New Jersey Lawyers Blog

Published on: June 1, 2018

The Use of Custom and Usage in Interpreting Commercial Contracts Under New Jersey Business Law

Enforceable contracts are the bedrock of a strong economy. If contracts were not enforced, parties could not rely on the other side performing because there would be no remedy if they breached. Therefore, commerce would break down. Enforceable contracts are so important to the economy, in fact, that the freedom to contract is included in both the New Jersey and United States Constitutions. Before a contract can be enforced, however, the parties and the reviewing court must figure out what the contract means. When the terms are clear this normally isn’t a problem. However, when the contract is ambiguous, or even just a part of it is unclear, the question becomes what evidence may be admitted to determine the meaning and intent of the contract.

As I’ve written earlier, New Jersey courts generally adhere to the “parole evidence rule,” which holds that when there is a clear, unambiguous contract, extrinsic, or external, evidence beyond the four walls of the contract is inadmissible to prove what the contract means. However, in New Jersey business law, the exceptions come close to swallowing the rule. Indeed, the New Jersey Supreme Court held as far back as 1953, in the case of Atlantic Northern Airlines v. Schwimmer, that all evidence is relevant if it will assist the trier of fact in determination what the parties to a contract intended and what the contract means – even if that evidence is extrinsic.

The question, then, is what sort of extrinsic evidence is admissible? In the case of commercial contracts, one source of evidence is custom and usage.

Published on: May 21, 2018

Pay for Suspended Teachers in New Jersey

by Pauline M.K. Young

back-to-school-1576791__340-300x200 Under New Jersey employment law, specifically Section 6-14 of Title 18A of New Jersey Statutes, tenured teachers may be suspended on disciplinary charges with or without pay while their tenure charges are pending a determination. However, the statute provides that if an arbitrator has not issued a decision on the charges by the 120^th day of the suspension, the board of education is required to pay the suspended teacher beginning on the 121^st day until the arbitration decision is issued. If the charges are dismissed at any stage, the teacher will be reinstated with full pay for the entire period of her suspension. If the charges are dismissed and the board of education appeals, and it continues the suspension during the appeal, the teacher must receive full pay during the appeal. If the charges are not dismissed at the arbitration and the employee appeals, she is not entitled to pay while the appeal is pending, but if the appellate court orders her to be reinstated she will then be entitled to her lost pay for the entire suspension. (The board is required to deduct any salary the employee was paid while she was suspended from what the board is required to pay her.)

The Appellate Division of New Jersey’s Superior Court, New Jersey’s intermediate appeals court, recently faced a situation not expressly covered by the statute – a situation where a tenured employee is suspended, the arbitrator upholds the termination, the employee appeals, and the appeals court does not order that the employee be reinstated but instead remands the case for a new arbitration hearing. In that case, Pugliese v. State-Operated School District of the City of Newark, two tenured teachers were suspended without pay pending resolution of their disciplinary charges. They contested the charges, and an arbitrator holding a hearing under New Jersey’s TEACHNJ Act of 2012 upheld the charges and ordered the teachers dismissed. The teachers appealed. The Appellate Division reversed the arbitrators’ decisions. However, it did not order reinstatement, but rather remanded the cases for further proceedings. The appeal, filed by the teachers, stretched the suspension well past the 120 day mark. The teachers argued that they should be paid while the proceedings continued, but district refused because it was the employees who appealed and the charges were not dismissed. The Commissioner of Education agreed. The teachers appealed.

The Appellate Division held that even though it was the employees who appealed and the tenure charges were not dismissed, the district had to pay the teachers during their suspension.

Published on: May 16, 2018

Construction Lien Law: Timing is Key

by Robert Chewning, Esq.

McLaughlin & Nardi’s New Jersey construction attorneys represent owners, contr house-construction-3370969__340-300x197 actors and building suppliers in the prosecution and defense of construction lien claims.

As discussed in McLaughlin & Nardi’s overview of construction liens, they can be powerful tools for construction contractors, subcontractors, and suppliers who are experiencing difficulties in getting paid for the work that they have performed.

However, when considering whether to proceed with filing a construction lien for either a commercial or residential project, it is important to know that the contractor (“claimant”) act promptly once it starts to experience payment issues.

Published on: May 14, 2018

Executors Should Protect Themselves By Properly Closing Out the Estate

by Jennifer C. Meusel

hand-229777__340-300x215 The last acts of an Executor of an estate are often making final distributions to the beneficiaries of the estate. But beware, in New Jersey, before making distributions, an Executor should require each beneficiary to provide a properly executed refunding bond and release.

Under New Jersey law, N.J.S.A. 3B:23-24, the executor or personal representative of an estate is required to take a refunding bond upon making a distribution pursuant to a dececendent’s Last Will and Testament. The same statue also requires that the refunding bond be filed with the surrogate who probated the decedent’s Will.

After all the estate assets have been collected, all debts of the estate have been paid, and a determination as to what each beneficiary is entitled to receive has been made, the executor or personal representative of the estate must prepare, or have the attorney representing the estate prepare, a refunding bond and release for each beneficiary which states, among other things, what the beneficiary will be receiving as their distribution from the estate.

Published on: May 8, 2018

Governor Murphy Signs Diane B. Allen Equal Pay Act Into Law

by Maurice W. McLaughlin

dollar-1362243__340-300x200 Fulfilling one of his campaign promises, Governor Phil Murphy signed the Diane B. Allen Equal Pay Act on April 24, 2018. The Act amends New Jersey’s Law Against Discrimination. The main purpose of the Equal Pay Act is to close the pay gap between men and women. Governor Murphy explained, “From our first day in Trenton, we acted swiftly to support equal pay for women in the workplace and begin closing the gender wage gap. Today, we are sending a beacon far and wide to women across the Garden State and in America – the only factors to determine a worker’s wages should be intelligence, experience and capacity to do the job. Pay equity will help us in building a stronger, fairer New Jersey.”

While its main purpose was to protect women and close the gender pay gap, the Act protects against discrimination in pay because of an employee’s immutable characteristic, such as race, religion, sexual orientation, age, etc. The bill strengthens the Law Against Discrimination in several ways, and makes it one of the strongest anti-discrimination laws in the United States.

Pay Disparities Illegal. The Act makes it illegal to pay members of a “protected class” at compensation rates, including both pay and benefits, less than other employees not in a protected class. Protected classes include not just gender, but also race, religion, national origin, ancestry, age, marital status, civil union status, domestic partnership status, affectional or sexual orientation, genetic information, gender identity, gender expression, disability, atypical hereditary cellular or blood trait, liability for military service, nationality, refusal to submit to a genetic test, or refusal make available the results of a genetic test to an employer.

Published on: May 1, 2018

Forming a Tax Exempt, Non-Profit Organization in New Jersey

by Maurice W. McLaughlin

volunteer-1326758__340-300x236 Many people have the impulse to help their fellow man and to serve worthy causes. One of the most important tools to achieve this end is the non-profit, tax exempt corporation. Forming this type of entity allows funds to be raised without being taxed, permits contributors to deduct their contributions from their income tax, and protects the people working for the organization from personal liability. However, the process can be complex. Our attorneys help people and charitable organizations navigate this complex area. The basic steps are outlined below.

Incorporation. The first step is to incorporate. The primary protection offered by the corporate form is that it protects the people who run and work for the non-profit from personal liability. The organization is incorporated with State of New Jersey, and it must be designated as a non-profit. A Federal Employer Identification Number (EIN) must be obtained as well.

Trustees and Bylaws. To have a non-profit corporation, there must be a board with at least three trustees, each of whom must be at least 18 years old. The non-profit must also have bylaws, which are essentially the organization’s “constitution” — the bylaws set the entity’s purpose, the responsibilities and powers of the people who run the non-profit, and how it will be run.

Published on: April 13, 2018

United States Supreme Court Issues Important Wage and Hour Law Decision

by Maurice W. McLaughlin

Wage and hour claims dealing with overtime requirements are among the most contentious in employment law litigation. The United States Supreme Court recently issued a decision exempting one narrow class of employees (“service advisors” at automobile dealerships) from coverage. While the specific effect of the ruling is limited, the reasoning behind it may signal a shift in the way the Supreme Court interprets the exemptions from overtime requirements in federal employment law.

The Federal Fair Labor Standards Act governs wage and hour issues for most employees in the United States. Generally speaking, unless an employee is an “exempt employee” she must receive minimum wage for all hours worked, and overtime pay at the rate of one and a half times her normal pay rate (known as “time and a half”) when she works more than forty hours in a week. Broad categories of employees are exempt, however. The major categories of exemptions are professional, executive and administrative employees. Many other smaller or sub-categories of employees are also exempt.

New Jersey’s Wage and Hour Law provides similar coverage for New Jersey employees, who receive protection under both state and federal law. Both laws also prohibit retaliation against employees who file complaints about violations (although there are technical requirements about what constitutes a “complaint”), and both require the employer to pay the employee’s attorneys fees if she prevails in a lawsuit. The main difference is that the Fair Labor Standards Act provides for double damages if the violation is “willful” – this means that if the employer willfully underpaid the employee by $1000, it must pay her $2000 in damages plus reimbursing her for her attorneys fees. The New Jersey Wage and Hour Law, on the other hand, does not provide for double damages.

Published on: April 9, 2018

Appellate Division Rules on New Jersey Employment Discrimination Law in the Age of Telecommuting

by Maurice W. McLaughlin

In 1945, New Jersey’s Legislature enacted the Law Against Discrimination. It has been repeatedly revised to increase its inclusion and scope. However, its goal remains the same today as it was in 1945: “nothing less than the eradication of the cancer of discrimination in the workplace.” The Law Against Discrimination declares that a workplace free from discrimination is a civil right in New Jersey.

The main section of New Jersey’s Law Against Discrimination dealing with employment bars employers from firing, refusing to hire, or discriminating against employees in their pay or other terms, conditions or privileges of their employment because of their “race, creed, color, national origin, ancestry, age, marital status, civil union status, domestic partnership status, affectional or sexual orientation, genetic information, sex, gender identity or expression, disability or atypical hereditary cellular or blood trait of any individual, or because of the liability for service in the Armed Forces of the United States or the nationality of any individual, or because of the refusal to submit to a genetic test or make available the results of a genetic test to an employer.”

When the Legislature enacted the Law Against Discrimination, it listed its purpose as protecting “inhabitants” of New Jersey. However, every other section of this long Law prohibits discrimination against “any individual” or “any person.” In 1945, this discrepancy was not an issue. However, in today’s cyber-world, a conflict inevitably arose between the term “inhabitants,” and “any individual” or “any person” in the context of telecommuting. The Appellate Division of New Jersey’s Superior Court recently issued an unpublished opinion helping to clarify this issue.

Published on: March 16, 2018

The Reach and Limits of the Parole Evidence Rule in New Jersey Contract Law

by Maurice W. McLaughlin

laptop-3175111__340-300x200 New Jersey Courts have followed the Parole Evidence Rule since at least 1882. The Parole Evidence Rule holds that outside (or “extrinsic”) evidence is not allowed to alter the terms of a contract – in other words, the Parole Evidence holds that, the meaning of a contract is contained within its own four walls. Unlike most rules with the word “evidence” in it, the Parole Evidence Rule is not actually part of the Rules of Evidence. In fact, it is not really an evidence rule at all. Rather, it is a substantive rule of law which holds that once the parties sign a contract, their prior negotiations are irrelevant because they have selected the terms of their agreement.

The first requirement for the Parole Evidence Rule to be invoked is that there must be a written contract – the Parole Evidence Rule only applies to agreements which have placed into a written contact. Second, the written contract must be intended as the parties’ final agreement. While this may seem self-evident, in the early stages of commercial transactions parties often use “letters of intent” which are not intended as the final agreement, but only as the broad outlines of how the parties foresee their eventual agreements turning out. Finally, the contract must be a “fully integrated” agreement. This means that the contract must cover all parts of the transactions, not just some elements; the Parole Evidence Rule does not bar extrinsic evidence in the interpretation of “partially integrated” contracts.

Limitations on Application of the Parole Evidence Rule

Published on: March 13, 2018

McLaughlin & Nardi, LLC Congratulates its Newest Member, Pauline Young

by Maurice W. McLaughlin

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McLaughlin & Nardi, LLC, welcomes aboard the firm’s newest member, Pauline Young. Pauline M.K. Young joined us when she was a student at New York Law School. For some reason, after getting to know us she decided to stay. We could not be happier. Besides being an excellent attorney, Pauline is, as Reggie Jackson said, the “straw that stirs the drink.” She is detail oriented, but excels at working with our staff, attorneys, clients, adversaries, judges and juries, and keeping us on an even keel in the most stressful of environments.

Pauline’s practice includes employment law, commercial law, insurance and professional malpractice, tax litigation, business and real estate transactions, solid waste law (including both litigation, transactions and A-901 applications), among a diverse set of cases she has handled. To say this, however, is give a dry listing of her experience and ignore where her talents lie. Pauline can be handed the most complex set of problems, figure them out, determine a winning strategy, and pursue it to a successful conclusion.

For example, in one recent case Pauline stepped into a complex construction defect/commercial landlord-tenant case as it was about to go to trial. She took literally tens of thousands of pages of documents, organized them – but more importantly, in an extremely short time digested and understood them – and put together a winning trial strategy in a case where each side introduced more than five hundred exhibits over two months in a hard fought trial.