Who knows what ambiguity lurks in the heart of contracts? Well, reader Steven Sholk has an inkling, because he’s the one who told me about Graev v. Graev, 2008 N.Y. LEXIS 3252 (N.Y. Oct. 21, 2008), a case that involves the meaning of the word cohabitation.
As part of their divorce settlement agreement, Mr. Graev agreed to pay Mrs. Graev spousal support payments until the earlier of August 10, 2009, and occurrence of one of various “termination events,” including “[t]he cohabitation of the Wife with an unrelated adult for a period of sixty (60) substantially consecutive days.” The contract didn’t define cohabitation.
In September 2004, Mr. Graev stopped making spousal payments on the grounds that Mrs. Graev and one “MP,” an unrelated adult male, had been 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. Further, he contended that 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 had attended as a couple.
Mrs. Graev argued that Mrs. Graev argued that she did not “cohabit” with MP during the summer of 2004 because their relationship had long been platonic. And Mrs. Graev subsequently pointed to New York cases holding that because the individuals living together didn’t form an economic unit, termination of maintenance was not permitted.
The lower court found for Mrs. Graev, noting that her relationship with MP had ceased to be sexual long before the summer of 2004. And the court emphasized that the couple hadn’t functioned as an economic unit and that an economic unit was, according to New York caselaw, an essential element of cohabitation.
Mr. Graev appealed, and the first appellate court, the Appellate Division, affirmed the holding for Mrs. Graev. It stated that “the term cohabitation has a plain meaning which contemplates changed economic circumstances, and is not ambiguous.” 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. But these facts were not decisive under New York caselaw because MP owned his own home and there was 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.
Mr. Graev appealed again, and the Court of Appeals (the highest New York appellate court) reversed and remitted the case to the lower court for further proceedings. The Court of Appeals held that the word cohabitation as used in the separation agreement doesn’t have a plain meaning, and that without extrinsic evidence as to the parties’ intent a court would have no way to assess what particular factors inherent in the dictionary meanings or caselaw discussions of cohabitation the parties had meant to embrace or emphasize.
A dissent to the Court of Appeals opinion found that the term cohabitation has a commonly-accepted core meaning:
habitually living with an unrelated adult in the same residence while engaged in an intimate relationship without being legally married to that person. It noted that the 60-day time time limit stipulated in the separation agreement was enough to make the cohabitation clause unambiguous; the dissent would have found for Mr. Graev.
So it’s clear that cohabitation is a risky word to use. What should contract drafters use instead? In a footnote, the dissent had something to say about that:
Parties to future divorce agreements may wish to consider whether to define “cohabitation” to expressly exclude the “economic unit” concept (see generally Zipparo v Zipparo, 70 AD2d 616 [2d Dept 1979] [defining term to mean “‘the regular living together of the Wife with a man for a period exceeding six (6) months”‘]) or simply discontinue using the term “cohabitation”—which the majority believes is inherently meaningless in the absence of factual findings regarding the parties’ intent—in favor of “reside” or “live together” along with a specified period of time.
The person making the support payments would presumably prefer to avoid the messy business of establishing, before stopping payments, that the other was having sexual relations with, or sharing expenses with, someone else.
