Court Opinion

ID: 9700581
Source: CourtListenerOpinion
Date Created: 2023-08-25 21:36:23.536837+00
Date Added: 2024-06-11T18:21:11.725765
License: Public Domain

The opinion of the Court was delivered by
HANDLER, J.
The issue raised in this appeal is the enforceability of a divorce judgment incorporating a property settlement agreement that authorized the termination of the husband’s support and maintenance payments in the event of the wife’s cohabitation -with an unrelated male.
I
Kathleen and Lawrence Konzelman were married for twenty-seven years at the time of their divorce. Their final divorce decree, entered on October 28, 1991, incorporated a Property Settlement Agreement both parties had entered into with the benefit of counsel. Section 1(D) of that Agreement dealt with alimony. It provided that Mr. Konzelman’s support and maintenance obligation of $700.00 per week would terminate should Mrs. Konzelman undertake cohabitation with an unrelated adult male for a period of four continuous months.
In February of 1993, Mr. Konzelman hired a private investigator, Noel J. Kirkwood, to verify whether Mrs. Konzelman was living with anyone. Mr. Kirkwood undertook surveillance of Mrs. Konzelman’s residence seven days a week for 127 days, mostly in the evening, nighttime, and early morning hours. Mr. Konzelman also hired L.S. Stephens, Inc., a private investigation agency, to overlap with Mr. Kirkwood in the last week of his surveillance.
The investigator reported on various activities of an “unrelated adult male” at Mrs. Konzelman’s home. Specifically, Mr. Kirk-wood observed that person, Mr. Roger Liput, return to Mrs. Konzelman’s residence most evenings. He left the residence most mornings to go to work. Mr. Liput used the garage door to gain *192access to the garage and parked his car there. He picked up the newspaper on a regular basis and did yardwork around the residence. He answered the door to the home. He also used Mrs. Konzelman’s number as a contact number for members of his softball team.
Relying on that information, Mr. Konzelman terminated alimony payments on June 26, 1993. On August 4, 1993, Mrs. Konzelman filed a Notice of Motion and accompanying certification denying cohabitation and demanding, among other things, the resumption of alimony payments and the payment of arrearage. In response, Mr. Konzelman filed a cross-motion, seeking to terminate support and maintenance. He provided certifications from four private detectives regarding Mrs. Konzelman’s living arrangements; Mrs. Konzelman provided certifications rebutting those allegations. The trial court ordered Mr. Konzelman to pay support arrears and resume payment until a plenary hearing could be held.
The plenary hearing was conducted over thirteen days and included twenty-six witnesses. During the hearing, it was established that Mrs. Konzelman and Mr. Liput had a monogamous romantic relationship, which included not only spending time together at Mrs. Konzelman’s home, but also vacations together abroad and at the Jersey Shore, for which Mr. Liput paid almost all the expenses. They spent holidays together with other members of their families. They had a joint savings account. Mr. Liput also performed many household chores, including mowing the lawn, gardening, and maintaining the above-ground pool, which he bought for Mrs. Konzelman. Although Mr. Liput did not have a key to the premises, he did know the code necessary to disarm the alarm system and enter the residence.
The trial court determined that Mr. Konzelman had established cohabitation. The court held, however, that the provision of the Agreement authorizing termination of alimony on cohabitation was invalid. Nevertheless, because Mr. Konzelman had established cohabitation, the court conducted a plenary hearing to determine to what extent Mr. Liput was either providing or receiving sup*193port from Mrs. Konzelman. The trial court determined that Mrs. Konzelman was receiving at least $170 per week from unidentified sources, which was attributed to Mr. Liput. Mr. Konzelman’s support obligations were reduced accordingly.
Mr. Konzelman appealed, challenging the trial court’s refusal to enforce the cohabitation provision of the Agreement. Mrs. Konzelman filed a'cross-appeal, contesting the factual determination of cohabitation and the subsequent modification of alimony. The Appellate Division reversed. 307 N.J.Super. 150, 704 A.2d 591 (1998). It construed cohabitation as a domestic relationship whereby two unmarried adults live as husband and wife. Id. at 159, 704 A.2d 591. The court then held that “a provision of a property settlement agreement, freely entered into, which causes permanent alimony to terminate if the dependent spouse enters into a new relationship which has all the indicia of marriage except a license is enforceable.” Id. at 161, 704 A.2d 591.
We granted plaintiffs petition for certification, 153 N.J. 405, 709 A.2d 798 (1998).
II
New Jersey has long espoused a policy favoring the use of consensual agreements to resolve marital controversies. Voluntary agreements that address and reconcile conflicting interests of divorcing parties support our “strong public policy favoring stability of arrangements” in matrimonial matters. Smith v. Smith, 72 N.J. 350, 360, 371 A.2d 1 (1977). The prominence and weight we accord such arrangements reflect the importance attached to individual autonomy and freedom, enabling parties to order their personal lives consistently with their post-marital responsibilities. E.g. Faherty v. Faherty, 97 N.J. 99, 107, 477 A.2d 1257 (1984) (recognizing that divorcing parties are free to bind themselves to arbitrate disputes over alimony). Thus, it “would be shortsighted and unwise for courts to reject out of hand consensual solutions to vexatious personal matrimonial problems that have been advanced by the parties themselves.” Petersen v. Petersen, 85 N.J. 638, 645, 428 A.2d 1301 (1981). For these reasons, “fair and definitive *194arrangements arrived at by mutual consent should not be unnecessarily or lightly disturbed.” Smith, supra, 72 N.J. at 358, 371 A.2d 1. The very consensual and voluntary character of these agreements render them optimum solutions for abating marital discord, resolving matrimonial differences, reaching accommodations between divorced couples, and assuring stability in post-divorce relationships. Petersen, supra, 85 N.J. at 645, 428 A.2d 1301. See Gordon v. Gordon, 342 Md. 294, 675 A.2d 540, 544 (1996) (stating that “separation agreements ... are generally favored by the courts as a peaceful means of terminating marital strife and discord so long as they are not against public policy”).
Divorce agreements are necessarily infused with equitable considerations and are construed in light of salient legal and policy concerns: Petersen, supra, 85 N.J. at 642, 428 A.2d 1301. The interpretation, application, and enforceability of divorce agreements are not governed solely by contract law. “[C]ontraet principles have little place in the law of domestic relations.” Lepis v. Lepis, 83 N.J. 139, 148, 416 A.2d 45 (1980). Thus, settlement agreements, if found to be fair and just, are specifically enforceable in equity. Schlemm v. Schlemm, 31 N.J. 557, 581-82, 158 A.2d 508 (1960).
The adoption of a property settlement into a divorce decree does not render it immutable. Courts have continuing power to oversee divorce agreements, Corbin v. Mathews, 129 N.J.Eq. 549, 552, 19 A.2d 633 (E. & A.1941), and the discretion to modify them on a showing of “changed circumstances,” Berkowitz v. Berkowitz, 55 N.J. 564, 569, 264 A.2d 49 (1970), that render their continued enforcement unfair, unjust, and inequitable. Lepis, supra, 83 N.J. at 154-55, 416 A.2d 45. The Court observed in Lepis, supra:
When we first upheld the specific enforceability of spousal agreements in Schlemm, we relied on the flexible power of equity to enforce such agreements only to the extent that they were fair and equitable.
[Id. at 148-49, 416 A.2d 45.]
Alimony, maintenance and support, for a dependent spouse, may clearly be the subject of a voluntary and consensual *195agreement undertaken as part of the termination of marriage and divorce. Schlemm, supra, 31 N.J. at 576-82, 158 A.2d 508 (1960); Sobel v. Sobel, 99 N.J.Eq. 376, 379, 132 A. 603 (E. & A.1926). The issue of maintenance and support between divorced parties implicates important statutory and policy concerns. New Jersey requires that a dependent spouse receive alimony to assure maintenance sufficient to support that spouse based on the living standards of the couple during marriage. N.J.S.A. 2A:34-23; Junes v. Junes, 117 N.J. 496, 503, 569 A.2d 770 (1990); Koelble v. Koelble, 261 N.J.Super. 190, 192-93, 618 A.2d 377 (App.Div.1992). The primary purpose of alimony is to permit the spouse to share in the accumulated marital assets to which he or she contributed. Mahoney v. Mahoney, 91 N.J. 488, 500-01, 453 A.2d 527 (1982).
Like other spousal agreements, those covering alimony may be modified in light of changed circumstances. “The equitable authority of a court to modify support obligations in response to changed circumstances, regardless of their source, cannot be restricted.” Lepis, supra, 83 N.J. at 149, 416 A.2d 45. Permanent alimony terminates automatically on remarriage. N.J.S.A. 2A:34-25. In enacting that basis or condition for discontinuing alimony, the Legislature articulated a public policy that the legal obligation of the supporting spouse is superseded and ends on the remarriage of the dependent spouse. In effect, the new marriage bond itself creates a change of circumstances that the Legislature deemed sufficiently fundamental and important to require the automatic termination of alimony. The legal obligation of post-divorce alimony is derived from the antecedent marriage; a new marriage supplants that obligation. Gayet v. Gayet, 92 N.J. 149, 151, 456 A.2d 102 (1983). Hence, remarriage justifies the termination of alimony without regard to the economic circumstances of the dependent spouse who has remarried.
A.
The initial issue posed in this case is whether the dependent spouse’s new relationship, characterized as one of cohabita*196tion, can itself be considered a change of circumstances. In Gayet, supra, 92 N.J. at 154-55, 456 A.2d 102, the Court determined that cohabitation of the dependent spouse without more was not a changed circumstance that could justify the reduction or termination of alimony by the supporting spouse. Cohabitation constitutes a change of circumstances only if coupled with economic consequences; the economic benefit enuring to either cohabitor must be sufficiently material to justify relief. Ibid. Under this economic needs test, the reduction in alimony is granted in proportion to the contribution of the cohabitor to the dependent spouse’s needs. Ibid.
The question, therefore, is whether an agreement between the parties to allow cohabitation to terminate alimony obligations can be a valid basis for discontinuing alimony, without regard to the economic consequences of that relationship. We are satisfied that the policy considerations that allow the termination of alimony on remarriage support the termination of alimony based on cohabitation provided that both parties have agreed to this contingency.
The enforcement of a cohabitation agreement terminating alimony comports generally with the legislative and public policy of our matrimonial laws. As noted, N.J.S.A. 2A:34-25 provides for the termination of permanent alimony upon remarriage, without regard to the financial condition of the dependent spouse, evincing an understanding on the part of the Legislature that the autonomous decision of the dependent former spouse to form new bonds creating mutual obligations of support must be recognized, and should, therefore, supplant the legal vestiges of the prior marriage. The statute “signals a policy to end alimony when the supported spouse forms a new bond that eliminates the prior dependency as a matter of law.” Gayet, supra, 92 N.J. at 151, 456 A.2d 102. The implications of the legislative policy are clear. The contractual termination of alimony upon cohabitation is not violative of either statutory or public policy. The Legislature may decide to reassess this policy in light of its application here. For now, as the Appellate Division in this case explained,
*197there are no considerations of public policy which should prevent competent parties to a divorce from freely agreeing that if the dependent spouse enters into a new relationship which, but for the license, is tantamount to a marriage, the economic consequences of the new relationship will be the same as those of remarriage.
[307 N.J.Super, at 161, 704 A.2d 591.]
A property settlement agreement that provides for termination of alimony where the dependent spouse enters a relationship that has all the indicia of a marriage is therefore enforceable. E.g. Quillen v. Quillen, 265 Ga. 779, 462 S.E.2d 750 (1995) (recognizing freedom of divorcing parties to contractually alter alimony obligation based upon the occurrence of certain events); Bergman v. Bergman, 25 Va.App. 204, 487 S.E.2d 264, 267 (1997) (interpreting settlement agreements as any other contracts, including the enforcement of provisions terminating alimony upon cohabitation).
Where the court considers a motion for reduction of alimony based on a change of circumstances, the dependent spouse’s finances and economic resources are ordinarily the court’s only consideration. E.g., Gayet, supra, 92 N.J. 149, 456 A.2d 102. Nevertheless, a specific consensual agreement between the parties to terminate or reduce alimony based on a predetermined change of circumstances does not require an inquiry into the financial circumstances or economic status of the dependent spouse so long as the provision itself is fair. Thus, where the parties have agreed that cohabitation will constitute a material changed circumstance, and that agreement has been judged fair and equitable, the court should defer to the arrangements undertaken by the parties. In that situation where the dependent spouse has entered into a new marriage-like relationship, the court need not delve into the economic needs of the dependent former spouse.
New Jersey courts have recognized the enforceability of contractual arrangements between cohabitants to provide support. E.g. Crowe v. DeGioia, 90 N.J. 126, 447 A.2d 173 (1982). It appears entirely consistent with that policy to allow divorcing persons to enter into a mutual agreement that recognizes the reality and viability of cohabitation relationships. See Gordon, *198supra, 675 A.2d at 548 (acknowledging significance of cohabitation relationships and the fairness of support agreements that take such relationships into consideration);1 In re Marriage of Schroeder, 192 Cal.App.3d 1154, 238 Cal.Rptr. 12, 15 (1987) (stating that the purpose of a statute codifying cohabitation provision was “to protect the supporting spouse from an unfair advantage being gained by the supported spouse who cohabits with a person of the opposite sex”).
We conclude that based on minimum standards to assure their mutuality, voluntariness and fairness, cohabitation agreements may be enforced.
B.
Agreements to terminate alimony on the condition of cohabitation must be voluntary and consensual, based on assurances that these undertakings are fully informed, knowingly assumed, and fair and equitable. Faherty, supra, 97 N.J. 99, 477 A.2d 1257; Petersen, supra, 85 N.J. at 642, 428 A.2d 1301. We recognize that the fairness in altering an alimony obligation in the event of cohabitation by the dependent spouse must be assessed in light of all material surrounding circumstances and will vary from case to case. “[T]he weight which will be due such agreements will grow in direct proportion to the degree that these understandings have been genuinely tailored to all of the relevant matrimonial concerns of the parties.” Petersen, supra, 85 N.J. at 645, 428 A.2d 1301; see Lepis, supra, 83 N.J. at 153-54, 416 A.2d 45. Thus, for example, parties can provide that alimony will terminate *199only where the dependent spouse has become contractually entitled to support from her cohabiting partner. See Bell v. Bell, 393 Mass. 20, 468 N.E.2d 859, 861 (1984); accord, Crowe, supra, 90 N.J. 126, 447 A.2d 173 (recognizing enforceability of support obligations derived from cohabitation relationship). Fairness requires that each party be adequately represented by independent counsel and that both parties completely understand the nature of the agreement. Cf. Guglielmo v. Guglielmo, 253 N.J.Super. 531, 602 A.2d 741 (App.Div.1992) (holding agreement to be unconscionable when the wife, who was not savvy in financial matters, was represented by the husband’s relative and received support that kept her at a subsistence level while her former husband’s income increased dramatically). Implicit in that standard of fairness as the basis for enforceability is the further requirement of judicial review and approval. See D’Ascanio v. D’Ascanio, 237 Conn. 481, 678 A.2d 469, 473 (1996) (determining that enforceability of a settlement terminating alimony in the event of cohabitation depends on whether court has approved agreement as fair and equitable); cf. Von Pein v. Von Pein, 268 N.J.Super. 7, 632 A.2d 830 (App.Div.1993) (finding that husband’s fraudulent conduct, diversion of marital assets and conspiracy to hide assets required court to reexamine divorce settlement).
Courts in other jurisdictions that have upheld cohabitation provisions in property settlement contracts have recognized that the parties’ freedom to mold contract obligations to fulfill their expectations should be assured. See Bell, supra, 468 N.E.2d at 861; Quillen, supra, 265 Ga. 779, 462 S.E.2d 750; Bergman, supra, 487 S.E.2d at 267; Gertrude L.Q. v. Stephen P.Q., 466 A.2d 1213 (Del.1983); Barr v. Barr, 922 S.W.2d 419 (Mo.Ct.App.1996); Eriksson v. Eriksson, 128 A.D.2d 500, 512 N.Y.S.2d 429, 430 (N.Y.App.Div.1987). Some courts have emphasized that freedom of contract, when coupled with a judicial check on unequal bargaining power and the equities of the agreement, is sufficient to render such provisions enforceable. See In the Matter of the Marriage of Laverne Watts Edwards, 73 Or.App. 272, 698 P.2d 542 (1985); D’Ascanio, supra, 678 A.2d at 473; Gordon, supra, *200675 A.2d at 544; accord Taylor v. Taylor, 11 Ohio App.3d 279, 465 N.E.2d 476, 477-478 (1983) (courts may not enforce cohabitation provisions without re-evaluating equities of situation).
In considering the enforceability of cohabitation agreements, concerns regarding inequality of bargaining power are genuine and, as stressed by the dissenting opinion, post at 204-05, 729 A.2d at 17, may arise not only from economic dependence but also the psychological and emotional factors in the relationship between the former spouses. See, Sally Burnett Sharp, Fairness Standards and Separation Agreements: A Word of Caution on Contractual Freedom, 132 U. Pa. L.Rev. 1399, 1405 (1984). For that reason, it is essential that courts inquire into the voluntariness of an agreement and its overall fairness in light of all relevant circumstances. While we are aware of the potential for unfairness and inequity, the importance of settlement agreements in the amicable resolution of the disharmonies that surround the demise of a marriage should be preserved. Such consensual agreements should be encouraged provided their provisions fully reflect the mutual wishes of the parties and their enforcement is fair and just. We affirm the ability of both spouses to make considered and lasting arrangements.
Similarly, we acknowledge that a contractual provision terminating alimony in the event of cohabitation potentially conflicts with the privacy interests of the dependent spouse. There is a danger that cohabitation provisions might encourage “economically dominant husbands to meddle arbitrarily with the post divorce lives of their wives,” Bell, supra, 468 N.E.2d at 862 (Abrams, J., dissenting). The policy that ends alimony on the formation of a new legal bond is in derogation of the dependent spouse’s individual privacy, autonomy and the right to develop personal relationships free from interference from either a supporting spouse or the state. Gayet, supra, 92 N.J. at 151, 456 A.2d 102; accord Levine v. Bacon, 152 N.J. 436, 705 A.2d 1204 (1998) (recognizing that parental rights of non-custodial spouse may not unduly interfere with personal freedom of custodial spouse); Holder v. Polanski, *201111 N.J. 344, 544 A.2d 852 (1988) (same). Nevertheless, the incentive that a cohabitation agreement creates for the supporting spouse to investigate the former husband’s or wife’s private life is not far removed from the incentive that any potential changed circumstance may provide a supporting spouse for ascertaining the current economic status of the dependent spouse. E.g., Gayet, supra, 92 N.J. at 151, 154, 456 A.2d 102. We do not minimize the potential impact on the private lives of the parties, as underscored by the dissent. Post at 205-06, 729 A.2d at 18. While such an agreement may influence the conduct of the parties, they will have knowingly entered into such agreements, understanding what the provisions entail and, presumably, anticipating the extent to which their freedom of action may be affected.
Privacy concerns may be addressed and mitigated by judicial supervision over agreements. A cohabitation provision cannot become an instrument for vindictive, vengeful, or oppressive actions on the part of the supporting spouse nor can it be allowed to serve as punishment for post-divorce unchastity on the part of a dependent spouse; it must be predicated on the mutual wishes of the parties and reflect the economic realities that usually flow from an intimate committed relationship. Moreover, in enforcing cohabitation provisions, the court does not abrogate its equitable jurisdiction over divorce arrangements and its responsibility to assure fairness in the implementation of such arrangements. A provision for the termination of alimony based on cohabitation may, under given circumstances, be inequitable and therefore unenforceable. Melletz v. Melletz, 271 N.J.Super. 359, 368, 638 A.2d 898 (App.Div.) (cautioning that in situation where former husband attempted to terminate alimony on the basis of a dating relationship, “the [dependent wife] is rendered social and economic hostage of the property settlement agreement. The agreement leaves very little latitude for the [wife] to engage in even a casual or social relationship without fear of losing her *202economic support .... ” (quoting trial court)), certif. denied, 137 N.J. 307, 645 A.2d 136 (1994).
A mere romantic, casual or social relationship is not sufficient to justify the enforcement of a settlement agreement provision terminating alimony. Such an agreement must be predicated on a relationship of cohabitation that can be shown to have stability, permanency and mutual interdependence. The Appellate Division expressed that standard by defining cohabitation as a domestic relationship whereby two unmarried adults live as husband and wife. 307 N.J.Super. at 159, 704 A.2d 591. Cohabitation is not defined or measured solely or even essentially by “sex” or even by gender, as implied by the dissent. Post at 205, 729 A.2d at 18. The ordinary understanding of cohabitation is based on those factors that make the relationship close and enduring and requires more than a common residence, although that is an important factor. Cohabitation involves an intimate relationship in which the couple has undertaken duties and privileges that are commonly associated with marriage. These can include, but are not limited to, living together, intertwined finances such as joint bank accounts, sharing living expenses and household chores, and recognition of the relationship in the couple’s social and family circle.
The supporting spouse must show cohabitation to the satisfaction of the court, as Mr. Konzelman did here. Although there were some inconsistencies in the private investigators’ reports, both the trial court and the Appellate Division found that there was cohabitation between Mrs. Konzelman and Mr. Liput. The couple lived together most of the time. Mr. Liput paid for improvements to the residence in the form of an above ground pool, and shared in various chores around the house. They had a joint savings account and Mr. Liput paid for their vacations together. Their family holidays together further indicate that their relationship was recognized as close and sustained. There was sufficient credible evidence in the record for the trial court reasonably to find cohabitation and its finding must be granted *203deference. Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 484, 323 A.2d 495 (1974).
We stress that to constitute cohabitation, the relationship must be shown to be serious and lasting. The Appellate Division, in declining to decide whether the four month period specified in the cohabitation agreement was sufficient to justify enforcement of the provision, noted that “Mrs. Konzelman’s cohabitation with Mr. Liput has been of long duration and was still continuing at the time of trial.” 307 N.J.Super. at 156, 704 A.2d 591. There was ample support for that conclusion. The reasonableness of the duration of the cohabitation that is specified in a cohabitation agreement will depend on the facts of the case. Here, Mrs. Konzelman’s relationship was sufficiently stable and enduring to render the enforcement of the provision fair and equitable under the circumstances. We are not required to determine what would happen if the cohabitation came to an end, including whether other, additional obligations of support could arise from the cohabitation arrangement itself. See Crowe, supra, 90 N.J. 126, 447 A.2d 173. As with all divorce settlement agreements, this agreement remains subject to judicial supervision. Petersen, supra, 85 N.J. at 644, 428 A.2d 1301.
Finally, the cohabitation provision of the property settlement agreement was voluntary, knowing, and consensual. Both plaintiff and defendant were represented by counsel. Mrs. Konzelman alleges no improprieties, suggesting no fraud, inequity, overreaching, or coercion. She knowingly entered into an agreement fully understanding the cohabitation provision and with every opportunity to. negotiate its terms. The agreement was brought to the attention of the trial court and given judicial approval when it was incorporated into the divorce decree.
Ill
Because the provision terminating alimony upon cohabitation is fair under the circumstances of this ease, we affirm the judgment below.

 The Maryland Supreme Court explained:
[I]f the ex-spouse and the cohabitant share expenses, the ex-spouse collects support form two sources. Alternately, if the cohabitant does not pay a fair share of household expenses, then it follows that part of the support payment supports the cohabitant rather than the ex-spouse. In either situation, we believe it would be inequitable to require the spouse paying support to continue payment despite cohabiting parties' de facto remarriage.
[Id. 675 A.2d at 548.]