New Jersey Lawyers Blog

Published on: March 19, 2017

Equitable Relief in the Chancery Division of New Jersey’s Superior Court

courthouse-303370__340-300x192 The General Equity Part of the Chancery Division of the Superior Court of New Jersey has the ability to grant “equitable” relief in addition to money damages, making it a desirable venue for business dispute.

Where a New Jersey lawsuit is heard is determined by New Jersey’s Rules of Court. Civil actions are heard in the various divisions of the Superior Court. Civil cases with disputes of up to $3000 are heard in the Small Claims Division of the Superior Court. Civil cases with disputes of up to $15,000 are heard in the Special Civil Division of the Superior Court. All other cases are heard in either the Law Division or Chancery Division, General Equity Part. The Law Division hears lawsuits which seek primarily “legal” damages – ie., suits which are primarily for money. The General Equity Part of the Chancery Division hears “actions in which the plaintiff’s primary right or the principal relief sought is equitable in nature.” Thus, in order to understand what is heard in the Chancery Division, we need to take a brief trip back to Merry Olde England and talk about the split between courts of “law” and “equity.”

The law courts in England gave “legal” relief, but developed a complex system of writs. If a suit did not fit precisely within the requirements of one of the writs, relief was denied. The office of the chancellor developed even prior to the Norman Conquest in 1066 as the “king’s conscience,” and could grant relief when remedies at law were inadequate. The chancery, or equity, court eventually carved out its own sphere, creating a rigid and artificial barrier between law and equity, creating a situation in which litigants sometimes could not find relief in either. Charles Dickens described the effects well in his classic novel Bleak House:

Published on: March 17, 2017

Money Damages in Business Litigation

by Maurice W. McLaughlin

“Legal” and “Equitable” Remedies in New Jersey Courts

Business litigation involves a claim that one party caused business harm to another, and sometimes counterclaims that each side caused the other harm. At the end of the case, if a court (whether a judge or jury depending on the facts and procedural status of the case) finds that one side did, in fact, harm the other, it will award a remedy. Through ancient legal doctrine stretching back to Merry Olde England, the law recognizes two types of relief, legal remedies and equitable remedies.

Legal relief is at is essence money damages. A civil action for legal relief involves a claim that a party has been wronged in violation of the law, and the harm can be compensated with an award of money damages. For example, a contract was breached by party B, and as a result party A suffered $1000 in lost damages; when the court awards the party A $1000 in damages, that is a “legal” remedy, and the damages are “compensatory” damages. Let’s say instead that Party B defrauded Party A, and that Party A suffered $1000 in damages. The $1000 party A lost are still compensatory damages. However, in fraud punitive damages are available if the fraud was especially egregious. So let’s say the court awarded another $2500 in addition to the $1000 compensatory damages to deter Party B from ever defrauding anyone again. The $2500 are punitive damages.

Published on: March 16, 2017

Solid Waste Transportation: CPCN’s and Other Requirements

by Pauline M.K. Young

eighteen-wheeler-614201__340-300x225 The New Jersey Department of Environmental Protection (“NJDEP”) regulates, monitors, and enforces a wide range of environmental laws throughout the State, including things such as the transport and disposal of solid waste.

The State Legislature and the NJDEP have enacted numerous laws, rules, regulations, and reporting requirements for waste transporters in an effort to ensure the safe, clean transportation of waste throughout the State.

The process for becoming a licensed waste transporter generally begins with the formation and registration of a business entity such as corporation or limited liability company with the State of New Jersey and obtaining a federal Employer Identification Number (FEIN or EIN) with the Internal Revenue Service. Next the company would need to obtain an A-901 license. Obtaining that license from the NJDEP can be a long and invasive process requiring a significant amount of information to be provided to the NJDEP in addition to fingerprinting and background checks for all owners and key employees. It is not uncommon for this process alone to take approximately one year.

Published on: March 10, 2017

Age Discrimination Under Federal and New Jersey Employment Law – Illustrated by Two Recent Cases

by Maurice W. McLaughlin

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Our employment law department represents private sector employers and public and private sector employees. One of the most prevalent claims we see is age discrimination in the workplace.

Age Discrimination Laws

Age Discrimination is illegal under both state and federal law. New Jersey employment law prohibits this under the Law Against Discrimination. The Federal law prohibiting age discrimination is the Age Discrimination in Employment Act, or the “ADEA.” Both laws prohibit discriminating against employees or job applicants because of their age, although the coverage is much different. Two recent cases illustrate these differences.

Published on: March 8, 2017

Enforcing Judicial Consent Orders in Solid Waste and Recycling Cases

by Maurice W. McLaughlin

recycling-1341372__340-300x300 New Jersey heavily regulates the transportation and disposal of solid waste (garbage) and recycling. These activities are governed by New Jersey’s Solid Waste Management Act. It is also governed by regulations promulgated by New Jersey’s Department of Environmental Protection (known as the DEP). The Appellate Division of the Superior Court of New Jersey had the opportunity recently to review these matters in connection with the actions of a recycling company in Newark.

In the unpublished case of State, Department of Environmental Protection vs. T. Fiore Demolition Company, two companies (T. Fiore Recycling Corporation and T. Fiore Demolition Company, collectively referred to as “Fiore,” both corporations) obtained approval from the DEP to operate a class B recycling center and receive up to 1865 tons of Class B recyclables, and to store up to 30,314 cubic yards of it. Class B recyclables, also known as “construction and demolition” or “C&D” recyclables, include concrete, asphalt, cinder block, brick, wood, street sweepings, creosote wood and roofing shingles at a location in Newark which the court called Site A. Fiore’s business model was to be paid to take the recycling, and then to process and sell it for use in road and other construction projects. Next door to Site A was Site B, 26 acres Fiore leased form the Newark Housing Authority. Fiore did not have approval from the DEP for operations or storage on Site B, even though it was next door to Site A. As time went on, Fiore used Site B to store recyclables. At one point the pile of recyclables at Site B reached one hundred feet high.

This use prompted the DEP to visit the site, at which point it discovered the violations. The DEP issued a notice of violation, and litigation ensued. The DEP entered an administrative cease and desist order requiring Fiore to immediately cease accepting any materials on Site B, and to only accept one truckload at Site A for every three it removed from the combined sites. It was after this order that it was discovered that the stockpile had doubled in size to 100 feet.

Published on: March 6, 2017

How and When a Landlord’s Claims are Capped Under the Bankruptcy Code

by Robert Chewning, Esq.

Our bankruptcy attorneys represent debtors and creditors in New Jersey in Chapter 7, 11, or 13 bankruptcies. Recently, a Bankruptcy Court within the Third Circuit had the opportunity to clarify the cap placed on landlords’ bankruptcy claims under 11 U.S.C. 502(b)(6).

In the case of In re Filene’s Basement, LLC, the Bankruptcy Court reviewed the reach and application of 11 U.S.C. 502(b)(6) on a landlord’s potential claims. The Code section provides a cap to a landlord’s claim for “rent reserved” as a result of a debtor’s termination of a lease. The claim for “rent reserved” is capped at the greater amount of either one year of rent or fifteen percent of the remaining term of the lease – not to exceed three years. The time to calculate this claim for damages is from the earlier date, either the date of the filing of the petition or the date on which the landlord repossesses the property and/or the tenant surrenders the property. The landlord also retains a claim for unpaid rent prior to the earlier of those two dates.

This cap does not apply to all landlord claims as a result of a breach of a lease. In fact, courts are typically faced with determining whether landlord claims should be subject to the cap. The Bankruptcy Court in In re Filene’s Basement, LLC was faced with deciding whether the additional claims asserted by the landlord should be considered outside of the cap. The claims were for: (1) the cost to remove furniture left by the tenant; and (2) the cost to remove a mechanic’s lien as a result of the tenant’s nonpayment to a contractor. In reviewing these claims, the Court adopted the Ninth Circuit’s narrow interpretation of the 11 U.S.C. 506(b)(6) in In re El Toro Materials Co., Inc., which asked: “Assuming all other conditions remain constant, would the landlord have the same claim against the tenant if the tenant were to assume the lease rather than rejecting it?”

Published on: March 2, 2017

Tax Exemptions for Non-Profit Businesses

by Pauline M.K. Young

volunteer-1326758__340-300x236 A nonprofit organization (“Nonprofit”) is an entity which puts its surplus revenue back into the entity, dedicating those funds to further the goals of the organization, as opposed to paying profits to owners or shareholders. Oftentimes Nonprofits are formed for a public welfare cause or interest or to advocate a certain ideological agenda. By way of example the American Red Cross, Make-a-Wish Foundation, and Greenpeace are all Nonprofits. While charitable organizations make up a large percentage of Nonprofits, there are many types of Nonprofits which serve selective groups or communities and which are not necessarily “charity” groups. For instance, credit unions and certain industrial or business associations can be Nonprofits as well.

The IRS provides for tax exemptions for many Nonprofits. For example, a Nonprofit may seek a federal income tax exemption if it is a corporation organized and operated exclusively for religious, charitable, scientific, public safety, literary or education purposes. Hospitals, schools, and credit counseling organizations are often tax-exempt Nonprofits as well. Some other examples of organizations which may obtain tax exemption include labor groups, business leagues, political groups, social clubs, mutual insurance companies, and agricultural organizations.

The application process to become tax-exempt as a Nonprofit can be complicated and onerous. First, the organization needs to be formed, meaning that the formal requirements for forming a business – such as incorporating that business with the State, creating By-Laws, Articles of Incorporation, and/or Operating Agreements, applying for a Federal Employer Identification Number (“EIN” or “FEIN”) with the IRS, etc. – must be completed. In New Jersey, generally the Nonprofit must also register with the New Jersey Charities Registration Section.

Published on: February 28, 2017

New Case on Teacher Arbitration from New Jersey Supreme Court

by Maurice W. McLaughlin

chalk-1551571__340-300x229 In the case of Bound Brook Board of Education v. Ciripompa, the Supreme Court reviewed the extreme deference which courts are required to give arbitrator’s decisions. However, the Supreme Court explained that this deference to the arbitrator is not unlimited.

In the Bound Brook case, two tenure charges were filed against a teacher. The teacher, who had tenure, had allegedly been engaging in pervasive misuse of his employer-issued computer and inappropriate conduct toward female coworkers, allegedly often in the presence of or involving students. After an investigation, the Board determined that the teacher should be fired and tenure charges were filed against the teacher.

The first count of the tenure charges was “conduct unbecoming.” The second count was not labeled, but contained allegations of inappropriate conduct and harassing behavior toward coworkers, some of a sexual nature, and occasionally involving students. Like the local board of education, the New Jersey Commissioner of Education likewise found dismissal warranted and submitted the charges for review by an arbitrator pursuant to the TEACHNJ Act.

Published on: February 23, 2017

Estate Planning for Digital Accounts

by Jennifer C. Meusel

When you think about estate planning, most people think about their physical possessions, their real estate and their financial assets, but in this day and age, you also need to consider your digital assets. You may have as much as 20 years of active digital presence. This can include documents, photos, and on-line accounts such as Facebook, Google, back-up services, Linked In, Twitter, Snapchat, etc. Such digital accounts generally have no expiration date.

It is important to consider what will happen when you die to your accounts and the data contained them. It is important to consider what will happen if you do nothing, and decide if that is what you want to happen. It is an often overlooked part of estate planning.

Many online accounts allow you plan during life for what will happen to the account upon death. However, this is all very new and some of the most popular online accounts do not provide a way to plan for what will happen to the account upon the account owner’s death. For any accounts which do not allow you to plan, it is desirable to establish a plan now with a trusted loved one.

Published on: February 21, 2017

Recent Decision by New Jersey’s Appellate Division Clarifies Requirements for Rice Notice to Employee Whose Employment May be Terminated

by Maurice W. McLaughlin

student-2052868__340-300x198 Our employment attorneys represent New Jersey public sector employees in disputes with their governmental employers. One area in which we frequently see disputes is the failure to give a “Rice Notice” to employees whose employment may be affected by an action by their governmental employers.

New Jersey employees, including non-tenured employees, have the right to advanced notice whenever a governing body, such as a town council or a board of education, is going to discuss the employee’s employment. This notice is called a “Rice Notice” after the case of Rice vs. Union County Regional Board of Education, which upheld the right. Normally, under New Jersey’s Open Public Meetings Act, personnel actions must be discussed in closed session unless all the affected employees request in writing that the discussion be held in the open during the public session of the meeting. The Rice Notice gives the employee the notice they need to actually exercise that right.

In the recent case of Kean Federation of Teachers vs. Morell, the Appellate Division of the Superior Court of New Jersey had the opportunity to take a fresh look at the requirements for a Rice Notice. In that case the Court was faced with a situation where the Board of Trustees of Kean University delegated the task of evaluating recommendations by the University President for the retention or dismissal of faculty members. The subcommittee evaluated the University President’s recommendations and made its own recommendations to the Full Board. The full Board of Trustees then voted on those recommendations without discussion. The Board argued that because it did not actually discuss any employment matters, but just voted without discussion,a Rice Notice was not necessary.