Capitol Report

Capitol Report

November 29, 2021

NJSBA to argue enforceability, defenses and attorney review requirement of palimony agreements this week

Palimony agreements should be enforced despite the lack of attorney review when notarized and signed by the parties, the New Jersey State Bar Association (NJSBA) believes. It will argue this point, and for confirmation that promissory estoppel and partial performance remain valid defenses to defeat the statute of frauds when necessary to prevent an injustice, before the New Jersey Supreme Court. The Court will hear arguments in the matter of Moynihan v. Lynch on Monday. The NJSBA’s Family Law Section chair, Robin Bogan, will argue the matter on behalf of the NJSBA. Bogan, Brian M. Schwartz and Brian G. Paul authored the amicus curiae brief.

The NJSBA urged the Supreme Court to reverse the Appellate Division’s ruling that reversed a decision that the palimony agreement in question fell within the statute of frauds, thus requiring that the agreement be in writing and entered into with advice of counsel. The latter requirement was added to the statute governing palimony agreements (N.J.S.A. 25:1-5) in 2010.

“The Agreement is precisely the type of written contract encompassed by the Amendment and for which attorney review is required,” the Appellate Division said in its opinion. “Absent compliance with the Amendment, the Agreement is not an enforceable contract.”

The NJSBA has long opposed impediments to the enforceability of palimony agreements as unconstitutional, violating the contracts clause of the New Jersey and United States constitutions. Reiterating its position, the NJSBA argued in its amicus brief that the longstanding precedent in New Jersey case law supports applying Section 139 of the Restatement (Second) of Contracts to recognize the equitable power to utilize promissory estoppel and partial performance to take an agreement out of the statute of frauds.

“To recognize the important public policy rationale behind the creation of the statute of frauds, the NJSBA submits that requiring proof of the elements of these two defenses by clear and convincing evidence is a sound means of balancing the competing interests and insuring justice ultimately prevails,” the NJSBA stated in its brief.

The NJSBA further urged the Court to reverse the decision of the Appellate Division to require non-married parties in a personal relationship to seek independent counsel to enter into agreements for support or other consideration because it violates both the contracts clause and the equal protection clause of the United States and New Jersey constitutions.

“While the NJSBA believes it is prudent for anyone entering into a contract or agreement to consult with independent counsel, requiring such consultation in order for the agreement to be valid is contrary to fundamental notions of fairness, equal application of the laws and access to justice for all persons, especially financially or otherwise disadvantaged litigants,” the NJSBA wrote.

Taking no position on the facts of the underlying matter, the NJSBA participated as amicus curiae in support of reversing the decision to invalidate a writing signed and notarized by both parties just prior to their split. Kathleen Moynihan sought to enforce the terms of the agreement, but at trial Edward Lynch testified that he never intended to be bound by the agreement. He further testified that he was aware that he was inducing Moynihan to remain in the relationship. Moynihan testified that when she suggested seeking counsel, Lynch demurred, saying he was a “man of his word.”

Also joining as amicus in support of reversing the Appellate Division is the New Jersey American Academy of Matrimonial Lawyers.

This is a status report provided by the New Jersey State Bar Association on recently passed and pending legislation, regulations, gubernatorial nominations and/or appointments of interest to lawyers, as well as the involvement of the NJSBA as amicus in appellate court matters.