Importance of Selecting an Appropriate Executor or Trustee

Posted in Trusts & Estates

Choosing an executor or trustee is a critical aspect of every estate plan. Executors and trustees have broad authority and are charged with gathering the decedent’s assets, discharging debts and paying taxes due on the decedent’s estate. Because the executor and trustee have broad authority, and are tasked with a variety of responsibilities and obligations, naming an executor or trustee who can handle these issues is extremely important. Failure to properly address these issues can have a profound impact on an estate, as demonstrated by the case Specht and Hoffheimer, co-fiduciaries for the Estate of Escher v. U.S.

The facts of this case are surprisingly straightforward. Virginia Escher died in December 2008 at the age of 92, and the court’s opinion reports her estate was worth $12,506,462. Ms. Escher named her cousin as her Executrix, and the Executrix hired Ms. Escher’s attorney to represent the Executrix with regard to the Estate. It was later discovered that the attorney was battling brain cancer at the time.

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College Contribution after Divorce

Posted in Divorce

Many parents are confused in the midst of their divorce when the topic of “college contribution” comes into the conversation.

“My parents didn’t pay for my college expenses and I didn’t think I would have to pay for his (or hers)!”

In all likelihood, most people did not previously think of the possibility of being divorced, so it is not surprising that most people do not know how the courts deal with whether parents should contribute to their children’s college education costs and how they will be able to do so. New Jersey courts generally view college education as a necessity, and the trend in New Jersey is to require parents to pay the college costs for their children in line with their ability to do so.

This is surprising to many parents, especially if they paid their own way through college or other higher education themselves. I hear from many parents that they want their children to pay their way through for character building, or simply because the parent does not believe they can contribute and maintain their lifestyle. However, most divorced parents in New Jersey will be required to contribute to the costs of their children’s higher education regardless of their personal views.

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Collecting Out-of-State Judgments in New Jersey

Posted in Collections

When considering collecting a judgment obtained in another state against a New Jersey state resident or a corporation doing business in New Jersey, it is relatively easy to obtain a docketed New Jersey judgment by virtue of N.J.S.A. 2A:49A-25, et. (the “Act”). The process only takes three to four weeks, but it does involve notice to the defendant. On the rare occasion that the defendant objects, the process becomes only slightly more complicated.

Once a judgment has been docketed in New Jersey, pursuant to the Act, the collection process begins in earnest. A law firm that is armed with collection resources, years of experience, and a thorough understanding of the collection practices will have a number of available remedies, including the following:

  1. The levy. Once a judgment has been properly docketed, if the defendant entity or individual has any personal items of any value (including bank accounts), the Sheriff can levy upon these. Once the levy has been perfected, the items are either sold at auction or, if the levy is upon funds, the creditor may file a motion for turnover with the court. A hearing is then conducted resulting in the payment of those funds to the creditor.
  2. Wage execution. If the judgment was against an individual, the most certain and effective way of collecting the debt is usually by way of wage execution. If a defendant fails to object after notice is served an order is entered. The order is then served upon the employer. The employer then must remit 10% of gross wages each and every payday to the Sheriff, provided the wages are above a certain minimal level.
  3. Receivership. If the entity is not paying other creditors it owes, it may be possible to have a court ordered receiver appointed. It would be his/her duty to liquidate the assets of the corporation and make payments to all creditors.
  4. Charging order. If the defendant individual or entity is a member of a New Jersey Limited Liability Corporation (LLC), a motion can be filed in Superior Court against the LLC seeking an accounting of any amounts paid or payable to the defendant, and also seeking supporting orders restraining those payments and/or directing them to the creditor.
  5. Information subpoena. Once a judgment has been docketed in New Jersey the creditor may serve an information subpoena. There is one for an individual and one for business entities. After the information subpoenas have been served the defendant has 10 days to respond. If they fail to fully complete the subpoena, the creditor may make an application to have the individual or the principal of the entity held in contempt, sanctioned and/or arrested. The information contained in these information subpoenas is very helpful for purposes of the other collection strategies noted above.
  6. Post judgment deposition. Once the judgment has been docketed in New Jersey the creditor can seek a post judgment deposition of the debtor, the debtor’s related entities and other third parties, including accountants, suppliers, and customers.

While the above list is not all-inclusive, it suggests post judgment procedures available once an out-of-state judgment is docketed in the state of New Jersey. It can be highly frustrating for a creditor to chase down a defendant into another jurisdiction; however, in the hands of proper collection counsel, New Jersey has an adequate arsenal of remedies to collect an out-of-state judgment’s balance.

New Jersey Has Officially Banned the Box: Employers Must Update Forms and Procedures

Posted in Employment

It has been a little over a month since the Opportunity to Compete Act (the “Act”) went into effect in New Jersey. The Act, which is New Jersey’s version of Ban the Box, was originally signed into law on August 11, 2014, giving employers roughly 6 months to review and revise their employment forms and practices to conform to the new mandates.

The enactment of the law solidifies New Jersey’s position regarding the use of criminal background checks during the initial employment application process. Although this movement has been in effect on a local level in many locations for some time, the Act specifically declares that any attempts to regulate this conduct on a local level are pre-empted by the Act, unless done so to regulate municipal operations.

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Stark & Stark Welcomes Shareholder Jeffrey M. Hall, Esq.

Posted in Stark News

Stark & Stark is pleased to announce that Jeffrey M. Hall has joined the firm as a Shareholder in the Lawrenceville, New Jersey office.

Jeffrey M. Hall is a Shareholder at Stark & Stark where he concentrates his practice in land use matters, including developer representation before planning and zoning boards, governing bodies and other local, regional and state agencies; zoning ordinance and master plan amendments and redevelopment projects; trials, concentrating in land use litigation, zoning challenges, tax appeals, eminent domain matters and property rights claims; commercial real estate transactions and leasing; real estate financing, including tax credits; lender representation, including loan documentation, compliance and work outs; and outdoor advertising law.

“We are very excited to welcome Jeff to the Stark & Stark family,” said Lewis Pepperman, chair of the firm’s Business Law practice and a member of the firm’s Executive Committee. “The addition of Jeff’s experience and his impeccable credentials are huge assets for our team and helps solidify our Real Estate practice as a powerhouse in the marketplace.”

Prior to joining Stark & Stark, Jeff was a Partner resident in a major law firm’s Princeton, New Jersey office where he served as co-chair of the firm’s Real Estate Tax Appeals Group. He also served as Deputy Attorney General of New Jersey, where he advised the New Jersey Department of Transportation and tried complex highway contract, civil rights and eminent domain cases. Later, Mr. Hall served as counsel to the New Jersey Outdoor Advertising Association, where he co-authored the New Jersey Outdoor Advertising and Roadside Sign Control Act, in addition to New Jersey’s outdoor advertising regulations, and litigated landmark cases.

Free Estate Planning Seminar: Estate Planning for Non-Citizens

Posted in News & Events, Trusts & Estates

Stark & Stark Shareholders Robert Morris and Steven Friedman will present the FREE estate planning seminar, Estate Planning for Non-Citizens, on Tuesday, April 21, 2105. The seminar will be held at Stark & Stark’s Lawrenceville, New Jersey office and attendees can choose between two convenient sessions. The first session will be held from 12:00-1:00pm and the second session will be held from 6:30-7:30pm.

Non-citizens face unique and complex estate planning issues. Failing to understand and properly address these matters may profoundly impact an estate. Attendees will learn about these issues and how to properly navigate them to make sure their families and estates are properly protected. (Estate Planning for Non-Citizens Flyer)

RSVP today by calling 609-945-7610 or emailing tmohin@stark-stark.com.

Jersey City Ordinance Proposes Chain Store Prohibition

Posted in Commercial, Retail & Industrial Real Estate, Real Estate

Various sources, including NJBiz, have reported that Mayor Fulop and Jersey City are pushing forward an ordinance largely prohibiting chain businesses, i.e., any business that has 10 or more locations within 300 miles from the City. If challenged, will the ordinance pass legal muster? Arguably not.

Generally land use ordinances must advance the purposes of zoning. Anti-competitive ordinances have historically and repeatedly been stricken by the Courts in New Jersey, for instance, distance regulations between competing businesses (e.g., a zoning ordinance that would purport to require at least 1500 feet between fast food restaurants or other uses otherwise permitted in the zoning district). Thus, in this instance, a chain located on the West Coast, such as In-N-Out Burger (whom ironically said it would not expand to the East Coast due to supply chain challenges) could locate in Jersey City, but Macy’s, Starbucks, Dunkin Donuts, Home Depot, and numerous other well-known chains would be prohibited from opening in most of Jersey City (excepting some areas of the waterfront).

Mayor Fulop asserts that the restrictions will keep the City “livable and desirable” and allow the City to “reflect diversity and spur creativity.” If challenged, the City and Mayor will have to convince the court that these considerations are valid land use objectives advancing the purposes of zoning. Cities such as San Francisco, California, and Nantucket Massachusetts, have enacted similar ordinances, but the authority for the Jersey City ordinance must pass muster under New Jersey’s Municipal Land Use Law, N.J.S.A. 40:55D-1 et seq., in order to survive a challenge.

This is definitely an issue we’re going to keep an eye on and will continue to update you as it develops.

The Next Generation of Affordable Housing in New Jersey

Posted in News & Events, Real Estate

Shareholder Gary S. Forshner, member of the Stark & Stark’s Real Estate, Zoning & Land Use Group and Chair of the New Jersey State Bar Association (NJSBA) Land Use Section, will moderate and present at the New Jersey Institute for Continuing Legal Education (NJICLE)’s “Affordable Housing: The Next Generation” seminar. The event is being held on Monday, April 20, 2015, from 9:00 AM – 12:30 PM at the New Jersey Law Center in New Brunswick. The program has been approved by the Board on Continuing Legal Education of the Supreme Court of New Jersey for 3.9 hours of total CLE credit.

This seminar will address the future of affordable housing in New Jersey after the landmark decision by the NJ Supreme Court on March 10, 2015. Click here to read more about the decision that will impact everyone involved with affordable housing litigation.

For more information, or to register to attend, please click here.

A New Concern about Confidentiality Agreements: Whistleblower Protection and Anti-Retaliation Emphasized and Enforced by the SEC

Posted in Employment

Companies subject to The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted on July 21, 2010, and the Securities Exchange Act of 1934, are on notice: the SEC is prosecuting violations of Section 21F-17 of the Exchange Act, which prevents companies, through the use of confidentiality agreements, from impeding the ability of whistleblowers to report potential securities violations to the SEC. On Wednesday, April 1, 2015, the SEC announced its first enforcement action against a company for using restrictive language in its confidentiality agreements which had, or could have, a chilling effect on protected whistleblower conduct. In In the Matter of KBR, Inc., Administrative Proceeding File No. 3-16466, the SEC commenced a cease and desist proceeding pursuant to Section 21C of the Exchange Act for the purpose of entering a Cease-And-Desist Order against KBR, Inc., a public company regulated by the SEC, whereby KBR agreed to undertake certain remedial action, including the amendment of its confidentiality agreements and payment of a civil penalty of $130,000.00 to the United States Treasury in accordance with Section 21F(g)(3) of the Exchange Act.

Through its investigation of KBR, the SEC learned that KBR, like many publicly traded companies, maintained a compliance program which monitored and responded to employee complaints about potential illegal or unethical conduct, including potential violations of federal securities laws. In its internal investigation process, KBR implemented a confidentiality agreement which KBR required its employee witnesses to sign upon being interviewed. In relevant part, the confidentiality agreement used by KBR prohibited the employee from “discussing any particulars regarding this interview and the subject matter discussed during the interview, without the prior authorization of the Law Department.”

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Landlord Wins Lawsuit Due To Good Lease and Guaranty

Posted in Commercial, Retail & Industrial Real Estate

The New Jersey Appellate Division recently issued an unpublished decision that shows that good leases and guaranties can help landlords make and save money. HLP Assocs., L.P. v. Carpet City Inc., Et Al., A-4134-13T3 (App. Div., March 17, 2015). The trial court granted landlord’s motion for summary judgment and found the tenants and guarantor liable for a judgment in the amount of $324,119.20 plus costs because the lease and guaranty were clear and unambiguous.

The case was affirmed on appeal. The case is important for landlords to ensure successful collection against defaulting tenants and guarantors.

This case involved a breach of a commercial lease by tenants and a guarantor that failed to pay rent. The initial lease was for a primary term of 10 years. The tenants had the option to renew the lease for two additional five-year extended terms. The lease contained a limited personal guaranty, which stated that “on the condition that Lessee is not in default of Base Rent, Additional Rent or any other term or condition of the Lease, this personal guaranty shall expire and become void at the end of the Fifth Lease Year”. At the conclusion of the Fifth Lease Year the tenants were behind in rent. Although the landlord did not then declare a default, it later instituted a repossession action. After the parties entered into two lease amendments, and rent was unpaid, the landlord filed a complaint in the Law Division to recover the arrears, and the parties moved for summary judgment.

The guarantor argued that the guaranty expired at the end of the first five years of the lease because the landlord did not give notice of a default during such five year period. The trial court disagreed with the guarantor and granted summary judgment to the landlord. The trial court stated that “guaranty agreements should be strictly construed” and found that this guaranty was “clear and unambiguous” and “did not require a notice of default”. The trial court then found that since tenants were in default, the guaranty did not expire and continued throughout the remaining years of the lease.

The Appellate Division also agreed with the landlord and affirmed the trial court. The Appellate Division added that the landlord was also not required to send a notice of default since the separate remedies available to landlord were “cumulative rather than exclusive.” The Appellate Division then rejected guarantor’s argument that the guaranty was no longer binding since the parties failed to specifically reference guarantor’s continued obligation to guaranty the rent payments in the lease amendments. The Appellate Division found that the lease amendments did not modify or extinguish the guarantor’s promise to personally guarantee, and each lease amendment stated, “[e]xcept as modified herein, all of the terms, covenants and provisions of the [original] Lease are hereby confirmed and ratified and shall remain unchanged and in full force and effect.”

For landlords, this decision illustrates the importance and value of preparing a good lease and guaranty. In this case the documents appear to have been properly prepared in order to persuade the courts to grant the landlord summary judgment. And by quickly obtaining summary judgment, the landlord was able to make and save money.

Do you have the lease, guaranty, and procedures you need to win a dispute, and should they be updated to maximize your opportunities? For example, should you send default notices and have guarantors sign lease amendments? Evaluating your legal issues and addressing them correctly, requires careful review on an individual basis. It is also vital to have counsel familiar with these issues for your commercial, retail, industrial and/or residential property needs.