new jersey laws

I can’t help but abuse legalese in my everyday life. Last night was no exception, when I accused my Wife of “spoliating” my good mood by watching “Glee.” Although I may have convinced my Wife to the contrary, the term “spoliation,” has nothing to do with whiny 30 year-old “high school students” incomprehensibly breaking into song. In fact, spoliation occurs when evidence that is pertinent to a lawsuit is destroyed, which interferes with the Court’s proper administration and disposition of the action. Aetna Life and Cas. Co. v. Imet Mason Contractors, 309 N.J.Super. 358, 364 (App.Div.1998) (quoting Hirsch v. General Motors Corp., 266 N.J.Super. 222, 234 (Law Div.1993)).
 

In general, a party has a duty to preserve evidence when there is:

The party who destroys such evidence, commonly referred to as the “spoliator,” can be held liable regardless of whether he or she intentionally or merely negligently destroyed the evidence. Various civil remedies are available to rectify the spoliation. One such remedy is that the Court infers that the evidence the spoliator destroyed would have been unfavorable to him or her, as if it were a fact established at trial. A second remedy is a discovery sanction in which the Court designates that certain facts be taken as established, or refuses to permit the spoliator to support or oppose designated claims or defenses. Finally, Courts may prohibit the introduction of designated matters into evidence, dismiss an action, enter judgment by default, or may order the delinquent party to pay reasonable expenses resulting from his or her conduct, including attorney's fees.
 

In addition to the above remedies, the New Jersey Supreme Court held that if spoliation of evidence is discovered during the course of litigation, the offended party can receive an adverse inference jury charge in its case in chief and still assert a completely separate cause of action for fraudulent concealment of evidence. Tartaglia v. UBS PaineWebber, Inc., et al., 197 N.J. 81 (2008)
 

Even if the prospect of litigation is questionable, best practices therefore require parties, and especially those regularly conducting business, to preserve all evidence such as letters, emails, pictures, video recordings and audio recordings that might be relevant to a dispute. But go ahead and delete that Glee episode from your DVR.

Cary Kvitka is a member of Stark & Stark's Lawrenceville, New Jersey Litigation Group. For questions, or additional information, please contact Mr. Kvitka: ckvitka@stark-stark.com.

One of the most common divorce myths involves the assumption that permanent alimony, which is typically awarded in divorces where the parties have been married for many years, will continue indefinitely.  In New Jersey, it is well settled law that an alimony obligation is modifiable based upon a showing that a substantial change in circumstances has occurred since the time that a divorce was entered.  Examples of a “change in circumstances” that may warrant a modification of an alimony obligation include an increase or decrease in either party’s income, cohabitation of the alimony recipient tantamount to remarriage,  receipt of an inheritance, loss of employment (if it is not voluntary), and good faith retirement.
 

The termination of an obligor’s alimony obligation occasioned upon the payor’s retirement is not automatic.  It is up to the obligor to file an application with the Court for a modification or termination of their alimony obligation.  In determining whether an obligor’s impending retirement constitutes a substantial change in circumstances warranting a modification or termination, the Court must consider: (1) the age and health of the party seeking to retire and (2) the motive and timing of the impending retirement.  The Court will also look to the obligor’s ability to pay alimony after retirement, and the dependent spouse’s ability to provide for themselves, which involves an examination of both parties’ incomes and assets.  In the event the Court determines that the reason for the obligor’s retirement is to avoid his or her alimony obligation, the application will be denied.    

Even if the Court determines that the payor has advanced a good faith reason for retirement, the Court must then decide whether the advantage of the retirement to the retiring spouse outweighs the disadvantage to the other party.  This determination is critical to the analysis.  If this inquiry is answered in the affirmative, only then will the Court address whether and to what extent the payor’s alimony obligation should be modified. 

In the event that the Court determines that the advantage to the payor in retiring does not “substantially outweigh” the disadvantage to the participant, then the payor’s retirement–even if pursued in good faith–will not be a basis to modify their alimony obligation.  This is a fact sensitive inquiry that the Court determines on a case-by-case basis. 

Of course, divorcing parties have the ability to negotiate through counsel an automatic date for the termination of alimony, if both parties agree.  If an agreement is reached that contemplates an automatic termination of alimony upon a triggering event (reaching a certain age, retirement, etc.), courts will enforce that agreement.  In negotiating these provisions, it is important that the payor of alimony understand that this is a benefit they would not normally receive and must be willing to offer something in exchange for an automatic termination.   

If you are contemplating a divorce, or are divorced, have an alimony obligation and are considering retirement, it is important to consult with an experienced family law attorney to determine how to best proceed.  
 

Corrine Cooke is a member of Stark & Stark's Divorce Group in our Lawrenceville, New Jersey office. For questions, or additional information, please contact Ms. Cooke: ccooke@stark-stark.com.

On January 17, 2012, the New Jersey Appellate Division released its decision in the case, Hopkins, et. al. v. Duckett, et. al. The Hopkins decision further clarifies some of my earlier blog posts relating to choice of law issues in minority oppression litigation and the applicability of minority oppression claims to limited liability companies.

Choice of Law
Plaintiff Hopkins was a former New Jersey resident who moved to Indiana shortly before he commenced litigation in the Superior Court of New Jersey, Chancery Division, Bergen County. Nightingale & Associates, LLC, the company at the center of Mr. Hopkins’ lawsuit, was a Delaware LLC with a principal place of business in Connecticut. The LLC’s operating agreement set forth the members’ agreement which states that all disputes were governed by Delaware law.
 

The Appellate Division found that Delaware law should govern the dispute because unlike the decisions which were the subject of my previous blog posts there were no substantial relationships to New Jersey. Moreover, there was no fundamental policy which required the application of New Jersey law. In other words, unlike Krzastek v. Global Resource Industrial and Power, Inc., No. A-1815-06T2 (App. Div. Sept. 11, 2008) and Conway v. DialAmerica Marketing, Inc., BER-C-116-08 (Super. Ct. Sept. 30, 2008), Nightingale & Associates, LLC did not maintain full time offices in New Jersey. Moreover, Nightingale & Associates, LLC did not employ many New Jersey residents.
 

Finally, only one owner of Nightingale & Associates, LLC had ties to New Jersey (although, he moved to Indiana prior to the commencement of his litigation). In addition, the entities in the Krzastek and Conway cases were corporations. The entity in the Hopkins case was a limited liability company where the parties entered into an operating agreement and agreed that Delaware law should apply. Those reasons led to the use of Delaware law in the Hopkins case.
 

Application of the Minority Oppression Statute to an LLC
In an article I published in the New Jersey Law Journal, I asserted that the minority oppression statute may not apply to limited liability companies. In that article, I asserted that the minority oppression statute should protect minority members of a Limited Liability Company. I asserted that the New Jersey Legislature should modify the statute to afford the same protections offered to minority members of a Limited Liability Company. The Appellate Division in Hopkins reaffirmed that the New Jersey minority oppression statute does not apply to limited liability companies. See also, Denike v. Cupo, 394 N.J. Super. 357, 378 (App. Div. 2007), rev’d on other grounds, 196 N.J. Super. 502 (2008).  Until the New Jersey Legislature amends the statute to afford minority members the same protections offered to shareholders in a corporation, I strongly encourage minority members to insist that the operating agreement afford them the protections found in N.J.S.A. 14A:12-7(c).

Scott Unger is a Shareholder in Stark & Stark's Lawrenceville, New Jersey office concentrating in Shareholder & Partner Dispute Litigation. For questions, or additional information, please contact Mr. Unger.

In a recent New Jersey divorce case (Bonaventuro v. Bonaventuro), the Court refused to lower the ex-Husband’s alimony obligation, even though he had been laid off from his job. The facts are as follows: The ex-Husband was laid off from his position with a consulting company which involved projects for banks and broker dealers. He had earned approximately $150,000 per year.  Pursuant to a prior Court Order, he was paying monthly alimony in the amount of $2,850. The ex-Wife had worked part time as a clerk at a bank; however, her position had also been recently eliminated. 
 

In September 2010, the ex-Husband filed a motion to suspend his alimony obligation until he obtained full time employment. He also requested that the accrual of arrears be stayed (or stopped) during that time. His only source of income was unemployment compensation of $390 a week. He asserted that he applied for 181 different jobs and established a professional profile on a networking site. 
 

The Trial Court denied the ex-Husband’s motion, and he appealed. The Appellate Division affirmed the Trial Court’s decision denying the ex-Husband relief. Both courts stated that the person seeking modification has the burden of showing changed circumstances that would warrant relief. In this case, there was a substantial decrease in the ex-Husband’s salary; however, the Court stated that a decrease, standing alone, will not constitute the requisite showing of changed circumstances. 
 

The Court noted the following:

Maria Imbalzano is the Co-Chair of Stark & Stark’s Divorce Group in the Lawrenceville, New Jersey office. For questions, please contact Ms. Imbalzano: mimbalzano@stark-stark.com.

If someone were to die without having a will in place, a common misconception that is often times mentioned is that the deceased’s assets are turned over to the State. This is completely false. Instead, state law determines who will receive the deceased’s property. Each state has a statute (the intestacy statute) that provides who the people are that are the closest relatives to the deceased, and those relative receive the deceased’s estate.
 

New Jersey law is as follows:

For a single person:

For a married person (spouse or domestic partner):

Now, maybe these are the people who you would want to inherit from you. But maybe they are not. Preparing and signing a Will gives you the power of choice to benefit others - family, friends, and/or charity - rather than relinquishing that choice to the government.
 

There is another important issue that state law will control if a person has died without a Will: guardianship of your minor children. If a child under the age of 18 has no living parent, state law determines that the child’s closest next of kin have the first right to serve as the child’s guardian. Being the closest relative does not really qualify someone to raise a child. And, if several persons are related in the same way to the child (for example, both sets of grandparents), the Court then decides, with both sides of the family incurring legal fees as well suffering an emotional hardship. Again, it is a matter of choice - should you choose who should raise your child in the event of an untimely death, or should the government?
 

Preparing a Will is not something you do for you - it is something you do for your family. To ensure your loved ones are benefitted, that your children are properly cared for, and that your estate is administered at the least possible cost, please contact us as to how we can assist you in preparing a Will and other estate planning documents.

Rose Durkin is a Shareholder in Stark & Stark's Lawrenceville, New Jersey office specializing in Wills & Estate Planning. For questions, please contact Ms. Durkin.

With the advent of the bankruptcy law changes in 2005, individuals have fewer alternatives when considering bankruptcy. An individual facing bankruptcy has three options to consider filing under, those being Chapter 7, Chapter 11 or Chapter 13 of the code. For a lender, the consumer’s choice of chapter has unique implications to be considered, and the devices and methods available to the lender under Chapter 7 will be considered in this article. The lender’s options for protective actions in Chapters 11 and 13 will be discussed in later articles.

Since Chapter 11 is typically used by small businesses we’ll start off by comparing Chapter 7 and 13 proceedings. The key difference between Chapter 7 and Chapter 13 is the repayment of debt. Chapter 7 is bankruptcy liquidation, meaning your assets are liquidated to pay lenders, with certain exceptions. Chapter 13 allows consumers with a regular income to establish a payment plan to pay back all or some of their debts to creditors, over a period of time.

To qualify for a Chapter 7 bankruptcy a consumer must obtain mandatory credit counseling within 180 days before filing bankruptcy, meet the means test and then file a petition and related schedules with the bankruptcy court. Upon filing, the automatic stay is put in place, which limits the actions of creditors and other pending legal actions. The court will appoint a Trustee to oversee the case. In a Chapter 7 a consumer’s assets (valued as of the date of the filing), with certain exceptions, will be liquidated and the proceeds will be used to pay creditors. At the termination of the matter the consumer will receive a discharge.

In this Chapter, a consumer’s home may be saved only if payments are kept current. Therefore, a lender should closely monitor the payments. If they are not made, the lender should refer the account to Bankruptcy Counsel who can then apply for relief from the automatic stay.

As a less costly alternative the lender can wait until the trustee has abandoned his interest and the debtor has been discharged in Bankruptcy and then start the foreclosure process (this is not recommended since the foreclosure process may take several months and the sooner one starts the process the more likely that a greater recovery will be achieved). Time almost never favors the lender in the current market and in the foreclosure process.

In this Chapter a loan secured by a vehicle must be kept current. A lender should closely monitor the payments and insurance for the collateral. If they are not timely made nor kept in place the lender should refer this to Bankruptcy Counsel who can then apply for relief from the automatic stay. The lender can also wait until the trustee has abandoned his interest and the debtor has been discharged in Bankruptcy and then start the repossession/replevin process but this is not recommended. This collateral is subject to vast depreciation and loss.

The consumer has one of four options:

While reaffirmation achieves the ultimate protection for a creditor, the amendments to the bankruptcy code have made this path so arduous that it is seldom achieved and the time and energy spent make this an impractical choice in most instances. If reaffirmed and approved by the Court, the consumer is bound by the original contract and may be sued for a deficiency if he were to default.

Bari Gambacorta is a Shareholder in Stark & Stark’s Bankruptcy & Creditors' Rights Group in the Lawrenceville, New Jersey office. For questions, please contact Mr. Gambacorta.

In determining alimony, we are compelled to take into consideration the 13 factors set forth in our statute. Of utmost importance is the actual need of one spouse and ability of the other spouse to pay, along with the duration of the marriage and the standard of living established during the marriage.

In a recent case (Dudas v. Dudas, decided on April 11, 2011), the Defendant/Husband earned between $40,000 and $59,000, towards the end of the marriage. A Complaint for Divorce was filed in 2008, and the case was tried in 2011. Over those years, the Husband’s income increased wherein he earned $64,000 in 2009, $76,000 in 2010 and $68,000 in 2011.

The Defendant argued that his post-Complaint income should not be considered in any alimony calculus and that only the income he earned up to the date of the Complaint should be considered, since the parties’ standard of living was based on his pre-Complaint income.

While the standard of living established during the marriage is a predominant consideration, this factor does not stand alone. The Court held that the actual need and ability of a party to pay directs an analysis of the parties’ present needs and ability to pay, not the past. One of the other factors is the earning capacities of the parties which is also a current consideration.
 

The Dudas Court also considered two additional factors under the catch-all factor of “any other factors which a court may deem relevant.”  They are:

The marginal cost estimation has to do with the fact that a couple living together is less expensive than a couple living separately in two households. Further, once each party establishes their separate residence, each party’s new budget is not 50% of the marital budget, it is generally more, and may not be substantially less than the two person household budget. In many divorce cases, when the parties separate, there is insufficient money available for either party to maintain the standard of living enjoyed during the marriage.
 

In the Dudas case, the Court felt it was fair to bring both parties reasonably closer to the marital standard of living, which could only happen by looking to the husband’s increased available funds after the Complaint date.
 

Momentum of the marriage recognizes the fact that one’s occupational efforts may take years to pay off. A person’s earning level may start out slow, but through experience, education and perseverance, it may increase dramatically the longer a person works in that particular field.
 

Therefore if a party focuses on his career throughout the course of a marriage, while the other party, as in the Dudas case, maintained the home, cared for the children and provided support and encouragement for the husband in his professional endeavors, then a post-Complaint rise in income will be considered in determining alimony.

Maria Imbalzano is the Co-Chair of Stark & Stark’s Divorce Group in the Lawrenceville, New Jersey office. For questions, please contact Ms. Imbalzano: mimbalzano@stark-stark.com.

A former personal assistant of Lady Gaga recently filed a lawsuit against the entertainer’s touring company claiming that she was improperly denied hundreds of thousands of dollars in overtime pay under both the Federal Fair Labor Standards Act (“FLSA”) and New York state law. O'Neill v. Mermaid Touring Inc., Civil Case No. 11-9128 (Southern District of New York, Dec. 14, 2011).  In support of her allegations, the former assistant claims that her position did not qualify for the “administrative exception” to overtime laws because she did not exercise any significant independent discretion or judgment in her role while she, essentially, worked around the clock in exchange for a fixed salary.  Although the assistant worked a mere 13 months for the pop star and was well-compensated for the position (pursuant to the complaint, she was initially paid $1,000 per week and, subsequently, an annual salary of $75,000), she claims that she was on call 24/7 to handle tasks that did not require any independent discretion or judgment and, accordingly, is seeking $380,000 in back overtime compensation for 7,168 overtime hours that she allegedly worked in the star’s home and while touring and traveling with her around the world. 

Cases such as these tend to catch our attention either because of the large amounts of money sought and/or because of the celebrity involved, but often their significance to more typical employment relationships goes unnoticed. 

Regardless of the ultimate merits (or lack thereof) or outcome of the lawsuit, the case illustrates two wage and hour issues that employers should be cognizant of: (1) the administrative exemption to overtime; and (2) the ways in which non-exempt, on-call employees should be compensated and/or treated.

Administrative Exemption to Overtime
Under the U.S. Department of Labor (“DOL”) regulations, an administrative assistant who is paid on a salaried basis and exercises significant independent discretion and judgment is exempt under the "administrative exemption." 29 CFR § 541.203(d). This exemption also applies to employees who exercise significant independent discretion and judgment in performing "office or non-manual" work. Challenges to the applicability of the exemption to executive or personal assistants are not uncommon.  Although some courts have expressed reluctance to rule that well-compensated individuals providing such assistance do not exercise "discretion and independent judgment,” case law remains unclear.

Non-Exempt, On-Call Employment
This case also serves as a reminder that on-call employment must not unduly restrict a non-exempt employee’s ability to spend his or her time away from the job.  The amount of restrictions imposed on a non-exempt, on-call employee’s time not at work will be considered in determining whether or not an employee should be compensated for on-call hours.  For example, if required to remain on an employer’s premises or within such a close distance that prevents the employee from using his or her time effectively or freely, the employee may be eligible to receive overtime pay under wage and hour laws. 

The Take Away
Compliance with wage and hour laws requires an understanding of what it means to be exempt or non-exempt from overtime obligations.  Further, employers of non-exempt employees are often unaware that some requirements of the positions may trigger payment/overtime obligations.  For example, if a non-exempt employee of a marketing group is required to attend networking events outside of normal working hours, such time must be paid.  Similarly, a building superintendent who lives at the building and is required to be “on-call” at all times may have to be compensated for all such “on-call” time if he is not permitted to leave the building (or travel beyond a limited distance) while off-duty but on-call.

Relevant to this personal assistant’s case, employers and individuals who retain personal or executive assistants should be aware of the employment risks associated with such employment and the need to pay such employees on a salaried basis and ensure that the assistants utilize independent discretion and judgment in performing their job duties in order to qualify for the protections afforded by the administrative exemption to overtime payment obligations.

For more information on this decision and how it might apply to your organization or employment, contact Amy Beth Dambeck, member of Stark & Stark’s Employment Group, via email: adambeck@stark-stark.com

New Jersey’s Appellate Court recently held that unpaid assessment and/or maintenance fee delinquency disputes between a condominium and a unit owner are ‘housing-related’ disputes for the purposes of New Jersey’ Condominium Act, N.J.S.A. 46:8B-14(k).  In Bell Tower Condominium v. Pat Haffert, et al, the board approved a special assessment related to alleged necessary repairs.  Haffert’s share was $22,000.00.  Haffert refused to pay.   Haffert – who was a board member at the time - challenged the special assessment on procedural and substantive grounds.  He argued that the vote was mishandled, that the board had violated the Act repeatedly over the years via its failure to procure annual audits, have elections, have open meetings, make financial records available for inspection, etc.  When Haffert still refused to pay, and attorney communications failed to resolve the dispute, the condominium sued.  Haffert filed a counterclaim, in which he sought an order compelling the condominium to provide him alternative dispute resolution (“ADR”) vis a vis the assessment-related dispute.  At the case’s conclusion, the court entered a $22,000.00 judgment against Haffert.  The court rejected Haffert’s ADR-related claims.

Haffert appealed.  On appeal, the court reiterated the dictates of Finderne Heights, an appellate court decision from 2007.  In Finderne Heights, the appellate court ruled that – because of the Act and its section 14(k) – all ‘qualifying disputes must be sent to arbitration if after suit is filed, either party chooses to invoke the alternative dispute remedy that must be made available under the Act.

It has been commonly understood that disputes involving unpaid assessments and/or maintenance fees were not ‘housing-related’ for the purposes of Finderne Heights and 14(k).  The court in Bell Tower disagreed.  This does not mean however that a condominium cannot commence a collection action at law and/or at equity without first offering and/or participating in, ADR.  It means only that once a debtor – after suit is filed – pleads and/or seeks through formal court papers that the delinquency be the subject of ADR, the condominium must oblige.  Since almost all disputes involving unpaid assessments and/or maintenance fees are uncontested, there should be no significant impact to the condominium’s assessment management and recovery program.  Additionally, I assume that efforts will be made to amend the Act to overturn that decision.  Before changing any process or program in light of the Bell Tower case, feel free to contact me to discuss and/or to clarify.

If you would like to discuss this client alert in more detail or how it may affect your community association, please contact David Byrne at 609-895-7365 or by email at dbyrne@stark-stark.com

The obligation to pay alimony to one’s former spouse is a long-standing tenet of New Jersey statutory and decisional law. From time to time, various efforts have been made to reform and, in some cases, eliminate alimony which have proven unsuccessful. A new challenge has been mounted by New Jersey Alimony Reform, an organization founded by Thomas Luesek, a biology professor at Rutgers University, who was ordered by a Union County Court to pay permanent (i.e. indefinite duration) alimony to his former wife who he claims is capable of self support and does not need alimony. 

Mr. Luesek’s organization seeks no less than the elimination of permanent alimony, a position supported by Assemblyman Sean Kean (R-Monmouth) who has introduced a bill to set up a blue ribbon panel to examine such changes and thereby “bring New Jersey into the 21st century”.

Such efforts will provoke discussion, of which this article is an example, but will likely bear little fruit. Alimony in New Jersey is based upon a myriad of statutory factors which the Court can utilize, balance or deem inapplicable in the circumstances of the case. These factors include need and ability to pay, duration of the marriage, marital standard of living, career interruption and other factors which give discretion to the Judge while imposing a set of guidelines for the Court’s instruction and application as  circumstances deem “fit, reasonable and just”  under the governing statute. 

Contrary to popular assumption, Judges are required by law to utilize these factors and cite them in their decisions,  as opposed to employing their personal  sense of what is or isn’t “fair”.  Coupled with the statutory establishment of multiple forms of alimony such as Limited Duration, Rehabilitative and Reimbursement Alimony, it is, in my, wrong to contend that the elimination of “permanent” alimony serves a legitimate legal or societal goal. This is not to say that every alimony case is decided in a manner acceptable to both parties; however, in my over 30 years of practicing matrimonial law throughout New Jersey, the overwhelming number of alimony awards (or denials) have been appropriate to the circumstances of the case. There also exists an enormous body of reported decisions which are legally precedential with respect to alimony and its variations, as a result of which New Jersey judges and lawyers are very well-informed.

I would be the first to add than an award of alimony is not the answer in every case. In fact, it may be deemed totally unwarranted as I, and other matrimonial attorneys, have learned through courtroom experience. Moreover, “permanent” (indefinite duration) alimony is always subject to modification based upon a substantial change in circumstances unless the parties specifically contract otherwise. Thus, the elimination of this type of alimony unfairly tilts the scales in favor of alimony payers and against alimony payees.

There are an increasing number of legal authors who propose a different look at alimony via the establishment of “alimony guidelines” which would determine the amount and duration of alimony awards on a uniform basis throughout all of New Jersey’s counties. Such guidelines would be rebuttable; that is, they could be demonstrated to be inapplicable in a particular case.

This dialogue should continue as uniformity of alimony awards is a legitimate topic.  In contrast, arguments favoring the elimination of one type of alimony are not so framed and, in my opinion, run counter to New Jersey’s distinguished legal history in this important area. 

John Eory is the Co-Chair of Stark & Stark’s Divorce Group in the Lawrenceville, New Jersey office. For questions, please contact Mr. Eory: jeory@stark-stark.com.

Internal Revenue Code Section 152 defines a dependent for tax exemption purposes. If parents are divorced or separated with a written Separation Agreement, or live apart during the last six months of the calendar year, and if a child or children are in the custody of one of the parents for more than one-half of the calendar year, that parent may take the dependency exemption for each of those children.

In many cases, parties who are divorcing reach an agreement as to who may take the dependency exemption for their children in any given year. Sometimes they split the dependency exemptions between them if there are two or more children. For any divorce or agreement entered into from 2009 onward, if the custodial parent (parent having the children for the greater portion of taxable year) agrees to give the other parent an exemption in any given year, the custodial parent must sign a written declaration that the custodial parent will not claim such child as a dependent for said taxable year and the non-custodial parent must attach that declaration to his/her tax return.  Prior to December 31, 2008, the non-custodial parent only had to attach the pages from his/her divorce decree or Separation Agreement to his/her tax return.

The form required now is IRS Form 8332 entitled “Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent.”  Said form may cover the exemption for more than one year.

Maria Imbalzano is the Co-Chair of Stark & Stark’s Divorce Group in the Lawrenceville, New Jersey office. For questions, please contact Ms. Imbalzano: mimbalzano@stark-stark.com.

In arguably the best episode of Seinfeld ever, Frank Costanza invented a new holiday called Festivus (for the rest of us), which started with the “airing of grievances.” Similar to Mr. Costanza notifying his dinner guests “I gotta lot of problems with you people, now, you’re gonna hear about it,” New Jersey’s Entire Controversy Doctrine requires parties to plead claims in a lawsuit that are related to or arise out of the same transaction or event.

The Entire Controversy Doctrine “is intended to be applied to prevent a party from voluntarily electing to hold back a related component of the controversy in the first proceeding by precluding it from being raised in a subsequent proceeding thereafter.”  Oltremare v. ESR Custom Rugs, 330 N.J. Super. 310, 315 (App. Div. 2000).

For example, if a condominium association sues a residential developer for construction defects but fails to plead under the Consumer Fraud Act (which carries lucrative treble damages), the Entire Controversy Doctrine would likely prevent the association from recovering in a later lawsuit under the Consumer Fraud Act. By contrast, if the developer and the association’s president get into a car accident after a deposition about the construction defect suit, the personal injury claims from the car accident would not have to be joined in the construction defect suit because those two claims do not arise out of the same transaction or event.

It is therefore invaluable for litigants to identify all possible causes of action related to a transaction or event, preferably before commencing suit.

Stark & Stark’s Litigation Group has extensive experience navigating such complex issues, to maximize your relief and avoid legal pitfalls like the Entire Controversy Doctrine. If you have questions regarding this, or other similar complex issues, please feel free to contact me: ckvitka@stark-stark.com.

On January 11, 2012, the Supreme Court issued a unanimous decision in the case of Hosanna-Tabor Evangelical Lutheran Church & School v. EEOC (“Hosanna-Tabor”). The decision upheld a religious church-school’s termination of a teacher based on the “ministerial exception” and ruled that employment discrimination lawsuits are barred when the employer is a religious group or organization and the employee is one of the group or organization’s ministers. 

Both the Americans with Disabilities Act (“ADA”) and Title VII of the Civil Rights Act of 1964 contain exemptions that entitle religious institutions to discriminate on the basis of religion – but they do not permit such institutions to discriminate on other legally protected basis, such as race, sex, or disability. The federal courts of appeals, however, have long recognized a broader, ministerial exception: a First Amendment doctrine that bars most employment-related lawsuits brought against religious organizations (“religious employers”) by employees performing religious functions. The circuits have been in agreement about the core applications of the doctrine to pastors, priests and rabbis, but have been divided over the boundaries of the ministerial exception when applied to other employees, particularly those whose duties are more secular in nature.

The question presented to the U.S. Supreme Court in the Hosanna-Tabor case was whether the ministerial exception applied to a teacher at a religious elementary school who taught a full secular curriculum and predominately engaged in secular duties, was a designated “called teacher,” taught religion classes, and regularly lead students in prayer.

Put a bit more simply: the Court was asked whether or not Cheryl Perich could sue her former church-school employer, the Hosanna-Tabor Evangelical Lutheran Church (“Hosanna-Tabor”), for discrimination under the ADA.

In this case, the EEOC filed suit on Ms. Perich’s behalf and against Hosanna-Tabor, claiming that the religious employer had unlawfully terminated her employment in violation of the ADA and, specifically, that it wrongfully fired her in retaliation for her threat to sue the church-run elementary school under the ADA.

In defense of the termination, Hosanna-Tabor claimed that Ms. Perich was a minister, and that, therefore, it had a First Amendment right to fire her for threatening to sue, which was contrary to their belief that Lutherans should resolve their disputes internally, and not within the courts.

In response, Ms. Perich argued that she was not a minister, just a teacher, and argued that Hosanna-Tabor had violated her federal statutory rights to protection against disability discrimination. Although most of Ms. Perich’s duties and teaching subjects were secular, she was a “called” teacher with some religious responsibilities, and the “called” designation was one conferred by the church. The U.S. Court of Appeals for the Sixth Circuit held that because, functionally, Ms. Perich was a secular teacher with few religious obligations, she was not a minister. As such, the Sixth Circuit concluded that Hosanna-Tabor did not have a First Amendment defense, and that Ms. Perich could pursue her ADA claims.  

In the Hosanna-Tabor decision, the Supreme Court rejected the Sixth Circuit’s analysis and concluded that Perich was a minister and, therefore, barred from pursuing her ADA claims.

The Supreme Court’s Decision
By the Hosanna-Tabor decision, the Court held that the Establishment and Free Exercise Clauses of the First Amendment serve as an absolute bar to employment discrimination suits brought on behalf of ministers against their religious employers; upheld the principle that it is impermissible for the government to contradict a church's determination of who can act as its ministers; and provided a fairly broad definition of “minister,” making clear that the designation is not limited to ordained clergy or their counterparts. 

The Court did not address whether or not the bar may also apply to other types of suits brought by ministers against their religious employers – such as breach of contract or tortious interference claims. 

Further, the Court did not articulate a rigid formula for deciding when an employee qualifies as a minister, choosing instead to apply a case-by-case approach which looks at the totality of the circumstances surrounding both the employee and the employment. 

In a Nutshell…

The Significance To Religious Employers and Employees
In light of this decision, religious employers must analyze whether an employee in question qualifies as a minister when making any employment decisions that could give rise to potential employment discrimination claims.  Such required analysis must keep in mind that the definition of a “minister” may be broader than one might expect. 

Further, because it is unclear whether or not the bar applies to other types of suits brought by ministers against their religious employers, such employers will still need to carefully evaluate all employment decisions for potential legal exposure – even for those employees who qualify as ministers.

Similarly, employees of religious institutions should be aware that, should the ministerial exception apply to them, they will be precluded from bringing employment discrimination claims against their employers and may be precluded from bringing other types of suits against their religious employers.  In addition, employees that may not consider themselves “ministers,” may, in fact, qualify for the designation, thereby being subject to the bar against bringing employment discrimination, and, potentially, other claims against their religious employers.

For more information on this decision and how it might apply to your organization or employment, contact Amy Beth Dambeck, member of Stark & Stark’s Employment Group, via email: adambeck@stark-stark.com

Thomas B. Lewis, Chair of Stark & Stark’s Employment Litigation Group, was quoted in the January 14, 2012 New York Post article, Bonus (cry) babies taking the money and running.  The article discusses a recent trend in Wall Street bankers retiring early amidst  fears of skimpy bonus checks this year, and for the foreseeable future. 

Mr. Lewis states, “There’s a strong argument that the gravy-train days of Wall Street may never replicate themselves again. It’s going to be very hard to make an embarrassingly large amount of money at a bank that’s a publicly traded company compared to a private-equity fund or a hedge fund.

David J. Byrne, Chair of Stark & Stark's Condominium & Co-Op Law Group, will moderate and present materials related to Site Safety Regulations and New York City’s Condominiums and Co-ops at the January 18, 2012, NYARM Meeting. The presentation will be held in the Ground Floor Library Pavilion at the General Society of Mechanics & Tradesmen, Manhattan.

Mr. Byrne will focus his presentation on the fiduciary duties of condominiums and co-ops as those duties relate to New York City’s site safety regulations. He will also moderate the entire presentation which will include John Chiusano, R.A., NYC Dept. of Buildings, James Fenniman, Bollinger Insurance and Scott Silberman, P.C., SMS Engineering. 
 

New Jersey has finally enacted a law allowing civil actions for the misappropriation of trade secrets.  The Trade Secrets Act (“The Act”) signed by Governor Christie on January 9, 2012 provides remedies available to the holder of a trade secret that has been acquired by improper means or improperly disclosed. 

The Act provides an arsenal of remedies, including compensatory and punitive damages, injunctive relief and attorneys’ fees. The legislation defines a trade secret as information such as a formula, pattern, business data compilation, technique, invention and/or process. New Jersey now joins 46 other states who have enacted a trade secrets statute.

A three-judge appellate court just halted – perhaps only temporarily however - the Christie administration's work to overhaul New Jersey’s rules governing a municipality’s rights and obligations in relation to affordable housing within that municipality.  The government’s extinguishment of the Council on Affordable Housing (“COAH”) was not undone.  However, the rules created by COAH and/or in relation to COAH were reinstated, pending a full hearing and decision by the appellate court in 2012.  The reinstated rules will be administered, until that hearing, by the New Jersey Department of Community Affairs.

The existence of affordable housing-related rules, and how they are administered and/or enforced, is heavily connected with the extent and nature of New Jersey’s residential development.

If you would like to discuss this client alert in more detail or how it may affect your community association, please contact David Byrne at 609-895-7365 or by email at dbyrne@stark-stark.com

A Housing Development Fund Company (HDFC) cooperative is a limited equity cooperative incorporated under Article XI of the Private Housing Finance Law. HDFC cooperatives are typically sponsored by an organization called the Urban Homesteading Assistance Board (UHAB). UHAB assists in the process of turning over City-owned buildings to their residents and in creating the cooperative.
 

These cooperatives are intended for persons of low income. As such, the co-ops have both income rules for people becoming shareholders and caps on the resale prices when shareholders leave. The income rules will vary on a case by case basis, however, in all cases the income cap will not exceed 120% of the "Area Medium Income” when UHAB is the direct sponsor of the co-op.
 

Roughly, HDFC cooperatives converted prior to 1995, have an income restriction on new shareholders equal to 6 or 7 times the annual maintenance plus utilities. Families with less than 3 dependents use 6 times the annual maintenance plus utilities to determine eligibility of income and families with 3 or more dependents use 7 times the annual maintenance plus utilities for the calculation. HDFC Cooperatives converted after 1995 typically have an income restriction of 120% of Area Median Income as the maximum qualifying amount.
 

Purchase prices are unique and are personalized to a building based on that building’s renovation scope and the mortgage the building has to pay. In all cases the controlling documents should be consulted to determine the actual income restriction and re-sale policies.
 

Since the apartments are intended for low income residents, they are often sold at a heavily discounted purchase price. The apartments can be sold for such low amounts because they are often subsidized by housing grants. In the event, the apartment within the HDFC co-op is sold to someone who exceeds the income restrictions, the seller will have to pay back the housing grant that subsidized the apartment, ultimately resulting in no profit to the seller.
 

Due to all of the restrictions and rules governing the re-sale and purchase of HDFC apartments, Boards and sellers should contact their attorneys for guidance during this process.

If you would like to discuss this client alert in more detail or how it may affect your community association, please contact Ashley Newman at 212-279-9090 or by email at anewman@stark-stark.com

House Bill 1582 was introduced on May 24, 2011 and provides the Business Improvement Districts (BID) the option of adopting an alternative method of billing residential units within a condominium association. Currently BIDs assess a fee on every property based upon the tax assessed value of the property.  Each individual condo owner then receives a bill for their property assessment and pays the assessment directly to BID.

 

The new Bill would allow the BIDs to value the condominium building in full and then send the bill with the assessed value to the condominium association. The association would be responsible for billing each condominium owner based on their proportionate share of the condominium and this additional expense would be added into the common expenses.

 

A problem with the proposed alternative way for BID to bill the condominiums is that if an association has delinquent owners, the association would still be responsible for paying BID in full and all the other owners in the association would have the burden of paying the fee for the delinquent owners.  This would cause an additional financial burden on many unit owners in an already difficult financial time.

 

Another negative with the alternative was of billing by BID is that originally each unit was assessed individually based on the tax assessed value of the unit.  Following the alternative method, all of the units are lumped together as the building and assessed as one large property.  It is then up to the association for dividing up the amount per the proportionate share of ownership which means some unit owners may be paying more than if based on their tax assessed value.

 

As proposed, this new legislation will not be beneficial to condominium associations and in the long run will become a liability. 

If you would like to discuss this client alert in more detail or how it may affect your community association, please contact Ellen Goodman at 609-219-7448 or by email at egoodman@stark-stark.com

The sunlight and the scenic views are often times what draw people to buy a condominium and co-op unit with floor to ceiling windows. However, many of those owners and their Associations soon come to regret that decision.  Floor to ceiling walls made of glass are generally referred to as "window wall systems".  Typically, the system is built on site by a contractor who assembles pre-cut pieces of metal and glass on site.  Unfortunately, although they provide spectacular views and a sense of openness, too often the systems are plagued by major problems.  These problems include insulation failures, water intrusion, and air leaks causing higher heating and cooling bills.  The cause of these problems can generally be traced back to the contractor's failure to follow the manufacturer's instructions and details.  Contractors all too often fail to install proper sealants (caulk), insulation and waterproofing (flashing), which can cause immediate problems for the owners and the Associations that are often time are responsible for replacement of exterior elements such as windows and doors. Furthermore, the glass and metal freeze and thaw at differing temperatures than the surrounding brick, stucco, concrete or siding.  As such, small cracks and voids can develop into larger problems much more easily, leading to water and air intrusion and ultimately a complete failure of the system.  In New Jersey, New York and Pennsylvania, temperatures range from the 90's in the summer to below 0 in the winter, putting an even larger strain on these systems.
 

Several experts in the field have opined that these types of window wall systems will generally fail within 5 to 15 years.  This is in stark contrast to concrete and steel buildings which have a 50+ year life span. Moreover, buildings with window walls require significant amounts of maintenance to ensure that they function as they should. Even if the system doesn't fail, Associations must hire engineers and other contractors to keep up with the maintenance of these systems.  Not surprisingly, these window wall systems are often cheaper and faster to install than a typical concrete or steel wall system.  This makes a window wall an enticing choice for a developer looking to maximize their bottom line.
 

For buildings with window wall systems only on the top most floors, the cost of replacement could be hundreds of thousands of dollars.  Buildings comprised entirely of these systems could be facing tens of millions of dollars worth of repairs.  For the Board Members of affected Associations, there are generally only two options: special assess the owners for the cost of the repairs, or file a lawsuit against the developer and contractors in an effort to have them pay for the repairs.  Stark & Stark has been very successful in recovering from developers and subcontractors the money that their clients need to repair or replace their own window wall systems.  Moreover, we can guide the Association through the complicated process of choosing experts, navigating insurance issues and fielding and responding to unit owner complaints which occur in virtually every lawsuit.  We have also counseled our clients on how to hire the right experts to ensure that the window wall systems are maintained in an effective, but cost efficient manner.

If you would like to discuss this client alert in more detail or how it may affect your community association, please contact Mark Wiechnik at 609-895-7249 or by email at mwiechnik@stark-stark.com