Take Care with a Cohabitation Clause

The New Jersey Supreme Court has once again spoken on a family law matter. On May 3, 2016, a precedential decision was issued in Quinn v. Quinn, which involved (at the Trial Court level) the suspension of the former husband’s alimony obligation during the former wife’s period of cohabitation, rather than a complete termination as the parties had agreed upon in their Property Settlement Agreement. The Supreme Court held that the Trial Court’s decision to ignore the terms of their Agreement, and the Appellate Division’s decision to affirm the Trial Court’s exercise of equitable discretion, was in fact error. For individuals who have already entered into negotiated agreements with so-called “cohabitation clauses,” and for individuals going through a divorce and mulling a “cohabitation clause,” this decision brings with it practice points for attorneys drafting these clauses, and for litigants subject to their terms.

The Quinn Case

The parties in Quinn married in 1983 and divorced in 2006. At the time the parties were negotiating their Property Settlement Agreement, both were represented by counsel. Mr. Quinn, as the breadwinner, agreed to pay just over $60,000.00 per year in alimony to Ms. Quinn. However, his obligation would terminate upon either of the parties’ deaths, Ms. Quinn’s remarriage, or Ms. Quinn’s cohabitation.

In 2007, Ms. Quinn began a dating relationship with Mr. Warholak, which substantially progressed over the years. In March 2010, Mr. Quinn filed a Motion for what he believed he was entitled to per the terms of their Property Settlement Agreement – the termination of his alimony obligation due to Ms. Quinn’s cohabitation. Perhaps a little too conveniently, Ms. Quinn and Mr. Warholak broke up soon after the Motion was filed, such that there was no continuing cohabitation as the Motion made its way through the Trial Court. Nevertheless, a Plenary Hearing began in August 2010, and almost a year later, the Trial Court determined Ms. Quinn had in fact been in an “‘intimate and committed relationship’…for over two years,” and that she and Mr. Warholak had in fact been living together in Ms. Quinn’s home for over two years.

Even though it found cohabitation and that Ms. Quinn had been less than credible in her testimony, the Trial Court merely suspended Mr. Quinn’s obligation during the two years it found she had cohabited, reasoning that to do otherwise would be unfair in light of Ms. Quinn’s complete dependence on the alimony to support herself. Mr. Quinn was also awarded $145,000.00 in counsel fees and costs.

Both parties appealed, and the Appellate Division affirmed as to all provisions of the Trial Court Order. The Supreme Court thereafter accepted certification of the following issue: “whether the trial court properly invoked its equitable power to modify the clear and unequivocal terms of a PSA entered knowingly and voluntarily by both parties.” (emphasis added).

To answer this question, the Court looked to the established law on the enforceability of negotiated agreements, and in what instances the Court could change the terms of such agreements. At the most basic level, the Court found that so long as a “cohabitation clause” was agreed upon in a voluntary, knowing, and consensual manner, no Court could change its terms and make for the parties a different or better agreement than they had initially set out to make themselves.

The Supreme Court found that Ms. Quinn had admitted in the Trial Court that she accepted the terms of the Property Settlement Agreement knowingly and voluntarily, that she knew what cohabitation entailed, and she knew what would happen to her alimony if she in fact cohabitated. Thus, there was no reason for the Trial Court to go out of its way to create “an agreement different from the one to which the Quinns agreed,” and thus no reason for the Appellate Division to affirm that decision. As such, Mr. Quinn was “entitled to full enforcement of the parties’ agreement,” and the Trial Court’s decision was reversed.

Takeaways from this Precedential Decision

Ms. Quinn’s relationship with Mr. Warholak may have ended for perfectly innocent reasons, or it may have ended for strategic reasons once she realized she may in fact lose her economic lifeline if it continued. What this case teaches us is that our actions are just as important as the words governing those actions, and that ceasing cohabitation may not be enough to save oneself from the termination of alimony if you have agreed, in writing, and under no duress or misunderstanding, that cohabitation is a terminating event.

As attorneys, we must always be mindful of how the words we write into an agreement will be interpreted by the parties and the Courts years into the future. Just as much careful consideration is also put into whether or not a “cohabitation clause” is even recommended to a client, however now, as opposed to the time period in which the Quinns’ Property Settlement Agreement was being negotiated, cohabitation can be a terminating event pursuant to statute.

Knowing what is in your Property Settlement Agreement is one thing, but actually understanding the practical effects of the terms contained therein is certainly just as, if not more, important. Whether you pay or receive alimony – or you believe you will be paying or receiving it in the future – it is important to know under what circumstances it can be modified, suspended, or terminated. To review your Property Settlement Agreement, or to understand how alimony and cohabitation may factor into negotiating a settlement in your divorce, contact Jacobs Berger, LLC, today.

For more information, or to talk about your divorce options with a NJ same sex divorce lawyer, give our office a call at 973-718-7705.

About the Author:

Sarah Jacobs is dedicated to protecting the interests of clients in family law proceedings. Certified by the Supreme Court of New Jersey as a Matrimonial Law Attorney, and Qualified as a Mediator, Sarah possesses close to 15 years of experience practicing law throughout the State of New Jersey. Together with partner Jamie N. Berger, Esq. their boutique Morristown family law firm is managed with the goal of providing high-quality service tailored to each client's individual needs. In her capacity as both a family law mediator and litigator, Sarah works with negotiation-minded clients in a cooperative setting. She is also a skilled litigator with the knowledge needed to take even the most complex cases to court, if necessary.

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