New Jersey Supreme Court Addresses Discretion of Judges When Interpreting Agreements for Termination of Alimony Due To Cohabitation

We have written previously about issues of cohabitation and it’s impact on the right and obligation to receive and pay alimony. We have also written about the courts’ attitudes towards the enforcement of Property Settlement Agreements. On May 3, 2016 the Supreme Court of New Jersey in the matter of Quinn -v- Quinn, — NJ — (2016) [(A-5-14) (074411)], addressed the issue of enforcing terms of a Property Settlement Agreement involving the effect of cohabitation on provisions dealing with alimony in the matter. In this matter the parties, who were married in 1983, entered into a Property Settlement Agreement in 2006 providing that upon the Wife’s cohabitation, per case or statutory law, her alimony would terminate. There were post-judgment factual disputes regarding the Wife’s cohabitation, and after a hearing the trial court found that the wife had cohabited in accordance with the law. The Court, however, suspended rather than terminate alimony, finding that her cohabitation had ended and based on the disparity of income between the parties and her continued need to receive alimony.

The Supreme Court reversed the decision of the Trial Court reasoning as follows:

1) There is a strong public policy favoring agreements. Accordingly agreements should Not be disturbed when the agreement was fairly entered into and understood by the parties.

2) Property Settlement Agreements are contracts that are enforceable in equity but to the extent the parties have agreed to terms based on contemplated future events, they should be enforced absent unconsionability

3) Alimony is an economic right arising out of the marriage, to the extent that separated spouses voluntarily enter into agreements settling the term and duration of alimony those
Agreements if understood when executed should be enforced

Under our current alimony statute, N.J.SA. 2A:34-23, a trial court can terminate or suspend alimony upon a showing of cohabitation. Quinn makes it clear that if the Property Settlement Agreement provides that cohabitation terminates alimony, the trial court does not have the discretion to merely suspend alimony, even though many commentators had previously opined that such a term was subject to the equitable discretion of the trial judge. In fact in this matter, Justices Albin and LaVecchia dissented from the majority’s decision, opining that such a termination of alimony clause  that is “untethered to economic factors” is contrary to public policy.

Certainly it is important that your Property Settlement Agreement clearly set forth the predicate for termination of alimony. The provisions of the agreement should be clearly set forth in the agreement and the history of negations preserved so that the elements of proof are available in the event of a contest.