A Labor Union’s Discipline of One of Its Members

Sheet Metal Workers Local Union 22 v. Kavanagh, ___ N.J. Super. ___ (App. Div. 2015).  This opinion by Judge Currier today addressed an appeal by defendant, a former member of the plaintiff labor union, of a $115,000 fine for violations of the union’s constitution.  The Law Division had granted summary judgment to the union, upholding […]

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Farmland is Not a “Brownfield,” So Application to Construct Solar Facility on Farmland Failed

In re Implementation of L. 2012, c. 24, ___ N.J. Super. ___ (App. Div. 2015).  The Solar Act of 2012 (“the Act”), chapter 24 of the Laws of 2012, amended prior legislation to encourage the installation of solar energy projects on contaminated sites (known as “brownfields”) that might otherwise remain unproductive, while discouraging such development […]

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Mobile Home Valuations – For Once Location Doesn’t Matter

It is common knowledge that in the real estate market, the selling price for a mobile home is almost always dependent upon where is located. Yet, in a recent Chapter 11 case in the district of Delaware, Boomerang Tube LLC, the debtors relied upon a decision by Bankruptcy Judge Shannon, In re George Welch Sr. (Bankr. D. Del. October 19, 2015).

In that Chapter 13 setting, the debtor suggested that the replacement value of the equipment was the proper valuation for purposes of the cramdown sought in their Plan. In this Plan, the chapter 13 debtors’ sought to assume the ground lease, retain the mobile home, and cramdown the secured creditor’s claim to value the of the mobile home as determined in the NADA Retail Value Guidebook for Manufactured and Mobile Homes.

The creditor objected based upon an appraisal it had obtained, which valued the mobile home at $80,000 “in place.” The creditor reasoned that since the debtor decided to assume the underlying ground lease and use the mobile home as a residence, the creditor was entitled to a higher figure – the true value of the living accommodation if sold as it stood. Comps in the creditor’s appraisal had relied upon the location of comparable mobile homes in order to establish value.

Judge Shannon rejected the creditor’s “in place” valuation, as this was contrary to the Supreme Court holding in Associates Commercial Corporation v. Rash 520 US 953 (1997), which adopted replacement value as the appropriate standard. The judge reasoned that the creditor did not have an interest in the land and the debtors alone were responsible for the ground lease payments. The Court reasoned that the creditor would receive the economic benefit of value only by way of the debtor’s continued expenditure of time and money post confirmation. In effect, such a ruling would provide the creditor with the economic benefit of a cost that it did not pay for or finance. Additionally, a lien on the ground lease would not extend to the creditor under state law.

The Court determined two flaws in the creditor’s analysis. The Supreme Court in Rash expressly rejected the use of a “foreclosure value” and adopted the replacement value when examining the cramdown standard. The Court found that in ruling otherwise, there would be no attribution to the debtor, who may wish to simply surrender the property rather than retain it. The Court also held that 11 U.S.C. Section 506 (a) (2) was directly applicable and provides that the replacement value means the “price a retail merchant would charge.”

In addition, the Court noted that the creditor’s security interest in the debtor’s mobile home was limited to the mobile home itself, as determined by the loan agreement. Pursuant to the TILA disclosure, the creditor was simply obtaining a security interest in the mobile home. On the TILA disclosure there was a box for “Real Estate.” This box was not checked. Instead, the creditor checked the other box that described “Mobile Home” as the sole collateral.

Since the debtor’s plan proposed paying $300 per month for the ground lease where the mobile home was located, the creditor did not have a security interest in the ground lease, nor the land, as indicated by the creditor’s own loan documents. Thus, the court reasoned, by permitting the creditor to use the mobile home’s location, the creditor sought an economic advantage that was unfair. It was simply unreasonable to allow the favorable comps relied upon by the creditor’s appraisal to include the value attributable by the ground lease’s location.

While the case reviewed in this blog is a Delaware District Court Bankruptcy case, the reasoning of the Court is correct, as both the Rash decision and section 11 U.S.C. Section 506(a) (2) strongly support that holding. In valuing a mobile home subject to a ground lease, for purpose of a cramdown, only the retail value is relevant. Courts will then often rely upon an industry-standard such as the NADA Retail Value Guidebook for Manufactured Mobile Homes to establish the cramdown value as Judge Shannon did.

When in doubt, it is prudent to seek the advice of counsel knowledgeable in this practice discipline.

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And I Know When That Hotline Bling…

Thanks to Drake, we all know that can only mean one thing.

By thecomeupshow [CC BY 2.0], via Wikimedia Commons

So what happens when your hotline bling(s), and you’re in the midst of or even about to be in the midst of a divorce?

By the time they are thinking about a divorce or going through the divorce process, many clients have moved on and are ready to get out there and see other people.  And many of them are wondering how that could impact their divorce.  Here’s what I tell them:

LEGALLY SPEAKING…

Legally speaking, the fact that you’ve started dating other people generally means nothing.  With two caveats, the Court doesn’t care about your personal escapades – and that includes your dating life.  But the two caveats are important ones:

1)  Dissipation of Marital Assets:  Don’t spend your soon-to-be ex’s money on your new fling or significant other.  If you are spending money on hotel rooms, lavish presents, lingerie and so forth on your new significant other(s) that rightfully belongs to your ex, then that will have an impact on the financial outcome of your divorce.  Specifically, your ex will be entitled to a credit for his or her share of that money.  That’s going to lead to a whole lot of legal fees trying to justify what expenses you paid for that were or were not legitimate (in other words, what did you spend on yourself that was in line with what you spent during the marriage, versus what did you spend on your dating life?).  Of course, a nominal amount of spending is generally not going to be an issue; it’s when the spending becomes exorbitant that there’s a problem.

2)  Whether / How the Kids are Affected:  If your new significant other poses a danger to your kids, obviously, the Court will care.  The best interests of the children are always paramount to the Court, as they most certainly are to you.  If you are dating someone with a  criminal history, drug problem, or so forth, legally speaking (and otherwise), that’s going to be a problem for you.  A Court may find that you do not have the children’s best interests at heart and this could impact the outcome of a custody and/or parenting time determination.  And sometimes, even if the new significant other may not pose a danger to the kids, the change in the status quo might be considered too much of a disruption.  In that type of situation, the Court may impose what are called “Devita restraints,” or restraints on one’s significant other interacting with the children.

EMOTIONALLY SPEAKING…

For better or worse (see what I did there?) this area of the law comes with a lot of emotions.  It’s an outlier in the legal world, where most everything can be chalked up to dispassionate transactions and an “it’s just business” mentality.  Here in the family law corner of the profession, the path of a case is often driven by rage, sadness, anxiety, jealousy, or some combination of those.  If your ex knows you’re dating new people or have a serious relationship with a new person, that can often fuel the fire.

Maybe your ex will fabricate stories about you and your new significant other and will tell your friends, kids, or even the Court these falsehoods.  On the other hand, I’ve had cases where one party was so dejected and heartbroken by the other’s decision to move on that nothing could move forward.  In those types of cases, the grieving party just acts like the divorce isn’t happening and is completely unresponsive.  I recently had a case where the spurned spouse insisted my client was dissipating marital assets to fund her long distance relationship; his refusal to drop the (totally unsubstantiated) claim held up the matter for months.  My client was forced to go through every check she wrote and charge she made over a year-long period so she could prove her husband’s claim was bogus.

Now, it is not for us to discourage anyone from pursuing a relationship or an experience that makes him or her happy – though when you are married, one would think it would be more prudent to end one relationship before starting another.  But, the above is food for thought before you decide to pick up the phone when that hotline bling, or let it ring.

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Jessica C. Diamond is an associate in the firm’s Family Law Practice, resident in the Morristown, NJ, office. You can reach Jessica at (973) 994.7517 or jdiamond@foxrothschild.com.

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APPELLATE DIVISION ADDRESSES RETIREMENT APPLICATION UNDER AMENDED ALIMONY LAW

Litigants and family lawyers have eagerly awaited each decision from the Appellate Division that could shed some light on the numerous provisions in the amended alimony law that became effective on September 10, 2014.  On November 6, 2015, the Court released an unpublished (not precedential) decision in Court v. Court, wherein the trial court’s order denying an ex-husband’s motion to terminate his alimony obligation and vacate his alimony arrears was reversed and remanded for a plenary hearing.

The decision is interesting in its application of the amended provisions of the alimony law with respect to the issue of retirement, especially based on the chronology of the facts at issue.  The factual highlights are as follows:

• The parties were married in 1981 and a judgment of divorce was entered in 2003 – approximately 11 years before the amended law took effect.
• The court in the JOD ordered ex-husband to pay $1,000 per week in alimony.
• Ex-husband was not paying as ordered and, in July 2013 he moved for a modification that resulted in a weekly alimony reduction to $500, plus a weekly payment towards accumulated arrears in the amount of $250.
• An economic downturn in ex-husband’s industry and his deteriorating health caused him to retire in August 2014.
• In 2014, ex-husband sought to terminate his alimony obligation based on his retirement at age 72.  He claimed that earned approximately $27k annually from Social Security and ex-wife was eligible, but refrained from applying for what would amount to $1,221 in monthly Social Security benefits.
• Ex-husband’s arrears totaled almost $200k as of July 30, 2014 – less than 2 months before the amended law went into effect.
• The trial court found ex-husband “provided the [c]ourt with sufficient evidence of his health problems to show he ha[d] lost his life insurance and [was] unable to be gainfully employed.”  It also found both parties in a “difficult financial situation” and noted how ex-husband’s sole income source of Social Security benefits was not enough for him to pay his bills, alimony and arrears.  The court also noted, however, that ex-husband – at age 72 – may again find work in the future and, as a result alimony should only be reduced.  The court, as a result, reduced the alimony obligation from $750 per week to $400 per week, with a $50 payment towards alimony and $350 towards arrears.

On appeal, the Appellate Court found that the trial court failed to make sufficient factual findings in support of its decision, specifically, it did not directly address the issue of ex-husband’s retirement, nor did it provide a basis for the reduced amount or ex-husband’s ability to pay “despite the findings defendant was unlikely to become reemployed given his advanced age and deteriorated health.”  Finally, the Court found that the family part judge “ignored defendant’s right to retire in good faith at age seventy-two.”

Notably, the Appellate Court directed the trial court to apply the amended alimony provisions on remand to determine whether ex-husband was still required to pay alimony.  In so doing, the Court conveyed “There is a rebuttable presumption alimony shall be terminated ‘upon the obligor spouse or partner attaining full retirement age.'”  It then cited to subsection (j)(1) of the amended law, which provides that alimony could only continue if ex-wife presented proof to overcome the rebuttable presumption based upon the following factors:

(a) the ages of the parties at the time of the application for retirement;

(b) The ages of the parties at the time of the marriage or civil union and their ages at the time of entry of the alimony award;

(c) The degree and duration of the economic dependency of the recipient upon the payor during the marriage or civil union;

(d) Whether the recipient has forgone or relinquished or otherwise sacrificed claims, rights or property in exchange for a more substantial or longer alimony award;

(e) The duration or amount of alimony already paid;

(f) The health of the parties at the time of the retirement application;

(g) Assets of the parties at the time of the retirement application;

(h) Whether the recipient has reached full retirement age as defined in this section;

(i) Sources of income, both earned and unearned, of the parties;

(j) The ability of the recipient to have saved adequately for retirement; and

(k) Any other factors that the court may deem relevant.

The Court added, in reference to subsection (j)(1) that “any arrearages that have accrued prior to [alimony] termination shall not be vacated or annulled.”  Thus, a payment towards arrearages was required in an amount based on ex-husband’s ability to pay.  Interestingly, Court indicated that the amount due could be reduced to a judgment upon which interest would accrue, thereby allowing ex-wife to take appropriate steps to collect.

I found the decision noteworthy multiple reasons, each of which have to do with the Court’s application of the rebuttable presumption under the new retirement language and its related factors.

Generally, the amended law seemingly, but not definitively from a legal application standpoint, provides three subsections in connection with an application for retirement that a trial court is to utilize depending on the facts of a given situation: (j)(1), (j)(2) and (j)(3).  Each subsection contains its own similar, but somewhat different sets of factors.  Only subsection (j)(1), which the Appellate Court referenced here, contains the “rebuttable presumption” language.  Subsections (j)(2), which applies to applications for early retirement, and (j)(3), which applies to retirement applications filed in cases where there is an existing final alimony order or enforceable written agreement, do not contain such language.

As a result, there existed a question emanating from the new language as to whether the rebuttable presumption referenced in (j)(1) applies to any retirement application, or just retirement applications stemming from final alimony orders/enforceable agreements entered AFTER the amendment’s effective date.  In other words, does the rebuttable presumption also apply to applications made under subsections (j)(2) and (j)(3)?  As the factual circumstances in Court involved a pre-amendment final alimony judgment, the answer from the Appellate Division, although not in a reported decision, suggests that the rebuttable presumption may apply to all retirement applications made under the new law.

The answer becomes somewhat uncertain, however, because the Appellate Court  remanded to the trial court with a direction that it apply the rebuttable presumption and factors enunciated in subsection (j)(1).  No reference in the decision is made to subsection (j)(3), which, as noted above, applies to retirements applications filed in cases where there is an existing final alimony order or enforceable written agreement.

Thus, while the decision in Court sheds some light on applying the retirement provisions of the amended law, it and future decisions will only provide a greater roadmap for litigants and attorneys with respect to seeking an opposing an alimony termination.

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 Robert Epstein is a partner in Fox Rothschild LLP’s Family Law Practice Group and practices throughout New Jersey.  He can be reached at (973) 994-7526, or repstein@foxrothschild.com.

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A Summary Contempt Proceeding Goes Awry

Ippolito v. Ippolito, ___ N.J. Super. ___ (App. Div. 2015).  This opinion by Judge Fisher today involved an appeal from a summary contempt proceeding.  Counsel for plaintiff in this matrimonial case wrote a letter to the Family Part judge handling the matter and accused defendant of violating a court order that prevented defendant from “threatening […]

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THE NEW YORK TIMES PRESENTS A “PORTRAIT OF THE MODERN FAMILY”

I was recently reading a New York Times article from early November entitled “Stressed, Tired, Rushed:  A Portrait of the Modern Family”, and couldn’t help but see the commonalities between today’s modern family and the ever-changing issues raised in divorce.

The author, Claire Cain Miller, citing from a new Pew Research Center Study, conveyed to readers what many of us may already believe/know, even without statistical support in our back pockets – namely, that children in today’s society are more likely than not to grow up in a household in which their parents work.  The study also found the existence of households with both parents working full-time “in nearly half of all two-parent families” (46% of all two-parent households have both parents working full time – an increase of 31% from 1970; similarly, the percentage of households in which mom stays home has declined from 46% to 26%).

Parents’ ability to balance everything that comes with everyday life has only become more difficult, the study concludes, since there is only so much time that can be devoted to the kids, each other, friends, the house, the family dog, and, last but not least, the workplace.  Miller also noted that how the data reveals that workplace policies (such as paid family leave and before/after child-care) are not yet up to speed, or current to truly help with the situation when dealing with what is described as a permanent and societal shift in the traditional family structure.

Pew found that 56% of all working parents say the “balancing act is difficult, and those who [found such difficulty] are more likely to say that parenting is tiring and stressful, and less likely to find it always enjoyable and rewarding.”  It should be no surprise to anyone, as a result, why divorce rates are rising nationwide.

Interestingly, the article touched upon a changing shift in the mentality of parents that divorce lawyers find more common than ever in custody disputes – specifically, situations where mom still asserts that she has always handled primary caretaking responsibilities despite working full-time, and dad asserting that he does just as much as mom, if not more.  In other words, the article notes:

In most cases . . . women still do the majority of the child care and housework – particularly managing the mental checklists of children’s schedules and needs – even when both parents work full time . . .Just don’t tell fathers that.  They are much more likely than mothers to say they share responsibility equally.

Not surprisingly, more dads say they equally share in such tasks than moms think they do.  Custody evaluators in our field are, more than ever, making recommendations about what is in the children’s best interests where both parents work full-time.  For better or for worse, evaluators are seemingly more likely, under such circumstances, to recommend an equal residential parenting time arrangement.

Some other notable statistical findings from the Pew study:

• Of full-time working parents, 39% of moms and 50% of dads say they feel that they spend too little time with the kids.
• 59% of working moms, and more than 50% of working dads, say they don’t have enough down time.
• The difference between working parents with college degrees versus parents without such degrees (65% with and 49% without) found the work-life balance difficult, with Miller speculating that the reason may be that workers with degrees may be expected to log in hours even after they leave the office despite increased flexibility during the work day.
• White parents are more than 10% likely to express stress than nonwhite parents.
• 41% of working moms said being a parent made it harder to advance at work, compared with 20% of dads.
• Parents spend more time with the kids and less time maintaining the house due to less available time for both.  As compared to past surveys, however, Dads spend less time working, double the time on housework, and tripe the time time on child care.  Even still, the article noted how women still do much more, especially when it comes to raising kids, managing their schedules, caring for them when they are sick, and the like.  In addition, “Fathers and mothers are much more likely to equally share in doing household chores, disciplining children and playing with them.”

The article highlights the changing, or permanently changed nature of today’s modern family, which, from an overarching perspective, will continue to shape the divorce landscape for decades to come.  Litigants’ positions in divorce proceedings, as a result, will continue to evolve and, more likely than not, be less grounded in notions of the traditional family that is ever slowly, according to Pew, becoming a thing of the past.

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 Robert Epstein is a partner in Fox Rothschild LLP’s Family Law Practice Group and practices throughout New Jersey.  He can be reached at (973) 994-7526, or repstein@foxrothschild.com.

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