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

This is the fifth installment of a six-part blog series focused on the Railroad Retirement Act (RRA). You can read the full series here.
 
Although Tier I benefits are not divisible, an eligible divorced spouse can receive an annuity similar to the non-divisible Tier I annuity under the RRA.  This is in addition to any divisible portion of the employee’s Tier II annuity awarded by way of equitable distribution by Court Order.  Unlike an equitable distribution award, which provides the former spouse a share of the employee’s Tier II annuity, the payment of a Tier I type annuity to an eligible divorced spouse does not reduce the amount of the employee’s annuity.  This is similar to SSA benefits available to a former spouse where the parties had been married for 10 years or more.

If you or your spouse have been railroad employees and thus may be eligible for a RRA annuity, it is strongly recommended that you speak to a legal professional to ensure that these unique benefits are properly accounted for and distributed incident to a divorce.

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In an effort to protect beach going summer renters, owners in several New Jersey beach towns, such as Stone Harbor, will be required to obtain a renter’s licenses in order to in order to legally rent their units. The license will include, among other things, registration with the local municipality and a fire inspection.  The inspections will have to be conducted each year, at the cost of the owner, in order to maintain compliance with the law and avoid costly fines.  The program in Stone Harbor, for example, begins for the 2010 rental season, if it passes through an upcoming council vote.
 

If a unit fails inspection, it cannot be occupied until it passes. If it’s already occupied at the time of inspection, then the owner has 30 days from that time to make repairs or corrections. An owner of a rental may get another five days to make repairs after re-inspection within the 30-day period.  Of interest to condominium owners who rent their units, each condo unit will be considered a separate rental, which will require a separate inspection.  However, a valid inspection from the Department of Community Affairs, which inspects condominiums and multiple dwellings every 5 years to ensure compliance with the construction, housing and fire codes, will satisfy the license requirements, at least for the year that the DCA inspects the condo.  Check with your local municipal offices to see if there are similar requirements for renting your condominium unit or house.

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The U.S. Census Bureau has released data regarding the incidence of divorce on a state-by state basis. Interestingly, and contrary to some segments of public opinion, New Jersey and Pennsylvania rank second and third, behind only Hawaii, for the lowest percentage of divorces.
This is all the more interesting since New Jersey is the most heavily populated state by square mile and not a politically conservative "red state".  In fact, some  "red states" have very high divorce rates, so go figure.
 

What's the reason?  One theory is that more folks are opting to live together rather than get married, thus reducing the number or divorce filings.  One the other hand, some opine that the availability of " no fault"divorce is a major contributor to the breakdown of marriage and  increase in divorce rates. Others say that the cost of divorce is too expensive yet increasing numbers of persons are electing mediation or arbitration as alternatives to divorce litigation and even the cost of litigation can be properly managed if a divorce attorney has an associate to assume appropriate responsibilities at a lesser billing rate during the process.

Putting the cold data aside, my experience is that unhappy spouses either need to find their way to a happier place through counseling (assuming both participate in good faith)  or acknowledge that their relationship is unworkable  and harmful to their children.  In the latter case, a person's retention of experienced divorce counsel is essential to maximize a fair and cost-effective outcome depending on the complexity of issues and willingness of the other party to be part of the solution.

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Members of Stark & Stark's Divorce Group, including David A. Beaver, Corrine M. Evanochko, Megan E. Smith and Joseph D. Visco, will present two free divorce seminars Saturday October 3, 2009. The seminars will take place at the Hyatt Regency Princeton in Princeton, New Jersey at 9:00 AM and 11:00 AM.
 
The seminars will cover topics such as hiring an attorney, alimony, child support, equitable distribution, settlement alternatives and attorneys fees. The seminars are free to the public, however, registration is required. Please contact Kelly at 609.791.7030 or by email at kelly@stark-stark.com to reserve your space.

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In a recent New Jersey Appellate Division Decision, Stengart vs. Loving Care Agency, Inc., the New Jersey Superior Court, Appellate Division, clarified when a company/employer can review and access an employee’s emails when the employee uses company technology to receive emails.  Many employees mistakenly believe that personal emails received on a company computer are private.  The Stengart case provides guidance on how email and internet policies should be drafted in the company/employee handbook.  The law holds that electronic communication policies must be drafted with unambiguous language alerting employees that the employer retains the right to monitor and review emails of the employee for any legitimate business purpose.  Although the Stengart Court did find that the company’s electronic communication policy was subject to claims of ambiguity, it is clear that a well-drafted electronic communication policy will properly advise the employee that there will be no expectation of privacy for that employee’s personal emails received on a company computer and that the company may review employee’s emails for any legitimate business purpose.  The policy should also advise the employee that use or misuse of company technology for non-business purposes violates company policy and may subject the employee to disciplinary action.

The Stengart Court clarified that a carefully crafted electronic communications policy will allow employees to understand that the employer retains the right to access electronic communications when the employee uses company technology.  This well-drafted policy will alert the employee that there is no expectation of email privacy, and will shield the employer from liability for reasonably reviewing an employee’s email on the company technology.

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NuvaRing®, the combined contraceptive vaginal ring that is supposed to provide month-long birth control, is currently involved in a Multi-District Litigation (“MDL”) in the United States District Court for the Eastern District of Missouri.  Plaintiffs have advanced claims that NuvaRing® is responsible for injuries in some individuals.
 

In recent months, the defendants filed a motion for the entry of a Lone Pine case management order. Such an order would have required all existing and future plaintiffs in the NuvaRing® MDL to submit a Rule 26(a)(2), or case specific, expert report attesting to a reasonable degree of medical certainty that NuvaRing® caused the injury suffered by each plaintiff. The defendants claimed that the entry of a Lone Pine case management order would promote judicial efficiency by discouraging claims that did not have merit and allowing the Court to group cases with legal similarities. However, the plaintiffs argued that the entry of a Lone Pine case management order would actually have amounted to an onerous burden that would have the effect of discouraging many plaintiffs from filing otherwise viable claims against the defendants. Accordingly, the Court ruled in favor of the plaintiffs and denied the defendants' motion for entry of a Lone Pine case management order, without prejudice.

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When buying and selling real estate, in nearly every transaction, a written contract is prepared for all parties involved to sign.  One reason for this is obvious - to make certain that all parties can clearly see, and are in agreement with, all the terms and conditions of the transaction.  This avoids any misunderstandings as to such important terms as the sales price, the description of the property being sold, the closing date, and any contingencies.  However, another important reason to have a signed written agreement is to comply with New Jersey’s statutory requirements for enforcement of such agreements for the transfer of an interest in real estate.
 

New Jersey has enacted a law setting forth certain requirements essential for the enforceability of agreements to transfer an interest in real estate.  Those requirements have been codified in N.J.S.A. 25:1-13, the N.J. Statute of Frauds, which states that an agreement to transfer an interest in real estate shall not be enforceable unless:

a.  A description of the real estate sufficient to identify it, the nature of the interest to be transferred, the existence of the agreement, the identity of the transferor and transferee are established in a writing signed by or on behalf of the party against whom enforcement is sought; or
   
b.  A description of the real estate sufficient to identify it, the nature of the interest to be transferred, the existence of the agreement and the identity of the transferor and the transferee are proved by clear and convincing evidence.
 

In most instances, parties to a real estate transaction comply with Subsection (a) above.  A standard written contract identifies the buyer and the seller, describes the property being sold, the type of title being transferred, and is then signed by all parties.  In addition to compliance with the statutory requirements, these agreements also set forth many other terms, conditions and contingencies between the buyer and the seller so that each party will understand their obligations under the sales contract.
 

Even with the existence of Subsection (b) above, which provides a statutory basis for enforcing certain agreements for the transfer of real estate without a signed document, the New Jersey courts have not always found an agreement to be enforceable when the alleged agreement is oral.  This appears particularly so when the negotiations between parties indicate that the parties intend to be bound only by a formal written contract.  See Prant v. Sterling, 332 N.J. Super. 369 (Ch. Div. 1999), affirmed 332 N.J. Super. 292 (App. Div. 2000) and Morton v. 4 Orchard Land Trust, 362 N.J. Super. 190, (App. Div. 2003), affirmed 180 N.J. 118 (2004).   
 

Thus, it is important to put any agreement for the transfer of real estate in writing with all significant terms included and to have it signed by all parties to the transaction to help insure the agreement’s enforceability.

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This is the fourth installment of a six-part blog series focused on the Railroad Retirement Act (RRA). You can read the full series here.

Below is a list of several other components related to the Railroad Retirement Act:

1. Supplemental Annuity:  Railroad employees who complete twenty five (25) years of service and commenced services before 1981 may receive a supplemental annuity under section 2(b) fo the RRA, which ranges between $23 to $43 per month.  This component is divisible upon divorce.
2. Vested Dual Benefit:  Railroad employees who meet certain vesting requirements and are fully insured under the RRA and SSA prior to 1975 are eligible for an additional benefit amount.  This component is divisible upon divorce.
3. Overall Minimum Increase:   If an employee’s annuity under the RRA is less than the amount that would be received under the SSA, the employee’s annuity may be increased so that the employee receives at least as much as would be received under SSA.  The amount of this increase is divisible.

If you or your spouse have been railroad employees and thus may be eligible for a RRA annuity, it is strongly recommended that you speak to a legal professional to ensure that these unique benefits are properly accounted for and distributed incident to a divorce.

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Since its publication in 2003, the decision of the Trademark Trial and Appeal Board (“TTAB”) in Medinol v. Neuro Vasx, Inc., 67 USPQ2d 1205 (T.T.A.B. 2003), has been a target for comment and criticism.  In Medinol, the TTAB found that a material misrepresentation in an application or renewal, which a trademark registrant knew or should have known was false, constituted fraud.  The result of the Medinol ruling was that trademarks could be canceled for fraud based on unintentional acts by the registering party.

 
On August 31, 2009, the Federal Circuit finally addressed the Medinol standard, and firmly rejected it.  In re Bose Corp., --- F.3d ----, 2009 WL 2709312 (Fed. Cir. 2009).  The court in Bose found, “By equating ‘should have known’ of the falsity with a subjective intent, the Board erroneously lowered the fraud standard to a simple negligence standard.”  Id. at *3.  The court applied this conclusion by stating, “There is no fraud if a false misrepresentation is occasioned by an honest misunderstanding or inadvertence without a willful intent to deceive.”  Id. at *5.

 
The obvious result of the decision in Bose is that it will probably be significantly harder to cancel trademarks based on fraud.  However, registrants should still exercise care in registering and renewing their trademarks, as it remains to be seen exactly how the TTAB will apply the new standard.  Additionally, the Bose decision does not affect any of the other bases for cancellation of a trademark.

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Timothy P. Duggan, Chair of Stark & Stark’s Bankruptcy & Creditor’s Rights Group, was quoted in the September 1, 2009 FinancialPlanning.com article, Staying Alive. The article discusses the challenges financial advisors have faced for years when economic troubles being. While filing for bankruptcy looks bad for anyone, when a financial advisor files for bankruptcy, the repercussions could cost them their future, and their future business. However, in today’s economic climate, it is important for financial planners to understand how filing for bankruptcy could affect their job, from a legal and financial standpoint.

Mr. Duggan states, “Advisors should find counsel as soon as they begin to consider bankruptcy as an option. All too often, in an effort to keep their business afloat, small business owners deplete resources that could otherwise be protected in a bankruptcy case.”

You can read the full article online here.

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The proper treatment of intellectual property (IP) in divorce cases requires an understanding of the different types of IP, valuation of the IP and ultimately equitable distribution of the IP as a marital asset.
 
There are four types of IP:

1. A Trademark is a name, word, phrase, logo, symbol, design, or image used to identify a product or service.  Also known as a “mark”, trademarks are denoted with the symbol “™”, although trademarks registered with the United States Patent Trademark Office are followed by the symbol ®.
2. A Copyright protects the expression of ideas captured in tangible form, such as drawings, sheet music, photographs, videotapes, computer files/software, books or paintings.  .  Copyright laws provide the creator with exclusive rights to publish and distribute his or her works for a certain time period after which the work belongs to the public.  Copyright owners may also authorize others to reproduce their work or derivative works based on the original work
3. A Patent protects a new or useful invention, such as a process or machine, as well as improvements thereto.  An inventor may assign his or her rights to the patent to another party.  Patent law exists for the purpose of excluding others from making, using or selling an invention for the term of the patent which is usually twenty years.
4. A Trade Secret protects  information which provides an economic benefit to the owner because it is not known to the public.  Unlike other types of IP, the protection of confidential information of a trade secret does not expire as long as the secret is never disclosed.

In a divorce, the first question is whether the IP is subject to equitable distribution.  Generally speaking, all assets acquired by the parties or either of them during the marriage (defined as from the marriage date to the date a divorce complaint  is filed) are marital. Thus, premarital assets, inherited assets or assets gifted from a third party ( and not subsequently “co-mingled”) will not be divided; however,  any increase in value of exempt assets which are the direct result of effort by one or both marital partners will be subject to equitable distribution.   

Thus, in cases involving IP, appropriate areas of inquiry are whether marital funds were expended to market the IP or to defend the owners rights to the IP during the marriage.  If marital funds were utilized, the non-owner spouse can assert that the otherwise exempt IP is subject to equitable distribution.

     
The valuation of IP as a marital asset is complicated by the fact that in many instances such value is based upon the IP’s ability to generate future income.  To the extent that such income will also be a factor in an alimony or child support calculus, the conundrum of a “double dip” exists.  In other words, having valued the IP as a marital asset based upon a future income stream and carried out equitable distribution based on that value, a court may nonetheless take a second look a the future IP income for alimony or child support.  New Jersey courts have determined that such an approach does not constitute a “double dip”, a fact which attorneys, forensic accountants and owners of an IP must recognize from the outset. 

   
Although there is no “bright line” ruling in New Jersey with respect to equitable distribution of intellectual property, guidance can be gleaned from decisions in other states such as a Kansas court’s decision that a disproportionate equitable distribution in favor of a patent holder was equitable since he would be required to expend post-marital efforts to ensure the continued income stream from the patents.

   
In summary, attorneys dealing with IP in divorce cases must be aware of the issues and pitfalls involved by exploring out-of-state cases and New Jersey cases dealing with different but analogous types of marital assets such as stock options and pension plans.

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