The Seven “C’s” of Ethical Appellate Practice

I have posted elsewhere about the “four C’s” for New Jersey Bar applicants before the Supreme Court Committee on Character.  At last night’s meeting of the New Jersey State Bar Association’s Appellate Practice Committee, Charles Centinaro, the Director of the Office of Attorney Ethics, made a presentation about ethics in appellate practice that topped my […]

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Common Pitfalls Made by Executors of Estates

Typically, the Executor of an Estate named by a Will has little or no prior experience in administering an Estate. As such, this somewhat complex process lends itself to the possibility of errors being made by the Executor or Executrix which could result in litigation. The purpose of this blog is to advise you as to some potential pitfalls to avoid if you are the Executor or Executrix of an Estate.

The first major pitfall to avoid is that the Executor/Executrix must first make sure that they are properly qualified by the County Surrogate to serve as the Executor/Executrix of the Will prior to taking any actions. This is done by bringing a copy of the Last Will and Testament and a Death Certificate to the County Surrogate, and thereafter, qualifying as the Executor of the Estate. Thereafter, the Executor must be careful to notify all potential heirs of the Estate and not only those referenced under the Last Will and Testament. Often times, the Executor may neglect to notify all potential heirs of the Estate aside from those listed under the Last Will and Testament. This is a typical error which could potentially result in the litigation if these individuals are not notified.

Another important task an Executor must undertake is to open an Estate account which is solely for the Estate. At times, an Executor/Executrix will make the error of combining an Estate account with their own personal account. This comingling of Estate assets with personal assets could result in unnecessary litigation and confusion in the Administration of the Estate. As such, a separate Estate account must be opened. Prior to making any distributions, an Executor/Executrix must ensure that all appropriate and necessary state and federal taxes have been paid. A common mistake made by an Executor/Executrix occurs when partial distributions are made prior to taxes being finalized. Should this occur and there is a shortfall, this can result in penalties being assessed against the Estate, or disgruntled heirs of the Estate refusing to pay back the entire or part of their bequests.

The final point that will be discussed during this blog, and one that is often rife with conflict in the context of estate litigation involves Executors keeping appropriate records. In administering an Estate it is essential that the Executor maintain meticulous records, consisting of receipts, checks, and other documents evidencing payments made on behalf of the Estate. If this is not done it is almost guaranteed that the formal or informal accounting will be challenged by beneficiaries of the Estate. This may result in unnecessary litigation which could have been easily avoided had these records been kept.

As such, the above lists serves solely as a partial guide as to the pitfalls to avoid as an Executor/Executrix of the Estate. It is always suggested that if you are appointed an Executor that you consult with an attorney and seek their counsel in serving as Executor of the Estate. The attorneys at Stark & Stark are versed in this regard.

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Another Failed Effort to Compel Arbitration

Midland Funding, LLC v. Bordeaux, ___ N.J. Super. ___ (App. Div. 2016).  This was a small claims case in which plaintiff sought to collect a consumer debt as to which it was an assignee.  After defendant filed an answer and a counterclaim under the Fair Debt Collection Practices Act, 15 U.S.C. §1692 et seq., plaintiff […]

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Loss of Employment and Alimony

New Jersey’s recently enacted alimony statute deals with modification of alimony in the event the payor loses his/her job through no fault of their own.

Even though this law allows a payor to seek modification once the payor has been without employment for 90 days, there is not an automatic termination or reduction. The Court must consider many factors which are set forth in the statute, which include but are not limited to:

1. The reasons for the loss of income;
2. The payor’s efforts to replace his or her employment or find alternative employment;
3. The payor’s health and how it affects his or her ability to obtain employment; and,
4. Any severance award received from the previous employer.

In the recent case of Mills v. Mills, the ex-Husband, who had been working in flooring sales, agreed to pay alimony at the time of his divorce based on a salary of $108,000. Less than two years later, he lost his job when his employer restructured the business and eliminated his job. The ex-Husband searched for a new job, and within three months obtained a similar job at another flooring company, earning $70,000 per year, plus a $6,000 annual car allowance. He also received a year-end bonus of $6,000. Therefore, his income was $82,000.

Based on this 20% decrease in salary, the ex-Husband filed a motion with the Court to decrease alimony. The ex-Wife argued that she should not receive a reduction because he was capable of earning $108,000 and that he failed to demonstrate that he could not earn this level of income.

As in many post-judgment cases where the parties’ allegations and viewpoints are conflicting, the Court held a plenary hearing, which is a trial with testimony, to determine the credibility of the parties and to understand and analyze all of the facts involved in the case.

The Court in the Mills case concluded that in light of the new alimony statute, as well as case law, there should be a practical two-step inquiry in addition to the factors set forth in the statute.

1. Was the supporting spouse’s choice in accepting a particular replacement employment opportunity objectively reasonable under the totality of the circumstances?
2. If so, what if any resulting support adjustment should occur that is fair and reasonable to both parties, given their respective situations?

The Mills Court held that the Defendant’s loss of job was due to a restructuring, and he made legitimate efforts to obtain replacement employment in the same field. The Court further found that Defendant’s decision to accept a lower-paying job was reasonable given the circumstances. In fact, he was fortunate in this economy to find replacement work in his field so quickly.

Once the ex-Husband’s choice of employment was found to be reasonable, the Court then lowered the ex-Husband’s alimony obligation until further Court Order. The Defendant had the obligation to notify his ex-Wife in writing if there were any changes in his employment income. Additionally, he was to supply the Plaintiff with documented proof each year of his prior year’s income. This would give the ex-Wife the needed information in the event the Defendant’s income increased, which in-turn would allow the Plaintiff to apply to the Court for an increase in alimony.

It must be noted that every case is fact sensitive, and an analysis must be done by applying the statutory factors and case law to the facts of each individual case. This is why we suggest speaking with experienced legal counsel to guide you through the process.

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Tenant’s Right to Legal Fees in a Successful Tax Appeal

In the United States, the general rule about legal fees is that each party to a lawsuit pays his or her own fees. However, like any rule, there are exceptions. In the event a contract specifically provides for the payment of legal fees, or a statute allows the recovery of legal fees, the prevailing party may apply to the court for reimbursement. There is no statute in New Jersey that allows recovery of legal fees for a successful tax appeal. The tenant may only recover the fees from a landlord if the lease expressly provides for such a recovery, or if the landlord separately agrees to pay them. As the parties learned in Crosspoint Developers v. Wegmans Food Markets, the express terms of the lease can lead to unforeseen results.

Lowes, as a tenant in a retail shopping center, filed a tax appeal and was successful in getting a reduction in the assessment. Since the appeal involved an entire retail center, all tenants received the benefit of Lowe’s efforts through a reduction in their pro rata shares of taxes.

The landlord determined the pro rata reduction in taxes and provided each tenant with a credit. One of the other tenants, Wegmans, exercised its audit rights under the lease and discovered that the landlord deducted $57,866.31 in legal fees and appraisal costs prior to allocating the refunds to the tenants. The net result was that each tenant shared in the cost of the appeal. Wegmans argued that it did not have an obligation to pay any portion of the legal fees or appraisal costs, and deducted the pro rata legal charge from its next rent payment. The landlord filed an eviction action for failure to pay rent which was aggressively defended by Wegmans.

The New Jersey Superior Court looked to the controlling language in the Wegman’s lease which stated:

In the event that Tenant shall obtain any reduction in assessment or in the amount of taxes, Tenant shall be entitled to its pro rata share of such reduction or rebate of Taxes paid and its reasonable costs in contesting such assessment or tax bill, including attorneys’ fees [.]

What did the landlord argue? The landlord argued that the use of the term “Tenant” in this section is solely an example to show how reimbursement would work for any party to the contract who secured a tax reduction. The landlord also argued the Court should take into consideration the equitable principle that all those who enjoy a common benefit should be obligated to pay their fair share of the costs. This would thus entitle the landlord to reimbursement for its successful efforts, or the successful efforts of an eligible tax appeal tenant, whether or not the tenant was aware of the filing or was a party to filing. The landlord’s position was that the lease specifically provided for this deduction.

What did the tenant argue? The tenant argued the contract terms are plain and unambiguous and since under the lease the “Tenant,” Wegman’s, did not file an appeal and obtain a reduction, there can be no deduction for legal fees.

What did the Court hold? First, the Court noted that the landlord and tenant were sophisticated parties and had an opportunity to negotiate the terms of the lease. Accordingly, the court would look to the language in the lease and, providing it was clear, strictly apply the language. Next, the Court looked to the definition of the term “Tenant” which was clearly defined as Wegmans – no other tenant. Finally, the Court found nothing in the lease that allows the landlord to be reimbursed for legal fees and expenses when the landlord obtains a reduction in a tax assessment. In the end, Wegman’s prevailed and did not have to pay any legal fees or expenses relating to the tax appeal.

Many of these problems can be avoid by carefully drafting a lease. More importantly, landlord and tenants should work together when challenging tax assessments to avoid problems that cost every party additional monies from court filings.

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Three New Grants of Certification

The Supreme Court has announced that it has granted review in three new cases.  The cases are an interesting assortment. In State v. Burkett, a criminal case, the question presented, as phrased by the Supreme Court Clerk’s Office, is “Was defendant’s conduct distributing wedding photographs of a colleague to which defendant had added vulgar annotations […]

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Judge Leonard Garth (1921-2016)

Judge Leonard I. Garth died last week at age 95.  Born in Brooklyn on April 27, 1921, he went to college at Columbia and got his law degree at Harvard.  In between, he served as a lieutenant in the United States Army.  After law school, the future Judge Garth was one of the founders of […]

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Donald Trump Offers More Potential Supreme Court Nominees

Back in May, Republican Presidential candidate Donald Trump announced a list of eleven potential nominees to the Supreme Court of the United States.  As discussed here, one of those candidates, Judge Thomas Hardiman, currently sits on the Third Circuit Court of Appeals.  Trump has now offered another ten names.  None of those come from New […]

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Commercial Tenants’ Rights to File and Control Tax Appeals: Size Matters

Under New Jersey law, an “aggrieved taxpayer” has the right to file a real estate tax appeal in protest of a tax assessment. Tenants are eligible for this right in certain circumstances. As a general rule, a tenant under a triple net lease, one that requires the tenant to reimburse the landlord for real estate taxes, is an aggrieved taxpayer with the right to appeal.

Some leases prohibit smaller tenants from filing a tax appeal under contract law, but many leases are silent on whether client must hold a threshold limit of leasable space in order to qualify. In such circumstances, the New Jersey Tax Court will generally utilize an “economic reality test” to determine not only if and when the tenant can file a tax appeal, but also who has the right to control and settle it.

In Village Supermarkets v. West Orange Township, the New Jersey Supreme Court adopted an economics reality test in order to determine whether a tenant may file a tax appeal. In adopting the test, the Court noted there is a difference between the single tenant under a long term net-lease of a free-standing store and the tenant in possession of an ice cream stand in a suburban mall. The issue is grounded in degree of interest in the assessment. In the former scenario, the landlord has almost no interest in the tax assessment because the leaseholder is responsible for the tax. In the latter, the small tenant pays very little tax, and therefore does not possess a sufficient interest to confer an independent right to appeal.

The Court considered and gave compelling weight to the following factors:

1. the provisions of the lease itself, its duration, the burden of the tax surcharge on the tenant, and the possibility that the issue will soon be resolved by renegotiation;
2. the tenant’s relationship to the property, whether it is the lead tenant in a shopping center or only a tenant slightly affected by the assessment;
3. whether the tenant will adequately represent the interests of the landlord and other tenants, or whether the tenant has interests adverse to either group;
4. the tenant’s ability to mount and prosecute an effective appeal; and,
5. the landlord’s overall relationship with the taxing authority and whether this is one of multiple properties on which the landlord may wish to exercise the right of appeal.

As mentioned, the economic reality test is also used to determine who can control the tax appeal once it is filed. An actual case will help understand the issue.

In 2009 and 2010, the owner of a retail center filed tax appeals challenging the assessment of the entire center (consisting of six leased stores). In the same years, Target Corporation, who leased 38% of that space, also filed a tax appeal on the entire center. The owner negotiated a reduction directly with the municipal assessor ($60,473,800 to $44,000,000 for 2009 and from $50,250,000 to $43,000,000 for 2010) and requested that Target dismiss its appeal. Target refused. The property owner filed a motion to 1) join the Target tax appeal (motion to intervene), which was granted by the New Jersey Tax Court; and 2) also asked the Tax Court to dismiss the Target tax appeal. The Tax Court was faced with the dilemma of who had the right to control the appeal and settle the case. (See Target v. Township of Toms River)

The New Jersey Tax Court relied upon the same economic reality test in determining who should have the right to control the tax appeal. In finding that the property owner’s interest “predominates” over that of Target, the Tax Court reviewed numerous factors, including the parties’ relative relationship to the property (Target only leased 38% of the center); and the property owner’s ability to adequately represent the interest of Target and mount an effective appeal (the property owner retained experienced tax counsel and obtained a sizable reduction). Ruling in favor of the property owner, the Tax Court found that the property owner had the right to control and settle the dispute. It therefore dismissed Target’s tax appeals.

This case demonstrates why it is important for landlords and tenants to review the language in tenant leases to make certain the issue of who can file an appeal and who has the right to control the litigation is clearly spelled out. If the lease is silent on these issues, the economic reality test will come into play. It is also prudent for landlords and tenants to have an open discussion on tax assessments and decide how to work together to get the tax assessment reduced. Had Target approached the property owner first, or vice versa, all court action might have been avoided.

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A Judson Anniversary

As discussed here, many veteran lawyers know of Judson v. Peoples Bank & Trust Co. of Westfield, 17 N.J. 67 (1957), as the predecessor to Brill v. Guardian Life Ins. Co., 142 N.J. 520 (1995), on the subject of the standards for summary judgment.  But Judson did not end there.  On this date in 1957, […]

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Certain Frivolous Litigation Sanctions are Reversed, But One Such Sanction is Affirmed

Tagayun v. AmeriChoice of New Jersey, Inc., ___ N.J. Super. ___ (App. Div. 2016).  As Judge Higbee noted in her opinion for the Appellate Division today, Rule 1:4-8 or N.J.S.A. 2A:15-59.1, which afford sanctions for frivolous litigation, “must both be interpreted strictly against the applicant for an award of fees.”  Sanctions are not warranted whenever […]

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Remittitur Decisions Cannot Take Account of Awards in Other Cases

Cuevas v. Wentworth Group, ___ N.J. ___ (2016).  In He v. Miller, 207 N.J. 230 (2011), the Supreme Court addressed issues of remittitur at length and in detail.  Among other things, the Court there “endorsed the use of comparable verdicts in remittitur motions,” as Justice Albin stated in his unanimous opinion today.  But in today’s […]

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Municipal Ban on Digital Billboards is Unconstitutional

E&J Equities v. Franklin Tp. Bd. of Adj. , ___ N.J. ___ (2016).  Billboards are not everyone’s favorite thing.  Many view them as a blot on the landscape (and not humorous at all, unlike the 1980’s British comedy “Blott on the Landscape“).  Here, after plaintiff had applied to the defendant Board for a variance allowing […]

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Renters and Owners: How Are They Treated by Community Association Board Members

Stark & Stark Shareholder Christopher Florio recently joined Ray Dickey from AssociationHelpNow to discuss treatment of renters and owners as it applies to homeowner association board members, community managers, and management companies. They discuss board meetings, parking, and access to the association recreation facilities. Check out the video below.

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The Supreme Court Will Review a Family Law Case and a Search Warrant Case

The Supreme Court has announced that it has granted review in two cases.  The first matter, Bisbing v. Bisbing, arises out of the Family Part.  The Appellate Divsiion’s decision, reported at 445 N.J. Super. 207 (App. Div. 2016), was discussed here.  The question presented in Bisbing, as phrased by the Supreme Court Clerk’s office, is […]

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Another Sports Retailer Bankruptcy – Golfsmith International, Inc. Files for Chapter 11 Protection in Delaware

Golfsmith International, Inc., a specialty golf retailer with 109 Golfsmith stores across the U.S. and 55 Golf Town stores in Canada, filed for Chapter 11 bankruptcy protection in Wilmington, Delaware on Wednesday, September 14, 2016. This case follows other large sports retailer bankruptcy cases, including Sports Authority and Eastern Mountain Sports, who both filed Chapter 11 proceedings in Delaware earlier this year.

Landlords should be particularly wary. According to papers filed with the Bankruptcy Court, Golfsmith cited that its profitability has been adversely impacted by outsized occupancy costs at its stores. To remedy that problem, Golfsmith has targeted 20 stores for closing in its first day store closing procedures motion. These 20 locations are alleged to be underperforming and operating under long-term, above-market leases in oversaturated markets. In the motion papers, Golfsmith states that it may seek authority in the future to apply the closing procedures to additional stores.

One of Golfsmith’s reorganization strategies will be to renegotiate leases with over-market terms to reduce its occupancy expenses.

As a landlord or other trade creditor in Golfsmith’s Chapter 11 case, it is critically important to know your rights and deadlines to assert those rights in order to mitigate risk and enhance recovery.

For more information regarding the Golfsmith bankruptcy case and how Stark & Stark can assist you, please contact either Tom Onder at (609)219-7458 or tonder@stark-stark.com or Joe Lemkin at (609)791-7022 or jlemkin@stark-stark.com. Onder and Lemkin write regularly on commercial real estate and trade creditor issues and are members of ICSC. Mr. Onder is Chair of the 2016 ICSC PA/NJ/DE Next Generation Committee.

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Removing an Invalid Construction Lien

As the owner of a parcel of property, you might someday be faced with a scenario wherein a construction lien filed by a contractor who performed work for you was either improperly filed, or is simply invalid on its face. The issue becomes what is the proper way to remove and/or discharge this construction lien so that the property is no longer encumbered.

Although the process for a party to file a construction lien against a residential property, as compared to a commercial property, is different, the relevant section of the New Jersey Lien Law which deals with the discharge of an improper or invalid construction lien is the same. N.J.S.A. 2A:44A-15 provides that if a lien claim is without basis, the amount of lien claim is overstated, or the lien claim is not filed in accordance with the relevant sections of the lien law, nor in the time required by the act, the lien claimant shall forfeit the rights to this lien or any subsequent related lien. In a nut shell, this means that if the lien claim is not timely filed, whether residential or commercial construction, or the lien claim is willfully overstated or is without basis, such as the lack of an enforceable contract, then the lien claim is deemed forfeited. Further, the statute punishes a contractor who does not willfully remove a lien claim as long as notice is given. Any owner who is forced to file an action to remove an invalid lien claim is entitled to reasonable counsel fees and costs incurred in said action.

The next question concerns what is the appropriate process to remove an invalid lien claim. Once you have determined that a lien claim is invalid, whether residential or commercial, the first thing that should be done is that an appropriate notice should be provided to the contractor demanding that the lien claim be discharged. It is suggested that this be done via certified and regular mail and any other delivery alternatives which are available. Once this notice is given, typically a short period of time is given for the lien claim to be discharged. A typical period would be approximately two weeks. If the lien claim is not properly discharged, a Complaint may be filed with the Court in the county wherein the lien claim was filed. This process can be done in a summary fashion pursuant to Rule 4:67, and if successful, would entitle the property owner to counsel fees, costs, and potentially sanctions.

Due to the technical nature of the process involved in removing a lien claim, it is suggested that a property owner consult with an attorney. This attorney should know the appropriate form of the original notification, as well as the process of filing a Complaint to remove the lien claim should the contractor not properly discharge the invalid lien claim. The attorneys at Stark & Stark are equipped to handle such a matter if you have been wrongfully subjected to an invalid or improperly filed lien claim.

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The Anniversary of Cox v. Sears Roebuck

On this date in 1994, the Supreme Court decided Cox v. Sears Roebuck & Co., 138 N.J. 2 (1994).  This unanimous opinion by Justice Clifford continues to be one of the leading cases on the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-1 et seq. (“CFA”). Cox had contracted with Sears for installation of a kitchen.  […]

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Third Circuit Forms a Task Force on Eyewitness Identifications

Chief Judge McKee has announced the formation of a Task Force on Eyewitness Identifications.  This seventeen-member body will be co-chaired by Chief Judge McKee and Judge Mitchell Goldberg of the United States District Court for the Eastern District of Pennsylvania, and includes judges of the Third Circuit and Dsitrict Judges from each District in the Circuit.  […]

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Sale of a Marital Home in Divorce – The Many Issues Involved

Many times the marital home is one of the biggest assets in a divorce case. While there are only three options in how to deal with the marital home, each option raises questions.

Option 1: One of the parties buys out the other party’s interest in said home. Some of the questions that must be discussed are:

1. What is the fair market value of the home?
2. What is the balance of the mortgage?
3. Is the spouse buying out the other party’s interest qualified to refinance the mortgage to get the other party’s name off the obligation?
4. Can the spouse buying out the other party’s interest come up with the funds to purchase the other party’s interest?
5. Do you know whether there will be capital gains, and if so, are you willing to pay the tax when you ultimately sell the house to a third party down the road?
6. Are there major repairs that need to be done that you will be solely responsible for after the house is transferred to you?

Option 2: Sell the house to third parties. Some of the questions that must be discussed are:

1. When should the house be listed, with whom and for how much?
2. Should the listing price be reduced by a certain amount or percentage after so many months if not sold?
3. Who is going to live in the house until sold?
4. Who is responsible for the mortgage, taxes, insurance and utilities until sold?
5. If one party is paying the mortgage until sold, does that party receive a credit upon sale for the principal pay down of the mortgage?
6. How are the proceeds to be divided?
7. Who is responsible for major or minor repairs pending sale, and who is paying for them or how are bills allocated?
8. Who gets the mortgage interest and real estate tax deduction on their tax returns, or how is it allocated?

Option 3: One party will continue to live in the house for a period of years, and then the house will be sold. Some of the questions that must be discussed are:

1. What triggers the sale of the house (i.e., a child graduating from school, either party wanting it sold, a certain number of years pass)?
2. Who has exclusive possession of the house until sold?
3. Who pays the carrying costs of the home until sold, and does that person get a credit when the house is sold for principal payments on the mortgage?
4. Who is responsible for major or minor repairs?
5. How are the proceeds to be divided?
6. What happens if the party responsible for the mortgage and taxes does not pay them?
7. Does either party have the right of first refusal to purchase the house before a third party can purchase it?

These are just some issues that must be discussed with your attorney and determined when deciding on how to deal with the marital home upon divorce.

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Savings as a Component of Alimony

Lombardi v. Lombardi , ___ N.J. Super. ___ (App. Div. 2016).  “[A]limony is neither a punishment for the payor nor a reward for the payee….  It is a right arising out of the marriage relationship to continue to live according to the economic standard established during the marriage.”  Judge Rothstadt’s opinion in this case today […]

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What not to say to your kids in a divorce.

As a family lawyer who deals with custody issues, I often remember Keanu Reeve’s line in the 1989 movie, Parenthood:  “You know, Mrs. Buckman, you need a license to buy a dog, or drive a car. H(eck), you need a license to catch a fish! But they’ll let any  *&%$ (expletive) be a [parent].”  There is no instruction manual, and a divorce often brings out some of the challenges of being a parent.

Attorneys are often asked by clients what they should say to their children and how should they let their children know the divorce ( or spit between unmarried parents) is coming. The common answer is to advise the client to let the children know both parents love them; the divorce is not about them in the least; don’t worry, and everything will be fine. This conversation often comes at a time where the questioned parent doesn’t have answers as to where the children will live, what school they will go to, and what the actual custody schedule will be.

As it turns out, this might not be the best advice after all. Time.com has recently published an article  in which the writer advises that children who are anxious should not be told everything will be O.K. Rather, it is important for parents to validate children’s worries.

Often times, a child psychologist can help parents relayed the news of an impending divorce to their children. As distasteful as it may seem to sit in an office with your soon-to-be ex to come up with a plan to tell the children, it could make all the difference in the world to your children

What to do when you don’t have all the answers? First, find out exactly what it is that the child is worried about. Depending on the age, this could be at its simple as wondering whether a favorite stuffed animal will be able to come to a new home. Determining precisely what any particular child is anxious about avoids compounding the problem by giving more information than might be necessary at any given time, thereby causing more stress. Give what answers you can, without scaring the child. For example, when a child asks which parent he or she will live with in the middle of a custody evaluation, the honest. Tell the child that mom and dad haven’t made that decision yet and the judge and other professionals are going to help make that decision. Don’t ask a young child for his or her preference. This places the child in the unreasonable position of having to choose one parent over the other. Regardless of how you feel about your soon-to-be ex, most children love both parents unconditionally.

Don’t be afraid to say, “I don’t know.” But say it in a reassuring way. For a parent who does not anticipate being able to stay in the same school district, assuring that the child will be part of the process of finding a new residence and looking at new schools can make the child feel part of the decision-making and alleviate some of the fears and anxiety. It certainly may not be a perfect answer, but is better than the child being kept completely in the dark until the day the divorce is over.

Jennifer Weisberg Millner is a partner in Fox Rothschild LLP’s Family Law Practice Group. Jennifer is resident in the firm’s Princeton Office, although she practices throughout the state. Jennifer can be reached at 609-895-7612 or jmillner@foxrothschild.com.

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As Expected, The Supreme Court Takes Up Another Affordable Housing Case, and Expedites the Appeal

In In re Declaratory Judgment Actions Filed by Various Municipalities, ___ N.J. Super. ___ (App. Div. 2016), discussed here (under the heading “Another Mount Laurel Case for the Supreme Court?”), the Appellate Division issued an important affordable housing decision.  That ruling stated that, in calculating their fair shares of such housing, municipalities were not required […]

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No Waiver of Arbitration Clause Even After Years of Litigation, Because Arbitration Demand, Pre-AT&T v. Concepcion, Would Have Been Futile

Chassen v. Fidelity Nat’l Financial, Inc., ___ F.3d ___ (3d Cir. 2016).  [Disclosure:  I was an expert witness for plaintiffs in this case, but my Declaration and deposition testimony was not the subject of, or referred to in, this opinion].  This was a putative class action involving allegedly improper charges, ranging from $70 to $350, […]

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Shipping Giant Hanjin Files International Bankruptcy Proceeding In Newark

Last week, South Korea’s Hanjin Shipping Company (“Hanjin”) filed for bankruptcy protection under the Debtor Rehabilitation and Bankruptcy Act in the Seoul Central District Court in South Korea. As the world’s seventh largest container shipper servicing 8% of the Trans-Pacific trade in the United States, Hanjin’s bankruptcy filing is cause for concern for landlord retail anchor tenants, such as Target and JCPenney, as well as to other trade creditors and suppliers.

In an effort to extend the foreign Korean bankruptcy proceeding and to allay the concerns of customers in the United States, on September 2, 2016, Hanjin filed a petition in the United States Bankruptcy Court for the District of New Jersey seeking recognition of the Korean “foreign proceeding” under Chapter 15 of the United States Bankruptcy Code. On September 6, 2016, the Bankruptcy Court entered an interim order recognizing the Korean foreign proceeding. This allowed the powerful automatic stay provisions of the Bankruptcy Code to take effect, providing Hanjin with much needed protection in order to ship and offload goods into U.S. ports.

Hanjin also requested the application of Section 365 of the Bankruptcy Code in the Chapter 15 proceeding, where relief was granted on an interim basis as well. Application of this provision of the Bankruptcy Code would enable Hanjin to maintain contracts and prevent counter-parties from terminating contracts based on insolvency related termination provisions. The continuation of the relief granted in the interim is scheduled to be heard by the Bankruptcy Court this Friday, September 9, 2016.

Manufacturers such as HP, Inc. (formerly “Hewlett-Packard”) filed pleadings in support of Hanjin’s request for recognition of its foreign bankruptcy proceedings in the United States. HP raised concerns that products being shipped by Hanjin are the property of: 1) HP; 2) its factories; or 3) its customers, depending on the point in transit the goods are located. With over 500 of its containers under the control of Hanjin, HP has reason for concern. Delays to HP’s supply chain could result in significant liquidated damages or cancellation of purchase orders to the tune of millions of dollars. The trickle-down impact on retailers and end-users, without access to goods from HP and other wholesalers, is transparent – especially as retailers gear up for the approaching holiday shopping season.

While HP supports Hanjin’s request for recognition of the foreign bankruptcy proceeding, HP requests that the Bankruptcy Court in New Jersey impose a coordinated protocol to ensure timely delivery and turnover of goods. As part of its protocol, HP requests: (i) the Court recognize HP’s right of ownership in the goods; and (ii) Hanjin provide assurances that it has sufficient funds to pay for services needed to deliver goods to HP, or that it will or institute a strict protocol proposed by HP to stabilize US shipping operations.

The fears of HP and other Hanjin customers are substantial. As of last week, one Hanjin ship was seized by its owner in Singapore. Other Hanjin ships were drifting offshore near ports such as Long Beach, California, unable to access shipping terminals due to the inability to pay bills and fear of seizures.

Relief under Chapter 15 of the Bankruptcy Code may help alleviate concerns of Hanjin’s customers, by providing international cooperation among the courts. Chapter 15 divides foreign proceedings into two categories: main proceedings and non-main proceedings. If Hanjin’s foreign proceeding is recognized as a “foreign main proceeding” on a permanent basis, Chapter 15 will provide certain mandatory relief, including an automatic stay of proceedings by creditors against the foreign debtor’s assets in the United States.

As a retailer, supplier and/or trade creditor in Hanjin’s Chapter 15 bankruptcy proceeding, knowing your rights and the deadlines to assert those rights are keys to mitigating risk and enhancing recovery.

For more information regarding the Hanjin filing and how Stark & Stark can assist you, please contact either Thomas Onder, Shareholder at (609) 219-7458 or tonder@stark-stark.com or Joseph Lemkin, Shareholder at (609) 791-7022 or jlemkin@stark-stark.com. Onder and Lemkin write regularly on commercial real estate and trade creditors’ issues and are members of ICSC. Mr. Onder is Chair of the 2016 ICSC PA/NJ/DE Next Generation Committee.

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Bridgegate Unindicted Co-Conspirator List Will Remain Private, at Least for Now

North Jersey Media Group Inc. v. United States, ___ F.3d ___ (3d Cir. 2016).  The 2013 closure of lanes at the George Washington Bridge, which led to extraordinary traffic backups in Fort Lee, has taken on the label of “Bridgegate” due to the involvement in the closure of persons highly placed in the Christie administration.  […]

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A “Bleak House” for the 21st Century- Chavez v. Dole Food Co.

Chavez v. Dole Food Co., ___ F.3d ___ (3d Cir. 2016).  In the classic Charles Dickens book “Bleak House,” the legal case of Jarndyce v. Jarndyce ran for so many years that “[i]nnumerable children have been born into the cause; innumerable young people have married into it; innumerable old people have died out of it.”  […]

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Judge Jones Weighs In on Pendente Lite Alimony Under the Amended Statute: The Case of Malik v. Malik

You have one household barely scraping by. You have two incomes, but the bills still pile up. From month to month, you pinch pennies, cut coupons and budget.
Now take that household, double the expenses, and cut the income in half.

Good luck.

This situation is something that millions of people face each day. One spouse leaves the residence, seeks a divorce and *surprise* you also need to help support his/her living expenses during the pendency of the matter. But how are you going to do that when your income has just been slashed and your expenses just doubled?

Judge Jones of Ocean County recently addressed what happens when one spouse requests support of the other during the divorce proceedings, or on a pendente lite basis, under the newly enacted statutory amendments to New Jersey’s alimony statute in the recent case of Malik v. Malik.

Historically, in New Jersey, judges have awarded pendente lite support to preserve the status quo, and maintain the parties in the positions they were in prior to the litigation. This typically involves payment of the marital bills and expenses necessary to maintain the dependent spouse at the standard of living enjoyed during the course of the marriage.

The logic of these awards is clear. As Judge Jones put it in Malik: “…if there is no interim support agreement or order defining the financial rights and obligations of the parties, economic chaos may result…the purpose of a pendente lite support application is to help financially bridge the gap in time between the beginning and end (or other interim point in the divorce litigation), in an orderly fashion…In fact, a pendente lite order is often the only way to provide the means for a supported spouse to survive at the start of an action.”

Here is a general run-down of how pendente lite applications are heard and decided:

• A supported spouse files a pendente lite motion at the start or the early stages of the divorce process, asking the court to make preliminary decisions about interim support. This is typically prior to the close or perhaps even the start of the period of discovery – meaning, that the Court does not yet have complete information as to the parties’ finances.

• The motion is generally heard on the Family Court’s motion calendar.

• In deciding the application, the Court rarely takes direct oral testimony of the parties and instead is authorized to make a determination based upon affidavits of the parties.

• Any pendente lite order is entered without prejudice, meaning that it can be retroactively modified, upward or downward at the trial of trial, in the court’s discretion. The court can also modify the award prior to trial upon a showing of change circumstances.

Prior to the enactment of the new alimony law, N.J.S.A. 2A:34-23, the focus of these applications was typically the marital lifestyle, i.e. the status quo of the marriage, almost to the exclusion of all other factors.

In 2014, however, the legislature enacted amendments to the statue, which now clarify the concept of considering all of the factors in the alimony analysis rather than just marital lifestyle. In fact, 4 separate directives in the statute make that concept more clear:

(1) The amended statute now directs family courts to consider, among other factors, “the practical impact of the parties’ need for separate residences and the attendant increase in living expenses on the ability of both parties to maintain a standard of living reasonably comparable to the standard of living reasonably comparable to the standard of living reasonably comparable to the standard of living in the marriage or civil union to which both parties are entitled.”

(2) The amended statute expressly provides that neither party has “a greater entitlement to that standard of living than the other.”

(3) The amended statute declares that “no factor shall carry more weight than any other factor unless the court finds otherwise.”

(4) The amended statute now states that the nature, amount and length of pendente lite support, if any, paid during the divorce proceeding is to be considered by the court when rendering a final alimony award.

Judge Jones applied these principles to the Malik case where the “blunt economic reality” of separation and divorce rendered it impossible for either party to financially maintain the prior marital lifestyle, or the same standard of living to which they formerly became accustomed during the marriage.

In the Malik case, the husband was a teacher earning $90,000 per year, while the wife was a hairdresser with an imputed income of $20,000 per year. In 2016, each party filed for divorce. They are living separately, and have been sharing joint legal and residential custody of their 2 children.

The wife filed a motion seeking pendente lite alimony which she contended that she needed alimony in order to maintain the marital lifestyle and standard of living, which she had not been able to maintain at the same level as the husband, because he was not paying support. The husband disputed the wife’s need for alimony because she had moved in with her mother.

When Judge Jones examined the evidence in this case, he concluded that the parties’ marital lifestyle budget was $6,100 per month. With the husband remaining in the former marital residence, that of course meant that there was not enough money for both parties to maintain the same lifestyle living apart that they were able to afford while living together. It was simple mathematics, the judge concluded.

Judge Jones went on to state that when neither party can afford to separately maintain the marital lifestyle after separation, both parties should be required to adapt to lifestyles which are financially lower than that which they enjoyed together. A separation constitutes a substantial change in circumstance which requires an appropriate adjustment to the status quo of the marriage. Put another way, no matter what a married couple’s prior married lifestyle and status quo may have been, a separation by married partners into two separate homes is sometimes as substantial a change of economic circumstances as on can possibly imagine.

While the judge certainly took into account both parties’ economic realities, he stated that he would not discount the wife’s need for support based upon her residence with her mother which “appears to be…of financial necessity.” He stated that denying alimony because limited financial circumstances required the wife to move back in with her mother would be “the height of irony.” Even without roof expenses, the wife still had reasonable needs.

Considering all the applicable statutory factors, under the totality of the circumstances, Judge Jones ordered that the husband pay the wife $350 per week in pendente lite alimony, which he noted may be considered “too high” by the husband and “too low” by the wife. But, he noted, it certainly could not be considered inequitable under all the circumstances.
____________________________________________________________________________________
Eliana Baer, Associate, Fox Rothschild LLP Eliana T. Baer is a contributor to the New Jersey Family Legal Blog and a member of the Family Law Practice Group of Fox Rothschild LLP. Eliana practices in Fox Rothschild’s Princeton, New Jersey office and focuses her state-wide practice on representing clients on issues relating to divorce, equitable distribution, support, custody, adoption, domestic violence, premarital agreements and Appellate Practice. You can reach Eliana at (609) 895-3344, or etbaer@foxrothschild.com.

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How to Prepare for Divorce Financially

As I always tell my clients, knowledge is power. Although getting a divorce can be devastating, frightening, and unsettling, there are ways you can take control to put yourself in a better position. Here are a few things you should keep in mind as you begin to plan for your divorce:

Know Your Assets

Many times couples divide their duties and responsibilities, and one party is left in charge of the finances, while the other doesn’t pay much attention to the status of the accounts. If you are anticipating a divorce, make copies of statements for all bank accounts, investment accounts, and retirement accounts. It doesn’t matter whether the accounts are in joint names or individual names. If they were accumulated during the marriage, they will be subject to equitable distribution, and it is important that you know where all assets are, as well as account numbers and balances.

Of less importance are deeds to real estate and car titles, although these documents will be necessary at some point. If you can’t obtain this information, your attorney will be able to obtain it through document requests or subpoenas once a Complaint for Divorce is filed.

Know Your Debts

In order to determine the equity you have in an asset such as a house, you will need to know the balance of the mortgage and home equity loan and/or lines of credit. In addition, obtain copies of credit card statements so you know current balances and account numbers, and whether those accounts are in joint names or individual names. If any credit card accounts are in joint names, but you don’t have the statements, you can easily get them online by signing up with the bank or institution and obtaining a pin number.

Know Your Incomes

A copy of the last three years of income tax returns is helpful to not only determine each party’s earned income, but the interest or dividends generated by assets as well.

Know Your Monthly Expenses.

If you are not the bill payer, take a look at the checkbook register and/or cancelled checks in addition to the credit card statements. Getting a handle on your monthly budget is not only eye-opening but important in terms of recognizing whether you over-spend and need to cut back, or if there is extra money each month that should be going into savings.

The above preparation will help you feel more in control of your finances and will give you the information you need in order to begin the divorce process.

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Shopping Malls Profit from Fun

How can retail landlords make more money? A recent article in the Wall Street Journal, entitled Shopping Malls’ New Product: Fun reveals the answer…add amusement attractions.

According to the article, many U.S. malls are profiting from entertainment tenants and amusement attractions, including go-kart racing, indoor rope climbing, laser tag, skydiving simulators, escape rooms, high-tech golf driving ranges, glow-in-the-dark miniature golf, state-of-the-art movie theaters, and new bowling and dining options.

These attractions generate traffic and keep people in the malls for longer periods of time. That means shoppers are spending more money. Food and entertainment now account for over 22% of the occupied space in malls and that percentage is increasing.

But there are risks to adding entertainment facilities—they may attract unsupervised children, reckless behavior, and increased liability. Before you decide to add amusement attractions or other uses to your commercial building it is recommended you speak with experienced counsel to maximize opportunities while reducing risk. For example, you may lose money by failing to obtain approvals required by other tenants or by governmental authorities. You may also be violating the terms of your lease resulting in loss of money spent on improvements and perhaps even damages. An experienced real estate attorney can advise you of your options help you obtain necessary approvals for added attractions, and address insurance needs for increased liability and capital improvements.

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Ascertainability Does Not Bar Class Action Settlement Where Parties Agree That the Class is Ascertainable

In re Comcast Corp. Set-Top Cable Television Box Antitrust Litig., 2016 U.S. App. LEXIS 16135 (3d Cir. Aug. 31, 2016).  It is not often that the Third Circuit summarily reverses a decision in a class action case.  This brief opinion by Judge Krause did just that. The District Court had rejected a settlement of this […]

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