But lawyer scrutiny presents another hurdle for parties wishing to enter into palimonia agreements and will almost certainly result in fewer such agreements, setting aside the impact on those who cannot afford a lawyer.
With respect to the issue of equitable remedies, in Maeker the court addressed these issues stating: “In light of our finding that oral palimony agreements prior to the 2010 Fraud Act Amendment do not are not extinguished by the new law, we choose not to decide whether equitable forms of relief would be available in the absence of such an agreement”. In Moynihan, they again insisted that “in light of our conclusion that the written support agreement is enforceable, we need not address any of the equitable remedies sought by Moynihan for the application of this agreement. In a sense, the existence of the written and enforceable agreement related to the house precluded the right to raise the other issues relating to alimony, etc. Maybe having a lawyer would have helped after all.