On October 16, 2014, the Appellate Division issued a case for publication concerning a tenant’s right to transfer a non-payment eviction matter to the law division. The Appellate Division in Bejoray, Inc. v. Academy House Child Development Center, A-5161-12T3 held that a tenant’s request to transfer an eviction matter, when it asserted claims for negligent misrepresentation and breach of contract for damages and rescission of the lease, should have been granted. This case is very important for commercial landlords in New Jersey as it raises a number of issues that should be addressed prior to proceeding with an eviction action. Continue Reading
Stark & Stark Shareholder Jerry A. Nelson, member of the firm’s Commercial, Retail and Industrial Real Estate group, will be a speaker at the International Council of Shopping Centers 2014 U.S. Shopping Center Law Conference.
This 44th annual U.S. Law Conference will be held on October 22-25, 2014 at the JW Marriott Orlando Grande Lakes in Orlando, Florida. According to the International Council of Shopping Centers, the 2014 U.S. Shopping Center Law Conference provides retail real estate professionals the opportunity to gain industry-specific knowledge and insight from leading authorities, network with 1200+ industry peers, and earn general and ethics CLE credits. Mr. Nelson has spoken at past U.S. Law Conferences and was selected again this year as a Roundtable Speaker to discuss maintaining lease guaranty enforceability.
Stark & Stark Shareholder Scott I. Unger, member of the Litigation and Shareholder & Partner Disputes Groups, authored the article “Former Los Angeles Clippers Owner’s Breach of Fiduciary Duty Claims,” which was published on September 16, by the American Bar Association.
The article discusses the recent civil suit that former Los Angeles Clippers owner, Donald Sterling, filed against the National Basketball Association (NBA) and its commissioner, Adam Silver. “The complaint seeks compensatory damages in excess of $1 billion along with injunctive relief.” Mr. Under explores the complaint in detail and discusses the legal issues involved.
After his analysis, Mr. Unger concludes, “The plaintiffs’ breach of fiduciary duty claim faces a number of legal hurdles. Convincing the court of the existence of a fiduciary relationship between the plaintiffs and the defendants and a breach thereof will likely require a high level of creativity. The plaintiffs’ counsel, frankly, faces an uphill battle.”
You can read the full article on the American Bar Association’s website by clicking here.
Stark & Stark Shareholder Jerry A. Nelson, member of the Commercial, Retail & Industrial Real Estate Group, authored the article “Landlord Wins Insurance Payment Due to Lease,” which was published on October, 9 2014 in the Mid Atlantic Real Estate Journal.
The article discusses the importance of drafting up good leases. He references the recent case In Re Amiel Restaurant Partners, LLC, 13-23866 (2014), where a landlord won the right to an insurance payment. Due to a properly prepared lease, the Court found that “the landlord’s right to recover the premises with its contents at the termination of the lease affords the landlord ‘a reasonable expectation of deriving pecuniary benefit from the preservation of the property’ and therefore an insurable interest in property for which it had been endorsed on the flood insurance policy as an additional insured.”
Mr. Nelson then discusses three essential questions to address in order to properly prepare a good lease.
You can read the full article in the Mid Atlantic Real Estate Journal, Volume 26 Issue 18.
It is not uncommon for Wills to contain “No Contest Clauses” which provide for a beneficiary being disinherited from the Estate should they challenge the Will or any provisions thereof. These Clauses are not new and have been utilized by scriveners of Wills for many years. In the context of a Will Contest, whether this type of clause is enforceable is an issue which a party must take into account in deciding whether to challenge a Last Will and Testament. There are essentially two circumstances which must be considered by a party in deciding whether to challenge a Last Will and Testament if such a clause is present.
Obviously, if a person was completely written out of a Will which they now seek to challenge, the existence of the “No Contest Clause” in the Will would be of no consequence, as they were not destined to receive under this Will regardless. Thus, the presence of this Clause would be irrelevant to a person challenging the validity of the Will under these circumstances.
The other situation is if a party is to receive a Bequest under the Will which they believe is unfair. Under such circumstances, it is necessary for the party to consider the possibility of them forfeiting their Bequest under the “No Contest Clause” of the Will. Clearly, there is a sliding scale which may determine a party’s willingness to contest a Will based upon the value of their Bequest or the percentage of the Estate which they could forfeit should they lose the Will Contest. Certainly, the larger the percentage of the Estate which is at risk may require the party to consider whether to contest the Will, whereas, if the party is only receiving a token share then they would be more likely to challenge a Will.
When contesting the validity of a Last Will and Testament, if the Last Will and Testament is invalidated, then in that event, the No Contest Clause would likewise be stricken. Furthermore, should the parties reach a settlement, a No Contest Clause is likewise of no import. Finally, there is the possibility that the Court could find the Will enforceable, however, could rule that certain provisions of the Will are unenforceable in light of a legitimate dispute between the parties as to the validity of the Will. Under such circumstances, the Court may provide relief from the No Contest Clause. Obviously, this decision is highly technical and is subject to the Court’s discretion.
As such, if you are deciding to contest a Will and are facing the possibility of being disinherited by a “No Contest Clause”, it is strongly suggested that you speak with an attorney, such as the attorneys at Stark & Stark. We are happy to assist you and guide you through the process.
Attorney Marshall T. Kizner, Esq., member of Stark & Stark’s Beer & Spirits and Bankruptcy & Creditors’ Rights groups, authored the article “Non-Compete Agreements Important for Protecting Beverage Secrets,” which was published by Beverage Industry Magazine on September 15, 2014.
The article discusses the why it is so important to have employees agree to non-compete and confidentiality agreements in the brewery and spirits trade. Mr. Kizner said, “Nothing is more important than protecting your product’s recipes and methodologies.” “They are the most valuable asset your business has.” Having non-compete and confidentiality agreements in place could protect these assets, and prevent competitors from imitating your product. Mr. Kizner also says that it is important to periodically review your non-compete and confidentiality agreements “to ensure that they comply with new legal decisions.”
If you would like to read the full article, please click here.
Timothy Duggan, Esq., Shareholder and Chair of Stark & Stark’s Bankruptcy & Creditors’ Rights Group, authored the article “Ad Valorem Tax Certificates: Are Tax Liens Subject to Anti-Modification under §511?,” which was published in the September 2014 edition of the American Bankruptcy Institute Journal.
The article discusses the recent case of Princeton Office Park v. Plymouth Park Tax Services, which ultimately made its way to the Supreme Court of New Jersey. The Court reviewed and clarified an “important and unresolved issue in New Jersey Law.” Mr. Duggan said of the Court’s clarification, “In New Jersey, the case law is now clear and provides guidance for practitioners in states with similar statutory schemes. However, a careful reading of the controlling state’s law is crucial, and general citations to bankruptcy court decisions will not carry the day.”
You can read the full article in the September 2014 edition of the American Bankruptcy Institute Journal.
Most homeowner’s policies issued in New Jersey contain statutes of limitation for filing a lawsuit against an insurance carrier where the homeowner (insured), disagrees with the insurance carrier’s claim payment amount, or refusal to make any payment on a claim.
In a recent unpublished United States District Court opinion, Turkmany v. Excelsior Insurance, the court reaffirmed the New Jersey Supreme Court’s holding in other cases, by ruling that the limitations period to bring suit against an insurance carrier begins to run once the insurer “flatly states that the insured will not be paid any additional funds on a claim.”
The court sought to clarify when the insured is entitled to “tolling” of the statute of limitations, the time during which the insured is granted additional time to file a lawsuit. For example, if a policy has a 1 year statute of limitations and a loss occurs on January 1 of given year, and the homeowner files a claim with the carrier on February 1, but the carrier takes until December 1, (10 months later), to issue a formal written denial of the claim, the homeowner is given the benefit of that additional 10 months to file a lawsuit. In other words, the Plaintiff will have 1 year and 10 months to file a lawsuit (in this example, November 1 of the following year).
This concept arises out of the court’s recognition that the homeowner should not be penalized for time spent by the insurance company in deciding whether to pay the claim, and should be given the benefit of the full amount of time set forth in the policy. This is most typically one or two years, although in the absence of a statement in the policy, a six-year statute would apply in New Jersey. However, given that almost all homeowner’s policies have a one or two-year limitation period stated in the form policy language, it is extremely rare that a homeowner would get the benefit of six years.
This opinion breaks no new ground, but, rather, reaffirms in slightly stronger and more clear terms, how a court might view computing the time allowed for the homeowner to sue the carrier. There has been discussion, in prior decisions, regarding an insured’s reasonable expectations, when the insurance carrier either doesn’t respond to the insured within the limitation period or provides an equivocal response – without specifically addressing whether additional monies will be paid out under the policy.
This opinion provides some guidance in that regard. The bottom line is that insureds should be diligent about putting the carrier on notice of a claim, in timely presenting proofs, and by filing suit promptly against the carrier, if necessary, to avoid statute of limitation bars. Similarly, insurance carriers must be prompt in their responses and definitive, regarding payment of claims, so that everyone knows what to expect in terms of time limitations.
In addition to unveiling the new iPhone and Apple Watch, Apple’s CEO, Tim Cook, also recently announced that the approximate 500 million iTunes users would also be receiving a free digital copy of U2’s latest album, Songs of Innocence. The album would be automatically downloaded and appear in each user’s iTunes library without the person having to do anything.
Analysts are estimating that this deal with U2 cost Apple approximately $100 million dollars. Apple likely calculated that the publicity and good will they expected to receive far exceeded this cost.
However, Apple’s marketing team did not anticipate the negative backlash sparked through social media and other outlets. Here is an article that refers to Apple’s approach as “invasive.”
Angry iTunes customers demanded to know how they could remove this U2 album that they did not ask for or want. Even fans who wanted the album complained about Apple downloading it onto their account without asking for their consent. In response, Apple had to develop a separate website which details the process for users to remove the U2 album from their library.
In addition to upsetting its customers, Apple also had to deal with unwanted media coverage criticizing Apple’s decision to download the music directly onto user’s iTunes library, rather than making the free download available for anyone who was interested, i.e., giving their customers a choice in the matter.
Apple’s misstep can serve as a lesson to franchise companies. Many franchise executives have the same thought process as Apple. They expect their franchisees to be thrilled by some new initiative that is going to increase their profitability, increase their sales, increase brand awareness, etc. What they do not take into account, is that franchisees, like Apple’s customers, want to feel they have a say in the process and that they are not being dictated to.
Successful franchise systems have strong franchisor-franchisee relationships. One of the quickest ways to weaken this relationship is to take steps where the franchisees feel that something is being force fed to them. A franchisor advising of a new initiative, without any input from its franchisees should expect results similar to what Apple received from their customers.
Insureds filing a fire loss claim against their homeowner’s insurance carrier for property damage and loss of personal property must not conceal or misrepresent any material fact or circumstance in presenting the claim.
In a recent unreported Appellate Division case in New Jersey, Masaitis v. Allstate, plaintiffs (the homeowners) sued Allstate for significant fire loss damages to property and contents. Allstate counterclaimed, alleging that the plaintiffs misrepresented their losses in making the claim. Although Allstate also alleged arson, that issue was considered and rejected by the jury, who concluded Allstate had not proven the plaintiffs committed arson. Regardless, the jury was very skeptical about the proofs presented by the plaintiffs, and held that the plaintiffs fraudulently claimed loss of items they could not prove they had ever owned, let alone had lost in the fire.
Although the fire marshal concluded the cause of origin could not be determined, there were apparently substantial proofs submitted to the jury, challenging the plaintiffs’ credibility regarding motive – based, in part, on their pets, vehicles, and expensive items of personal property, having been removed from the property prior to the fire and having presented conflicting testimony regarding at least one of the plaintiff’s whereabouts at the time of the fire.
Ultimately, the homeowners were found to have violated a New Jersey statute, which allows an action by an insurance carrier, against someone who knowingly files a statement of claim containing any false or misleading information. If the insurance company can prove a claim under the statute, they are entitled to reasonable investigation expenses, costs of suit and attorneys fees. Here the jury awarded over $800,000 to the insurance company.
The take away is that insureds must be honest in presenting claims to the insurance carrier following a property casualty loss. Often insureds are traumatized; the fire loss scene is chaotic; and proofs are hard to come by, depending upon the seriousness of the damage to property and the ability to reconstruct damaged items after the fact.
Notwithstanding, insureds must be straightforward in presenting claims and must not use a serious property loss to serve as a smokescreen for trying to inappropriately gain. Insurance companies are adept at investigating and approach losses with a skeptical, if not jaundiced, view of their insureds, as they sift through the evidence and form opinions regarding not only the cause of loss, but the quality of the proofs. This case is a sobering reminder that this process is a two-way street, requiring scrupulous honesty by all involved.