Edward R. Weinstein, Esq.Edward R. Weinstein, Esq.

Is the New Palimony Law In New Jersey Retroactive?

No.  If there is a change in the law (as is the case regarding palimony in New Jersey), the parties have few retroactive remedies because retroactive relief under a new statute has been held to be unconstitutional in most cases. During my decades as a lawyer practicing divorce and family law in New Jersey, I have seen matrimonial law change and evolve. New laws bring with them new obligations and new forms of relief. However, new laws can only be applied prospectively, unless the legislative history or the statute itself explicitly states otherwise. The following case directs all New Jersey lawyers that the court shall not retroactively apply new palimony law. 

In Maeker v. Ross, the Supreme Court of New Jersey reviewed if the Amendment to the Statute of Frauds, New Jersey Statute 25:1-5(h), passed by the New Jersey State Legislature in 2010, was intended to retroactively render oral palimony agreements entered into before the law became effective as unenforceable. Palimony is a substitute for alimony in cases where the couple were not legally married but lived together for a long period and then ended their relationship. The key issue is whether there was an agreement that one partner would support the other in return for the second making a home and performing other domestic duties beyond sex.

Beverly Maeker and William Ross started a romantic relationship in 1998. They moved in together the very next year and would continue to live together until their separation in 2011. Beverly was completely dependent on William’s financial support. In exchange for his support, she would perform all of the household duties that he asked of her. During their thirteen-year relationship, in which they rented a house together, and held themselves out as a family to the world, William orally promised that he would give Beverly his financial support for as long she lived. Beverly took this promise to heart, and left her twenty-year career in the architectural glass industry in reliance of it.

William signed a power of attorney in December 2010, that gave Beverly authorization to conduct and manage all of his financial affairs. He also signed a living will that named Beverly as the trustee and executor. Despite executing these legal documents, William left Beverly on July 1, 2011. He moved out of their joint home, cut off all ties to her, and ended all financial support.

In court, Beverly argued that she gave a significant portion of her adult life to supporting Williams physical and emotional needs, and progressing his financial interests. She also claimed that her sacrifices were made wholly because of her reliance on William’s representations and promises to give her a lifetime of financial support. As a result, she filed a complaint in the Superior Court of New Jersey, Family Part of Somerset County to enforce their oral palimony agreement. In response, William filed a motion to dismiss and argued that according to 2010 amendment to the Statute of Frauds, New Jersey Statute 25:1-5(h), all oral palimony agreements are unenforceable, even those entered into before the amendments. However, the Family Part dismissed his motion because the judge noted that the Statute of Frauds cannot be retroactively applied to invalidate contracts agreed to before the amendment was enacted. Converse to William’s argument, the Family Part judge found that there was no indication that the New Jersey Legislature intended for the 2010 Amendment to invalidate genuine palimony contracts that may have been entered in the last thirty years.

The New Jersey Appellate Division felt differently and reversed the Family Part’s decision and dismissed Beverly’s complaint with prejudice. According to the appellate panel, it was clear that the 2010 Amendment to the Statute Frauds indicated that a palimony agreement could only be enforced when memorialized in writing. The Supreme Court of New Jersey granted Beverly’s petition for review.

The Supreme Court of New Jersey explained that the 2010 statutory amendment to N.J.S.A. 25:1-5(h), that required that all palimony agreements had to be in writing, and that both parties to the contract must have had the benefit of advice from a lawyer, was a substantial change from the existing law at that time. Before that, oral palimony agreements were enforceable in New Jersey because the parties to this specific type of arrangement and relationship generally did not record their intent in detailed language. This was the law from 1979 until January 18, 2010, when the Amendment became effective. That means there were a large number of couples that may have entered into an oral palimony before that date. The Supreme Court of New Jersey agreed with the Family Part judge that neither the legislative history of the amendment, nor the plain language of the law itself, touched upon the issue of if the New Jersey Legislature intended to invalidate all those oral palimony agreements entered into before the Amendment became effective.

The Supreme Court of New Jersey explained that a major reason for the Legislature’s silence may have been the understanding that courts will usually enforce new statutes prospectively, rather than retroactively, unless the statute itself expresses a contrary intent. This is because, while every person is presumed to know the law, people are not expected to anticipate a law that has not yet been enacted.

The Statute of Frauds requires that certain agreements or contracts, must be executed in writing and signed, because certain agreements can be vulnerable to unreliable and fraudulent methods of proof. That said, most courts hold that as long as an oral contract is legal when it is made, it is not invalidated by a statute passed in the future, requiring that the agreement be in writing. A major reason why the Statute of Frauds should not be applied retroactively, is because to render a previously valid contract as unenforceable would hinder the responsibility of a contract.

New Jersey Statute 25:1-5(h) states that, effective January 18, 2010, a palimony agreement is unenforceable unless the contract is memorialized in writing, and the parties to the contract, entered into it after consulting with an attorney. However, there is no language in the body of the statute or any legislative history that suggests that the Legislature intended the Amendment to invalidate lawful oral palimony agreements entered into in the past. Actually, the long history of the Statute of Frauds supports the proclivity of New Jersey Courts not to give retroactive application to statutes or amendments to statutes that would invalidate previously authorized and legal oral agreements, unless the New Jersey Legislature clearly expressed an intent of the contrary. Therefore, the Supreme Court of New Jersey concluded that the when the New Jersey Legislature passed the 2010 amendment to the Statute of Frauds, New Jersey Statute 25:1-5(h), they did not have the intent to retroactively invalidate the unknown number of oral palimony agreements that had been lawfully entered into before the Amendment became effective.

As such, the Supreme Court of New Jersey accepted the contentions in Beverly’s complaint as true, and determined that she had in fact made a lawful cause of action. Thus, the New Jersey Appellate Division inappropriately focused on the date the complaint was filed, rather than the date the oral palimony agreement was entered into, for retroactivity purposes. The New Jersey Appellate had stated that Beverly and William had the chance to memorialize their long-standing arrangement in writing, in compliance with the new Amendment, between the day the Amendment became effective, and the day their relationship ended. The Supreme Court of New Jersey, however, found that the New Jersey Appellate Division was assuming that Beverly had an obligation to bring her previously valid contract into compliance with N.J.S.A 25:1-5(h), and that William would have just cooperated with memorializing the agreement in writing, and would have hired lawyers for the both of them to further that goal. The Supreme Court of New Jersey found that reasoning to be inconsistent with the traditional retroactivity analysis that applies to the Statute of Frauds. Therefore, the decision of the New Jersey Appellate Division was reversed, and the issue was remanded for a new trial consistent with the Supreme Court’s analysis.