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

If you hold a judgment obtained in another state against a resident of New Jersey, you may wonder whether your judgment can be enforced in New Jersey without new legal action being initiated.  The answer is “yes”.  New Jersey has adopted the Uniform Enforcement of Foreign Judgments Act (N.J.S.A. 2A:49A-25, et seq.) (the “Act”) which sets forth a fairly simple process by which a foreign judgment –a judgment, decree or order issuing from a court outside of New Jersey but which is entitled to full faith and credit in New Jersey[1] - can be filed with the Clerk of the Superior Court, and thereafter enforced in the same manner as if it had been entered in New Jersey.

The process of domesticating a foreign judgment is fairly straightforward.  To domesticate a foreign judgment in New Jersey, a judgment creditor must obtain an authenticated copy of its judgment from the court of original jurisdiction.  The authenticated judgment must be filed with Clerk of the Superior Court[2], accompanied by an affidavit detailing certain information about the underlying judgment[3], and the appropriate filing fee[4]. The Clerk will then issue a notice to the judgment debtor providing 14 days during which they can object to the judgment being domesticated.  A creditor cannot take any action to enforce the judgment during this 14-day period[5].  Assuming no objection, the creditor is free to pursue available remedies to collect on its judgment.

While a judgment debtor cannot use a New Jersey court to attack the merits of the underlying matter, a New Jersey court will stay the enforcement of the judgment if the judgment debtor demonstrates that an appeal has been filed or a stay of execution granted[6]. Likewise, if the judgment debtor shows the Superior Court any ground upon which enforcement of judgment would be stayed, enforcement of the judgment will be stayed[7].  In either instance, the judgment debtor must furnish security (a bond or a like amount of collateral) for the satisfaction of the judgment in a manner accepted by the state in which the underlying judgment was obtained.

There are, of course, nuances to every legal matter.  Accordingly, it is always best to confer with an attorney experienced in collections matters to assist you in this process.

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The Philadelphia Chapter of the Turnaround Management Association (“TMA”) has been selected as the 2012 Chapter of the Year.  Stark & Stark Shareholder Jennifer Gould, in the firm's Bankruptcy & Creditor's Rights Group, currently serves as the Secretary of the Board of Directors for the Chapter and was previously the Chairperson of the Networking Organization of Women (“NOW”).

The TMA has 49 Chapters located throughout the world.   It is the only international non-profit association dedicated to corporate renewal and turnaround management.

For more information, please visit www.turnaround.org.

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Bari J. Gambacorta, Shareholder in Stark & Stark’s Bankruptcy & Creditor’s Rights Group, authored the article, Bankruptcy Court Finds Lien Strip Down Notice Defective, published on April 17, 2013 in US1 Newspaper.

The article discusses a specific example where a debtor’s proposed Chapter 13 bankruptcy plan called for a lien strip down on a creditor’s second mortgage, which is considered a “contested matter under the Federal Rules of Bankruptcy Procedure.”  

Mr. Gambacorta explains “if a creditor misses a lien stripping motion and or confirmation plan notice it should carefully examine the content of the notice.  If the notice was defective that fact may well allow the creditor […] to argue that its due process rights had been violated and have its claim reinstated as secured.”

To read the full article, click here. 

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1. Maintain accurate records.  While this might seem basic, keeping accurate records on accounts is vital to increasing the likelihood of collections on delinquent accounts.  Without accurate records and the ability to provide a set amount that is due and owing, the courts will not award a judgment for the amount claimed to be owed.
2. Obtain a personal guaranty.   When a contractual relationship begins with a business entity, obtaining a personal guaranty can not only help encourage payments but can also provide additional security for post-default collection efforts. If collection efforts can only be brought against a business entity such as an LLC or corporation, collections can be tricky because of their ability to close down shop quickly and because many do not have bank accounts in their respective names and to avoid post-judgment bank levies.
3. Provide for prejudgment interest if applicable or post-default rate. If the subject agreement contains a provision for interest, the award of pre-judgment interest can usually be obtained and the rate in the agreement will normally govern, subject to the limitations of certain New Jersey statutes.  If there is no specific provision for interest, it is unlikely that a court will award this amount.     
4. Provide for the Recovery of Attorneys’ fees.   If the underlying contract or agreement between the parties provides for an award of attorneys’ fees upon default, this may be included in the judgment amount.  While this amount will be subject to the court’s discretion and the fees awarded will usually be limited to an amount deemed reasonable by the court based upon the services rendered, the inclusion of attorneys’ fees in the contract will bolster the argument for the award of such fees. 
5. Know your debtor.  Once judgment is obtained, a judgment creditor can initiate a bank levy, a personal property levy or constructive levy against property owned by the judgment debtor.  While this type of collection effort may involve additional costs, because of the costs incurred by the Sheriff’s office for scheduling an execution sale; if the value of the property is sufficient, it may be worth considering.  Real property levies are also available; however, first you must exhaust all personal property in the county in which the real property is located.  Usually, this can be done through use of an information subpoena which reveals that the debtor owns no personal property, has no job and holds no bank accounts.

 Allyson Cofran is a member of the Stark & Stark's Bankruptcy & Creditor’ Rights Group in the firm's Lawrenceville, New Jersey office.  For more information, please contact Ms. Cofran.

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There are two types of consumer bankruptcy filings that many creditors will likely encounter. A Chapter 7 and a Chapter 13.  In a Chapter 7, the debtor is attempting to liquidate his/her assets. In a Chapter 13, the debtor is proposing to pay creditors some of what creditors are owed over time (3-5 years.).  In a Chapter 13, the debtor will file a Chapter 13 Plan which sets forth how the debtor plans to pay back creditors and how much they propose to pay.

What do you do when learn there is a bankruptcy filing?  Immediately upon the filing of a bankruptcy petition the automatic stay is in effect which means that any and all actions and collection efforts against property of the bankruptcy estate must stop. All collection efforts and any notices seeking to collection money from the debtor must stop.  In addition, do not speak with the debtor and do not send further notices to the debtor.  All communications must go through debtor’s counsel. 

So what is the purpose of filing for bankruptcy?  It is to obtain a discharge.  Once a discharge order is entered, with some exception regarding certain types of debts; it means that the debtor is no longer personally liable for the debt owed. This means that a creditor cannot pursue any wage executions, bank levies, or personal property levies for debt that is owed pre-petition (before the date of the bankruptcy filing).  However, judicial liens (as well as some other types of liens) are not automatically discharged and can be pursued.  Consulting an experienced attorney regarding this issue is key to avoid failing to preserve and protect certain rights.

In both a Chapter 7 and Chapter 13, a creditor may file a motion for relief from the automatic stay. The purpose of obtaining relief from the automatic stay is for the creditor to pursue their State Court remedies with respect to the property that is the security for the debt owed.           

So how does a bankruptcy end?   A discharge and final decree is entered. Once a final decree is entered and the case closes the creditor is free to pursue all post-petition debts owed by the debtor. Very important to note is once the discharge is entered, creditors are barred from collecting pre-petition debt. Pursuit of the pre-petition debt may result in possible sanctions and fines.

Generally, a Chapter 7 case will take about 4-6 months from petition to discharge and case closure. A Chapter 13 will depend upon the proposed Chapter 13 Plan however; generally a plan will be between 3-5 years (from the petition date to discharge and case closure) unless the debtor does not make their plan payments, whereby the case would be dismissed.  Upon dismissal a creditor may freely pursue their collection efforts.

When a consumer files for bankruptcy protection, knowing how to collect and what rights a creditor has in the bankruptcy case is crucial for avoiding possible sanctions and for turning delinquent accounts into cash.

Allyson Cofran is a member of the Stark & Stark's Bankruptcy & Creditor’ Rights Group in the firm's Lawrenceville, New Jersey office.  For more information, please contact Ms. Cofran.

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Marshall T. Kizner from Stark & Stark’s Bankruptcy and Creditor’s Rights Group authored the article,Commercial Property Taxes: Is Your Business Paying More Than Its Fair Share?, published on March 20, 2013 in US1 Newspaper.

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On Sunday, March 24, 2013, Namco, LLC dba Branch Brook filed for Chapter 11 bankruptcy protection before the District of Delaware (docket # 13-10610).  The Manchester, Connecticut based retailer sells pools, pool accessories and other recreational equipment and operates 37 stores mostly in the Northeast.  Bankruptcy documents state Namco closed 21 stores since January 2012.

Whether you’re a landlord or a trade creditor, you should immediately contact counsel to protect your rights.  Following are three (3) simple, but important questions to ask: 

Landlords: (1) Is the Debtor assuming or rejecting the lease; (2) When and how will “stub” rent (the rent between the petition date and the next regular monthly payment) be paid?; and (3) What other damages are owed (both pre- and post-petition)?

Trade Creditors: (1) Do I have a reclamation claim and how do I assert the same (the right of a trade creditor to demand the return of unpaid goods); (2) Does the Debtor want to continue to do business; ad (3) What other monies are owed?

Both commercial Landlords and Trade Creditors should contact bankruptcy attorneys immediately.   Failure to address these issues in a timely manner can be detrimental to protecting your rights.  Sound legal counsel can obtain your objectives of getting paid in a quick and efficient manner.

Contact Stark & Stark’s Creditor’s Rights Group to assist you in this or other bankruptcy matters.  Our bankruptcy attorneys regularly represent landlords in the District of Delaware, as well as the District of New Jersey, Southern and Eastern Districts of New York, and Eastern District of Pennsylvania on a variety of issues.

For more information about the Namco, LLC bankruptcy filing and how Stark & Stark can assist you, please contact Thomas Onder, Shareholder at Stark & Stark (609) 219-7458 or tonder@Stark-Stark.com. Mr. Onder writes regularly on residential and commercial real estate issue and is a member of ICSC and its NextGeneration Committee.  

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The bad news is that costs increased when taxes rose in January.  Interest rates may also rise.  The good news is that for savvy landlords, there are some proactive strategies to improve the bottom line now with the help of sound legal counsel.  Following are Stark & Stark’s top 10 tips for landlords to consider:

1.    Refinance.  With interest rates low, now is the time to act to refinance and cut costs before interest rates rise.  Have you reviewed your properties with counsel to ascertain what you need to refinance?  Are your estoppel certificates in order?  Any outstanding litigation cases that need to be resolved, in case your lender asks?  Stark & Stark’s Real Estate Group can manage these issues.  

2.   Reduce Taxes.  Have you considered filing a real estate tax appeal before the deadline?  April 1st is almost here.  Have you considered 1031 exchanges to provide tax benefits?  Stark & Stark’s Business & Corporate Group can help guide you through these tax issues.

3.   Plan.  Have you consulted with counsel lately to discuss and update your plans and options, including estate planning and business succession planning?  An experienced trusts and estates counsel can ensure that the maximum amount of your money stays where you want it, instead of going to Uncle Sam.  Stark & Stark’s Trusts & Estates Group can assist in planning for your future.

4.  Reduce Responsibilities.  Have you updated all your documents and procedures to reduce your responsibilities?  Have you minimized your repair and construction costs?  Have you reduced your utility and compliance costs?  Stark & Stark’s Real Estate and Construction Groups have the expertise you need.

5.   Improve Insurance.  When was the last time you reviewed and updated your insurance coverage?  Have you looked at your coverage in the wake of Hurricane Sandy?  Do you know what risks are not covered?  Are you relying on certificates of insurance that may not protect you?  Stark & Stark’s Insurance Group is here for you.

6.   Manage Risks.  Have you updated your compliance procedures, employee handbooks, and other documents and procedures to prevent problems?  Have you considered all available dispute resolution options?  Stark & Stark’s Employment Group can provide you with solutions to these issues.

7.   Improve Properties.  Have you recently developed or remodeled your real estate to attract and retain the best tenants and increase rents?  Stark & Stark’s Land Use Group can help you assess the legal issues with your property improvements.

8.  Increase Collections.  Are you collecting your unpaid debts while complying with the Fair Debt Collection Practices Act and other applicable laws?  Will your strategies and procedures reduce future debt collection problems?  Are you enforcing all your bankruptcy and other rights?  Stark & Stark’s Bankruptcy & Creditor’s Rights Group is here for you.

9.   Improve Your Deals.Do your documents maximize recovery of operating expenses and unpaid rent?  Have you included all the language you need in different jurisdictions, such as "additional rent" language to capture all rent in New Jersey evictions and Confession of Judgment language to expedite rent recovery in Pennsylvania?  Stark & Stark is a regional firm with offices in New Jersey, New York, and Pennsylvania.

10.   Get Deals Done Faster.  Do your negotiations take too long?  Are you expediting the negotiation and drafting of letters of intent, leases, amendments, contracts, and other documents? Stark & Stark’s Real Estate Group understands the immediacy of “now” and can help you with your needs.

These are just a few examples of how landlords can, with the help of good legal counsel, improve the bottom line now.  Evaluating these questions requires careful review on an individual basis with experienced counsel.  Having an attorney familiar with these issues is critical.  The attorneys at Stark & Stark understand the real estate community and can provide you the insight you need to address these and other questions for your real estate and business needs.

Feel free to contact Jerry Nelson at 609.945.7635 or jnelson@stark-stark.com for a review of your real estate and business issues.

Jerry A. Nelson, Esq. is a Shareholder and member of Stark & Stark's Business & Corporate and Real Estate, Zoning & Land Use Groups.  He writes regularly on issues for commercial landlords and brokers.  He is a member of the International Council of Shopping Centers and a regular speaker on commercial landlord issues.

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The New Jersey legislature recently made changes to the law that may have a significant impact on industrial property that is environmentally contaminated. The law requires a municipality to pay any property tax refund ordered by the Tax Court or a County Board of Taxation to the Commissioner of Environmental Protection for required site remediation when the property under appeal is an industrial property that has is “currently vacant or underutilized” and that is subject to any federal or State court order, or administrative action or order, for environmental remediation. Under the statute, within 30 days after completion of the site remediation, the Commissioner must return any remaining balance of the refund to the property owner and, if the balance is not timely returned, interest accrues. The new law applies to any property tax refunds that are not disbursed to the taxpayer prior to July 9, 2012.
 
Under the law, a municipality is also allowed to assess an annual charge on contaminated industrial property that “becomes vacant or underutilized” to help ensure the expedient remediation of that site. The annual charge collected by the municipality must be deposited with the Commissioner of Environmental Protection and credited against the property owner's remediation liability. Unpaid charges shall be reduced to a lien on the property and may be collected in the same manner as a tax lien. The law excludes property for which a remediation trust fund has been established.
 
The statutes leaves the question of what constitutes an “underutilized property” open for judicial determination. A court dealing with this issue may look to the Pan Chemical Corp. v. Hawthorne Borough, 404 N.J.Super. 401 (App.Div. 2009). In Pan Chemical, the court held that it could not take into account contamination in evaluating the property unless the Industrial Site Remediation Act (“ISRA”) was triggered. For a discussion of Pan Chemical, click here.

The statute also demonstrates the importance of obtaining counsel to litigate a tax appeal for industrial property. Particularly, when the property may be subject to the new law. If you are considering filing an appeal for industrial or commercial property, do not hesitate to contact Marshall Kizner at (609) 219-7449.

Marshall Kizner is an Associate in Stark & Stark's Lawrenceville, New Jersey office concentrating in Bankruptcy & Creditors Rights. For questions, or additional information, please contact Mr. Kizner.

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Like most areas of the law, court decisions and new legislation impact the rights of property owners as they navigate the tax appeal system.  Among the more notable changes that occurred in the later part of 2012 which will have an impact on tax appeals filed for 2013 are the following:

• On January 17, 2013, the New Jersey Supreme Court ruled that naming the wrong plaintiff in a tax appeal complaint is not always a fatal flaw requiring the case to be dismissed.  In Prime Accounting the property owner filed an appeal and attached the tax assessment card to the complaint (as required by the court rules). However, the tax assessment card had the wrong company listed as the property owner and when the tax complaint was filed, the name from the tax assessment card, not the current owner of the property, was identified as the plaintiff in the case. The tax court dismissed the complaint, and the Appellate Division affirmed the dismissal. When the case reached the New Jersey Supreme Court, the lower court decisions were reversed and the tax appeal was reinstated. In reviewing the facts, the New Jersey Supreme Court noted that the municipality was aware which property was under appeal since the tax card was attached to the complaint, and more important, the new owner asked to tax office to change the name of the owner on the tax records.  As a result, the New Jersey Supreme Court held that the mistake did not deprive the Tax Court of subject-matter jurisdiction and the complaint could be amended to correct the mistake. In addition, the amendment would relate back to the original filing date.  It is important to note that this case did not expand the definition of an "aggrieved taxpayer" or who has standing to appeal.  Rather, the case makes it clear that certain types of errors can be corrected with relation back to the original filing date. To read the case, Click Here.

•  On December 7, 2012, the Tax Court found that the dismissal of a tax appeal by the Morris County Tax Board fell short of providing the taxpayer with the “square deal” that the New Jersey legislature had hoped for.  At the tax board hearing, the property owner’s appraiser testified based upon an appraisal that contained some boiler-plate language indicating that the report’s “intended use was for the lender/client to evaluate the property.”  Despite the appearance by their appraiser and attorney, the Tax Board dismissed the appeal for lack of prosecution which, under New Jersey law, is a dismissal with prejudice.  The Tax Court reversed the Tax Board noting that tax appeals are being dismissed for lack of prosecution far too often by local tax boards and the remedy should only be granted in the “most egregious circumstances”.  It is important to note that this decision does not change the burden of proof in a tax appeal case, or change the requirement that a property produce some evidence at the tax board hearing.  To view the case, Click Here.

• On November 15, 2012, the Tax Court once again held that a contract purchaser does not have standing to file a tax appeal. Prior to the April 1 tax appeal deadline, a contract purchaser filed a complaint to appeal the tax assessment of the property it was acquiring. The sale closed on May 30, 2012. The municipality filed a motion to dismiss the complaint since at the time of the appeal, the contract purchaser was not an “aggrieved taxpayer” since it had not paid any taxes on the property.  The Tax Court agreed with the municipality and dismissed the appeal. Although this case did not change the law, it drives home the lesson that appealing parties must meet the definition of an aggrieved taxpayer to have standing to appeal.  If a contract purchaser wants to have the tax assessment appealed, he or she must make certain the contract requires the seller to file an appeal and, once filed, expressly set forth each party’s rights and obligations (ie. who can settle the case). To view the case, Click Here.

• Hurricane Sandy visited New Jersey after the applicable valuation date of October 1, 2012.  As a result, Hurricane Sandy will not be relevant in most tax appeals.  However, if an owner complied with the requirements of N.J.S.A. 54:4-35.1 and sent a written notice to his or her tax assessor before January 10, 2013, he or she will be able to take advantage of a little know law which will make Sandy's damage relevant to the 2013 tax appeal.  Click here for more details on this statute.  By moving the valuation date from October 1, 2012 to January 1, 2013, the damage from Sandy can be taken into account when valuing your property.  The Tax Court has not issued many decisions interpreting this law, but Hurricane Sandy is likely to change that as cases progress through the court.

Tim Duggan and Marshall Kizner are members of Stark & Stark's Eminent Domain and Real Estate Tax Group in our Lawrenceville, New Jersey office.  For questions or additional information, please contact Mr. Duggan or Mr. Kizner.

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