Does cohabitation before marriage count in the length of a marriage? A 2017 NJ Supreme Court case answered this question. Sort of.
Michael Thieme and Bernice Aucoin-Thieme were living together for eight years before they married. Their marriage lasted 14 months. For the divorce, the parties agreed on a full settlement, including a clause that waived any equitable distribution for subsequently acquired property. Shortly after the divorce, the husband received a one-time $2.25 million dollar bonus. The husband earned the bonus for work performed for a biotechnology startup. The husband deposited $200,000 of that money into a joint account he did not realize the wife still had access to. She withdrew $200,029 from the account. He sued to retrieve the money.
A trial judge ruled that the wife should receive part of the bonus based on the 14-month marriage and awarded the wife $30,228, determining that the bonus was not gained because of mutual effort. Rather than helping the husband earn the bonus, the wife jeopardized it through her conduct. An Appellate panel unanimously upheld the trial court ruling.
The NJ Supreme Court held (from the case syllabus):
HELD: N.J.S.A. 2A:34-23(h) authorizes the equitable distribution of Thieme’s Closing Bonus only to the extent that the compensation was earned during the parties’ marriage because, under that statute, the property to be divided is that which was earned, or otherwise acquired, during a marriage or civil union. The Court holds, however, that the extraordinary circumstances of this case warrant the imposition of a constructive trust as a remedy for Aucoin-Thieme’s claim of unjust enrichment and that Aucoin-Thieme is entitled to a percentage of the portion of the Closing Bonus earned during the parties’ cohabitation.
The equitable distribution statute does not govern disputes over property between parties who have cohabited but have never entered into a marriage or civil union, nor does it treat property acquired during a period of cohabitation prior to a marriage or civil union as equivalent to property acquired during that marriage or civil union.
The Court agrees with the trial court and Appellate Division that if the portion of Thieme’s Closing Bonus that was earned prior to the marriage were held to be a marital asset, such a ruling would contravene the plain language of N.J.S.A. 2A:34-23(h). The Court holds that the trial court correctly allocated the distribution of Thieme’s Closing Bonus to premarital and marital periods, and properly deemed only the portion of the compensation that was earned during the parties’ marriage to be a marital asset subject to equitable distribution.
Having rejected Aucoin-Thieme’s claim for equitable distribution of the portion of the Closing Bonus allocated to the period prior to the parties’ marriage, the Court turns to her claims based on equitable principles. The Court notes that the Family Part is a court of equity, and that “[e]quities arise and stem from facts which call for relief from the strict legal effects of given situations.”
To prove a claim for unjust enrichment, a plaintiff must demonstrate that the defendant received a benefit and that it would be unjust for the defendant to retain that benefit without compensating the plaintiff. In the event that a court finds unjust enrichment, it may impose a constructive trust
Under these facts, a decision constraining Aucoin-Thieme to the nominal share of the Closing Bonus that is authorized by the equitable distribution statute would result in unjust enrichment. As a remedy, a percentage of the portion of the Closing Bonus that was earned by Thieme during the period in which the parties cohabited prior to their marriage should be deemed to be held by Thieme in constructive trust for Aucoin-Thieme. The Court directs the trial court on remand to determine the specifics of that constructive trust.
So, in plainer English, the pre-marriage cohabitation time does not count in Equitable Distribution but the court found it would be inequitable not to share the bonus earnings and directed the trial court to create a trust to accomplish this.
Clear as mud, right? Family Part is contained within the court of general equity and that court looks at “fairness” (another word for equity). This makes outcomes in court somewhat uncertain when a judge is determining “fairness.” Every single person has a different sense of fairness — judges included.
That uncertainty leads many divorcing couples to choose mediation — where the settlement is on your terms and what works for you. Contact me to learn more about mediating your divorce.