Walsh Pizzi O'Reilly Falanga LLP

Expert legal services specializing in corporate law, pharmaceutical, and criminal defense. Serving clients in New York, New Jersey, Pennsylvania, USA, with a dedicated team for what matters most. Bet the company. Commercial Litigation.
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Client Alert – Potential Changes Afoot for New Jersey Insurers
Client Alert – Potential Changes Afoot for New Jersey Insurers 150 150 walsh.law

By: Richard J. Badolato

Affirming the State’s persistent effort to become one of the most pro-policyholder jurisdictions, New Jersey’s State Senate on June 7, 2018 passed a bill dubbed the “New Jersey Insurance Fair Conduct Act,” following a near decade-long battle to introduce such an enactment. While current law directs distressed consumers to seek relief with the Commissioner of Insurance, the new proposed legislation, designated S2144, furnishes consumers with the right to sue in court for violations of C.17:29B-4, marking a significant shift for New Jersey insurers. Seeking to remedy a perceived incongruity of power between claimant and insurance company, the bill hinges upon a new conception of “bad faith” on the part of insurers and considerably changes the first party rights of claimants.

Under this proposed legislation, a plaintiff could file a civil action against its insurer for an “unreasonable delay or unreasonable denial of a claim for payment of benefits under an insurance policy,” yet the proposed legislation falls short of a full elucidation of (un)reasonability. In addition to the new pro-policyholder language, the bill describes penalties to be assessed against the insurer for noncompliance or misconduct including treble damages, prejudgment interest, and reasonable attorney and litigation expenses.

Main points of tension with this bill are grounded in its lack of specificity, as insurers would be liable for any “unreasonable delay or denial.” This language has been criticized as unduly ambiguous, and the New Jersey State Bar Association’s Civil Trial Bar Executive Committee argues in favor of bill modification to decrease public confusion and unnecessary litigation. If legislation is to be considered, the Committee suggests sharpening the definition of “bad faith” to impose numerical or time limits as opposed to the current bill’s language, a more objective criterion to assess bad faith liability and an equitable measure of damages could emerge – protecting insurers and the public alike. The Bar Committee further objects to the treble damages penalty and suspects that fee shifting as described may create potential attorney/client conflicts of interest. Since this bill substantially alters the current law, insurance companies should stay abreast of all developments.

Richard J. BadolatoFor more information surrounding this proposed legislation, please contact Richard J. Badolato at (973)757-1100 or rbadolato@walsh.law

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Walsh Law Firm Sponsors the HBA-NJ’s 37th Annual Scholarship Gala and Awards Dinner
Walsh Law Firm Sponsors the HBA-NJ’s 37th Annual Scholarship Gala and Awards Dinner 150 150 walsh.law

The Newark, New Jersey-based Walsh law firm is a sponsor of The Hispanic Bar Association of New Jersey’s (HBA-NJ) 37th Annual Scholarship Gala and Awards Dinner to be held on Saturday, June 16, 2018, at The Venetian in Garfield, New Jersey.

The sponsorship is a result of Walsh’s pledge to diversity within the legal industry as well as the participation of a number of Walsh attorneys in the organization.  Hector D. Ruiz is the President of the HBA-NJ, a state-wide organization, and Joseph L. Linares is a Trustee within the Association.

The HBA-NJ is committed to the advancement of Hispanics in the legal profession and strives to advocate for diversity in the legal profession and the judiciary.  The 37th Annual Scholarship Gala and Awards Dinner maintains the tradition of awarding eligible law students with grants so that they may continue their legal studies at Rutgers Law School, Seton Hall University School of Law, and other area law schools.

Mr. Ruiz said, “My platform as president is ‘Working Together, Making a Difference’.  To that end, I am pleased that we are able to continue to provide deserving students with the funds necessary to pay for their law school experience.”

As explained by Managing Partner, Liza M. Walsh “As a majority women-owned law firm, we are committed to supporting all types of diversity in the legal profession.”

Mr. Ruiz also said that there is still time to purchase tickets and sponsorship opportunities, and asks that any interested parties contact him via email at hruiz@walsh.law or call 973-908-0605.

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NJ District Court Upholds Bankruptcy Court Ruling Avoiding Tax Sale Foreclosure as a Preferential Transfer
NJ District Court Upholds Bankruptcy Court Ruling Avoiding Tax Sale Foreclosure as a Preferential Transfer 150 150 walsh.law

By:  Christopher M. Hemrick

Recently, in Hackler v. Arianna Holding Co., LLC (In re Hackler), Civ. Action No.: 17-cv-6589 (PGS), 2018 U.S. Dist. LEXIS 47594 (D.N.J. March 22, 2018), New Jersey District Court Judge Peter G. Sheridan affirmed Bankruptcy Judge Christine M. Gravelle’s decision avoiding a tax sale foreclosure as a preferential transfer pursuant to Section 547 of the Bankruptcy Code.

In Hackler, the Township of North Brunswick conducted a tax sale on the Debtors’ property for unpaid municipal liens. In June 2013 the tax sale certificate was sold to a non-governmental third-party, Phoenix Funding, Inc. (“Phoenix”).  Pursuant to New Jersey law, Phoenix had the right to pay the Debtors’ delinquent property taxes for a period of two-years, after which Phoenix could foreclose on and take title to the property unless the Debtors timely redeemed the tax sale certificate, with interest at the rate of 18%.  After paying the Debtors’ taxes for the requisite two-year period, Phoenix assigned its tax sale certificate to Arianna Holding Company (“Arianna”).  In October 2016, final judgment in foreclosure was entered in Arianna’s favor, vesting Arianna with title to the Debtors’ property.

Less than three-months later (within the 90-day preference period), Debtors filed for bankruptcy protection.  The Debtors scheduled the property as being worth $335,000, with $89,000 in judgment liens.  The Debtors owed $45,000 to Arianna under the tax sale certificate.  The Debtors sued to avoid the transfer of title to Arianna pursuant to the tax foreclosure as a preference.

In granting Debtors’ motion for summary judgment, the Bankruptcy Court found that the transfer of title to Arianna satisfied all elements of a preference under Section 547.  Specifically, the tax foreclosure resulted in a transfer of the Debtors’ property: (1) to a creditor (Arianna); (2) on account of a debt owed to Arianna prior to the transfer; (3) while the Debtors were insolvent; (4) within 90-days prior to the Debtors’ bankruptcy filing; (5) that enabled Arianna to receive property worth $335,000—substantially more than the $45,000 value of its tax lien it would have received in a Chapter 7 case.

In affirming the Bankruptcy Court’s ruling, the District Court agreed the Supreme Court’s decision in BFP v. Resolution Trust Corp., 511 U.S. 531 (1994)—which held that a properly conducted mortgage foreclosure could not be avoided as a constructively fraudulent transfer pursuant to Section 548 of the Bankruptcy Code—did not control the issue of whether a tax foreclosure could be avoided as a preference under Section 547.  Among other distinctions, the District Court found that tax foreclosures, unlike mortgage foreclosures, result in the direct transfer of title to the tax certificate holder based only on the taxes and interest owed without any public bidding to establish the value of the underlying property being transferred.

The District Court also found no prejudice to Arianna resulting from the avoided tax foreclosure since it would remain entitled to the value of its tax lien (including 18% interest) from the Debtors.

Though Arianna has appealed the District Court’s decision to the Third Circuit, tax lien investors in New Jersey and elsewhere should be aware of the Hackler decision, and its potential impact on a tax lien holder’s ability to maintain title to property acquired via tax foreclosure in the event of a debtor’s bankruptcy filing.

We will update this post if and when the Third Circuit reaches the merits of this issue.

For more information, contact Christopher M. Hemrick at (973)757-1100 or chemrick@walsh.law

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NJ Judge Says Parties with Rights of First Refusal May Redeem Tax Sale Certificates
NJ Judge Says Parties with Rights of First Refusal May Redeem Tax Sale Certificates 150 150 walsh.law

By: Sydney J. Darling

Creating new precedent, on February 14, 2018, Judge Anne McDonnell, P.J. Ch., ruled that parties with contractual rights of first refusal to purchase real property encumbered by a tax lien have the right to redeem a tax sale certificate and therefore must be named as a party defendant in any foreclosure proceedings.

In the matter of Actreo LLC Series 972 S Broadway v. Massari Svs. Co. LLC, et al., Dkt. No. F-7343-16, a third-party “landlord,” Telecom Acquisition Group, L.P. (“Telecom”), who had not been named as a defendant in the tax sale foreclosure action or otherwise noticed of the action, filed a motion to vacate the final judgment in foreclosure. Pursuant to a long-term agreement with the property owner, Telecom acted as a property manager of a cell phone tower located on the property. In turn, the tenant cell phone company made its lease payments directly to Telecom. Pursuant to its agreement with the property owner, Telecom also had a right of first refusal to purchase the property. A memorandum of the agreement between Telecom and the property owner was recorded. The foreclosure action foreclosed out Telecom’s interest in the property completely. The plaintiff, Actreo, assumed both ownership of the property and management of the cell phone tower. Actreo began collecting rents directly from the tenant cell phone company.

Despite the seemingly clear language of the statute limiting the right of redemption to “the owner, his heirs, holder of any prior outstanding tax lien certificate, mortgagee, or occupants of land,” the Court ruled that parties situated similarly to Telecom have a right to redemption. The Court based this ruling on an expansive reading of the term “occupant.” Examining prior case law in depth, the Court held that “an occupant is a person or entity that has a valid interest in the land that will be extinguished by the foreclosure.” Because Telecom was such a party, the Court vacated the final judgment in foreclosure.

This case highlights the risk inherent in electing not to name a party with a recorded interest in property in any type of foreclosure action, especially an interest that will be foreclosed out as a result of a final judgment in foreclosure.

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Firm Anniversary Clothing Drive
Firm Anniversary Clothing Drive 150 150 walsh.law

Walsh is celebrating its second anniversary in the month of May.  Since the traditional second-anniversary gift is cotton, the firm is hosting a clothing drive to benefit Dress for Success® and Career Gear®.  Dress for Success empowers women to achieve economic independence by providing a network of support, professional attire and the development tools to help women thrive in work and in life.  Career Gear provides professional clothing, mentoring and life-skills to help men in poverty become stronger contributors to their families and communities.

Donations can be dropped off at Walsh’s Newark Office beginning today until May 25th.  We are collecting new, nearly new or gently used women’s and men’s professional clothing and accessories.  If your donations are appropriate to wear to work and/or if you would be comfortable wearing your donated item to an interview yourself, we’ll take it!

Donations should be clean and ready to wear, so clean out your closet for any suits, pants, blazers, shirts, skirts, blouses and dresses that you no longer need.  We will also accept both women’s and men’s gently worn shoes, handbags, briefcases, belts, and jewelry, too.

In addition to helping women and men enter or re-enter the workforce, all donations are tax deductible.

No Professional Clothing to Donate? 

Dress for Success and Career Gear also accepts monetary donations to provide career development and retention services to its clients.

Monetary Contributions are 100% tax deductible and no donation is too small!  Checks can be made payable to “Dress for Success Worldwide” or “Career Gear.”

If you have any questions, please contact Nicole Travostino via email:  ntravostino@walsh.law

The firm, Dress For Success, and Career Gear appreciate your support!

Logos courtesy of www.dressforsuccess.org and www.careergear.org

Logos courtesy of dressforsuccess.org and careergear.org

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Darling Co-Chairs TMA 2018 Mid-Atlantic Regional Symposium; Falanga to Speak on Hot Topics Panel
Darling Co-Chairs TMA 2018 Mid-Atlantic Regional Symposium; Falanga to Speak on Hot Topics Panel 150 150 walsh.law

Stephen V. FalangaSydney J. Darling

Walsh attorney Sydney Darling is co-chair of this year’s Turnaround Management Association (TMA) Mid-Atlantic Regional Symposium, which will be held on June 6-7th at Harrah’s in Atlantic City, NJ. Hosted by the TMA Philadelphia/Wilmington, New Jersey, and Chesapeake Chapters, this is the premier event for the Mid-Atlantic region for networking, dealmaking, and professional development.  In addition, Stephen Falanga, chair of Walsh’s Financial Services & Risk Management practice group, will be speaking on a panel on June 6th discussing hot topics in restructuring law.

For more information, contact Stephen V. Falanga or Sydney J. Darling at (973)757-1100
or sfalanga@walsh.law and sdarling@walsh.law

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Governor Murphy Signs NJ Paid Sick Leave Act
Governor Murphy Signs NJ Paid Sick Leave Act 150 150 walsh.law

By: Kristin Spallanzani

Kristin SpallanzaniOn May 2, 2018, New Jersey Governor Philip D. Murphy signed the New Jersey Paid Sick Leave Act, which allows New Jersey’s private and public workers to accrue and use up to forty hours of paid sick leave per year.  This new law expressly preempts municipal paid sick leave ordinances, which had been in effect in thirteen New Jersey municipalities, including Newark and Morristown.  New Jersey is now the tenth state in the United States to require paid sick leave.

The Paid Sick Leave Act applies to all businesses that employ employees in New Jersey – there is no exemption for smaller employers.  As for employees, most full-time and part-time workers are covered by the Act.  However, per diem healthcare workers, construction workers employed pursuant to a collective bargaining agreement, and public employees who already have sick leave benefits are ineligible for the benefits provided by the Act.

The Act requires businesses to offer their employees one hour of paid sick time for every thirty hours worked, starting on the employee’s 120th day of employment.   Employees may accrue a maximum of forty hours per year; however, a business may choose to simply offer employees the maximum forty hours of paid sick leave per year up front, in lieu of the accrual system.  Employers are required to pay employees at their regular rate of pay when they use paid sick leave.  An existing paid time off (“PTO”) plan could already satisfy the Act’s requirements if it provides equal or greater benefits than the benefits provided under the Act.

Pursuant to the Act, employees may use earned sick time to care for their own mental or physical illness or injury, to care for family members, to address domestic or sexual violence, when their child’s school or child care is closed because of an epidemic or public health emergency, or to attend their child’s school-related conference or meeting.  The definition of “family member” under the statute is broad and includes any individual “whose close association with the employee is the equivalent of a family relationship.”

The Act is set to take effect on October 29, 2018.  Employers must post a notice (provided by the commissioner of the New Jersey Department of Labor and Workforce Development) in a conspicuous place and must also provide a copy of the notice to all employees within thirty days of the issuance of the notice by the NJDOLWD, at the time of an employee’s hiring, and any time an employee requests a copy.

Employers with New Jersey employees should review their existing PTO and sick leave policies to ensure compliance with the Act.  Please contact Walsh Pizzi O’Reilly Falanga LLP’s employment counsel for more information or for guidance on reviewing or revising policies to comply with the New Jersey Paid Sick Leave Act.

For more information, contact Kristin Spallanzani
at (973)757-1100 or kspallanzani@walsh.law

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Walsh Named One of the Top Law Firms Representing Pharmaceutical Companies in ANDA Suits
Walsh Named One of the Top Law Firms Representing Pharmaceutical Companies in ANDA Suits 150 150 walsh.law

The fourth annual Hatch-Waxman/Abbreviated New Drug Application (ANDA) litigation report was released by Lex Machina on May 3, 2018.    As part of the report, the top law firms in the country representing both plaintiffs and defendants were listed and Walsh Pizzi O’Reilly Falanga LLP (Walsh) was included along with some of the largest law firms in the country.

In its press release for the latest report, Lex Machina’s Chief Evangelist and General Counsel, Owen Byrd stated:

“Lex Machina’s latest Hatch-Waxman/ANDA Litigation Report provides pharmaceutical companies and their law firms with invaluable, data-driven insights about the legal matters, key participants, case timings and resolutions that can shape or reshape business and legal strategies . . . It also explores trends pertaining to top ANDA judges, parties and law firms, which can help litigators prepare legal strategies, select the best outside counsel and forecast litigation costs.”

When asked about the report, Liza Walsh, managing partner of the majority women-owned law firm said:

“Walsh lawyers strive to provide what matters most to our clients, namely, high-quality, sophisticated legal services, provided with personal attention and responsiveness. We are grateful to be included among such great firms.”

Liza M. WalshBased in Newark, New Jersey with additional offices located in New York City and Philadelphia, Walsh is comprised of a team of seasoned attorneys bringing together over 150 years of combined experience in a law firm poised to deliver high-quality, sophisticated legal services. For more information about Walsh, please contact Liza M. Walsh at (973)757-1100 or at lwalsh@walsh.law

 

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New Pay Equity Law Introduces Changes to NJLAD
New Pay Equity Law Introduces Changes to NJLAD 150 150 walsh.law

By: Kristin Spallanzani

Kristin SpallanzaniOn April 24, 2018, New Jersey Governor Phillip D. Murphy signed P.L. 2018, c.104, known as the Pay Equity Law.  The new law introduces a series of changes to the New Jersey Law Against Discrimination (“NJLAD”), including making it illegal to offer lower pay to women and minorities.

The NJLAD prohibits employment discrimination based on a variety of protected characteristics, such as race, age, sex, and disability.  The newly-enacted Pay Equity Law expands the NJLAD to: (1) prohibit unequal pay for “substantially similar work” based upon any protected characteristic; (2) require that employers justify differences in pay among protected classes (like sex, race, etc.); (3) restart the clock for filing a wage discrimination claim to each time a paycheck is issued; (4) add additional provisions to prohibit retaliation against an employee for discussing compensation; and (5) require greater transparency in state contracting.

Though pay discrimination has been illegal in New Jersey since the 1960s, the Pay Equity Law puts a greater burden of proof on the employer to explain differences in wages between protected categories of employees.  This new law is considered one of the most comprehensive pay equity laws in the country because it does not limit coverage to only sex or sex and race.  Instead, it provides coverage to any member of a protected class under the NJLAD.

The Pay Equity Law will take effect on July 1, 2018 and will apply, like the NJLAD, to all New Jersey public and private employers.  Employers should examine their pay structures and ensure that compensation differentials can be justified with legitimate, non-discriminatory reasons.  Importantly, employers should keep these considerations in mind at the time that bonuses, merit increases, and other benefit changes are issued.  In addition to the NJLAD’s other penalties, the Pay Equity Law allows victims of discrimination to sue for up to six years of back pay, and monetary damages will include triple the amount of the pay differential proven by the employee.  Employers should contact employment counsel to review how to comply with this new law.

For more information, contact Kristin Spallanzani  at (973)757-1100 or kspallanzani@walsh.law

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Murphy Administration to Hold Public Hearing on Marijuana Reclassification in Response to Kadonsky Ruling
Murphy Administration to Hold Public Hearing on Marijuana Reclassification in Response to Kadonsky Ruling 150 150 walsh.law

By: Marc D. Haefner

In response to Walsh’s successful challenge to the prior administration’s 2017 refusal to reconsider the classification of marijuana, New Jersey’s Division of Consumer Affairs has announced that it will hear public comment on how marijuana should be classified under New Jersey’s Controlled Dangerous Substances Act, N.J.S.A. § 24:21-1 et seq. (the “CDSA”).  Public comment will be heard on April 19, 2018 in Newark and again on April 24, 2018 in Trenton. Each city will host two sessions on the stated dates; one from 9:30 AM to 12:30 PM, and another 1:30 PM to 4:30 PM.

The Division will entertain comments on marijuana’s actual or relative potential for and patterns of abuse including scope, duration and significance of abuse; the scientific evidence of any pharmacological effect(s) of marijuana; current scientific knowledge regarding marijuana; marijuana’s psychic or physiological dependence liability; and whether marijuana is an immediate precursor of a substance already controlled under the CDSA.

Referenced in the Division’s press release is Walsh’s successful appeal in Kadonsky v. Lee, in which Judge Guadagno, writing for the majority, held that marijuana’s Schedule I designation under the CDSA must be revisited because the Division Director had the authority to reclassify marijuana without any change in federal law and New Jersey has already recognized marijuana’s accepted uses in medical treatment by passing the Compassionate Use Medical Marijuana Act in 2009. The ruling has received considerable media coverage.

Walsh will make a written submission on behalf of Mr. Kadonsky and will appear for comment. Written submissions from the public will be accepted through April 12, 2018. Pre-registration is not required, but those who do not pre-register will only be permitted to speak as time allows.

For more information on the firm’s Marijuana Regulatory Practice, contact Marc Haefner, Selina Ellis or Joseph Linares at (973)757-1100.

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