New Jersey Lawyer & Attorney : Stark & Stark Law Firm : New Jersey Law Blog

In every divorce, there are financial issues. These issues may involve equitable distribution of assets, alimony, and/or child support. Many times it is difficult for an attorney to obtain the financial information needed from a client. If the client is no longer living in a marital home and does not have access to the records, or if the client was not the financial person in the family, it may be very difficult for them to give a complete picture of the assets and debts.

If you are contemplating divorce and if you are still living in the marital home, you should photocopy as much information as possible. It is important for you to make an all inclusive list of every asset, whether it be in your name individually, your spouse’s name individually, or in joint names. Some assets are easy to determine and some are not. It is best if you can do the foot work by trying to find out (1) the name and account number of every bank account, (2) name and number of shares of every stock or bond, (3) face amount, owner, beneficiary, and insured of life insurance contracts, (4) year end balance of pension plans and retirement accounts, (5) the name of any business that you or your spouse are involved in, (6) the name and account number of every credit card used by either you or your spouse, (7) a copy of your most recent mortgage statement, and (8) the names, account numbers and current balances of any home equity or personal loans.

Even if you do not have complete information for everything, approximate values or estimates of what is owned is helpful. Your attorney can more easily obtain the remaining information through the legal process of discovery if he or she knows in which direction to proceed.

Almost every party going through a divorce is owns real estate. The only information you need to provide to your attorney is the address, a recent mortgage statement for each property and the deed, if available. For equitable distribution purposes, real estate generally must be appraised by a reputable appraiser in the area. If the real estate is to be sold, there is no need to get an appraisal. You and your spouse will just have to decide with whom to list the property and at what price.
It is easy to determine the value of bank accounts by looking at monthly statements. Since the date for valuation is the date of the divorce complaint, it is necessary to obtain copies of bank statements for the month that the divorce complaint was filed.

For stock that is traded publicly, you only need to know the number of shares that existed on the date of the complaint and the name of the stock. The price per share of stock can be obtained from daily newspapers.

Clients generally disregard pensions as an asset when they are inventorying assets. However, they have a value and often have a great value. In order to obtain the value, the pension information must be sent to an actuary to determine what the it is worth on the date of equitable distribution, i.e. the date of the divorce complaint. Since pensions are subject to equitable distribution, this value is absolutely necessary to obtain and you should retain the services of an expert to prepare this valuation.

Some pensions may be in the form of IRA accounts or 401(K) plans. If this is the case, an actuary is not necessary and a statement of the account on the date of the divorce complaint will be sufficient.
Closely held corporations, partnerships, and/or professional practices are very difficult to value. Many times, the party involved in a business has tight control over the books and records and does not always report their entire income. Whenever there is a closely held business involved in a divorce case, it is imperative to obtain the services of an accountant or business evaluator to determine the value of that business.

It is advisable to make an inventory of all furnishings and other personal property accumulated by either or both parties during the marriage. Generally it is not worth the money to obtain an appraisal of personal property. The suggested way of dealing with the division of personal property is by discussing it with your spouse or by having your attorney send a list to your spouse’s attorney of the property you wish to retain.

Occasionally, there are more marital debts than assets. If this is the case, it is advisable for you to make an inventory of all of the outstanding marital debts, and either close the accounts or stop incurring additional debt. If the marital estate is compromised of a lot of debt, it is wise to reach a compromise with your spouse than it is to spend what marital money there is for attorney involvement.

Technorati Tags: New Jersey : Divorce

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This week's New Jersey Legal Update podcast will discuss the October 25, 2006 landmark decision of Lewis v. Harris. This podcast will give a brief summary of the case, and what the court's decision means for the future of marriage in the state of New Jersey.

This week's New Jersey Legal Update is presented by John Eory, a member of Stark & Stark’s Divorce Group.

You can download the New Jersey Legal Update Podcast # 50 here. (5.7 MB)

Technorati Tags: New Jersey : Podcast :  Divorce : Gay Marriage : Lewis v. Harris

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John Eory, a Shareholder in the Divorce group, was quoted in today's USA Today regarding the New Jersey Supreme Court's Decision in Lewis v. Harris. 

Referring to the Supreme Court, Eory said, "They could have said this is an issue for the Legislature to decide, we don't find any equal-protection issues that rise to the level that we should be involved in this. And what they said was framers of the marriage statute years ago, or the constitution years ago, cannot have even imagined this issue."

Read the story here.

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New Jersey's Supreme Court has just issued its decision in Lewis v. Harris, a case brought by seven New Jersey same-sex couples who sought marriage licenses but were denied.  The couples argued that the state violated their rights to privacy and equal protection under the New Jersey Constitution.

Today, the Court issued its opinion which gave the State legislature180 days to either amend the marriage statutes or enact an appropriate statutory structure which will allow same-sex couples to exercise their full constitutional rights.

For more information see our media advisory on this decision here.

Technorati Tags: New Jersey : Same-Sex Marriage : Lewis v. Harris : Gay Marriage

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The majority of Federal and State courts addressing the issue have rejected the total cost method for determining the apportionment of delay damages. Under the total cost method, the subcontractor is able to seek the difference between the total costs incurred in performance of the contract and its bid price. Most courts have rejected this method and have chosen to follow the approach articulated in Boyajian v. United States, 423 F.2d. 1231 (U.S. Ct. Claims, 1970), which requires that the damages claimed by the plaintiff result from and are directly caused by the specific breaches attributable to the defendant. In addition, Federal cases have held that in a situation where both parties contribute to the delay, neither party can recover damages, unless there is proof of clear apportionment of the delay and expense attributable to each party.

Boyajian is the landmark Federal case rejecting the use of a total cost method for determining alternative causes of delay and apportionment. The Boyajian case involved a contractor who sued the United States Air Force for breach of a contract for modulators and interval and dwell testers. The contractor claimed that it suffered delay damages as a result of testing procedures established by the Air force that were unreasonable. The contractor calculated its damages by deducting both its anticipated and actual costs from the entire project amount under the total cost method, but did not itemize these damages. The Court rejected the total cost method, finding that it was an unacceptable method for determining damages for breach of the contract.

The Boyajian Court gave numerous reasons for rejecting the total cost method of recovery. It found that recovery of damages for breach of contract is generally not allowed unless acceptable evidence demonstrates that the damages claimed resulted from and were caused by the breach. Id. at 1235. Furthermore, the proper measure of damages is the amount of the plaintiff’s extra costs which are directly attributable to the defendant’s actions. Id.

However, contrary to these basic causal-connection damage principles, no attempt is here made to relate any specific amount of increased costs to any particular alleged breach. Nor is any satisfactory explanation given as to why an attempt was not made or why it would not have produced reasonably accurate results.

Id. It held that, based on the record, it was impossible to conclude that the plaintiff’s contract loss, constituting the difference between the plaintiff’s contract expenditures and its contract receipts, was reasonably to be equated with the increased costs directly resulting from defendant’s alleged breaches. Id. at 1236.

Applying the total cost method, the subcontractor sought damages for labor, overhead, and material costs which were not covered by contract receipts even though these increases occurred during non-delay periods. Id. The court held that the subcontractor was barred from failing to differentiate between delay and non-delay periods and that it could not indiscriminately lump the damages together. Id.

In addition, the Court found that the record was replete with production interruptions and delays that were caused by events which were not attributable to the defendant, but for which the plaintiff made no adjustments whatsoever. Id. at 1238. The Court cited a line of cases rejecting damage claims seeking reimbursement for all contract expenditures of every nature made throughout the life of the contract. Id. at 1238-39. See, Urban Plumbing & Heating Co. v. United States, 408 F.2d. 382 (1969); Phillips Construction Co. v. United States, 394 F.2d. 834 (1968); WRB Corp. v. United States, 183 Ct. Cl. 249 (1968); Turnbull, Inc. v. United States, 389 F.2d 1007 (1967); Roberts v. United States, 357 F.2d 938 (1966); Wunderlich Contracting Co. et al. v. United States, 351 F.2d 956 (1965); Laburnum Construction Corp. v. United States, 325 F.2d 451 (1963); River Construction Corp. v. United States, 159 Ct. Cl. 254, 270 (1962); Snyder-Lynch Motors, Inc. v. United States, 292 F.2d 907, 910 (1961); Lilley-Ames Co., Inc. v. United States, 293 F.2d 630 (1961); F. H. McGraw & Co. v. United States, 130 F.Supp. 394 (1955); Christensen Construction Co. v. United States, 72 Ct.Cl. 500, 514 (1931).

It is important to point out that though the court rejected the total cost method according the factual circumstances in the Boyajian case and dismissed the subcontractor’s claims, it did not unilaterally reject such an approach altogether as long as there is reasonably satisfactory evidence of what the damages are, computed on an acceptable basis. Id. at 1244.

In Lichter v. Mellon Stuart Company, 305 F.2d. 216 (3d Cir. 1962), a subcontractor sued the prime contractor for the balance of a masonry subcontract for the balance due and breach of contract and the contractor filed a counterclaim. The subcontractor claimed that the breach occurred as a result of delays in the project, which resulted in the subcontractor being forced to speed up its work and perform inefficiently. The District Court found in favor of the contractor and the subcontractor appealed.

The subcontractor did not itemize its damages. In the lower Court, the subcontractor introduced testimony as to what it would have cost to perform all of the masonry work if the undertaking had proceeded without untoward occurrences in the manner contemplated at the time of the contracting. Id. at 219. It then introduced testimony as to the actual cost of the entire masonry job as delayed, interrupted and hindered by all causes. Id. At trial, the plaintiff’ss counsel conceded that there was no way to itemize the damages. Id. On appeal, the Court rejected the subcontractor’s total cost method, finding that:

In these circumstances [the subcontractor’s] inability to break down its lump sum proof of extra costs justifies the denial of any recovery if on the record any substantial part of the added cost of performance was chargeable to non-actionable causes rather than to a breach of contract by [the contractor].

Id. The Appellate Court affirmed the District Court’s findings, holding that:

On the whole record, we think the court was justified in concluding that a substantial amount of the lump sum which [the subcontractor] proved as extra cost of the masonry work was a consequence of factors other than a breach or breaches of contract by [the contractor]. Since the court could find no basis for allocation of this lump sum between those causes which were actionable and those which were not, it [was] proper to reject the entire claim.

Id. at 220.

Thereafter, in E. C. Ernst, Inc. v. Koppers Company, Inc., both parties blamed the other for delays, engineering failure, and inadequate supervision stemming from a purchase order for furnace construction at a steel mill. 476 F. Supp. 729 (W.D. Pa. 1979), 626 F.2d 324 (3d Cir. 1980), on remand, 520 F. Supp. 830 (W.D. Pa. 1981). The District Court ruled in favor of the contractor, finding that though the contractor was responsible for all of the delays, the subcontractor failed to link the delays to its damages. On appeal, the Third Circuit remanded the case to the District Court, finding on the outset that the District Court incorrectly rejected the total cost method, because, under Pennsylvania law, damages need not be proved with mathematical certainty, only reasonable certainty. Id. at 328. The court further held, however, that:

This is not to say... that a plaintiff merely may label damages evidence as being under the total cost method and leave the matter at that. Under the total cost method, at a minimum the plaintiff must provide some reasonably accurate evidence of the various costs involved.

Id.

Despite the court’s decision in Ernst, Pennsylvania Courts have subsequently applied the total cost method only in very limited circumstances. See, John F. Harkins Co. v. School District, 460 A.2d 260 (Pa. Super. 1983); Larry Armbruster & Sons, Inc. v. State Pub. Sch. Bldg. Auth., 505 A.2d 395 (Pa. Commw. 1986). In addition, the Third Circuit will only apply the total cost method if there are no other alternative and reliable measures of damages available. See, In Re Meyertech Corp., 831 F.2d 410 (3d Cir. 1987) (rejecting the total cost method under the holding in Boyajian).

In addition, Courts in the 4th Circuit have rejected the total cost method in favor of a modified approach. See, Biemann and Rowell Co. v. Donohoe Companies, Inc., 556 S.E.2d 1, 5 (N.C. Ct. App. 2001); Virginia Beach Mechanical Services, Inc. v. Samco Construction Company, supra, 39 F. Supp. at 672 . In Biemann, a ventilating subcontractor sued the general contractor for breach of contract in the construction of a hospital at the University of North Carolina. The Superior Court found that the ventilating subcontractor failed to establish the causation element by proving that the delays by the general contractor caused the ventilating subcontractor’s delays. On appeal, the North Carolina Court of Appeals affirmed. The Appeals Court reasoned that it is well settled that a plaintiff has an obligation to prove the facts that will create a good basis for the calculation of damages. Id. at 5 (citing Esteel Co. v. Goodman, 348 S.E.2d 153, 157 (N.C. Ct. App. 1986), disc. review denied, 351 S.E.2d 745 (1987)). For the breach of an executory contract, a plaintiff may recover only such damages as can be ascertained and measured with reasonable certainty. Id. [W]here both parties contribute to the delay, neither can recover damages, unless there is proof of clear apportionment of the delay and expense attributable to each party. Id. (citing Blinderman Constr. Co. v. United States, 695 F.2d 552, 559 (Fed.Cir.1982).

The ventilating subcontractor used a total cost method of calculating damages. The court rejected this method on the basis that the total cost method is condoned only where no other way to compute damages is feasible, because it assumes that every penny of the plaintiff's costs are prima facie reasonable, that the bid was accurately and reasonably computed, and that the plaintiff is not responsible for any increases in cost. Id. See also, Youngdale & Sons Const. Co., Inc. v. United States, 27 Fed. Cl. 516, 541 (1993); Urban Plumbing & Heating Co. v. United States, 408 F.2d 382, 394 (1969), cert. denied 398 U.S. 958 (1970); F.H. McGraw & Co. v. United States, 130 F.Supp. 394, 400 (1955).

The court applied a four part test for recovery under the modified total cost method articulated in Servidone Constr. Corp. v. United States, 931 F.2d 860, 861 (Fed.Cir.1991)) and Boyajian, supra, 423 F.2d at 1243, looking at: (i) the impracticability of proving actual losses directly; (ii) the reasonableness of its bid; (iii) the reasonableness of its actual costs; and (iv) the lack of responsibility for the added costs. Id. It found:

The modified total cost method is the total cost method with adjustments for any deficiencies in plaintiff's proof in satisfying the four requirements. The modified approach assumes the elements of a total cost claim have been established, but permits the court to modify the test so that the amount plaintiff would have received under the total cost method is only the starting point from which the court will adjust the amount downward to reflect the plaintiff's inability to satisfy the test.

Id. (Citing Youngdale, supra, 27 Fed. Cl. at 541). The court found that the plaintiff failed to establish the first element of the four-part test because the plaintiff failed to prove that it sustained damages that could not be ascertained and measured with reasonable certainty. Id.

Accordingly, in order to succeed on a total cost delay claim, the subcontractor is responsible for providing itemized proof that the EPC contractor was the direct cause of the delay damages. In the event that the fact finder finds that both parties’ actions attributed to the delays, the EPC contractor will only liable for delay damages in the event that the subcontractor is able to properly eliminate or apportion any alternative causes of delay.

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Oren Chaplin, a member of the Securities Practice group, authored Operational Risk Management for the October issue of The Active Manager, the bimonthly journal of the National Association of Active Investment Managers.

The article discusses the SEC's operational risk assessment audit that subjects adviser's to inquiries about their risk assessment documentation, including the inventory of compliance risks, minutes from risk committee meetings, and standard operating procedure.

You can read the article here.

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This U.S. Supreme Court breathes new life into a 1967 decision known as Prima Paint Corp. v. Flood & Conklin, 388 U.S. 395 (1967) which held that arbitration clauses in franchise agreements are enforceable even where other provisions of the contract are unenforceable. For example, even in situations where the Franchisee claimed that he had been fraudulently induced into signing a Franchise Agreement, the fraud claim would be determined by the arbitrator, and the matter would not be decided by a Court. Various cases subsequent to the Prima Paint decision, notably cases from the 9th Circuit (California), along with numerous state court decisions have “muddied the waters” on this issue. The recent Buckeye decision, however, clearly reaffirms the U.S. Supreme Court’s holding that claims such as unconscionability and fraudulent inducement would have to be resolved by an arbitrator, and that those claims would not provide a mechanism for avoiding arbitration.

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This week's New Jersey Legal Update podcast will discuss the new bankruptcy code and how it affects creditors and franchisors. This podcast will address the creditor's treatment under the debtor's plan, the creditor's rights for reclamation of goods, and the debtor's assignment or rejection of the franchise agreement.

This week's New Jersey Legal Update is presented by Thomas Onder, a member of Stark & Stark’s Franchise and Creditor's Rights Groups.

You can download the New Jersey Legal Update Podcast # 49 here. (7.8 MB)

Technorati Tags: New Jersey : Podcast : Franchise : Creditor's Rights

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Your son or daughter is divorced or deceased. You do not get along with his/her former spouse, and that spouse is refusing to allow you to see your grandchildren. So what do you do?

New Jersey has statute which provides for grandparent visitation. The statute is as follows:

a. A grandparent or any sibling of a child residing in this State may make application before the Superior Court, in accordance with the Rules of Court, for an Order for visitation. It shall be the burden of the applicant to prove by a preponderance of the evidence that the granting of visitation is in the best interests of the child.

b. In making a determination on an application filed pursuant to this section, the Court shall consider the following factors:

(1) The relationship between the child and the applicant;
(2) The relationship between each of the child’s parents or the person with whom the child is residing and the applicant;
(3) The time which has elapsed since the child last had contact with the applicant;
(4) The effect that such visitation will have on the relationship between the child and the child’s parents or the person with whom the child is residing;
(5) If the parents are divorced or separated, the timesharing arrangements which exist between parents with regard to the child;
(6) The good faith of the applicant in filing the application;
(7) Any history of physical, emotional or sexual abuse or neglect by the applicant; and
(8) Any other factor relevant to the best interests of the child.

c. With regard to any application made pursuant to this section, it shall be prima facie evidence that visitation is in the child’s best interest if the applicant had, in the past, been a full-time caretaker of the child. N.J.S.A. 9:2-7.1

While this statute allows a grandparent to apply to the Court and request visitation rights, the Statute does not make the visitation automatic. Until recently, the grandparent had to prove to the Court that they met the above factors and visitation with his/her grandchild was in the best interest of the child.
That burden of proof has been recently changed by case law. In the case of Moriarty v Bradt, 177 N.J. 84 (2003), the Court held that New Jersey’s Grandparent Visitation Statute was constitutional, however, it held that before visitation can be ordered over the objection of the child’s parent, a Court must find that an actual harm will result to the child’s health or welfare without such visitation.
In other words, if a grandparent successfully meets the factors set forth in the statute, visitation will only be order if the grandparent can additionally prove that without the visitation, there will be harm to the grandchild.

Why is this burden so difficult?

This burden is a tough burden to overcome because visitation with a child, against the child’s fit parent’s wishes, interferes with the fit parent’s fundamental liberty interest protected by the due process close of the Fourteenth Amendment of the United States Constitution. Moriarty, 177 N.J. at 101.

In other words, a fit parent’s right to raise their child as they see fit is a Constitutionally protected right. Therefore, if an otherwise fit parent does not believe that visitation with a child’s grandparents are in the child’s best interest, the Court will not interfere with the fit parent’s wishes, unless the grandparent can prove that the grandchild will be harmed without the visitation.

 If you are seeking to make a grandparent visitation application, I suggest that you discuss with your attorney the facts of your case and the success rate of overcoming this strong burden.

Technorati Tags: New Jersey : Divorce : Grandparent Visitation

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As the number of individuals living in community associations has sky-rocketed in recent years, many of these associations have enacted rules and regulations that prohibit or restrict activities based on age. In many cases, these rules attempt to regulate when and where children can play and participate in activities within the community. However, what you may not know is that many of these rules can be illegal – and therefore unenforceable – under the federal Fair Housing Act.

The Fair Housing Act, 42 U.S.C. § 3601 et seq., prohibits discrimination in housing and makes it illegal to refuse to provide housing or housing-related services based on numerous classes, including race or color, national origin, religion, sex, handicap, and familial status. As amended, the Act is applicable to condominium associations and townhouses, as well as garden apartments, multi-family dwellings and dormitories. The penalties for violations of the Act can be severe; up to $1,000.00 or a period of incarceration for one (1) year, or, if bodily injury results from the violation, the penalty could increase to up to $10,000.00 and incarceration for up to ten (10) years.

Pursuant to Section 3602(k) of the Fair Housing Act, “familial status” is defined as “one or more individuals (who have not attained the age of 18 years) being domiciled with: (1) a parent or another person having legal custody of such individual or individuals; or (2) the designee of such parent or other person having such custody, with the written permission of such parent or other person.” As such, rules that seek to prohibit children from participating in certain activities within the community may be prohibited by the Act. For example, a rule that says that children under the age of thirteen (13) are not permitted to swim at the community pool without an adult may be in violation of the Act, and, as such, unenforceable. Other examples of rules that may violate the act include: (1) prohibiting children under the age of thirteen (13) from the clubhouse, weight room or other facilities at certain times; and (2) allowing only adults to swim in the community pool during certain hours. Ultimately, under the Fair Housing Act, an association cannot prohibit the actions of an entire class of people unless a showing is made that the reason for such prohibition is the health or safety of those particular people.

Related to question of prohibitions based on age is the legality to of “age-restricted active adult (55 years and older) communities”. The answer is that Fair Housing Act, Section 3607, provides an exemption for these types of communities, making them legal if certain criteria are met. For an “age-restricted community” to qualify under this exemption, it must have eighty (80%) percent of its units occupied by at least one person whom is fifty five (55) years or older, the community must publish and strictly adhere to policies and procedures that demonstrate the intent required under Section 3607 (i.e., intent to restrict housing to individuals over age 55), and the community must comply with the rules issued by the federal and state officials for verification of occupancy.

While the Fair Housing Act provides that not all age-based rules will be considered illegal, community associations wishing to impose such restrictions must assure that any restriction based on age is based on health or safety concerns of the individuals. If your association has such restrictions, it is important to consult your management company and/or legal counsel to ensure compliance with the Fair Housing Act, and to avoid potential violations, fines and/or other legal action.

Technorati Tags: New Jersey : Community Associations : Fair Housing Act

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As a general rule, the plaintiff carries the burden of proving delay and constructive acceleration claims. According to well-settled law, the party claiming delay damages must demonstrate to the trier of fact (1) what delays occurred; (2) whether the delays are compensable; (3) who caused the delays; (4) whether the delay was offset by concurrent delays such as the delays of the opposing party or by compensable delays; and (5) the relationship between the delay and damages claimed. See, Fieldcrest Builders, Inc. v. Antonucci, 724 N.E.2d 49 (Ill. App. Ct. 1999); Premier Elec. Const. Co. v. American Nat. Bank of Chicago, 658 N.E.2d 877 (Ill. App. Ct.); Pathman Const. Co. v. Hi-way Elec. Co., 382 N.E.2d 453 (Ill. App. Ct. 1978). The claimant has the burden of proving the extent of the delay, that the delay was proximately caused by the other party, and that the claimant was harmed by the delay. See, Wilner v. U.S., 24 F.3d 1397 (Fed. Cir. 1994) The extent of the delay of each party must be clearly shown. See, Fieldcrest Builders, supra, 724 N.E.2d 49 (denying owner's counterclaim for delay damages in contractor's action for recovery in quantum meruit, finding that owner caused delays in contractor's work during the course of the project and the owner made no attempt to separate, explain, or identify which delays could be attributed to the contractor; also rejecting owner's argument that delay damages were mandated because project was delayed when owner terminated contractor from the project in August and could not find replacement until December).

In establishing a causal link between delay and the damages claimed, a contractor must show that the contractee's actions affected activities on the critical path of the contractor's performance of the contract. See, Kinetic Builder's Inc. v. Peters, 226 F.3d 1307 (Fed. Cir. 2000) (government contractor failed to show causal connection between Air Force's delay in correcting defective restroom design in building to be altered and slowing of contractor's progress in completing contract, so contractor was not entitled to time extension or reimbursement for extended job site overhead costs in connection with such delay). The party seeking delay damages bears the burden of establishing the alleged damages with a reasonable degree of certainty. See, Fieldcrest Builders, supra, 724 N.E. at 58 (1st Dist. 1999).

In addition, Courts in the 4th Circuit have held that the party claiming it incurred added costs because of delay in performance required under the contract has the burden of proving these costs. Virginia Beach Mechanical Services, Inc. v. Samco Construction Company, 39 F. Supp. 661, 672 (E.D. Va. 1999) (citing United States v. Citizens & Southern Nat. Bank if Atlanta, 367 F.2d. 473, 480 (4th Cir. 1966). If there are factors for which the defendant is responsible and factors for which it is not, the party alleging a delay caused by a material breach must provide a reasonable basis for apportioning the damages. Id. Applying these principles to the facts in Samco, the Court held that at least one other subcontractor caused the delays and may have stalled the contract performance, and for this reason, it could not conclude what role the contractor played in delaying ultimate completion of the contract and causing the damages sought. Id. Finally, the Court found that the subcontractor did not provide a reasonable basis for apportioning damages among the contractor and other subcontractors, who were obviously a substantial factor in the delay that did result. Id.

Therefore, it is the subcontractor that bears the burden of proving that an EPC contractor’s actions caused delay and constructive acceleration.

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Until recently, it was impossible to get a divorce in New Jersey without at least one party appearing before a Judge and requesting the divorce. However, despite the new procedure many attorneys still proceed with the standard default divorce procedure.

The new procedure is slightly more complex than the standard default divorce. In a “default” divorce, one spouse would file the complaint and serve the complaint on the other spouse. If the second spouse did not respond to the complaint within the appropriate statutory time limit, the filing spouse could request that the court schedule a hearing and enter a divorce judgment by default.

The “on the papers” process as modified starts off the same way. One party files the complaint, and after the appropriate statutory waiting period has elapsed, the filing party requests that the court enter a default judgment. A default hearing is scheduled. However, because the parties have executed a property settlement agreement, they are able to get a divorce without ever appearing in Court.
The parties must forward to the Court, prior to the default hearing the following documentation:

1. Verified Complaint
2. Proof of service of defendant
3. In adultery cases, notice to correspondent and proof of service, which shall include that the correspondent has not moved to intervene or otherwise respond to the notice.
4. Request for default and proof that such default was served on the defendant
5. Affidavit of non military service
6. Affidavit of Insurance
7. Plaintiff’s sworn statement in support of request of judgment (see below)
8. An original and two copies of the Proposed Final Judgment of Divorce,
indicating that the matter was heard on the papers submitted and that the court made no finding on the merits
9. Child support guidelines worksheet, and if a deviation from the guidelines, a statement of reasons for the deviation
10. Written statement required by the probation department
11. A stamped, addressed return envelope

Appropriate proofs must be submitted to establish the plaintiff’s right to the relief requested. Unless the following are contained in the complaint, such a request should be in the form of a sworn statement (affidavit or certification), captioned “Certification in Support of the Request for Judgment” (or a similar title), and should:

1. Include a statement identifying all prior and pending proceedings in this or any other jurisdiction. The statement must indicate the caption, docket number and a brief indication of the status. If there are no other proceedings, the statement must certify that there are no other pending matters between the parties.
2. Certify that neither party is on public assistance, or if so, the nature of the assistance being received, the amount of the assistance for plaintiff and children, if any.
3. If incorporation of a PSA is requested, state the agreement was entered into voluntarily and freely and without coercion; that it resolves all the issues between the parties; that plaintiff considers it to be fair and equitable under all the circumstances; that plaintiff waives a right to trial and that plaintiff is satisfied with the legal services provided, if any, and a request to incorporate the Agreement into the Final Judgment of Divorce.
4. In cases where permanent alimony is a relief requested, or where the PSA contains a provision for permanent alimony, include a “Marital Lifestyle Statement” consistent with Crews v. Crews, 164 NJ 11 (2000), and a CIS which is less than one year old.
5. State that plaintiff is aware that s/he is waiving the right to have the judge decide these issues.
If Plaintiff requests the continuation of prior final orders, the complaint or certification must:
1. include copies of the orders.
2. identify the orders in the body of the certification.
3. confirm there is no other property or debt to be distributed.
4. confirm that there are no other outstanding issues between the parties.
5. confirm that plaintiff is aware that s/he is waiving the right to have the judge decide these issues.
6. recite that plaintiff understands that all prior orders not specifically referenced in the Final Judgment will be vacated upon the entering of the final judgment; except that no Restraining Order entered under the Prevention of Domestic Violence Act shall be vacated by the entry of a Judgment of Divorce.
7. state whether or not either party seeks to continue a restraining order previously entered under the Prevention of Domestic Violence Act.

If either spouse is requesting a name change, the complaint or certification must confirm that the party qualifies for a name change and is not changing their name to avoid creditors or criminal prosecution.

Once the staff has confirmed that all the above is included in the file, the file will be forwarded to a Judge to enter the Final Judgment of Divorce.

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The equity in a marital residence (defined as the appraised value of the residence minus the existing mortgages and liabilities) is often the largest asset to distribute in a divorce.

Perhaps you need to access the equity in the residence to meet living expenses or to pay the cost of litigation, and you want to list the residence for sale right away. On the other hand, maybe you don’t agree that the house should be sold right away because of practical concerns. The way in which the residence is distributed, and when, is therefore a common source of contention.

The New Jersey Courts were previously barred from compelling the sale of a marital asset prior to the entry of a Final Judgment of Divorce, as in Grange v. Grange, 160 N.J. Super 153 (App. Div.1978).

However, pursuant to the New Jersey Supreme Court’s holding in Randazzo v. Randazzo, 184 N.J. 101 (2005), a Court may compel that the marital residence be listed for sale as long as it would serve best interests of the parties under the circumstances of each individual case.

In Randazzo a Husband and Wife owned multiple properties, but faced significant cash flow problems after losing a towing contract with the city of Clifton New Jersey. Id. at 104.

After the Wife filed a Complaint for Divorce, the Husband consented to the sale of a jointly held property in Florida. Thereafter, the Husband opposed the sale of the property and refused to sign the listing agreement. The Trial Court entered an Order stating that the Wife’s request to sell the Florida property was moot because the Husband already agreed to the sale. Id.

The Husband further resisted the sale of the property.

Ultimately, the New Jersey Supreme Court agreed to hear the Husband’s petition partially upon the issue of whether the trial court erred in ordering the sale of the property before the entry of the Final Judgment of Divorce.

In specifically overruling Grange v. Grange, supra, the Supreme Court held as follows:
The Family Part is a court of equity. We read the statutory requirement that directs equitable distribution at the time of the divorce judgment to be limited by the portion of N.J.S.A. 2A:34-23 that authorizes the court in its discretion to “ make such order as to the alimony or maintenance of the parties, and also as to the care, custody, education and maintenance of the children.” We conclude that, consistent with N.J.S.A. 2A:34-23 and Rule 5:3-5, the trial court may exercise its discretion to order the sale of marital assets and the utilization of the proceeds in a manner as “the case shall render fit, reasonable and just.” Id.at 113. (Emphasis added)

With those parameters in mind, it is always best to agree with your spouse about when and how a jointly held asset will be distributed to spare litigation costs and acrimony. However, if you believe that it is “fit, reasonable, and just” to sell the residence before the entry of the Final Judgment of Divorce over the objection of your spouse, you or your attorney may apply to the Court to compel the sale. The Court’s ultimate decision will be heavily influenced by the individual facts of your case.

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David Byrne, co-chair of the Community Associations group, was quoted in a story in today's Daily Record.  The article, Montville Condo Association Accused of Discrimination, discusses a suit filed by the State Division of Civil Rights against Longview at Montville Homeowners Association. The suit alleges the association is discriminating against a couple by demanding the remove the invisible fencing they use to keep their dogs in the yard at their condo.

You can read the article here.

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Section 7 of the Federal Arbitration Act (“FAA”) provides that "[t]he arbitrators ... or a majority of them, may summon in writing any person to attend before them or any of them as a witness and in a proper case to bring with him or them any book, record, document, or paper which may be deemed material as evidence in the case ...." 9 U.S.C. §7. Section 7 further provides:

[I]f any person or persons so summoned to testify shall refuse or neglect to obey said summons, upon petition the United States district court for the district in which such arbitrators, or a majority of them, are sitting may compel the attendance of such person or persons before said arbitrator or arbitrators, or punish said person or persons for contempt in the same manner provided by law for securing the attendance of witnesses or their punishment for neglect or refusal to attend in the courts of the United States.

Id.

F.R.C.P. 45 governs the issuance and service of subpoenas in federal district court. Thus, under the FAA, F.R.C.P. 45 also governs the service of arbitration subpoenas. F.R.C.P. 45(a)(2) provides that "a subpoena for production or inspection shall issue from the court for the district in which the production or inspection is to be made.” F.R.C.P. 45(b)(2) imposes territorial limits upon the area in which a subpoena may be served providing that:

a subpoena may be served at any place within the district of the court by which it is issued, or at any place without the district that is within 100 miles of the place of the deposition, hearing, trial, production, or inspection specified in the subpoena or at any place within the state where a state statute or rule of court permits service of a subpoena issued by a state court of general jurisdiction sitting in the place of the deposition, hearing, trial, production, or inspection specified in the subpoena.

Under the above rules, it is necessary to apply a two-step analysis in order to determine the geographic limitation of the enforcement of an arbitration subpoena. First, it is necessary to identify the proper district court in which to file a petition to enforce the arbitrator's subpoena. As noted above, the FAA requires the petition to be filed in the "district in which such arbitrators, or a majority of them, are sitting." This is the only Federal Court that can legally enforce the arbitrator's subpoena, no matter where the witness works or resides.

The next step is to identify the jurisdictional limitations of the particular court. F.R.C.P. 45(b)(2)restricts the District Courts' ability to enforce a subpoena to the area within 100 miles of the courthouse or within the state in which the trial or the hearing is being held. Because Section 7 invokes F.R.C.P. 45, this limitation applies to the Court's authority to compel a witness to attend an arbitration hearing. Thus, if a third party receives an arbitration subpoena to appear at the hearing but fails to show up, the remedy the FAA provides is to petition the District Court in the District in which the panel is sitting for an order to compel compliance with the subpoena. In the alternative, Section 7 authorizes the District Court to punish the non?complying party for contempt.

The Federal case law regarding non-party subpoenas is somewhat scarce, in most cases not on point, and has led to varying results. In Amgen, Inc. v. Kidney Center of Delaware County, 879 F. Supp. 878 (N.D. Ill.1995), the arbitration was pending in Illinois and the arbitrator issued a subpoena to the non-party out of state kidney center, which was based in Pennsylvania, to produce documents and a representative for a deposition in Illinois. The kidney center refused to honor the subpoena and the plaintiff sought to enforce the subpoena in Federal Court in Pennsylvania, which held that it lacked authority to entertain the petition. Plaintiff filed a new petition with the federal court in Illinois, where the kidney center was based. The Illinois federal court ruled that it had no power to enforce the arbitrator's subpoena under the FAA and F.R.C.P. 45, but held that the parties had expressly agreed to arbitrate their dispute under the Federal Rules. Thus, they inherently agreed to liberal discovery and to the arbitrator acting "with the power of a judge applying those rules." Accordingly, the Court held that the plaintiff could follow the procedure in F.R.C.P. 45(a)(3)(B), and have its attorney issue a subpoena on behalf of the district court in Pennsylvania where the kidney center was located.

Thereafter, the U.S. District Court for the Southern District of New York, decided to strictly apply Section 7 of the FAA in Integrity Insurance Co. v. American Centennial Insurance Co., 885 F. Supp. 69 (S.D.N.Y. 1995), holding that it does not authorize an arbitrator to subpoena non-party witnesses for pre?hearing depositions. In Integrity, two non-party witnesses moved to quash an arbitrator's subpoenas for a deposition and documents. Though the non-parties were in the same jurisdiction, the Court granted the motion to quash as to the depositions, holding that the arbitrator only had the power to compel a witness to attend the hearing. The Court modified the subpoenas to provide for the non-party witnesses to appear at the hearing. It also enforced the subpoena for documents, but modified it to require production in advance of the hearing.

Most recently, in Legion Insurance Co. v. John Hancock Mutual Life Insurance Co., 2002 WL 537652 (3d Cir. 2002), the U.S. Court of Appeals for the 3rd Circuit refused to enforce an arbitration subpoena for a deposition of a non-party who resided outside the court's jurisdiction and refused to enforce the portion of the subpoena requesting document production. There, the arbitration was to take place in Pennsylvania, and the third party resided in Florida. The 3rd Circuit based its refusal to enforce the arbitrator’s non-party subpoena on the ground that the witness resided beyond the Court's territorial jurisdiction under F.R.C.P. 45.

Though there is a paucity of cases addressing an appearance at an arbitration hearing, as opposed to depositions and the production of documents, it is clear that the rules regarding arbitration subpoenas for non-party out-of-state witnesses are strictly construed by the Federal Courts. It is also clear that Federal Courts have held that there is a direct relationship between Section 7 of the FAA and F.R.C.P. 45, such that arbitration subpoenas for non-party out-of-state witnesses are restricted in that they must be issued in the same jurisdiction or within 100 miles of the location of the arbitration hearing.

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Gary S. Forsher, a Shareholder in the Real Estate group, was mentioned in Millville OKs drive-in Pizza Hut in the October 11 Press of Atlantic City.

Forshner represented Capital Pizza Hut before the Millville Planning Board.  You can read the article here.

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Over the weekend I read this story in the Star Ledger and I began to think about how many property owners I know that are in the same situation. This scenario may be repeated by the New Jersey School Construction Corporation ("NJSCC") who acquired numerous properties to build schools throughout New Jersey. However, due to funding issues, some NJSCC school projects have been put on hold and it is questionable whether all of the schools will be built. If not, NJSCC will own property which may ultimately be re-sold and the original property owners will have no recourse.

Courts look at the proposed public purpose at the time of the taking to determine whether the taking is constitutional. However, most governmental takings are political in nature and subject to changing administrations and funding availability. In addition to governmental uncertainties, the economic climate may also impact construction projects, especially redevelopment projects. There are numerous redevelopment projects on the drawing board throughout New Jersey which are at various stages of planning and implementation. If housing demand drops, it is questionable whether redevelopers will seek to complete projects immediately, or look to delay the construction until the housing market improves. The recent bankruptcy filing by Kara Homes may be a telling sign.

Technorati Tags: New Jersey : Eminent Domain : Condemnation : School Construction

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The City of Trenton is all in a huff over eminent domain these days. See Tim Duggan's post from Wednesday. On December 16, 2005, Ed and Antoinette Shelton defeated in court the City of Trenton's first attempt at amending the Champale Redevelopment Area to include their properties and designating such lands for acquisition. Now, after having gone through the process of designating the Sheltons' lands for redevelopment a second time, City Council has become a little skittish about authorizing the use of condemnation to take them.

According to Mrs. Shelton, as reported in the October 4th edition of the Trenton Times, four council members in the past have expressed reservations about using eminent domain for K. Hovnanian's proposed 84-unit condominium complex known as the Villages at Delaware Run. At least one councilman, Jim Coston, has continued to buck K. Hovnanian's redevelopment effort due to, apparently, the City's and K. Hovnanian's less-than-satisfying approach in their attempts at acquiring the subject properties. Indeed, The Times reported in the October 4th news story, among other things, that "Coston complained" about the administration's failure to "sen[d] the property owners letters about the the [C]ity's intentions" regarding eminent domain, forcing property owners "to learn about it through a local newspaper."

City Council is expected to vote on proposed ordinances giving the City of Trenton authority to take the Sheltons' property and others by eminent domain at its meeting on October 10, 2006.

Technorati Tags: New Jersey : Eminent Domain : Condemnation

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Stark & Stark's Investment Adviser Regulation group is pleased to announce that the latest Investment Adviser Compliance Update has been published and is available for download.

The Fall 2006 edition covers topics including:
Risk Assessment
States Impose Compliance Manual Requirements
NASD: Exam Priorities/Frequent Violations

You can download a copy of the latest Investment Adviser Compliance Upate here (PDF).

Technorati Tags: New Jersey : Securities : Compliance

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Lewis Pepperman, Co-Managing Director of the firm and Chair of the Litigation group, was quoted in the article For some lawyers, temping is tempting in the October 1 Star Ledger.  The article discusses the pros and cons of contract lawyers from both perspectives - working and hiring.

Pepperman commented that the firm philosophy is to hire a few extra associates rather than use temps. He added, "The concern is that you are bringing in somebody you don't know. We found that we always try to stay ahead of the curve on associates."

You can read the story here.

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A successful challenge to a redevelopment plan does not always end the battle. If a plan is stricken by a court for procedural reasons (ie. sufficient proofs were not submitted to the planning board), the condemning authority can start over and once again adopt a plan and seek to condemn property forcing property owners to challenge the redevelopment plan a second time. However, the property owner may benefit from (1) changes in the law, or (2) changes in political agendas, which is what is happening in Trenton.

On behalf of our clients, Mr. and Mrs. Shelton, we were successful in having an amendment to an area in need of redevelopment to include the Shelton's property stricken by the court. (Decision - PDF) The City (and its redeveloper) went back to the planning board and are seeking a "do over" to once again go after the Sheltons' property. Although this is permitted, a certain City councilman who is concerned over Eminent Domain abuses has voiced his opposition to any amendment that would allow the condemnation of property. Mr. and Mrs. Shelton have done a terrific job of staying on top of this project and making certain that City council is aware of what is going on.

Technorati Tags: New Jersey : Eminent Domain : Condemnation

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The potential lien fund ultimately available to an EPC contractor’s subcontractor is circumscribed by the relationship between the EPC contractor and the owner under the New Jersey Construction Lien Law ("CLL"). "Underlying the lien fund concept is the principle that an owner, contractor, or subcontractor should not be compelled to pay twice for the same work or services when a valid lien claim is filed." Thomas Group, Inc. v. Wharton Senior Citizen Housing, Inc., 163 N.J. 507, 522 (2000)(emphasis added); see, also, 41 N.J. Prac., Construction Law § 12.58, "Construction Lien Law--The Lien Fund" (2004).

In this manner, the protection enjoyed by the owner under the CLL exists at each contractual level that contains parties with lien rights under the CLL. Thus, simply stated, the EPC contractor cannot be compelled to pay out more in sub-subcontrator lien claims than dictated by the contractual relationship between the EPC contractor and the subcontractor. Craft v. Stevenson Lumber Yard, Inc., 179 N.J. 56, 80 (2004) ("Because the lien fund can only be based on what is actually owed, when nothing is owed there can be no fund").

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Brian Carlis, a Shareholder in the Securities Practice group, was quoted in the N.J. Insurer Claims Hedge Fund Meddled With Stock Price Moves in the October 2, 2006 New Jersey Law Journal.

The article discussed a suit filed by Crum & Foster Holdings Corp., and it's parent company, Fairfax Financial Holdings Limited of Toronto against S.A.C. Capital Management.  The complaint alleges that S.A.C. drove to Fairfax's stock price so they could profit by short-selling the stock.

Carlis said a long-term run up in Fairfax's stock price could make it difficult to prove damages beyond the early period when the stock slumped.  He added, "Manipulation is difficult to prove. And if the stock ultimately went up, any damages would likely be limited to the period in which the price had gone down."

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Within the terms of virtually every EPC contract is an indemnification provision in which the EPC contractor must indemnify and hold the property owner harmless from the construction liens and lien enforcement lawsuits of the project subcontractors and sub-subcontractors. As such, the EPC contractor can be placed in the unenviable position of having to defend against the claims of a sub-subcontrator, while being saddled with an adverse owner and an unresponsive or insolvent subcontractor. In such situations, the New Jersey Construction Lien Law ("CLL") imbues the EPC contractor with standing to defend against the sub-subcontractor’s claims.

The lien claimant sub-subcontractor must file suit against the subcontractor, property owner, EPC contractor and any possible parties the subcontractor knows to have an interest in the real property that would be adversely affected by the judgment. The CLL permits the EPC contractor the right to defend against such foreclosure regardless of the position taken by the subcontractor or property owner:

(emphasis added);see, also, Kvaerner, 368 N.J. Super. 200 ("We are mindful that N.J.S.A. 2A:44A-14a(2) confers upon a lienee the opportunity to force an evaluative review of the lien claim. Logic suggests that the property owner's representative, a general contractor, should have the same opportunity").

In this manner, an EPC contractor enjoys standing to object to and defend against the sub-subcontractor’s lien claim, regardless of the position taken by the owner or subcontractor.

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