Ansell.Law’s Seth Rosenstein Secures Summary Judgment in Pivotal Americans with Disabilities Act (ADA) Litigation

As noted in a recent article published by Ansell.Law Partner Seth M. Rosenstein, nuisance Americans with Disabilities Act (ADA) cases have cost American businesses millions of dollars, and settlement is often the path of least resistance. It is often the case that an aggressive defense of the claims – particularly when the claims are frivolous – benefits both the business or property owner defending the action, as well as the greater community, by deterring vexatious litigation primarily focused on lining counsel’s pockets.

In one particularly egregious ADA case, the plaintiff claimed that he traveled from Lower Manhattan to Midtown for the purpose of having a document notarized — and that he was unable to access the defendant’s building as a result of a single, small step from the sidewalk. The plaintiff conveniently ignored numerous issues with his case, particularly those stemming from a dearth of facts and crucial information from his cookie-cutter complaint. This is hardly surprising as plaintiffs in ADA cases often profit from the sheer number of cases filed, and the complaints filed in these actions tend to be identical to one another.

The Ansell.Law team aggressively defended this action, and after reviewing the extensive and meticulously detailed moving papers drafted by Rosenstein, the Honorable Lorna G. Schofield of the United States District Court for the Southern District of New York questioned the “tester” plaintiff’s intent to return to the subject property and found that he had “not shown a sufficiently concrete intent to return under the heightened standard” of the Second Circuit’s standard set in Calcano v. Swarovski North America. Put another way, the court rejected the plaintiff’s laughable assertion that he (i) traveled to Midtown Manhattan to notarize a document, (ii) frequently needs documents notarized or has a specific document requiring notarization in the future, and (iii) intended to return to Midtown Manhattan for notarization services in the future. The property owner could have rolled over and negotiated a settlement of questionable claims, but instead, it elected to fight – and ADA plaintiffs will think twice before bringing an action against the owner in the future.

If you or your business have been named as defendants in an ADA case, please contact Ansell.Law Partner Seth M. Rosenstein to discuss the path forward.

Recently Filed Federal Lawsuit Seeks To Exempt Community Associations From the Corporate Transparency Act’s Mandatory Reporting Requirements

By Nicole D. Miller

As we discussed here, starting January 1, 2025, most existing homeowner and condominium associations (Community Associations) in New Jersey, and across the country, will be considered “reporting companies” that must comply with the extensive, detailed, and complex reporting requirements of the federal Corporate Transparency Act (CTA). Unless an association falls within one of the act’s 23 enumerated exemptions (and most don’t), the governing board members (Board) must provide “Beneficial Ownership Information” (BOI) to the Financial Crimes Enforcement Network (FinCEN) division of the U.S. Treasury Department by designated deadlines. Failure to comply with the CTA can result in substantial fines and penalties, including incarceration.

For boards composed primarily of volunteer homeowners, and associations with already stretched resources, sharing and reporting sensitive personal information to the federal government while parsing the language of a confusing and ambiguous statute presents significant burdens and challenges. This is why, on September 11, 2024, the country’s largest community association advocacy organization filed a federal lawsuit challenging the constitutionality of the CTA, seeking to exempt associations and boards from its reporting requirements, and seeking a preliminary injunction against its enforcement as to Community Associations and Boards. The motion hearing for the preliminary injunction is currently scheduled for October 11, 2024.

The lawsuit filed by the Community Associations Institute (CAI) against the United States Department of the Treasury in the U.S. District Court for the Eastern District of Virginia asserts that the CTA imposes excessive administrative and financial burdens on the more than 75.5 million Americans living in 365,000 community associations across the U.S.

In a press release, the CAI’s chief executive officer, Thomas M. Skiba, said, “Requiring community associations to comply with the Corporate Transparency Act not only diverts resources away from community governance and service but also poses a chilling effect on volunteerism. We are asking the court to recognize the constitutional violations, overreach of federal powers, and equal protection violations related to the Corporate Transparency Act and community associations.” However, CAI has stated that if the lawsuit is successful in exempting Community Associations from the CTA, “it is very possible the exemption will only apply to community associations that are members of CAI” given the decision in National Small Business United v. Yellen, which was discussed here.

Until and unless the court issues an injunction against enforcement of the CTA regarding community associations, boards must take steps to comply with the law’s reporting requirements by the following deadlines:

  • Associations formed during calendar year 2024 must submit their BOI report within 90 days after the date of the entity’s formation (i.e., the filing date of its Articles or Certificate). 
  • Associations formed before January 1, 2024, must submit their BOI report on or before January 1, 2025 (one year after the effective date of the CTA).    
  • Associations formed on or after January 1, 2025, must submit their BOI report within 30 days after its date of formation (i.e., the filing date of its Articles or Certificate).

If you have any questions about the CTA and its impact on Community Associations, please contact Nicole Miller at Ansell Grimm & Aaron.

Freedom From Clutter v. Freedom of Expression: What NJ Community Association Boards Can and Can’t Do About Political Signs This Election Season

By Nicole D. Miller

Labor Day 2024 has come and gone, which means that after a summer of dramatic developments, the final sprint to Election Day is here. It also means citizens in New Jersey and across the country will be more engaged in the political process and want to ensure their voices are heard. In addition to the ballots they cast, voters often like to declare their political preferences, and support their preferred candidates, by posting signs in their yards, windows, balconies, or other highly visible areas. Doing so is the essence of free speech as protected by the First Amendment to the U.S. Constitution and New Jersey’s Constitution. As the U.S. Supreme Court has said, political signs on one’s property are “a venerable means of communication that is both unique and important.”

But for New Jersey community associations, election season presents unique and tricky challenges that pit the covenants and rules that all owners agreed to abide by with their right to political expression. When owners display signs and other items that, on their face, appear to violate the rules and limitations outlined in the covenants, conditions, and restrictions (CC&Rs) that govern their community, it can add fuel to an already combustible political environment, leading to conflicts and lawsuits between boards and owners.

New Jersey’s Free Speech Protections Are Broader Than the First Amendment’s

No specific statutes govern or delineate the power of New Jersey community associations to ban or limit the size, number, and placement of political signs. Additionally, the First Amendment only limits the ability of government actors to restrict free speech. Since community associations are not government entities, the First Amendment doesn’t govern the actions or policies of community associations as to political signs. 

However, New Jersey’s constitution is unique in that its free speech protections go further than the First Amendment and do not just apply to the government. As New Jersey’s Supreme Court noted in its decision in Mazdabrook Commons Homeowners’ Ass’n v. Khan addressing the conflict between CCRs and the constitutional right to free expression, ” an individual’s affirmative right to speak freely is protected not only from abridgment by government, but also from unreasonably restrictive and oppressive conduct by private entities in certain situations.” 

In that same case, the Court declared that a community association’s total ban on signs of any kind, other than “For Sale” signs but including political signs, “violates the free speech clause of the State Constitution.”

Reasonable Time, Place, and Manner Restrictions on Political Signs Are Permitted

Short of a total ban, courts in New Jersey have generally upheld the authority of community associations to enforce reasonable restrictions on political signs, provided these restrictions are: (i) clearly outlined in the governing documents; (ii) content-neutral; and (iii) applied uniformly. For instance, New Jersey courts have recognized that community associations have a legitimate interest in maintaining the aesthetic appearance of the community, which can justify certain restrictions on the display of political signs. However, these restrictions must be reasonable and not so broad as to effectively prohibit all forms of political expression.

One solution some New Jersey community associations have embraced is implementing rules that allow for the display of political signs but impose certain limitations. For example, an association might allow residents to display one political sign per candidate or issue, with restrictions on the size and placement of signs. This approach seeks to balance the homeowner’s desire for political expression with the association’s interest in maintaining an attractive, cohesive community environment.

If your community association board is facing an issue involving an owner’s display of political signs or has questions about its power to restrict such signage, please contact Nicole Miller at Ansell.Law.

Game Changing National Association of Realtors Antitrust Settlement – What Real Estate Professionals Need To Know

By Seth M. Rosenstein

August 17, 2024 was a date of unprecedented and monumental change in America’s real estate industry. On that date, many practices that were standard operating procedure for decades among real estate professionals were forever discarded and replaced as part of a landmark settlement that resolved a high-profile antitrust lawsuit.

For real estate agents and brokers of record, understanding and complying with the National Association of Realtors’ (NAR) new mandatory national Multiple Listing Services (MLS) policies as to disclosure, commission, incentive, documentation, and training is non-negotiable.  Failure to follow the new protocols can have dire consequences and put licenses and livelihoods at risk.

The NAR posted extensive information and FAQs on its website that dive deep into the nuances and details of what is now required of agents and brokers of record. The three most significant changes, however, relate to compensation structures and transparency about broker compensation. Here is the NAR’s description of its new policies in this regard:

Offers of Compensation Prohibited on Multiple Listing Services 

Multiple Listing Service  participants, subscribers, and sellers are prohibited from making any offers of compensation on an MLS to buyer brokers or other buyer representatives. Additionally, an MLS must eliminate all broker compensation fields and compensation information, and it may not create, facilitate, or support any non-MLS mechanism for participants, subscribers, or sellers to make offers of compensation to buyer brokers or other buyer representatives.

Disclosure of Compensation

MLS participants and subscribers must:

  • Disclose to prospective sellers and buyers that broker compensation is not set by law and is fully negotiable. This must be included in conspicuous language as part of any listing agreement, buyer written agreement, and pre-closing disclosure documents.
  • Conspicuously disclose in writing to sellers and obtain the seller’s authority for any payments or offer of payment that the listing participant or seller will make to another broker, agent, or other representative (e.g., real estate attorney) acting for buyers. This disclosure must include the amount or rate of any such payment and be made in writing in advance of any payment or agreement to pay.

Written Buyer Agreement Required Before Touring a Home

Agents working with a buyer must enter into a written buyer agreement before touring a home in person or through a live virtual tour. To comply with the terms of the settlement, a buyer agreement must:

  • Specify and conspicuously disclose the amount or rate of any compensation the MLS Participant will receive from any source or how this amount will be determined.
  • Set forth an amount of compensation that is objectively ascertainable and not be open-ended. 
  • Include a statement that MLS Participants may not receive compensation from any source that exceeds the agreed-upon rate with the buyer.
  • Disclose in conspicuous language that broker commissions are not set by law and are fully negotiable.

What Realtors and Brokers of Record Need To Do Now

Failure to follow the new requirements can lead to a host of negative consequences, from hefty fines to NAR sanctions to losing professional licenses. Broadly speaking, industry professionals should take several steps to modify their practices and institute training and education programs to ensure they comply with the new requirements:

  • Training and Compliance: The settlement mandates that the NAR and its affiliates implement training programs to educate agents and brokers about the new rules and compliance requirements.
  • Monitoring and Enforcement: The settlement requires regular audits and the establishment of a compliance committee to oversee adherence to the new rules. 
  • Adjustment of Commission Structures: The prohibition against setting minimum commission amounts for buyer’s agents may require brokers of record to reevaluate their commission structures and policies. 

If you are a New Jersey real estate professional and have questions about the new requirements brought about by the NAR settlement, please contact Ansell.Law Partner  Seth M. Rosenstein. Our team of experienced attorneys often address issues facing the industry and counsel real estate professionals, on an issue-raised basis and as part of ongoing training, compliance and Q&A sessions.

 

Amendments to New Jersey’s Open Public Records Act May Prejudice Those Involved in Legal Disputes and Undermine the Law’s Purpose

By David J. Byrne and Nicole D. Miller

Every level of government possesses a treasure trove of information. Each New Jersey municipality and state agency is supposed to keep copious records relating to things like interactions with the public, police reports, permit applications, zoning variance requests as well as internal documents reflecting governmental decision-making. For many, many years, by virtue of New Jersey’s Open Public Records Act (“OPRA”), some of those records have been open to the public.

Recently, New Jersey’s legislature amended OPRA.  Unfortunately, those amendments may make it much harder for parties anticipating, or involved in, legal disputes to get access to evidence they need to support their claims or defenses. 

How OPRA Relates to Litigation and Legal Disputes

While not obvious at first glance, the recent amendments to OPRA are extremely significant to individuals and businesses involved in litigation, other legal proceedings, or potentially exposed to either. 

Legal proceedings often involve “discovery.” “Discovery” is the process of requesting, and exchanging, information and documents relevant to the dispute. Discovery also often involves subpoenas or requests to third parties that may have documents or information that neither litigant possesses. 

Sometimes, a local governmental body or state agency is such a third party. There are many types of matters in which governmental records can play a critical role: land use, real estate and/or development-related disputes and construction defect litigation, to name a few.

The Problem With the Recent Amendments to OPRA

Before the recent amendments to OPRA, a party involved in litigation could use OPRA to get such records.  Now, such a party may be limited to the use of subpoenas.

For example, the revised OPRA, which goes into effect on September 3, 2024, provides, in part, that:

  • Parties to a legal proceeding are not entitled to government records via OPRA if the record sought is within the scope of any court order in that proceeding or is within the scope of a pending litigation discovery request. 
  • Public agencies are not required to respond to a request if it “does not identify specific individuals or job title or accounts to be searched, a specific subject matter, and is not confined to a discrete and limited reasonable time period.” This creates a Catch-22 for requestors who likely could only obtain such detailed information from the very records they are seeking.

As noted, these amendments may unnecessarily increase the costs associated with procuring records from the government by forcing the use of subpoenas.  These amendments also appear to undermine the public’s “right to know.” After the amendments to OPRA become effective in September, we will have a better sense of their impact on legal proceedings and the public in general. 

If you have questions or concerns about OPRA and these recent amendments, please contact Nicole Miller or David Byrne at Ansell.Law.

Andrea B. White Attains American Academy of Matrimonial Lawyers Arbitrator Qualification

Ansell.Law is pleased to announce that partner Andrea B. White has earned the qualification to be a matrimonial arbitrator. She joins an elite group of attorneys nationwide who have been accepted and successfully completed the training through the American Academy of Matrimonial Lawyers Arbitration Training Institute.

This latest certification follows Andrea’s endorsement to serve on the New Jersey Judiciary Roster of Mediators for Economic Mediation in Family Matters, with a qualification for domestic violence cases. Andrea’s additional certifications provide clients with a range of practical solutions to meet their specific needs in all aspects of family law matters.

A veteran family law attorney, Andrea cultivated her practice in the highly specialized discipline of divorce, custody, parenting time, child support, alimony, and domestic violence. In recognition of her many years of volunteer service, Andrea was recently re-appointed to the New Jersey State Bar Association’s (NJSBA’s) Membership Committee for the 2024-2025 term. Andrea is an emeritus member of the NJSBA’s Family Law Executive Committee and is dedicated to enhancing the New Jersey legal community. 

Ansell.Law Welcomes Thomas Gironda

Ansell.Law is pleased to announce that Thomas J. Gironda, Esq. has joined the Firm’s Corporate, Finance & Banking Department. Gironda has a breadth of experience handling mergers and acquisitions, entity formation, corporate governance, and complex commercial transactions. Gironda also routinely handles public offerings, private placements, and securities compliance matters. That experience will help support many of the Firm’s clients, including the Commercial Real Estate and Controlled Substances and Regulatory Law Departments. His legal prowess enhances the Firm’s capabilities to meet growing client demand in these areas.

“Thomas brings tremendous knowledge across a broad scope of business transactions, and his private equity and venture capital skills are superb,” said President and Managing Shareholder Michael V. Benedetto. “A terrific attorney, we’re thrilled to have his significant talents in our Firm.”

Before joining the Firm, Gironda was an attorney at a highly regarded AmLaw 200 regional firm handling general corporate matters. Prior to being admitted to the Bar, he participated in the Ansell.Law Summer Associate program.

Anthony D’Artiglio Recognized in 2025 Edition of Best Lawyers

Ansell.Law is pleased to announce that Anthony D’Artiglio has been named in the 2025 Edition of The Best Lawyers in America®. Recognized for his work in business litigation and bankruptcy, D’Artiglio is named among New Jersey’s Ones to Watch.*

D’Artiglio is a partner and the litigation team leader in our Woodland Park office. He litigates a wide range of commercial matters from inception through trial, including commercial lease disputes, class actions, Consumer Fraud Act claims, corporate/shareholder disputes, employment disputes, and secured property actions. He also regularly represents creditors in bankruptcy matters. His diverse practice includes Bankruptcy, Controlled Substances and Regulatory Law, and Labor & Employment Law matters.

Best Lawyers’ listings, published since 1983, are based on merit and comprehensive peer review. Their methodology captures the consensus opinion of leading lawyers about the professional abilities of their colleagues within the same geographical and legal practice areas.

*No aspect of this advertisement has been approved by the Supreme Court of New Jersey or the American Bar Association.

Melanie Scroble Named Among 2024 Top Women Leaders in Law

Ansell.Law is pleased to announce that Women We Admire has included Melanie J. Scroble in the Top Women Leaders in Law for 2024. As an organization focused on executives and leaders in the United States and Canada, Women We Admire highlights today’s women in business, law, medicine, entertainment, sports, motherhood, and many other fields.

Melanie is a shareholder and a member of the Commercial Real Estate, Corporate, Finance & Banking, and Residential Real Estate departments. A leader within the Firm, Melanie serves as the on-site managing shareholder of the Firm’s Woodland Park office. She has amassed an impressive track record over 25 years and become a trusted advisor for clients nationwide.

Specializing in complex commercial real estate matters, Melanie has successfully closed a wide range of real estate transactions, including acquisitions, dispositions, leasing, and financing of various commercial properties across the country. Her expertise lies primarily in shopping centers, retail pads, multi-family apartment buildings, 1031 exchange transactions, and commercial financing and lending. Whether working with national REITs or first-time investors, Melanie is adept at building lasting relationships with her diverse client base. In addition to her practice, she is actively involved with the International Council of Shopping Centers and has been a roundtable speaker at their annual Law Conference.

As New Jersey’s cannabis industry has grown, Melanie has also developed niche experience navigating the challenges surrounding retail leasing matters. She is a valued member of the Firm’s Controlled Substances and Regulatory Law practice group.

Ansell.Law Obtains Huge NJ Supreme Court Victory for Condo Association In The Face of a Former Board Member Seeking Indemnification and Attorney’s Fees for a Lawsuit He Started

How To Interpret Indemnification Clauses As Well As Bylaws Provisions

Those who serve on condominium or community association boards must have indemnification with respect to lawsuits filed against them personally related to their board service. Most association bylaws contain provisions that provide such protections. However, most of those provisions are almost universally drafted as shields for board members, not as a vehicle for recovering attorney’s fees a board member incurs in a lawsuit they file against the board. 

Such provisions were the subject of a recent New Jersey Supreme Court decision, Patrick Boyle v. Carol Huff, et al. In Boyle, Ansell.Law attorneys represented certain members of Ocean Club Condominium’s board, each of whom had been sued by Patrick Boyle. Ansell.Law attorneys also represented Ocean Club itself against Boyle’s attempt to have Ocean Club reimburse the attorney’s fees he incurred to secure reinstatement to the board. The Court’s ruling in Boyle v. Huff saved the condominium from a judgment that could have exceeded $750,000.00. The ruling also highlighted how indemnification-related provisions should be both amended and interpreted. 

Case Background

Patrick Boyle, a unit owner of the Ocean Club Condominium in Atlantic City, was removed from the condominium board by the board’s other members, relying on new government regulations. Boyle successfully challenged his removal in court. He also sought indemnification for his attorney’s fees and costs incurred in order to make that challenge, relying upon the indemnification provision in the association’s bylaws.

That provision reads, in relevant part, as follows:

The Trustees and officers shall not be liable to the Unit Owners for any mistake of judgment, negligence or otherwise, except for their own individual willful misconduct or bad faith. The Association shall indemnify every Trustee and officer. . . against all loss, costs and expenses, including counsel fees, reasonably incurred by him in connection with any action, suit, or proceeding to which he may be a party by reason of his being or having been a Trustee or officer of the Association except as to matters as to which he shall be finally adjudged in such action, suit or proceeding to be liable for willful misconduct or bad faith.   

The trial court interpreted that provision as allowing for Boyle’s recovery even though his fees and costs were incurred solely because of a lawsuit that he, himself, commenced and pursued. The appellate court affirmed, and on behalf of the association, Ansell.Law sought review by New Jersey’s Supreme Court.

Ambiguous Indemnity Provisions Exclude Coverage for First-Party Claims

The fundamental issue before the court was whether an indemnification provision provides for the recovery of attorneys’ fees in a first-party claim, such as here, where Boyle, the party to be indemnified, filed a claim against Ocean Club, the indemnifying party – as opposed to a lawsuit filed by a third party, like a unit owner suing Boyle agreeing to indemnify — as opposed to a claim involving a third party, where a unit owner sues Boyle with respect to his role as an Ocean Club trustee. 

In Justice Noriega’s unanimous decision, the Court reversed the appellate court. It held that the indemnification provision at issue was ambiguous as to first-party claims. Under rules of contract construction, ambiguities in indemnification provisions must be strictly construed against the indemnitee (Boyle). Accordingly, the Court held that “Contrary to the conclusion reached by the Appellate Division, we cannot presume first-party coverage in the absence of language precluding it; rather, there must be affirmative indicia of the intent to indemnify to overcome the presumption that parties will each pay their own way.”

The Court concluded that “indemnification may also apply to first-party claims if that is the clear intent of the parties as expressed by their deliberate word choices when drafting contracts.” (emphasis added) It stated further that “Those word choices will govern whether an indemnification provision supports a first-or third-party claim for damages.” 

Key Takeaways for Community Association Boards

  • Strict Construction Against Indemnitee: Ambiguous indemnification clauses will be construed strictly against the party seeking indemnification. This means that an indemnification clause will cover first-party claims only if the provision explicitly states so.
  • Importance of Clear Language: An indemnification provision must be clear and explicit. Any association seeking to allow board members to enjoy indemnification vis-à-vis lawsuits they start must amend their bylaws with specific language.
  • Limitation to Third-Party Claims: Absent explicit language otherwise, an indemnification clause will likely be limited to third-party claims, not disputes between trustees and the association itself. This aligns with the traditional view that indemnification is typically about third-party actions.

The victory obtained by Ansell.Law in this case highlights the importance of one’s bylaws’ specific text, especially the provisions forced upon an association by a developer via that association’s original bylaws (as was the case here). Associations should work with counsel to ensure language clearly reflects a community’s needs and expectations.  

For more information or assistance in reviewing and updating your association’s bylaws, contact Nicole D. Miller in the firm’s Community Association Law practice group.