A New Twist On Who Gets The House When The Relationship Ends

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

House + money (pd)If you read this blog then you know that failed relationships often make for the most interesting cases. For example, if your would-be spouse calls off your wedding, then you are usually entitled to get the engagement ring back. But, if you cancel your wedding reception, you may not be entitled to a refund from the venue where it would have taken place. And, of course, if your ex-wife agreed to pay all "utilities" under a divorce settlement but fails to pay for water filtration services that remained in your name and you get sued by the water filtration company, your ex-wife will be required to reimburse you for those charges. Now, Burke v. Bernardini can be added to this list.

In Burke, plaintiff and defendant were involved in a "romantic relationship." (They had actually known each other for 25 years before they began dating.) While they were dating, plaintiff bought property on which he built a house where he and defendant lived together. He paid approximately $368,000 for the property and another $100,000 for improvements and additions. Both plaintiff and defendant contributed furnishings.

Before buying the property, the parties entered into an agreement that provided:

[Plaintiff] acknowledges and agrees that [defendant] has provided, and will continue to provide[,] companionship to him of an indefinite length. [Plaintiff] promises and represents that upon closing, the home shall be deeded and titled in the name of "[plaintiff] and [defendant], as joint tenants with the right of survivorship."

(As a side note, only in the hands of a lawyer does "'til death do us part" become "I agree to provide companionship of an indefinite length.") The agreement also provided that defendant would have no "financial obligations for the home, including, but not limited to, property taxes, homeowners association fees, and homeowners insurance."  

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“This Eight Dollar Dish Will Cost You A Thousand Dollars In Phone Calls To The Legal Firm Of That’s Mine, This Is Yours . . . .”

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

One of my favorite scenes from "When Harry Met Sally" occurs when the late, great Bruno Kirby, and the late, great Carrie Fisher, whose characters are just moving in together, are arguing about a wagon wheel table that Kirby's character wants to put in their apartment. Then they ask Billy Crystal's character for his opinion about the table. Big mistake. Crystal had just run into his ex-girlfriend and her new boyfriend. After a few seconds, Crystal launches into a rant about how things may be wonderful for Kirby and Fisher now, but a few years from now they will break up and will spend hours and hours, and thousands of dollars fighting over a "stupid, wagon wheel, Roy Rogers, garage sale coffee table."  

I was reminded of this scene when I read the Appellate Division's decision in Maciejczyk v. Maciejczyk. Instead of a wagon wheel coffee table, however, the parties in that case were fighting over a water filtration system. Regardless, they proved Crystal's point.

 

Continue reading ““This Eight Dollar Dish Will Cost You A Thousand Dollars In Phone Calls To The Legal Firm Of That’s Mine, This Is Yours . . . .””

Refer(ral) Madness: Court Nixes Fee Sharing For Lawyer Who Referred Case To Lawyer Who Referred Case To Lawyer Who Handled Case

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

Ripped dollar (pd)
Under New Jersey law, lawyers can, in some instances, share fees with lawyers at a different firm to whom they refer a case. But what happens when Lawyer A refers a case to Lawyer B who then refers the case to Lawyer C? Can Lawyers A and B share in the recovery that Lawyer C achieves for the client? This was the question the Appellate Division faced in Weiner & Mazzei, P.C. v. The Sattiraju Law Firm, PC. The answer, in that case, was "no," but there are instances where this type of three-way sharing would be appropriate.

In Weiner & Mazzei, a lawyer was contacted by a family friend in need of advice on a possible workplace injury/change of employment case. The lawyer advised the family friend that he appeared to have a valid claim and referred the family friend to an attorney who specialized in that area of law. The first lawyer claimed that he told the family friend that the second lawyer would take the case on contingency and that the first lawyer would be paid a referral fee. The family friend denied ever being told about the referral fee.

After speaking with the first lawyer, however, the second lawyer also refused the case but agreed to refer it to defendant, a law firm with at least one certified civil trial attorney. The second lawyer had a standing referral agreement with defendant and defendant agreed to abide by the usual one-third referral fee contained in that agreement.

Defendant prosecuted the client's employment case and eventually reached a confidential settlement with the client's former employer. Plaintiffs — the first and second lawyers — sued, claiming they were jointly entitled to one-third of defendant's fee. Defendant moved for summary judgment, which was originally denied, but was later granted upon reconsideration. Plaintiffs appealed.

 

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Transfer Can Be Fraudulent Even If It Occurs Before Loan, Default, And Lawsuit Over Default On Loan

Fraud (PD)A recent Appellate Division decision should serve as a warning to anyone thinking about transferring assets and rendering themselves judgment proof before entering into a business deal. If the deal goes bad, the transfer might be deemed fraudulent and creditors might be able to look to the fraudulently transferred assets to satisfy their judgments. 

In Anastasi v. Barmbatsis, defendants, husband and wife, held all of the shares in a single-purpose entity that owned and operated a Stewart's Root Beer in Franklin Park, New Jersey. Shortly before procuring a loan to open a new Stewart's location with a partner, husband transferred his interest in the entity to wife, along with nearly all of his interest in another entity that the two owned. Husband then entered into a deal with plaintiff — verbal, but "apparently sealed with a handshake" — to borrow $50,000 to use to open the new restaurant. Defendants used this money, along with other funds, to open the restaurant.

Husband agreed to repay the loan in five to seven months. This was subsequently extended but husband failed to repay the loan even with the extension. Plaintiff sued and obtained a default judgment against husband for $50,000. In post-judgment discovery, plaintiff learned about the pre-loan transfers from husband to wife. Thereafter, he sued both husband and wife alleging, among other things, that the transfers violated New Jersey's Uniform Fraudulent Transfers Act (the "UFTA"). The trial court ruled in plaintiff's favor. It held that wife was not personally responsible for paying back the loan, but plaintiff could satisfy his judgment with the interests in the two entities that husband had transferred to wife.

 

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