As If You Needed Reminding: Don’t Violate Protective Orders!

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

Gavel (pd)The Appellate Division recently reminded all lawyers of the importance of complying with protective orders. In Rotondi v. Dibre Auto Group, LLC, the Appellate Division affirmed a trial court's decision to disqualify plaintiff's counsel from continuing to represent plaintiff because she violated such an order.

In Rotondi, plaintiff purchased a new car from defendant car dealership. One year later, she attempted to refinance the car with the dealer, but ended up filing a class action lawsuit against the dealer and various other entities involved in the refinancing for alleged improprieties in the refinancing process. She alleged violations of the New Jersey Consumer Fraud Act and various other statutory and common law causes of action. Although filed as a putative class action, plaintiff's attempt to certify the class were eventually denied and the case, in the words of the trial court, "ultimately became simply a claim by [plaintiff] against the dealer."

As part of that lawsuit, the trial court entered a protective order that allowed the parties to designate materials as "Confidential" or "Attorneys' Eyes Only." Under the order, documents designated as "Confidential" could only be used by the "receiving party for purposes of the prosecution or defense of [the] action," and could not be used "by the receiving party for any business, commercial, competitive, or other purpose." Documents designated as "Attorneys' Eyes Only" could only be "disclosed [ ] to outside counsel for the receiving party and to such other persons as counsel for the producing party agrees in advance or as ordered by the court."

Continue reading “As If You Needed Reminding: Don’t Violate Protective Orders!”

Supreme Court Issues Important Decision On Truth In Lending Act

by: Peter J. Gallagher (@pjsgallagher)

Please check out an article I wrote for law360.com on the U.S. Supreme Court's  recent decision in Jesinoski v. Countrywide Home Loans. Here is the opening paragraph:

On Jan. 13, 2015, the U.S. Supreme Court released its opinion in Jesinoski v. Countrywide Home Loans (No. 13-684) and resolved a circuit split on an important issue arising under the Truth in Lending Act, 15 U.S.C. §1601-1677 (“TILA”). Under TILA, a borrower has the right to rescind certain loans for up to three years after the loan is consummated. To exercise this right, borrowers must “notify the creditor” of their intention to rescind the loan within three years. The question in Jesinoski was whether a borrower satisfies this requirement by sending written notice to a lender of its intent to rescind or whether the borrower must file a lawsuit within the three-year statutory period. In recent years, a circuit split had developed over this issue. In Jesinoski, the Supreme Court resolved this split, holding that written notice is sufficient.

Check out the rest of the article here.

“Judges Think I Am Awesome!” Third Circuit Approves Use Of Judicial Endorsement on Lawyer’s Website

by: Peter J. Gallagher

In an interesting First Amendment decision issued yesterday, he U.S. Court of Appeals for the Third Circuit struck down a New Jersey attorney-advertising guideline that banned attorneys from including judicial quotations in their advertising unless the full judicial opinions appeared in the advertisement.

In Dwyer v. Cappell, an attorney, Andrew Dwyer,  included several favorable quotations from judicial opinions on his firm’s webpage, including one where a judge, in the context of a fee application, noted that the attorney was “a fierce, if sometimes not disinterested advocate for his clients,” who had “molded the case to the point where it could be successfully resolved.” The judge who wrote that opinion asked Dwyer to remove the quotation from the website. When Dwyer refused, the judge contacted the Committee on Attorney Advertising.

After meeting with Dwyer and receiving submissions from him on the issue, the Committee proposed an attorney-advertising guideline, and solicited public comment on it, that would have banned attorneys from including quotations “from a judge or court opinion (oral or written) regarding the attorney[s’] abilities or legal services.”  Dwyer submitted a comment objecting to the proposed objection as an unconstitutional ban on speech. Nonetheless, three years later, the New Jersey Supreme Court approved an amended version of the guideline that banned attorneys from using quotations from judicial opinions in their advertisements, but allowed them to advertise using the full text of judicial opinions in which those quotations appeared. The comments to the proposed rule explained that it was designed to avoid confusing the public into believing that a judge was endorsing a specific attorney, something that is prohibited under the Rules of Professional Conduct.

 

Continue reading ““Judges Think I Am Awesome!” Third Circuit Approves Use Of Judicial Endorsement on Lawyer’s Website”

When Do Condominium Associations Have Standing To Sue Under The Consumer Fraud Act?

by:  Peter J. Gallagher

In a recent decision, the Appellate Division restated and clarified the rules regarding when a condominium association has standing to sue a developer.  In Belmont Condominium Association v. Geibel, an association sued the sponsor/developer/contractor of the Belmont, a seven-story, thirty-four unit condominium in Hoboken, asserting common law fraud and negligence claims along with statutory claims under both the New Jersey Consumer Fraud Act (“CFA”) and The Planned Real Estate Development Full Disclosure Act (“PREDFDA”).  The claims arose out of the allegedly faulty construction of the Belmont, and certain pre-construction statements from the developer, including that it had “overseen the building and renovation of Over 400 Single Family & Condominium Homes.”  (Although largely irrelevant to the issues addressed by the Appellate Division, it turned out that the Belmont was actually the first building that the developer’s owner and general manager had ever constructed.)  As it relates to the faulty construction, the association alleged that the building was “plagued by water leaks” almost immediately after construction was complete.  These leaks impacted both the individual units and the common elements.  After years of repairs that did not correct the problem, the association sued the developer.  The association argued that construction defects were the cause of the water filtration, while the developer blamed the problems on poor and inadequate maintenance.        

Among other things, the developer in Belmont argued that the association lacked standing to bring claims under the CFA.  At the outset, the Appellate Division observed that New Jersey courts take a liberal approach to standing, and  have historically given wide recognition to suits by condominium associations.  It then analyzed the language of the New Jersey Condominium Act (“NJCA”) to determine whether the association had standing.  As it related to claims arising out of damage to the common elements, the Appellate Division held that the association had standing to sue because the NJCA vests condominium associations with the “exclusive right”(emphasis in original) to sue a developer for defects pertaining to the common elements, and generally prohibits individual unit owners from doing so. 

The Appellate Division rejected the developer’s argument that the association lacked standing because it could not demonstrate reliance by the original purchasers on any of the alleged misstatements.  On this point, the Appellate Division noted that reliance is not an element required to sustain a claim under the CFA.  The Appellate Division also rejected the developer’s argument that the association could only recover damages for the unit owners who actually sustained damage as a result of the developer’s alleged misrepresentations.  The Appellate Division held that because the NJCA allows associations to sue for damages to the common areas sustained by “any or all” of the unit owners, it was entitled to recover all of the damages necessary to repair any damages, not a prorated amount based on the number of unit owners who identified damages. 

However, the Appellate Division held that the association lacked standing to sue for damages to the individual units because the NJCA only vests it with authority to sue or be sued in connection with damages to common elements.  In Belmont, the damages associated with individual units all related to the windows, which the Appellate Division held were “personal to the unit owners,” and therefore not part of the Belmont’s common elements.  On this point, the Appellate Division reviewed the definition of common elements contained in both the NJCA and the master deed for the Belmont, neither of which identified windows as common elements.  Once the Appellate Division concluded that the windows were unit elements, not common elements, its decision on standing was a simple one because it had already concluded that an association has standing to sue for damage to common elements, but lacks standing to sue for unit elements.