A new reported trial court decision, S.N. v. C.R.was released today, confirming that the remedy of partition is still available when non-married parties purchase a home together and there is evidence that the purchase is a joint venture, even if they do not have a writing as required by the 2010 amendment regarding palimony (addressing support for non-married cohabitants). In other words, there is still an equitable remedy available for unmarried couples with a joint property (exclusive of title) notwithstanding the writing requirement for palimony.
It’s not often that trial court decisions are reported so when they are, we know it’s important! As the court notes, this is an issue of first impression:
“Whether, in the absence of a writing, partition of a residence remains an equitable remedy among unmarried, cohabitating intimates engaged in a joint venture.”
As always, the facts are important. Here:
- The parties began their romantic relationship in 2010 and moved in together.
- They purchased a home in 2012. The home and mortgage were titled individually to the plaintiff, but the defendant was heavily involved, including:
“He selected and communicated with the realtor. He provided $10,000 of the $15,000 down payment. He chose and paid the inspector. He received the inspection report, which listed him solely as the client. He chose the closing attorney. He negotiated a $10,000 seller’s concession. Finally, both C.N. and S.R. were, and remain, named insureds on the homeowners’ insurance policy. On closing, C.N. thought he and S.R. ‘would live there forever.'”
- They became engaged in 2016.
- They had a destination wedding “ceremony” in 2018 with guests.
- Despite the “ceremony”, they were never legally married.
- They broke up in 2019.
- While they lived together, the mortgage payments were drawn directly from the plaintiff’s bank account, having made a majority of the payments (87-90 of 96 total) and the defendant paid the remaining payments when the plaintiff was out of work.
- In 2019, the defendant took a 401(k) loan to reduce the principal on the mortgage in order to eliminate the private mortgage insurance and reduce the monthly payment amount.
- The defendant paid for the upkeep for the home (utilities, security, landscaping, pest control, and the like), purchased furniture for the home and oversaw contractors working on the home, as well as worked with a lawyer to appeal a tax assessment.
In July 2019, the plaintiff filed a complaint in the non-dissolution unit of the family part, which is dedicated to separating couples who were never married (i.e.: not eligible for marriage “dissolution”). The plaintiff initially sought only child-related relief. The defendant filed a counterclaim for child-related and financial relief and, in September 2019, amended the counterclaim to seek partition of their residence. Following a failed mediation process, the court held a trial on the limited issue of partition, which lasted for two days, included testimony from both parties and “voluminous exhibits”, and the above facts were found by the court.
Notably, during trial, the plaintiff present testimony that was not credible, including that she perceived the home as her individual investment (even though she delegated significant tasks to the defendant) and she was evasive about the source of the down payment for the home. Moreover, despite the claims about her “own” investment, when she completed her Case Information Statement, the plaintiff listed March 2012 as “date of marriage” and listed an engagement and wedding ring under personal property.
So, what is the court to do when one party to a relationship is heavily involved in the purchase, maintenance and increased equity to an asset titled in the other party’s name and they were never married? Partition.
As the trial court noted here, “‘[p]alimony is the enforcement of a broken promise made for future support’ made between unmarried parties involved in a marriage-like relationship. ” As of the 2010 amended statute (section (h) of N.J.S.A. 25:1-5) all palimony agreements entered after the amendment must be in writing and comply with the Statute of Frauds.
While S.N. and C.R. did not have such a “promise”, and they certainly did not have a writing, the court found that it didn’t matter because palimony is different than partition. As compared to palimony, a party to a partnership or joint venture is entitled to accumulated assets, as demonstrated by the following from Connell v. Diehl, a 2008 palimony case before the Statute of Frauds applied to post-amendment palimony agreements:
“Generally, a mere promise to provide lifetime support does not extend to a claim against assets owned solely by the promissor. However, unmarried cohabitating persons “who have engaged in a joint venture to purchase property in which they reside, are entitled to seek a partition.” Joint venturers are entitled to seek a partition of their property when their joint enterprise comes to an end.”
Going a step further, the court reviewed the amendment to the statute and specifically found it does not apply to partition. Upon making this precedential finding, the court moved on from palimony analysis to partition analysis, relying upon Mitchell v. Oksienik, a partition case with facts similar to the instant matter (they purchased a home during their relationship titled in only one party’s name and the mortgage in the name of the same party, received a loan from the other party’s parents for the down payment, and ultimately separated). There, the Appellate Division found that partition is appropriate for unmarried cohabitants who engage in a joint partnership to purchase property and that formal agreements are not required because “a joint enterprise can be ‘inferred from conduct of the parties'”, and that title is “‘essentially irrelevant to an equitable action'”.
Not only did the trial court equate Mitchell to this case, but it further found that the current facts are even more compelling because the defendant contributed $10,000 of the $15,000 down payment and he resided in the home longer than the non-titled partner in Mitchell, as well as took charge in all of the processes leasing to the closing of sale, he is named on the insurance policy and made 10% of the mortgage payments, as well as paid most of the other house-related expenses.
To close the loop in the decision, the court reviewed the law of joint venture, which is defined as a “limited-purpose partnership” with “some or all of the following elements”:
- contribution “of money, property, effort, knowledge, skill, or other asset to a common undertaking”;
- joint property interest;
- right of mutual control or management;
- expectation of profit, or presence of an adventure;
- right to participate in profits; and
- “limitation of the objective to a single undertaking.”
Based on all of the above, the court found that even without a writing, the defendant is entitled to the equitable remedy of partition, which survived/is not impacted by the palimony amendment, for “unmarried, cohabitating intimates engaged in a joint venture.”
The takeaway from this case carries a lot of weight. We are equipped to prepare Cohabitation Agreements outlining each party’s expectations in a signed writing and I still recommend that parties are always safer to have a writing to rely upon. However, when you do not have such a writing, this case tells us that unmarried cohabitants can still achieve equitable relief and receive their share of an asset without the ability to pursue equitable distribution had they been married.
Notably, the case did not address what would have happened if one party was seeking support from the other, which would fall under palimony. There, the support request without a writing that meets the Statute of Frauds would still fail as the relationship began after 2010 (thus, so too would have been the promise to provide support in the future), while the partition action could survive.
Final tip – pay attention to your documents. Note how that trial court made a point to reference the plaintiff’s Case Information Statement, use of the “date of marriage” and listing engagement/wedding bands, which contributed to the lack of credibility finding.
For more reading, here is a link the prior palimony blog posts: https://njfamilylaw.foxrothschild.com/articles/palimony/