On Amateur Chihuahua Breeding And Bailments

by: Peter J. Gallagher (LinkedIn)

After reading the opening paragraph of the Appellate Division’s decision in Rivera v. Canseo, I was hooked. Here it is:

[Plaintiff] owns a female chihuahua. Defendant . . . owns a male Chihuahua. [Plaintiff] and [defendant] reached an oral agreement to have their dogs mate. [Plaintiff] was to obtain puppies from the mating and [defendant] was to receive consideration for the use of his dog.

Interesting facts, check. Awkward references to uncomfortable subjects reminiscent of 1950’s health class videos – “obtain puppies from the mating” – check. And what exactly does it mean to “receive consideration for the use of his dog”? Needless to say, I was hooked.

[As it turns out, the consideration question was never answered. Plaintiff claimed that defendant was to receive “the pick of the litter if the mating ultimately resulted in the birth of puppies,” while defendant claimed he was to receive $500, “regardless of whether [plaintiff’s] dog was impregnated.” Because “[t]he exact nature of [defendant’s] expected consideration [was] not material” to the court’s decision, however, the dispute was never resolved.]

In Rivera, after plaintiff and defendant agreed to have their Chihuahuas mate, plaintiff brought her dog to defendant’s home, along with a supply of the dog food to which her dog was accustomed. According to plaintiff, her dog was in good health when she left her at defendant’s home. Clearly a hopeless romantic, “[defendant] placed [plaintiff’s] dog and his dog in the basement together” and locked the door.

Continue reading “On Amateur Chihuahua Breeding And Bailments”

Fee Dispute Between Counsel Inspires Court To Bemoan The Death Of The Practice Of Law As A Profession

by: Peter J. Gallagher (LinkedIn)

In the final scene of the movie Scent of a Woman, Al Pacino’s character defends Chris O’Donnell’s character, who is about to be expelled from the (fictional) prestigious Baird School. Among many other things, Pacino’s character exclaims: “I don’t know who went to this place. William Howard Taft. William Jennings Bryant. William Tell, whoever. Their spirit is dead, if they ever had one.” Similarly, although slightly less dramatically, a fee dispute between counsel in Meister v. Verizon New Jersey Inc. led the trial court to eulogize the law as a profession:

This unfortunate fee dispute, coming as it does in the midst of seemingly final negotiations of a settlement, should resolve, with certainty, any lingering doubt that the practice of law, that storied profession of Marshall and Jefferson and Lincoln, is really now just another capitalist enterprise.

The court walked these comments back, slightly, by acknowledging that “[t]he practice of law is not a hobby” and “[h]ard working and industrious counsel who take risks to advance a client’s case and to maximize a client’s recovery should be rewarded.” But it then immediately returned to its original thesis:

However, while lawyers may indeed make a client’s life better through their advocacy and vigilant protection of that client’s interests, they are uniquely able to make it seem as though they are not doing so when quarreling, as they are here, over who gets to spell out how much they should be paid from their paralyzed client’s recovery and why one is more entitled to do so than another.

This is probably not how the lawyers in the case hoped the court would start its opinion.

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Reason Number 2,345,789 To Have A Will

[Full disclosure: I don’t have a will. I know I should. And everyone tells me I should, even my doctor who reminds me, every year, at my annual check up that I need one. Yet I still don’t have one. But this post is not about me.]

In Estate of Travers, the trial court provided yet another reason why everyone should have a will. In that case, decedent passed away unexpectedly (and far too young). He died without a will, without a spouse, and without any children. His parents, who were divorced, agreed on every aspect of the administration of his estate except one — whether decedent should be cremated or buried. Because they could not agree, the court had to resolve the issue.

At the outset, the court noted that both parents had presented “reasonable explanations for their respective positions that [were] very personal to them and emotionally charged.” But, under New Jersey law, it was the “wishes and desires of the decedent, not the parents,” that governed.

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Where Are We Arbitrating Again? Parties Must Identify Forum And Process For Arbitration Provision To Be Enforceable

by: Peter J. Gallagher (@pjsgallagher) (LinkedIn)

arbitration (PD)New Jersey courts frequently invalidate arbitration provisions that do not clearly and unambiguously explain that plaintiffs are waiving the right to seek relief in court and have their claims decided by a jury (see here, here, and here for examples). In Flanzman v. Jenny Craig, Inc., the Appellate Division invalidated one for an even more basic reason — the provision did not identify any arbitration forum or any process for conducting the arbitration.

In Flanzman, plaintiff worked for defendant. After she was terminated, she sued, alleging age discrimination. Defendant moved to compel arbitration under an agreement with plaintiff that provided:

Any and all claims or controversies arising out of or relating to [plaintiff’s] employment, the termination thereof, or otherwise arising between [plaintiff] and [defendant] shall, in lieu of a jury or other civil trial, be settled by final and binding arbitration. This agreement to arbitrate includes all claims whether arising in tort or contract and whether arising under statute or common law including, but not limited to, any claim of breach of contract, discrimination or harassment of any kind . . . [Plaintiff] will pay the then-current Superior Court of California filing fee towards the costs of the arbitration (i.e., filing fees, administration fees, and arbitrator fees).

Plaintiff did not agree to this when she began her employment with defendant. Instead, defendant presented it to her 20 years after she was hired, and plaintiff signed it to keep her job.

The flaw in the provision is that, even if it adequately advised plaintiff that she was giving up her right to a jury trial, it says “nothing about what forum generally replaced that right.” The trial court recognized this shortcoming, but instead of declaring the provision unenforceable, simply allowed plaintiff to choose the forum. Plaintiff appealed, arguing that the arbitration agreement lacked mutual assent and was therefore invalid.

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Arbitration Provision Bounced Again, Even After Kindred Nursing Decision.

by: Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Arbitration (pd)As readers of this blog know, arbitration provisions in consumer contracts are difficult to enforce in New Jersey. (Click here or here for a refresher.) There was some belief that the U.S. Supreme Court's recent decision in Kindred Nursing Centers Ltd. P'ship v. Clark might change this, but it does not appear, at least not yet, that it has. In a recent case, Defina v. Go Ahead and Jump 1, LLC d/b/a Sky Zone Indoor Trampoline Park, the Appellate Division was asked to revisit, in light of Kindred Nursing, its prior decision refusing to enforce an arbitration provision in a contract between a trampoline park and one of its customers. The Appellate Division did so, but affirmed its prior decision, holding that Kindred Nursing did not require New Jersey courts to change the manner in which they approach arbitration provisions.

I wrote about Defina in its first go-around with the Appellate Division — Bounce Around The (Court)Room: Trampoline Park's Arbitration Provision Deemed Unenforceable. The underlying facts of the case are unfortunate. A child fractured his ankle while playing "Ultimate Dodgeball" at a trampoline park. Before entering the facility, the child's father signed a document entitled, "Participation Agreement, Release and Assumption of Risk." The document contained an arbitration provision, which provided: 

If there are any disputes regarding this agreement, I on behalf of myself and/or my child(ren) hereby waive any right I and/or my child(ren) may have to a trial and agree that such dispute shall be brought within one year of the date of this Agreement and will be determined by binding arbitration before one arbitrator to be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures. I further agree that the arbitration will take place solely in the state of Texas and that the substantive law of Texas shall apply.

Notwithstanding this provision, the child's parents sued the trampoline park in state court, alleging tort claims for simple negligence and gross negligence, and statutory claims for alleged violations of the Consumer Fraud Act and the Truth in Consumer Contract, Warranty and Notice Act. 

Continue reading “Arbitration Provision Bounced Again, Even After Kindred Nursing Decision.”

NJ Supreme Court Narrowly Defines “Aggrieved Consumer.” End Of The Road For One Type Of “No Injury” Class Action?

by: Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Contract(pd)
I have written a number of times about New Jersey's Truth in Consumer Contract, Warranty and Notice Act (TCCWNA). (Here, here, and here for example.) This statute, which was largely ignored after it was enacted in 1981, became increasingly popular in recent years as part of so-called no injury class actions. (So-called mostly by defense counsel, not plaintiff's counsel.) Its popularity may now have come to an end, however, because the New Jersey Supreme Court recently issued its opinion in the highly-anticipated case, Spade v. Select Comfort Corp., which answered two questions certified to it by the U.S. Circuit Court of Appeals for the Third Circuit, one of which appears to hamper, at the very least, the ability of plaintiffs to sue for alleged violations of the act.

By way of brief background, the TCCWNA was enacted to prevent deceptive practices in consumer contracts by prohibiting the use of illegal terms or warranties. It provides:

No seller . . . shall in the course of his business offer to any consumer or prospective consumer or enter into any written  consumer contract  .  .  .  or display any written . . . notice or sign . . . which includes any provision that violates any clearly established legal right of a consumer or responsibility of a seller . . . as established by State or Federal law at the time the offer is made . . . or the . . . notice or sign is given or displayed.

To state a claim under the TCCWNA, a plaintiff must prove four elements: (1) that it is a consumer; (2) that defendant is a seller; (3) that the seller offered a consumer contract containing a provision that violated a legal right of the consumer or a responsibility of the seller; and (4) that it was an "aggrieved consumer." Any party found to have violated the TCCWNA is liable for a civil penalty of not less than $100, actual damages, or both, and reasonable attorneys' fees and court costs.

The questions certified to the Supreme Court in Spade arose out of two cases that had been consolidated by the district court. Each involved plaintiffs who ordered furniture pursuant to contracts that violated certain regulations promulgated by New Jersey's Division of Consumer Affairs. The regulations require, among other things, that furniture sellers deliver furniture to customers by or before the promised delivery date or provide written notice that they will not be able to do so. Sellers must also provide notice to the purchaser that if the delivery is late, the consumer has the option of canceling the order and receiving a full refund, or agreeing to accept delivery at a specified later date. The regulations also prohibit sellers from including certain language in their contracts, such as "all sales final," "no cancellations," and "no refunds." In Spade, plaintiffs alleged that the contracts they entered into with defendants did not contain language required by these regulations, contained language prohibited by these regulations, or both. Notably, however, plaintiffs received their furniture deliveries on time.  

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On Cloaking Devices And Usury: Lender Can Be Sued If It Uses Corporate Shell To Cloak A Personal Loan As A Business Loan

 by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Star Trek (pd)Cloaking devices are common in sci-fi movies like Star Trek and Star Wars. They are used to render an object, usually a spaceship, invisible to nearly all forms of detection. Although scientists are apparently working to make real-life cloaking devices, at this point they exist only in the movies and, apparently, in New Jersey courts, at least according to the Appellate Division in Amelio v. Gordon.

In Amelio, plaintiff owed an apartment building in Hoboken. He approached defendants about obtaining a loan to finish renovations on three units in the building, along with the common areas. Plaintiff claimed that defendants instructed him to create a corporate entity to obtain the loan. Plaintiff did as he was instructed, and formed a limited liability company, which obtained the loan from defendants. Plaintiff, who was identified as the managing member of the limited liability company, signed the loan documents on behalf of the company.

Plaintiff later sued, arguing that the fees and interest payments under the loan exceeded the amounts allowable under New Jersey's usury laws. He also claimed that defendants fraudulently convinced him to create a limited liability company and have that entity obtain the loan, just so they could charge him usurious fees and interest. Plaintiff sued in his individual capacity, not on behalf of the limited liability company. On the day of trial, defendants argued that the complaint had to be dismissed because plaintiff lacked standing to sue since the company was the borrower, not plaintiff. With little explanation, the trial court granted the motion and dismissed the complaint. Plaintiff appealed. 

Continue reading “On Cloaking Devices And Usury: Lender Can Be Sued If It Uses Corporate Shell To Cloak A Personal Loan As A Business Loan”