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Vol. 3 No. 111 DECISIONS RELEASED JUNE 14, 1995 STATE COURT CASES AGENCY AND PARTNERSHIP 02-1-5861 Conklin Farm v. Doris Liebowitz, Supreme Ct. (21 pp.) An new partner is not liable for interest that accrues on a partnership debt that arose before the the partner’s admission into the partnership, since interest on a pre-existing debt is not a new debt, but an integral part of the prior debt. [Available online in N.J. Full-Text Decisions.] CIVIL PROCEDURE — VACATION OF DEFAULT 07-2-5862 Raymond T. Parker, et al. v. Florence Marcus, et al., App. Div. (8 pp.) Where plaintiff made every effort to keep in contact with his attorney to monitor his personal injury case, and, as soon as he learned his case had been dismissed due to his (uninsured) attorney’s malpractice, he hired another attorney who made a motion to vacate the default, and where the judge denied the motion without oral argument or findings of fact, the interests of justice require reversal and reinstatement of the case since plaintiff, who was seriously injured in the accident, would be left without a viable remedy because his attorney was uninsured and has been disbarred. [Approved for publication June 14, 1995.] [Available online in N.J. Full-Text Decisions.] INSURANCE — VERBAL THRESHOLD 23-2-5863 Andre Burton, et al. v. Raj C. Butani, et al., App. Div. (7 pp.) Since the appellate decision in the case of Jordan v. Dennison, 278 N.J. Super. 306 (App. Div.), cert. denied, __N.J.__ (1995), held that the 1990 amendment to the verbal threshold law was to be applied retroactively, and restoration of the no-threshold status to persons like plaintiff who had no coverage and were not required to have coverage, was proper, plaintiff was not subject to the verbal threshold for injuries sustained in an accident 12 days before the amendment was passed, and summary judgment should not have been granted to the defendants. 23-2-5864 Kimberly J. Almon v. Robert G. Marxer, et al., App. Div. (6 pp.) The manifestation of spasm the day after an accident, with no manifestation again for a two-year period (at which time it was not causally related to the accident), was insufficient to surmount the verbal threshold and plaintiff’s case was properly dismissed. LABOR AND EMPLOYMENT — WRONGFUL DISCHARGE — DAMAGES 25-2-5865 John Bonilla, et al. v. Hershey Industries, Inc., et al., App. Div. (7 pp.) In a case where employee sued for wrongful discharge based on alleged retaliation for a workers’ compensation claim filing, the jury should not have been allowed to consider emotional distress damages since the pleadings dealt with compensatory damages and the claim for emotional distress damages was not raised until the trial began, and the defense was prejudiced since it had no means to prepare to defend this new claim; since the plaintiff did not prove any compensatory damages, judgment should have been entered for the defense. NEGLIGENCE — AUTOMOBILES 31-2-5866 Frank Campione v. Eric M. Jensen,et al., App. Div. (8 pp.) In a case involving a double-impact collision, there was error (1) in the jury’s inadvertent failure to allocate damages between the individual defendants, (2) when the judge usurped the jury’s function by molding the verdict to require one defendant to bear the majority of the award, and (3) when the judge incorrectly directed a verdict on liability for the first impact; therefore, a new trial is required on liability only. NEGLIGENCE — DOGS 31-2-5867 Tanisha Diaz v. Peter Barragan, App. Div. (5 pp.) In a case where one unleashed dog bit and seriously injured a neighboring unleashed dog, since the “fault” of the dogs cannot be assessed, and the only moral actors are their human owners, the comparative negligence of the dog owners, both of whom allowed their dogs to run unleashed, is equal, and the judge’s decision requiring the owner of the dog who caused the injuries to bear the veterinarian’s bill for the injured dog is reversed and remanded for a 50-50 split. TAXATION 35-2-5868 Goodwill Home and Missions, Inc. v. Garwood Borough, App. Div. (10 pp.) The denial of a real property exemption to Goodwill for its parsonage, occupied by its executive director and pastor, was erroneous and is reversed, since the Goodwill organization qualifies as a “religious congregation” and the pastor, an ordained minister, performs duties like those performed by congregational leaders of all religious denominations, notwithstanding that he also performs administrative functions. [Approved for publication June 14, 1995.] [Available online in N.J. Full-Text Decisions.] 35-5-5869 Charles A. Sabino, et al. v. Director, Div. of Taxation, Tax Ct. (22 pp.) Charitable contributions and direct expenses made by a partnership and reported and deducted on a federal return can be deducted by an individual partner, and the standard for deductibility is not whether the expense was “ordinary or necessary,” but whether it was “incurred in the conduct of the partnership’s business.” [Approved for publication.] [Available online in N.J. Full-Text Decisions.] 35-5-5870 Continental Apt. Assocs. v. City of East Orange; Beechwood Gardens v. City of East Orange, Tax Ct. (6 pp.) Taxpayers’ appeals of the local property tax assessments on their apartment houses should not have been dismissed due to their procedural failure to supply experts’ reports to their adversary before the trial date, but sanctions may be imposed as a condition of the cases’ reinstatement. [Approved for publication.] 35-5-5871 Cent. Nat’l Gottesman, Inc. v. Director, Div. of Taxation, Tax Ct. (19 pp.) Since the taxpayer has shown by clear and cogent evidence that there was a lack of functional integration, centralization of management and economies of scale between its investment division and forest products division, the divisions were not unitary and the investment division income is not subject to New Jersey taxation; therefore, taxpayer’s refund claim is granted. [Approved for publication.] 35-5-5872 East Washington Realty v. Washington Borough; West Washington Realty v. Washington Borough, Tax Ct. (11 pp.) Since any mistakes in the assessments that are the subject of the complaints in this case are due to matters of valuation involving an assessor’s opinion or judgment, they are not correctable under the abbreviated and extraordinary procedures authorized by the correction of errors statute, and the defendant’s motion to dismiss the complaints is granted. [Approved for publication.] 35-5-5873 Don Dan Constr. Co. v. Director, Div. of Taxation, Tax Ct. (10 pp.) Where a corporation filed its 1986 corporate business return late and did not include with the tax payment a calculation or payment of penalties and interest, and where the penalties and interest were not paid until one year later when the division issued a certificate of corporation franchise tax lien in connection with a real estate closing, the taxpayer’s refund claim for the 1986 tax year was properly denied as untimely, since the two-year period within which to file runs from the time of the filing of the return and tax payment, not from the later time of the payment of the penalty and interest. [Approved for publication.] 35-5-5874 Manuel Lorenzo v. Director, Div. of Taxation, Tax Ct. (14 pp.) Despite his controlling stock interest and title, the president of a construction company did not assert any authority over the financial, business and tax aspects of the company, relying instead on his partner and, since the president was an unsophisticated man who was used as a “front” so that the company could qualify for minority status, the director’s assessment against the president– finding that he was personally responsible for the failure of the company–to remit withholding taxes, penalties and interest, is canceled. [Approved for publication.] 35-5-5875 Leonard I. Kanarek, et al. v. Director, Div. of Taxation, Tax Ct. (9 pp.) Where taxpayers claimed a credit against their New Jersey tax liability for a portion of the income taxes paid by them to New York City and New York state, director’s summary judgment motion, reducing the credit under a critical analysis of N.J.S.A. 54A:4-1, is granted. [Approved for publication.] 35-5-5876 Alpha-Bella VI, Inc. by United Jersey Bank v. Clinton Twp., Tax Ct. (34 pp.) While an assessment of rollback taxes made after the filing of a bankruptcy petition does not by itself violate the U.S. Bankruptcy Code’s automatic stay provision, the township’s lien for the rollback taxes is void due to the automatic stay, and, because there is no lien, the township cannot enforce collection of the rollback taxes unless the bankruptcy court annuls the stay. [Approved for publication.] TORTS — DEFAMATION 36-2-5877 Bruce R. Akins, et al. v. Gloucester County Times, et al., App. Div. (12 pp.) The trial judge correctly granted summary judgment dismissing plaintiffs’ claims of defamation in newspaper articles, since the articles were only factual accounts of events and quotes of opinions from various people, which opinions were fair comment on the fact that plaintiffs did not fully pay elderly seller of their house, which was then damaged extensively by arson. WILLS, TRUSTS AND ESTATES — ELECTIVE SHARE 38-2-5878 In the Matter of the Estate of Ray D. Post, Deceased, App. Div. (35 pp.) The judge erred when he found that property derived by widow from the decedent and from other sources was less than one-third of the augmented estate under the elective share statute, N.J.S.A. 3B:8-1 to 19, when he (1) added to the augmented estate the value of a remainder interest in a 1975 irrevocable trust, (2) refused to calculate and apply the value of a family trust in which widow had an interest, and (3) allowed a 50 percent reduction in the value of widow’s stock. [Approved for publication June 14, 1995.] [Available online in N.J. Full- Text Decisions.] CRIMINAL LAW AND PROCEDURE 14-2-5879 State v. Darren Johnson, App. Div. (7 pp.) Since a defendant who has previously received diversionary treatment is ineligible for pre-trial intervention, the defendant’s previous conditional discharge from a disorderly persons offense for violation of the marijuana laws bars him from application in the program, and the judge erred when he required the prosecutor to permit defendant to submit his PTI application for consideration on the merits. [Approved for publication June 14, 1995.] [Available online in N.J. Full-Text Decisions.] FEDERAL COURT CASES ATTORNEY/CLIENT — PRIVILEGE — E.E.O.C. 04-7-5880 Equal Employment Opportunity Commission v. James Emiliani, et al., U.S. Dist. Ct. (19 pp.) Although there is no attorney-client relationship between the EEOC and a charging party, the common interest rule may be applicable to communications between the EEOC attorneys and the charging party, and, therefore, those communications may be privileged, and the judge should not have denied the EEOC’s request for a protective order without an inquiry into that issue; therefore, the matter is remanded. BANKRUPTCY 42-6-5881 In the matter of Edwin F. and Dianne E. Gribbon, et al., U.S. Bankruptcy Ct. (13 pp.) Paraprofessional services may be compensated in the context of a Chapter 7 trustee’s application for commission and expenses if such compensation is reasonable and the services were actual and “necessary” such as if they were required by the estate for some articulable reason beyond the normal administration of the estate. 42-8-5882 In re: David Louis Cohn, et al., Third Cir. (27 pp.) Because the bankruptcy court based its decision on facts not in the record (when it held that Ins. Co. of North America’s debt was dischargeable because it did not meet its burden of proving that it reasonably relied upon a materially false statement contained in the debtor’s investor bond application), and because the district court acted beyond its authority in making its own fact findings, the matter is remanded to the district court with instructions to remand to the bankruptcy court for further fact finding. 42-7-5883 In re: West End Associates, L.P., et al., U.S. Dist. Ct. (12 pp.) The bankruptcy court judge did not abuse his discretion in granting the trustee’s motion to convert case to a Chapter 7 matter from a Chapter 11 matter since the debtor had failed to comply with the trustee’s operating guidelines and reporting requirements regarding the monthly financial report filing, had filed no feasible reorganization plan and failed to pay the requisite quarterly fees. 42-6-5884 In re: Anthony Dell’Aquila; Joseph DiPasquale, Inc., Chapter 11 Trustee v. City of Hoboken, et al., U.S. Bankruptcy Ct. (28 pp.) The City of Hoboken’s summary judgment motion, seeking to dismiss the trustee’s complaint for a declaration that the city’s recorded easement, which runs through the debtor’s property, has been extinguished, is granted, since the trustee has failed to show genuine issues of material fact by which he could prove that the easement was terminated by abandonment, estoppel, prescription or adverse possession. DEBTOR/CREDITOR 15-7-5885 Int’l. Ins. Underwriters of Washington, Inc. v. Universal Brokerage Corp., et al., U.S. Dist. Ct. (16 pp.) Where defendants’ sole defense to their default on promissory note, executed for a settlement agreement, was that the settlement agreement was void because the plaintiff’s officer did not have the authority to negotiate it, their argument fails because the first payment and stock certificates given by defendants as part of the agreement were held in escrow until they received a board of directors’ resolution ratifying the agreement and authorizing another officer to sign. CRIMINAL LAW — CIVIL FORFEITURE — DOUBLE JEOPARDY 14-7-5886 U.S.A. v. All Shares of Stock of R.S. Cars, Inc., et al., U.S. Dist. Ct. (9 pp.) Where defendant’s four vehicles were instrumentalities used in a money laundering operation, they are forfeitable, since double-jeopardy provisions do not prevent the government from seeking and obtaining both the full civil penalty and full statutorily authorized criminal penalties in the same proceeding and, for all practical purposes, the civil forfeiture action is an extension of the criminal proceeding and an integral part of a single litigation unit. A

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