New Jersey Attorney Law Review Blog

When a construction supplier sells materials on credit to a contractor with multiple open accounts, receives only partial payments without instructions from the contractor as to whose jobs/accounts the payments should be applied to, and later seeks to enforce a construction lien claim against a single property owner for the unpaid balance, the supplier must make inquiry as to the source of the funds obtained by the contractor to pay the supplier.   The suppliers duty in this regard extends to circumstances where a reasonable supplier should suspect the contractor has not used an owner's funds to pay for materials supplied for that owner.  The purpose in requiring a supplier to ascertain the source of its customer's funds is to ensure that the supplier has properly allocated its customer's payments to the correct jobs/accounts.   A supplier that fails to fulfill this duty sacrifices its rights under the Construction Lien Law, a NJ appeals court concluded in  L&W

  There are significant legal distinctions between owning property as tenants by the entirety versus owning property as tenants in common.  Understanding these legal distinctions is important when it comes to purchasing  residential real estate with friends, business partners, or relatives. A joint tenancy is a form of property ownership where the co-owners own the property equally.  If one joint tenant dies, the surviving joint tenant automatically inherits the entire property.   By contrast, a tenancy in common is a form of co-ownership of property that does not include a right of survivorship.   In a tenancy in common, each co-owner's portion can be passed to beneficiaries named in a will, which may or may not be someone who the surviving co-tenant ever envisioned owning the property with or living with.  In New Jersey, two people, other than married couples, are presumed to own property as tenants in common unless they've otherwise specified in the deed.   

  In a recent decision that merits the attention of borrowers and lenders in commercial real estate foreclosures, the New Jersey Appellate Division held that a lender's acceptance of numerous late payments did not constitute a modification to the mortgage or result in curing the borrower's mortgage default.  Bank of America v. Princeton Park Associates, L.L.C. , Docket No. A-0927-11T3 (App Div., November 8, 2012).   Consequently, the Appellate Division affirmed the trial court's granting of summary judgment in favor of the lender. The facts of the case are rather straightforward.  Princeton Park Associates involved a commercial real estate loan transaction. The lender’s loan documents contained the standard default and acceleration provisions. Also, the promissory note included the following provisions: (i) no failure by the lender to accelerate the debt pursuant to the default provisions would constitute a waiver of the lender’s rights to insist on s

--> In this post I discuss the issue of mortgage fraud as it relates to a borrower's claim that the signature appearing on the mortgage is a forgery.   On September 19, 2012 I am scheduled to try a case involving this very issue on behalf of a private mortgage lender seeking to enforce a mortgage pledged as collateral in connection with a business loan transaction.   Mock v. Bae, et al. , Superior Court of New Jersey, Chancery Division, Bergen County, Docket No.: F-58854-10.    Click here to download a copy of my trial brief filed with the Court. Succinctly summarizing from the trial brief, in New Jersey duly executed, notarized and recorded mortgage instruments  are presumptively valid and enforceable, and are presumed to have been made for good and valuable consideration.. In re Shaw , 51 F.Supp. 566, 568 (D.N.J. 1943), and N.J.S.A. 12A:3-308.  Under New Jersey law, a mortgage instrument must be duly acknowledged, proved and certified at the time the lo

--> In an opinion issued on July 31, 2012, the New Jersey Supreme Court declared that a pet owner is not entitled to recover damages for emotional distress caused by witnessing the traumatic death of her dog.  Joyce McDougall v. Charlot Lamm (A-99-10) (067436) . The facts are relatively straightforward.  On June 7, 2007, plaintiff Joyce McDougall was walking her dog when a large dog belonging to defendant Charlot Lamm ran out, grabbed McDougall's dog by the neck, and picked it up and shook it several times before dropping it, causing the death of her dog.  McDougall bought the dog as a puppy for $200 in 1997, and believed a new puppy would cost $1,395. At the trial level McDougall described her pet as a “friendly, lively, energetic dog” that loved children and was capable of performing numerous tricks.  McDougall testified that the dog was very happy to see her when she came home, slept in a bed near hers, and was with her much of the time.  McDougall a

In this post I briefly discuss the standards by which New Jersey Courts are to apply in determining whether a corporation is the successor-in-interest to, or alter-ego of, a previously existing but defunct corporate entity.  The issue often presents itself when an insolvent closely held corporate entity (such as construction companies or other privately held small businesses)  looks to rid itself of trade debt without effectively shutting down the business and losing valuable assets, customers, contracts or good will.  Unscrupulous business owners may attempt to accomplish this seemingly impossible feat by engaging in fraudulent asset transfers - essentially taking the assets from the debt-ridden business and transferring them over to a new business often established under another family member's name without paying anything to the former business - intended to avoid creditors.    My firm is presently pursuing this exact claim in a matter captioned, C.L. Indus

  What happens when a judgment creditor holding a judgment against only one spouse levies on their joint bank account and moves for turnover of 100% of the funds in the account - should the husband and wife kiss all the money goodbye?   Not necessarily. The New Jersey Multiple Party Deposit Account Act (“NJMPDAA”), N.J.S.A. § 17:16I-1, et seq., which governs “multiple party deposit accounts” (“MPDAs”), including joint bank accounts, provides in relevant part: Unless a contrary intent is manifested by the terms of the contract, or the deposit agreement, or there is other clear and convincing evidence of a different intent at the time the account is created:  a. A joint account belongs, during the lifetime of all parties, to the parties in proportion to the net contributions by each to the sums on deposit. In the absence of proof of net contributions, the account belongs in equal shares to all parties having present right of withdrawal.  N.J.S.A. § 17:16I-4a.  

One of my clients is currently involved in bitter litigation with a judgment creditor who is trying to wrestle away her ability to hold onto a small hair salon that she incorporated several years ago and which operates in Ridgewood, New Jersey. In this particular instance, the judgment creditor claims to have perfected its judgment lien against my client's stock ownership in the hair salon by virtue of a levy made by the Bergen County Sheriff some several years before my client filed a Chapter 7 bankruptcy petition, and is objecting to a proposed settlement between my client and the Chapter 7 bankruptcy Trustee that would enable my client to purchase the Trustee's claims against the stock.   My client,  currently a debtor in a Chapter 7 bankruptcy case pending in the United States Bankruptcy Court for the District of New Jersey, disputes the judgment creditor's claim and maintains that the judgment creditor is, at most, an unsecured creditor who failed to

Given the substantial number of property foreclosures in recent years,  I frequently report on decisions involving foreclosure law.   In a case of first impression, on March 29, 2012, the New Jersey Appellate Division held that municipal fines/penalties imposed against the property owner under New Jersey's Uniform Fire Safety Act were wiped out by the bank's foreclosure of the property owner's mortgage.   Pitman v. Monroe Savings Bank , Superior Court of New Jersey, Appellate Division, Docket No.: A-3110-10.  This case interprets N.J.S.A. 52:27D-192 et. seq. known as the Uniform Fire Safety Act and the corresponding Uniform Fire Saftey Code 5:70-1.2 et. seq. as they apply to property acquired by foreclosure. A bank or any other entity acquiring a commercial property through foreclosure is not a "subsequent owner or one who succeeds to control over the premises" under the Code and therefore is not liable for outstanding fire code penalties as

In what appears to be a case of first impression in New Jersey, a Bergen County judge fined a jury foreman $500 for Googling possible sentencing penalties for a defendant in a drug case. The jury's deliberations ended in a mistrial after he shared his concerns with fellow jurors. In the Matter of Daniel Kaminsky , Superior Court of New Jersey, Bergen County (March 13, 2012) .   As wonderful as modern technology has become, this case demonstrates how the availability to readily access the Internet from almost anywhere on hand held devices and smart phones can negatively impact the sanctity of our judicial system.    FACTS Kaminsky participated as a juror in State v. Luis A. Montas, Indictment No. S-149-11, a criminal matter in which Montas was indicted for allegedly selling 1,500 ecstasy pills to an undercover agent.  The jury heard the case over the course of five days in December, 2011.  Kaminsky was designated the jury foreperson. During the jury voir dire process