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In 2014, I authored a post on this blog entitled Stern Revisited – Using the Shareholder Agreement to Determine Value.  I noted then that it seemed that after the Appellate Division’s decision in Brown v. Brown  which changed the landscape by doing away with discounts and essentially ushered in more of a value to the holder construct, that the consideration of an agreement was dead.  Rather, a myopic view of methodologies focused on income seemed to be the norm – disregarding all else.

This was the case even though there was New Jersey Supreme Court case law  (Stern v. Stern and Bowen v. Bowen to be precise ) that suggests the use of a “trustworthy” buy-sell agreement to establish value, noting that in some instances it may appropriately establish a presumptive value of a party’s interest.  Often the issue is what is a “trustworthy” buy-sell agreement?  What makes an agreement trustworthy?  It is updated frequently and routinely used when people enter and exit a business.  In my 2014 post, I blogged about the use of the buy-sell agreement in deciding the value of a medical practice where there had been 32 purchases or sales of interests in the practice in the recent past.  In the case cited in that blog, the Appellate Division noted “We find no error in the judge’s considered decision that the practice’s regularly updated corporate agreements were a better measure of value than plaintiff’s expert’s projection of cash flows through 2020, discounted by a rate chosen on the basis of U.S. Treasury bonds, augmented by selected risk premiums and reduced by an assumed long-term growth rate.”  Simply put, what the doctor would have received if he left the practice was used as the value.  Unlike many valuation calculations, there was no subjectivity to that number.  But this case was an unreported decision which means that it wasn’t precedential and there haven’t been many, if any, reported decision on the issue in some time.

That is, until August of 2017 when the Slutsky case was decided.  In that case, the husband was a partner at a major New Jersey law firm.  Though his income was substantial, he was not a rainmaker, and thus, worked on business generated by other attorneys at his firm.  In valuing the husband’s interest in the firm, the big issue was whether there was goodwill to be added to the amount that the husband would have been due under the firm’s partnership agreement.  The wife’s expert added goodwill; the husband’s expert did not.  The trial judge sided with the wife’s expert finding it “”incredible” the firm had no goodwill value. ”  The Appellate Division disagreed and reversed.

The Court noted that:

As Dugan instructs, the start of the examination of goodwill considers whether excess earnings exist. Dugan, supra, 92 N.J. at 439-40. This was a highly contested issue on which the experts used slightly different resources and offered greatly disparate opinions. Factual findings regarding this pivotal question were not provided.

Moreover, the court returned to Stern and the husband’s argument in that case regarding  “the propriety of considering his earning capacity as being a separately identified and distinct item of property” and pointed out the passage in Stern that held as follows:

[A] person’s earning capacity, even where its development has been aided and enhanced by the other spouse, as is here the case, should not be recognized as a separate, particular item of property within the meaning of N.J.S.A. 2A:34-23. Potential earning capacity is doubtless a factor to be considered by a trial judge in determining what distribution will be “equitable” and it is even more obviously relevant upon the issue of alimony. But it should not be deemed property as such within the meaning of the statute.

Of note, in this case the Appellate Division framed the real issue as follows:

Here, a nuanced valuation methodology is required because defendant is an equity partner in a large firm, who generally is not responsible for originations, and who is bound by the firm policies and a shareholder agreement.

In this case, the Appellate Division found that the formula in the firm’s agreement actually captured good will.  In addition, the court noted:

We believe the trial judge misunderstood Hoberman’s conclusion, as suggesting goodwill did not exist for the firm. Actually, Hoberman’s opinion asserted the TCA of each equity partner accounted for any goodwill. Further, plaintiff, who was not an originator but a worker in a highly specialized legal area, was actually paid what a similarly skilled lawyer would be paid. Thus, defendant’s compensation matched his earning capacity, nothing more. This view considered whether defendant’s “future earning capacity has been enhanced because reputation leads to probable future patronage from existing and potential clients” and concluded it did not. Accordingly, there was no additional component of goodwill. Id. at 433.

In this matter, any analysis of goodwill must evaluate the firm’s shareholder’s agreement to determine whether it is an appropriate measure of the total firm value, including goodwill. That formula computes an exiting partner’s interest, calculated as a portion of the firm’s excess earnings. See Levy, supra, 164 N.J. Super. at 534. The Court must discern the objectiveness and accuracy of the formula and calculations. When “it is established that the books of the firm are well kept and that the value of partners’ interests are in fact periodically and carefully reviewed, then the presumption to which we have referred should be subject to effective attack only upon the submission of clear and convincing proofs.” Stern, supra, 66 N.J. at 347.

The take away here is that Stern lives now for the same reasons that that it was originally decided.  If a regularly updated and followed agreement was disregarded, the titled spouse would be stuck getting only what the agreement allows, which the other spouse could wind up with a lot more, or less, if valuation methodologies with subjective components are used.  On the other hand, say that there are two similarly situated law firm partners with a similar book of business and making similar money, but one worked at a large firm with a regularly updated and followed shareholders agreement and the other at a smaller firm without a formal agreement, it seems like a safe bet that the values of their practices would be extremely different.  One other question to ponder.  Would the result have been different if the husband here was a major rainmaker?  Perhaps that will be addressed in a future case.

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Eric SolotoffEric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Morristown, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com.

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We have all had those cases where any request that we made, big or small, has been rejected by the other side and any requests that our client has made to her/his spouse is similarly rejected.  They don’t agree to informally provide discovery that they will eventually have to provide formally (and then maybe even not then).  They won’t agree to a mediator because you proposed him or her.  They won’t agree to a joint expert, for the same reason.  They wont agree to pay any or the right amount of support.  They won’t agree to parenting time.  They wont agree to the slightest deviations to parenting time.  Post-judgment, when an Agreement says that the parties must agree on something before the other side will have to pay “with consent to not be unreasonably withheld”, they will not agree to anything, nor even make proposals for the other side to agree to.

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This is bad when the litigant’s do this.  It is worse when the lawyers do it, especially when there is no advantage, tactical or otherwise, not to be agreeable.  I have a matter now where the other party simply refuses to answer discovery or do anything whatsoever, and there is no benefit to him in any way, shape or form.  Sometimes you hear “my client wont let me agree to an adjournment” which, quite frankly, is rarely, if ever, should be the basis of denying a reasonable adjournment request.  But all too often, the lawyer becomes the instrument of the client’s bad behavior or general inability to reasonably agree to anything.

I recently heard a story about a party rejecting out of hand a Consent Order providing the relief that he asked for and got, simply because it was drafted by the other attorney.  Instead of getting it done, his attorney said “why did you even bother since he wont sign anything unless I draft it.”  Think about that.  He was willing to cut off his nose to spite his face, and put himself in a more precarious position, simply because of who the messenger was, ignoring the message completely.

This can permeate every part of a case.  How many times have we seen bogus motions to quash of completely discoverable materials (i.e. income information, current bank account information, etc. – i.e. the stuff that you have a duty to update until the end of a case, if requested)?  How many times have we had to file repeated motions to compel or repeated enforcement motions?  How many times has an adversary apologized for taking a ridiculous position forcing you to file a motion rather than forcing their client to do the right thing?

On the rare occasion that the disagreeable person actually makes a settlement proposal that your client agrees to, how many times have you seen the offer be walked back or the deal otherwise go south because the proposal was really made in bad faith and was never expected to be accepted, and the offering party now thinks that the offer was too good if your client actually accepted.

 

Are their any benefits to saying no to everything?  Assuming the clients can pay, maybe the attorneys do ok.   Or do they?  When your reputation is damaged and/or your stature and relationship with your judge and your adversary takes a hit, is it worth it?  For the parties, unless both parties are equally disagreeable, and this happens sometimes, the court eventually figures out who the difficult party is.  Do you want that impression guiding a judge’s substantive or counsel fee decisions.

Now I am not suggesting that you need to agree on everything that the other party says.  There will be good faith disputes and disagreements that will have to be resolved by a judge or arbitrator.  But, in most cases unless there is an emergency or some really good strategic reason, what is the harm in trying to resolve issues, big and small, before just saying “no,”  It doesn’t make you weak, it makes you smart.

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Eric SolotoffEric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Morristown, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com.

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Our partner in our Chester County, Pennsylvania office, Mark Ashton, just wrote an interesting piece on our Pennsylvania Family Law Blog entitled “”Tis the Season”  about how the time between November 1st and the end of the year used to be the quiet time for new matters and how he has found that this year has been different.  We have found that to be the case, as well, as noted below.

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That said, for many divorce attorneys, the busy season starts after the first of the year. For the last few years, I have posted on the phenomenon of the New Year’s Resolution Divorce. For whatever reason, this post has struck a chord and has been both well received and cited by other bloggers. As such, given that the new year is near, I thought I would share that piece again, updated slightly for the new year.

Over the years, I have noted that the number of new clients spikes a few times of the year, but most significantly right after the new year. Out of curiosity, I typed “New Years Resolution Divorce” into Google and got 540,000 results in .29 seconds. While not all of the search results were on point, many were extremely interesting. It turns out that my intuition about this topic was right and that there are several reasons for it.

One article on Salon.com put divorce up there with weight loss on New Years resolution lists. Also cited in this article was that affairs are often discovered around the holidays. Another article linked above attributed it to “new year, new life”. Another article claimed that the holidays create a lot of pressures at the end of the year that combine to put stress on people in unhappy or weak relationships. Family, financial woes, etc. associated with the holidays add to the stress. Turning over a new leaf to start over and improve ones life was another reason given. This seems to be a logical explanation for a clearly difficult and perhaps heart wrenching decision.

In my experience, people with children often want to wait until after the holidays for the sake of the children. There is also the hope, perhaps overly optimistic, that the divorce will be completed by the beginning of the next school year. These people tend to be in the “improving ones life” camp.

So as divorce lawyers, we hope to avoid or at least resolve in advance the holiday visitation disputes that inevitably crop up, then relax and enjoy the holiday as we await the busy season to begin.

In the last several years, the phenomena started early for us and many other attorneys. We were contacted by more people in December in the last few years than in any years in recent memory. This year, the calls started in November at a pace more robust than in prior years.  Moreover, we have heard of more people telling their spouse it “is over” before the holidays this year. I suspect that in some, it was the discovery/disclosure of a new significant other or perhaps pressure being exerted by that person that was the cause. In other cases, the person just didn’t want to wait until the new year to advise their spouse.

Whatever the reason, we await those who see 2017 as a chance for happiness or a fresh start. Happy New Year?!?!

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Eric SolotoffEric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Roseland and Morristown, New Jersey offices though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com.

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As we have blogged before, in light of the Constitutional protections given to parents, grandparent visitation is very hard to obtain because the grandparents have to show harm to a child to meet their burden.  What happens, however, if parties agree to grandparent visitation and the parent then either changes their mind or reconsiders decides that the grandparents shouldn’t have visitation anymore?  Must the grandparents then have to prove harm, as if there never was a consent order in the first place because there was no proof that the visitation was necessary to avoid harm to the child.  That is exactly what a trial court, in the case of Slawinski v. Nicholas held.  Note that that basis for the motion to terminate the visitation was a claim that the child was upset by the visits, was not properly cared for during the visits and further, that the grandparent allowed the child’s father to be present at a visit even though his visitation had been suspended by a prior court order.  However, in a reported (precedential) opinion, released on December 6, 2016, the Appellate Division reversed and held that a parent could not unilaterally modify a consent order for grandparent visitation.

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The parent’s attorney argued that she  should not have the burden to demonstrate grounds to terminate visitation inasmuch as the original Consent Order was entered by consent without any judicial findings that the visitation was beneficial. The attorney further contended, “[T]here is no burden that my client has to do anything other than say this is not working out, I tried.” The trial judge agreed and held that since the order was entered by consent, defendant was entitled to terminate visitation unless plaintiff could demonstrate, by a preponderance of the evidence, “that denial of visitation would result in harm to the child.”

In the decision, the Appellate Division provided a concise primer on the state of grandparent visitation, as follows:

We recognize that a parent’s fundamental right to raise a child as he or she sees fit encompasses the authority to determine visitation by third parties, including grandparents. See Moriarty v. Bradt, 177 N.J. 84, 114-15 (2003), cert. denied, 540 U.S. 1177, 124 S. Ct. 1408, 158 L. Ed. 2d 78 (2004). Yet, that autonomy gives way to the need to protect the child from harm. Id. at 115. Thus, “grandparents seeking visitation . . . must prove by a preponderance of the evidence that denial of the visitation they seek would result in harm to the child.” Id. at 88. “If the court agrees that the potential for harm has been shown, the presumption in favor of parental decision making will be deemed overcome.” Id. at 117.

Still, proof of harm involves a greater showing than simply the best interests of the child. Id. at 116 (stating that a dispute between a “fit custodial parent and the child’s grandparent is not a contest between equals[,]” consequently “the best interest standard, which is the tiebreaker between fit parents, is inapplicable”). Substantively, it is a “heavy burden.” Major v. Maguire, 224 N.J. 1, 18 (2016); cf. Fawzy v. Fawzy, 199 N.J. 456, 479 (2009) (“The threat of harm is a significantly higher burden than a best-interests analysis.”). The harm to the grandchild must be “a particular identifiable harm, specific to the child.” Mizrahi v. Cannon, 375 N.J. Super. 221, 234 (App. Div. 2005). It “generally rests on the existence of an unusually close relationship between the grandparent and the child, or on traumatic circumstances such as a parent’s death.” Daniels v. Daniels, 381 N.J. Super. 286, 294 (App. Div. 2005). By contrast, missed opportunities for creating “happy memories” do not suffice. Mizrahi, supra, 375 N.J. Super. at 234. Only after the grandparent vaults the proof-of-harm threshold will the court apply a best-interests analysis to resolve disputes over visitation details. Moriarty, supra, 177 N.J. at 117.

The Appellate Division then discussed the impact of a consent order on the above law, and held:

But nothing about a parent’s right to autonomy warrants allowing a parent to unilaterally modify or terminate a consent order on grandparent visitation. The parent effectively waives that autonomy by entering into the order, just as a parent waives rights when entering into any other consent order governing custody or visitation. Given our respect for the consensual resolution of family-related disputes and the stability such agreements achieve, modification of a consent order governing grandparent visitation must be considered according to the same Lepis changed circumstances framework applicable to other custody and visitation orders.

The Appellate Division then provided the necessary procedure to follow should a parent wish to modify a Consent Order for Grandparent visitation, as follows:

Consistent with this approach, the court should apply the standard governing grandparent visitation if the movant-parent also succeeds in establishing changed circumstances. That is to say, the court must consider whether or not the modification of a grandparent’s visitation will cause harm to the child, as distinct from considering the best interests of the child.3 If the modification will not cause harm, the court must grant the modification even if the grandparent could show doing so was contrary to the child’s best interests.

When the parent is the movant, the parent bears the burden to establish grounds for modification. See Beck v. Beck, 86 N.J. 480, 496 n.8 (1981) (“[W]hen seeking joint custody after an initial custody determination has been made, even a parent enjoying such a relationship must satisfy the same burden of proof as applies to anyone seeking to change a custody decree, namely, a change of circumstances warranting modification.”); Abouzahr, supra, 361 N.J. Super. at 152 (assigning burden to show change of circumstances and child’s best interests to “party seeking a modification”); Sheehan, supra, 51 N.J. Super. at 287 (stating “the party seeking a modification bears the burden of proof”).

Thus, in a grandparent visitation case, the parent seeking modification bears the burden to prove changed circumstances and that the child would not suffer a particular, identifiable, child-specific harm, see Mizrahi, supra, 375 N.J. Super. at 234, if modification were ordered. Given that a grandparent’s burden to prove harm is more onerous than satisfying a best interests test, the parent’s burden to prove the absence of harm is less onerous than the best interests test. See Moriarty, supra, 177 N.J. at 113 (noting that a best interests test can be satisfied although the child suffers no harm) (citing Watkins v. Nelson, 163 N.J. 235, 248 (2000)); cf. Morgan v. Morgan, 205 N.J. 50, 63-65 (2011) (noting that a custodial parent’s burden to prove good faith and lack of harm in order to remove the child is less onerous than a showing of best interests). Once the parent establishes changed circumstances and the absence of harm, the court must grant the parent’s requested modification.

The Appellate Division was clearly wrestling with the long standing public policy favoring the settlement of disputes as juxtaposed against a parent’s constitutional rights as it relates to their children.  That said, one wonders whether a parent would be willing to give up their autonomy, especially in questionable circumstances, if they have will have to expend a lot of time and money to terminate the grandparent visitation in the future.

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Eric SolotoffEric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Roseland and Morristown, New Jersey offices though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com.

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Ah, that unforgettable line uttered by Veruca Salt in Willy Wonka and the Chocolate Factory.  As a matrimonial attorney, this is what it feels like we deal with quite often.  But I am not referring to people just being demanding, I am talking about people making unreasonable demands, with no apparent justification in law or in fact.  In fact, I have had enough of “my client just wants”, “that’s not enough” and “I know that a court would never do that but my client insists” over the last several months to last me a career.

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Some examples have been, in no particular order, demands for child support that exceed what the Guidelines would require by 7 to 10 times; demands for combined alimony and child support representing 60% or more of pre-tax income; demands for a buy out on the house for higher than the agreed upon value less the agreed upon mortgage; demands to share in exempt inheritances, trusts or family gifts that were never commingled; demands that one party get most of the marital assets because they were held in her name, though not exempt; demands for more than half of the assets, or 100% of the house free and clear of the substantial mortgage debt “because you caused the divorce.”

It is bad enough when an a litigant, who is uneducated about the law makes these demands.  That is to be expected because of ignorance of the law or raw emotions clouding judgment or both.  It is quite another thing when the client’s lawyer makes the demand, knowing that there is no rational or legal basis for the request.  As a younger lawyer, I remember incredulously asking an adversary, “Is your client really seeking 80% of the assets and 90% of my client’s net income?” to which the answer was yes.  Inevitably, when they are called on it, they sell their client out, saying how unreasonable they are, but they are just doing what they have been instructed to do.  Is that response good enough?  First, you wonder if they ever actually educated their client on the law (or whether they know it themselves).  If they have educated the client, is it proper to make a demand that is unreasonable, if not bad faith?

On the other side of the equation there may be the litigant that is willing to negotiate a reasonable resolution within the expected settlement parameters based upon the facts of the case (though often, water finds is level and where there is one unreasonable party, their spouse may be their mirror image in that regard.)  But what is the reasonable litigant to do?  They are often left with having to make the  “Hobson’s choice” of capitulating to the unreasonable party, or incurring the cost of litigation.  Worse yet, I have seen mediators, early settlement panelists, and even judges, try to pressure the reasonable party to settle because the other party wont budge, or split differences between the reasonable proposal and the unreasonable demand resulting in a slightly less unreasonable proposed resolution.  That said, I have seen these same judges, mediators or panelists use the threat that the unreasonable party may be required to pay the other party’s counsel fees as an effective deterrent.  Unfortunately, usually by that time, a lot of money has already been spent for something that should probably have been nipped in the bud from day one.

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Eric SolotoffEric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Roseland and Morristown, New Jersey offices though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com.

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“Justice delayed is justice denied.”  I am sure that many have heard this old legal maxim.  Though the original source is unclear, what is not unclear is that it essentially means that when a legal remedy is available, but not provided in a timely fashion, it is like having no remedy, at all.

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When I speak to other attorneys in court, at mediations or at bar events, one of the things discussed most is the delay in getting matters decided.  While the discussion is sometimes about a trial decision, most of the time we are talking about routine motion practice both during active divorce cases and during post judgment cases.  For a trial, especially a long one, it is more understandable.  Very often the attorneys want to review the transcripts and otherwise have a month or more from the close of the evidence to submit written summations.  Moreover, in addition to their jam packed daily dockets, the judge needs time to review the evidence and prepare a thoughtful and comprehensive (hopefully) written or oral decision.  That said, I have been in involved in cases where it has taken more than a year from the end of a trial to get a decision.  I have heard, anecdotally, of people getting trial decisions more than 2 years after the close of the evidence.  In addition, several years ago, we heard that one judge was not permitted to start any more trials due to the number of completed trials that were not decided.  A moment ago I said that “hopefully” you then get a comprehensive decision, but very often, it seems that decisions are either incomplete, or certain findings of fact simply wrong, most likely due to the passage of time between when the testimony heard and evidence presented, and the completion of the opinion.  During this time, peoples lives remain on hold and temporary support orders which might be too high or too low remain in effect.  In the off chance that they are adjusted by the trial decision, that could create a huge arrears or huge credit to a party.  If they are not corrected, then one party had to live with a potentially unfair result for a very long time.

While there are delays in receiving trial decisions, while more understandable, this impacts fewer litigants than delays in receiving motion decisions because a very small percentage of cases are actually tried to conclusion.  On the other hand, motions are heard every Friday or every other Friday depending on the county and the judge.  Now, the rule regarding motions in family part cases, specifically R. 5:4-4(f), clearly states:

(f) Orders on Family Part Motions. Absent good cause to the contrary, a written order shall be entered at the conclusion of each motion hearing.

Unfortunately, all too often, this Court Rule is honored in the breach and the decision on the motion is delayed days, weeks, months or even years.  Yes, I said YEARS.  I have one pre-judgment motion that was filed nearly 2 years ago, in large part regarding the payment of college for the first child.  A second child is now in college and there is still no decision.  The matter, which was supposed to be tried more than a year ago, has basically been shut down for 22 months and counting.  I have another motion that is pending for more than 15 months.  We have others which have been pending for several months, including ones that are seeking either financial restraints or restraints related to children which are being flaunted while no decision is made.  I hear similar stories from many or our colleagues and adversaries.

Note too that these delays are on top of the delays in getting the motion heard in the first place.  It is not unusual for a motion to be delayed based upon an adversaries request for an adjournment.  Since first adjournment requests are almost universally granted, even when there is time of the essence on certain issues, it is most often fruitless to oppose them – though sometimes you have to.  Very often, motions are administratively adjourned because the judge’s motion calendar for the selected day is full or the judge is otherwise unavailable.  When that adjournment is added to the first adjournment request, which at that point possibly shouldn’t be granted but is granted anyway, then the motion is heard about one month after the original return date and about 2 months after it was filed.  Some judges, however, despite demanding that all papers be filed as if the motion is going to be heard, do not schedule oral argument on the motion for weeks or months.  That is then compounded when that same judge doesn’t decide the motion on the day of argument as required by the Court Rules.

What is the outcome of this delay?  For a party who is cut off financially by their spouse, they could go weeks, if not months, with little to no money at all.  When it is an enforcement motion, the violator is often empowered by the lack of a decision and doubles down in his or her violation of court Orders because they feel impervious to sanctions.  When restraints are sought and adjudication is delayed, the risk of a new status quo being improperly created or parties or children harmed because you cannot “put the genie back into the bottle”, or the money is gone, or worse yet, a child is physically or emotionally hurt, are real results of justice delayed.

The other outcome is that the harmed litigant loses faith in the judicial system. They have not been treated fairly by the delay and feel that they will never receive a fair result from the judge that they believe does not care about their case – or worse yet, they feel that the judge is harming their case if not their children and/or their life. Sometimes this results in them losing faith in their lawyers too.  Sometimes it makes cases harder to settle because decisions that could have nipped issues in the bud or shaped a fair resolution of the case do not happen or come too late and then the fight is how to fix the mess created by the delay or counsel fees created by it.  And who do you complain to?  Do you risk a negative result on the pending motion or future appearances before that judge by writing to the Presiding or Assignment Judge?

The only ones who seem to benefit from this delay are mediators or arbitrators, who the parties now have to pay because they cannot get timely relief from the court.  There is something very unfair about that, though this happens every day.  Clients suffer and the system as a whole suffers as a result.

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Eric SolotoffEric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Roseland and Morristown, New Jersey offices though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com.

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In law school, lawyers begin to be engrained with the concept of ethical duty of zealous advocacy.  While this concept used to be in the Rules of Professional Conduct, over time, it has been removed.  It has even been largely removed from the ABA’s Model Rules, upon which many State’s rules have been based upon, other than in statements in the Preamble that say, “As advocate, a lawyer zealously asserts the client’s position under the rules of the adversary system” and:

In the nature of law practice, however, conflicting responsibilities are encountered. Virtually all difficult ethical problems arise from conflict between a lawyer’s responsibilities to clients, to the legal system and to the lawyer’s own interest in remaining an ethical person while earning a satisfactory living. The Rules of Professional Conduct often prescribe terms for resolving such conflicts. Within the framework of these Rules, however, many difficult issues of professional discretion can arise. Such issues must be resolved through the exercise of sensitive professional and moral judgment guided by the basic principles underlying the Rules. These principles include the lawyer’s obligation zealously to protect and pursue a client’s legitimate interests, within the bounds of the law, while maintaining a professional, courteous and civil attitude toward all persons involved in the legal system. (Emphasis added).

22610764 - advocacy - business background. golden compass needle on a black field pointing to the word "advocacy". 3d render.

Nevertheless, time and again you hear the refrain, in defense of an aggressive if not improper action, position, etc. that “I was only being a zealous advocate.”  However, assuming for arguments sake, that the duty of zealous advocacy exists in either some express or implied way, there certainly seems to be a difference between zealous advocacy and overzealous advocacy.  While the former may be appropriate, the latter is often not.  Moreover, it can be very costly, both financially and emotionally for the parties.

In a recent matter, I have seen an attorney send subpoena after subpoena seeking records, that if obtained, would add nothing to her client’s case.  In some instances, it is more than a fishing expedition or seeking a needle in a haystack, as even if the records were produced, no matter what they said, they would have no probative value in the case.  Moreover, when the subpoenas were not responded to or not responded to the their liking, threats of contempt followed.  Even the seemingly appropriate subpoenas seem needless given that a third party with much greater resources had already done an investigation.  There is one thing about leaving no stone unturned when there is a possibility that the due diligence will be fruitful, and quite another when it is a clear waste of time and money, if not harassment of third parties, from the start.  In that case, the “my client just wants to be sure” defense may not really cut it.

What about the lawyer that lies to further their client’s interests.  I have previously done a blog entitled The Lawyer The Liar which discussed this improper practice.

How about taking and litigating a position that is either contrary to the law, contrary to the facts, or both, and refusing to give it up notwithstanding.  I have seen lawyers push these issues because their client wanted to, because they figured they could make money and/or they figured they would wear the other side down and force them to capitulate to be done.   There are many other examples that I am sure my colleagues can add about examples of overzealous advocacy.

When the offender is called on these tactics, they hide behind the “zealous advocacy” shield. The question to ponder is what is a court to do when zealous advocacy crosses the line to overzealous advocacy.  Whether or not this rises to an ethical issue, will a court make the other party whole or at least put a stop to it?  If not, are we not rewarding pushing the envelope?

 

Eric SolotoffEric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Roseland and Morristown, New Jersey offices though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com.

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You hear people talk all the time these days that mediation and arbitration, or quite frankly, any alternate dispute resolution (ADR) methods are the best things since sliced bread.  They may very well be in the right case – which these days may be most of them given judicial backlogs, and other factors making presenting cases to a court undesirable.  They may not be the panacea that people think they are, especially when you don’t frame what you want the arbitrator to do or how you want them to do it, correctly.  In fact, I have previously blogged that the right to appeal is not automatic unless you contract for it.

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The issue of a less than ideal arbitration agreement coming back to bite a litigant in the behind was exemplified again yesterday in the unreported (non-precedential) Appellate Division case of Little v. Little.  In that case, the parties agreed to arbitrate a Tevis claim seeking damages for alleged spousal abuse and battered woman’s syndrome before a retired judge. Rather than a full blown arbitration agreement, spelling out all of the desired standards, a right of appeal, etc., the agreement to arbitration was only memorialized in an order, which stated in total:

ORDERED, that the matter is hereby dismissed as the parties have agreed to submit to binding arbitration with a retired judge agreed on between the parties, which arbitration shall take place on or before February 15, 2013, the costs of which will be shared equally by the parties.

After the arbitration took place, the arbitrator issued a two-page written arbitration decision that awarded plaintiff $125,000 “for the physical and mental injuries sustained by her during her marriage…” The award did not set forth any findings of fact or conclusions of law.  Thereafter, the plaintiff moved to confirm the award and the defendant moved to vacate the award, both because of the lack of findings of fact and the reliance on a letter produced after the close of discovery.  The cross motion was denied and the arbitration award confirmed, leading to an appeal.

Defendant appealed claiming that  (1) the arbitration award was against public policy and should be vacated because without findings of fact and conclusions of law it cannot be determined if the award was procured by corruption, fraud or other undue means; and (2) the arbitrator’s reliance on the letterproduced after the close of discovery in constituted undue means.  The Appellate Division rejected both of those arguments.

As to the lack of fact finding, the Court specifically noted:

The scope of arbitration and the requirements of an arbitrator are controlled by contract. Minkowitz v. Israeli, 433 N.J. Super. 111, 132-33 (App. Div. 2013). If the arbitration agreement does not require the arbitrator to make specific factual findings or follow particular procedures, the arbitrator is free to make an award in a manner consistent with the Arbitration Act. N.J.S.A. 2A:23B-4. The Arbitration Act only requires the arbitrator to “make a record of an award.” N.J.S.A. 2A:23B-19(a). Moreover, the arbitration award provides that an arbitrator may conduct an arbitration in any manner that the arbitrator considers appropriate, with the goal of disposing of the matter fairly and expeditiously. N.J.S.A. 2A:23B-15(a). Accordingly, we have previously explained:

[W]ithout an agreement to the contrary, the power of the arbitrator is simply to issue an award that resolves a dispute. If they have not agreed in advance, the parties cannot, for example, force an arbitrator to give reasons for an award or to write a decision explaining his or her view of the facts. Neither can they appeal from the award as they could if they had proceeded to litigate their matter in court. Rather, the rights of the parties following issuance of an award, in the absence of an agreement to the contrary, are entirely governed by statute. (internal citation omitted).

As to the reliance on the letter produced after the close of discovery:

Arbitrators are not bound by the rules of evidence, and instead may determine the admissibility, relevance, materiality and weight of any evidence. N.J.S.A. 2A:23B-15(a). Additionally, an arbitrator may permit any discovery that he or she determines to be appropriate, taking into account the goal of making the proceeding fair, expeditious, and cost-effective. N.J.S.A. 2A:23B-17(c).

What is the takeaway here?  If you want the rules of evidence to apply, put that in your arbitration agreement.  If you want findings of fact and conclusions of law, put that in your arbitration agreement.  If you want a right of review greater than the very limited right of review contained in the arbitration statute, put it in your arbitration agreement.  Otherwise, you can be left with very little remedies if you disagree with a decision, and like the litigant in this case, very little ability to determine what the decision was actually based upon.

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Eric SolotoffEric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Roseland and Morristown, New Jersey offices though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com. Connect with Eric: Twitter_64 Linkedin

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As we have previously noted on this blog, some of the biggest changes in the 2014 alimony reform amendments came in connection with the issue of retirement.  In fact, the amendment to the alimony statute now has three different standards, one for early retirement, one for retirement at the attainment of full retirement age (i.e. age upon which you can receive full Social Security benefits – 67 for most people) for new matters and a third for retirement at full retirement age for matters that pre-dated the amendments to the statute.

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Perhaps due to either inartful drafting and/or creative lawyering, or both, there were arguments made that the language in the statute “…There shall be a rebuttable presumption that alimony shall terminate upon the obligor spouse or partner attaining full retirement age, …”  applied to all matters, no matter when the divorce occurred.

The Appellate Division decided this question in the negative in the reported (precedential) case of Landers v. Landers released on February 22, 2016.  In that case, which involved a pre-statute divorce where the ex-husband had been paying alimony for 24 years, the husband sought to terminate his divorce based upon retirement.  The trial judge misapplied the law, per the Appellate Division, and determined that the ex-wife had not overcome the presumption that alimony should terminate.

In reversing, Judge Lihotz held:

Notably, the rebuttable presumption included in subsection (j)(1), which places the burden on the obligee to demonstrate continuation of the alimony award once an obligor attains full retirement age, N.J.S.A. 2A:34-23(j)(1), is not repeated, but replaced by a different standard in subsection (j)(3). The latter provision follows the prior principles outlined in Lepis and its progeny, by mandating “the court shall consider the ability of the obligee to have saved adequately for retirement as well as the following factors in order to determine whether the obligor, by a preponderance of the evidence, has demonstrated that modification or termination of alimony is appropriate . . . .” N.J.S.A. 2A:34-23(j)(3) (emphasis added).

Just as the Crews case elevated marital lifestyle ostensibly to a “super factor” in the alimony calculus prior to the 2014 amendments, it appears that this decision could have the same effect on the “ability to save for retirement” aspect of the new statute.  Specifically, the decision holds:

Importantly, subsection (j)(3) elevates the ability of the obligee to have saved adequately for retirement, listed only as a factor under N.J.S.A. 2A:34-23(j)(1)(j), setting it apart from other considerations and requiring its explicit analysis. N.J.S.A. 2A:34-23(j)(3). Also, factors identified in the two subsections are not identical, making the court’s focus different. For example, most apt to plaintiff’s arguments are subsections (j)(3)(f) and (g), mandating an examination of the obligor’s ability to maintain payments upon retirement, and “[t]he obligee’s level of financial independence.”

The problem with making the ability to save to be a “super factor” presumes that permanent alimony, the predecessor to open durational alimony was actually permanent and could never be modified based upon retirement.  That simply was not the case for the last several decades and there was ample decisional law addressing retirement.  Moreover, if alimony had a “savings component” allowing a recipient to save for a time when alimony may end, does that too not suggest that even permanent alimony can end other than death (and upon death, alimony is secured by life insurance in most instances.)

So, put another way, if permanent alimony was never really permanent, or at the very least, if retirement of the payor was a foreseeable event, can someone argue that they knew or should have known of this possibility and the failure to save should not be held against the payor?  Remember, just because retirement was not specifically included in a divorce agreement, does not mean that it was not foreseeable since the law allowed for it – and by the way, it was very difficult, pre-amendment to ever get anyone to agree that alimony should terminate on retirement so the issue was often silent and left to the law to address at the appropriate time.

Either way, as the nuances of the new alimony law work their way through the court, it will be interesting to see if the results lead to the call for even more reform.

Eric SolotoffEric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Roseland and Morristown, New Jersey offices though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com.

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The way things have gone lately, I thought it was time to reprise this blog post, originally published in April of 2014.  It is unfortunate for the system and the litigants to have to endure the misrepresentations by people who should know better.

I like a good joke as much as the next person.  That said, like many in my profession, I get sensitive about lawyer jokes.  Often, they are just cheap shots that in no way reflect the reality of what most of us do.  I particularly despise this one, “How can you tell when a lawyer is lying? His lips are moving.”

This one is particularly offensive on many levels.  Justice cannot tolerate dishonesty on the part of the lawyer.  In fact, honesty permeates the Rules of Professional Conduct:  meritorious claims and contentions; duty of candor to the tribunal; fairness to the opposing party and counsel; truthfulness in statements to others; not engaging in conduct that involving fraud, deceit, dishonesty, mispresentation or that which is prejudicial to the administration of justice are just a few of the rules where the bedrock is the lawyer being truthful.  There is an expectation in the system that someone is not telling the truth.  That is why judges and juries have to determine who is more credible.  That said, a lawyer cannot allow their client to get on the stand and lie.

(photo courtesy of free Google images.)

Unfortunately, however, lawyers lie all of the time.  Small lies and big lies.  They lie to their adversaries and they lie to judges.  I am not talking about an honest mistake – you believed that documents were not provided, but they actually were.  That said, too few people will even admit to the honest error, and then perpetuate the side show rather than just acknowledging that they were wrong with a lower case “w.”  Efforts then digress into addressing the misrepresentation that could simply be avoided.

A few years back, I was new to a case and at a case management conference, the other side alleged that my client had not produced his tax returns.  I did not believe this to be true and said as much, but I had only been in the case for a few days.  The judge reamed my client.  When I got back to my office, I contacted prior counsel who not only confirmed that the tax returns were produced, but there were emails from the adversaries office confirming receipt.  Given that my client had just been ripped by the judge, I asked the adversary to simply correct what must have been an inadvertent mistake.  She refused and then it became a much bigger issue.  It was a total and needless waste of time.

That’s a small lie that caused damage.  What about the big lie?  In one matter, opposing counsel insists that he was called “stupid” in a letter from one of my colleagues, and worse yet, that that letter justifies his vendetta against our client.  The problem is that no such letter exists yet he persists in pursuing this phantom letter, to the detriment of his client and ours.

In another matter, a lawyer denied taking a position on a major issue in the case in an earlier motion, even after the transcript showed otherwise.  She disavowed her own statement.

In another matter, the adversary epitomizes the distasteful joke noted above, from telling a court that documents were signed to allow us to get documents, when they were not, to misrepresenting income, to denying events that are not deniable, and on and on.

Why do lawyers lie?  Some do it to get an advantage in the case.  Some do it because they are afraid of losing the client if they don’t do their client’s bidding and/or are unsuccessful.  Some do it because it is a personal game – I win – you lose.  Some do it because they are unprepared or did not do what they are supposed to do so they are covering up.  Some do it to cover for their client’s misdeeds. Some do it because they just always lie.  For some, it is all of the above.

What do you do about it?   You raise the issue to the judge – but often, the judge doesn’t do anything about it.  Some times, it takes a trial to prove it and trials are few and far between.  Further, ethics complaints are usually tabled if not dismissed until a litigation is over.  If the perpetrator is a junior lawyer, perhaps you speak to their supervisor – but often that goes no where, because people protect their own.

That said, don’t let it go.  Call the person out.  Be prepared with your proofs.  At the appropriate time at a motion or a trial, let the judge know. Litigation is hard enough when people play it straight.  It is untenable when they lie and it does a disservice to the litigants, the courts and the system.  Moreover, clients are outraged when their spouse lies, but when it is the other lawyer, it is often impossible to control the justifiable outburst.  And lawyers, if you accidentally misspeak or make an honest mistake – you are human – it is better to own up to it and put the issue to bed then let it fester into something unnecessary and totally avoidable.  And don’t tell the big lie, for any reason.

Eric SolotoffEric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Roseland and Morristown, New Jersey offices though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com.

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