Recent Blog Posts

• Failure to Request Mediation Bars Claim For Attorney's Fees
  Public policy supports the resolution of disputes before a lawsuit is filed.  What happens when a contract calls for mediation prior to filing suit as a condition of securing attorneys fees, if the party filing the suit suggests mediation after the lawsuit is filed?  Is the failure to seek mediation a bar to a recovery of attorneys fees or is the request for mediation made just after suit is filed deemed to be substantial compliance?   In the case of Lange v. Schilling, No. C055471, 2008 WL 2192833 (Cal. Ct. App. May 28, 2008), the Court of Appeals enforced a contract term that established a condition precedent that required a party to attempt to mediate a conflict before proceeding to arbitration or litigation in order to recover attorney fees. In that case, the plaintiff bought property from a real estate broker, using a standard residential property purchase agreement. The agreement provided that the parties would mediate any dispute before resorting to arbitration or ....
• Mediator Privilege Amended as of July 1, 2008
  The mediator privilege is extremely important to the mediation process.  Without it, participants would have no confidence in the process and information necessary to assist the mediator in resolving a case would not be communicated.   It has often been said that the mediation process involves two levels of confidentiality.  The first level is when the parties are together in a joint session.  While the communication itself at a joint session cannot be used at a later proceeding, the information conveyed has been heard by all and that cannot be changed.  However, communications at a separate session consisting of a party, counsel and the mediator are completely confidential, subject to the provisions noted below.   Effective July 1, 2008, New Jersey Evidence Rule 519 was amended.  This amended Rule deals with the "Mediator Privilege".    Privileged communications The amended Rule provides that a mediation communication is ....
• The Importance of Insurance Coverage in Mediating Complex Construction Claims
  Thomas J. Pryor, Shareholder and Chair of Stark & Stark's Insurance Coverage & Liability Group, has authored the article, The Importance of Insurance Coverage in Mediating  Complex Construction Claims for the March 31, 2008 issue of the New Jersey Law Journal. You can read the full article here. ....
• Arbitrator's Immunity From Civil Liability
  Is an Arbitrator in a civil matter immune from a party's claim of negligence that occurs during the arbitration proceeding?  This is the question that was recently asked in a case heard before the Appellate Division of the New Jersey Superior Court.   In the case of Malik v. Ruttenberg (Docket No. A-6615-06T3), the Appellate Division of the State of New Jersey was presented with a situation where an attorney involved in the arbitration allegedly assaulted one of the parties.   The party involved had previously asked the Arbitrator to remove this attorney from the proceedings.   This request was denied by the Arbitrator and the assault allegedly took place during a recess outside of the arbitration room.   The party that was allegedly assaulted brought an action against the American Arbitration Association and the Arbitrator, claiming that they knew of this attorney's dangerous tendencies but failed to exercise reasonable care to control ....
• Appeals Court Affirms Request for Arbitration After Parties Had Litigated for Over One Year
  The New Jersey Appellate Division decided Delam Construction v. 15 Thornton Road on December 10, 2007.  The parties had entered into a contract for Delam to construct a building.  Defendant, Thornton, owed Delam a balance of $187,368 for Delam’s work on the project.  Delam filed suit for breach of contract and later added Thornton’s managing member as a defendant. Thornton counterclaimed alleging construction deficiencies. Discovery took place and trial was scheduled more than one year after the complaint was filed.  By then, defendant had obtained new counsel, trial was adjourned and the court sent the matter to arbitration after defendant’s new attorney raised for the first time an arbitration clause in the original contract.  Plaintiff alleged that defendant had waived its right to arbitration by participating in the litigation for over one year.  The court examined the competing interests between, on the one hand, favoring commercial ....
• Mediator Privilege
  The New Jersey Supreme Court has adopted New Jersey Rule of Evidence 519 entitled “Mediation Privilege” to become effective July 1, 2008.  It provides that a mediation communication is privileged and shall not be subject to discovery or admissible in evidence in a proceeding unless waived or precluded under limited circumstances further defined in the amendment. However, evidence or information that is otherwise admissible or discoverable does not become inadmissible or protected from discovery solely by reason of its disclosure or use in a mediation. The parties to a mediation may expressly waive the privilege, and in the case of the privilege of a mediator, it may be expressly waived by the mediator. Among the exceptions, where the privilege does not apply are the following: 1.    Communications made during a public mediation; 2.    A threat or statement of a plan to inflict bodily injury; 3.    Communications sought or ....
• Unresolved Legal Issues Make For Unsuccessful Mediations
  Mediators want high “batting averages”–i.e. a very high percentage of mediations which successfully resolve all matters in dispute.  As a mediator so do I, and there is nothing more frustrating to this mediator than a mediation which fails because the lawyers have failed to recognize outstanding legal issues and how the resolution of those issues affects the “value of the case.”  In such circumstances, a lawyer cannot perform a litigation risk and cost analysis which is a necessary predicate to a successful mediation.  Furthermore, the lawyer has probably given the client an unrealistic evaluation of various claims making it difficult to successfully mediate the case.  And when several of the lawyers participating in the mediation have given their clients unrealistic evaluations, it is almost impossible to have a successful mediation.  How do I as a mediator attempt to overcome the problem of unresolved legal issues? First, as soon ....
• Getting a Divorce Without Ever Entering a Courtroom
  Until recently, it was impossible to get a divorce in New Jersey without at least one party appearing before a Judge and requesting the divorce. However, despite the new procedure many attorneys still proceed with the standard default divorce procedure. The new procedure is slightly more complex than the standard default divorce. In a “default” divorce, one spouse would file the complaint and serve the complaint on the other spouse. If the second spouse did not respond to the complaint within the appropriate statutory time limit, the filing spouse could request that the court schedule a hearing and enter a divorce judgment by default. The “on the papers” process as modified starts off the same way. One party files the complaint, and after the appropriate statutory waiting period has elapsed, the filing party requests that the court enter a default judgment. A default hearing is scheduled. However, because the parties have executed a property settlement ....
• Arbitrator's Powers Under Revised Arbitration Act
  Michael S. Kimm v. Blisset, LLC. In the case of Michael S. Kimm v. Blisset, LLC., et als., in an opinion decided on August 28, 2006, the Appellate Division of the Superior Court of New Jersey ( Docket No. A-0965-04T2)  dealt with issues concerning the scope of an arbitrator's powers.    In the opinion, the Court drew distinctions between:  1) fee disputes between attorneys and clients; 2) arbitrations in Court annexed proceedings; and 3) arbitrations held pursuant to private agreements.  In addition, the Court focused on the meaning of the recently enacted  New Jersey Arbitration Act, N.J.S.A. 2 A: 23 B-1 to 32 as it relates to the powers of an arbitrator.    The Court noted that, at its heart, arbitration is a creature of contract.  It is a favored remedy and arbitration agreements are liberally recognized.   It is state contract law principles that generally govern whether a valid agreement to arbitrate exists. An ....
• Divorce - Mediation or Litigation?
  Maria Imbalazano, a Shareholder in the Divorce Group, authored the article Mediate or Litigate: Which is Best for Your Divorce Client for the August 2006 New Jersey Law Journal Family Law Supplement. The article discusses the growing trend of divorce mediation as opposed to traditional litigation.  You can read the article here. ....
• ABA Opinion Sets Standards for Negotiations in Mediations
  On April 12, 2006, the American Bar Association Standing Committee on Ethics and Professional Responsibility issued Formal Opinion 06-439 on a lawyer's obligation of truthfulness when representing a client in negotiations in caucused mediation. Under Model Rule 4.1, a lawyer representing a client in general negotiations outside of the mediation process may not make a false statement of material fact to a third person. However, statements that are considered to be negotiation "puffing", or statements regarding a party's negotiating goals are not considered as false statements of material facts within the meaning of the Model Rules when dealing with general negotiations. The simple example given is where an attorney understates the willingness of a client to make concessions to resolve a dispute. Another example is where a party may exaggerate or emphasize the strengths or minimize the weakness of a factual or legal position. These remarks have been viewed as statements as to ....
• Benefits of Arbitration Sited in Recent Study
  In a recent study conducted by Cornell Professor David Sherwyn, he presented a case study of a large employer following implementation of a program of alternative dispute resolution. He concluded that there did not appear to be discernable bias either in favor of employees or employers in terms of the results of arbitration of employment discrimination claims. Cases were resolved in under two weeks, on average, rather than one year or more as is typical in matters which proceed to court. The costs on all sides were considerably less and where the parties were not otherwise able to work out disputes on their own, arbitration appeared to be a generally more favorable alternative to litigation. Technorati Tags: New Jersey : Alternative Dispute Resolution : ADR ....
• "Prompt Pay" Bill
  Currently there is legislation pending in the New Jersey Legislature that will require builders to pay subcontractors upon demand or immediately instigate arbitration. These bills (A-3174/Caraballo and S-1726/Sweeney) are on a "fast track". By way of background, this proposal provides that an invoice is automatically deemed approved and certified by an owner 10 days after the owner receives it, unless the owner disputes the amount in writing. It then requires the owner to make full payment to the contractor not more than 20 calendar days after the billing date specified in the contract. According to this proposal, all disputes regarding payment are submitted to binding arbitration. This proposal was introduced by Senator Sweeney (D-3) in March, released from the Senate Labor Committee, and forwarded to the Senate Budget and Appropriations Committee for further review. The Assembly companion measure was introduced by Assemblyman Caraballo (D-29) earlier this month and ....
• $25 Million Dollar Dispute Ordered To Mediation
  When first entering into the mediation process, it is not unusual for one or both sides to not have much faith that mediation will be able to solve the dispute. However, experience has shown that a skilled, trained, mediator, with knowledge of the industry, can help to bring an amicable solution to even the most adverse situation. As reported in The Washington Business Review, the Marty and Dorothy Silverman Foundation ("Foundation") is seeking payment of nearly $25 million for 31 acres of property from the University Heights Association ("UHA") in Albany, N.Y. The UHA is a consortium of the Albany Medical Center, Albany Law School, Albany College of Pharmacy and The Sage College's Albany campus, and is looking to improve the inventory of buildings on the four campuses as well as create a medical research hub and improve the surrounding neighborhood. The UHA contends that the $25 million in dispute were not loans that needed to be repaid and that the Foundation intended to forgive the ....
• New Jersey Legal Update - Podcast # 34
  This week's New Jersey Legal Update podcast will discuss the recent decision in The Jayson Company v. Vertical Market Software where the court ruled on the enforcement of arbitration clauses in commercial contracts. This week's New Jersey Legal Update is presented by Scott Unger, a member of the Firm's Litigation group. You can download the New Jersey Legal Update Podcast # 34 here.(9.6MB) Technorati Tags: New Jersey : Podcast : Arbitration : Contract ....
• Boston Town and Power Giant Give Mediation A Try
  With a recently retired Federal Judge playing the role of a mediator, a dispute between power giant American National Power ("ANP") and the Town of Blackstone ("Blackstone") in Massachusetts is taking a break from the Courthouse. The pending litigation concerns an estimated $10 million in tax revenue that Blackstone officials maintain the company must pay the town through 2019 concerning one of the company's co-generation plants. The mediation is an attempt to resolve two legal actions the company has filed in protest of its bills, which actions are pending before the Massachusetts Appellate Tax Board in Boston and the Middlesex County Superior Court in Framingham, MA. The combatants met for two lengthy sessions of mediation and among those participating were Blackstone Town Administrator Raymond Houle, Selectman Chairman Charles Sawyer and other members of the selectmen's panel. A mediated settlement will be of obvious benefit to all involved since it will allow the town and the ....
• Appellate Division Rules On Mediator Confidentiality
  Lehr vs. Afflitto In Lehr vs. Afflitto, decided January 19, 2006, the New Jersey Appellate Division ruled that the trial court erred in permitting a mediator to testify during a hearing held to determine whether the parties had reached a settlement of their matrimonial dispute. After 22 years of marriage and two children, plaintiff filed a divorce complaint in 2002. The parties were directed to court appointed mediation. After two sessions, the mediator met briefly with the parties, without their attorneys, in order to finalize what was thought to have been an agreement between the parties. The mediator prepared a letter to the attorneys listing 13 items the parties had "agreed" to, identifying three items that were left open. The mediator made "recommendations" as to how the three open items might be resolved. These included the amount of defendant's child support obligation; the parties' financial responsibility for their childrens' college education expenses; and the allocation ....
• Court Reluctant to Overturn Abritrator's Decision
  Caridi v. Caridi In a recent construction partnership break-up case, Caridi v. Caridi, a New Jersey Chancery Judge addressed whether an arbitration award should be confirmed where one of the parties alleged that the arbitrator's decision was erroneous because certain evidence was not considered. The party challenging the arbitrator's decision alleged that his former partner falsely claimed that certain documents relevant to the arbitration were "lost," only to have been later produced during an insurance investigation. The Court was not convinced that the "lost" documents would have resulted in a different outcome and refused to disturb the arbitrator's money judgment award. The Court did, however, delay the payment of the award, to allow 30 days for the challenging party to appeal. This case demonstrates the Court's reluctance to overturn an arbitrator's decision. For the prevailing party, this can be comforting. For the party disappointed by the outcome of an arbitration, it can be ....
• Judge Cautions Litigants Regarding Trial Costs
  The Matter of the Estate of Lee Siegel, deceased In The Matter of the Estate of Lee Siegel, deceased, Docket No. P-480-04, Judge Gerald C. Escala, Presiding Judge of the Chancery Division for Bergen County, rendered a decision on December 8, 2005, following a two-day bench trial in an estate matter. The decision centered around attorney fee applications made in the case. While finding the attorney fee applications themselves to be reasonable, the Court admonished the litigants and counsel for having failed to perform a reality check as they proceeded with the case toward trial. Judge Escala noted that: "All too often, litigants leave common sense behind when they embark on litigation in which they convince themselves they are destined to prevail, oblivious to the fact that they might not be successful. They also fail to notice the sometimes astounding amount of time in legal services (and costs) they are incurring to pursue their claim. It must be because in addition to their ....
• New Jersey District Court Finds Forum-Selection Clause Enforceable in Franchise Arbitration
  Jesse Cohen, et al. v. Stratis Business Centers, Inc. Under New Jersey law, forum selection provisions in franchise agreements have been rendered enforceable. In Kubis v. Perszyk Assoc. v. Sun Microsystems, 680 A.2d 618 (N.J. 1996), the New Jersey Supreme Court held that the Forum-selection clauses in contracts subject to the New Jersey Franchise Practices Act are presumptively invalid and should not be enforced unless franchisor can satisfy burden of proving that clause was not imposed on the franchisee unfairly on the basis of its superior bargaining position. As a result, franchisors could not enforce their Forum-selection clauses to franchisees located in New Jersey. However, recently, the United States District Court held in Jesse Cohen, et al. v. Stratis Business Centers, Inc., et al.,, in a non-published decision, that the holding in Kubis applied only to judicial forums, as opposed to arbitral forums. In Jesse Cohen, the franchise agreement contained an arbitration clause that ....