NEW JERSEY LAWYER

DAILY BRIEFING      03/01/2005


News Briefs

DISBARRED LAWYER SEEKS SHORTER PRISON TERM
Citing his cooperation in repaying his victims as a mitigating factor, disbarred Camden County lawyer Dennis O’Brien, in prison for stealing nearly $3 million from 39 clients, will ask an appeals panel March 8 to reduce his 18-year term. Some clients have been paid interest for investments made through O’Brien, 10 have shared about $503,000 from the New Jersey Lawyers’ Fund for Client Protection, and the fund has approved payment for an 11th claimant, according to director Kenneth J. Bossong. None have yet received money from the liquidation of O’Brien’s assets, but at least $300,000 has been collected, says court-appointed special master, Voorhees lawyer S. David Brandt, and some $450,000 more is expected. A court-appointed receiver, Cherry Hill lawyer James Greenberg, will recommend percentages of compensation based on each case, and Camden County Judge Linda G. Baxter, who sentenced O’Brien in August, will decide how much each victim will receive, taking into account the panel’s recommendations and amounts already recovered. 2-28-05

BILL WOULD SET RULES FOR BOUNTY HUNTERS
Bounty hunting, the stuff of Westerns, exposés and reality shows, would be regulated under a new bill in the legislature. Assemblyman Peter J. Barnes Jr. (D-Middlesex) has introduced a program that would require bounty hunters to apply for licenses from the New Jersey State Police. If A-3828 becomes law, applicants would need at least five years of law enforcement experience and submit to a criminal background check. The measure has been referred to the Assembly Law and Safety Committee. A Senate version has not yet been introduced. 2-28-05

PRINCIPALS MUST REPORT CRIME, OR ELSE?
A bill that would punish school officials for not reporting to police any suspicious activity on school property has, after seven years, made it past a legislative committee. Under A-2980, a school principal “who receives information concerning the commission or suspected commission of a criminal offense in the school or on school property” must report it to police. Failure to do so can result in a $500 fine the first time, $1,000 the second time and $3,000 after that. A criminal offense is defined as anything in the state criminal code (2C). The bill was first introduced in 1998 and in the three subsequent sessions, but it never made it past a committee. The current version is sponsored by Joseph Cryan (D-Union). An Assembly floor amendment last week, plus recent approval by the Assembly Education Committee, could mean the measure could reach a vote. The Senate version is sponsored by Anthony R. Bucco (R-Morris), but there’s been no movement on it there since introduction a year ago. 2-28-05

STUDY SAYS RULE CHANGE WOULD HELP FUND SOCIAL SECURITY
A rule change clarifying limited partners’ and “S” corporations’ obligations to pay Social Security taxes would add some $6 billion annually to Social Security coffers, according to a study by the congressional Joint Committee on Taxation. Unlike partners in a general partnership, limited partners do not have to pay Social Security taxes since the money they received from the partnership is considered unearned income. But with changes in state laws, members of limited liability corporations and limited liability partnerships now play active roles in the management of their companies. And “S” corporations are taxed like sole proprietorships, allowing unscrupulous owners to pay themselves below-market salaries with minimal Social Security obligations while treating the rest of their profits as corporate income, which has no Social Security obligations. “The uncertainty in treatment creates an opportunity for abuse by taxpayers willing to make the argument that they aren’t subject to any employment tax, even though this argument is contrary to spirit and intent” of tax rules, said the report, which suggested some 70 different ways to boost tax revenues. 2-28-05

JUDGE HALVES COUNSEL FEES IN SECURITIES CLASS ACTION
“It is not 30 times more difficult to settle a $30 million case than it is to settle a $1 million case,” wrote a federal judge in Manhattan, in a decision awarding $12 million in counsel fees, less than half the amount requested in In re Bristol-Myers Squibb Securities Litigation. The class action lawsuit, dismissed last March, settled for $300 million in July while under appeal. New York’s Bernstein Litowitz Berger & Grossman and Boston’s Berman DeValerio Pease Tabacco Burt & Pucillo had asked for 7.5 percent of the settlement amount, about $22 million, for serving as co-lead plaintiffs’ counsel in a suit over the pharmaceutical giant’s $2 billion investment in biotechnology company ImClone. But U.S. District Judge Loretta A. Preska of the Southern District of New York awarded $12 million, noting, “neither the facts nor the legal and accounting theories were complicated,” and giving them the requested amount would provide a “windfall.” 2-28-05



Today's Decision Summaries

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FROM THE NEW JERSEY SUPREME COURT, MONDAY, FEBRUARY 28, 2005
THE FOLLOWING OPINION WAS RELEASED BY THE NEW JERSEY SUPREME COURT ON MONDAY, FEBRUARY 28, 2005:

ENVIRONMENTAL LAW
U.S. SPORTSMEN’S ALLIANCE FOUNDATION v. NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION
New Jersey Supreme Court, A-69, February 28, 2005. (25 pages). Facts-on-Call Order No. 92325

The Fish and Game Council’s power to authorize a black bear hunt is subject to the statutory condition precedent of the Commissioner’s approval of comprehensive policies governing the propagation of black bears.

NO OPINIONS ARE SCHEDULED TO BE RELEASED BY THE NEW JERSEY SUPREME COURT ON TUESDAY, MARCH 1, 2005.



APPROVED FOR PUBLICATION
PARTNERSHIP
SEBRING ASSOCIATES v. COYLE
Appellate Division, A-5374-02T3, approved for publication February 28, 2005. (20 pages). Facts-on-Call Order No. 92326

A terminated partner is entitled to his interest in the partnership at the time of its dissolution, less any damages caused by his conduct. The Appellate Division discussed the proper standards under the present and former partnership acts for calculating that partnership interest and damages in circumstances in which the partnership, which at the time had a negative value, is continued by the remaining partners following dissolution.

JURISDICTION
UNALACHTIGO BAND OF THE NANTICOKE-LENNI LENAPE NATION v. STATE OF NEW JERSEY
Appellate Division, A-475-02T3, approved for publication February 28, 2005. (24 pages). Facts-on-Call Order No. 92327

The federal courts have exclusive jurisdiction over a claim by the Unalachtigo Band of the Nanticoke Lenni Lenape Nation and its tribal chairperson and war chief for exclusive use, occupancy, and control and for the removal of all non-Indians from a reservation where the plaintiffs asserted that their ancestors’ sale of reservation land in what is now Shamong Township violated the 1758 Treaty with the Colony of New Jersey and the 1790 federal Nonintercourse Act.

PRISONERS’ RIGHTS
JOHNSON v. DEPARTMENT OF CORRECTIONS
Appellate Division, A-3864-03T3, approved for publication February 28, 2005. (9 pages). Facts-on-Call Order No. 92328

The final administrative decision of the Department of Corrections which found an inmate guilty of possession of a weapon was reversed because the hearing officer failed to explain why he found the confidential informant credible or why his story was reliable, as required by N.J.A.C. 10A:4-9.15(b)(1).

TORT CLAIMS ACT
PANDYA v. STATE OF NEW JERSEY
Appellate Division, A-813-03T2 and A-957-03T2, approved for publication February 28, 2005. (27 pages). Facts-on-Call Order No. 92329

The Appellate Division reversed the grant of summary judgment against the plaintiffs and remanded for trial because the plaintiffs had made a prima facie showing as to a lack of plan and design immunity under N.J.S.A. 59:4-5 of the Tort Claims Act.

NOT APPROVED FOR PUBLICATION
MUNICIPAL CORPORATIONS
RAMAPO RIVER RESERVE HOMEOWNERS ASSOCIATION, INC. v. BOROUGH OF OAKLAND
Appellate Division, A-549-03T5, February 28, 2005, not approved for publication. (9 pages). Facts-on-Call Order No. 17670

Partial summary judgment for the third-party defendant developer in an action seeking reimbursement for snow and ice removal services affirmed; the plaintiff homeowners’ association hired contractors to remove snow from the developer’s development, and it filed an action in lieu of prerogative writs against the defendant Borough to obtain reimbursement for those services; seeking to hold the developer liable for the reimbursement under the developer’s agreement between the Borough and the developer, the Borough filed a third-party complaint against the developer; the trial court properly determined that the Borough had a duty under the Municipal Services Act to provide snow and ice removal services or to reimburse the homeowners’ association for those expenses and that the Borough could not contract away that duty.

LAND USE
DUNCAN v. PATERSON CITY COUNCIL
Appellate Division, A-645-04T3, February 28, 2005, not approved for publication. (14 pages). Facts-on-Call Order No. 17672

Order reinstating the three plaintiff members of the Paterson Zoning Board of Adjustment to their positions affirmed; on April 21, 2004, the defendant City Council adopted resolutions removing the plaintiffs from their positions; the plaintiffs challenged the resolutions because they had not been adopted by two-thirds of the City Council, and the resolutions were affirmed by more than two-thirds of the City Council on April 27; the trial court found that the April 21 vote was invalid and was not corrected by the April 27 vote; contrary to the defendant’s arguments on appeal, the trial court did not err (1) by failing to decide whether there was sufficient cause to support the plaintiffs’ removal or (2) by concluding that a two-thirds vote was required; moreover, the April 27 resolution was procedurally flawed.

INSURANCE
TANDON v. HAMILTON
Appellate Division, A-4013-03T3, February 28, 2005, not approved for publication. (12 pages). Facts-on-Call Order No. 17671

Denial of the plaintiff’s motion to vacate an order enforcing litigant’s rights reversed and remanded; while riding his bicycle, the plaintiff was struck by the door of a parked car that was licensed and registered in New Jersey; the defendant owner of the parked car sued his insurer after it denied coverage, and the plaintiff sought PIP benefits from the Unsatisfied Claim and Judgment Fund Board; pursuant to a settlement agreement reached by the plaintiff’s attorney, the UCJFB, and the insurer, the insurer would pay its $10,000 policy limit and the UCJFB would pay nothing if the defendant prevailed in his action; the insurer settled with the defendant, the UCJFB sought to enforce the settlement, and the plaintiff claimed that he had not agreed to the settlement; the settlement could not be approved under N.J.S.A. 39:6-82 due to its “striking” unfairness and the UCJFB’s “extreme position” of not offering to cover the plaintiff’s medical fees.


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