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Bayne v. Johnson

October 27, 2008


On appeal from Superior Court of New Jersey, Chancery Division, Family Part, Hudson County, FM-09-2381-04.

The opinion of the court was delivered by: Collester, J.A.D.



Argued November 5, 2007

Before Judges A. A. Rodríguez, Collester and C.L. Miniman.

Defendant Earl Johnson appeals from a judgment entered in the Family Part in favor of plaintiff Fiona Bayne for $384,000 in damages as palimony and from a separate award of $48,660 against both Earl and his wife, defendant Carolyn Johnson, representing a fifteen percent interest in real property located in North Bergen. Carolyn initially appealed the second portion of the judgment, but that appeal was dismissed at her request. Fiona has cross-appealed from that portion of the judgment denying her counsel fees.

The facts are unique. Carolyn, born on September 16, 1916, is the income beneficiary of a spendthrift trust established by her grandfather which pays her $200,000 to $300,000 per year until her death, when the corpus of about $11 million will devolve to her issue. Carolyn married several times and has three children from whom she is estranged. In 1971 she was involved in a serious automobile accident which left her partially paralyzed. After brain surgery to remove an embolism, she suffered the loss of short-term memory and stroke-like symptoms including a tendency to fall. Age has further compromised her health. She requires full-time caregivers to assist her with the daily necessities of life.

Earl is twenty years younger than Carolyn. He grew up in southern California, attended junior college, obtained an online degree, worked as a police officer, and then transitioned into cosmetology. In 1975 he operated a beauty salon and health spa called EDJ's on Wilshire Boulevard in Beverley Hills. It was there that he met Carolyn in 1976. She took an interest in the business, and within a few months she became an investor. Soon after Earl and Carolyn expanded the business by opening similar facilities in Las Vegas hotels.

Carolyn confided to Earl that her son, an attorney, had a plan to petition a court to declare Carolyn incompetent and administer her trust income. After discussing this issue with an accountant, Earl and Carolyn decided that one way to thwart the son's plan was to marry so that Earl would be the next of kin and Carolyn could continue to use the income as she saw fit. It was understood that their relationship was platonic, that they would live together only as friends, and each would be free to conduct their own personal lives. They were married in Los Angeles on May 12, 1978. It was Earl's third marriage and Carolyn's seventh. Earl was forty-one and Carolyn, sixty-one. They moved into an apartment in Beverly Hills, but Earl spent considerable time at Carolyn's Las Vegas condominium to oversee their salons in several hotels.

In 1979 a transfer of ownership of the hotels forced Earl and Carolyn to close their Las Vegas salons, and they sold the one in Beverly Hills. They next went on a cruise where Earl met a man who gave him the idea of starting a business involving metallurgy processing. So in 1980 Earl started a business in Ireland extracting precious metals from used x-ray film and computer scraps. He lived in an apartment in Dublin during the work week to run the business while Carolyn lived in London and later rented a home in Sligo and lived with the owner named Bridy Regan, who served as her caregiver for the next several years.

In 1981 Fiona was twenty-five, a flight attendant with British Airways on inter-European flights, and living in Scotland with a boyfriend. Earl, then forty-five, met Fiona when he was a passenger on a flight between London and Dublin. He handed her his business card after writing a note on the back asking her to call him sometime. Fiona waited about a month and called. They met in London a few weeks later and shared a romantic evening. Over the next few months Earl romanced Fiona in style, meeting her at the airport in a stretch limousine, taking her to expensive restaurants and other nice places. He bought her expensive gifts, including a ring which she testified he told her was an engagement ring. Earl traveled to Scotland to meet Fiona's family, and later they flew to California to meet his parents and son. Needless to say, Earl did not mention he was married, and it did not occur to Fiona that he might be.

In late 1981, Earl's metallurgy business went sour, and he sold it for a small profit. He decided to move to the Bahamas where he kept his boat and opened an investment business. Fiona testified she did not want a long-distance relationship and told Earl she would break off the relationship unless they got married. Fiona said that when Earl stated he wanted to make his new business profitable before they married, she relented and agreed to continue the relationship.

Earl, Carolyn and Bridy moved to Paradise Island, Carolyn rented a villa, and Earl divided his time between the villa and the boat he harbored on the island. Because of her job with British Airways, Fiona was able to fly to the Bahamas at minimum cost. She visited Earl about twenty times over the next two years, always staying with him on his boat. She knew nothing of Carolyn.

When Fiona told Earl she was tired of traveling back and forth from Europe, Earl suggested she quit her job and live in the Bahamas. She said he was able to pay all of her expenses because he had an independent income. Fiona agreed although she said she was happy working at British Airways and knew that by quitting she gave up her salary, travel benefits, a pension plan, and the opportunity to attend a management training program. Earl, however, testified that Fiona expressed frustration that she had not received a promotion and was interested in leaving British Airways.

Fiona took advantage of a L12,000 buyout that British Airways was offering for voluntary resignations in 1982 and moved to the Bahamas to join Earl. Although she brought some money with her, her living expenses were paid from a joint bank account opened and funded by Earl. When she arrived, Earl rented a condominium for her on the other side of the island from the villa where he sometimes lived with Carolyn. Before Fiona left the U.K., Earl explained she would have to live separate from him at first because he lived with an elderly, sick aunt who depended on him and did not want anyone else living with her.

During the year she spent in the Bahamas, Fiona did not work, and Earl paid all of her expenses. They would "go fishing, tour around the island, go to the beach, visit with friends, and enjoy life." When Earl's tax shelter business began to fail, he started a mortgage business with Fiona which Earl said would do better in Florida. So they moved to Ft. Lauderdale where Earl, Carolyn and Bridy rented a villa, and Fiona moved into a nearby apartment. Fiona said she had still not met Earl's "elderly aunt."

Earl and Fiona both worked in the business which began as a financial consulting company and later became a mortgage services company. Earl continued to pay Fiona's rent and living expenses. He also purchased a new convertible for her. They traveled together on business to France and London. Fiona was regularly introduced to Earl's friends and associates as his girlfriend. It was during their first year in Florida, Fiona testified, that she finally met Carolyn. At a Christmas lunch Earl introduced them to each other simply as Fiona and Carolyn. Of course Fiona believed Carolyn to be the elderly and possessive aunt.

Living in Florida, Earl and Fiona would usually go to work, spend the day in the office, come home to walk the dogs, then go out to dinner or socialize with friends. Fiona took classes to obtain a real estate license and learn about the mortgage business. Matters were complicated by the fact that Fiona never got a green card so that all the income from the business was attributed to Earl. They lived high and spent all they earned. When things went well with the business, they lived on the proceeds. Oscar Wilde quipped, "Nothing succeeds like excess," and this was very true for Earl and Carolyn at this time.

But Fiona's mother kept asking when she and Earl were to be married, and at Fiona's insistence plans were made for a wedding in Scotland. Caterers were booked, flowers were arranged, invitations were printed, and Fiona and Earl made application for a marriage license. It was then that Earl's carefully constructed plan began to unravel. He cancelled the first wedding date, claiming a business commitment made it impossible. After the wedding was rescheduled, the licensing office in Scotland called Earl. After he hung up the phone, he told Fiona that there was a delay in getting the marriage license approved. He also said that the wedding had to be put off again because he had to be abroad on another business trip. Fiona now suspected something was wrong.

While Earl was out of the country, Fiona went to California, reviewed Earl's marriage records, and discovered that he was married to Carolyn. She immediately called him in Bangkok. At first he lied, but in a subsequent phone call he admitted he was married to the woman he called his aunt. In a series of overseas phone calls Earl assured Fiona that his relationship with Carolyn was not a true marriage, and he begged her not to leave him. He told her he contemplated talking to Carolyn about a divorce but could not bring himself to do so after she broke her hip. Fiona met him in London, and they spent a week or two discussing their relationship. When they returned to Florida, Earl thought that things were smoothed over. But Fiona started making plans with her mother to move on. She asked Earl for $20,000 as traveling expenses back to the United Kingdom and six months living expenses. Earl agreed to help if it was her final decision to leave, but he reiterated his feelings for her and his plan to move on to "the next step" as soon as the business was profitable and he could set up Carolyn independently.

Outside events intervened in late 1985 or early 1986 when Earl received word that his brother in Las Vegas was terminally ill and wanted Earl to help him run his business of minting coins for use by casinos. Earl started traveling to Las Vegas to assist his brother while Fiona continued to run their business in Florida. After Earl's brother died, Earl took over his business. He convinced Fiona to abandon her plan to leave and move with him and Carolyn to Las Vegas. Fiona agreed on condition that she and Earl live together under the same roof and that Earl explain their relationship to Carolyn. So after three years in Florida, Earl, Carolyn and Fiona moved to Las Vegas where they lived in a 7,000 square foot ranch home costing between $6,000 to $7,000 a month. But it soon became clear that Carolyn was not happy with the new living arrangement.

When Earl and Fiona were in Atlantic City on a business trip, Carolyn left the Las Vegas house, emptied the joint bank account, moved in with one of her ex-husbands in Chicago, and filed for divorce from Earl. Carolyn's move was disastrous for Earl and Fiona. A lawsuit was initiated by Earl's sister-in-law and the other partners in the minting business. Since the house was in the company name, Earl and Fiona were evicted and ...

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