Update: the Supreme Court ruled and I address it here.

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.

NJ Supreme Court hears oral arguments

On September 26, 2016, the NJ Supreme Court heard oral arguments for this case.  The wife argues that it is only fair that the entire length of their relationship be taken into account when determining equitable distribution, including the time they were living together.  She is also arguing that the husband knew about the impending bonus and hid it during negotiations.  The husband argues that NJ statute says equitable distribution is based on the length of the marriage, not the length of the relationship.  He says the bonus came about from the sale of the company, which was only disclosed to the employees once the sale finalized.

The Supreme Court will rule on this matter likely in a few months.  My guess: the court will not overturn the lower rulings.  NJ does not recognize common law marriages (made illegal in 1939).  The plain language of the statute says the length of the marriage, not the length of the relationship, cohabitation or living together.  “Palimony” agreements (for non-married couples) must be in writing.  There was a settlement agreement that addressed later found money (which the lower court seemed to ignore when awarding any money to the wife).  However, depending on how their settlement agreement reads, the court could find the bonus to be changed circumstances for purposes of alimony (and child support) and direct changes there.

I will file a further post once the court makes a ruling.

How is Mediation Different?

In a mediated settlement, the parties are not obligated to strictly follow divorce law.  The parties can determine how they view living together time relative to the marriage.  In mediation, we look to see what works for the parties.  If you want to learn more about divorce mediation, please contact me.