For the uninitiated, palimony is defined as a promise of so-called lifetime support (both during and after the relationship) by one person to another in a relationship in which there is no marriage or other legally recognized form of relationship such as a civil union or domestic partnership. It is generally reserved for situations in which one party is financially dependent upon the other party and relied upon express promises that the other party would support him or her. For many years, New Jersey courts enforced “oral” palimony agreements in marital-type relationships where one party induced the other to enter or remain in the relationship by a promise of support.
There is a law in New Jersey known as the Statute of Frauds (N.J.S.A. 25:1-5), which addresses certain oral agreements that may be “susceptible to fraudulent and unreliable methods of proof.” To minimize potential fraud with these types of agreements, the Statute of Frauds mandates that certain agreements be reduced to a writing and signed. In short, the general rule is that certain agreements falling under the Statute must “be in writing and signed by the party against whom enforcement is sought.”
In 2010, the State Legislature amended our Statute of Frauds to include palimony agreements. Consequently, a promise by one party in such a relationship made after the statute’s amendment now must be reduced to a signed writing to be enforceable. In other words, oral palimony agreements are no more unless the relationship and related promise predated the amendment’s 2010 effective date.
This amendment to the Statute of Frauds, however, went a step further as to palimony agreements by requiring that these written and signed agreements also involve the “independent advice of counsel for both parties.” N.J.S.A. 25:1-5(h). The requirement of independent advice of counsel for both parties was the distinguishing feature for palimony agreements that did not apply to any other agreement covered by the Statute of Frauds. As noted by our Supreme Court, no other law in this state conditioned enforceability of an agreement between private parties on attorney review.
This distinguishing feature survived for twelve years until this March 2022 when our Supreme Court in the landmark decision of Moynihan v Lynch determined that the attorney review mandate for palimony agreements violated the substantive due process guarantee of our State Constitution protecting against interference with the right to personal autonomy.
Moynihan involved two parties – namely, Ms. Moynihan and Mr. Lynch – who were in a long-term personal relationship where they never married and never otherwise entered into any other form of legally recognized relationship. In anticipation of a potential dissolution of their relationship, they signed and notarized a written agreement sometime between 2012 and 2014 (after the 2010 Amendment to the Statute of Frauds), without the assistance or advice of counsel. This agreement provided that Mr. Lynch would pay off a mortgage for Ms. Moynihan’s home and pay her real estate taxes for two years following a separation event, amongst other things.
The parties separated in 2016 and Mr. Lynch refused to abide by their written agreement. Ms. Moynihan filed a Complaint seeking to enforce the agreement (including an oral agreement that was allegedly made prior to the written agreement and the amendment to the statute). Initially, the trial court determined that there was no oral agreement between the parties before 2010 as argued but Ms. Moynihan and that their written agreement was not a palimony agreement but more akin to an “orderly removal” in a landlord/tenant dispute and enforced their written agreement. The matter went to the Appellate Division where the trial court decision was reversed. The matter then ended up before the New Jersey Supreme Court.
The Supreme Court reversed the Appellate Division, holding that that the palimony agreement, as written and signed, without the requirement of attorney review, is enforceable. In making this ground-breaking decision, the Supreme Court determined that the attorney review requirement of N.J.S.A. 25:1-5(h) directly infringed on the right of parties’ substantive due process liberty interests in crafting and entering such agreements without the forced involvement of attorneys. Ultimately, the Supreme Court could not “ignore the irony that, under N.J.S.A. 25:1-5(h), the parties cannot enter a palimony agreement without counsel, but can stand in a courtroom and argue for the enforcement of such an agreement without counsel.” As such, “in light of the nature and importance of the right of willing parties to enter palimony agreements without the burden of attorney participation,” the Supreme Court concluded “that the imposition of an attorney-review requirement is an arbitrary government restriction that contravenes [parties’] substantive due process rights.” Consequently, the Supreme Court struck down the attorney-review requirement in N.J.S.A. 25:1-5(h) as to palimony agreements. Parenthetically, although the Court found the written palimony agreement to be enforceable, the Supreme Court also affirmed that there was no oral agreement between Mr. Lynch and Ms. Moynihan thereby endorsing the initial trial court decision that there was sufficient evidence in the trial court record to support that Mr. Lynch did not make an explicit or implied oral promise to support Ms. Moynihan.
Ultimately, while the Supreme Court held that attorney review should not be required for palimony agreements, the Court made sure to acknowledge the benefit and guidance that attorneys provide in reviewing or crafting a palimony agreement. Indeed, “attorneys will be better able to draft palimony agreements and other contracts” but individuals are still free to do so on their own without consulting or retaining counsel. In the end, palimony agreements must still be in writing and signed, if not by both parties, at least by the party against whom the agreement is to be enforced – just like all agreements enumerated in the Statue of Frauds.
Lastly, it is important to note that because the Supreme Court determined the written and signed agreement between Mr. Lynch and Ms. Moynihan was enforceable, it did not address any of the potential equitable remedies (or common law defenses) presented by Ms. Moynihan as a basis for enforcement of the Agreement outside of the Statute of Frauds. Specifically, amongst other things, Ms. Moynihan argued promissory estoppel (essentially arguing Mr. Lynch made a clear promise upon which Ms. Moynihan relied upon to her substantial detriment) and partial performance (arguing that the agreement should be enforced based upon alleged partial performance of their oral agreement) to remove the alleged oral agreement from the Statute of Frauds. Given that the Supreme Court did not address these equitable remedies or defenses presented by Ms. Moynihan, the door – for now – remains open to such claims.
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