New Jersey Lawyers Blog

Published on: September 16, 2013

Personal Injury Protection Benefits Under No Fault Auto Insurance

New Jersey requires each driver to have an auto insurance policy with “personal injury protection” or “PIP” benefits. As part of New Jersey’s no-fault auto insurance legislation enacted in 1972, the Legislature required all auto insurance policies to provide “personal injury protection” or “PIP” benefits.
What is Personal Injury Protection?

PIP was designed to reduce litigation and bring down insurance rates by providing that a driver’s own insurance policy will pay medical expenses for the insured’s own injuries sustained in auto accidents regardless of fault. Standard PIP policies provide up to $250,000 of medical coverage, plus limited benefits for income continuation, essential services, and death benefits. Coverage may be increased for additional fees.

If you are injured in an accident you must notify your insurance company to begin receiving benefits.

What benefits does Personal Injury Protection provide?

A PIP policy will typically pay all reasonable hospital, medical, and related expenses incurred for treatment of injuries sustained in an accident. Typically, PIP benefits will pay for doctors, chiropractors, dentists, psychologists, therapists, and skilled nurses.
You will still be required to pay some medical bills because most insurance policies contain a deductible. The deductible can range anywhere form $250 up to $1,000. In addition, PIP is only responsible for eighty percent of your medical bills for the first $5,000. You are responsible for the remaining twenty percent of the medical bill. PIP will then pay for all remaining medical bills in excess of $5,000 up to the policy limit.
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Published on: September 9, 2013

Condominium Associations

by Pauline M.K. Young

Community associations are an important part of New Jersey’s housing environment. There are three main types of community associations in New Jersey: condominium associations, cooperative boards (“co-ops”), and homeowners associations. Condominium associations are the most common.

When a person buys a condominium, they are buying title to the property unit, such as an apartment or townhouse. However, title to the “common elements,” such as the land, the building exterior, recreational facilities, and parking lots or spaces, are held by the buyer together with all the other owners in common throughout the condominium association. When an new owner buys a unit, she automatically becomes a member of the condominium association, which exists to maintain the common elements. This membership is typically not optional.

The association is responsible for the administration and management of the condominium property, meaning the areas and activities of common interest to the unit owners. The operations of the condominium association are run by its board of trustees, made up of owners who are elected by the association membership. The association must maintain accounting records in accordance with generally accepting accounting principles and must be made available for inspection by unit owners at reasonable times. When a condominium association is first created, owner-control of the board is phased in during development of the property, and the owners take after 75 percent of the units are sold.
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Published on: August 28, 2013

Drafting New Jersey Arbitration Agreements is Important if at a Later Date a Dispute Arises

by Boris Peyner

In New Jersey nobody can be forced to arbitrate a dispute unless there is an agreement to do so beforehand. Arbitration agreements are controlled by the Federal Arbitration Act and the New Jersey Arbitration Act.

Arbitration is a process that utilizes a neutral third party to decide a dispute. Disputes are submitted to an arbitrator who makes a binding decision. An arbitrator will review the evidence and then render a binding decision. The decision can then be entered as a judgment by a court and enforced by the Sheriff.

Parties can agree to arbitrate a dispute even after litigation is filed. Arbitration is typically less expensive and faster than litigation. Discovery of information between the parties, however, is greatly reduced, typically limited to the exchange of relevant documents, thereby further reducing costs. Arbitrations themselves are conducted like trials, but are less formal and in private. Arbitrators are then compensated for their time by the parties. Unfortunately, arbitration rulings, generally, cannot be appealed, but that finality can make arbitration less expensive.

Parties to a dispute have considerable discretion about the terms and conditions of arbitration in their Agreement to arbitrate. For example, the parties can decide if the dispute will be submitted to one arbitrator or multiple. The parties can also decide to select a particular arbitrator, or have a neutral third-party select the arbitrator.

However, one thing that is clear in New Jersey is that once the parties agree to arbitrate a dispute, they must do so. In Petersburg Regency, LLC v. Selective Way Insurance Company, the litigants were three years into a civil litigation. The litigants then decided to arbitrate the dispute but did not prepare a written agreement that dictated the specific terms and conditions of the arbitration. When the arbitration was about to proceed the parties had a disagreement to some key terms and conditions and demanded that the arbitration be remanded back to the trial court. Initially the trial court determined that there was “no meeting of the minds” and the parties were required to litigate. On appeal, however, the Appellate Division of New Jersey’s Superior Court ordered the case back to arbitration.
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Published on: August 26, 2013

New Jersey Court Rules – Changes for 2013 and 2014

by Pauline M.K. Young

New Jersey’s Constitution tasks the State’s Supreme Court with creating rules to govern the practices and procedures in the New Jersey court system. The first set of rules went into effect on September 15, 1948.

Every year thereafter, the Supreme Court organizes an annual Judicial Conference to consider new amendments and improvements to the Court Rules. Two comprehensive revisions have previously taken place in 1953 and 1969. However, more minor revisions and amendments are made as deemed appropriate and practical. Changes are made at least once every year.

Recently, the Supreme Court’s Revision Committee has made several amendments
which will take effect on September 1, 2013. It is important for attorneys to be aware of and comply with these rules to avoid any filing issues with the court. While many amendments have been made, the following are some of the amendments more widely applicable to civil cases.
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Published on: August 23, 2013

New Jersey Employers Must Take Discrimination Complaints Seriously or Face Significant Consequences

by Boris Peyner

New Jersey employers should be wary to take all allegations of retaliation or discrimination seriously or face significant consequences. New Jersey employment law provides some of the strongest protections in the nation for employees. In New Jersey employees are protected against discrimination and whistle-blowing retaliation.

New Jersey’s Law Against Discrimination (the “LAD”) applies to all employers. The LAD prohibits discrimination or harassment in employment for a prohibited reason, including race, religion, color, gender, national origin, nationality, ancestry, age, marriage status, domestic partnership or civil union status, sexual orientation, identity, and disability. The LAD is remedial in nature and therefore is applied by the Court expansively.

New Jersey’s Conscientious Employee Protection Act (“CEPA”), which is New Jersey’s “whistleblower law,” prohibits employers from retaliating against employees who disclose, object to, or refuse to participate in actions which they reasonably believe are either illegal, fraudulent or in violation of public policy. CEPA protects all New Jersey employees and some independent contractors. The New Jersey Supreme Court has described CEPA as the most far-reaching whistleblower law in the United States.

Given the expansive interpretation of these two laws courts have been interpreting them with a very liberal standard. As a result, New Jersey employers that do not take discrimination or whistleblowing seriously can face dire legal consequences.
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Published on: August 21, 2013

Transfers in Contemplation of Death in New Jersey

by Jennifer C. Meusel

Gifting your assets to your intended beneficiaries is an effective way to minimize Federal and New Jersey Estate taxes. In order to do so, you must consider the tax implications of making the gift, who will receive the gift, the type of gift, the value of the gift, and the cost basis of the gift.

There are several possible tax liabilities which can be incurred as the result of making a gift: federal gift tax, capital gains tax, generation skipping transfer tax, federal estate tax, New Jersey estate tax, and New Jersey inheritance tax.

Gifts made in contemplation of death can trigger New Jersey inheritance tax liability if the value of the gift is over $500 and they are made within three years of the date of a person’s death. New Jersey Inheritance tax is a tax imposed upon certain classes of beneficiaries. Thus, you must consider who is receiving the gift before you can determine if this will result in liability. The New Jersey tax code separates beneficiaries into “Classes.” Class A beneficiaries pay no inheritance tax, Class C beneficiaries will pay tax on gifts over $25,000 made within three years of the date of death and Class D beneficiaries will pay tax on gifts over $500 made within three years of the date of death.

The decedent’s spouse, civil union partner, domestic partner, children, grandchildren, great-grandchildren, parents, grandparents, great-grandparents, and step-children are Class A beneficiaries, and no inheritance tax will be attributable to gifts made to these people. The decedent’s brother and sister, and son-in-law, and daughter-in-law (if they are the spouse of decedent’s predeceased child) are Class C beneficiaries. Anyone not included in Class A or Class C are Class D Beneficiaries.
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Published on: August 19, 2013

Mediation – An Alternative Option for Dispute Resolution

by Pauline M.K. Young

While many lawsuits settle prior to trial, many cases may proceed to the eleventh hour of litigation, just prior to trial, to settle. Though litigation may involve years of depositions, written discovery (questions and sworn answers regarding claims), and motion practice, the parties rarely, if ever, have a chance to sit down face-to-face with their opponents and try to resolve their case. Yet often this can be the best way for the parties to come to a resolution. This is why New Jersey courts have been so supportive of mediations.

Indeed, in many cases, the Court will require the parties to attempt to settle their dispute through mediation. When requiring the parties to attend court-ordered mediation, the court will initially assign the parties a mediator who has been approved by the court – meaning he or she has received the requisite mediation training.

However, the parties may also agree to select their own, mutually agreed upon mediator. This may occur if the parties believe that certain legal issues exist that the assigned mediator has insufficient knowledge of or experience with, or if there is some conflict or other relationship between the mediator and a party that makes it inappropriate for the mediator to be involved in the matter. If the court does not order the parties to mediate, the parties may still agree on their own to mediate the matter and may ask the court for a referral to mediation or simply have their own mediator.
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Published on: August 12, 2013

The Pros and Cons of an FHA Loan

by Jennifer C. Meusel

Recently, many potential home buyers have been seeking (“FHA”) loans. FHA lenders will finance up to 96.5 percent of the purchase price for a property, and many buyers are attracted by the low down payment required to purchase a home (3.5 percent). Additionally, FHA lenders will allow a seller’s concession in the contract for sale of up to 6 percent of the purchase price. For example, if a property is being sold for $400,000 with a 3 percent sellers concession, the seller will pay $12,000 of the buyer’s closing costs, and the buyer will only need to pay $14,000 up front on the purchase price. If a buyer is obtaining a conventional mortgage, it will typically require at least 10 percent down at closing, or $40,000. The purchase of a home with an FHA loan which is structured with a seller’s concession can enable people who would otherwise not qualify to be able to purchase a home.

Additionally, FHA loans are assumable, which means the loan can be transferred to a qualified buyer when the home is sold, thus avoiding the costs associated with a new mortgage. Additionally, the new buyers can retain the low rate provided in the first loan. However, the transfer of an FHA mortgage can be a more difficult process than actually obtaining a new mortgage.

FHA loans, however, have disadvantages as well. FHA loans require borrowers to pay significant mortgage insurance premiums. There is at the onset of the loan, a fee equal to 1.75 percent of the principal amount of the loan. This can be rolled into the mortgage, however it increases the monthly payment. The borrowers will also be required to pay annual mortgage insurance premiums which are significantly higher than the mortgage insurance premiums required by convention loan for loans which exceed 80 percent of the value of the property. Additionally, if an FHA borrower makes a down payment toward the purchase which is less than 10 percent of the value of the property, the mortgage insurance will be required for the life of the loan. If an FHA borrower makes a down payment which is equal to or greater than 10 percent, the borrower can cancel the mortgage insurance after 11 years.

On a conventional mortgage, once the loan to value ratio is below 80 percent, the borrower no longer has to carry mortgage insurance. In a rising real estate market, this can happen quite quickly. Moreover, usually, when the outstanding balance on the loan reaches 78 percent of the home’s value at the time of the mortgage, the mortgage insurance must be cancelled even if the current value of the home has dropped. For this option, the borrower must not be in default on the mortgage, having made his or her payments on time throughout the life of the loan, and the 78 percent value must be reached through normal amortization of the loan, not by additional unscheduled payments being made by the borrowers.
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Published on: August 9, 2013

Standards for Proving Age Discrimination Can Be Difficult to Navigate

by Noelle Robinson

Federal employment law, in the Age Discrimination in Employment Act (the “ADEA”),prohibits employers from firing, refusing to hire, or discriminating in compensation, terms, conditions, or privileges of employment because of a person’s age. Case law has evolved over time regarding the extent to which age needs to influence employer decisions for the employer to violate the ADEA. A 2009 Supreme Court decision made a distinction between the ADEA’s prohibition against age discrimination and federal law prohibiting so-called status-based discrimination based on race, color, religion, sex, or national origin (Title VII of the Civil Rights Act of 1964). Title VII finds an employer culpable for employment practices for which race, color, religion, sex, or national origin is “a motivating factor,” even if other factors also motivated the practice.

When an employee claiming age discrimination tried to use the “motivating factor” standard for the court’s decision, the Supreme Court disagreed that the standard was appropriate for age discrimination, instead turning to the language in the age discrimination law specifically, which states, “It shall be unlawful for an employer . . . to fail or refuse to hire or to discharge any individual or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s age.” The Supreme Court found that the “because of” language brought the issue back to a term familiar in the legal realm, “but-for” causation — the idea that “but for” discrimination against the person’s age, the employer’s action would not have occurred. As applied in that way, the standard requires an employee to show that employer’s action (such as hiring and firing decisions) would not have occurred in the absence of age discrimination. That standard is harder to prove than proving that age discrimination was one of possibly other motivating factors.

Although the case itself and case law that followed emphasized that the decision reflected a distinction between the age discrimination law and discrimination for other reasons (such as race and religion), the reasoning behind the case has begun to seep into case law about other forms of discrimination. A 2013 case held that similar to the 2009 decision on age discrimination, a civil rights claim of unlawful employer retaliation for status-based discrimination requires proof that the desire to retaliate was the but-for cause of the challenged employment action (Univ. of Tex. Southwestern Med. Ctr. v. Nassar, 133 S.Ct. 978 (2013)).
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Published on: August 8, 2013

Defining Severe Misconduct when Denying Unemployment Benefits

by Pauline M.K. Young

In 2010, the New Jersey State Legislature and Governor Chris Christie revised New Jersey’s Unemployment Compensation Law to combat the significant increase in funds needed to pay unemployment benefits as a result of the rise in the unemployment rate in New Jersey.

To achieve this problem of fast-depleting funds for unemployment benefits, the state created a new category of conduct, called “severe misconduct,” which would allow the state to disqualify employees from receiving unemployment benefits.

The prior two categories of misconduct which could be assessed were: “simple misconduct” and “gross misconduct.” Simple misconduct includes actions that are improper, intentional, malicious, or exhibit a willful disregard of the employer’s interest, a deliberate violation of the employer’s rules, a disregard of standards of behavior which the employer has the right to expect, or negligence in such degree or recurrence as to manifest culpability, wrongful intent, or evil design. Simple misconduct disqualifies the individual from disability for eight weeks (the week in which the misconduct occurred and seven weeks immediately following that).

Gross misconduct includes acts that are criminal, in the first, second, third, or fourth degree under the New Jersey Code of Criminal Justice. Employees fired for gross misconduct are disqualified from receiving any unemployment benefits.

The revisions implemented by the State in 2010 regarding “severe misconduct” failed to define severe misconduct, but included examples, such as: repeated violations of an employer’s rules, repeated lateness or absences after a written warning, falsification of records, physical assault or threats, misuse of benefits, sick time, or leave, theft of company property, excessive use of intoxicants or drugs on work premises, or where the behavior is malicious and deliberate.
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