Cohabitation Agreements in Arizona
Earnings of both spouses during a marriage are community property. The court divides community property equitably between the spouses if they divorce. However, community property protections do not apply if the couple is unmarried and cohabiting. In Cook v Cook, 691 P.2d 664 (1984), an unmarried cohabiting couple made a property agreement. When they split up, one filed a lawsuit to enforce it. The Arizona Supreme Court considered whether it could be enforced under Arizona law.
Facts of the Case: Cook v. Cook
Ms. Cook and Mr. Cook began living together in 1969. Donald was still married to someone else. They intended to marry once his divorce was final, but they never did. They lived together as man and wife in Arizona, pooling all of their earnings. They held bank accounts and property in joint tenancy with the right of survivorship.
Ms. Cook left Mr. Cook in 1981. The couple owned many assets together. However, Ms. Cook only got a car and a few hundred dollars when she left. She sued for half of all of their assets on a partnership/contract theory. The judge ruled against her. He said that Arizona courts did not have the right to enforce a partnership agreement between cohabiting, unmarried persons.
The Court of Appeal also ruled against Ms. Cook, saying that, in Arizona, partnerships between cohabiting individuals are against public policy. The Supreme Court granted review on this issue.
A Partnership Agreement Can Be Proved by Actions
The Arizona Supreme Court considered whether Ms. and Mr. Cook had made an agreement about their property. It reviewed the record in the case as well as the behavior of the couple during their time together.
The Court noted that the Court of Appeals had concluded that the individuals did enter into an agreement. They agreed to pool their earnings and share their assets equally.
It also reviewed the way Mr. and Ms. Cook had acted during their years together. It found that their behavior was completely consistent with this sort of an agreement. It noted that writing is not necessary to form an agreement, but that it can be expressed in the couple’s behavior.
It said that an agreement that reflects the intentions the parties is enforceable in Arizona unless contrary to public policy.
Public Policy and the Meretricious Relationship
The Court next considered whether enforcement the parties’ agreement would be against public policy. In Arizona, the public policy is to protect the marital relationship. That policy is reflected in the state’s community property laws. Those laws do not give unmarried cohabiting individuals community property rights in assets earned during a relationship.
Here, however, the Court noted, Ms. Cook is not seeking community property rights. She only wants the court to enforce an agreement for the pooling of income and the ownership of assets.
The Arizona Supreme Court concluded that Arizona allows property division by people cohabiting outside of marriage. It said that the fact of their unmarried relationship does not prevent enforcement of a fair agreement. If the unlawful relationship was separate from their contract concerning the ownership of property, the court will enforce it.
The Court said that the question is not why the contract was made. Nor is the question if it would have been made had the couple not been cohabiting. Rather, it is whether the contract can stand as a valid independent contract.
In this case, the Court found that it could. The agreement would never have existed but for the relationship. Still, the Court will enforce if it is supported by consideration that is not contrary to public policy.
A promise to contribute funds to a “pool” of income is a proper consideration. The Court did not consider whether the contract would be enforceable if the consideration was the performance of cohabitants’ marital functions. It specifically noted that this was not part of its decision.
Procedural Issues Require Remand
The trial court never stated whether it found that a contract existed between the parties. Therefore, the Supreme Court sent the case back down to that court. It directed the court to apply the law stated in this opinion.