Attorney Jeffrey Heldman recently obtained a $300,000 judgment for a client following a four-day trial in Bergen County Superior Court. In a case that rested upon the credibility of the witnesses (including competing handwriting experts), Mr. Heldman successfully proved to the court that the disputed debt was due. Key to this result was Mr. Heldman’s cross-examination of both the defendant, and the defendant’s handwriting expert witness, which led to the court giving less weight to the testimony of the defendant and his expert. In a case where the believability of the witnesses was the critical factor, such a finding was essential to the success of the firm’s client. The case was tried in the before Judge Mary E. Thurber. Please be advised that every case is different and has a unique set of facts. Therefore, past results are not necessarily indicative of the outcome in any other matters.
In a recent unpublished decision of the Appellate Division, a construction management company was seeking to recover 50% of the profits from the construction of two new buildings in Montclair. The Plaintiff claimed that he had brought the Defendant into the project because the Plaintiff did not have the bonding capacity or experience needed in order to be awarded the project, and also participated in some of the pre-construction services. While there appears to have been some verbal discussions regarding a possible joint venture, nothing was ever put in writing and the Plaintiff did not actually participate in the construction of the buildings.
In finding that there was no joint venture created, the court found that the Plaintiff was, "unable to contribute money, property, effort, knowledge, skill or other asset to the common undertaking. Plaintiff's contribution to the joint venture seems to have been simply connecting [the owner and the Defendant] to perform the necessary work." The panel affirmed the trial court and found that the Plaintiff did not make any substantial contribution to the venture, and lacked the relevant construction experience and bonding capacity for the project. Finally, the court cited Supreme Court authority for the proposition that there cannot be joint venture unless there is an agreement to share not just profits, but also losses, and that was not present here. Consequently, the mere referral of a customer was found to be an insufficient basis to form a joint venture. (The Holder Group, Inc. v. Pike Construction Co., LLC, et. al.) New Jersey Residential home improvement contractors are required to provide clients with an estimated timeframe for the completion of the work. In a recent unpublished case from the Appellate Division, a contractor provided the homeowner with a 45-day time period from the date of the contract to complete an addition. However, due permit delays and other reasons, the work did not begin until months later. Despite the contractual time-frame not being met, the court found that there was no violation of the CFA, stating that the homeowners, "were aware that ... [c]onstruction began approximately 120 days from the contract date, yet defendants did not cancel the contract or allege a breach at that time." Furthermore, although a change order for additional work was never signed by the homeowner, a regulatory violation of the CFA, the court found that since there was no ascertainable loss suffered by the homeowner as a result of the regulatory violation, the contractor was not liable for damages under the CFA. (MYCWHome, LLC v. White, et. al.)
A recent non-precedential Appellate Division case serves as a reminder that not all arbitration provisions are drafted equally. At issue in a residential construction suit was the defendant-contractor's arbitration provision which required an aggrieved homeowner to file a claim with the American Arbitration Association in lieu of filing an action in court. However, the provision at issue did not contain specific language which would have informed a reasonable homeowner that by going to arbitration they would be "waiving a right to seek relief in a court of law." (see Atalese v. U.S. Legal Servs. Grp., 219 N.J. 430 (2014)). This proved fatal to the defendant-contractor's invocation of arbitration, and the defendant-contractor's motion to compel arbitration was reversed and the matter remanded to the trial court for (expensive) litigation. This serves as a reminder for all businesses and individuals with arbitration clauses in their contracts to have same reviewed by an attorney knowledgeable on the subject matter. (Becker v. Ollie Slocum and Son, Inc.)
A group of homeowners joined together to sue the builder of their development for selling them homes with infiltrator septic systems instead of stone and pipe septic systems, which allegedly have a substantially-shorter useful life. Since many of the homes were sold over ten years prior to the filing of the complaint, the Plaintiffs only filed Consumer Fraud Act ("CFA") claims and did not file faulty design or construction defect claims. However, the Appellate Division affirmed the ruling of the trial judge that all claims must be dismissed based upon the statute of repose. Noting the broad application of the statute of repose, that it covered all claims regardless of how a plaintiff couches the cause of action, citing the legislature's use of the language that no action could be brought after ten years, "whether in contract, in tort, or otherwise." (Allen, et. al. v. Beazer Homes Corporation)
In an interesting unpublished Law Division case, tenants argued that a landlord violated the City of Newark's rent control ordinance because it was trying to evict them for failure to pay "additional rents" (such as late fees and legal fees for collection of past-due rents) which would increase the total rent above the cap set forth in the ordinance. The Judge agreed with the tenant’s argument that the landlord could not insist on the additional rent as part of a summary dispossess (eviction) action, which is an important factor in this case as the only remedy sought in the case was to evict the tenants for failure to pay rents. The Court wrote that its holding only applies in a summary dispossess action and that the landlord could file suit pursuant to contract law in the law division seeking a monetary remedy. The unpublished nature of this decision means that it is not binding upon other courts, but it will be interesting to see if the Court's clarifying dicta holds up in an action to recover the additional rent because if the lease violates the law per the rent control ordinance, then it would follow that the portion of the contract that is in violation of the law would be unenforceable. (Opex Realty Management LLC v. Taylor
The Appellate Division recently ruled on Restrictive Covenant Agreements ("RCAs"). These agreements are also known as non-competes or non-solicitation agreements. The first step in any of these types of cases is for the business to prove that it has a legitimate business interest in having a restrictive covenant with its employee or ex-employee. In ADP v. Kusins, et. al., the business cleared the first hurdle. In the business' RCA, it prevented ex-employees, "from soliciting any actual or prospective … client, regardless of the employee's geographical location or personal contact with the client, for a twelve-month period after termination." The Court here found these restrictions were too broad. However, the court did not void the entire RCZ, but instead curtailed the terms of the restrictions.
First, the court allowed ex-employees to be prohibited from soliciting any "actual clients" whom they had prior contact with while at the former business. Second, the court only permitted restricting solicitation of prospective clients, "if the employee gained knowledge of the potential client while at ADP and directly or indirectly, solicits that client after leaving." Third, with regard to the non-competition portion of the RCA, the Court found a business could, "restrict its former employees, for a reasonable time, from providing services to a competing business in the same geographical territory in which the employee operated while at ADP." The Court did not define what a "reasonable time" meant but in the particular RCA before the court, the length of the restriction was 12 months. (ADP v. Kusins, et. al.) In a recent unpublished decision from the Appellate Division, the court reversed the granting of a zoning variance and remanded the matter back to the local zoning board. A Morristown homeowner sought, and received, approval from the zoning board to convert a two-family residence into a three-family residence. However, the township's approval was conditioned on the property being occupied by the owner. On appeal, this residence condition was overturned with the court stating that, "a fundamental principle of zoning that a zoning board is charged with the regulation of land use and not with the person who owns or occupies the land," and, "conditions which make a variance personal to the property owner are invalid." Since the record reflected that many of the members of the board based their approval votes on the fact that the property would remain owner-occupied, the Appellate Division remanded the matter back to the local zoning board for a rehearing and new vote now that the residence requirement was determined to be impermissible. (Kiehn v. Mongey, et. al.)
In an unpublished decision, the Appellate Division found that a commercial tenant could be evicted where although there were some minor issues with the building, such issues did not rise to the level of uninhabitability. First, the court confirmed that the case of Marini v. Ireland, 56 N.J. 130 (1970) is applicable both to residential and commercial tenancies. After doing so, the court referenced Berzito v. Gambino, 63 N.J. 460 (1973) which established the factors to consider when determining if a landlord breached the warranty of habitability. Specifically, those factors are as follows: 1. Has there been a violation of any applicable housing code or building or sanitary regulations? 2. Is the nature of the deficiency or defect such as to affect a vital facility? 3. What is its potential or actual effect upon safety and sanitation? 4. For what length of time has it persisted? 5. What is the age of the structure? 6. What is the amount of the rent? 7. Can the tenant be said to have waived the defect or be estopped to complain? and 8. Was the tenant in any way responsible for the defective condition? Based upon these factors, the appellate court determined that there was no breach of the warranty of habitability. Although the record did demonstrate that there were some roof leaks as well as some vegetable oil smells and leaks from the adjacent unit in the building, the evidence in the record demonstrated that such issues were mere inconveniences and did not rise to the level of uninhabitability. Consequently, the tenant was not entitled to an abatement and the matter was remanded so that a judgment of possession could be issued for the Landlord. (Linwood Avenue Development, LLC v. Advanced Professional Plumbing, Heating & Cooling, LLC)
Many construction contracts contain waiver of subrogation clauses. Where a property owner agrees to such a clause, that owner's insurer cannot seek reimbursement from the contractor for any payment made to the property owner, even if the claim was caused by the fault of the contractor. This was the situation in an unpublished Appellate Division case entitled National Fire Ins. Co. of Hartford, et. al. v. Cintas Fire Protection Inc. There, the sprinkler contractor's faulty work resulted in National Fire having to pay a claim for $1,500,000 in damages to the property, and National Fire sought to be reimbursed from Cintas Fire Protection for such payments. However, Cintas was victorious at both the trial and appellate levels in arguing that the waiver of subrogation clause in its contract was enforceable and insulated them from any subrogation claims.
Although Ohio law governed in this New Jersey court case, the court found that that both New Jersey and Ohio law were in agreement on the issue. In so doing, the court held that waiver-of-subrogation provisions were, in fact, valid under New Jersey law. Further, even if the contract in question could be characterized as one of adhesion, the contract was not unconscionable and the waiver of subgrogation provision was enforceable. Consequently, despite performing faulty work, the fire sprinkler contractor was not responsible for paying for any of the damages caused by its negligence. (Nation Fire Ins. Co. of Hartford, et. al. v. Cintas Fire Protection, Inc.) |
AuthorsPeter J. Vazquez, Jr. Archives
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