Timothy P. Duggan, Shareholder and member of Stark & Stark's Condemnation Group, was quoted in Monday's Courier News, in the article, Somerville seizes supermarket's lease.
Mr. Duggan commented on Pathmark's potential option of filing an appeal in court in order to save the property, and states that while it is difficult to get a stay granted, several recent court decisions have favored property owners.
You can read the full article here.
Adam J. Siegelheim, member of Stark & Stark's Franchise Group, was quoted in Thursday's New York Times, in article titled: Don't Go West, Young Man. Buy Yourself a Franchise Instead. The article discusses the increasing number of college graduates seeking to begin their own business rather than work for someone else's.
You can read the full article here.
Committee for a Better Twin Rivers v. Twin Rivers Homeowners’ Association
On Thursday, July 26, 2007, the New Jersey Supreme Court issued its much awaited and highly anticipated decision in Committee for a Better Twin Rivers v. Twin Rivers Homeowners’ Association. In overturning the Appellate Division’s decision and reinstating the decision of the Trial Court, the Supreme Court found that community associations could lawfully impose reasonable restrictions on its members – such as restricting the posting of political signs or allowing access to a community newsletter – and that such restrictions do not violate the New Jersey Constitution’s protections regarding freedom of expression and equal protection.
At issue in Twin Rivers was the question of whether the New Jersey Constitution’s speech and assembly clauses should be applied to limit the authority of homeowners’ associations to promulgate certain community-wide restrictions and, if so, under what circumstances. In the lower court’s decision, Committee for a Better Twin Rivers v. Twin Rivers Homeowners’ Association, 383 N.J. Super. 22 (App. Div. 2006), the Appellate Division found that because community associations have supplanted certain responsibilities once undertaken by towns and municipalities, the individual members’ state constitutional rights to free speech outweigh the restrictions imposed by homeowners associations, even though such property is private rather than public.
In the Supreme Court’s decision, authored by Justice John E. Wallace, Jr., the Court determined that even in light of New Jersey’s broad interpretation of its constitutional free speech provisions, the “nature, purposes, and primary use of Twin Rivers property is for private purposes and does not favor a finding that the Association’s rules and regulations violated plaintiffs’ constitutional rights.” Moreover, the Court found that “plaintiffs’ expressional activities are not unreasonably restricted” by the Association’s rules and regulations. Finally, the Court held that “the minor restrictions on plaintiffs’ expressional activities are not unreasonable or oppressive, and the Association is not acting as a municipality.”
You can read the Supreme Court’s decision in Twin Rivers here.
If you would like to discuss the Twin Rivers opinion and how it affects condominium associations in more detail, please contact David J. Byrne or Jonathan H. Katz.
Apparently in response to widespread criticism of the recently amended Child Support Guidelines, the New Jersey Supreme Court has modified them to reduce the included income levels. The Court had recently modified the guidelines to include families earning up to $4500 per week; an increase which, according to some experts, would have included as much as 94% of New Jersey families.
Divorce Attorneys and various interest groups argued that the increased guidelines resulted in inappropriately low child support awards for upper income families.
While not fully accepting the criticisms, the Court did reduce the income levels covered by the Guidelines to $3600 per week.
It is hoped by many that the reduction will more fairly provide for the support of upper income family children, and prevent such parents from avoiding what many believe to be a much more fair amount of child support than that which was provided by the previous Guidelines.
One of the items commonly adjusted at real estate closings is municipal real estate taxes. Real estate taxes are billed on a quarterly basis with a quarterly tax payment being due on the first day of the middle month of the quarter. Thus, first quarter taxes, covering January, February and March are due February 1st. Second quarter taxes, covering April, May and June are due May 1st. The due date for third quarter taxes is August 1st and fourth quarter taxes, November 1st.
The reason municipal real estate taxes are adjusted at closing, i.e., apportioned between the buyer and the seller as of the day of closing, and paid at closing is because the taxes become a lien on the property on and after the first day of January of the year for which they are assessed. N.J.S.A. 54:5-6.
Unless the sales contract provides otherwise, municipal taxes are adjusted based on the current year’s assessment. If taxes for the current year have not yet been determined at the time of closing then the amount of the taxes for the last assessed year will be used as the basis for computing the apportionment between the buyer and seller. N.J.S.A. 54:4-56.
While municipalities should have their budgets and tax rates in place by July 1st, sometimes they do not. This means that taxes are frequently adjusted based on the prior year’s taxes, even after July 1st. The 1st and 2d quarter tax bills are actually estimates for the current tax year. Once the municipality’s budget and tax rate are adopted, the full annual taxes are assessed and the 3d and 4th quarter final bills are sent out. The 3d and 4th tax quarter bills, when added to the 1st and 2d quarter estimated bills, total the full year’s taxes. Usually, the municipality sends out the estimated tax bills for the 1st and 2d quarters along with the 3d and 4th quarter final bills.
When improvements or newly constructed homes are built after the date for the regular tax assessment by the municipality, an added assessment is made and billed in October of the year in which the improvement is completed provided it is completed before July 1st. The added assessment usually commences the first full month following the issuance of a Certificate of Occupancy or Approval which is proof of the completion of the improvement. If the improvement is completed after July 1st, then the bill for the added assessment taxes for the improvement is usually sent out to the homeowner in October of the following calendar year.
Frequently, homeowners pay their real estate taxes by means of a monthly escrow payment to their mortgage company, which in turn makes the quarterly tax payments for them. As a result, many homeowners may be unaware of the method by which the municipality bills their real estate taxes.
Throughout New Jersey and Pennsylvania, the familiar Mobil gas station signage and products are gone, replaced with the new brand Lukoil. Time will tell whether Getty Petroleum Marketing’s (“Getty”) re-branding efforts will have a positive or negative impact on its franchisees. However, in the matter captioned, Akshayraj, Inc. v. Getty Petroleum Marketing, Inc., certain New Jersey and Pennsylvania franchisee operators are betting on the latter and have filed suit in the United States District Court in the District of New Jersey against Getty and Lukoil Americas Corporation (“Lukoil”).
In their Complaint, the franchisee operators allege that the conversion to Lukoil has constructively terminated their franchise agreements, in violation of the Petroleum Marketing Practices Act, the New Jersey Franchise Practices Act and Pennsylvania’s franchise laws. The plaintiffs contend that the brand change to Lukoil has resulted in the franchisees operating a generic station, as opposed to the “recognizable, identifiable and sought out [Mobil] branded stations.” The plaintiffs further allege that were being charged the same higher whole sale prices for a product without any customer base or brand loyalty.
Defendants Getty and Lukoil moved to dismiss the Complaint. The District Court dismissed the franchisee operator’s breach of contract claims, claiming that Getty breached the franchise agreement by refusing to provide Mobil products to its franchisees. The court noted that the franchise agreements specifically provided Getty with the right, at its sole discretion, to change its brand (including its proprietary marks and products).
Preliminary, the court also did not find any evidence of record to establish that Lukoil was a generic brand. However, on the remaining counts dealing with this issue, the court converted the Defendants’ motion to dismiss to a motion for summary judgment. The franchisee operator’s will now need to demonstrate some material question of fact related to whether Lukoil is a generic brand.
In order to determine child support in any divorce case, we are compelled to use the Child Support Guidelines promulgated by the Rules Governing the Courts of the State of New Jersey. Under these Guidelines, we must determine the income of both parents in order to calculate the appropriate amount of child support.
Income is not just earned income. For purposes of using the Guidelines, gross income also includes tips, commissions, interest, dividends, bonuses, royalties, gains derived from dealings in property, rents, annuities, distributions from government and private retirement plans, including Social Security, Veterans Administration, Railroad Retirement Board, deferred compensation, Keoughs and IRAs.
The list goes on and on and it is easy to see that any type of income will be included in the calculation. From this income, certain deductions are taken such as federal, state and Social Security taxes. But, how do we handle the other deductions from income such as retirement contributions?
In a recent case, the question became whether contributions to the father’s voluntary 401(k) plan, as well as any income generated by that plan should be considered as income for purposes of child support. The Court broke down the contributions into those made by the employer for the benefit of the Defendant/Father and those made by the Defendant/Father voluntarily to his own plan. Arguably, an employer’s contribution to a 401(k) plan could be considered income for child support purposes because the contribution is compensation for services. In addition, the increase in the plan corpus could constitute both “an interest in a trust” and “gains derived from dealings in property,” two categories of income defined by the Child Support Guidelines.
Yet, the Guidelines limit gross income to “all earned and unearned income that is recurring or will increase the income available to the recipient over an extended period of time. When determining whether an income source should be included in the Child Support Guidelines’ calculation, the Court should consider if it would have been available to pay expenses related to the child if the family would have remained in tact.”
It was noted by the Court that once money was deposited into a 401(k) plan, those funds may not be removed without substantial penalties and taxes. In addition to the tax required to be paid, an early distribution is subject to an additional tax of 10% of the amount distributed. Therefore, the Court determined that it should not consider either the employer’s contribution to the 401(k) plan or the increase of the Plan corpus’ income, explaining that “requiring the income that is generated through the sheltered program to become part of a child support award would punish the father for investing wisely to secure a stable retirement . . . .”
It was noted that assets in a 401(k) plan only become available, even to an intact family, in the event of extreme financial distress. Therefore, income from that asset would not have been available within the meaning of the Guidelines. Because of the heavy tax burden imposed on early withdrawal, a withdraw would be an unlikely occurrence. Therefore, it is not income available to the Defendant over an extended period of time for the payment of child support.
The Court also noted that the philosophy of the Child Support Guidelines is to allow the children “to share in the current income of both parents” and to prevent them from becoming “the economic victims of divorce.” Children of divorce should be afforded the same opportunities available to children of intact families with parents of similar financial means. Since the Guidelines were never intended to allow children of divorced parents a greater share of combined parental income than would have been available for them had there been no divorce, it was held that neither the contributions made by an employer to a 401(k), nor the increase in value of the plan due to employer contributions, should be looked at as income for purposes of child support.
However, any monies voluntarily contributed to an employee’s 401(k) plan by the employee will be considered income for child support purposes since it is a voluntary contribution made by a parent. The choice to place money into a retirement fund does not absolve a parent of his obligation to utilize that income for his children.
Thomas Giachetti, Chair and Shareholder of Stark & Stark's Securities Compliance & Arbitration Group, authored the article So You Think Your Marketing Practices Are Compliant? for the May/June issue of the IMCA Monitor.
You can read the full article here.
In the recent decision, Allen v. World Inspection Network, Int’l, Inc., 389 N.J.Super. 115, 911 A.2d 484 (App. Div. 2006), the New Jersey appellate division held that a franchise agreement provision-requiring that all disputes be arbitrated in the State of Washington- was enforceable.
Prior to this decision, the New Jersey Supreme Court held that forum-selection clauses in franchise agreements are presumptively invalid, and should not be enforced. Kubis & Perszyk Assocs. v. Sun Microsystems, 146 N.J. 176 (1996). The Supreme Court’s rational was based, in part, on the presumption that forum-selection clauses are unfairly imposed on the franchisee, as a result of the franchisor’s superior bargaining position. However, the Allen Court distinguished the Kubis ruling, on the basis that arbitration clauses are governed by the Federal Arbitration Act, which preempts New Jersey law.
Significantly, the Allen court also rejected the franchisee’s argument that even if the arbitration clause is enforceable, the court could require the parties to arbitrate their claims, but not enforce the portion of the provision which required the parties to arbitrate in Washington. In rejecting this argument, the court concluded that the location of the arbitration was also an integral part of the arbitration clause and was therefore also governed by the Federal Arbitration Act.
As noted in a prior blog posting, the United States District Court had also considered this issue and reached the same conclusions.
Legislation that would require co-ops to provide rejected applicants with a written explanation as to why they were rejected is making its way – slowly – through the New York City Counsel. Historically, cooperative boards in New York City have not been required to provide any reason or explanation to applicants as to why their applications for co-ops are rejected. However, if this proposal is enacted, the application and rejection process may become much more transparent.
Unlike a condominium or homeowners associations where units are owned in fee simple, in a cooperative, legal title to the property is vested in a cooperative entity and individuals purchase shares of stock in the corporation, which carry the right to occupy a unit within the cooperative pursuant to a proprietary lease. In New York, it has long been the law that, absent discrimination or bad faith, a board can reject an applicant for any reason or no reason at all. See Weisner v. 791 Park Avenue Corp., 6 N.Y.2d 426 (1959). Similarly, in New Jersey, the Cooperative Recording Act, N.J.S.A. 46:8D-6(l), acknowledges and authorizes a similar approval process so long as the consent to transfer is not unreasonably withheld or would constitute discrimination under federal or state law.
The proposed legislation, which was introduced by City Councilman Hiram Monserrate (D - Queens) in February of 2006, but which has languished in committee for over a year, has been gaining support and momentum lately. Known as Intro 119 – “The Fair and Prompt Co-op Disclosure Law”, or more commonly referred to as the “Written Rejection Bill”, would require that co-op boards provide rejected applicants with a written explanation – signed by an officer of the co-op – detailing each individual reason as to why such applicant was rejected. The statement must also include the number of applications received and the number of applications rejected in the previous three years prior to this decision. If a co-op board fails to provide such a written explanation, it can be held liable to the applicant for fines, punitive damages and attorneys’ fees. The full text of this proposed legislation can be found here.
While opponents of the legislation argue that it is unfair, intrusive and too far-reaching, its supporters argue that it will force co-op boards to openly cite legitimate reasons for any rejection and will help root out discrimination, ultimately shining a brighter light onto the inner workings of New York City’s most powerful co-op boards, which were only required to begin disclosing sale prices in 2006. The legislation is expected to move forward for a vote before the counsel in the coming months.
We will continue to monitor this proposed legislation and provide timely updates as to its progress. If you would like to discuss this legislation or how it affects cooperatives in more detail, please contact David J. Byrne or Jonathan H. Katz.
New Jersey-based law firm Stark & Stark is pleased to announce that two Bucks County law firms have joined the firm. The addition of the Liederbach, Hahn, Foy & Van Blunk of Richboro and Marston & Shensky of Doylestown will allow Stark & Stark to offer its services to a greater number of businesses and individuals working and living in Pennsylvania. A total of 7 attorneys and 8 support staff will join Stark & Stark as a result.
Both firms are fixtures of the Pennsylvania legal community. The Liederbach firm was founded in 1954 and focuses on representing businesses in corporate, real estate and litigation matters. The Marston & Shensky firm was founded in 1981 and focuses on complex injury claims.
The two firms will maintain their current offices until a new facility in Yardley Pennsylvania is completed. It is expected that the new office will be occupied by on or before November 2007.
This acquisition will grow Stark & Stark to 104 Attorneys (61 shareholders, 2 counsel, 41 associates) and a support staff of approximately 195 with offices in Princeton, Philadelphia, Marlton, New York, Richboro and Doylestown.
Stark & Stark is a full service law firm that provides a wide range of services including, corporate, litigation, real estate, divorce and complex injury claims. A full list of services the firm provides can be located at www.stark-stark.com.
Stark & Stark Co-Managing Shareholders Lewis Pepperman and John Sakson, along with new Shareholders Henry “Hank” Van Blunk and Edward Shensky are available for comments about the merger. Please contact Richard DeLuca - rdeluca@stark-stark.com to coordinate interviews.
Believe it or not, some employers still want to respond to inquiries by potential employers of former employees. Do not give in to the temptation! While it is true that New Jersey has a qualified privilege for statements made by former employers about their former employees, you do not want to be in the position of having to justify comments you make about former employees.
Further, most employers these days are familiar with getting nothing more than “name, rank, and serial number,” so you will not be discrediting former employees by severely limiting information. Carefully limit what you say, and you won’t live to regret it.
It has been almost a year since we first reported on a proposal working its way through the Legislature that would protect by statute an additional source of revenue for many condominium associations in New Jersey. You can find our original blog on this subject here. Now, this proposed legislation is on the Governor’s desk and, if approved, will become effective immediately.
On June 21, 2007, this bill – which had previously passed in the Assembly – easily passed in the Senate by a vote of 36-0. The legislation would permit a condominium association – if authorized by its master deed or by-laws – to levy and collect a capital contribution, membership fee or other charge upon the sale or transfer of a unit for the purpose of defraying the association’s common expenses. As amended by the Senate, the legislation now allows for the collection of such a fee by an association not to exceed nine (9) times the amount of the most recent monthly common expense assessment for that unit – reduced from the original proposal of eighteen (18) times. You can view the most recent version of this legislation here.
The legislation would also settle the dispute caused by the Appellate Division’s decision in Micheve, L.L.C. v. Wyndham Place at Freehold Condo. Ass’n, 381 N.J. Super. 148 (App. Div. 2005), which invalidated a condominium working capital contribution authorized solely by the condominium’s board-enacted resolution. More importantly, however, the legislation would authorize condominium associations who do not have provisions for working capital or membership fees in their master deed and by-laws to validly enact such amendments requiring new buyers to pay such a fee upon the purchase of their units.
Stark & Stark will continue to monitor this legislation and provide updates as to its progress. If you would like to discuss this legislation or how it affects your association in more detail, please contact David J. Byrne or Jonathan H. Katz.
Recent additions to the New Jersey Law Against Discrimination has some employers a little confused on what is now considered discrimination. In addition to race, religion, age, etc., your anti-discrimination policy now needs to protect against:
1) discrimination based upon “civil union” and
2) sexual orientation and sexual “expression” discrimination
The smart employer will have counsel review their employee handbook every year. An example of why this is necessary is the new changes (applicable as of this coming Monday) to the scope of the New Jersey Law Against Discrimination (NJLAD) that you need to reflect in your handbooks.
Also, on a practical note, these changes need to be published on new, anti-discrimination posters (like the ones posted in your “break room”). The smart employer will make the appropriate changes to the employee handbook and will order updated posters as soon as possible.
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