Winning Bidder At Sheriff’s Sale Entitled To Recoup Some, But Not All, Of His Deposit After Sale Is Vacated

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

Auction (pd)A recent decision from the Appellate Division drives home (1) the duty of sellers at sheriff's sales to announce all material information about the property being sold at the sale, (2) the duty of bidders at sheriff's sales to perform independent due diligence about the property notwithstanding that announcement, and (3) the flexibility of Chancery Division courts to fashion remedies when both fail to fully satisfy their obligations.

In Wells Fargo Bank Bank, N.A. v. Torney, plaintiff foreclosed on property owned by defendant, obtained final judgment against defendant, and proceeded to sheriff's sale. In advance of the sheriff's sale, plaintiff submitted its "sheriff's sale package" to the Camden County Sheriff. Included in the package was a short form property description (required under N.J.S.A. 2A:61-1), which, among other things, disclosed that the property was subject to a $94,000 first mortgage. The existence of this prior mortgage was also disclosed in the conditions of sale attached to the short form property description, and in the Affidavit of Consideration submitted by plaintiff in connection with the foreclosure. Finally, the short form property description also contained the following disclaimer: "all interested parties are to conduct and rely upon their own independent investigation to ascertain whether or not any outstanding interest remain[s] of record and/or have priority over the lien being foreclosed and, if so[,] the correct amount due thereon."

Edward Shuman, who would eventually be the winning bidder at the sheriff' sale,  learned about the sale through the sheriff's website, which did not mention the prior mortgage. Also, at the sheriff's sale, plaintiff did not announce, as part of its "general announcements," that the property was subject to a prior mortgage. And, on the "printed condition of sale, the box next to 'subject to a first mortgage' was not checked." Shuman claims that he did not know about the prior mortgage when he placed his winning bid on the property, and did not learn about it until later that day when he inquired about the existence of any tax liens on the property. Once he learned about the mortgage, he contacted plaintiff and requested that the sale be vacated and his deposit returned. When plaintiff refused, Shuman filed a motion seeking the same relief. 

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Not An Open-Ended Issue: Judge’s Failure To Ask Open-Ended Questions During Voir Dire Is Reversible Error.

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

 Jury (pd)
In 2006 and 2007, the Administrative Office of the Courts issued directives addressing jury voir dires. The directives require, among other things, that trial judges ask jurors at least three open-ended questions that are designed to elicit a narrative response to which "appropriate follow up questions [can] be asked." These questions must be "posed verbally to each juror to  elicit a verbal response." The purpose of this requirement is to "ensure that jurors verbalize their answers so the court, attorneys and litigants can better assess the jurors' attitudes and ascertain any bias or prejudice, not evident from a yes or no response, that might interfere with the ability of that juror to be impartial." The importance of the Administrative Office's directives was highlighted in two recent decision from the Appellate Division, both of which overturned verdicts rendered by jurors who were not asked at least three open-ended questions during voir dire.

In Heredia v. Piccininni, plaintiff sued after being injured in an automobile accident. Before trial, defendant stipulated liability, thus the only issue for the jury was damages. In advance of jury selection, Plaintiff submitted the following open-ended questions to be asked during voir dire:

  1. What are your feelings regarding the proposition that accidents resulting in serious damage to a vehicle may result in no bodily injuries and accidents resulting in little damage to a vehicle may result in serious bodily injuries?
  1. Describe by way of an example an experience in your life that illustrates your ability to be fair and open-minded in this case.
  1. Who are the two people that you least admire and why?
  1. What would you do about the homeless situation?
  1. What would you do about those without medical insurance?

The court did not include any of plaintiff's proposed questions in the list of questions used during voir dire. Instead, the trial judge asked each juror "multiple biographical questions required by the [Administrative Office]," including how they received their news, what their favorite television shows were, what bumper stickers they had on their cars, and how they spent their time. None of these were open-ended questions. Plaintiff's counsel used two of her six peremptory challenges during jury selection and, at the end of the process, advised the court that the jury was satisfactory.

After trial, the jury returned a verdict of no cause on plaintiff's non-economic losses (e.g., pain and suffering damages) but awarded plaintiff her economic damages, representing the full value of her outstanding medical bills. Plaintiff appealed, arguing, among other things, that the trial judge failed to ask any open-ended questions during voir dire.

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Arbitration Award Stands Even Though One Of The Arbitrators Was Later Convicted Of Crime

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

Divorce decree (pd)Arbitration awards are, by design, difficult to vacate. But what happens when one of the arbitrators who entered the award is later convicted of a crime related, at least to some extent, to an issue in the arbitration. In Litton v. Litton, the Appellate Division addressed this interesting but (hopefully) uncommon occurrence.

In Litton, plaintiff and defendant were married in 1982 and had one child. In 2008, the Family Part entered a judgment of divorce and ordered them to share joint custody of their son. They were also directed to proceed to arbitration before a rabbinical panel, or Beth Din, which they did. The panel, which was comprised of three rabbis, entered an award requiring the husband to pay the wife $5,000 per month until he gave her a Get. (As the Appellate Division explained, a Get is a "written document a husband must obtain and deliver to his wife when entering into a divorce. Without a Get, a wife cannot remarry under Jewish law.") Once the wife received the Get, the husband's monthly support obligation would be reduced to $3,500. The husband was also ordered to pay $20,0250 in arrears, $100,000 in the wife's legal fees, and a fine of $250,000 for "his refusal to disclose information about the couple's joint funds."

Several months later, the wife moved to enforce the award and, apparently, have the husband jailed for not complying with it. The Family Part denied the request and found that the husband was not capable of complying with the support order.

Four years later, the Family Part reduced the husband's support obligation from $5,000 per month to $23 per week. Around the same time, in a "wholly unrelated matter," one of the arbitrators on the panel was charged with, and apparently later convicted  of, "criminal conspiracy to threaten and coerce Jewish husbands to give Gets to their wives."  The husband moved to vacate the arbitration award, arguing that, in light of these charges against one of the rabbis on the panel, "the award was the product of corruption." The trial court denied the motion, holding that there was no causal connection between the arbitration in 2008 and the charges against the rabbi five years later, and that there were two other rabbis on the panel who were not charged as part of the conspiracy. The husband appealed.

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Married in 1967, Divorced in 1982, Sued for 47 Years of Alimony in 2014

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

Divorce (pd)It seems like the plot of a Lifetime movie, but it is not (or, at least, not yet). Plaintiff and defendant marry in 1967 in Vietnam. In 1975, plaintiff flees Vietnam because of the "impending communist takeover." He ends up in New Jersey where, in 1981 he files for divorce. The judgment of divorce is entered in 1982, after which plaintiff re-marries. In 2004, defendant immigrates to the United States and ten years later seeks to vacate the divorce and collect alimony and equitable distribution "based on a 47 year marriage." These are the basic facts in a recent unpublished Appellate Division decision, Chau v. Khon.  

Here are the relevant missing details. After coming to America in 1975, plaintiff sent letters to defendant, "including a signed application for family reunification." Plaintiff's brother also sent letters to defendant. These letters were sent between 1975 and 1981, but defendant never responded. Plaintiff filed for divorce in 1981, asserting a separation of more than 18 consecutive months as the basis for the divorce. Because he had not heard from his wife in six years, and did not know here whereabouts, he sought permission to serve her by publication. The court agreed, and following publication, a judgment of divorce was entered.

Plaintiff remarried and the couple had a son. Plaintiff also had two daughters from his first marriage. In 1993, the daughters came to live with their father and his new wife. In 1996, plaintiff and his son even visited Vietnam and met with defendant. In 2004, defendant immigrated to the United States. She claims that she learned about the divorce in 2006 when she obtained copies of the original complaint and judgment of divorce. Nonetheless, she waited until 2014 to (1) move to vacate the original divorce and (2) file her own complaint for divorce, seeking alimony and equitable distribution going back to the original 1967 wedding date. She also filed lis pendens on three properties, only one of which was owned by plaintiff (the other two were owned by his son). Defendant claimed that she waited ten years to file the complaint because it took her that long to "obtain all of the papers they needed to prove that plaintiff knew where she was living in 1981 and 1982 so she could challenge his fraudulent divorce from her." This was important to her because, among other arguments, defendant claimed that plaintiff's assertion that he did not know her whereabouts when he filed the complaint for divorce was a fraud on the court.

Plaintiff opposed the motion to vacate the divorce and cross moved to discharge the lis pendens and for an award of attorney's fees. The trial court denied defendant's motion and granted plaintiff's motion (except the request for fees). The trial court explained that defendant "admitted that she knew of the divorce in 2006 , but failed to act diligently by waiting until 2014 to file her motion to vacate the divorce."  It also held that defendant failed to "address[] how her motion and proposed new divorce complaint would affect plaintiff's second wife, who had been married to plaintiff for over thirty years." Defendant appealed.

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