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The way Summit, N.J., attorney Hugo Pfaltz Jr. describes a new law to enforce child-support obligations, “it’s like using an ax to try to kill a fly.” The law, in effect since August, imposes a lien on net proceeds of more than $2,000 of all settlements, civil judgments, inheritances and civil arbitration and workers’ compensation awards. Moreover, it bars distribution of the money until someone — in most cases the prevailing party’s attorney — obtains certification, after an exhaustive search, that the recipient or beneficiary is not behind on child-support payments. And many attorneys apparently remain unaware that the law — Chapter 81, codified at N.J.S.A. 2A:17-56.23b — has been in effect since its Aug. 14 enactment. “When I talk to other attorneys about it they are surprised,” says James Woller, Pfaltz’s partner in Pfaltz & Woller. “One-third know about it, one-third don’t seem to care, and the other one-third are amazed and appalled.” Heidi Currier, who heads the New Jersey State Bar’s Civil Practice Section and does primarily defense work, says she didn’t know about Chapter 81 at first, although she has started to see people sending her the form in settling cases. Currier is a partner at Connell Foley in Roseland. Pfaltz and Woller say they first learned of the new law from a flyer distributed by the judgment search company Charles Jones Inc. of Trenton, N.J., which says it has been fielding calls from confused lawyers. Woller says he also read about it elsewhere. And Paul Franz of Elizabeth, N.J.’s Franz & Baptista says he learned of it only last week, from another attorney. Daniel Phillips, legislative liaison for the Administrative Office of the Courts, acknowledges that there has not yet been an AOC notice to the Bar on Chapter 81 and that some attorneys are still mistakenly complying with the old law, N.J.S.A. 2A:17-56.37. The prior law, which went into effect in May 1996 and was repealed by Chapter 81, applied only to civil judgments and settlements. It required filing a certification with the probation department in the prevailing party’s county of residence and then waiting 30 days for a judgment search before the money could be disbursed. Sometimes the attorneys never heard back at all, says Woller, but “everything was held up for 30 days.” Phillips says the unworkability of the old law became apparent within a few months. The courts were inundated by the flow of paper, slowing the processing of other business, he says. And when courts failed to get back to the inquirer within 30 days, money could be distributed regardless of support arrearages, thereby defeating the purpose of the law. So, at the AOC’s request, Wayne Bryant, a Democratic state senator from Camden County and an attorney, introduced the first version of the bill in September 1996. He says the new law is an extension of the previous one, which was enacted as part of a welfare reform package to obtain more support from noncustodial parents. BURDEN SHIFTED TO PRIVATE SECTOR Phillips says Chapter 81 is an attempt to fix the old law and then some. It shifts the burden of searching for support judgments from the courts to attorneys, insurance companies, union representatives, executors, administrators, arbitrators and any other person or entity responsible for distributing proceeds to a prevailing party or beneficiary. Where the prevailing party is pro se, the onus falls on the attorney for the opposing party. On top of that, it eliminates the 30-day wait and expands the reach of the law to other transfers, including settlements reached where no suit has been filed. One of the reasons Chapter 81 took so long to enact was that many groups, including the Bar groups, teachers, bankers and insurance companies, were consulted in an attempt to address their varied concerns, Phillips says. “We tried to work out something for each group so it wouldn’t be onerous,” says Phillips. For example, insurance companies can get a copy of the court’s support judgment database to do their own searches. Revisions adopted at the State Bar’s urging include various immunities and a provision that, with structured settlements, only one search is necessary, either at the time of settlement or before the first payment. The Bar also won an exemption for amounts payable to minors, partnerships, corporations and other entities. Workers’ compensation attorneys perhaps fare the best under Chapter 81, which requires the Division of Workers’ Compensation to do the matching and to inform compensation judges so they can provide for payment of the support in their awards. Still, “the final version is not one that the Bar signed off on,” says New Jersey State Bar President Barry Epstein, who calls the bill “well-meaning but misguided.” Epstein, of Epstein Byrne, in Rochelle Park, N.J., adds that the Bar will monitor the statute’s effect on the practice of law. Early reports are that distribution is generally speedier under Chapter 81. Personal injury lawyer David Fried, a partner at Chatham, N.J.’s Blume Goldfaden Berkowitz Donnelly Fried & Forte, reports that he has received search results within a few hours’ time. And where the results are negative, he can distribute the money right away. It is also inexpensive. Chapter 81 sets a $10 ceiling on the cost of a search and provides that it can be charged against the proceeds. Still, like many other lawyers for would-be prevailing parties, Fried is unhappy with Chapter 81, saying it “imposes on me a duty I never used to have.” It’s an obligation “totally unrelated to my representation of my client.” Pfaltz grumbles that Chapter 81 “puts a burden on lawyers for a social problem they are not equipped to handle.” Woller sees it as “just another assault on lawyers.” Haddonfield, N.J., attorney Glenn Henkel, secretary of the State Bar’s Real Property, Probate and Trust Law Section, says “it imposes a huge burden on attorneys who represent estates to have a judgment search done and be responsible when the likelihood is very small that child support is outstanding.” Henkel points out that it is not unusual for him to meet with an executor on a consultation basis rather than being retained to handle everything. Now, to be safe under the new law, he will probably have to comply with Chapter 81 in those situations. “It’s upsetting that if it’s not done it’s the lawyer’s fault,” he says. IS LAWYER LEFT HOLDING THE BAG? At the AOC, Phillips reports he has received a number of calls from attorneys with questions about what happens if they overlook the certification requirement. He says he expects that a parent to whom child support is owed would seek an order to show cause why the attorney should not have to repay the amount wrongly disbursed. And, adds Phillips, “willful failure to comply with the law would be an ethics violation.” The fact that the certifications must be provided by a private search company is also a buffer, adds Phillips, because the search companies have errors and omissions policies. The law specifically lets lawyers and others off the hook for distributing proceeds based on a certification if the prevailing party gave them incorrect information and for amounts beyond those uncovered by the search. It also excuses lawyers and others from liability to the client or other beneficiary for satisfying the support and from having to challenge the child-support judgment unless specifically retained to do so. Fried recounts that both times he has run the check, he received a list of judgments under the searched name in locations around the state and had to request a follow-up search to ascertain whether the Social Security numbers matched. “If I have to err, I will hold the money longer,” he says. Paying money subject to child support “is the last thing I want to do.” Phillips acknowledges that a snag in the process is that not every docketed judgment has a Social Security number to enable a match. Where that is the case, he says, attorneys can protect themselves by obtaining an affidavit from the client that he or she is not the person owing the support. Not everyone is critical of the new law. “It’s going to require a lot of work and a lot of paperwork, but anything that makes enforcement easier is better for the client, the practice and the litigants,” says Ronald Rosen, a partner at Chamlin, Rosen, Uliano & Witherington in West Long Branch, N.J. Rosen, president of the state chapter of the American Academy of Matrimonial Lawyers, who represents both obligors and obligees, says Chapter 81 will help him reduce what he calls “the most difficult part of an attorney’s job … to tell the client we won in court but you’re not getting any money.” It is complicating client relations for other lawyers, however. Woller says the real cost comes in writing to recipients asking them to provide a certification containing the information necessary for the search. About a third of them call him back and are “generally argumentative,” with some not understanding why they are being contacted because, for example, “I had a vasectomy.” Fried and Henkel have had similar experiences with elderly clients wondering why they are being asked questions about child support. Although the Division of Workers’ Compensation “does all the heavy lifting,” workers’ compensation lawyer Craig Livingston still has concerns. With “union representatives” expressly bound by Chapter 81, he intends to inform his union clients that they are now obligated to do a search even where he is not handling the arbitration. He points out that insurance companies that make voluntary tenders of settlement are now at risk also unless they do a search. Livingston, a partner in Nutley, N.J.’s Ball Livingston, also notes that the $2,000 cutoff — chosen, says Phillips, to correspond with small claims jurisdiction — will affect settlement amounts because a worker gets to keep it all if it is below $2,000 but can lose it all at $2,001 or more. Despite these concerns, Livingston says Chapter 81′s burden on the labor and workers’ compensation bar is appropriate. “I am not unwilling to shoulder that burden,” he adds. But he calls it “very dumb” that the statute became effective immediately in August, when many people were away or not paying attention. “It was not fair to sign it into law without giving notice,” he says. Livingston says he learned of Chapter 81 in September from a notice he received as a member of the Advisory Council on Workers’ Compensation.

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