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Splitting up

Photo by Kevin Harnack

Breaking up is increasingly hard to do.

With less money to go around, formerly cohabitating couples are increasingly likely to take their battles to court once the relationship sours, according to a recent survey conducted by the American Academy of Matrimonial Lawyers. Nearly 50 percent of the AAML’s 1,600 members have experienced a spike in such litigation over the past five years, the survey found.

“When the economy was good and home values were increasing, it was easier for people to negotiate more, with each walking away with something,” said Milwaukee attorney Carlton Stansbury. “But now, since the economy’s so bad and home values have either flattened or decreased, people are losing their investments so they’re fighting harder to get money out of the house.”

Stansbury, of Burbach & Stansbury SC, said he’s seen a “noteworthy” increase in legal battles between former cohabitants of late.

“When the pot is smaller, people fight harder for it,” he said. “When the pot is bigger, they’re more willing to give because they’re still getting something.”

Equitable remedies are the only relief available for unmarried couples, said Madison attorney Christopher Krimmer of Balisle & Roberson SC. Krimmer also has seen a great increase in litigation among former cohabitants, he said, but the state’s two-year-old Domestic Partnership Law didn’t outline what should happen when those relationships end.

An unjust enrichment case in civil court is an option, seeking an order for an equitable, but not necessarily equal, distribution of property.

The other option seeks relief under contract law theories. When a prenuptial or cohabitation agreement is in place, the parties will argue either for or against its enforcement by the court.

More frequently, there is no written agreement and one party argues quasi-contract — relying upon evidence such as joint checking accounts, who paid the mortgage, any jointly-titled assets, etc., to prove that an explicit or implied contract existed.

With regard to the guiding caselaw, there isn’t much for same-sex couples, Krimmer said. The seminal cases all involve opposite-sex couple breakups.

Watts v. Watts, 137 Wis. 2d 506 (1987), established the right for unmarried cohabitants to bring a quasi-contract or unjust enrichment claim following a breakup. In the unjust enrichment claim, where one party seeks to retain an unreasonable amount of property, the other party must show that the parties engaged in a joint enterprise or mutual undertaking to accumulate assets.

Waage v. Borer, 188 Wis. 2d 324 (Ct. App. 1994), tailored the three elements of the unjust enrichment claim to nonmarital cohabitation actions. They are: 1) an accumulation of assets; 2) acquired through the efforts of the claimant and the other party; and 3) retained by the other party in an unreasonable amount.

Ulrich v. Zemke, 2002 WI App 246, established that a party need not show a joint enterprise existed for each individual asset, but merely that the joint enterprise existed generally, making all assets accumulated during the joint enterprise available for distribution by the court.

None of the cases Krimmer has filed have been resolved by a judge, he said. Like the vast majority of all civil cases, they’ve settled short of trial, often via alternative dispute resolution.

There’s a big push to use mediation early in the process nowadays, Stansbury said.

“Most of the same-sex couples are resistant to having a case filed because then it becomes very public. So there’s a strong motivation among that group to mediate,” he said. “And in opposite-sex couples, there’s a certain sense of embarrassment as well. They might say, ‘We should’ve gotten married,’ ‘My family told me not to do this,’ or, ‘I should’ve gotten a prenup.'”

Krimmer said the flexibility of ADR is especially appealing to former cohabitants.

“We can’t focus on being someone’s lover or companion in a courtroom; you have to present it more as a business undertaking,” he said. “But with mediation and arbitration, you can be more flexible in describing the reality of what the relationship was. And you can select someone whom you know to be more accepting, which is especially important for gay and lesbian couples. They don’t have to worry about a decision maker who might have a bias against them.”

Arbitration also is increasing in popularity, Krimmer said. It’s the better option when one of the parties has the majority of the property titled in his or her name. That party, going into mediation, is typically less inclined to want to give anything, and mediation works best when there’s more equal bargaining power between the parties.

In Krimmer’s experience with neutrals such as retired judges Angela Bartell and Mark Frankel, he said, both spend a sizable amount of time mediating the dispute initially, fostering some of the therapeutic benefits of mediation.

“It’s only when they’ve reached an impasse that they switch hats and say, ‘Here’s what I’m thinking. Here’s what I’m going to order,'” Krimmer said.

Bartell, of Bartell Dispute Services LTD, (http://www.bartelldisputeservices.com/) Middleton, said that among the dissolution cases where she serves as a neutral, arbitration or mediation with a binding decision (if they can’t reach an agreement) have become increasingly popular choices.

“If people want a good fight, court is the place to do it,” said Bartell, a former Dane County circuit court judge. “If people want to have a more amiable, gentler process for resolving their differences, they choose ADR.

“Very often the agreements that are reached or the awards made [in arbitration] still have to be approved in court, but it’s a far different proceeding than a contested trial.”

Cohabitation agreements on the rise

It’s not the most romantic way for couples to kick off living together, but more partners are opting to set cohabitation agreements early on, to avoid legal battles later.

A recent American Academy of Matrimonial Lawyers survey reported that 38 percent of its members — family law attorneys from across the U.S. — are seeing an increase in couples seeking cohabitation agreements.

“I think there’s been so much discussion about the legal rights of partners who are not married, in our culture, the press and everywhere, that people are more informed,” said Milwaukee attorney Carlton Stansbury of Burbach & Stansbury SC. “With more information, they want to seek out clarity.”

Discussing key issues while drafting such agreements can be helpful for couples, he said, even if it is difficult at times.

“It’s a good thing. I find when drafting prenuptial agreements, too, that when people sit down and talk about these difficult issues, they learn more about the other — and sometimes they’re surprised about what they learn,” Stansbury said. “It’s really a healthy exercise to have these hard discussions and then go forward in the relationship with their eyes wide open.”

For family lawyers looking to expand their practices into this growing area, attorney Christopher Krimmer of Balisle & Roberson SC, Madison, recommends professionals read Button v. Button, 131 Wis. 2d 84 (1986). It’s the seminal case on prenuptial agreements in Wisconsin, he said, which may apply to cohabitation agreements as well.

Button emphasizes the need for full disclosure, as well as a sense of fairness when the parties enter into the agreement. It also makes it clear that both parties should be entering into the agreement freely and voluntarily.

When drafting cohabitation agreements, Stansbury said, attorneys should be as detailed and specific in drafting as possible.

“There needs to be a clear recital of each of their contributions that are going into the cohabitation, whether they own property together or share expenses,” he said. “It should be a really clear statement of, ‘This is our plan.'”

Family lawyers should also be aware of any ethical pitfalls regarding dual representation, Krimmer said. Often, unmarried couples seek estate planning along with cohabitation agreements, which could cause issues, he said.

“There are attorneys who will represent both clients in cohabitation agreements, but because I equate these agreements to marital property agreements, and the law is clear that an attorney should not represent two parties of a contract, I will not represent both parties,” Krimmer said. “Other attorneys consider the cohabitation agreement similar to their estate plan with both partners sharing a mutual interest in the terms so there is no conflict between them.”

Jane Pribek can be reached at jpribek@bellsouth.net

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