Newark Business, Commercial and Family Law Blog

Arbitration decisions are rarely overturned.  However, in a recent decision the court found it necessary to do so.  Plaintiff entered into a contract with defendant to purchase a luxury condo unit, and provided deposit monies to defendant's attorney. When plaintiff failed to appear at the closing, defendant refused to return her deposit. The parties proceeded to binding arbitration, as required by their contract, and the arbitrator concluded that plaintiff was entitled to the return of her deposit. On appeal, the judge found that the arbitrator exceeded the scope of his powers by disregarding the clear terms of the parties' contract, essentially rewriting for plaintiff a better contract that the for which she had bargained. Noting that a court will vacate an arbitration award only under limited circumstances, the appellate panel affirmed the lower court's decision, finding that the arbitrator exceeded the scope of his authority by adding terms to the parties' contract.

The New Jersey Condominium Act, N.J.S.A. 46:8B-14(k) provides,

K. An association shall provide a fair and efficient procedure for the resolution of housing-related disputes between individual unit owners and the association, and between unit owners which shall be readily available as an alternative to litigation. A person other than an officer of the association, a member of the governing board or a unit owner involved in the dispute shall be made available to resolve the dispute. A unit owner may notify the commissioner of community affairs if an association does not comply with this subsection. The commissioner shall have the power to order the association to provide a fair and efficient procedure for the resolution of disputes.

The Condominium Act does not define what are "housing-related disputes" that require some type of mediation between parties.

The Appellate Division recently grappled with that issue and reached a decision of great consequence to a condominium's obligation to provide Alternative Dispute Resolution ("ADR") to unit owners prior to litigation. In Bell Tower Condominium Association vs. Haffert, 2012 W.L. 86813 (N.J. Super A.D.), unit owners appealed from the award of a summary judgment to the condominium association which entered judgment against the owners for the sum of $22,400. The judgment was the result of the owners' refusal to pay their portion of a special assessment for various improvements to the condominium's property. The owners refused to pay because they objected to the association's decision making process concerning the special assessment and its allocation of funds. The unit owners repeatedly notified the association in writing of "their disagreement with the manner in which the decision had been made and their concerns about how the money would be allocated" Id. at 2.

The Appellate Division was called upon to determine whether or not the dispute between the parties fell within the language of N.J.S.A. 46:8B-14(k) which requires the condominium association to establish a "fair and effective procedure for the resolution of housing-related disputes".

The Appellate Division in Bell Tower ultimately held it was a housing-related dispute that should have been submitted to a form of ADR because the unit owners had raised substantive issues which went to the very core of the association's management of the condominium's common elements. The Appellate Division held,

The present dispute is a housing-related dispute within the meaning of the applicable statute. Underlying defendants' refusal to pay the special assessment is their contention that the board breached the fiduciary obligations imposed upon it by N.J.S.A. 46:8B-14(j). N.J.S.A. 46:8B-14(j) requires a condominium association to 'exercise its powers and discharge its functions in a manner that protects and furthers or is not inconsistent with the health, safety and general welfare of the residents of the community'. The present dispute is clearly 'housing related', as it is premised upon one of the sections of the Act. Id. at 6.

While the Appellate Division in Bell Tower recognized a "strong public policy in favor of arbitration" it did recognize that only "qualifying disputes" are subject to the requirement of arbitration.

Condominiums need to be mindful of their obligation to offer ADR concerning qualifying disputes prior to filing litigation against a unit owner. Otherwise, they risk having their complaints dismissed by a Court and referred to mediation.

If you would like further details, please post your comments, or contact Anne P. Ward at anne@epgp-law.com or call (973) 854-6717.

Divorced and divorcing parents in New Jersey are often shocked to learn that they may be legally obligated to provide their children in divorce that which they are not obligated to provide in marriage: namely a college education. The full extent of that obligation, however, is not always clear. In the case of Sciacca v. Hagarty, 2012 WL 127616 (N.J.Super.A.D.), the New Jersey Appellate Division recently held that a divorced father was still obligated to pay his daughter's college expenses despite the fact that during her senior year of high school she moved out of his house and insisted on residing exclusively with her mother following a serious conflict with her father. In so doing, she effectively severed her relationship with him. For the twelve years prior to that point, the daughter lived with both her mother and father on an equal basis. In fact, the mother paid the father child support.

When the daughter received her college acceptance later that year, the father notified the mother that he was not going to contribute to the daughter's college expenses because, in part, she had been "very abusive to [him] both physically and verbally [.]" Given her malicious conduct toward him, the father did not think it was fair to reward her with an education at the college of her choice. The father also claimed an unrelated lack of financial ability to share in the expenses. Ultimately, the mother filed a motion to compel the father's financial contribution.

In opposition to the motion, the father relied heavily on the case of Gac v. Gac, 351 N.J.Super. 54 (App. Div. 2002), which held that a parent is not be obligated to contribute to the college expenses of a child where the circumstances between them would make such a payment inequitable. Both the lower court and the Appellate Division found, however, that Gac was distinguishable from the present case. Specifically, the Appellate Division found that the "inequity" in Gac was based upon the fact that the father, despite his best efforts and desires, was denied any relationship with his children since the time they were 5 and 8 years old. Conversely, although there was a serious rift with his daughter, the appeals court emphasized the fact that Mr. Hagarty was previously involved in his daughter's college plans and actively participated in the application process while she lived with him until her senior year of high school. Accordingly, the Appellate Division ruled that, despite experiencing a serious conflict, "the relationship between [the] parent and child is not so poor that to compel college contribution would be inequitable."

As is the case with so many other aspects of divorce litigation, there is no precise definition of what constitutes circumstances that would make it inequitable to require a divorced or separated parent to contribute to the college expenses of an estranged child. Rather, it remains a question of degree left to the judgment of the trial court on a case by case basis.

Contributed by Jeffrey W. Plaza, who is a partner of the firm practicing in the area of divorce and family law.

Bruce Gudin, Esq. will give a seminar on Thursday, October 20, 2011 entitled "A Comprehensive Roadmap to Handling Commerical Landlord Tenant Issues".  Serving on the faculty with Bruce will be Lori I. Meyer, Esq. and Jonathan Mehl, Esq.  The seminar will be given at the Wilshire Grand in West Orange.  Further information can be obtained by going to www.NJICLE.com or emailing Bruce at Bruce@lep-lawyers.com.