Justia Business Law Opinion SummariesArticles Posted in New Jersey Supreme Court
Hersh v. County of Morris
Plaintiff Cheryl Hersh worked for defendant County of Morris. The County rented approximately sixty-five parking spaces for its employees in the Cattano Garage, a private parking garage containing several hundred parking spaces located approximately two blocks from Hersh’s office. Although she did not have sufficient seniority to park in a county-owned lot located adjacent to her building, the County granted Hersh permission to park in one of the rented spots, gave her a scan card so she could enter the garage, and instructed her to park on the third level. Shortly after Hersh parked her car and exited the structure, she was struck by a motor vehicle while crossing a public street between the garage and her office. Hersh suffered significant injuries. Hersh filed for workers' compensation benefits. The judge concluded Hersh's injuries were compensable, finding that under New Jersey case law, parking lots provided or designated for employee use are part of the employer's premises for purposes of workers' compensation. The Appellate Division affirmed. The County appealed. The Supreme Court reversed: because the County did not control the garage where Hersh parked, the route of ingress and egress from the parking garage to her office, or the public street where she was injured, and did not expose her to any special or additional hazards, Hersh's injury occurred outside of the employer's premises and therefore was not compensable under the Workers' Compensation Act. View "Hersh v. County of Morris" on Justia Law
Willingboro Mall, LTD. v. 240/242 Franklin Avenue, L.L.C.
In 2007, Franklin Avenue, LLC forwarded a letter to the trial court judge and its opponent, Willingboro Mall, Ltd. announcing that the case had been "successfully settled" and outlined the purported terms of the settlement. Franklin's attorney sent a separate letter to Willingboro stating that he held $100,000 in his attorney trust account to fund the settlement, that Franklin had executed a release, and that the monies would be disbursed when Willingboro filed a stipulation of dismissal in the foreclosure action and delivered a mortgage discharge on the mall property. Willingboro rejected the settlement terms and refused to sign a release or to discharge the mortgage. Franklin filed a motion to enforce the settlement agreement and attached certifications from its attorney and the mediator that revealed communications made between the parties during the mediation. Willingboro did not move to dismiss the motion, or strike the certifications, based on violations of the mediation-communication privilege. Instead, in opposition to the motion to enforce, Willingboro requested an evidentiary hearing and the taking of discovery, and filed a certification from its manager. The trial court ordered the taking of discovery and scheduled a hearing to determine whether an enforceable agreement had been reached during mediation. The issues on appeal to the Supreme Court reduced to: (1) whether Rule 1:40-4(i) required a settlement agreement reached at mediation to be reduced to writing and signed at the time of mediation; and (2) whether plaintiff waived the privilege that protects from disclosure any communication made during the course of mediation. The Supreme Court concluded that Plaintiff expressly waived the mediation-communication privilege and disclosed privileged communications. The oral settlement agreement reached by the parties was upheld. Going forward, however, a settlement that is reached at mediation but not reduced to a signed written agreement will not be enforceable. View "Willingboro Mall, LTD. v. 240/242 Franklin Avenue, L.L.C." on Justia Law
Norfolk Southern Railway Company v. Intermodal Properties, LLC
Plaintiff Norfolk Southern Railway Company owned and operated Croxton Yard, a large intermodal freight facility. Business was expected to grow; the railroad's future plans included the Crescent Corridor project, which would expand rail service from ports in New York and New Jersey across the United States and into Mexico. In 2004, Norfolk Southern decided to expand the yard by acquiring three adjacent properties, including one owned by defendant Intermodal Properties, LLC. Intermodal rejected Norfolk Southern's offers, and the railroad initiated condemnation proceedings through a petition filed with the New Jersey Department of Transportation, which referred the contested case to an Administrative Law Judge (ALJ). Intermodal proposed to use the property as a parking facility for the Secaucus Junction passenger rail station, a use it contended was more compatible with the public interest. The ALJ precluded Intermodal from invoking the prior public use doctrine because the property was not being used for a public purpose and was not zoned to permit a parking facility. Intermodal succeeded in having the property rezoned, but the ALJ deemed this irrelevant since Intermodal presented no evidence that any entity was willing to enter into a contract for public parking. The ALJ also disagreed with Intermodal's contention that the statutory provision permitting a taking only "as exigencies of business may demand" required the railroad to demonstrate an urgent need. The issue on appeal before the Supreme Court centered on two statutory provisions relating to the eminent domain power vested in public utilities and railroads. The Court found that Norfolk Southerns proposed use met the requirement of N.J.S.A. 48:3-17.7 that the taking be "not incompatible with the public interest." Intermodal could not invoke the prior public use doctrine because it lacked the power to condemn and its proposed use was neither prior nor public. As used in N.J.S.A. 48:12-35.1, "exigencies of business" did not necessitate an urgent need for land in order to justify a taking, instead it limits a railroad's power to condemn to those circumstances where the general needs or ordinary course of business require it. View "Norfolk Southern Railway Company v. Intermodal Properties, LLC" on Justia Law
Shelton v. Restaurant.com, Inc.
Plaintiffs filed a complaint in Superior Court alleging that Restaurant.com's certificates violate the Truth-in-Consumer Contract, Warranty and Notice Act (TCCWNA). Restaurant.com removed the matter to the federal district court, which granted its motion to dismiss. The judge concluded that certificates purchased by plaintiffs "provide an individual with a contingent right for discounted services at a selected restaurant[,]" but such a contingent right did not constitute the purchase of "property or service which is primarily for personal, family or household purposes." Therefore, plaintiffs were not "consumers" as defined by the TCCWNA and that the certificates were not "consumer contracts." Plaintiffs appealed. The United States Court of Appeals for the Third Circuit certified two questions to the New Jersey Supreme Court. (reformulated): were Restaurant.com's certificates "property" under TCCWNA; if so, were they "primarily for personal, family or household purposes;" and were they a written contract, that gave or "displayed any written consumer warranty, notice, or sign." The New Jersey Court concluded that Plaintiffs were "consumers" and the certificates were "property . . . primarily for personal, family, or household purposes." Furthermore, the certificates purchased from Restaurant.com were "consumer contracts" and the standard terms provided on the certificates are "notices" subject to the TCCWNA. View "Shelton v. Restaurant.com, Inc." on Justia Law
Sipko v. Koger, Inc.
This case presented the issue of revocability of a gift of stock in one company and the validity of stock transfers in two other companies. George Sipko and his two sons Robert and Rastislav managed Koger, Inc. George made an undocumented gift of 1.5 percent in Koger stock to each of his sons. George then formed Koger Distributed Solutions, Inc. (KDS) and Koger Professional Services, Inc. (KPS) The sons each owned fifty percent of KDS and KPS. According to Robert, George became angry after learning about a romantic relationship in which Robert was involved and threatened to physically harm Robert unless he signed certain documents. Robert signed a document transferring his stock in KDS "For Value Received." A second document, transferred Robert's KPS stock using the same language. Robert testified that he signed the KPS document on February 3, 2006, and it was backdated. At a 2006 board meeting, George conducted a purported recall of Robert's 1.5 percent share of Koger stock. George and Rastilav contended that any document signed by Robert was executed voluntarily. Robert then sued his father, Rastislav and the three companies seeking damages and equitable relief. Upon review, the Supreme Court held that George's gift of Koger stock to Robert was unconditional and therefore irrevocable. Robert's transfers of KDS and KPS stock were void for lack of consideration. View "Sipko v. Koger, Inc." on Justia Law
IMO The Liquidation of Integrity Ins. Co. v. Celotex Asbestos Trust
Celotex Corporation manufactured and distributed products that contained asbestos. Thousands of asbestos-related claims were filed across the country against Celotex for bodily injury and property damage. In 1990, Celotex filed for Chapter 11 bankruptcy; the Celotex Asbestos Settlement Trust was formed thereafter to process the asbestos claims. As part of the bankruptcy case, Celotex sought a declaratory judgment that it was entitled to insurance coverage for all of the asbestos claims. The bankruptcy court determined that because some of Celotex's bodily injury and property damage excess insurers received inadequate notice of the claims, it barred Celotex from obtaining coverage. The Trust appealed, but the appellate court held that Celotex's duty to give notice to its insurers arose well before the company actually provided notice of the claims. The Trust filed proofs of claim with the Integrity Liquidator seeking coverage for future claims. The Liquidator denied the claims; a special master upheld the denial. The Appellate Division reversed, finding the trial court did not address future claims coverage. The appellate court found that the occurrences of asbestos injuries on which future claims were based were not known at the time of the bankruptcy, therefore, Celotex had no duty to provide reasonable notice. The Liquidator appealed that decision to the Supreme Court. The Supreme Court concluded that under collateral estoppel, the orders entered in the prior federal court proceedings finding one occurrence from which all pending a future claims derived (and that Celotex failed to notify its insurers) barred the proofs of claim filed by the Trust. View "IMO The Liquidation of Integrity Ins. Co. v. Celotex Asbestos Trust" on Justia Law
Fox v. Millman
Defendant Jean Millman worked as a sales representative for Plaintiff Target Industries, an industrial bag company. Plaintiff Thomas F. Fox was Target's director of development and purchased all of its assets after Target filed for Chapter 11 bankruptcy protection in 1999. Plaintiffs asserted that Millman signed a confidentiality agreement when hired. Target terminated Millman on September 7, 2000. Several days later, Defendant Polymer Packaging Inc., an industrial bag company owned by Defendants Larry and William Lanham, hired Millman knowing that she had previously worked for Target. The Lanhams asserted that Millman assured them that she was not subject to the terms of either a confidentiality agreement or a non-compete clause. The Lanhams did not verify independently the truth of that assertion. The Lanhams conceded that Millman provided Polymer with a list of customers, but contended that she described it as a customer base that she had developed over the years, thereby implying that she had generated the list on her own. The list did not identify Target or bear any indication that it was not Millman's own, and the Lanhams did not further inquire into the genesis of the list. Millman sold products for Polymer to former Target customers and, before leaving Polymer in October 2004, was responsible for generating substantial sales for the company. The core dispute over the list gave rise to a series of rulings by the trial court prior to and following a jury verdict based on special interrogatories, all of which were affirmed by the Appellate Division. Plaintiffs' petition for certification to the Supreme Court asserted that it was error for the trial court to permit Defendants to raise the defense of laches. In particular, they argued that permitting a laches defense, in circumstances in which the statute of limitations had not expired, would erase clearly defined deadlines and therefore create ambiguity, lead to confusion and engender inconsistent results in application. Further, Plaintiffs asserted that the trial and appellate courts erred in rejecting the continuing violation doctrine, in misapplying settled precedents from the Supreme Court recognizing that customer lists are protected as trade secrets, and in failing to require Defendants to inquire independently about the proprietary nature of the customer list prior to utilizing it. Upon review, the Supreme Court held that the equitable doctrine of laches could not be used to bar an action at law that was commenced within the time constraints of an applicable statute of limitations. The case was reversed and remanded for a new trial. View "Fox v. Millman" on Justia Law
Cast Art Industries, LLC v. KPMG LLP
Defendant-Appellant KPMG already was in the process of auditing Papel Giftware's 1998 and 1999 financial statements when merger discussions began with Plaintiff Cast Art. In a November 1999 letter to Papel’s audit committee, KPMG explained that the audit was planned "to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether caused by error or fraud. Absolute assurance is not attainable . . . ." The letter cautioned that there is a risk that "fraud" and "illegal acts may exist and not be detected by an audit performed in accordance with generally accepted auditing standards," and that "an audit is not designed to detect matters that are immaterial to the financial statements." In September 2000, KPMG delivered completed audits to Papel. KPMG's accompanying opinion letter, addressed to Papel's audit committee, stated that the audits were conducted in accordance with generally accepted auditing standards. The letter concluded by observing that as of December 31, 1999, Papel was not in compliance with certain agreements with its lenders, which raised "substantial doubt" about Papel's "ability to continue as a going concern." Three months later, Cast Art and Papel consummated their merger. Soon, Cast Art had difficulty collecting accounts receivable that it had believed Papel had outstanding prior to the merger. Cast Art investigated and learned that Papel's 1998 and 1999 financial statements were inaccurate and that Papel had accelerated revenue. Cast Art sought to recover from KPMG for the loss of its business. Cast Art alleged that KPMG was negligent; that if KPMG had performed a proper audit, it would have uncovered the fraudulent accounting activity that was taking place at Papel; and that Cast Art would not have proceeded with the merger if it had been alerted to the fraud. KPMG argued, among other things, that Cast Art had not retained KPMG and was not its client, and thus Cast Art's claim was barred by the Accountant Liability Act, N.J.S.A. 2A:53A-25. Upon review, the Supreme Court found that because Cast Art failed to establish that KPMG either "knew at the time of the engagement by the client," or later agreed Cast Art could rely on its work for Papel in proceeding with the merger, Cast Art failed to satisfy the prerequisites of N.J.S.A. 2A:53A-25(b)(2).
Lombardi v. Masso
In 2002, Defendants decided to purchase, renovate, and resell a home located in Medford Lakes. According to their plan, Defendants Christopher Masso and John Torrence would finance the purchase; Defendant James Githens would perform the renovations; and Defendant real estate agent Jennifer Lynch would serve as the listing agent. Plaintiff Debra Lombardi viewed the home and made an offer. The sales contract, which was signed by Masso and Torrence, indicated that the house was being sold to Lombardi âas isâ and that any guarantees, unless set in writing, would be void. However, handwritten into the contract was a notation to âsee construction addendum attached.â That addendum reflected at least seventy repairs and renovations. At the closing, the house was nowhere near completion. Masso agreed to place money in escrow to ensure completion of the renovations. The escrow was to be held until which time the renovations would be completed. Against her realtorâs advice, Lombardi went ahead with the closing. Thereafter, the house remained unfinished and Plaintiff filed suit. The trial court granted summary judgment to the Defendants, finding that Lombardi accepted the property âas is,â Defendants did not breach the contract, Defendants could not be held liable under the Consumer Fraud Act, and they made no misrepresentations. Later the trial judge would write a letter to the parties, including the dismissed defendants, informing them that he was going to reconsider his order granting summary judgment and was scheduling a new hearing on the issue. The judge ultimately vacated the grant of summary judgment in favor of Defendants. The Appellate Division granted defendantsâ motion for leave to appeal, remanded to the trial court for further findings of fact and conclusions of law, and ultimately reversed the trial court. The Supreme Court concluded after its review that the Appellate Division correctly determined that the trial courtâs original summary judgment order dismissing several of the defendants was issued in error, the trial judge was well within his discretion in revisiting and vacating the summary judgment order.
Pomerantz Paper Corp. v. New Community Corp.
Defendant New Community Corporation appealed judgments in favor of Plaintiff Pomerantz Paper Corporation stemming from a breach of contract claim. Pomerantz appealed a judgment in favor of New Community on a counterclaim that held that Pomerantz engaged in unconscionable business practices as defined by the state Consumer Fraud Act (CFA) stemming from the same contract. According to New Community, items regularly were missing from shipments. In 2000, New Community began to question the invoices and prices Pomerantz charged. By 2004, Pomerantz claimed that New Community had failed to pay invoices totaling approximately $700,000, and it filed a claim for breach of contract. New Community filed a counterclaim asserting that Pomerantz engaged in unconscionable business practices in violation of the CFA. Upon review of the contract, the parties' business dealings and the trial court's record, the Supreme Court concluded that the trial courtâs findings that were central to its evaluation of the New Community's Consumer Fraud Act counterclaim failed for want of sufficient credible evidence in the record, and that the appellate panel erred in deferring to those findings and, by extension, in affirming the trial courtâs conclusions. Furthermore, the appellate panel erred in its analysis of the sellerâs breach of contract claim by imposing a duty of written notice of non-delivery on the buyer that is found neither in the Uniform Commercial Code nor in the course of dealing between the parties. The Court remanded the case for further proceedings.