SILENCE DURING DWI STOP IS NOT EVIDENCE OF GUILT

The New Jersey Supreme Court ruled yesterday that silence by a defendant at or near the time of his arrest for DWI cannot be used as evidence of guilt or to impeach the person's credibility at trial.  In both the municipal court and Law Division, the judges had drawn an inference of guilt from the defendant’s silence at the accident scene and ruled that he had allowed operation of his vehicle by an intoxicated person in violation of N.J.S.A. 39:4-50(a). The Supreme Court reversed, holding that a person's federal constitutional and state statutory and common law right to remain silent applies in the context of New Jersey DWI cases and that silence by the defendant "at or near the time of arrest" may not be used to infer guilt or impeach credibility at trial.  After a lengthy discussion of an individual's right to remain silent, the N.J. Supreme Court held it was "undisputed" that until the defendant was questioned and issued a summons, he was not free to leave the scene of the accident.  Thus, Defendant’s silence occurred “at or near” his receipt of a summons at the scene for a violation of N.J.S.A. 39:4-50, the functional equivalent of an arrest.  In the Supreme Court's opinion, the defendant's silence should not have been used for any purpose assess guilt or credibility -- and the Law Division’s reliance on that silence constituted error.  The link to State v. Stas is:  http://www.judiciary.state.nj.us/opinions/supreme/A1411StatevManafStas.pdf

For more information, or if you have other legal concerns, email Gavin Handwerker, Esq. at gih@beinlaw.com.

IT'S REALLY QUITE SIMPLE: CONTRACTORS, TAKE OFF THE "ORS" AND GET YOURSELF A CONTRACT!

I am always amazed when contractors come into my office looking for legal advice and they cannot understand why in the world a customer is suing them for consumer fraud.  "We were friends", "He said we did not need a contract", "Why should I have to tell her what materials I'm using" - and the list of mishaps goes on and on and on (even though the N.J. Administrative Code spells out quite clearly what every home improvement contract must have).  If you care about your contracting business, then you need to start incorporating into your thought process scenarios where you can envision a problem (i.e., will I get sued for this?).  If you don't, then you (yes, you, individually) and your company are just asking for a problem.  I am a firm believer that everyone needs to read Sun Tzu, "The opportunity to secure ourselves against defeat lies in our own hands".  Had the defendant in Chaykowsky v. Marut followed that advice, they would not be looking at a judgment of over $2.5 million dollars!

In Chaykowsky, the defendant operated a landscaping business and entered into an agreement with a homeowner to build a number of projects for the agreed upon sum of $750,000.  Plaintiff paid the entire sum as invoices were presented.  Of course, the defendant never used a contract, never informed the homeowner about the materials it would supply and use at the job and never provided a schedule of when the project would begin and end.  Coupled with nearly $200,000 in additional monies that had to be paid, inexcusable delays by the defendant (or no work at all) and requests for even more money to complete the project, the plaintiff eventually got tired of the defendant's antics and sued the company and the individual owners of the company for violating the N.J. Consumer Fraud Act ("CFA").

We need not bother ourselves with the nitty gritty procedural aspects of the case but needless to say the defendant did not comply with its discovery obligations thus resulting in dismissal of their answer counterclaim and third-party complaint with prejudice.  The lower court also denied defendant's subsequent attempt to restore their pleadings and entered judgment against them in the amount of $2,510,798.22 - finding that plaintiff sustained compensatory damages in the amount of $802,774.00 and that defendant violated N.J.A.C. 13:45A-16.2(a)(12) by failing to have a written contract.  The lower court thereafter awarded plaintiff $1,605,548 in statutory damages (remember the CFA provides for TREBLE/TRIPLE damages), $98,612.50 in attorney's fees and $3,863.72 in costs (all recoverable by a plaintiff who successfully pleads consumer fraud).

The Appellate Division upheld the lower court's findings and judgment and remanded the case (meaning sent it back) to the lower court for the purpose of determining an appropriate award of legal fees and costs of suit to the plaintiff and to determine whether whether the individual defendants are liable for the plaintiff's damages.

Click on Chaykowsky v. Marut for the entire opinion. http://www.judiciary.state.nj.us/opinions/a2901-10.pdf

Are you a contractor who needs advice on how to protect your individual and business assets from attack.  Call us today and make an appointment to see how we can help.

For more information, or if you have other legal concerns, email Gavin Handwerker, Esq. at gih@beinlaw.com. 

REAL ESTATE – FORECLOSURE: DOCTRINE OF LACHES UTILIZED TO PREVENT HOMEOWNER FROM VACATING DEFAULT JUDGMENT

The doctrine of laches is an interesting concept.  Although pled with a fair amount of regularity, it is a defense to a claim that is employed sparingly.  The doctrine of laches can be defined as a bar to any delay in enforcing a known right which cannot be explained or excused and, as a result, the other party has been prejudiced because of such delay.  In this foreclosure action, PHH Mortgage Corp. v. Krowicki, laches is used to prevent a homeowner from vacating a default judgment of foreclosure entered in 2007 and well after the sale of the property to an innocent third party.  According to the Court, with all of Defendant’s posturing, motion practice, bankruptcies and attempts at mediation regarding the foreclosure, it never once challenged the default judgment until Defendant was out of options.  Unfortunately, Defendant waited too long to enforce a right which it was clearly aware of.  Similarly, the doctrine of equitable estoppel also barred relief for the same reason.  The court also rejected Defendant’s argument, raised for the first time on appeal (see the common thread running through the Defendant’s prosecution of this case), that the Plaintiff bank lacked standing because it did not possess the 1998 note when it filed the complaint, because the judgment and sale were entered and accomplished in 2007 and 2010, well before the Supreme Court adopted substantial amendments to the rules governing foreclosure actions.

Bottom line, DO NOT WAIT and hope for the best when it comes to a foreclosure action.  Contact competent legal counsel to find out your rights.

Click on PHH Mortgage Corp. v. Krowicki for the entire opinion.  http://www.judiciary.state.nj.us/opinions/a1654-11.pdf

For more information, or if you have other legal concerns, email Gavin Handwerker, Esq. at gih@beinlaw.com. 

CONTRACTS – LANDSCAPER NOT REQUIRED TO INDEMNIFY ASSOCIATION FOR LITIGATION COSTS BECAUSE IT DID NOT ASSUME RESPONSIBILITY FOR ASSOCIATION’S OWN NEGLIGENT ACTS

If you are involved in a service oriented business, you may very well have a contractual obligation to indemnify some of your customers for negligent acts.  Therefore, it is critical that you hire competent legal counsel who can identify pitfalls in an indemnity agreement and fight to protect you and your business from financial disaster when that provision comes into play.  A good example is the Franchini case.  In her complaint, Plaintiff Franchini claimed she injured herself when she slipped and fell on ice on property owned by Defendant Beverly Hills Terrace Condominium Association (the “Association”).  The complaint further alleged separate acts of negligence by the Association and Greenview Landscaping, the entity hired to maintain the grounds and provide snow and ice removal for the Association.  Following a jury trial on all issues, a verdict was rendered in favor of Greenview and the Association.  The Association thereafter filed an application with the trial court for attorney’s fees from Greenview, arguing that Greenview was required to indemnify it for defending against Franchini’s lawsuit.  Over the objections of Greenview the trial court awarded the Association approximately $39,000 in counsel fees.

In reversing the lower court’s ruling, the Appellate Division provided a thorough review of indemnity clauses and the N.J. Supreme Court’s decision in Mantilla v. NC Mall Associates, 167 N.J. 262 (2001).  In Mantilla, the N.J. Supreme Court held that absent explicit contractual language to the contrary, an indemnitee may not recover the costs of its defense from an indemnitor where the indemnitee has defended against allegations of its own independent fault.  With that backdrop, the Appellate Division reviewed the contract between the Association and Greenview, including the indemnification provision language, and held that the indemnification clause in the contract was confined to liability for Greenview’s performance of its work, not third party acts.  The Appellate Division rejected the Association’s contention that Greenview assumed indemnification responsibility for the Association’s acts of negligence because of the absence of the explicit contractual language required by Mantilla, and reversed the lower court’s award of counsel fees.

Click on Franchini v. Beverly Hills Terrace Condominium Ass’n for the entire opinion.  http://www.judiciary.state.nj.us/opinions/a6221-10.pdf

For more information, or if you have other legal concerns, email Gavin Handwerker, Esq. at:  gih@beinlaw.com.

CONSUMER FRAUD- SCHOOL’S FALSE PROMISE OF EMPLOYMENT WITH LACK OF ACCREDITATION TANTAMOUNT TO CONSUMER FRAUD

After an admissions representative told her that on graduation, she would be able to perform ultrasounds on patients in hospitals and clinics and earn $65,000 per year, Plaintiff Suarez enrolled in the diagnostic medical ultrasound technician program of Defendant Eastern International College, formerly known as Micro Tech, a for-profit school.  According to the complaint, Plaintiff alleged that in order to obtain employment in this field, it was necessary to obtain certification from the American Registry for Diagnostic Medical Sonography (“ARDMS”).  Because Micro Tech lacked the necessary accreditation, Plaintiff was ineligible on graduation to take the examination administered by ARDMS to obtain the certification required by potential employers. Plaintiff further alleged that, as a practical matter, she could not either attain the credentials necessary to be eligible to take the ARDMS examination or obtain employment as an entry-level sonographer.  Plaintiff’s expert supported her version of the facts by explaining that major insurance companies would not reimburse a provider for any service performed by an ultrasound technician not certified by ARDMS; and the inability to obtain reimbursement and the risk of sanctions provided ample reason for employers to decline to employ any ultrasound technologist who was not certified by ARDMS.  As a result, Plaintiff sued Defendant alleging violations of the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -195, and common-law fraud, and contended that the Defendant’s representations were false. 

Plaintiff appealed from an order granting summary judgment to Defendant and dismissing her complaint.  In an opinion dated August 23, 2012, the Appellate Division held that because a jury could find that Defendant’s statements were so misleading as to a material fact as to deprive the Plaintiff of the ability to make an intelligent decision as a consumer, the statements were actionable under the CFA and summary judgment was inappropriate.  The Appellate Division did affirm dismissal of Plaintiff’s common-law fraud claim on the basis that Defendant’s statements regarding Plaintiff’s potential employment and earning capacity were not statements of present or previously existing facts and therefore cannot provide the basis for a claim based on common law fraud.

Defendant also cross-appealed from the lower court’s decision, arguing that plaintiff's CFA claim should have been dismissed as barred under a “learned professional” exemption.   That exception, an exception created by the courts, provides that certain transactions are excluded from the purview of the CFA “because they involve services provided by learned professionals in their professional capacity.”  The reasoning for this exception is that such professionals are subject to regulation specifically applicable to their profession, which might conflict with the regulation of activities under the CFA.  The Appellate Division rejected Defendant’s argument that it was entitled to the “learned professional” exception because it provided post-high school educational and vocational training.  In support of its holding, the Appellate Division found that Defendant identified no regulatory body that defined uniform standards for the services Defendant provide or its activities as a for-profit training school, such that it would present a “patent and sharp” conflict with the application of the CFA.  Accordingly, the learned professional exemption was inapplicable to this particular case.

Click on Suarez v. Eastern International College for the entire opinion.  http://www.judiciary.state.nj.us/opinions/a2705-10.pdf

Have you been the victim of unscrupulous business practices?  Call us.  The BeinhakerMiller Law Firm, LLC can help.  Written by Gavin I. Handwerker, Esq.  Questions for Gavin?  Email him at gih@beinlaw.com. 

New York Commercial Tenant’s Failure to Give Required Notice of Renewal is Insufficient as Grounds to Excuse Conduct Required by Lease

Whether you are a commercial landlord or tenant, read your lease, read your lease, read your lease! Lease review is not just for when you are negotiating and executing it, only to be put away and forgotten once the ink has dried; but it is an exercise to be carried out through the entire course of the commercial lease tenancy. If you don’t, you run the risk of making a serious mistake that may leave you scrambling for new space. Take the case of Baygold Assocs., Inc. v. Congregation Yetev Lev of Monsey, Inc., 19 N.Y.3d 223 (May 3, 2012). In Baygold Landlord and Tenant entered into a lease on August 2, 1976 for premises used by Landlord as a nursing home. The term was 10 years with four additional 10-year renewal options available to Tenant. In order to exercise an option period, Tenant was required to provide the Landlord with no less than 270 days’ notice before the expiration of each term. The lease further required that the renewal notice be sent “by certified mail with return receipt requested”.

Thereafter, Tenant subleased the space to Monsey Park. Monsey Park ran the nursing home between 1976 and 1985, during which time it made a number of improvements to the leased space. In January 1985, Monsey Park subleased the space to Orzel, who continued to run the premises as a nursing home. During Orzel’s tenancy, only Orzel made improvements to the premises. Renewals were made extending the lease until 2005. The 2005 renewal became the issue. Baygold’s attorney testified that he sent a timely renewal letter to cover the remaining two option terms, but could produce no mail receipt or return card, as required by the lease. In 2007, the Landlord arranged to sell the property to Congregation Yetev Lev of Monsey. Baygold thereafter sued to declare the rights of the parties with respect to the lease renewal.

The Court of Appeals rejected Baygold’s claim to declare the lease properly renewed. In its 1977 decision in J.N.A. Realty Corp. v. Cross Bay Chelsea, 42 N.Y.2d 392 (1977), the Court of Appeals held that equity would relieve a commercial tenant of its untimely failure to exercise an option to renew a lease where (1) such failure was the result of “inadvertence,” “negligence” or “honest mistake”; (2) the non-renewal would result in a “forfeiture” by the tenant; and (3) the landlord would not be prejudiced by the tenant’s failure to send, or its delay in sending, the renewal notice. J.N.A. Realty Corp. v. Cross Bay Chelsea, 42 N.Y.2d 398-400. Here, the Court found Baygold was not entitled to such equitable relief because it could not prove the second element of forfeiture, defined by the Court as where the tenant “‘has in good faith made improvements of a substantial character, intending to renew the lease’ and the tenant ‘would sustain a substantial loss in case the lease were not renewed.’” Id. at 397-398. Baygold did make substantial improvements, but did so some 20 years earlier; and the more recent improvements to the property were made by Baygold’s subtenants, not by Baygold. Thus, Baygold could not take advantage of what the Court of Appeals deemed to be a “narrow” equitable doctrine.

N.B. Judge Smith filed a dissenting opinion, joined by Judge Grafeo, which sees the majority’s opinion as basically a distinction without a difference from the original J.N.A. decision. In Judge Smith’s opinion, the majority opinion made no effort to explain why a subtenant must forfeit all of its improvements because of the mistake of the tenant in failing to provide timely notice. For the entire opinion of Baygold Assocs., Inc. v. Congregation Yetev Lev of Monsey, Inc., click: http://www.nycourts.gov/ctapps/Decisions/2012/May12/66opn12.pdf

 At the BeinhakerMiller Law Firm, LLC, we specialize in commercial leasing for both landlords and tenants. Call us today at 908-272-2232 for appointment to see how we can help.