Wednesday, April 27, 2016
An “Attagirl” for Judge Chrystal in a Long-Running Mount Laurel Case
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Affordable Housing Oversight: Q & A with Gary Forshner, Esq.
BRIEFLY EXPLAIN THE RECENT NJ SUPREME COURT DECISION RELATED TO AFFORDABLE HOUSING OVERSIGHT.
After sixteen years without viable and constitutional regulations for Affordable Housing, the Supreme Court created new mechanisms to meet Affordable Housing goals. To really explain this issue, we need to go back for some history. In 1975 the Supreme Court said every municipality has an obligation to provide a reasonable opportunity for Affordable Housing. In other words, there needs to be a variety of choice in housing for residents and citizens of New Jersey at all income levels. In the eighties, the courts created a methodology to provide Builders’ Remedies, whereby builders who brought suit and established that municipalities engaged in exclusionary zoning would be granted the remedy of rezoning of their property for an inclusionary development, providing for a percentage of affordable housing within a market rate project. In response the legislature adopted the Fair Housing Act (FHA) whereby the Council on Affordable Housing (COAH) was delegated as the authority to create and enforce regulations concerning affordable housing. Since 1999, COAH has failed to act in a responsible manner to create those regulations—we’ve been without constitutionally satisfactory regulations for sixteen (16) years.
The Supreme Court said that because COAH has been “moribund” and failed to act in the manner designed, the court was going to take back that responsibility. With that decision we return to procedures that existed in the mid-eighties—the courts are going to decide the obligations of municipalities and how they are going to create Affordable Housing opportunities.
WHAT ARE THE IMMEDIATE CONSEQUENCES OR RAMIFICATIONS FOR INTERESTED PARTIES?
Before this ruling, we didn’t know very clearly how to accomplish obligations under Affordable Housing regulations. We were basically in the Wild West. Municipalities didn’t know the scope of housing regulations; developers didn’t know how they were going to satisfy components of those regulations; housing advocates didn’t know how they were going to get Affordable Housing built. Now we have a path forward. The Supreme Court gave us a methodology and a path:
- Municipalities can apply to the courts for approval of Affordable Housing Plans;
- Developers’ can take part in that process by:
- Determining the number of Affordable Housing units;
- Defining which properties fall in the applicable zones; and/or,
- Defining how housing will be built.
WHAT HAPPENS AFTER A TOWN SUBMITS A NEW PLAN?
Once a town submits a Plan—and that is expected to include about 400 municipalities—the process starts and all other interested parties have the opportunity to join the process. These parties include builders; property owners with a property they are interested in developing for that purpose; and also housing advocates.
DOES THIS MEAN THE RETURN OF BUILDERS’ REMEDY SUITS? SHOULD THEY WAIT TO FILE SUIT?
The answer is a definite “Maybe.” First of all to answer the question of the return of Builders’ Remedy lawsuits, “Yes,” Builders’ Remedies are still an option. First you should address the municipality saying, “I have a piece of property. I think it’s appropriate for Affordable Housing. I believe you as a municipality have not satisfied your obligations to provide a reasonable opportunity for Affordable Housing.” If the municipality won’t cooperate, you can ask the courts for a Builders’ Remedy. In this situation the Builders’ Remedy gives a builder the opportunity to create a higher density development with a “set aside” for Affordable Housing. Typically this is done over a municipality’s objection. If the municipality participates in court proceedings it may get some protection from a Builders’ Remedy suit. If it hasn’t participated in the past, and isn’t going to participate in the future, it leaves the door open for builders to pursue that remedy.
WHAT DOES THIS MEAN FOR THE VOLUNTARY REZONING PROCESS?
The Voluntary Rezoning Process can occur during the process of enacting a plan, or subsequent to it. There’s nothing that prevents voluntary rezoning. The reality is that a typical municipality is going to resolve their Affordable Housing obligation by rezoning property to allow for an inclusionary development or sometimes a 100% Affordable Housing development, but only once the affordable housing plan has been approved by the Courts.
WHAT STEPS SHOULD PROPERTY OWNERS AND DEVELOPERS TAKE NOW?
This is perhaps the most critical question for property owners and developers. Municipalities will be creating a thorough plan to submit in June in most cases, but the deadlines are being set by individual courts. Property owners and developers should do the following:
- Identify the property or properties that are suitable for Affordable Housing
- Gain control of that property
- If you are an owner you have control
- If you are a developer you want to put it under contract
- Conduct due diligence on the property to make sure it’s suitable for Affordable Housing—it MUST be suitable to qualify:
- Does it have water, sewer, etc.?
- Does it have environmental constraints?
- Does appropriate infrastructure, including access roads, exist?
- Put municipality on notice that you want to be part of their service list so you know what’s being filed and when.
- Put municipality on notice that you have property that is appropriate for the purpose and that you want to be involved in the court process. Do what we call a “Friendly.” Approach the municipality and say, “I have suitable property, I’d like to be included in your Affordable Housing Plan.” This is critical because the next step is a step through the core process as determined by the municipality’s response:
- “White Hat” approach to support the municipality’s Plan
- “Yes, we like what the municipality has done; they rezoned our property for that purpose; and we support their Affordable Housing Plan, as proposed.”
- The “Black Hat” alternative if you are on a different page from the municipality because it chose not to rezone your property even though you feel it is suitable and appropriate; you believe it is not providing enough Affordable Housing; and or, you believe it is choosing less suitable properties.
- “No, we don’t support the plan—we think our property should be included—and here’s why.”
- “White Hat” approach to support the municipality’s Plan
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Tuesday, April 26, 2016
The Arbitration “Rules of Engagement”
The recent Appellate Division case of Sirigotis v. Sirigotis, although unpublished (non- precedential), provides a great reminder of how important it is to know the “rules of engagement”.
In Sirigotis, the parties were able to resolve a majority of their issues by consent but agreed to submit the remaining unresolved issues to “final and binding” arbitration to be conduct by a retired judge. The parties provided the arbitrator a list of open issues that were to be decided.
The parties agreed to the appropriate amount of base alimony but a remaining open issue was that wife had an additional claim for alimony should husband’s income rise over a certain level as well as the inclusion of specific language in the award regarding plaintiff not being able to maintain the standard of living Crews v. Crews. Husband had objected to both of these requests. During one of many arbitration sessions, the arbitrator had initially indicated that “all Crews [language] is out” because the issue of the determination of the marital lifestyle was not “before him”. Notwithstanding, in a later submission from wife, she again raised the issue of additional alimony on the grounds that the base alimony would not neither meet her needs or the marital lifestyle. Husband’s submission argued that no additional alimony should be paid as the base alimony would “without question” meet wife’s needs and exceeds the marital lifestyle. Moreover, Husband requested that language be inserted that specifically indicated that both parties would be able to maintain a lifestyle reasonably comparable to that enjoyed during the marriage.
The reasons the parties were at odds over this language is because the standard of living and the likelihood that each party can maintain a reasonably comparable standard of living is a factor that must be considered when awarding alimony. This factor is of import because it serves as the touchstone for the initial alimony award and for adjudicating later motions for modification of the alimony award when ‘changed circumstances’ are asserted.
Ultimately, the arbitrator denied wife’s request to predicate more alimony based on a “future event” (increased income) and left wife to make an application to the Court in the future if necessary. The arbitrator also agreed with the husband that wife could maintain the standard of living.
Once the final arbitration award was issued, the wife moved to vacate the arbitration award in the trial court asserting that the arbitrator exceeded his authority by addressing the standard of living issue. Although the trial court found that the arbitrator had the authority to address the issue, the court ultimately vacated the arbitrator’s Crews finding and remanded for further proceedings, finding that plaintiff did not have the opportunity to give all her proofs on the issue. Both parties appealed.
The Appellate Division found the trial court erred in vacating the Crews finding and reversed and remanded to the trial court to confirm the arbitrator’s award. In doing so, it reminded us that arbitration awards are given considerable deference therefore the party seeking to vacate it bears a heavy burden, with the scope of review being narrow.
While arbitration is ‘creature of contract’ and an arbitrator exceeds his or her authority if they decide something outside the scope, the Appellate Division found that be virtue of the issues raised by the wife herself, the Crews issue had to be decided. Moreover, the Appellate Division found that the wife had ample time and ability to present evidence on this issue and indeed did so by virtue of oral testimony, written submissions and voluminous exhibits.
The take away from this case is regardless of whether you decide to mediate, arbitrate or litigate, some or all of your divorce, it is important to know the “rules of engagement”. It is imperative to engage an experienced professional to help guide you through the ins-and-outs. You do not want to find yourself at a disadvantage simply because you were not aware of the rules.
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Monetary Sanction is Imposed on Appellate Counsel for “Utter Indifference to the Standards of Professional Competence”
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Monday, April 25, 2016
Just Call Him Justice Timpone
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Thursday, April 21, 2016
Timpone Clears the Judiciary Committee by a Unanimous Vote
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A Cyberlaw Preparedness Primer for Businesses
As the dust settles on the legal battle between Apple and the F.B.I., businesses should take note of the many issues related to the privacy and confidentiality of electronically stored information. Though Apple arguably emerged victorious in refusing to create a backdoor for its security measures, the still unknown point of access utilized by the F.B.I. highlights the risk that electronically stored information is never truly secure. Data breaches at Sony, Home Depot, Target, and even within the federal government highlight this point.
Given their volume and value of data, businesses need to be particularly cognizant of the cyber-threats and nimble in response to cyber-attacks. However, it is not enough to simply recognize the threat posed by a cyber-attack. Businesses need to be prepared to act swiftly and effectively to prevent any further misappropriation or transmission of electronically stored information.
It can be no doubt that external cyber threats pose the greatest harm to companies because, often, the attacker is unknown and therefore leaves a business without a true remedy. After discovering the what, where, and why, the question quickly becomes who? Specifically, who do you seek relief from? If the attacker is unknown or anonymous, how do you prevent further dissemination of confidential and proprietary information? Unfortunately, for many businesses, those questions remain forever unanswered.
But while the threat of external theft is great, businesses should not disregard or overlook the potential possibility of internal cyber threats. Employees, partners, shareholders, members, agents, and others all are typically given unquestioned access to confidential and proprietary information of a business. The logic and intent of this access is simple. Those individuals will use their access to better the business. But what happens when the relationship sours? What happens if an employee copies information, or retains unauthorized access to information after either termination or voluntary departure? This may be of no concern if the employee does not utilize the information, but it could be of great concern if the employee joins or forms a competition entity. Though the attacker is known, unlike an external cyber-threat, the damage can nonetheless be catastrophic.
As a means of preparing for both internal and external threats, businesses should not only seek to continually improve computer security, but also develop and maintain proper legal protections. A recommended first step in this process is to define access levels. If your business maintains confidential and proprietary information, then access to that information should be defined and enforced. The second step is subjecting those employees requiring access to proper agreements providing for the protection of said information, including, but not limited to, non-disclosure agreements, restrictive covenants, non-solicitation agreement, etc. These agreements will not only serve as mechanism of enforcement in the event of an internal cyber-attack, but also a tool for any equitable action related to the exposure of confidential or proprietary material.
The third step is to regularly update those agreements consistent with the terms of applicable laws, like the Computer Fraud and Abuse Act, 18 U.S.C. § 1030, the New Jersey Computer Related Offenses Act, N.J.S.A. 2A:38A-1 et seq., and the New Jersey Trade Secrets Act, N.J.S.A. § 56:15-1, et seq. The last step is to monitor access and use of confidential and proprietary information and to enforce non-compliance with the above agreements in the event of a breach. Given the particularly sensitive nature of electronically stored information, a business needs to act swiftly in the event of an attack to prevent any use of further transmission.
George Washington once wrote “that offensive operations, often times, is the surest, if not the only (in some cases) means of defence.” That adage is particularly relevant in the realm of cyberlaw. A business should prepare the sword as a means of deterrence to internal threats, and as a means of shielding the potential damage of an external attack.
If you are a business that maintains sensitive electronically stored information, it is strongly recommended that you consult with an attorney to take these proactive steps. Likewise, if you are a business or individual has been subjected to an attack, it is strongly recommended that you consult with an attorney for guidance in securing relief. The attorneys at Stark & Stark are very familiar with these issues and would be happy to guide you through the process.
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Wednesday, April 20, 2016
Timpone Nomination May Move Quickly
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Shareholder Scott Unger Appointed to the Ohio State University Moritz College of Law National Council
Congratulations to Stark & Stark Shareholder Scott Unger, who was appointed to the Ohio State University Moritz College of Law National Council. The National Council serves as the board of directors for the Ohio State University Moritz College of Law.
The National Council provides constructive advice and plans to the law school, and bestows grants and awards to recognize the accomplishments of the graduating students. Current board members include an Ohio governor, an Ohio State Supreme Court Judge, as well as several federal judges. Once elected, a voting board member will have a term of five years, with a maximum of two terms.
Scott Unger is a Shareholder and a member of the firm’s Litigation Group, and he concentrates his practice on litigation arising out of business and commercial disputes. He also counsels corporations and their executives on various employment issues, such as workplace discrimination and wrongful discharge, and non-compete and confidentiality agreements. Additionally, Mr. Unger received B.A. from the Ohio State University and his juris doctor from the Ohio State University Moritz College of Law.
To learn more about the Ohio State University Moritz College of Law National Council and its current roster of members, please click here. To learn more about Scott Unger, please click here.
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Tuesday, April 19, 2016
Office of Attorney Ethics May Investigate Grievance That District Ethics Committee Had Declined to Docket
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Monday, April 18, 2016
NFL Concussion Settlement Affirmed in a Magnificent Third Circuit Opinion
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Open Public Records Act Request That Requires Government to Create Records is Improper
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Friday, April 15, 2016
Tort Claims Act Notice Need Not be Served on Private Government Contractor
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Thursday, April 14, 2016
Filling in the Gaps: The Addition of “Criminal Coercion” as a Predicate Act Under the NJ Prevention of Domestic Violence Act
In August 2015, the New Jersey Legislature formally amended the Prevention Against Domestic Violence Act (N.J.S.A. 2C:25-19(a)) to include the predicate act of criminal coercion as a fifteenth form of domestic violence (in addition to: homicide, assault, terroristic threats, kidnapping, criminal restraint, false imprisonment, sexual assault, criminal sexual contact, lewdness, criminal mischief, burglary, criminal trespass, harassment, and stalking, all of which are as defined under their respective criminal statutes).
By way of background, in order to obtain a restraining order under the NJ Prevention Against Domestic Violence Act, the plaintiff/victim must have a qualifying relationship with the defendant, must prove that one or more of the (now) 15 qualifying “predicate” acts of domestic violence was perpetrated against you, and must also show that there is a continuing need for protection based on the facts of your case. The addition of criminal coercion as a predicate act opens an additional avenue by which victims can seek to obtain protection under the Act.
Criminal coercion is defined as a threat made to unlawfully restrict freedom of action, with a purpose to coerce a course of conduct from a victim which defendant has no legal right to require, including threatening to:
- Inflict bodily injury on anyone or commit any other offense;
- Accuse anyone of an offense;
- Expose any secret which would tend to subject any person to hatred, contempt or ridicule or to impair credit or business repute;
- Take or withhold action as an official or cause an official to take or withhold action;
- Bring about or continue a strike, boycott or other collective action except that such a threat shall not be deemed coercive when the restriction compelled is demanded in the course of negotiation for the benefit of the group in whose interest the defendant acts;
- Testify or provide information or withhold testimony or information with respect to another person’s legal claim or defense;
- Perform any other act which would not in itself substantially benefit the defendant but which is calculated to harm another person with respect to his health, safety, business, calling, career, financial condition, reputation or personal relationships.
A recent opinion penned by Judge Jones, J.L. v. A.C. specifically addressed the first category of criminal coercion. In that case, Judge Jones found that the defendant had criminally coerced the plaintiff into meeting with him, at which time he brutally beat her, by threatening the safety of her child if she refused to meet with him as he demanded. As Judge Jones notes in his opinion, the NJ Prevention Against Domestic Violence Act has been criticized for its failure to provide protection to children because the Act only extends protections to victims who are over the age of 18 (except in cases where the relationship between the victim and defendant is a dating relationship). Thus, Courts have typically denied relief to plaintiffs who try to obtain restraining orders for acts of violence committed against their children, rather than against them personally.
The major takeaway from this decision? As a parent, it seems that you can definitively obtain protection under this Act where the defendant coerces a course of conduct from you by threatening to inflict bodily injury or commit an offense against your child. It would also seem that this could extend to threats against anyone else in the plaintiff/victim’s life, including a boyfriend or girlfriend, co-worker, friend, or other family member. However, there are limits. Although Judge Jones’s opinion emphasizes that the new predicate act of criminal coercion fills in the gap where there was no way to obtain a restraining order for threats of violence toward a child or third party, it is important to note that there must also be “purpose to coerce a course of conduct” from the plaintiff him/herself. A threat to harm a child or third party is not enough; that threat must cause the victim to engage in a particular course of conduct. In J.L. v. A.C., that course of conduct was the act of meeting with the defendant, which the victim would not have done but for the threat to her child.
Additionally, it is vital to remember that the restraining order is still going to be between the plaintiff and the defendant – NOT between the defendant and the third party against whom a threat has been levied. With that said, the court has always been empowered to issue a final restraining order that includes a victim’s family members as additional protected persons. As an important practice tip, if you are an attorney or a self-represented party seeking a restraining order based upon criminal coercion that includes a threat to inflict bodily injury or commit an offense against a third party, it is imperative that you seek to include the threatened third party as a protected party on any final restraining order issued by the Court.
Jessica C. Diamond is an associate in the firm’s Family Law Practice, resident in the Morristown, NJ, office. You can reach Jessica at (973) 994.7517 or jdiamond@foxrothschild.com.
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No Private Nuisance Liability for Natural Conditions
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Wednesday, April 13, 2016
Court May Consider Environmental Contamination of Property in Assessing True Market Value Even When Property Generates Income and is Used by Tax Payer
In a recent New Jersey Tax Court decision, ACP Partnership v. Garwood Borough, the court ruled that it will permit consideration of a property’s environmental contamination in deciding its true market value even though the property possesses a “value in use” to the tax payer. The case is significant because it rebuts the notion that a commercial property “in use” by the tax payer may only be assessed using “normal assessment techniques,” with no consideration given to environmental contamination in establishing its true market value.
The subject property in ACP Partnership is a multi-tenanted and multi-structured industrial and warehouse complex containing approximately 230,000 square feet of improvements. The tax payer leases the property to tenants for warehouse and industrial uses. The tax payer also occupies a small portion of the property for self-storage.
At the time the property was purchased, the property owner was not required to investigate the property for contaminates, or cleanup the property, since its sale pre-dated the enactment of the Environmental Cleanup Responsibility Act (“ECRA”) and Industrial Site Recovery Act (“ISRA”). Following the acquisition of the property, the tax payer discovered the presence of contaminates and entered into a voluntary Memorandum of Agreement (“MOA”) with the New Jersey Department of Environmental Protection (“NJDEP”) to investigate the source of the contaminates and commence remediation efforts. Remediation efforts by the tax payer are ongoing. Nonetheless, the property is still “in use” since it generates income for the property owner and the owner occupies part of the property.
The tax payer appealed the municipality’s tax assessment for six years beginning in 2010. The cases were thereafter consolidated. The tax payer moved for partial summary judgment on the issue of whether the property’s “in use” status precludes any consideration of environmental contamination in both assessing practices and in establishing true market value. The municipality opposed the motion by arguing that the property’s “in use” status requires the court to only consider “normal assessing techniques,” without consideration of environmental contamination in establishing true market value.
In analyzing the issues, the court focused on the Supreme Court’s decision in Inmar Assocs., Inv. v. Borough of Carlstadt, 112 N.J. 593 (1988) and the body of law that developed thereafter. Inmar laid the foundation for the general principle that environmental contamination must be considered when determining true market value for property tax purposes. In Inmar, the Court opined that environmentally contaminated property for which there is no market may nonetheless have a distinct “value in use” to the owner as long as the owner continues to operate the property. Significantly, in Inmar, the New Jersey Supreme Court never expressly provided that environmental contamination could not be factored into the analysis for determining true market value when the property is “in use” by the tax payer.
After Inmar, two lines of cases emerged. The first was based on the scenario where the property owner continued to operate the property in order to avoid statutorily mandated environmental cleanup requirements. See Pan Chemical Corp. v. Borough of Hawthorne, 404 N.J. Super. 401 (App. Div. 2009), certif. denied, 198 N.J. 473 (2009). Under the rationale of Pan Chemical, the court declined to consider the influence of contamination on the property in determining true market value since the property was “in use.” One of the reasons for this is because the tax payer who caused the contamination continued to operate the property in order to avoid statutorily mandated cleanup requirements. Therefore, allowing consideration of environmental contamination in the assessment of true market value would provide a “windfall benefit” to the party responsible for the contamination at issue.
The second line of cases involves property where the operations that caused environmental contamination on the property had ceased and the property owner was engaged in investigation and remediation of the contamination. See Badische Corp. v. Town of Kearny, 288 N.J. Super. 171 (App. Div. 1996); Metuchen I, LLC v. Borough of Metuchen, 21 N.J. Tax 283 (Tax 2004); Orient Way Corp. v. Township of Lyndhurst, 27 N.J. Tax 361 (Tax 2013), aff’d, 28 N.J. Tax 272 (App. Div. 2014), certif. denied, 220 N.J. 574 (2015); and Methode Electronics, Inc. v. Township of Willingboro, 28 N.J. Tax 289 (Tax 2015). In those cases, the courts have considered the impact of environmental contamination on the true value of the property.
After providing a recitation of both lines of cases, the court noted that the facts in ACP Partnership differ from the facts and rationale of Pan Chemical Corp. In ACP Partnership, the tax payer is an innocent party who did not cause the contamination of the property, yet was engaged in investigation and cleanup of the property. The court held that the use of “normal assessment techniques” must be considered in attempting to determine true market value of contaminated property “in use” by the tax payer. However, those techniques “must be tempered by the costs encountered by the tax payer in addressing the environmental condition of the property.” The court did not provide a methodology for the tax payer to employ, but left the issue open to the “competence of the appraisal community.”
The ACP Partnership case demonstrates a few points:
- Tax payers continue to face uncertainty when appealing environmentally contaminated property despite the progeny of established cases on the subject.
- The door now appears to be open to for the consideration of environmental contamination in assessing true market value for contaminated property even in scenarios where the property is “in use,” as long as the tax payer is not trying to skirt its obligation to remediate the contamination.
- Finally, the case highlights the difficulty that the courts have in grappling with the valuation of contaminated property. Instead of providing a rule or framework that tax payers can use to valuate contaminated property, the issue is left to the “competence of the appraisal community.”
If you are considering filing an appeal for industrial or commercial property, it is strongly recommended that you consult with experienced legal counsel immediately. If you have any additional questions, feel free to reach out to one of our real estate tax appeal attorneys.
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Voting by Proxy Actually Requires a Proxy
The bylaws of most community associations permit members to vote “in person” or “by proxy.” Voting “in person” means just what it sounds like: a member attends a meeting and casts their vote while physically in attendance. But what does voting “by proxy” mean? Black’s Law Dictionary defines a “proxy” as the written authorization given by one person to another so that the second person can act for the first.
Thus, when a member of a community association votes by proxy, they give written authorization for another person to vote for them. It may be tempting to take short cuts in this process, but if your members are voting by proxy, they must actually execute a proper proxy.
Voting “by proxy” can be done by a general proxy or directed proxy. With a general proxy, the member executes the proxy and gives the appointed person the authority to attend the association meeting and act for the member. If the association is holding trustee elections, the appointed person attends the meeting and completes a ballot on behalf of the member, and has full discretion on choosing who to vote for.
With a directed proxy, instead the member executes the directed proxy and gives the appointed person the authority to attend the association meeting and act in a specific way as directed by the member. If the association is holding trustee elections, the appointed person is directed by the member as to who to vote for. The appointed person casts the ballot, but has no discretion over the actual voting. In some ways a directed proxy may seem the same as an absentee ballot; however, they are not the same and are not interchangeable.
If you need assistance preparing proxies or with elections in general, please feel free to contact Stark & Stark’s Community Association Group.
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Monday, April 11, 2016
The End of a Six-Year Supreme Court Dispute? Governor Christie Nominates Walter Timpone to the Court
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Thursday, April 7, 2016
APPELLATE DIVISION ADDRESSES NON-RELOCATION AGREEMENT
In many custody disputes, a primary area of concern is one parent’s ability to relocate with the children after the divorce is over. Relocation requests have been characterized as often resulting in “heart-wrenching” decisions. As we have previously discussed on this blog, the legal standard to be applied to a parent’s interstate removal application differs if the parent is the primary caretaker as compared to an equal physical and legal custodian with the other parent. The two standards are briefly explained below:
Equal custodial parents: If the parents “truly share both physical and legal custody,” then the moving parent must prove that the best interests of the children would be better served by residential custody being primarily vested with the relocating parent.
One primary custodial parent: On the other hand, if one parent is the primary caretaker, that parent’s request to relocate with the children is governed by the two-prong Baures test – specifically, the moving party has to prove by a preponderance of the evidence that (1) there is a good faith reason for the move; and (2) the move will not be inimical to the children’s interests. The Baures test is analyzed in the context of twelve (12) factors set forth in that case, and is more favorable to the primary custodian seeking relocation. In fact, it is this favorable standard that often sees non-custodial parents claiming “de facto” equal custodial status in response to a primary custodian’s relocation motion to convince the trial judge to utilize the best interests standard. As an aside, there exists pending legislation that would alter this favorable legal standard.
What happens, then, if there exists a so-called non-relocation agreement and a primary custodian seeks to relocate interstate? The Appellate Division was faced with that issue in the newly published (precedential) decision of Taormina Bisbing v. Bisbing. Here are the facts that you need to know:
- The parties were married in 2005 and the children were married in 2006. Both parties were highly-paid professional employees, with wife earning more than husband.
- In early 2013, husband investigated job opportunities in Colorado and California. The parties separated in August, 2013 and, in November, wife began a long distance relationship with a Utah resident who had children from a prior marriage. The Utah resident owned a business in Idaho and had business interests requiring him to frequently travel to California and Louisiana.
- On March 8, 2014, the parties entered into a marital settlement agreement wherein they agreed to joint legal custody, and that wife would have primary residential custody under the condition that she would not relocate outside of New Jersey. The MSA also provided that dad would have “broad, reasonable and liberal timesharing” of the children – Father’s Day, his birthday, every other weekend and on one weeknight during the weeks when he did not have parenting time, every other Thanksgiving, Christmas Eve, Christmas Day, New Year’s Eve, New Year’s Day, and school breaks. Each parent was entitled to attend all sporting events and activities regardless of which parent was scheduled to have parenting time.
- As to relocation, the agreement provided:
The parties agree that each shall inform the other with respect to any change of residence concerning himself or herself or the said minor Children for the period of time wherein any provision contained in this Agreement remains unfulfilled. The parties represent that they both will make every effort to remain in close proximity, within a fifteen (15) minute drive from the other. Neither party shall permanently relocate with the Children from the State of New Jersey without the prior written consent of the other. Neither parent shall relocate intrastate further than 20 miles from the other party. In the event either party relocates more than 20 miles from the other party, the parties agree to return to mediation to review the custody arrangement. In the event a job would necessitate a move, the parties agree to discuss this together and neither will make a unilateral decision. Neither party shall travel with the minor Children outside of the United States without the prior written consent of the other party.
The parties hereby acknowledge that the Children’s quality of life and style of life are provided equally by Husband and Wife.
The parties hereby acknowledge a direct causal connection between the frequency and duration of the Children’s contact with both parties and the quality of the relationship of the Children and each party.
The parties hereby acknowledge that any proposed move that relocates the Children any further away from either party may have a detrimental impact upon the frequency and duration of the contact between the Children and the non-moving party.
- On April 16, 2014, a final judgment was entered that incorporated the terms of the settlement agreement. Husband represented that, after the divorce, he was very involved in the children’s lives, coached their teams, took them to activities, and attended school events.
- One month after the divorce, wife sent an email to husband telling him that, although she received no alimony, she was planning to leave her job on July 1, 2014 to be a full-time stay-at-home parent, which she did.
- On January 8, 2015, wife called husband to tell him of her intention to get married to the Utah resident and relocate to Utah. Wife asked for husband’s permission to relocate with the children. Husband refused, indicating that she could move and leave the children with him.
- On March 16, 2015, wife filed a motion to relocate with the children to Utah without the need for a plenary hearing. The court granted the motion – without a hearing – so long as a visitation schedule could be established through mediation.
- On July 14, 2015, after unsuccessful mediation, with only wife suggesting a parenting plan, the court issued a supplemental order establishing a parenting time and communication schedule using most of wife’s suggestions. Eleven days later, wife and the children “left for a vacation to Utah.” Three days thereafter, she permanently relocated with the children in Utah.
In reversing and remanding for a plenary hearing, the court found:
- The best interests of the child standard should be applied if wife was found to have negotiated the settlement agreement in bad faith.
- If no bad faith finding is made, the court is to consider whether wife proved a substantial unanticipated change in circumstances “warranting avoidance of the agreed-upon non-relocation provision and simultaneously necessitating a Baures analysis.”
- If the settlement agreement was deemed to have been negotiated in good faith, but wife fails to prove a substantial unanticipated change in circumstances, the court is to apply the above-referenced best interests of the child standard.
- In other words, wife could only receive the “benefit” of the Baures standard if wife was found to have negotiated in good faith and proved a substantial unanticipated change in circumstances.
Distinguishing from the notable prior trial court decision of Shea v. Shea,wherein the father accused the mother of of manipulating the Baures procedure by settling the divorce, and immediately thereafter filing for removal so as to reply upon the more favorable burden of proof, the court here critically found that husband was entitled to a hearing to prove whether wife manipulated the situation to obtain “favorable Baures removal procedures” that:
- When wife entered into the agreement, she may not have definitely known of the “material facts and circumstances forming the good faith reason for the removal request” (i.e., moving to Utah to marry her boyfriend).
- The non-relocation provision did not exist in the earlier matter.
In so holding, the court found:
Similar to the situation in Shea, the close proximity between the parties’ agreement and [wife’s] plans to relocate provides evidence of suspicious circumstances requiring a plenary hearing. If, after holding a hearing, the family court finds that [wife] negotiated in bad faith, it should then analyze the relocation request under a “best interests” analysis.
The non-relocation was to be considered even if wife is found to have negotiated in good faith, “without manipulative intent” premised on New Jersey’s strong public policy favoring agreements that resolve marital disputes. In damning tone, the Court found:
Thus, [wife], in a written and voluntarily agreed-upon contract, specifically surrendered her “freedom to seek a better life” in another state while obtaining primary custody of the children, and was well aware of that agreement when she chose to remarry and move far away.
While the relocation language of the agreement considered new employment as a basis for moving, it did not mention remarriage, thereby leading the Court to suggest that testimony would reveal whether remarriage was a considered eventuality at the time of the agreement and, thus, not an unanticipated substantial change in circumstance. The Court also noted that, if the Baures standard was to ultimately apply, the trial judge would be charged with analyzing the effect on the children of moving away from both parents’ extended families.
The facts are shocking on a first read, and no less so after I read the decision multiple times in preparing this blog post. Unfortunately, however, today’s relocation jurisprudence lends to the very situation that occurred. In
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- Robert Epstein is a partner in Fox Rothschild LLP’s Family Law Practice Group and practices throughout New Jersey. He can be reached at (973) 994-7526, or repstein@foxrothschild.com.
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PacSun Files for Chapter 11 protection in Delaware – Next Batch of Expected Retail Chapter 11 Bankruptcy Filings
On the heels of the Joyce Leslie and Sports Authority Chapter 11 bankruptcy filings, another retailer just filed for Chapter 11 bankruptcy protection, and it appears that two (2) more retailers are preparing to file to reorganize.
PacSun, formally known as Pacific Sunwear of California, Inc., just filed for Chapter 11 bankruptcy protection this morning in the United States Bankruptcy Court for Delaware, docket # 16-10882. High debt forced the teen retailer of surf/beachwear to file. PacSun operates 600 stores and is expected to close a number of stores either after the big back to school or holiday season. It lists total assets of $298,853,000 and liabilities of $305,056,000 in its petition.
In addition to PacSun, two more retailers are expected to file shortly. Bloomberg recently reported that Vestis Retail Group, owner of Eastern Mountain Sports (68 stores), Bob’s Stores (35 stores), and Sport Chalet (51 stores), appears to be preparing for a Chapter 11 bankruptcy filing. Bob’s Stores previously filed for bankruptcy in 2003 and was subsequently purchased by Vestis. This would be the second recent entrant into bankruptcy for a sporting goods retailer following Sports Authority, which filed on March 2, 2016.
Additionally, the New York Post recently reported that Fairway Market may also be filing shortly. The company hired Weil, Gotshal & Manges, the law firm which most recently handled the A&P bankruptcy.
Landlord’s Issues
Landlords – if one of these companies is a tenant of yours, the first thing you should do is ensure they are current on rent. If rent payments are not current, it is probably a good idea to call any defaults that may exist, now. Aside from staying current with rent, it is important to ensure that your operations personnel are fully-apprised. For instance, when was the last time your property manager spoke with the store manager to obtain important security codes, HVAC, and utility information? If a store is rejected or abandoned in a bankruptcy proceeding, you don’t want to be scrambling for that information after the fact.
If and when these companies file for bankruptcy protection, some important things landlords need to know are:
- Will they remain a tenant?
- When will rent be cured?
- Are there pre-petition claims that are owed?
- When will “Stub Rent” be paid?
- Is their Debtor in default of pre-petition non-monetary obligations? and,
- What other damages are owed (both pre- and post-petition)?
Trade Creditor Questions
Trade creditors, including suppliers, should also be asking important questions, such as:
- Have you been paid on time and does a reclamation claim (right to take back goods shipped, unpaid within 45 days) exist?
- Can an administrative claim be asserted?
- Should a proof of claim be filed, and if so, how?
- If you are a consignor of goods, when can you get paid or take your goods back?
It’s a good idea for commercial Landlords and trade creditors to speak with bankruptcy counsel immediately to formulate and execute a plan in the event of the likely bankruptcy filing.
Stark & Stark’s Bankruptcy & Creditors’ Rights Group can help. Our bankruptcy attorneys regularly represent landlords throughout the country, including recently in the District of New Jersey, Southern District of New York, District of Delaware, and Eastern District of Pennsylvanian on a variety of issues. Most recently, our Group represented landlords and trade creditors in the RadioShack, A&P, Joyce Leslie, and Sports Authority Chapter 11 bankruptcy cases.
For more information the PacSun filing and how Stark & Stark can assist you, please contact Thomas Onder, Shareholder at (609) 219-7458 or tonder@Stark-Stark.com. Mr. Onder writes regularly on commercial real estate issue and is a member of ICSC and Chair of the 2016 ICSC PA/NJ/DE Next Generation Committee.
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When Can a Custodial Parent Relocate Out of State With the Children, and What if The Divorcing Parties Have a Non-Relocation Agreement?
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Wednesday, April 6, 2016
The Third Circuit Applies Campbell-Ewald and Rejects an Attempt to Moot a Class Action by Buying Off the Named Plaintiff
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Adam Siegelheim, Esq. Recognized as Franchise Times “Legal Eagle” for 2016
Stark & Stark would like to congratulate Shareholder Adam J. Siegelheim, Chair of the firm’s Franchise Practice, for being named by Franchise Times Magazine as a 2016 Legal Eagle. Mr. Siegelheim was even selected as a featured Legal Eagle.
Legal Eagles are selected each year from nominations by their clients and peers and are recognized as the top lawyers in franchising. This year’s selection focused on “around-the-clock” attorneys, who are always available for clients. When looking at this year’s list of Legal Eagles you will find “dedicated professionals who are available whenever their clients need them, steeped in knowledge about all things franchising – with plenty of interesting aspirations and outlets beyond the courtroom.”
For more information about this year’s Legal Eagle selections, please click here.
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Tuesday, April 5, 2016
Shareholder Quorum Requirement Cannot be Altered by Changing the Bylaws
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When Do I Receive My Share of the Estate
If you are the beneficiary of an Estate where a Decedent recently passed away, you will undoubtedly like to know when you will receive your bequest under the Decedent’s Last Will and Testament. What you should be aware of, however, is that there are a multitude of steps that must occur before distributions can be made under a Last Will and Testament.
The first necessary step is that the Decedent’s Will must be admitted to probate. This would be done by the named Executor in the Will, and thereafter, the Executor would be appointed by the Surrogate to serve as the Executor of the Estate. The next step would be for the Executor to marshal all available liquid assets of the Estate and deposit them into an Estate account, or simply discover the location of the assets if they exist in the form of stocks, bonds, or other investment vehicles. Once this has occurred, the Executor will typically prepare an informal accounting, which will be provided to the beneficiaries of the Estate.
If all continues smoothly, the Executor will then commission the preparation of tax returns to be filed with both the federal and state government, depending upon the value of the Estate. Once the returns are filed, it is often necessary for the Executor to receive tax waivers from the individual state(s), provided all appropriate taxes are paid by the Estate. Once this has occurred, it is almost time for distributions to be made.
Prior to distributions being made, the Executor will typically provide an informal accounting and will require any beneficiary of the Estate to sign a Release and Refunding Bond. This means that any bequest that a beneficiary receives from the Estate could potentially have to be paid back in full or in part to the Estate should additional tax liabilities be incurred by the Estate. Provided the Estate accounting is done properly and the appropriate taxes are paid, a refund by a beneficiary to the Estate is typically unlikely—however, is possible. Once all Release and Refunding Bonds are returned to the Executor of the Estate, distributions can be made.
As you can see, the process to receive a distribution from an Estate often takes a significant amount of time as many steps are necessary. The number and complexity of the steps that must be performed correlates directly to the value of the Estate, as well as the complexity and nature of the assets held by a decedent.
If you are a beneficiary of an Estate and you are experiencing difficulty receiving your bequest, you should consult with counsel experienced in Estates to determine whether the Executor is acting properly. At times, an Executor may not be acting properly or may be unnecessarily delaying the distribution of an Estate, which may entitle you to bring an action. The above information is merely a roadmap as to how distributions might be made, and should you require additional information it is suggested that you consult with experienced legal counsel.
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Monday, April 4, 2016
Cohabitation Under the Amended Alimony Statute – Are We There Yet?
Suffice it to say, the issue of cohabitation under the amended alimony statute has been a hot topic of late in New Jersey family law. With several recent notable seminars on the topic, and two recently issued Appellate Division decisions (one published and the other unpublished) addressing when the amended law applies, practitioners and potential litigants hungrily consume these new cases looking for any morsel of guidance on how the statutory language will work.
Back when the law originally passed, I wrote an article for the New Jersey Law Journal analyzing cohabitation law past, present and future. A year and a half later, I am not only unable to confirm how a trial judge would apply the new statute, but if the discussions from each of those recent seminars are any indication, different judges may and will likely apply the statute very differently. In other words, some trial judges may favor applying the pre-amendment legal analysis, some may strictly apply the new statutory language, and some may even implement some sort of combination of the two.
Thus, as a very strong introductory caveat – We have no idea how the new will be applied given what we have heard judges say about it, and the fact that there is no law to guide us. Now, with that being said…
Just to briefly refresh, what did the old law say? Well, cohabitation was described by the Supreme Court of New Jersey as:
- An “intimate,” “close and enduring” relationship that requires “more than a common residence” or mere sexual liaison. The relationship “bears the generic character of a family unit as a relatively permanent household,” is “serious and lasting,” and reflects the “stability, permanency and mutual interdependence” of a single household.
- It involves conduct whereby “the couple has undertaken duties and privileges that are commonly associated with marriage.”
Indicia may include, but is not limited to, long-term intimate or romantic involvement; living together, intertwined finances such as joint bank accounts, shared living expenses and household chores, and recognition of the relationship in the couple’s social and family circle. The so-called “economic benefits” test would come into play after the payor made an initial showing of cohabitation, at which time the court would determine if the third party contributed to the dependent spouse’s support, or if the third party resided in the dependent spouse’s home without contributing anything to household expenses.
Now what does the new law have to say? The law defines cohabitation as involving a “mutually supportive, intimate personal relationship in which a couple has undertaken duties and privileges that are commonly associated with marriage or civil union but does not necessarily maintain a single common household.” A trial judge presented with a cohabitation allegation is required to consider: (1) Intertwined finances such as joint bank accounts and other joint holdings or liabilities; (2) Sharing or joint responsibility for living expenses; (3) Recognition of the relationship in the couple’s social and family circle; (4) Living together, the frequency of contact, the duration of the relationship, and other indicia of a mutually supportive intimate personal relationship; (5) Sharing household chores; (6) Whether the recipient of alimony has received an enforceable promise of support from another person within the meaning of subsection h. of R.S. 25:1-5; and – of course, since this is family law that we are dealing with – (7) All other relevant evidence. So we now know that, at the very least – under the amended law – cohabitation does not require the couple to live together on a full time basis, which was unresolved pre-amendment.
Also to clarify what I indicated earlier, some trial judges have suggested that because the family part is one tasked with imparting an equitable result, they may still apply the economic benefits test and potentially modify – rather than suspend or terminate as the statute says – an existing alimony obligation. Notably, as I wrote for the Law Journal, those amended portions of the law addressing an alimony change in the event of the payer’s retirement or down income use the word modify as a possible option, but that word is nowhere to be found in the cohabitation section. Was that deliberate, favoring the notion that the law is more payor friendly, or was it unintentional and not meant to wipe away the old law? We do not yet know the answer. Also notable is how a recent case addressing the retirement language section of the amended statute relied upon statutory interpretation and construction, rather than a broader interpretation that perhaps some practitioners were expecting. This does not mean, however, that the cohabitation portion of the statute will be similarly analyzed and applied.
Other trial judges have indicated that the statute requires a suspension or termination, although a separate question exists as to when a suspension would occur. Perhaps as a sign of rulings to come or, perhaps, also inadvertently, the Appellate Division in one of those two cases I mentioned above indicated that alimony “shall” terminate upon cohabitation by the payee. This, however, was neither an issue or holding in the case, and even the statute uses the word “may” rather than “shall.” Also, when should a so-called suspension of alimony even occur? Should it only occur during a cohabitation proceeding and potentially be reinstated if cohabitation is ultimately unproven? Should it occur as a final result and be subject to reinstatement if the cohabitation ends? The answers are unknown at this point.
What about making the initial cohabitation showing? As is true with any case, judges are going to look at the same set of facts differently from each other. For instance, while one judge may find it sufficient for the payor to establish that the couple has been living together at least four days per week for a month, another judge may want more. While one judge may deem sufficient intertwined finances via a single joint bank account and the couple holding themselves out as in a relationship on occasion, another judge may disagree. All judges present at the seminars seem to agree, however, that the more information and evidence of cohabitation to be considered in the initial filing, the better. We even discussed a good old fashioned garbage inspection, where you never know what kind of gems may turn up in a payee’s trash bin – in other words, one payee’s trash may be one payor’s Exhibit A to a Certification.
Thus, no matter how the law is to apply once cohabitation is established (suspension, terminate or modify), the process by which a payor spouse is to gather information for a motion to “address” alimony due to cohabitation seems to remain the same. Private investigators will often still be a potentially key part of the puzzle, and, to the extent the couple somehow cannot manage to keep themselves from discussing the relationship on social media, such evidence is often, but not always, the equivalent of the goose that laid the golden egg – in other words, the online version of the garbage can.
It was those recent seminars that really brought back to the forefront for me how much has yet to be determined under the amended law and, perhaps more importantly, how each case leaves unanswered the question of what gets a moving party passed that first litigation hurdle, and what a payee spouse can do to successfully fend it off. For both sides, the picture remains cloudy in some ways and crystal clear in others, and that is without any of the sort of guidance that we have recently seen with the retirement portion of the amended law. We will all continue to stay tuned as to what this portion of the new law can do once tested.
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Robert Epstein is a partner in Fox Rothschild LLP’s Family Law Practice Group and practices throughout New Jersey. He can be reached at (973) 994-7526, or repstein@foxrothschild.com.
*Photo courtesy of mondspeer (Google free images).
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Judge Sloviter Will Go on Inactive Status
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Supreme Court Will Review LAD, Fraudulent Conveyance, and Two Criminal Cases
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Supreme Court Will Review Conley v. Guerrero
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Your No-Pet Building Cannot Restrict Guide Animals
Community associations in New Jersey which have pet restrictions may need to permit a disabled resident to maintain an animal in his or her unit depending on needs. This rule could even apply to a visiting guest who is disabled and has a guide animal.
Most people understand that the blind are entitled to use a guide dog wherever they go. However, there are other types of animals that also assist individuals with different types of disabilities and these also must be allowed despite any community pet restrictions. This could range from a monkey which performs tasks for a person with a spinal cord injury to a cat that provides emotional support to an individual with PTSD. Even if your association prohibits pets (or has weight or size restrictions for pets) they may be required to permit such animals for disabled residents or guests.
State and Federal law require a community association to make reasonable accommodations to the rules, policies, practices, or services when necessary to give someone with a disability an equal opportunity to use and enjoy the unit and common areas. When a resident requests an accommodation to a no-pet rule, the resident should be able to establish that he or she is disabled and describe how the animal would help him to use and enjoy the premises.
While some service animals may require specialized training, such as guide dogs or service dogs, others may not require any training at all. Keep in mind that assistance animals are not pets and you should never require an individual with an assistance animal to pay a pet fee.
Requests for disability accommodation should be taken very seriously by community association boards and managers. You may want to seek legal advice while reviewing a request and before making a decision.
If your association needs assistance with a reasonable accommodation request, or if you have any other questions, feel free to contact Stark & Stark’s Community Association Group.
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Friday, April 1, 2016
Judge Greta Gooden Brown is Temporarily Assigned to the Appellate Division
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Plaintiffs Get Another Chance to Show “Mode of Operation” Liability
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Child Support: A Child's Right and that Right Just Got Stronger!
Governor Christie recently signed into law an act of legislation addressing one of the issues of child support: