A defendant can be unjustly enriched by contributions from the plaintiff that are independent of homemaking services, even in the absence of a viable claim for palimony

Law Lessons from BEVERLY MAEKER v. WILLIAM S. ROSS, 430 N.J. Super. 79 (App. Div. 2013), A-3034-11T4, February 4, 2013:

The 2010 amendment to the Statute of Frauds, N.J.S.A. 25:1-5(h) (Amendment), requires a writing memorializing palimony agreements and independent advice of counsel for each party in advance of executing any such agreement.

Effective January 18, 2010, the Amendment provides in relevant part:

[N]o action shall be brought upon any of the following agreements or promises, unless the agreement or promise, upon which such action shall be brought or some memorandum or note thereof, shall be in writing, and signed by the party to be charged therewith, or by some other person thereunto by him lawfully authorized:
(h) A promise by one party to a non-marital personal relationship to provide support or other consideration for the other party, either during the course of such relationship or after its termination. For the purposes of this subsection, no such written promise is binding unless it was made with the independent advice of counsel for both parties.

[N.J.S.A. 25:1-5(h).]

Palimony is a claim for support between unmarried persons, which our Supreme Court first recognized as a viable cause of action in Kozlowski v. Kozlowski, 80 N.J. 378 (1979). Because palimony actions are based upon principles of contract, a plaintiff’s cause of action accrued at the time defendant is alleged to have breached the agreement, not at the time the promise of lifetime support was purportedly made. See In re Estate of Roccamonte, 174 N.J. 381, 398 (2002); see also Sodora v. Sodora, 338 N.J. Super. 308, 313 (Ch. Div. 2000); Samuel Williston, A Treatise on the Law of Contracts § 79:14 at 303-04 (Richard A. Lord ed., 4th ed. 2004). To bring a palimony claim, a plaintiff must have a broken promise of continued support. Bayne v. Johnson, 403 N.J. Super. 125, 143 (App. Div. 2008), certif. denied, 198 N.J. 312 (2009).

Whether an oral promise of lifetime support may be enforced based upon a claim of partial performance, or even full performance, post-amendment is questionable in view of the Legislature’s statement that passage of the amendment was “intended to overturn recent `palimony’ decisions [Devaney v. L’Esperance, 195 N.J. 247 (2008); Roccamonte, supra; Kozlowski, supra] by New Jersey courts[.]” Senate Judiciary Committee, Statement to S.2091, supra.

In order to recover for unjust enrichment, a plaintiff must show that the “defendant received a benefit and that retention of that benefit without payment would be unjust.” VRG Corp. v. GKN Realty Corp., 135 N.J. 539, 554 (1994). Similarly, in order to recover under the quasi-contract theory of quantum meruit, “a plaintiff must establish: (1) the performance of services in good faith, (2) the acceptance of the services by the person to whom they are rendered, (3) an expectation of compensation therefor, and (4) the reasonable value of the services.” Starkey & White v. Estate of Nicolaysen, 172 N.J. 60, 68 (2002). Finally, “to establish equitable estoppel, plaintiff[] must show that defendant engaged in conduct, either intentionally or under circumstances that induced reliance, and that plaintiff[] acted or changed [her] position to [her] detriment.” Knorr v. Smeal, 178 N.J. 169, 178 (2003). Although equitable relief is widely recognized in other contexts, New Jersey courts have refrained from awarding future support based on equitable theories.

In Kozlowski, Justice Pashman, in his concurring opinion, first raised the question of whether quasi-contractual and equitable remedies should be available to unmarried parties upon dissolution of their relationship, where the parties failed to enter into an agreement. Supra, 80 N.J. at 390. Justice Pashman concluded that in the absence of an agreement, such remedies should be available “to insure that one party has not been unjustly enriched, and the other unjustly impoverished, on account of their dealings.” Id. at 390-91 (J. Pashman concurring). The majority did not, however, reach this issue because an agreement existed in that case.

In 2003, this issue came before the Chancery Division, in Carney v. Hansell, 363 N.J. Super. 111, 127 (Ch. Div. 2003). There, the court declined to award future support to the plaintiff under equitable theories, noting “Justice Pashman’s concurring decision aside, no New Jersey decision to date has extended the right to receive palimony for future support without finding the existence of such a contractual agreement between the parties.” Id. at 127.

Although the Carney court declined to compensate the plaintiff for services rendered as a homemaker, reasoning “claims for compensation for services rendered must fail, as [the plaintiff] received the benefit of the bargain of her relationship with defendant[,]” the court found viable the plaintiff’s claim that the defendant’s business interests had been unjustly enriched at her expense. Id. at 123. The court reasoned, “[t]here is a separation between [the] plaintiff’s role as home-maker, mother and housemate, and her role as a key employee of the business” and thus “claims for past due compensation for services rendered to [the] defendant on account of the business, are an entirely different matter.” Ibid.

Subsequent cases have also recognized that a defendant can be unjustly enriched by contributions from the plaintiff that are independent of homemaking services, even in the absence of a viable claim for palimony. See Bayne, supra, 403 N.J. Super. at 144 (recognizing it would be a clear injustice to deprive the plaintiff of her contribution to the down payment and proportionate increase in equity of the condominium and also constitute an unjust enrichment to defendant); Connell v. Diehl, 397 N.J. Super. 477, 500 (App. Div. 2008) (recognizing “unmarried cohabitating persons who have engaged in a joint venture to purchase property in which they reside, are entitled to seek a partition”). Restatement Third of Restitution and Unjust Enrichment § 28 (2011) provides:

If two persons have formerly lived together in a relationship resembling marriage, and if one of them owns a specific asset to which the other has made substantial, uncompensated contributions in the form of property or services, the person making such contributions has a claim in restitution against the owner as necessary to prevent unjust enrichment upon the dissolution of the relationship.

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