by: Peter J. Gallagher (@pjsgallagher) (LinkedIn)
Generally, when you end an email to your adversary with "we'll be awaiting your motion," something has gone wrong. This was certainly true in So v. Everbeauty, Inc.
In So, plaintiff sued defendant, his former employer, alleging that defendant had violated his rights under the New Jersey Law Against Discrimination and the Workers' Compensation Law. Shortly after the lawsuit was filed, defendant's counsel suggested to plaintiff's counsel that the matter should be arbitrated under the arbitration provision in plaintiff's employment contract. Plaintiff's counsel initially responded that his client was "leaning towards . . . going to arb," but that counsel still needed to speak with plaintiff, who was away on vacation. Later, plaintiff's counsel emailed defendant's counsel as follows: "I was able to speak to my client and we will proceed to arbitration. I can draft stip of dismissal." Two weeks later, however, plaintiff apparently had a change of heart. His counsel wrote to defendant's counsel stating that plaintiff had "instructed him to make efforts to avoid arbitration." Seeing the writing on the wall, plaintiff's counsel ended the email, "we'll be awaiting your motion."
As expected, defendant moved to compel arbitration, but did so in a somewhat unusual way. Defendant's counsel acknowledged that the arbitration provision in plaintiff's employment contract was unenforceable because it was not "sufficiently specific." But defendant argued that the back-and-forth between counsel created a separate, binding agreement to arbitrate. The trial court denied the motion, holding that (1) the emails between counsel did not "evidence a bargained for exchange but only a statement by plaintiff's counsel as to what his intentions were going forward in response to inquiries from defense counsel," and (2) there was no consideration to support the alleged agreement to arbitrate. Defendant appealed.
Continue reading “Emails Between Counsel Create Agreement To Arbitrate, Even Where Contractual Arbitration Provision Would Have Been Unenforceable” →
In Motorworld, Inc. v. Benkendorf, the Appellate Division decided to "put the issue raised in [the] appeal as if it were a law school exam," and then answer the exam question. Here is how it described the case:
A owns all the outstanding stock of DEF and GHI; her husband, B, operates all these and other entities wholly-owned by A. XYZ has done work for some of A and B's entities over the course of many years.
One of XYZ's principals asked B for a loan. B agreed, and A transferred $499,000 to DEF, a moribund entity. DEF then transferred $500,000 to XYZ, which executed a promissory note in DEF's favor; this note became DEF's only asset and its only debt is its unspoken obligation to repay A.
XYZ continued to perform work for GHI, and the note's due date was repeatedly extended; meanwhile, GHI's indebtedness to XYZ rose to approximately $1,000,000. Consequently, DEF executed a release of the note in exchange for XYZ's forgiveness of GHI's debt.
Was DEF's release of the note a fraudulent conveyance?
Believe it or not, this description was actually less complicated than the facts of the case.
Continue reading “Just In Time For Finals: Court Poses, Then Answers, Law School Exam Question On Fraudulent Conveyances” →
by: Katharine A. Muscalino
Although a landlord is generally required to maintain a leasehold in good condition, the Appellate Division has now clarified that the leasehold’s condition must make the premises attractive to tenants’ customers and assist in the tenants’ “in selling their wares and goods.” In Wallington Plaza, LLC v. Taher, decided on July 7, 2011, the tenant vacated the premises upon one months’ notice, with six months remaining in the lease term. The landlord demanded judgment in the amount of six months’ rent. However, the tenant claimed that because the landlord had breached an implied covenant to maintain the shopping center in a good condition attractive to tenants’ customers, tenant was only obligated to pay rent for the time it occupied the premises. Finding that the parking lot of the shopping center was run-down and that many of the other shopping center stores were vacant, the court agreed that landlord had breached this obligation. The court held that tenant was responsible for paying two months’ rent, inclusive of its last month of occupancy following its notice, because the lease required two months’ notice of termination of the lease.