January 5, 2009
ELYSE B. AUERBACH, PLAINTIFF-RESPONDENT,
RUSSELL J. AUERBACH, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Bergen County, Docket No. FM-02-676-96.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 15, 2008
Before Judges Parker, Yannotti and LeWinn.
In this post-judgment dissolution matter, defendant Russell Auerbach appeals from the order entered on September 10, 2007, denying his application to terminate alimony based upon plaintiff's cohabitation, and from the order entered on November 16, 2007, denying his motion for reconsideration. For the reasons that follow, we reverse.
The parties were divorced on February 23, 1996, after almost twenty-four years of marriage. Three children were born of the marriage, all of whom were emancipated at the time of defendant's application to terminate alimony.
The parties executed a property settlement agreement (PSA) incorporated into their final judgment of divorce. Pursuant to the PSA, defendant agreed to pay limited duration alimony to plaintiff according to the following schedule:
(1) Commencing upon the first day of the month next following the date of execution of this Agreement, through and including April 1, 2001, HUSBAND shall pay to WIFE for her support and maintenance the sum of ELEVEN THOUSAND TWO HUNDRED ($11,200) DOLLARS per month on or before the first day of every month.
(2) Commencing upon May 1, 2001, through and including December 1, 2009, HUSBAND shall pay to WIFE for her support and maintenance the sum of SEVEN THOUSAND SEVEN HUNDRED ($7,700) DOLLARS per month, on or before the first day of every month.
The PSA provided for the termination of alimony as follows:
The terms of this Article shall continue until December 1, 2009 unless terminated by any one or more [of] the following:
(1) Death of WIFE;
(2) Remarriage of WIFE;
(3) Repudiation or modification of this Agreement by mutual consent of the parties, provided that said repudiation or modification is in writing duly signed by the parties and witnessed;
(4) Death of HUSBAND.
On April 13, 2007, defendant filed a motion to terminate his alimony obligation based upon plaintiff's cohabitation with an unrelated male, one Craig Bagin. Defendant certified that plaintiff and Bagin "have been cohabitating for the past nine (9) years," and, therefore, he claimed that his "obligation to make spousal support payments should have been terminated in March 1998."
Defendant further certified: "[Plaintiff] hid her relationship with Mr. Bagin from me. Had I known that they were living together at the time, I would have sought to terminate my obligation." Defendant calculated that between March 1, 1998 and April 13, 2007, he had paid plaintiff $949,900 in alimony, and he sought reimbursement of that amount.
In her opposing certification, plaintiff contended that in their PSA, the parties had expressly "agreed not to include a cohabitation provision triggering a termination of the defendant's alimony obligation[,]" in exchange for plaintiff's acceptance of limited duration, rather than permanent, alimony after a lengthy marriage, as well as her waiver of equitable distribution of defendant's business and pensions. Plaintiff asserted that the conditions set forth in the PSA were "the only circumstances under which the defendant's alimony obligation could be terminated/revisited."
Plaintiff also disputed defendant's claim that he had "just 'learned'" of her relationship with Bagin. Plaintiff certified that:
Mr. Bagin has attended various family functions where both the defendant and our children have been present, including my son, Brian's wedding five years ago and Randy's graduation 7 years ago from Cornell. In fact, the defendant has had several conversations with Mr. Bagin over the last several years. Furthermore, our answering machine states "you have reached Elyse and Craig . . . " which the defendant has left several messages on. Thus, the suggestion that he just became aware of him is absurd.
Plaintiff further asserted that, notwithstanding her cohabitation with Bagin, she "exclusively pay[s] the expenses associated with the residence." She denied having any joint bank accounts with Bagin and stated that the only asset they own jointly is a property in Florida purchased "well after [her] divorce" from defendant.
In his reply certification, defendant denied that the parties had expressly agreed to eliminate cohabitation as an alimony termination event, and disputed plaintiff's claim that eliminating cohabitation had been a quid pro quo for her acceptance of limited duration alimony and her equitable distribution waivers.
The trial judge heard oral argument on July 20, 2007, and at the conclusion of the argument requested that counsel brief the "retroactivity" issue. The judge added that upon receipt of the briefs, he would consider whether to hold a plenary hearing.
On September 10, 2007, the trial judge entered an order denying defendant's request to terminate his alimony obligation as of March 1998. The judge did not address the parties' dispute concerning the absence of cohabitation as an alimony terminating event in their PSA; he gave the following the statement of reasons in support of his decision to deny defendant's motion:
The defendant's application to terminate alimony is denied. In a motion to terminate alimony based upon cohabitation, and no agreement between the parties exists to allow cohabitation to terminate alimony, mere cohabitation of a dependent spouse is not a change of circumstances that would justify a per se reduction in or termination of alimony. Cohabitation constitutes a change of circumstances only if coupled with an economic benefit to either the cohabitant or the supported spouse. In addition, reduction or termination of alimony should only be granted in proportion to the reduction of the dependent spouse's needs. . . . It is undisputed that Ms. Auerbach pays all of the expenses on the Mahwah residence. She would have to do this whether or not she lived with Mr. Bagin. Therefore there is no proof of an economic benefit to plaintiff. Defendant has also failed to prove the direct economic benefit that Mr. Bagin gains from his cohabitation with plaintiff.
The Court finds that the defendant's application seeking to terminate alimony effective March 1998 is barred by laches. The equitable doctrine of laches is the failure to assert a right within a reasonable time resulting in prejudice to the opposing side. The key factors are the length of the delay, the reasons for delay, and the change of position by either party during the delay. . . . Here, the defendant provides the Court with no compelling reason for his delay of nine (9) years to modify his support obligation.
In addition, the Court finds no bad faith on the part of plaintiff in disclosing her relationship with Mr. Bagin. The parties were divorced in 1996. The plaintiff has lived in the parties' former marital home since the divorce. It is not disputed that plaintiff attended family functions with Mr. Bagin and held him out as her boyfriend on multiple occasions. Furthermore defendant was aware of the cohabitation per the message on the Mahwah home answering machine containing the names of both "Elyse and Craig". Concerns about the living arrangements were easily discoverable nine (9) years ago. Thus, defendant's unreasonable delay in seeking the relief sought is without sufficient justification.
On November 16, 2007, the judge entered an order denying defendant's motion for reconsideration, stating that "defendant attempts to get a second bite at the apple by raising no new issues of fact or law."
On appeal, defendant argues that (1) the trial judge erred in failing to impose upon plaintiff the burden of proving she derived no economic benefit from her relationship with Bagin once defendant had established a prima facie case of cohabitation; (2) the judge erred in finding defendant's claim for retroactive relief was barred by the doctrine of laches; and (3) our decision in Calcaterra v. Calcaterra, 206 N.J. Super. 398 (App. Div. 1986), entitles him to relief retroactive to the entire period of plaintiff's cohabitation.
At the outset, we note that the parties' certifications presented three significant factual disputes: (1) whether the omission of cohabitation from the parties' PSA established their mutual intent to eliminate it as an event triggering the possible termination/modification of alimony; (2) when defendant learned of plaintiff's cohabitation with Bagin; and (3) whether plaintiff's cohabitation with Bagin conferred an economic benefit upon her sufficient to warrant modification or termination of defendant's alimony obligation.
As noted, the trial judge did not address the first dispute. Therefore, we conclude that plaintiff should be permitted to pursue that contention at the plenary hearing on remand. We only comment that, on remand, the parties and the trial court consider the Supreme Court's view that "[t]he adoption of a property settlement into a divorce decree does not render it immutable. Courts have continuing power to oversee divorce agreements, and the discretion to modify them on a showing of 'changed circumstances,' that render their continued enforcement unfair, unjust, and inequitable." Konzelman v. Konzelman, 158 N.J. 185, 194 (1999)(citations omitted).
That plaintiff now cohabits with Craig Bagin is undisputed. Nor does plaintiff deny that she has been cohabiting with Bagin for a number of years. When "coupled with economic consequences[,]" such as an "economic benefit enuring to [the] cohabitor . . . sufficiently material to justify relief[,]" cohabitation will "constitute a change of circumstances . . . ." Id. at 196. The law is clear that once a supporting spouse makes a prima facie showing that the dependent spouse is cohabiting with an unrelated person, the burden then shifts to the dependent spouse to prove that the cohabitation does not confer an economic benefit upon her sufficient to warrant termination/modification of alimony. Gayet v. Gayet, 92 N.J. 149, 153-55 (1983).
The trial judge resolved this critical factual issue on the motion papers alone. As noted, the trial judge concluded that plaintiff derived no economic benefit from her cohabitation with Bagin because she continued to pay "all of the expenses on the Mahwah residence." This finding does not consider whether Bagin contributes to any of plaintiff's other expenses such as food, clothing, restaurants, entertainment and vacations.
Clearly, a plenary hearing is required in order to address this issue. As noted, cohabitation may constitute changed circumstances. Konzelman, supra, 158 N.J. at 196. By making "an initial showing" of cohabitation, defendant has met "the procedural prerequisites to discovery and a hearing . . . ." Gayet, supra, 92 N.J. at 154.
Finally, we address defendant's argument that he is entitled to termination/modification of his alimony obligation retroactive to March 1998. The trial judge determined that defendant's retroactivity request was barred by the "equitable doctrine of laches . . . ."
Laches is "an equitable defense that may be interposed in the absence of the statute of limitations," and has been defined as an "'inexcusable delay in asserting a right.'"
But "laches involves more than mere delay, mere lapse of time. There must be delay for a length of time which, unexplained and unexcused, is unreasonable under the circumstances and has been prejudicial to the other party." [Nw. Covenant Med. Ctr. v. Fishman, 167 N.J. 123, 140 (2001) (citations omitted).]
Here, the trial judge concluded that defendant's delay of nine years before bringing his application to terminate/modify alimony is "unexplained and unexcused." Ibid. The judge drew this conclusion on the basis of the motion papers alone. The parties' certifications created a factual dispute regarding when defendant first learned of plaintiff's cohabitation with Bagin. Resolution of that dispute "hinge[s] on factual determinations, credibility and diverse contentions, [therefore] a plenary hearing is required." Dunne v. Dunne, 209 N.J. Super. 559, 571 (App. Div. 1986)(citations omitted).
In this context, defendant's claim that he is entitled to relief pursuant to Calcaterra v. Calcaterra, supra, remains subject to exploration at a plenary hearing. There, the husband brought his motion to terminate alimony based upon his former spouse's cohabitation within two years of the parties' divorce and in response to the wife's motion for alimony arrearages. 206 N.J. Super. at 400-01. It also appears that the husband "sought the relief a full year prior to the ultimate entry of the order." Id. at 404. Under the particular facts of that case, we found "no reason that we can justify for withholding relief to which [the husband] demonstrated he was entitled simply because of the slow-grinding mill of the trial court process." Ibid.
Here, the burden will be upon defendant to prove when he first learned of plaintiff's cohabitation. The retroactive extent of any relief afforded will be a determination within the discretion of the Family Part judge who has the particular expertise to achieve an equitable result based upon the evidence. Cesare v. Cesare, 154 N.J. 394, 413 (1998).
Reversed and remanded for proceedings in conformance with this opinion.
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