By: Bobby Epstein
On the heels of the Supreme Court’s recent landmark palimony decision in Moynihan, now the Appellate Division has determined in the new published (precedential) decision of Primmer v. Harrison that the Moynihan ruling applies retroactively. Well, what does any of that even mean? As we previously blogged, New Jersey law requires that all agreements (entered after the law went into effect in 2010) involving “[a] promise by one party to a non-marital personal relationship to provide support or other consideration for the other party . . . after its termination” must be in writing. Until the Supreme Court of New Jersey’s recent decision in Moynihan, each party to such an agreement required the advice of independent legal counsel to render such a writing binding and enforceable. The Moynihan decision struck down that requirement as violative of an individual’s due process rights.
Here are the many facts that you need to know:
- The parties began cohabiting in 1988 and ended their relationship in 2011.
- No children were born of the relationship.
- Sharyn earned approximately $50,000 through a medical billing job and Michael earned more through a debt collection law firm.
- Sharyn was 67 years old, and Michael was 70 years old when the trial occurred.
- During their relationship, the parties negotiated a written agreement with the aid of an attorney (Ira) who also happened to be Michael’s long-time friend. Sharyn knew Ira through Michael. Ira practiced family law but never served as a mediator.
- Ira helped the parties resolve the dissolution of their relationship, but did not open a mediation file, hold a mediation session, bill the parties for mediation services, or ask the parties to sign a mediation retainer.
- No discovery occurred, nor or a disclosure between the parties of their respective assets.
- Sharyn expressed concern about her ability to support herself to both Ira and another mutual friend. Michael wanted Sharyn to vacate their shared home and took her to see new potential residences.
- Michael advised Sharyn to retain an attorney. After doing so, all further communication occurred between Sharyn’s attorney and Ira.
- Plaintiff’s attorney represented that Ira began representing Michael because her attempts to correspond with Michael were not productive, and that Ira’s “role-change” to acting as Michael’s attorney was “pretty extraordinary” since he was previously acting to help the parties resolve the matter.
- Ira sent correspondence to Plaintiff’s attorney with a deadline to sign the agreement being negotiated between the parties and that no further negotiations would occur. Ira referred to Michael as “my client” therein. Such reference to Michael as Ira’s client occurred again in written correspondence shortly thereafter also imposing deadlines to sign the agreement.
- Approximately two weeks later, Ira corresponded with Plaintiff’s attorney, provided a countersigned agreement from Michael with Michael’s checks to Sharyn and instructions from Michael regarding other aspects of the parties’ arrangements.
- The agreement itself contained the following relevant information: (1) the preamble indicated the parties “made a full disclosure of all relevant financial information;” (2) the parties agreed to buy a condominium for Sharyn and would share equally in the down payment with Michael front loading the down payment because Sharyn did not have access to funds; (3) Michael would pay a $140,000 down payment and Sharyn would pay him $70,000 within three years of the closing date without interest unless timely payment did not occur; (4) Michael agreed to pay the mortgage and real estate taxes, condo dues, assessment and insurance, $1,500 per month to Sharyn on a permanent basis, various moving expenses and related lifestyle expenses; and (5) a portion of Sharyn’s counsel fees.
- The agreement provided it:
- "shall be considered a contract by the parties duly enforceable in" court and contained a severance clause upholding the remainder of the agreement even if a court declared a portion invalid.
- a "defaulting party shall indemnify the other for all reasonable expenses and costs, including attorney's fees, incurred in successfully enforcing this [a]greement."
- Regarding representation, it further stated:
- “[Defendant] acknowledges that he has been advised of his right to obtain independent legal advice by counsel of his own selection. [Defendant] is giving up his right to have an attorney review this [a]greement before he signs it. [Plaintiff] has not discouraged [defendant] from obtaining an attorney. [Plaintiff's lawyer] has not rendered any legal advice to [defendant]. . . . . The parties mediated with . . . Cohen. Both parties acknowledge being satisfied with the mediator's services.” Sharyn’s attorney indicated that such boilerplate language was initially drafted when she of the understanding Michael was representing himself, and that it was never removed once Ira was acting on Michael’s behalf.
- In November 2011, Sharyn filed a palimony complaint for a judgment incorporating the settlement agreement. Sharyn’s lawyer sent the complaint to Ira with an acknowledgment of service, which he signed and returned. The complaint was dismissed for reasons unrelated to the appeal.
- Thereafter, the parties lived by the terms of the agreement until 2017, except Sharyn never paid her share of the condo down payment. Starting in July 2017, Michael stopped paying to her $1,500 per month and, in August 2017, Sharyn received from a different lawyer on Michael’s behalf a letter claiming the agreement was “null and void” because Michael “was not represented by an attorney as required by pertinent New Jersey [s]tatutory [l]aw.” Michael thereafter indicated he would stop paying Sharyn’s cell phone, mortgage and home maintenance.
- In February 2018, Sharyn filed a complaint for breach of the agreement and Michael filed a counterclaim indicating the agreement should be null and void because he did not have the independent advice of an attorney at the time the agreement was signed as the law required. At trial and despite the facts outlined above, Michael and Ira denied Ira represented Michael when the agreement was negotiated and signed. Sharyn’s lawyer testified to the contrary.
- The trial court enforced the agreement and found Ira acted as Michael’s legal counsel.
The Appellate Division Weighs In
On appeal, the Appellate Division noted how the Supreme Court of New Jersey’s recent decision in Moynihan struck down the attorney review mandate in that part of our Statute of Frauds requiring a written agreement where there is “[a] promise by one party to a non-marital personal relationship to provide support or other consideration for the other party . . . after its termination.” In other words, such an agreement no longer required the independent advice of legal counsel for both parties to be binding.
The issue on appeal in Primmer was whether the Moynihan ruling should apply retroactively to written agreements reached prior to its entry. In applying that ruling retroactively, the Appellate Court held:
“We are unpersuaded by these arguments. The gravamen of Moynihan is that the statutory requirement to have counsel violated fundamental constitutional rights. It matters not that this was not a basis of either party's claims at trial here because, in the end, defendant invoked the invalidated portion of the statute as a sword to attempt to avoid the parties' agreement despite the fact they both viewed it as valid and honored its terms for many years. To ignore Moynihan by declining to apply it here would run contrary to the parties' conduct and frustrate their bargain, precisely the harm the Court intended to prevent.”
The Court also found its ruling facilitates our State’s public policy of settling disputes and that there were not many other people similarly situated in the “pipeline” that would be adversely impacted by the Court’s ruling. As a side note, the Appellate Division also commented that it affirmed the trial court’s determination that Ira did, in fact, act as Michael’s legal counsel.
Where does this leave us? Well, this is part two of a potential palimony trilogy with the issue of whether so-called equitable claims can still be raised by a party involved in such a non-marital relationship. Oftentimes these cases can prove very complex and highly fact-specific. Having zealous legal counsel to aid you in navigating these potentially perilous waters is critical.