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Michael J. Thieme v. Bernice F. Aucoin-Thieme(076683)

Supreme Court of New Jersey
227 N.J. 269, 151 A.3d 545, 2016 N.J. LEXIS 1289 (2016)
ELI5:

Rule of Law:

While New Jersey's equitable distribution statute limits the division of assets to those acquired strictly 'during the marriage,' a court may use its equitable powers to impose a constructive trust on assets acquired during a pre-marital cohabitation period to prevent the unjust enrichment of one party when both parties made significant life decisions in reliance on the future acquisition of that asset.


Facts:

  • In 1999, Michael J. Thieme began working for a biotechnology consulting business, International Biometrics Group (IBG).
  • Thieme and Bernice F. Aucoin-Thieme began cohabiting in 2002.
  • In May 2002, IBG's owners executed a 'Statement of Understanding' committing to compensate Thieme for his contributions if the company was ever sold.
  • After their daughter was born in January 2003, the couple agreed that Aucoin-Thieme would be a stay-at-home parent, sacrificing her own career aspirations.
  • The couple made significant personal and financial decisions based on the shared expectation that Thieme would receive substantial compensation if IBG were sold.
  • After eight years of cohabitation, Thieme and Aucoin-Thieme married in August 2010.
  • Their marriage lasted 14 months before they divorced in June 2012.
  • Three months after the divorce was finalized, IBG was sold, and Thieme received a $2.25 million 'Closing Bonus' as compensation for his 13 years of service.

Procedural Posture:

  • After learning of the bonus, Aucoin-Thieme withdrew $200,000 from a joint bank account.
  • Thieme filed a complaint in the Chancery Court of Harrison County, Mississippi, to recover the funds.
  • Aucoin-Thieme filed a counterclaim, alleging fraud and seeking a share of the Closing Bonus.
  • The case was transferred to the New Jersey Family Part, a court of first instance.
  • Following a bench trial, the Family Part judge ruled that Aucoin-Thieme was only entitled to equitable distribution of the portion of the bonus earned during the 14-month marriage, awarding her $30,288.
  • Aucoin-Thieme, as appellant, appealed the decision to the Appellate Division, an intermediate appellate court.
  • The Appellate Division affirmed the trial court's judgment.
  • The Supreme Court of New Jersey, the state's highest court, granted Aucoin-Thieme's petition for certification.

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Issue:

Does New Jersey's equitable distribution statute permit the division of deferred compensation earned during a period of pre-marital cohabitation? If not, may a court impose a constructive trust on such compensation to prevent unjust enrichment?


Opinions:

Majority - Justice Patterson

No as to the statute, but Yes as to the equitable remedy. New Jersey's equitable distribution statute, N.J.S.A. 2A:34-23(h), does not permit the division of assets acquired during a period of pre-marital cohabitation, but a court may impose a constructive trust on such assets to prevent unjust enrichment in extraordinary circumstances. The plain language of the statute unambiguously limits equitable distribution to property acquired 'during the marriage.' The legislature did not intend to treat property from a cohabitation period as equivalent to marital property, and prior case law does not support such an expansion. However, the Family Part is a court of equity. Unjust enrichment occurs when one party receives a benefit and its retention without payment would be unjust. Here, the parties structured their lives and made mutual sacrifices—most notably Aucoin-Thieme forgoing her career—in reliance on the shared expectation of the IBG compensation. For Thieme to retain the entire portion of the bonus earned during their cohabitation would be an unjust enrichment. Citing Carr v. Carr, the Court found that when a statutory remedy is unavailable or inadequate, equity can intervene. Therefore, imposing a constructive trust on the pre-marital portion of the bonus is the appropriate remedy.



Analysis:

This decision reinforces the strict statutory limitation of equitable distribution to the formal marital period, declining to judicially expand the statute to include pre-marital cohabitation. However, it significantly affirms the robust equitable power of family courts to look beyond the statute and prevent unjust outcomes. The case establishes a precedent for former spouses to seek recovery for contributions made during long-term cohabitation that led to the acquisition of a specific, anticipated asset, even if that asset materialized post-divorce. This creates a narrow path for equitable claims based on proven reliance and sacrifice during a pre-marital partnership, potentially impacting cases where long-term cohabitants who later marry build their financial lives around a future asset.

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