New York Court of Appeals Rejects Interpretation of the term “Cohabitation” which contemplates “changed economic circumstances"

In Graev v Graev, —NY3d—, --- N.E.2d ----, 2008 WL 4620698 (N.Y.) the parties settlement agreement that was incorporated, but not merged, into a judgment of divorce required Mr. Graev to pay Mrs. Graev spousal support payments of $10,000 per month, subject to adjustment, until the earlier of August 10, 2009 or the occurrence of any of four "termination events"; namely, the wife's remarriage or death, the husband's death, or "[t]he cohabitation of the Wife with an unrelated adult for a period of sixty (60) substantially consecutive days." The agreement did not define "cohabitation."
On September 7, 2004, Mr. Graev advised Mrs. Graev that her cohabitation with MP, an unrelated adult male, had been documented and photographed by professionals retained by his counsel." Invoking the separation agreement's provision for termination in the event of cohabitation, Mr. Graev ceased making spousal support payments as of September 2004. Mrs. Graev moved in Supreme Court to enforce the settlement agreement's maintenance provisions; Mr. Graev cross-moved for summary judgment on the ground that a termination event had occurred. He took the position that Mrs. Graev and MP were cohabiting within the meaning of the settlement agreement because MP had stayed overnight in Mrs. Graev's vacation home in Connecticut for at least 60 substantially consecutive days during the summer of 2004, as borne out by surveillance. He also contended, there was an "obvious serious relationship" between Mrs. Graev and MP, and MP was Mrs. Graev's "lover and life partner," as illustrated by the number of family occasions--weddings, birthdays and the like--they attended as a couple. Mrs. Graev argued that she did not "cohabit" with MP during the summer of 2004 because their relationship had long been platonic, as proven by evidence of MP's sexual incapacity and her diminished sexual desire caused by prescribed medication. In Mrs. Graev's view, use of the word 'cohabitation'--rather than 'living together' or 'residing' ... plainly meant having sexual relations. In response, Mr. Graev insisted that "cohabitation could not possibly require 'sexual relations' " under the law and the plain meaning of the settlement agreement, which was intended to be less stringent than section 248 of the Domestic Relations Law. Supreme Court granted both parties' motions to the extent of ordering a hearing to determine whether Mrs. Graev's relationship with MP constituted "cohabitation" within the meaning of the separation agreement. After the hearing , Supreme Court, credited Mrs. Graev's and MP's testimony that their relationship ceased to be sexual long before the summer of 2004. It concluded that New York cases "find that an essential element of cohabitation is a shared residence with shared household expenses" and that "the couple functioned as an economic unit," features lacking in the bond between Mrs. Graev and MP, which she likened to "an adult dating relationship." On appeal, Mr. Graev repeated his plea that the word "cohabitation" was ambiguous under New York law. Mrs. Graev rejoined that New York courts have construed "cohabitation" as synonymous with "living together," which, in turn, the courts have long held to mean sharing a residence, sharing expenses, and functioning asan economic unit. The Appellate Division affirmed, with two Justices dissenting. According to the majority, New York judicial decisions had consistently interpreted "cohabitation" to mean "more than a romantic relationship or series of nights spent together" and to require "the sharing of finances" or "an economic relationship akin to a shared possessory interest in one home," which could be "proven with evidence that two people keep their personal belongings and receive their mail at the same address". The majority found that Mrs. Graev and MP spent more than 60 substantially consecutive nights together during the summer of 2004, and that "their relationship became romantic in January 2003". These facts were not "decisive" under New York case law, however, because MP owned his own home and there was "absolutely no evidence that the couple shared household expenses or functioned as a single economic unit" . As a result, the majority concluded that Mrs. Graev's relationship with MP did not amount to "cohabitation." The Court of Appeals reversed in a 4-3 opinion by Judge Read. She did not agree that "the term cohabitation has a plain meaning which contemplates changed economic circumstances, and is not ambiguous" absent an explicit provision to the contrary in a separation agreement or stipulation, or, put slightly differently, is necessarily determined by whether a "couple share[s] household expenses or function[s] as a single economic unit". The Court held that the word "cohabitation" is ambiguous as used in this separation agreement: neither the dictionary nor New York case law supplies an authoritative or "plain" meaning. She noted that courts in other states have not ascribed a uniform meaning to the word "cohabitation" as used in separation agreements. Black's Law Dictionary defines "cohabitation" to mean "living together, esp[ecially] as partners in life, usu[ally] with the suggestion of sexual relations" (Black's Law Dictionary 277 [8th ed 2004]. In addition to the definition in Black's Law Dictionary "cohabit" is variously defined as "[t]o live together as husband and wife: often said distinctively of persons not legally married" (Oxford English Dictionary [2d ed 1989] ); "to live together and have a sexual relationship without being married" (The New Oxford American Dictionary [2d ed 2005] ); "to live together as or as if as husband and wife" (Webster's Third New International Dictionary [2002] ); "to live together as husband and wife, usually without legal or religious sanction," or "to live together in an intimate relationship" (Random House Webster's Unabridged Dictionary [2d ed 2001] ); and "to live together as or as if a married couple" (Merriam Webster's Collegiate Dictionary [10th ed 1997] ). The common element in all these definitions is "to live together," particularly in a relationship or manner resembling or suggestive of marriage, and New York courts have used the word "cohabitation" interchangeably with the phrase "living together". Ultimately, however, "living together" as if husband and wife is no less opaque than "cohabitation": both bring to mind a variety of physical, emotional and material factors, and therefore might mean any number of things in a separation agreement, where otherwise unexplained in the text, depending on the parties' intent. For example, the parties here might reasonably have meant "cohabitation" to encompass whether Mrs. Graev engaged in sexual relations with an unrelated adult; whether she and the unrelated adult commingled their finances or--just the opposite--whether she supported the unrelated adult financially; whether she and the unrelated adult shared the same bed; or some combination of these or other factors associated with living together as if husband and wife. The Court found that New York case law does not establish a distinct meaning--"changed economic circumstances"--for "cohabitation.". While more recent Appellate Division decisions may be read to imply, as the Appellate Division held in this case, that there can be no "cohabitation" without changed economic circumstances, the Court of Appeals stated that it had never taken this position and declined to do so now. The Court found that the ambiguity of the word "cohabitation" in this separation agreement was illustrated by the shifting "plain" meanings and positions advanced by the parties over the course of the litigation. The Court of Appeals found that the word "cohabitation" did not have a "plain" meaning in this separation agreement. Without extrinsic evidence as to the parties' intent, there was no way to assess the particular factors inherent in the dictionary meanings or case law discussions of "cohabitation" the parties may have meant to embrace or emphasize. In a footnote the Court responded to the complaint of the dissent that its resolution of this appeal created uncertainty, making it difficult for parties to understand their obligations and responsibilities"; and that "[t]he wiser choice is to articulate a clear rule of law" (dissenting op at 10-11). The Court responded that articulating a "clear rule of law" was hardly fair to those who may have used the word "cohabitation" in an extant separation agreement, intending the meaning ascribed to it by those Appellate Division cases requiring financial interdependence. The wisest rule is for parties in the future to make their intention clear by more careful drafting.