Supreme Court Endorses Alimony Termination for Cohabitation

Michael Booth, New Jersey Law Journal

May 3, 2016

The New Jersey Supreme Court ruled May 3 that a divorce agreement that calls for the termination of alimony if an ex-spouse cohabitates with another person, even if that cohabitation is temporary, is enforceable.

In a 4-2 ruling, the majority upheld a property settlement agreement that mandated the termination of alimony for a woman who lived with another man for a little more than two years after she divorced her husband of 23 years.

Appellate Division Judge Mary Cuff, temporarily assigned and writing for the majority, said both divorcing spouses in this case, Cathleen and David Quinn, voluntarily entered into the property settlement agreement and that both were represented by counsel at the time.

"Marital agreements, including PSAs that clearly and unequivocally provide for the termination of alimony upon cohabitation, are enforceable when the parties enter such agreements knowingly and voluntarily," Cuff said.

Chief Justice Stuart Rabner and Justices Anne Patterson and Lee Solomon joined in the majority ruling.

Justice Barry Albin, joined by Justice Jaynee LaVecchia, dissented. Albin said enforcing such agreements violates the public policy of equity and said the court's 1999 ruling in Konzelman v. Konzelman-in which a majority first upheld the enforceability of PSAs that called for the termination of alimony based on cohabitation-should not be used as precedent.

Such PSAs, Albin said, are "instruments of oppression."

"A property settlement agreement in a divorce action should address the economic consequences of a marriage's dissolution; it should not contain shackles that deprive a spouse of the right to seek love and companionship," he said.

David Quinn's attorney, Bonnie Frost, said she was "thrilled" with the ruling.

"The court confirmed that once you make a deal, you're bound by the deal, as long as it's fair and equitable," said Frost, of Denville's Einhorn, Harris, Ascher, Barbarito & Frost.

Cathleen Quinn's attorney, Vernon solo John McDermott Jr., said the majority should have adopted Albin's position.

"Justice Albin hit the nail square on the head," McDermott said. "This was an unjust result that goes against public policy and discriminates against a divorced spouse who has helped her husband succeed.

"The result is just wrong," McDermott said. "She is now going to be destitute."

The Quinns were married in 1983 and divorced in 2006. They had two children, both of whom are now adults. At the time of the divorce, David Quinn was earning $208,900 a year while Cathleen Quinn was earning about $21,500 a year. The PSA called for David Quinn to pay Cathleen $2,634 biweekly in alimony payments. The PSA also said alimony payments were to be terminated if she cohabitated with someone else.

Beginning in January 2008, Cathleen began cohabiting with another man, John Warholak. At that time, the ruling said, David Quinn moved to have alimony terminated.

The cohabitation between Cathleen Quinn and Warholak continued through the trial, which lasted almost a year, but ended in April 2010.

Sussex County Superior Court Judge Robert Gilson, who now is an Appellate Division judge, ruled partially in David Quinn's favor by ordering that he should be refunded the alimony payments he made while his ex-wife was living with Warholak. Gilson also awarded David Quinn $145,536 in counsel fees.

Both sides appealed. Cathleen Quinn denied that there had been any cohabitation, while David Quinn argued that alimony should have been terminated completely. An Appellate Division panel affirmed Gilson's decision.

Cuff said the lower courts should have been guided by the language of the PSA.

"The record developed in this matter provides no basis to do anything other than to enforce the clear and unequivocal obligation by both parties to each other under the PSA," she said.

If the courts ruled in Cathleen Quinn's favor, Cuff said, it would confirm David Quinn's belief that his ex-wife could cohabitate, lie about it if caught, reject her boyfriend, have alimony revived, and then cohabitate again.

"A settlement agreement is governed by basic contract principles," Cuff said. "It is not the function of the court to rewrite or revise an agreement when the intent of the parties is clear.

"[T]he parties cannot expect a court to present to them a contract better than or different from the agreement they struck between themselves," she said. "[W]hen the intent of the parties is plain and the language is clear and unambiguous, a court must enforce the agreement as written, unless doing so would lead to an absurd result."

Merely because Cathleen Quinn terminated her cohabitation with Warholak does not mean alimony should resume, Cuff said. "In light of the parties' agreement that alimony would terminate upon cohabitation, the circumstances here do not call for a different result," she said.

Cuff said the majority rejected the dissent's reasoning because it was clear that Cathleen Quinn knew the consequences she would face if she began living with another person in a romantic relationship.

"[W]e reiterate today that an agreement to terminate alimony upon cohabitation by fully informed parties, represented by independent counsel, and without any evidence of overreaching, fraud, or coercion is enforceable," Cuff said.

Albin said the court took a "wrong turn" in its ruling in Konzelman.

"An ex-husband should not be empowered through a property settlement agreement to threaten his ex-wife with termination of alimony if she cohabitates with another person, when the living arrangement does not change her financial circumstances," Albin said.

Justice Faustino Fernandez-Vina did not participate.