Monday, December 30, 2019

The New Year’s Resolution Divorce

For many divorce attorneys, the busy season starts after the first of the year. For the last several years, I have posted on the phenomenon of the New Year’s Resolution Divorce. For whatever reason, this post has struck a chord and has been both well received and cited by other bloggers. As such, given that the new year is near, I thought I would share that piece again, updated slightly for the new year.

Over the years, I have noted that the number of new clients spikes a few times of the year, but most significantly right after the new year. Before writing this article for the first time, out of curiosity, I typed “New Years Resolution Divorce” into Google and got 540,000 results in .29 seconds. There are even more results when you do the same search now. While not all of the search results are on point, many were extremely interesting. It turns out that my intuition about this topic was right and that there are several reasons for it.

One article on Salon.com put divorce up there with weight loss on New Years resolution lists. Also cited in this article was that affairs are often discovered around the holidays. Another article linked above attributed it to “new year, new life”. Another article claimed that the holidays create a lot of pressures at the end of the year that combine to put stress on people in unhappy or weak relationships. Family, financial woes, etc. associated with the holidays add to the stress. Turning over a new leaf to start over and improve ones life was another reason given. This seems to be a logical explanation for a clearly difficult and perhaps heart wrenching decision.

In my experience, people with children often want to wait until after the holidays for the sake of the children. There is also the hope, perhaps overly optimistic, that the divorce will be completed by the beginning of the next school year. These people tend to be in the “improving ones life” camp.

So as divorce lawyers, we hope to avoid or at least resolve in advance the holiday visitation disputes that inevitably crop up, then relax and enjoy the holiday as we await the busy season to begin.

In the last several years, the phenomena started early for us and many other attorneys. We were contacted by more people in December in the last few years than in any years in recent memory. In some recent years, the calls started in November at a pace more robust than in prior years. Moreover, we have heard of more people telling their spouse it “is over” before the holidays this year. I suspect that in some, it was the discovery/disclosure of a new significant other or perhaps pressure being exerted by that person that was the cause. In other cases, the person just didn’t want to wait until the new year to advise their spouse.

Those who divorced in 2019 were the first to test the new tax laws eliminating the deductibility of alimony.  That created new support paradigms that attorneys and divorcing parties are working with.  Those who divorce in 2020 may still enjoy a booming economy and not the  slowing economy that many predicted for 2019 and some still predict for 2020.  Bad economies historically mean more divorces, either because of the stress it creates or because one or both parties is being opportunistic.  On the other hand, someone who might be a support recipient might be opportunistic on the other end of the spectrum – getting out while incomes and asset values are high.

Whatever the reason, we await those who see 2020 as a chance for happiness or a fresh start. Happy New Year?!?!


Eric S. Solotoff, Partner, Fox Rothschild LLPEric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Morristown, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973) 994-7501, or esolotoff@foxrothschild.com.



from NJ Family Legal Blog https://ift.tt/2Q8VEI2
via IFTTT

Monday, December 16, 2019

Garden State Slated to Grow Hemp

In June 2019, the Legislature passed the New Jersey Hemp Farming Act (the “HFA”). This is great news for the “Garden State.” New Jersey has hundreds of thousands of acres in farmland and hemp cultivation may prove to be a lucrative business.

Previously, hemp cultivation in New Jersey was limited to non-germinating seeds and stalks of the hemp plant and confined to individuals who were approved to collaborate with educational institutions to research the plant. Because the HFA now legalizes the sale of products originating from any part of the plant, there should be an expected increase in the sale of both raw hemp and hemp products.[1]

Increases in sales may also drive production and manufacturing costs down as well. State Senate President Stephen Sweeney stated that New Jersey’s propensity for agricultural production “has the capacity and ability to capitalize on new opportunities for hemp products that will create and expand economic opportunities.[2] Recently, one Canadian cannabis firm spent hundreds of millions of dollars to enter the United States hemp market.[3] Hemp is increasingly viewed as a strategical investment and growth opportunity. Now the Garden State can join a dozen other states who have already created procedures for hemp production.

The industrial hemp craze that has been sweeping the United States is now taking root in New Jersey. However, it is important to note that individuals and entities must still apply for the requisite licenses and approval to work with hemp and to comply with reporting requirements after permission to work with hemp has been authorized. Otherwise, they may be subject to the same penalties as those related to illegal marijuana production and sales.

 

 


[1]           See https://ift.tt/2EpF8g9

[2]           See https://ift.tt/2KxV4zy

[3]           See https://ift.tt/2YFvZHY



from New Jersey Law Blog https://ift.tt/2swGVxk
via IFTTT

Monday, December 9, 2019

End of the Year Bonuses – Do They Have to Be Shared with My Ex?

The end of the year is coming, and for many employees that means end of the year bonuses will be included in their paychecks this month. Many question whether their bonus should be included as “income” for the purpose of support obligations, as well as equitable distribution in the context of a divorce.

A baseball manager from Arizona, Anthony DeFrancesco, recently faced issues surrounding his year-end bonus and how it related to his support obligations. Mr. DeFrancesco, the manager of the Houston Astros AAA minor league team, was given a $28,000 bonus in 2017 when the Astros won the World Series. The Arizona Appeals Court recently found that the bonus was considered a gift, as opposed to earnings, and he did not have to provide a portion of the bonus to his now ex-wife.

This result is not typically what happens in New Jersey when courts consider whether bonuses are a part of income. In the vast majority of cases, bonuses are awarded to employees for their exemplary work during the preceding year, often resulting from meeting specific targets, going above and beyond the work of a typical employee, and sharing in the success of the company without which the company would have not have otherwise reached. While employees are not legally entitled to bonuses in most cases, bonuses are most often the result of the employee’s hard work. Thus, in the eyes of most courts, the bonus was earned. Any earned income is considered by courts when setting support obligations.

In connection with equitable distribution, money that is earned during the marriage is considered an asset of the marital estate. Therefore, even if the complaint for divorce has already been filed, an end-of-year bonus may be considered a part of the marital estate. For example, if a complaint for divorce is filed on July 1, and an employee receives a bonus of $50,000 at the end of the year for work performed during the previous calendar year, half of that bonus would be attributable to time spent during the marriage.

New Jersey is a court of equity. Arguments can be made that bonuses, or portions of bonuses, should or should not be considered for support and equitable distribution purposes.

Several years ago there was a case in New Jersey in which a private company had been working for many years to go public. One of the company officers had been a long-time employee and, in fact, his dedication to the company to the exclusion of all else contributed to the failure of his marriage. Two years after the divorce complaint was filed, the company went public. The SEC filings noted that the employee received a bonus in excess of $1 million for his dedication to the company and work over the last five years. His wife was successful in her application to reopen the divorce and obtain a portion of that payout due to the evidence that it was for work conducted during the course of their marriage. While this case may be unique, it speaks to why each case has to be evaluated on its own merits, and why each case may have a different result.



from New Jersey Law Blog https://ift.tt/2RxU83k
via IFTTT

Tuesday, December 3, 2019

International Child Abduction and the Hague Convention

The world is increasingly becoming a smaller and more accessible place. Globalization and international employment opportunities have made it common for people to move or be transferred to foreign countries. The increased possibility of living abroad combined with marriage and/or children may result in complex issues. Which country’s laws apply if one parent takes a child out of the United States? What if an international custody dispute materializes?

There has been an increase in the number of cases where a parent unilaterally removes a child from the child’s place of residence to another country in an attempt to become the child’s sole custodian.

Take for example this hypothetical. Wife is born and raised in France, but relocates to New Jersey for employment. While here, she meets and marries Husband and they have two children together. Marital strife sets in and while Husband is away on a business trip, Wife takes the children and their passports and returns to France with the children to live with her family.

A second hypothetical: Wife is born and raised in France. Husband originates from New Jersey. Husband relocates to France for employment, and while there, he meets and marries Wife, and they have two children together. One day, without notice to Wife, Husband suddenly leaves with the children and returns to New Jersey.

In either of these scenarios, which countries laws apply when determining custody and whether the children need to be returned to the spouse that was left behind? The answer depends on the particular facts and circumstances with each family and their application to the Hague Convention.

The Hague Convention on the Civil Aspects of Child Abduction, a multilateral treaty ratified by 98 countries as of May 2018, provides an expeditious protocol for the adjudication and return of a child (or children) unilaterally removed by a parent from one member country to another. Article 3 of the Hague Convention requires member countries to promptly return children to their country of “habitual residence” when they are wrongfully removed or retained in another country in breach of the custody rights of the left-behind parent.

Importantly, the Hague Convention provides that the law of the country from which the child was removed determines custody rights, assuming it was the child’s habitual residence, which is itself a fact-specific inquiry and determination. Note that additional complexities in the custody analysis are common if the foreign country’s law applies. Some countries, for example, do not provide any custodian rights to unwed fathers. Therefore, unmarried parents (especially fathers) must be extremely careful when it comes to international child custody disputes.

Remedies are likely even less certain if the country your child has been removed to is not a member of the Hague Convention.

Regardless of the country at issue, if you have an international child custody dispute, timing is everything. It is essential for you to seek legal counsel, determine if the Hague Convention protections apply, and assert your rights as soon as practical. Custody and access to your children may depend on how and how quickly you proceed.

If you find yourself in this situation and require assistance, or require legal advice pertaining to any other issues related to child custody, please feel free to reach out to the author, Louis Ragone, Esquire.



from New Jersey Law Blog https://ift.tt/2LihiqE
via IFTTT

Monday, December 2, 2019

NJ’s New Drunk Driving Law Can Help Ease Concerns of Divorced Parents

Alcohol and substance abuse by one parent are always concerning to the other parent, but when those parents are separated or divorced, there is an increased level of anxiety. A new law, which took effect on December 1, 2019, can help ease the concerns of a parent whose former partner has been convicted of Driving While Intoxicated in New Jersey.

Under the new law, anyone who is convicted of DWI will have to have an ignition locking device installed on their vehicle. An ignition locking devices acts as a breathalyzer test, with the would-be driver required to blow into a tube to provide a blood-alcohol reading. The car will not start if the blood alcohol level registers above .05 percent, which is slightly below the legal limit of .08. After the car begins moving, the technology periodically requires the driver to blow into the tube to insure it is actually testing the driver of the car.

The law requires first time offenders with a blood alcohol limit of 0.08 percent to 0.10 percent to have an interlock device installed in their vehicle for three months. An offender with a BAC above 0.10 percent to 0.15 percent would be required to have a device installed for seven to twelve months.

This law is a step forward for easing the concerns of a parents whose child will be with a parent who has been convicted of DWI. Moreover, it is a tool to make sure that a parent’s relationship with his or her child is not negatively impacted as a result of something that may not be indicative of that person’s ability to be a regular and positive presence in a child’s life.

To be sure, critics will suggest that there will be individuals who will be able to create a “work around” to get behind the wheel, or who will borrow or rent a vehicle. That may be true, but for many instances of custody disputes where alcohol is involved, this may be a step in making sure that a child’s best interests are preserved.



from New Jersey Law Blog https://ift.tt/2DISlAh
via IFTTT

Wednesday, November 27, 2019

Black Friday Shopping for… A New Attorney? Considerations for Selecting New Counsel

The holiday season is here, which means your inbox is probably flooded with e-mails about sales, promotions and must-have purchases. If you are unhappy with your current counsel and a new divorce attorney is on your shopping list this year, here are some important considerations to remember selecting new legal representation:

  1. Don’t be afraid to browse. Any seasoned consumer knows you have to shop around a bit before making a purchase. The same principle applies when picking a new attorney. Ask for referrals and then speak to several attorneys before making your decision. You will spend a significant amount of time working with your selected counsel, so it is important that it’s a good fit. A  trustworthy attorney should encourage you to explore your options before making a choice, so you are confident in your decision and feel comfortable with your new counsel.
  2. Read the reviews. Once you find someone you like, do some research! Your new attorney should have experience in handling matters similar to your own. While any lawyer can tell you they have the necessary qualifications, the right one will have examples to back it up. Reviewing their bio, LinkedIn, blog posts and articles will help you do your homework.
  3. Make a shopping list. You should identify and write down your objectives at the outset of your search. Why are you unhappy with your current counsel? Is your current lawyer too easy-going? Too aggressive? Unresponsive to your inquiries? When consulting with a potential new lawyer, explain your dissatisfaction and ask targeted questions to ensure that the switch will remedy those concerns.
  4. Don’t miss the sale. Timing is critical. Whenever an attorney takes over a case in the middle, it takes time to get up to speed. Your new attorney will need to review the file and become knowledgeable about what has happened in your case to best assist you. If you think you want to change counsel, don’t hesitate and wait until you have an upcoming trial date or other big court appearance. Unless the court will grant an extension or adjournment, the right attorney for you may not have the capacity to get on board so quickly.

Happy shopping!

 

Katherine A. Nunziata, Associate, Fox Rothschild LLPKatherine A. Nunziata is an associate in the firm’s Family Law practice, based in the Morristown, NJ office. You can reach Katherine at (973-548-3324) or at knunziata@foxrothschild.com.

 



from NJ Family Legal Blog https://ift.tt/33lh6Nu
via IFTTT

Tuesday, November 26, 2019

Estate vs. Non-Estate Assets

In the process of probating and administering a Last Will and Testament of a Decedent, questions may arise whether assets owned by the Decedent are considered Estate assets or non-estate assets. This is called the distinction between probate and non-probate assets. It is important for determining Estate taxes to make this distinction.

In general, probate assets are all assets which pass under the terms of the Last Will and Testament. This could include specific bequests or property, transfers of sums of money, or any other type of tangible or intangible asset that is specified to pass pursuant to the terms of the Last Will and Testament. Additionally, accounts which are titled only in the name of the Decedent without a right of survivorship, insurance policies which are similarly situated, or other investment vehicles which contain no beneficiary designation, could likewise be considered assets of the Estate which pass under the Will.

Assets which are considered non-probate are assets which pass outside of the Estate. These may be joint accounts with a right of survivorship which pass to the remaining account holder upon the death of one of the parties. Further, most residences are titled as joint tenants with the right of survivorship whereby the residence passes to the remaining surviving member upon the death of the other. Obviously, if a house is owned solely by one person than it can pass to the Estate. Other common forms of non-probate assets could be insurance policies where a specific beneficiary is named, as well as IRA’s or other investment vehicles whereby beneficiaries of the accounts are named.

When preparing an accounting for an Estate, it is important that the Executor and their counsel know whether assets are classified as probate or non-probate due to the tax consequences which may result therefrom. It is a bright line rule that if an asset is named under a Last Will and Testament and there is no beneficiary designation with regard to the asset, than it is a probate asset. On the other hand, if an asset is not named under the Will and contains a beneficiary designation on the instrument itself, than it is a non-probate asset. Obviously, there are exceptions to this process rule. For insurance, if the purported beneficiary predeceased the Decedent. Nonetheless, it is always important to determine whether an asset is probate or non-probate in the context of administrating an Estate. The attorneys at Stark & Stark are well versed in this regard and are happy to assist you.



from New Jersey Law Blog https://ift.tt/33ma6zR
via IFTTT

Monday, November 18, 2019

Appellate Division Examines Proofs Required to Establish Mental Incapacity and Lack of Consent Under the Sexual Assault Survivor Protection Act (SASPA)

In a recent published (i.e. precedential) decision, C.R. v. M.T., the New Jersey Appellate Division elaborated upon the legal standard proving that a sexual encounter during which one party was intoxicated was non-consensual under the Sexual Assault Survivor Protection Act (SASPA) N.J.S.A. 2C:14-13 to -21.

Although we have blogged frequently on domestic violence restraining orders obtained under the New Jersey Prevention of Domestic Violence Act, SASPA offers another avenue to obtain restraining orders for victims of sexual assault.  In C.R., the plaintiff commenced an action under SASPA in order to restrain the defendant from having any contact or communication with her.  The question in dispute was not whether a sexual encounter occurred – both parties agreed that it had – but rather whether the plaintiff was capable of providing her consent for the encounter and, if so, whether she had in fact done so.

Under SASPA, the first factual hurdle that a plaintiff must overcome is proof of “the occurrence of one or more acts of nonconsensual sexual contact sexual penetration, or lewdness, or any attempt at such conduct.” This must be proven by a preponderance of the evidence, meaning that the plaintiff must convince the finder of fact that it is more likely than not that there was a sexual encounter that was non-consensual.  Furthermore, as the trial court acknowledged, consent given out of fear and/or consent that is ultimately revoked is treated under the statute as a lack of consent.  As stated in the decision In re MTS, 129 N.J. 422, 444 (1992), “Permission to engage in sexual relations must be freely given and that willingness may be inferred from acts or statements reasonably viewed in light of the circumstances.”

The second prong that the plaintiff must establish in order to obtain a restraining order is that such protection is needed due to “the possibility of future risk to the safety or well-being of the alleged victim.”

The Appellate Division decision addresses the first prong, namely the question of adequate proof that the sexual encounter was non-consensual. One way in which the statute permits a lack of consent to be established is via temporary mental incapacity, which can be generated by the victim’s intoxication. In this case, the plaintiff argued that she was so intoxicated from drinking alcohol that she temporarily lacked the capacity to provide her consent to the sexual encounter.  The trial judge agreed.

The Appellate Division described this issue as having two components.  First, whether the plaintiff expressed or conveyed her consent to engage in the encounter and, second, whether, if not, she was too intoxicated to be capable of consent.  The trial judge correctly found that both parties presented versions of events from the encounter in question that were equally plausible.  On the plaintiff’s side, she testified that her original consent was provided only out of fear and that, eventually, she revoked it.  She further argued that, regardless, she was not capable of providing consent because she was temporarily mentally incapacitated.  It is that terminology that the Appellate Division focused on in its analysis.

SASPA defines a sexual assault victim as “one who the actor knew or should have known” was, among other things, “mentally incapacitated” at the time of the encounter.  The statute defines mental incapacitation as:

that condition in which a person is rendered temporarily incapable of understanding or controlling his conduct due to the influence of a narcotic, anesthetic, intoxicant, or other substance administered to that person without his prior knowledge or consent . . . .  N.J.S.A. 2C:14-1(i).

The Appellate Division interpreted this statute as saying that a victim may prove the lack of consent a mental incapacity brought on by either voluntary or involuntary intoxication.  Put another way, whether the victim voluntarily drank to the point of intoxication (which, in this case, it was not disputed that she did this) or was involuntarily intoxicated (i.e. forced to become intoxicated or given something which would cause intoxication without her knowledge) is of no moment.

The Appellate Division next considered the level of intoxication necessary to establish mental incapacity, or an inability to consent.  The Appellate Division found that in order to establish this, “[a]n alleged SASPA victim must prove intoxication to such a degree that her faculties were prostrated to the point of being incapable of consenting to the sexual encounter,” which may be established by a preponderance of the evidence.

Undoubtedly, the Appellate Divisions’ examination of these issues provides some important clarification.  However, when considering the required proofs, it is all too clear that in many cases, the ability to establish these facts by a preponderance of the evidence will often  come down to the comparative credibility of the parties and their respective versions of events, as it did in this case where the trial judge believed both parties’ recitations of the events of the night in question to be “equally plausible.”


headshot_diamond_jessicaJessica 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.



from NJ Family Legal Blog https://ift.tt/37rl7mW
via IFTTT

Friday, November 15, 2019

Houlihan’s Files for Chapter 11 Bankruptcy; Rival, Landry’s LLC is Stalking Horse Bidder

HRI Holding Corp, aka the Houlihan’s restaurant chain, filed for Chapter 11 bankruptcy in Delaware under docket number 19-12415 on Thursday, November 14, 2019.

The Debtor owns 47 restaurants in 14 states, under Houlihan’s, Houlihan’s Restaurant + Bar, Bristol Seafood Grill, J. Gilbert’s Wood-Fired Grill, and Devon Seafood Grill restaurants.

HRI Holding Corp owns 100% of Houlihan’s Restaurants Inc., but there are 39 separate entities, 93.4% owned by affiliates of York Capital Management.

The Debtor has an asset purchase agreement with Landry’s for a stalking horse bid for most of the assets.

If you have a Houlihan’s, Houlihan’s Restaurant + Bar, Bristol Seafood Grill, J. Gilbert’s Wood-Fired Grill, and/or Devon Seafood Grill lease in your portfolio, Stark & Stark’s Shopping Center & Retail Development Group can help.

Our bankruptcy attorneys regularly represent landlords throughout the country, including recently in the Eastern District of Missouri, District of New Jersey, Southern District of New York, District of Delaware, District of Minnesota, and the Western and Eastern Districts of Pennsylvania regarding a variety of issues.

Our Group has been counsel to landlords and trade creditors in the Mattress Firm, Toys “R” Us, Payless, Eastern Outfitters (EMS Part 2), EMS, Golfsmith, RadioShack, General Wireless (RadioShack 2), Gander Mountain, A&P, Joyce Leslie, rue21, Central Grocers, and Sports Authority chapter 11 bankruptcy cases.

For more information on how Stark & Stark can assist you, please contact Thomas Onder, Shareholder, at (609) 219-7458 or tonder@stark-stark.com or Joseph Lemkin at (609) 791-7022 or jlemkin@stark-stark.com.



from New Jersey Law Blog https://ift.tt/379MZf7
via IFTTT

What Happens to Your Home During a Divorce

Deciding what to do with a marital home during a divorce can be tricky. Sometimes one or both parties wishes to retain the house after the divorce by buying the other spouse out of their interest. Other times, the parties may choose to sell the home either during the divorce or after the divorce is finalized.

There are financial and personal benefits to selling the marital house in the midst of the divorce process. The profits gained from the sale of the home might provide each spouse with the means to start anew post-divorce. It can also provide closure both legally and emotionally. Couples often choose to sell their home during a divorce because their financial circumstances may prohibit them from simultaneously maintaining the costs of the marital home and one or more separate residences.

In some cases, the disposition of a home in equitable distribution is the simplest issue to address. The home is either sold, with the proceeds divided between the parties, or one party quickly refinances the mortgage and buys out the other party’s interest.

Sometimes, it isn’t so easy. What happens if both parties want to keep the home post-divorce? What happens if neither party can afford to keep the home by themselves, but the property’s value is less than the mortgage on the property and can’t be sold without both parties walking away with excess debt from the mortgage(s)? Are there children involved, and is it important to keep them in the home, perhaps to keep them in the same school or district? Are one or both parties’ credit rating an impediment to refinancing? Is the property in foreclosure or behind in payments?

The answers to these questions and more can determine what may happen to your home and whether you can retain it following the finalization of your divorce. Equitable distribution of any asset, your home included, depends on the particular circumstances in yours and your spouse’s life.

If you have any questions about how to retain or dispose of your marital home during a divorce, or any other issues related to a divorce, please feel free to reach out to the author, Louis Ragone, Esquire.



from New Jersey Law Blog https://ift.tt/33OAfZm
via IFTTT

Monday, November 11, 2019

The Third Circuit Court of Appeals Hit Penneast Pipeline Company with Another Setback

The Third Circuit Court of Appeals hit PennEast Pipeline Company with another setback on November 5, 2019. The Court of Appeals denied the company’s request for a rehearing of the Court’s earlier decision, which held that the 11th Amendment of the United States Constitution prohibits PennEast Pipeline Company from suing the State of New Jersey in Federal Court. A copy of the Order can be found here.

So, where does PennEast go from here? We hope home, but that is unlikely.

PennEast can ask the United States Supreme Court to review the decision, however, appeals to the United States Supreme Court are not automatic and an appealing party must file a petition and ask the Court to accept the case for review. The United States Supreme Court only agrees to review about 1% to 2% of the cases where parties seek a review by the high court.

Stay tuned for the next step in the saga of PennEast versus New Jersey and its residents. PennEast is not going away, but either are the people fighting the good fight!



from New Jersey Law Blog https://ift.tt/2X4mW4b
via IFTTT

Solving The Puzzle Now Will Hopefully Make For A Less Litigious Future

One of the hardest lessons I learned in my early days of practicing family law is that a case is never really over when we think it’s over.  I remember walking out of my first uncontested hearing so proud that I helped finalize a client’s divorce, emotional for their loss (yes, it happened to be a case where each party cried and hugged) and hopeful for their future.  I still have those feelings but, over time (and it didn’t take long), have become less blinded by the proverbial success of “putting through” a divorce because it’s never really over, especially when children are involved.  Instead of focusing on getting across the finish line sooner rather than later, the focus shifts to preparing agreements that will hopefully enable the parties to have their uncontested hearing as the last piece of the puzzle, and not the start of a new jigsaw.  Admittedly, this is not always easy.  Sometimes in that 3rd, 4th, 5th mediation session, when it’s 8:00 at night,  stomachs are rumbling and the caffeine is wearing off, and agreements are complete but for certain issues that seem minor at the time, it’s hard for clients to walk away without a signed writing just because of an ancillary thought that, in the moment, may seem resolvable down the road.  What if the parties are amicable and you are trying to convince a client to open up an issue that he/she may not want to address with their spouse because they know it’s a trigger and doubt they will ever become acrimonious down the road?  However, the price to pay in the days, months or years to come is worth the extra time to resolve issues now to the extent that they are ready for resolution.  But, as hard as we try, we have all been there!

In a recent unpublished (non-precedential) decision Soler v. Stark,  the issue at first glance appears to be the children’s religious upbringing when each parent observes a different faith.  However, when reading between the lines, the crux of the case is really the importance of comprehensive settlement agreements without leaving ripe issues for future resolution down the road.  Put another way, it seems apparent that a difficult, and possibly impossible to resolve issue was kicked down the road, even though it was foreseeable that future litigation would ensue.

In Soler, the parties entered into a marital settlement agreement, with an incorporated custody parenting time agreement.   Plaintiff was designated as the parent of primary residence for school enrollment only.  The parties explicitly agreed to share equal decision making rights regarding all integral decisions for their children.  The parties acknowledged in their agreements that they each have different religious and cultural backgrounds (plaintiff/mom is Catholic and defendant/dad is Jewish).  They  agreed to later submit to mediation any unresolved issues regarding the cultural and religious upbringing of their children.  It seems that they did allocate parenting time for holidays of both religions because, as relevant to this decision, Defendant had parenting time for Easter Break every year but Plaintiff had parenting time on Easter so long as Defendant was not traveling with their children.  All seems standard and not unlike many agreements that I have reviewed/drafted.  So, what comes next?  The parties disagree about their children’s religious upbringing.

In 2018, Defendant filed an application seeking to complete their youngest child’s conversion to Judaism, to enroll the twins in Hebrew School and also enroll their youngest child at the relevant age, as well as to compel Plaintiff to bring their children to Hebrew School during her parenting time and restrain her from making derogatory comments about the religion to their children.  In opposition, Plaintiff sought to have their children exposed to both religions/cultures and for Easter Sunday parenting time every year.  The trial court heard oral argument but did not require a hearing.  Briefly, in support of his application, Defendant certified that Plaintiff took classes in Judaism before their marriage, that they agreed to raise their children in the Jewish faith and that their son was circumcised in a Jewish ceremony but his conversion was not complete.  In opposition, Plaintiff certified that she went to the class to support her then soon-to-be husband, that she never agreed to raise their children in the Jewish faith/send them to Hebrew School and only partook in certain rituals during their marriage due to Plaintiff’s pressure to do so, as well as claimed that Defendant wrongfully withheld Easter parenting time from her in 2018 when he brought their children to a local amusement park.

Ultimately, the trial court determined that their youngest child would complete his conversion to Judaism, that Defendant may bring their children to Hebrew School during his parenting time but that Plaintiff need not do so during her parenting time, and granted Plaintiff’s request for Easter Sunday parenting time every year commencing in 2020, as well as permitted her to educate their children with her religious and moral values.  This appeal followed.

The Appellate Division ultimately held that (1)  Each party was free to raise their children in their own religious beliefs during his/her parenting time; thus, the trial court’s decision allowing Plaintiff to do so was affirmed; and, (2) The trial court improperly modified Easter parenting time with a showing of changed circumstances and the court did not conduct a hearing to determine if the modification was in their children’s best interests; thus, the modified Easter parenting time schedule was reversed.  The Appellate Division noted that Plaintiff may be entitled to compensatory parenting time for her loss of Easter parenting time, but even if Defendant violated the schedule, one violation does not equate to changed circumstances warranting a modification to their parenting time schedule.

Notably, the Appellate Division reviewed case law regarding superior rights bestowed upon primary/custodial parents to make decisions on behalf of their children, which was not relevant here given the language of Plaintiff’s designation being for school enrollment only, as well as case law regarding disputes for religious upbringing and each party’s constitutional right to religious freedom.  This was all required because the contractual agreement lacked a decision with respect to their children’s religious upbringing.  The Appellate Division also reviewed the parties’ conflicting certifications but could not determine whether they had an agreement to raise their children in the Jewish faith because the trial court did not conduct a plenary hearing.  Of note, had the court done so, each party would have spent a substantial amount of time and money litigating this issue that was held in abeyance.

While the case law history is interesting, and I recommend a read to brush up on who gets to determine a child’s religion, the puzzle is really solved by addressing all relevant issues to the extent we can at the time the agreement is finalized.  This also enables you to be the person who chooses the outcome, rather than asking the trial court or Appellate Division to determine material child-rearing issues on behalf of your family.


Lindsay A. Heller is an associate in the firm’s Family Law practice, based in its Morristown, NJ office. You can reach Lindsay at 973.548.3318 or lheller@foxrothschild.com.

Lindsay A. Heller, Associate, Fox Rothschild LLP



from NJ Family Legal Blog https://ift.tt/2Q9ZEIH
via IFTTT

Friday, November 8, 2019

Sears Wants It’s Money Back… Debtor Filing Preference Complaints Against Trade Creditors

This past week, Chapter 11 debtor Sears Holdings Corporation (“Sears”) filed hundreds of preference complaints to recover money from paid pre-petition creditors.

For most creditors, it must seem odd to be receiving a complaint to return money for goods or services sold prior to October 15, 2018 (the date when Sears filed for bankruptcy protection). However, the practice of recovering “preferences” in bankruptcy is allowed by federal statute – 11 U.S.C. 547. Before you go a writing a check to Sears, know what defenses you have against this statutory claim.

What is “Preference”?

A “preference” is a payment received from a debtor, made within 90 days of the bankruptcy filing.  Bankruptcy Code section 547(b) allows a bankruptcy trustee or debtor-in-possession to avoid these payments, if the transfers were to, or for, the benefit of a creditor on account of an antecedent debt while the debtor was insolvent. When Congress enacted the Bankruptcy Code, “preferences” were meant to level the playing field for all creditors by preventing a creditor from receiving more money than it would have within the debtor’s bankruptcy case.

The Bankruptcy Code provides the trustee or debtor-in-possession the power to recover these transfers. However, you may have certain defenses, including: payments made within the ordinary course of business; new value provided for the debt; payments made outside of the 90-day preference period; settlements during the bankruptcy case; and/or payments made via C.O.D.

Gather Information From Your Client

To determine if you have any defenses, it is critical that you analyze the full payment history at least one year before the bankruptcy filing. This information includes:

  1. All correspondence, contracts, emails, and the like with the debtor
  2. A copy of all invoices showing invoice date, terms, and amount of each invoice;
  3. A copy of the payments received (i.e. checks, wires, cash deposit slip) and date posted to your client’s bank account;
  4. The number of days elapsed between the invoice date and the date payment was received; and
  5. Personnel involved with the debtor’s account so they can advise how payments were made, applied and any unique issues with the debtor.

 

It is critical to properly analyze this information and formulate a corresponding response to reduce or even eliminate preference exposure.

If you received a preference complaint and/or demand, Stark & Stark’s Shopping Center & Retail Development Group can help.

Our bankruptcy attorneys regularly represent landlords throughout the country, including recently in the Eastern District of Missouri, District of New Jersey, Southern District of New York, District of Delaware, District of Minnesota, and the Western and Eastern Districts of Pennsylvania regarding a variety of issues.

Our Group has been counsel to landlords and trade creditors in the Mattress Firm, Toys “R” Us, Payless, Eastern Outfitters (EMS Part 2), EMS, Golfsmith, RadioShack, General Wireless (RadioShack 2), Gander Mountain, A&P, Joyce Leslie, rue21, Central Grocers, and Sports Authority chapter 11 bankruptcy cases.

For more information on how Stark & Stark can assist you, please contact Thomas Onder, Shareholder, at (609) 219-7458 or tonder@stark-stark.com or Joseph Lemkin at (609) 791-7022 or jlemkin@stark-stark.com.



from New Jersey Law Blog https://ift.tt/2CoOoAg
via IFTTT

Wednesday, October 23, 2019

Do I Have To Divide the Inheritance I Received During My Marriage?

An issues that frequently arises is the treatment of an inheritance received by a spouse during the marriage.  The basic rule is that any property received via gift or inheritance during the marriage is exempt from equitable distribution.  When advising people, to the end of that sentence, I usually add something like, “provided that it is kept separate from marital assets.”  Put another way, when an inheritance or any other exempt asset (like a premarital asset) is “commingled” (a legal term) with marital assets, it can lose it’s exempt status.

That is the basic rule, however, it is not absolute.  There is a reported (precedential) decision that held that an inheritance was exempt, even though it was briefly parked in a joint account.  In fact, I had a case, more than a dozen years ago, that I tried, where one of the major issues was the proceeds of a life insurance policy that my client received as a result of his brother’s untimely death.  Because he was too distraught to deal with it when the check was received, his wife took the check and opened a joint bank or investment account with the money.  The money was never touched thereafter but it didn’t stop the wife from seeking 50% of it when the parties divorced a few years later.  In that case, the judge found that the proceeds from the insurance policy were my client’s separate property.

A similar issue arose in the case of Davis v. Davis, an unreported (non-precedential) Appellate Division decision released on October 23, 2019.  In that case, the wife received $162,000 in life insurance proceeds and some other assets after her daughter from a prior marriage, died in January 2010.  The money was initially deposited into a joint checking account and later, the wife opened a CD in the amount of  $154,995.95 in her name alone.  At the time of the divorce, the husband sought distribution of the account.  The trial judge disagreed and awarded it solely to the wife and the Appellate Division agreed.  Specifically, they held that:

Assets exempt from equitable distribution may become subject to equitable distribution if the recipient intends them to become marital assets. See Weiss v. Weiss, 226 N.J. Super. 281, 287 (App. Div. 1988). The comingling of such assets with marital assets, however, is not necessarily dispositive of the issue. The assets remain the recipient spouse’s property absent evidence the
parties intended them to become marital property. See Wadlow v. Wadlow, 200 N.J. Super. 372, 380 (App. Div. 1985).

Here, the trial court found that the wife was credible that there was no intent to make the inheritance a marital asset.  The concept is one of “donative intent.”  Put another way, did she have the intent to gift the inheritance to the marriage, making it a marital asset.  In this case, the trial court found that there was no such intent and the Appellate Division could not disrupt that credibility finding.

Even in cases when an inheritance is commingled and the court finds and/or the evidence is clear that there was donative intent, that does not mean that the asset should be divided 50-50.  There are a lot of factors at play, including, proximity in time between the inheritance and the divorce.  For instance, if a party deposited an inheritance into a joint account a year or two before the divorce, they could certainly make a claim for a disproportionate distribution of that asset if their argument that they should get back 100% of it doesn’t fly.  The longer you go between the inheritance and the divorce, the harder that argument gets.

Moreover, some people argue that payment of income taxes on an inherited asset represents commingling.  There really is no legal precedent for that.  That said, their may be a claim to recoup some of the marital assets used to pay the taxes on an exempt asset.

Similarly, some people argue that the use of exempt assets during the marriage represents a commingling of the assets themselves.  That too is a difficult argument.  However, the use of the assets may represent marital lifestyle in an alimony analysis.

_________________________________________

Eric S. Solotoff, Partner, Fox Rothschild LLP

Eric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Morristown, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973) 994-7501, or esolotoff@foxrothschild.com.

 



from NJ Family Legal Blog https://ift.tt/340ceye
via IFTTT

Destination Maternity Files for Chapter 11 Bankruptcy

Destination Maternity Corporation filed for Chapter 11 bankruptcy on Monday in Delaware under docket number 19-12256.

The large maternity-wear retailer owns approximately 458 U.S. stores comprised of 362 Motherhood Maternity Stores, 26 Pea in the Pod stores, and 70 Destination Maternity stores.

The Debtor’s prime demographic is diminishing as generational shifts are effecting the industry. Specifically, the U.S. birthrate has dropped to a 32-year low, according to the U.S. Department of Health and Human Services. This generational shift reflects that Millennials are having children later, or not at all.

CNBC reports that other baby-related retailers are also feeling the pinch of this generational shift, including Huggies diaper-maker Kimberly-Clark and baby oil and bubble bath maker Johnson & Johnson.

The Debtor is working with Kirkland & Ellis to either find a buyer or proceed with a liquidation.

If you have a Motherhood Maternity, Pea in the Pod, or Destination Maternity lease in your center, Stark & Stark’s Shopping Center & Retail Development Group can help.

Our bankruptcy attorneys regularly represent landlords throughout the country, including recently in the Eastern District of Missouri, District of New Jersey, Southern District of New York, District of Delaware, District of Minnesota, and the Western and Eastern Districts of Pennsylvania regarding a variety of issues.

Our Group has been counsel to landlords and trade creditors in the Mattress Firm, Toys “R” Us, Payless, Eastern Outfitters (EMS Part 2), EMS, Golfsmith, RadioShack, General Wireless (RadioShack 2), Gander Mountain, A&P, Joyce Leslie, rue21, Central Grocers, and Sports Authority chapter 11 bankruptcy cases.

For more information on how Stark & Stark can assist you, please contact Thomas Onder, Shareholder, at (609) 219-7458 or tonder@stark-stark.com or Joseph Lemkin at (609) 791-7022 or jlemkin@stark-stark.com.



from New Jersey Law Blog https://ift.tt/340H0a9
via IFTTT

Thursday, October 10, 2019

Valid Execution of a Will

The general conception by most people is that a Last Will and Testament must be signed by the Decedent in the presence of two witnesses. While this is undoubtedly the preferred method for a Last Will and Testament to be executed, it is not the only way that a Will may be deemed validly executed by a Decedent.

In fact, the statute which governs the valid execution of a Will provides a great deal of leeway to ensure that a Decedent’s Last Will and Testament is admitted to Probate. Aside from the preferred method discussed above, there are two other ways that a Decedent’s Last Will and Testament can be deemed validly executed.

The first way that the execution can be deemed valid is if after signing his or her Last Will and Testament the Decedent acknowledges to the witness that in it was his or her signature. The witness would then be able to witness the Will provided the Decedent makes that representation that it is his/her signature on the Will. This can occur when a witness to the Will is not at the same location as the notary who may eventually notarize the Will. The Will may be signed before the notary, and thereafter, the other witness can witness the Will after the Decedent has acknowledged his/her signature.

The next way that a Last Will and Testament can be deemed validly executed is if the Decedent simply acknowledges to a witness that the document which the witness is going to sign is the Decedent’s Last Will and Testament. In other words, the Will does not have to contain the Decedent’s signature for it to be witnessed by a witness, provided the Decedent makes it clear to the witness that the document is his or her Last Will and Testament. This situation can occur if the Decedent wants a witness to witness the Will, and thereafter, wants to take it to a notary who will notarize the signature. Once again, this is very different from the common conception concerning witnessing a Last Will and Testament.

As discussed above, the statute governing the valid execution of the Last Will and Testament is broader than most of the public would anticipate. Problems can still arise in this process if the relevant statute is not met. For the reasons, it is suggested that if there arises an issue concerning witnessing a Last Will and Testament, that a party consult with an attorney in this regard.



from New Jersey Law Blog https://ift.tt/33gVSAL
via IFTTT

Tuesday, October 8, 2019

I’m Moving With the Kids To Burlington County – Not So Fast

For decades, when a custodial parent wanted to move out of state, it would not be unusual to hear that if the court or other party won’t let me leave New Jersey, she will just move to Cape May, or some other point far away from North or Central Jersey.  When someone wanted to move just across the river to New York or Pennsylvania, you might hear an exasperated utterance about being able to move to Cherry Hill but not 10 miles away to New York City.

And by and large, that was the law.  That is, while a court could restrict a custodial parent from removing children from the State of New Jersey, there was little stopping them from intrastate moves.  While there was case law that said that that might be a change of circumstances if it impacts the non-custodial parent’s parenting time, by and large people were free to move about the state.  In fact, about a dozen years ago, I had a case where the ex-husband file a motion seeking to prevent my client from moving from Hudson County to Monmouth County.  After getting our brief wherein we presented the law, his story changed from the mother being the parent of primary residence (as set forth in the parties’ Agreement, to him being the “de facto Parent of Primary Residence.”  The trial did not go well for him and my client moved as was her right.

Just as the Bisbing case that we previously blogged on made it much more difficult for the custodial parent to move out of state, the paradigm of the custodial parent being permitted to move, without restriction, was seemingly ended on October 7, 2019, when the Appellate Division rendered the reported (precedential) opinion in A.J. v. R.J. 

In A.J., the parties were divorced in 2013.  They had two children who were 10 and 8.  The mother was the parent of primary residence and the father had alternate weekend (Friday to Sunday)  and Wednesday overnight parenting time – 4 out of 14 overnights which my what is often seen these days, is not much.  The mother remarried and had a third child, with whom she lived with her husband and two other children in a two bedroom apartment in Elizabeth.  She moved in March 2018, because her landlord increased the rent and would not give her additional time to search for another residence before doing so. She searched without success for a suitable residence in Elizabeth,Somerset, and Florence. Prior to the move, the parties only had one text conversation in July 2017, in which the mother stated that she wished to move and was searching locally and as far as Mount Laurel and the father asked her to remain local because it  he claimed would be unfair to him and the children to move far away.

After the move, the father filed an Order to Show Cause seeking to block the move and change custody. The Judge entered an order giving him 3 weekends a month, ordered mediation and scheduled a plenary hearing to determine whether the mother would be permitted to remain in Mount Holly and also ordered that the children remain in school in Elizabeth.  Mediation was unsuccessful and after a plenary hearing, the trial judge ordered the mother had to return with the children and live within 15 miles of Union.   As noted by the Appellate Division:

Significantly, although the judge’s decision recognized “Baures . . . has since been overruled by Bisbing,” his reasoning relied upon our decision in Schulze v. Morris, 361 N.J. Super. 419 (App. Div. 2003), which applied the Baures factors to determine whether a parent could relocate intra-state. Applying a preponderance of the Baures factors, the trial judge explained “[p]laintiff’s decision may not have been solely driven by a desire to alienate the children from their father, but was certainly done in wanton disregard of his rights, with the result being that his relationship with them will clearly suffer.” The judge concluded the distance between the parties’ residences increased the travel time from “minutes away” to “slightly over an hour[.]” The judge noted if the children resided in Mount Holly defendant could no longer leave work early to tend to a sick child, enjoy additional parenting time, or attend extracurricular activities as he had in the past. The judge found the surreptitious nature of the move belied plaintiff’s explanation that she did not inform defendant because she did not have time.

The mother failed to move back, claiming it was impossible for her to break her lease and she could not afford two homes.  The father filed an Order to Show Cause seeking a transfer of custody which was granted and the mother appealed.

As to the mother’s argument that changing custody as a sanction was inappropriate, the Appellate Division disagreed.  However, in this case, additional proceedings and findings were necessary in order to do so.  Specifically, the Court held:

However, we hold Rule 5:3-7(a)(6) requires a separate adjudication, which considers the children’s best interests and findings pursuant to N.J.S.A. 9:2-4, before the sanction is ordered. Additionally, because the relief granted under Rule 5:3-7(a) is coercive in nature and derived from Rule 1:10-3, the sanctioned parent may seek termination of the sanction when the parent complies with the court’s order. The court should be solicitous of such applications.

This is because custody matters directly impact the welfare of children. The designation of a parent of primary residence is a consequential decision because “the primary caretaker has the greater physical and emotional role” in a child’s life. Pascale v. Pascale, 140 N.J. 583, 598 (1995). Where there is already a judgment or an agreement affecting custody in place, it is presumed
it “embodies a best interests determination” and should be modified only where there is a “showing [of] changed circumstances which would affect the welfare of the children.” Todd v. Sheridan, 268 N.J. Super. 387, 398 (App. Div. 1993). In the context of a transfer of child custody as a sanction, affording both parents the ability to address whether a transfer of custody is i n
the best interests of the children and requiring the court to make the necessary statutory findings provides the necessary process and a reviewable record. Therefore, a best-interest hearing and findings pursuant to N.J.S.A. 9:2-4 is required where a court transfers custody as a sanction

Here, because the trial court did not consider the best interest facts before changing custody, that part of the Order was reversed and remanded.

The Appellate Division also reversed the relocation decision because the court used the prior standard (Baures) instead of Bisping.  The Appellate Division note: “Because the science and anticipated outcomes undergirding the Baures factors have not borne out as the Court anticipated and no longer apply to interstate removals, they should not apply to the intra-state relocations discussed in Schulze.”

The Appellate Division then set forth the new standard to be followed for intra-state relocations, as follows:

We further hold where a parent of primary residence seeks an intrastate relocation and the parent of alternate residence opposes it, the parent of alternate residence must convince the court the move constitutes a change in circumstance affecting the best interests of the children. If a prima facie case is established, the trial court must assess custody and parenting time, by applying the N.J.S.A. 9:2-4 factors to determine whether the best interests of the children requires a modification of one or both.

It is interesting that the parent of alternate residence bears the burden of showing that the move is not in the children’s best interests even though they aren’t the one seeking the change.  On the other hand, the custodial parent’s ability to move, which may have certain constitutional implications, is being hampered and in fact, a 15 mile radius clause is being imposed on her when the non-custodial parent can move anywhere he wants.   In this case, the non-custodial parent had only minimal parenting time.  The move really only implicated the mid week overnight.  Why wasn’t the interim relief of an extra weekend  per month, or some extra time during the summer, enough to address the issue?  Given that only one day per week was implicated, why wasn’t the radius clause larger given the mother’s clear financial distress?  It is one thing where 50-50 or substantial parenting time (5 or 6 out of 14 overnights every two weeks), but when it is 4 out of 14  – which is the minimum to have technical “shared parenting” as defined by the child support guidelines, or less, should a custodial parent really need court approval?

My guess is that one or both parties will see Certification to the Supreme Court. Stay tuned.

_________________________________________

Eric S. Solotoff, Partner, Fox Rothschild LLP

Eric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Morristown, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973) 994-7501, or esolotoff@foxrothschild.com.

 



from NJ Family Legal Blog https://ift.tt/2ASI6Iz
via IFTTT

Thursday, October 3, 2019

New Jersey Lien Law vs. Pennsylvania Lien Law: The Writing Requirement

This is the second blog in a series of blogs examining the differences between New Jersey Lien Law and Pennsylvania Lien Law. Read part one discussing notice and timing differences here.

Since these states share a border, and many contractors operate in both states, they should be aware of the differences in the corresponding Lien Law Statutes. One key difference between the two states concerning the ability to file construction liens by a contractor is the writing requirement. Pennsylvania and New Jersey are on the polar opposites of the spectrum when it comes to the necessary writings to file a lien claim on a property.

In the state of New Jersey, a lien claim cannot be filed by either a general contractor or subcontractor in the absence of a written and signed agreement between the owner and the general contractor, or a subcontractor and the general contractor. There is no exception to this writing requirement and any lien claim which is filed without a written and signed agreement is deemed invalid. The writing requirement also applies to any change orders which may increase the contract price. In the absence of a signed change order, a lien claim cannot contain a claim for change orders above the original contract amount. In fact, New Jersey Law is so stringent as to the writing requirement that if a lien claim is filed without a written contract, the property owner may be entitled to counsel fees, costs, and sanctions incurred in having the invalid lien claim removed.

In Pennsylvania, a written and signed contract is not necessary. While it is always beneficial to have a written construction agreement so that the there is no confusion, the state of Pennsylvania provides that a contractor or subcontractor can file a lien claim on a project if they have a contract with the owner, either express or implied. Express means a written contract, whereas implied means all other contracts which are not in writing. This is a stark difference from the New Jersey Law, and thus, a contractor who routinely conducts business in Pennsylvania should be well aware of the formal requirements within the state of New Jersey. Nonetheless, it is always preferred that there is a writing signed by all parties so that this issue can be dispensed with. A written contact also better protects the contractor with regard to the materials and services that were provided.

Should you as a contractor have any questions with regard to the requirements to file a lien within the state of New Jersey or Pennsylvania, the attorneys at Stark & Stark can assist you in this regard.



from New Jersey Law Blog https://ift.tt/358gGfI
via IFTTT

Wednesday, September 25, 2019

How to Know You Have the Right Transition Attorney for Your Community Association

When community association board members hire a transition attorney for their condominium or homeowners association, they may not know exactly what to look for. They may not know much about transition to begin with, or may not know the right questions to ask in order to find the right transition attorney. If your association is looking for a transition attorney, or you are reconsidering the one you have, the following may help you to identify the right transition attorney.

Your transition attorney will not be afraid to go to trial and should have plenty of trial experience.

Not all transition cases need to go to trial. Many transitions will settle on satisfactory terms without the expense of trial. However, when a sponsor is negotiating with association attorneys, it is clear which are experienced litigators and which ones rarely or never go to trial. If a sponsor knows an association attorney is unlikely to take a case to trial, the sponsor may believe the attorney will settle cheap. That means the association might be leaving money on the table.

On the other hand, if a sponsor knows an association attorney has significant trial experience and would take a case to trial if necessary, that sponsor may weigh the costs of trial and the potential of a large verdict and agree on a generous settlement. That means more money for the association to remediate deficiencies. And, of course, if you do end up at trial, your association would need an experienced litigator. Ask your transition attorney about his or her trial experience, trial verdicts, and settlements at trial and decide if that experience is right for your association’s transition.

Your transition attorney will understand the importance of insurance in a transition case.

New Jersey allows builders and contractors to create limited liability companies to conduct business in the state. This means that most sponsors, contractors, and design professionals conduct their construction work through corporate entities designed to shield them from personal liability for damages caused by their negligence. As a result, the prime source of recovery dollars in construction defect cases is the insurance policies that these sponsors, contractors, and design professionals have in place to cover their companies in the event they are sued.

Accordingly, the transition attorney would need to fully understand how insurance coverage works for construction defect claims. An attorney who does not understand which types of damages insurance policies cover in a construction suit and which types of damages they do not cover, will cause an association to waste considerable amounts of money pursuing claims that may never be paid. Ask your transition attorney about the insurance policies relevant to your matter and how they will help your association.

Your transition attorney will have competent general counsel and collection counsel to support transition efforts.

Transition cases can involve numerous issues which may not be the specialty of your litigation attorney. An association in transition may require a special assessment or bank loan. These issues often require a detailed review of the association’s governing documents and legal opinion to understand the requirements and procedures; resolutions may be required for special assessments or a loan and closing counsel is required for a loan. Associations with sponsors which still own units but do not pay maintenance fees will require diligent and competent collection counsel able to think of aggressive and creative ways to coerce payment. Also, unit owners who cannot pay transition special assessments or increased assessments will need to be addressed. Ask to meet an attorney’s general counsel/collection counsel to help determine their breadth of expertise.

Your transition attorney will not waste time (or money) pursuing claims that do not make financial sense.

If your association is considering litigation over construction issues in your community, it is extremely important to choose a transition attorney with knowledge about the costs and risks associated with such a suit. That attorney will have the experience necessary to explain the concept of risk-reward, as it applies to every one of the association’s claims, so that your board can make an informed choice on whether or not to pursue litigation.

By way of example, your community may have a significant problem with dying trees or shrubs installed by the sponsor. The cost to replace all of the dying landscaping may be upwards of $80,000, an amount your unit owners feel is worth suing over. An experienced transition attorney, however, would explain to your community that you would need an expert to investigate the cause of the problem and render a report suitable for trial at a potential cost of $20,000 to $30,000, or more. The attorney would also explain that attorneys’ fees for pursuing the landscaping claim could be another $30,000 to $40,000. The board and unit owners would then have a choice: 1) to spend $50,000 to $70,000, or more, to litigate for two to three years to collect $80,000.00; or 2) to simply fix the problem themselves.

Unfortunately, many transition attorneys do not have that kind of fully informed discussion with their clients prior to charging off to court. Ask your transition attorney about the numbers to ensure your case makes financial sense.

Your transition attorney will offer various payment options, including contingency.

As a board is evaluating deficiencies in its community, an hourly fee arrangement makes sense. If it’s an easy transition that does not require litigation, an hourly arrangement will continue to be appropriate. However, if your community has significant deficiencies and the sponsor and its contractors are not addressing them satisfactorily, a board may need to make the decision to litigate. Not every association can afford to fund litigation on an hourly basis, since large litigation cases can cost millions of dollars in attorneys’ fees and expert expenses.

Without other payment options, a board must make the difficult decision to not pursue litigation and remediate deficiencies using common funds (money the association still doesn’t have). The right transition attorney will provide various payment options. That might mean hourly, contingency (the attorney gets paid when the association gets paid), or some combination of the two. Ask your transition attorney about options for payment.

Your transition attorney will understand the statute of limitations and statute of repose.

This would seem to be an obvious competency test for transition attorneys. However, if your transition attorney is telling you that either of these dates have anything to do with the date of homeowner control, you may need a second opinion – quick. The six-year statute of limitations will start to run once you know or should have known of a deficiency.

Depending on circumstances, this date can be well before the date of homeowner control. In any event, the statute of limitations is capped by the ten-year statute of repose which (typically) starts to run upon the issuance of a certificate of occupancy or a temporary certificate of occupancy. Failing to settle or file a claim before these dates could be catastrophic for your association’s transition case. Ask your transition attorney for a timetable of these important dates.

If you have any questions about the issues discussed in this article, please feel free to reach out to the authors, Mary Barrett, Esq., and J. Randy Sawyer, Esq..

Stark & Stark offers Boot Camps for Board members on a wide variety of topics including transition. Learn while enjoying lunch, dinner or happy hour at a convenient location near you. If your Board is interested in learning more about transition or any other topic, please contact us for upcoming dates or to customize a Boot Camp for your Board.



from New Jersey Law Blog https://ift.tt/2l2VJ3l
via IFTTT