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NOT SO FAST II: THE BATTLE OVER THE ENFORCEABILITY OF ORAL PALIMONY AGREEMENTS CONTINUES

Almost 2 years ago I wrote a series of blogs discussing the viability of palimony claims in the State of New Jersey in light of a January, 2010 Amendment to the Statute of Frauds (N.J.S.A. 25:1-5(h)), requiring that for any promise by one party in a non-marital personal relationship to provide support to the other person to be enforceable, that promise had to be both in writing and made with independent advice of counsel for each of the parties. In one of my previous blog posts: “TO MARRY OR NOT TO MARRY – IS THERE STILL A QUESTION?”, I discussed the case of Maeker v. Ross, 430 N.J. Super 79 (App. Div. 2013), whereby the Appellate Division answered with a resounding “YES” the question of whether this statute applied retroactively to pre-existing non-marital relationships, where an unwritten promise of support was allegedly made prior to this January, 2010 Amendment. The Appellate Division concluded that a cause of action accrues only at the time that the support agreement is breached, not at the time the promise of support is purportedly made and, therefore, unless the breach occurred before January of 2010, the statutory Amendment barred such a cause of action for enforcement. In essence, the Appellate Division in Maeker seemed to adopt the maxim that “ignorance of the law is no excuse” in retroactively applying this change in the law; namely, if the parties to a non-marital relationship had been operating under an unwritten promise of support prior to the statutory Amendment, they were charged with the knowledge of this change in the law and were under a duty to reduce that promise of support in writing with each party obtaining independent advice of counsel if they wanted that promise to be enforceable in the future.  The Appellate Division also rejected “equitable principles” such as unjust enrichment, quantum meruit, quasi-contact and equitable estoppel along with claims of partial performance as either exceptions to the retroactivity of the Amendment or as a means to enforce a promise of support.

I posited that this case seemed to effectively serve as a death knell to palimony claims in New Jersey as rarely, if ever, are such “agreements” of support put in writing.  However, in my blog several months later, entitled “NOT SO FAST: THE OBITUARY OF PALIMONY’S DEMISE MAY BE PREMATURE“, I noted that not only had our Supreme Court granted Certification to review the Appellate Division’s decision in Maeker, but other trial court level decisions were declining to follow the Maeker Appellate Court’s seemingly hard and fast rule and courts were allowing for the continued enforcement of alleged oral palimony agreements in order to prevent an inequitable result where the circumstances of those cases warranted.  Hence, I posited that writing the obituary of palimony’s demise may have been premature in light of those legal developments.

This question appeared to have been settled when on September 25, 2014, the Supreme Court of New Jersey rendered its decision in Maeker v. Ross, 219 N.J. 565 (2014). As summarized in his blog “A PROMISE IS A PROMISE“, my colleague, James P. Yudes, Esq. noted that the Supreme Court disagreed with the Appellate Division and found that the Legislature did not intend the 2010 Amendment to apply retroactively to oral agreements that predated the Amendment. In so doing, the Supreme Court was of the view that in amending the Statute of Frauds, the Legislature was “aware” that this Statute had been construed, absent legislative expression to the contrary, not to reach back to rescind preexisting, lawfully enforceable oral agreements, and that in this instance, the Legislature had given no indication that it had intended to depart from the traditional view that changes to a statute apply prospectively and not retroactively.  While the Amendment had included the language that the amendment was to take effect immediately, the Supreme Court noted that neither the plain language of the statute itself, nor the legislative history, gave any indication that the Legislature intended to render existing palimony contracts previously enforceable null and void.  Hence, the Supreme Court reversed the Appellate Division and reinstated Ms. Maeker’s palimony complaint.  In light of the Court’s pronouncement, it appears that oral palimony contracts entered into prior to the January 2010 Amendment to the Statute of Frauds remain enforceable even if not reduced to writing and, therefore, “a promise is a promise”.

NOT SO FAST!

Obviously disagreeing with the Supreme Court’s view of what the Legislature “intended”, a bill has been introduced and is now pending before the New Jersey Legislature in direct response to the Supreme Court’s decision so as to clarify that the Amendment to the Statute of Frauds was intended to be retroactively applied to agreements of support that pre-dated the amendment’s effective date of January 18, 2010. This proposed Legislation would provide:

1.a. A promise by one party to a non-marital personal relationship to provide support or other consideration for the other party, either during the course of such relationship or after its termination, that was made prior to January 18, 2010, the effective date of P.L. 2009, c. 311, is not binding unless it complies with the requirement of subsection h, of R.S. 25:1-5.

b. Any such promise is binding only if it is reduced to writing, and signed by the party to be charged therewith, or by some other person thereunto by him lawfully authorized, and was made with the independent advice of counsel for both parties, within one year of the effective date of this section.

2. This act shall take effect immediately.

Hence, it is clear under this legislation, that palimony agreements allegedly entered into prior to January 18, 2010 would only be enforceable if brought into compliance with the Amendment within one year of its effective date, by reducing the agreement to writing and doing so under the independent advice of counsel for each party to the agreement. Despite opposition by the New Jersey State Bar Association, this bill has already been approved by the State Senate Judiciary Committee, and will likely be approved by the full Legislature in due course.

Even if this bill passes and becomes law, will this be the end of the story on palimony? It is noteworthy that while the Supreme Court rendered its decision by holding that the 2010 Amendment to the Statute of Frauds did not apply retroactively to oral palimony agreements made prior to that amendment’s effective date, the Supreme Court did not decide whether equitable forms of relief might also be available in the absence of such a written agreement. Will the courts now look favorably in allowing equitable claims to form a basis of relief in order to avoid what might be viewed as inequitable or unjust results from a hard and fast application of the Statute? What about those circumstances where there has been a breach and claims brought for enforcement of a pre-existing palimony agreement before the expiration of the 1 year time frame within which to come into compliance with the Statute? Will the Legislature have the final word or will our Courts (and creative lawyering) continue to find ways to stretch the legal boundaries to achieve a fair and just result where circumstances warrant?  I suspect that the end of this story has yet to be told. Stay tuned.