‘Til Death, Not Bank Levy, Do You Part: Creditor Must Prove Funds In Joint Account Belong To Debtor, Not Wife

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

A wise colleague once told me that obtaining a judgment only gets you about 60% of the way home. Collecting on judgments is a sometimes overlooked, but almost always tedious and expensive process that makes me think my colleague was optimistic with his 60% projection. The Appellate Division's decision in Banc of America Leasing and Capital, LLC v. Flethcer-Thompson Inc., offers just one example of the many nuances of collection work that make it a minefield for the unwary.

In Banc of America, plaintiff obtained a judgment against several defendants in Michigan. It domesticated the judgment in New Jersey and obtained a bank levy against a joint account held by both defendant, Kurt Baur, and his wife, who was not a party to the lawsuit. After the sheriff served the writ and froze the assets in the account, plaintiff filed a turnover motion to have the funds turned over to satisfy a portion of the judgment. Baur and his wife opposed the motion, arguing that the funds in the account were the wife's personal property and derived from her pension, earnings, and tax refunds.

Before the trial court ruled on the motion, the parties entered into a consent order, under which defendants agreed to replace the "levied funds" with "replacement funds" in an equal amount. Once the "replacement funds" were deposited, plaintiff's counsel would release the "levied funds" back to defendants. In addition, defendants agreed to pay plaintiff $25,000 per quarter and $6,000 per month until the judgment was satisfied. Unfortunately, defendants defaulted on their obligations under the consent order, and plaintiff filed a new motion to turnover the "levied funds." Baur and his wife opposed the new motion on the same grounds as they had opposed the original motion. The trial court granted plaintiff's motion. In a three-sentence opinion, the court concluded that there was an agreement reached by the parties to avoid turnover, but defendants breached that agreement, therefore turnover was justified. Defendants appealed.

Continue reading “‘Til Death, Not Bank Levy, Do You Part: Creditor Must Prove Funds In Joint Account Belong To Debtor, Not Wife” →

Wait. This Is Arbitration? I Thought It Was Mediation.

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

Early in the movie, My Cousin Vinny, Joe Pesci's character, Vincent Gambini, tells the judge that he has significant experience trying cases in New York. The judge does some research and learns that there is no record of anyone named Vincent Gambini trying any cases in New York. Gambini then does what one should never do, he lies to the judge. He tells the judge that he tried cases under the name Jerry Gallo. Gambini thinks this is a brilliant move because Jerry Gallo is a notable New York lawyer who Gambini has read about in the papers. Unfortunately for Gambini, however, he never read the articles about Jerry Gallo's death. Naturally, the judge finds out that Jerry Gallo is dead, and confronts Gambini, which leads to the following exchange:

I imagine this may have been similar to what the defendant in Marano v. The Hills Highlands Master Association, Inc. said when it received an unfavorable arbitration award. "Did you say binding arbitration? No. We were participating in non-binding mediation. Not arbitration." Things worked out for Vincent Gambini in the movie, they did not work out so well for defendant in Marano.

In Marano, plaintiffs owned a unit in a condominium development. The relationship between unit owners, like plaintiffs, and the association was governed by the association's bylaws, which "arguably include[d] an arbitration provision." So, after a dispute developed between plaintiffs and the condominium association over a "flooding condition" in their backyard, plaintiffs' attorney wrote to the association's attorney to demand arbitration. He received no response, so he wrote again and stated that unless the association's attorney confirmed that he was "in the process of arranging for the arbitration proceeding," plaintiffs would sue to compel arbitration. The association's attorney responded by disputing some of the claims in plaintiffs' letter but agreeing to participate in "ADR" (alternative dispute resolution). Several weeks later, plaintiffs' attorney again wrote to the association's attorney asking for confirmation that the parties would proceed to an "arbitration hearing," with a hearing officer who would serve "as an arbitrator." In response, the association's counsel contacted a retired judge to determine his availability and willingness to serve as "the arbitrator."

Up to this point, it appears clear that the parties were discussing arbitration, not mediation. What happened next created the confusion that sent the case down the path that would eventually land it before the Appellate Division.

Continue reading “Wait. This Is Arbitration? I Thought It Was Mediation.” →

I Thought That Juror Looked Familiar!

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

What happens if you are a party in a lawsuit and you recognize one of the jurors as someone who not only knows you, but probably does not like you and may be looking for revenge? According to the Appellate Division in Rumbas v. Sony Electronics, Inc., at the very least, you bring it up before the jury returns its verdict.

In Rumbas, plaintiff claimed that a television defendant manufactured was defective and caused a fire that damaged plaintiff’s condominium unit and three other units. At the start of jury selection, the judge explained the nature of the case to the potential jurors. He then sat the first eight jurors in the jury box and explained the jury selection process. Specifically, he explained that he would be asking a series of 28 questions, each of which was “designed to elicit a negative response.” As jurors in the box were excused, they would be replaced by jurors from the panel, but the judge would not repeat the 28 questions. Instead, he would simply ask the replacement juror if his or her answer to any of them would be anything other than “no.” Therefore, the judge stressed that it was important for all jurors, not just those in the jury box at the time, to pay attention to the questions.

Early on in the selection process, while the original eight jurors were seated in the jury box, the judge asked the attorneys to introduce their clients. Plaintiff was not in the courtroom at the time. Apparently, he had to go to the pharmacy, but his attorney indicated that he would be returning soon. The judge then read a list of potential witnesses and asked if any of the jurors knew any of them. None did. During this questioning, plaintiff returned to court, at which time he was introduced to the jurors. The judge asked if any of them knew plaintiff, but none did.

Continue reading “I Thought That Juror Looked Familiar!” →

New York Court: “Happy Wife, Happy Life” Will Not Shield You From A Wrongful Termination Lawsuit

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

I do not have these mugs at home, but I should. Most married men will tell you that the easiest way to avoid trouble at home is to remember that your wife is always right (even on those rare occasions when she is obviously wrong). Sometimes this policy of gratuitous appeasement fails, however, as was the case in a recent decision, Edwards v. Nicolai, from the New York Appellate Division (First Department).

In Edwards, defendants were husband and wife, and co-owners of Wall Street Chiropractic and Wellness. The husband was head chiropractor, while the wife was the chief operating officer. The husband hired defendant as a "yoga and massage therapist," and was her direct supervisor. According to plaintiff, her relationship with the husband was entirely professional and he "regularly praised" her work performance.

A little more than one year after hiring plaintiff, the husband allegedly "informed Plaintiff that his wife might become jealous of Plaintiff, because Plaintiff was too cute." This apparently proved to be a prescient statement. Approximately four months later, at 1:30 in the morning, plaintiff received a text from the wife, stating that plaintiff was not "welcome any longer" at the office, that plaintiff should "NOT ever step foot in [the office] again," and that plaintiff should "stay the [expletive] away from [the wife's] husband." A few hours later, at around 8:30 am, plaintiff received a text from the husband notifying her that she was "fired and no longer welcome in [the] office," and that if she called or tried to come back, defendants would call the police.

Continue reading “New York Court: “Happy Wife, Happy Life” Will Not Shield You From A Wrongful Termination Lawsuit” →

NJ Court: Agreement To Arbitrate “Any Claims” Does Not Include Agreement To Arbitrate Statutory Claims

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

In recent months I have written several times about the difficulty of enforcing arbitration agreements in New Jersey (e.g., here, here, and here). While the U.S. Supreme Court's decision in Kindred Nursing Centers v. Clark has some people confident that this will change, it hasn't yet. Instead, New Jersey courts continue to issue opinions demonstrating the uphill battle faced by parties trying to enforce contractual arbitration provisions. A recent unpublished Law Division opinion, Griffoul v. NRG Residential Solar Solutions, LLC, is the latest example.

In Griffoul, plaintiffs entered into a lease for a residential solar system. The lease contained a "broad form arbitration clause" in which plaintiffs agreed to arbitrate "any" claim "arising out of" or "in connection with" the lease, and agreed that, by entering into the lease, plaintiffs were waiving their right to a jury trial. The lease also contained a class action waiver provision, declaring that "each party may bring claims against the other only in its individual capacity and not as a plaintiff or a class member in any purported class or representative proceeding."

Nonetheless, just over three years after entering into the lease, plaintiffs filed a putative class action in state court. The complaint asserted the now-common one-two punch of claims under the Consumer Fraud Act ("CFA") and the Truth in Consumer Contract, Warranty and Notice Act ("TCCWNA"). The CFA claims were based on alleged misrepresentations made by defendants in connection with the marketing of the solar energy system, and the TCCWNA claims were based on six provisions of the lease that plaintiffs claimed violated clearly established rights under New Jersey law.

Continue reading “NJ Court: Agreement To Arbitrate “Any Claims” Does Not Include Agreement To Arbitrate Statutory Claims” →