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Guest Spotlight: Jim Wrynn of NAM (National Arbitration and Mediation)

Posted: October 13th, 2020

In 2020, the court system has faced unprecedented challenges from the pandemic and associated budget cuts. Business disputes, however, continue on – and with would-be litigants facing uncertain waits in the court system for their most pressing issues, Alternative Dispute Resolution (ADR) has taken on new importance.

We sat down (virtually) with Jim Wrynn, Chief Commercial Officer and a Hearing Officer at NAM (National Arbitration and Mediation), to discuss ADR, how NAM has filled a critical void left by the pandemic, and how his unique background informs his approach to cases. Read the Q&A to learn more.

Q: How do you explain ADR to non-lawyers?

Alternative Dispute Resolution (ADR) is any method for settling disputes without litigation. It is an alternative to the court system and is increasingly being utilized in disputes that would otherwise result in litigation, including commercial/business transactions, labor and employment matters, insurance disputes, matrimonial actions, and personal injury claims. Arbitration and Mediation are two of the most common forms.

Mediation is a private, collaborative process whereby the Mediator (a neutral third person) works with the parties to come to a mutually agreeable resolution.

Arbitration is like an informal trial where one or more persons (the “arbitrator,” “arbiter,” or “arbitral/arbitration tribunal”) hears evidence and arguments from each side of the dispute and issues an arbitration award which is legally binding and enforceable by the courts.

A major benefit of ADR is that the process is flexible – parties have the freedom to choose their own Arbitrator/Mediator with the requisite subject matter experience and can choose the procedural and discovery rules that may apply to their dispute. The procedure is much quicker than litigation, is significantly less expensive, is confidential, allows all parties to be heard, and is more likely to preserve existing relationships (business and/or social).

Q: When might ADR be a good choice for a particular dispute?

When:

liability is apparent, but the parties cannot agree on damages;
there are coverage issues that must be resolved;
the parties cannot agree upon apportionment of damages;
privacy/confidentiality is an issue;
litigating would incur significant time and expense;
the parties are concerned with preserving their existing relationship; or
when the parties must because the agreement requires it.

Q: The pandemic has severely limited court operations, and the recent announcement of a judicial hiring freeze suggests that these limitations will not be fully resolved for some time. How has NAM filled the void?

For almost 30 years, we have seen a significant increase in the use of ADR as opposed to formal court proceedings. Recent months have seen this shift rapidly accelerate due to the unprecedented impact of the pandemic. Accelerating even faster is the use of remote (or virtual) videoconferencing that enable the parties and counsel to proceed with Mediation/Arbitration in a way that protects them from the virus.

NAM has been way ahead of the curve in its ability to integrate technology and case conferencing. We have been conducting hearings and conferences via videoconferencing for over 25 years. Since mid-March alone, NAM has successfully conducted thousands of hearings remotely without any technological or security issues.

Q: How does virtual mediation compare to in-person mediation? Do you think in-person will resume post-COVID or is virtual mediation a satisfactory substitute?

Frankly, the conversion from mostly in-person to virtual hearings has been seamless for us, and the parties and counsel are finding it quicker and more cost-effective. For example,

clients do not have to pay the cost (time and expense) of the attorney, witness and/or party travel expenses;
the hearing itself is more efficient (it starts as soon as you log on – no more waiting for parties/witnesses to arrive and everyone present in the room to begin) and the parties lose minimal time from their respective businesses/professions (not having to travel); and
parties don’t have to worry about many hurdles that can lengthen or delay settlement (bad weather, traffic delays, flight cancellations, poor health, etc.)

In addition, the Mediator/Arbitrator can speak to all parties and counsel together or separate them into break-out rooms. We are also finding that there is much more eye contact with the parties and counsel virtually, where faces are very visible on the screen, than there would be if all were present in the same room sitting around a large conference room table.

Participants are now familiar and comfortable with Virtual ADR and the benefits it provides, but time will tell as to the degree participants will continue to utilize this format post-Covid.

Q: What sets NAM apart from other ADR services?

First and foremost is the quality of our roster of neutrals. NAM offers a nationwide panel of more than 2,600 top-tier former judges and experienced legal practitioners that are each uniquely qualified to resolve these disputes. NAM has two of the top three neutrals in the U.S. based on the National Law Journal and consistently ranks in the top three of the Corporate Counsel Best of Surveys. Eight of the top 10 mediators and seven of Top 10 arbitrators were NAM neutrals based on the New York Law Best of Survey and others are working their way up the list.

We continue to expand the roster to include even more distinguished neutrals. We recently added the Honorable David B. Saxe of the NYS Appellate Division, First Department, to our panel. Justice Saxe is one of the most honored and respected members of New York’s legal community, and I have no doubt that he will soon be joining many of our other neutrals on these lists in the future.

Another reason is NAM’s superior case administration – we have an experienced team of case managers with the skill set and experience to handle all aspects and nuances involved in the administration of the individual dispute or with a specific ADR program.

Other reasons include: our focus on technology – being at the forefront of videoconferencing over the past 25 years is paramount. We also offer unparalleled flexibility – we have tremendous expertise in the customization and implementation of numerous innovative ADR programs and initiatives. In addition, NAM has constantly demonstrated industry leadership. It has been a true pioneer in the field of ADR and, as a result, has been repeatedly recognized as a leader in the field by the legal community.

Q: Talk about your own background as Superintendent of the NYS Insurance Department and how that experience has shaped your work at NAM.

In addition to my role as Superintendent of the NYS Insurance Department, my background includes more than 35 years of experience as an attorney, regulator, executive, strategic advisor, board member, and expert witness in the insurance field. These experiences have made me somewhat uniquely qualified to serve as both Chief Commercial Officer (where I help develop NAM’s overall strategic policy), and as a Hearing Officer (primarily in the Insurance/Reinsurance field).

For the first 25 years of my career, I was a trial attorney and, coincidently, handled many mediations and arbitrations with NAM, so I am familiar with them as both a client and an executive. Since that time, I have been involved with thousands of claims from a number of different viewpoints in my various roles with the NYS Insurance Fund, the NYS Department of Insurance, and the NYS Department of Financial Services, and as a regulatory attorney, expert witness, and strategic advisor.

As a result, I do not approach the dispute from only one vantage point, as many neutrals do, but I understand the perspective of all parties, their counsel, the impacted business owners, the insurance carrier, and even the regulator, since I have worn hats in each of these capacities.

Learn more about NAM here.

CMM attorneys have helped countless clients reach successful resolutions through both litigation and ADR. Contact us today to discuss the best path forward for your employment, business divorce, personal injury, or other disputes.

“Pink Tax” Ban Takes Effect in New York

Posted: October 5th, 2020

By: Christine Malafi, Esq. email

Tags: corporate

Business owners: to avoid civil penalties, be sure to review your pricing model on goods and services to confirm you’re adhering to recently passed legislation. As of September 30, 2020, New York State has banned the “pink tax,” a reform passed as part of the 2021 New York State Budget.¹

The “pink tax” describes a practice by retailers, manufacturers, and service providers to charge different prices for “substantially similar” consumer goods or services that are marketed to different genders. The law is in response to instances in which women are charged more, and pay more, for the same goods or services offered to men.²

“Substantially similar goods” are defined by the State as goods that exhibit little difference in the materials used in production, intended use, functional design and features, and brand. “Substantially similar services” is defined as two services that exhibit little difference in the amount of time delivering, difficulty, and cost in providing the service. The State uses the following as examples of prohibited pricing:

a store selling a toy in blue for $5.00 and the identical toy in pink for $10.00, or
a dry cleaner that charges a higher price to dry clean a woman’s dress suit than a man’s dress suit.

To combat discriminatory practices, the law empowers consumers to request and receive a written price list for standard services to ensure any such difference is not discriminatory.

To avoid potential liability, businesses should make sure that any price difference is based upon:

The amount of time it took to manufacture such goods or provide such services
The difficulty in manufacturing such goods or offering such services
The cost incurred in manufacturing such goods or offering such services
The labor used in manufacturing such goods or providing such services
The materials used in manufacturing such goods or providing such services
Any other gender-neutral reason for having increased the cost of such goods or services

The New York State Division of Consumer Protection will handle all complaints, and violations may result in an order to stop such sales, along with restitution to consumers, up to a $250 fine for the first violation, and up to $500 fine for any subsequent violations. Consumer restitution, while in and of itself is not a high cost, could lead to potential class action lawsuits.

Businesses should protect against violations of the “Pink Tax” prohibition to avoid the appearance of discriminatory practices and potential liabilities which may result. If you have questions or need assistance, please contact us at (631)-738-9100 or fill out our form here.

[1] Senate Bill S2679

[2] A Study of Gender Pricing in New York City

Business Divorce: Negotiating with Your Business Partner

Posted: August 4th, 2020

By: Joe Campolo, Esq. email

Published In: HIA-LI Reporter

Tags: negotiation

Negotiating in the Time of COVID

As a business lawyer, I’m used to receiving frantic calls at all hours about any number of business issues, from the mundane to the bizarre. But over the past eight weeks, as PPP has run out and many business owners and CEOs are facing seemingly insurmountable challenges, these calls have overwhelmingly focused on one topic: business divorce.

Due to the prolonged economic disruption of COVID-19, the reality is that many business partnerships will disband. Whether you’re buying out a partner, want to sell your interest, or close up shop and move on, the goal is to do so in a way that maximizes the value of the hard work you’ve put into the business. Since I’ve been spending my days navigating these issues with clients, I’m sharing some tips here to help you negotiate with your business partner to part ways as productively as possible.

1. Recognize that “it’s not personal, it’s strictly business”

This tip from The Godfather is also known as “get your head in the right place.” When you’ve built a business with someone, separating the emotion from business decisions is extremely difficult, especially when it comes to splitting up. But it’s critical to try. The decision to “break up” is likely one of the most important of your life, and you can’t make sound decisions if you view the economic realities as a personal affront. Talk through your feelings with someone you trust – scream if you have to – but take the emotions out of the decision-making process as best you can.

2. Use a trusted advisor as a sounding board.

Of course, you’ll need legal counsel to draw up the documents memorializing the business divorce. But before you get there – and to help keep your emotions in check – bounce ideas off someone you trust. This can be a business advisor, such as a lawyer, accountant, financial advisor, or even a business mentor, or someone you can confide in with personal matters, such as a therapist, friend, or family member. As a business owner, you live and breathe your business – sometimes so deeply that seeing the big picture can be difficult. Using a trusted advisor can help keep you focused and consider scenarios you wouldn’t have otherwise thought about.

3. Empathize.

Take the time to consider your business partner’s interests and positions. Being able to empathize with the other party’s perspective is critical to achieving a good result. By suppressing your automatic reaction of anger or fear, you can better understand what he or she is seeking. (Remember, empathy isn’t sympathy. The key is to demonstrate that you understand how the person feels, but you’re not necessarily agreeing with it.) This understanding puts you in a much stronger negotiation position as you’ll be better able to craft win-not lose solutions.

4. Start at the end.

What resolution do you envision? Rather than preparing a negotiation script in which you’re just reacting (i.e., “If she says this, I’ll respond with this”), picture your ideal scenario, and work backwards to see what it will take to get there. Do you want your business partner to sell you her shares? Consider what her take will be on how much blood, sweat, and tears she’s put in over the years (not how much you think she’s put in) and consider ways to respond to that. Perhaps you can provide value to her in ways other than an inflated buyout price – loan forgiveness, equipment, and so forth. By starting at your desired result and pressing rewind, you’ll make more progress than if you simply script out a response to your adversary’s anticipated comments. That strategy won’t get you anywhere.

As a business lawyer and experienced negotiator who has spent my career helping business owners navigate these issues, I know firsthand that business divorces are high-stakes negotiations peppered with emotions and stress. But don’t let fear prevent you from pursuing what you want. The business environment we find ourselves in today is unprecedented, but may be just the opportunity you need to move forward.

Found this article helpful? Learn more negotiation tips here or contact us to learn more about our business divorce experience.

CMM Success Spotlight: Realtor Patty Brunn

Posted: August 4th, 2020

After more than 10 years of dedicated service at Campolo, Middleton & McCormick, Patty Brunn has turned her passion for real estate into a successful new career. As a Licensed Real Estate Salesperson, Patty now works with residential buyers and sellers across Suffolk, Nassau, and Queens, helping clients sell their homes for top dollar or find their new dream homes.

CMM clients remember Patty as a knowledgeable, service-oriented paralegal. She joined CMM in 2008 as one of the firm’s first hires, starting in the litigation department and eventually working with the firm’s real estate team, where she found her passion. “Communicating with clients regularly and guiding them through the real estate process was always one of my pleasures,” Patty says. “I enjoy helping people, so getting them to the finish line as stress-free as possible always brought me joy.”

Patty spent several years in CMM’s Bridgehampton office, helping to build our presence and reputation on the East End. While working full-time, she studied for and received her Real Estate Salesperson license in January 2019, pursuing real estate on the side, but staying focused on her work at CMM.

While COVID-19 has caused unprecedented economic disruption and challenges, Patty – true to her nature – decided to view the pandemic as an opportunity. With the Long Island residential real estate market rapidly heating up as people look to relocate, Patty decided to focus on her real estate career full-time. She’s now affiliated with Nappa Realty in Massapequa, where she uses the customer service skills she honed at CMM to help her real estate clients maximize the value of their investments and start new chapters in their lives.

“Patty has always been a tremendously hard worker, a good listener, and client-oriented – all required traits for a successful real estate salesperson,” said CMM Managing Partner Joe Campolo. “My own family has already used Patty to sell a home and she did an amazing job. We miss her at the firm, but are extraordinarily proud of her, and will happily recommend her to our network.”

To get in touch with Patty, email pattybrunnrealtor@gmail.com or call 631-704-5015.

The Leadership Pivot In A Time Of Crisis

Posted: May 14th, 2020

By: Joe Campolo, Esq. email

Originally published by Express News Group

When I let go of what I am, I become what I might be.
— Lao Tzu

Leaders aren’t born — they are made by the times they exist in and how they rise to the occasion.

Let me back up.

The richness of Long Island lies not only in its real estate and school districts but also in its innovative businesses, restaurants and hospitality. Small businesses are the backbone of our economy and must survive.

Like many of you, I have spent my entire career helping to build Long Island — and, also like you, I am not willing to sit back and watch these businesses be destroyed without a fight.

The only way to move forward is for us to be leaders.

Leading through this pandemic requires both an acceptance of reality and being adaptable and agile to our ever-changing circumstances. The “pivot,” if you will — on steroids.

On Monday, March 16, shell-shocked business owners and employees, my team included, headed home with stacks of folders, remote login instructions, and barely a clue that the world had just changed forever.

Personally, I felt like I had been hit in the head with a bat, and I wasn’t alone. My next few days were filled with panicked calls from clients and friends who simply had no idea what the future held and how their businesses could survive. The fear was palpable, and it paralyzed some of the strongest people I know.

By Friday, March 20, most people were in one of two camps: overtaken by panic (not sure what to do, so doing nothing), or in total denial (refusing to accept the reality of where we are now, which is understandably difficult, because everybody just wants this to go away).

I was trained in the U.S. Marine Corps that no one is coming to help me. So I did the only thing that made sense to me: worked with my team to help cut through that static, and take action.

By Saturday morning, we had launched a first-of-its-kind coronavirus relief hotline, open to all members of the business community, regardless of whether they were CMM clients.

We set up a dedicated phone number and email address where businesses could submit questions about the impact of the pandemic on their businesses. The calls were then routed to the appropriate CMM attorney, who promptly followed up with guidance, at no charge.

Over those first few weeks, we answered hundreds of questions about everything on the business community’s mind: sick leave, workplace safety, cash flow, stimulus questions, and eventually the Paycheck Protection Program application and forgiveness. The list was endless.

Our simple pivot from providing legal services to clients to providing targeted business guidance to the larger business community enabled us to empower these businesses with the knowledge they needed to move forward and make critical decisions impacting their survival.

I truly believe that this work helped many businesses stay open when they otherwise wouldn’t have made it.

Our next pivot involved our charitable foundation, CMM Cares Inc. Before the pandemic hit, we were focused on fundraising initiatives; once we realized the gravity of the situation, our focus shifted from trying to raise awareness of us to raising awareness of others. There were so many good people doing so many good things out there, and we knew we needed to highlight those other organizations so that people could access all the resources available, not just ours.

We immediately launched a donation drive for comfort care items (granola bars, drinks, lotions, etc.) for the health care heroes fighting on the front lines at Stony Brook Medicine, helping to fulfill a critical need with a low-value ask.

We also started an aggressive social media campaign for CMM Cares, where we highlight a mix of charitable initiatives, mental health resources, businesses adapting to the changes, and ways people can help in a crisis that makes us feel powerless. In doing so, we were able to connect hundreds of people to these resources — which is exactly the reason we started the foundation in the first place.

None of us knows where this next chapter leads us, but we can all control our responses. We must be patient, focused, disciplined, hopeful, optimistic and zealous.

We must continue to endure the most stressful conditions we will likely face in our lifetime.

We have to look at a macro level, accept, and adapt.

We must help others along the way, including making sure we are taking care of our own physical and mental health.

We must be able to change and react to brand new circumstances that may arise without warning.

We must find ways to bring value to our new ecosystem.

In short, we must all be leaders to survive.

Governor Issues Executive Order Regarding Masks for Essential Workers

Posted: April 14th, 2020

Tags: coronavirus, labor & employment

Governor Cuomo issued Executive Order 202.16 on April 12 requiring that as of Wednesday, April 15 at 8 p.m., any employees present in the workplace of all essential businesses shall be provided and shall wear face coverings when in direct contact with customers or members of the public. Businesses must provide these face coverings at their own expense for their employees. Local governments and local law enforcement shall enforce the requirement.

Read the full Executive Order, which also addresses antibody testing, the Multiple Dwelling Law, and others, here.

Please call us with any questions regarding how this Executive Order affects your business.

Coronavirus-Related Suspension of NYS Laws – UPDATED April 7, 2020

Posted: April 7th, 2020

Tags: coronavirus

On April 7, 2020, Governor Cuomo signed Executive Order 202.14 to continue the modification and suspension of certain New York State laws relating to the COVID-19 disaster.

In relevant part, the Executive Order extends the provisions tolling the statute of limitations until May 7, 2020 (tolling previously went through April 19, 2020).

Further, the statewide restriction on all non-essential businesses and functions, including the operation of schools, has been extended an additional two weeks to April 29, 2020.

The Executive Order also clarifies the requirements for remote signing of documents such as deeds, wills, powers of attorney, and healthcare proxies. The law authorizes the use of audio-visual technology for witnessing if:

• The person requesting that his or her signature be witnessed, if not personally known to the witness, must present valid photo ID to the witness during the video conference (not before or after);
• The video conference must allow for direct interaction between the person and the witness (and the supervising attorney, if applicable);
• The witness must receive a legible copy of the signature page, which may be transmitted via fax or electronically, on the same date that the pages are signed by the person;
• The witness may sign the transmitted copy of the signature page and transmit the same back to the person; and
• The witness may repeat the witnessing of the original signature page as of the date of execution provided the witness receive such original signature pages together with the electronically witnessed copies within thirty days after the date of execution.

The text of the full Executive Order is available here.

Mediation Is Having Its Moment

Posted: April 6th, 2020

By: Scott Middleton, Esq. email

Tags: commercial litigation, coronavirus, negligence

Back in normal times – loosely defined as early March 2020 and before – mediation could be either a great tool to move beyond an impasse or – if the parties were too far apart and unrealistic – a colossal waste of time and money. Now that the court system has effectively shut down due to the COVID-19 pandemic, however, mediation has emerged as a critical tool to resolve disputes that keep marching on even as the world around us has stopped.

Alternative dispute resolution (known as “ADR”) is the settling of disputes outside the courtroom. Non-binding mediation is a voluntary form of ADR in which a neutral third party, the mediator, works to help the parties come to a mutually acceptable resolution to their dispute. (Unlike arbitration, mediation is not binding and mediators are not empowered to make or enforce decisions.)

In general, without the proper approach and preparation to mediation, the parties may be pushed further apart. Consider this example: a couple of years ago, my client was amenable to settling but the plaintiff, in the lead-up to the mediation, was less than forthcoming. He led me to believe that he was looking to settle for less than six figures. Based upon this understanding, my client agreed to mediation. We prepared our submission for the mediator and attended the mediation with the goal of resolving the case. At the mediation table, however, the plaintiff’s counsel increased his prior settlement demand and then acted indignantly when the offer presented was, in his mind, inadequate. While the mediator sided with us when it came to valuation, there was no reasoning with the plaintiff and needless to say, the case did not settle and we all moved forward to trial more frustrated than before.

Considering situations like that one, our office generally moves a case into mediation only when there is a glimmer of hope for a resolution. But remember, mediation is a tool to avoid trial in an effort to resolve matters reasonably. Well, regardless of how badly we may want to go to trial on a matter, for the foreseeable future in New York, that’s an impossibility. But the disputes that led litigations to be filed in the first place have not gone on hiatus. Therefore, in just a few [long] weeks, mediation has emerged as a vital tool to resolve disputes that were previously headed for trial before the coronavirus upended life as we know it.

In normal times, if the parties are reasonable and amenable to settling, mediation can be an economical way to resolve a matter before fully preparing for a long and costly trial. When we are prepared and the parties are close enough to make it worthwhile, mediation is almost always a success. Now that litigation is temporarily off the table, mediation is a more important tool than ever to achieve a final resolution when the parties need it. Please contact us to discuss whether the time is right to mediate.

Paycheck Protection Program Update

Posted: April 2nd, 2020

Tags: coronavirus, labor & employment

Guest Post by Alan R. Sasserath, CPA, MS, Sasserath & Zoraian, LLP

Note: Please visit the S&Z blog here for additional information current as of April 3, 2020.

As you are aware, there is a lot of confusion surrounding the Paycheck Protection Program (“PPP”) – maybe more confusion than certainty.

Many of you have taken advantage of our workbook to calculate the loan amount under the PPP. We have adjusted our workbook as described below based on questions we have received:

Q: What period should be used to calculate the “Average Monthly Payroll”?

A: Based on our reading of the law, you are to use the 12 months ending on the date of the loan applications. From a practical perspective, the banks may require you to use calendar year 2019 as indicated in the instructions to the SBA Application. You should contact your lender for guidance.

Q: Are Independent Contractor Payments included in the definition of Payroll Costs used to determine “Average Monthly Payroll”?

A: Based on our reading of the law, they are included. This is open to interpretation, however; this Borrower Summary indicates that they are as does guidance on the JP Morgan Chase FAQ regarding the CARES Act.

Q: What is included in the definition of “Group Health Care Benefits” used to calculate Payroll Costs? Does it only include medical or does it include vision and dental among others benefits?

A: This is subject to interpretation as there is no additional guidance in the CARES Act. We will provide additional information as it becomes clearer.

Q: How is the $100,000 cap on per employee payroll computed?

A: Unfortunately, this too is confusing with no clear guidance. Please see “PPP Information Sheet: Borrowers.” We have highlighted several sections of the sheet that discuss this issue. Here are the areas of this document causing confusion:

The first highlighted sentence indicates: “Payroll costs are capped at $100,000 on an annualized basis for each employee.”

The next highlighted sentence indicates: “Payroll costs include: Salary, wages, commissions or tips (capped at $100,000 on an annualized basis for each employee)” and then goes on to add group health care benefits among other costs to the calculation of payroll costs and does not mention the $100,000 limitation on Payroll costs.

The third highlighted sentence states: “Payroll costs will be capped at $100,000 annualized for each employee.”

How do we interpret that? Are salary, wages, commissions or tips capped at $100,000 annualized for each employee or are Payroll costs capped at $100,000 annualized for each employee? Are both capped? The wording on the JP Morgan Chase site referred to above parrots the language in the PPP Information Sheet: Borrowers. Unfortunately, we don’t have a clear answer on that yet but we will keep you updated.

Because of the questions above, our workbook has been updated as follows:

Independent contractors can be entered in the workbook by using the dropdown menu on tabs 2a and 2b, line 12. That functionality has always been there. Choose “Other” to enter independent contractor information.
With regard to the $100,000 cap on employee payroll, we have two separate workbooks as follows:
1. PPP loan calculation V1.1 033020 calculates the cap based on payroll costs per employee.
2. PPP loan calculation V2.0 040220 calculates the cap based on Salary, wages, commissions or tips per employee and will yield a higher loan amount because of that.

Please note that the workbooks are meant to be used as a guide to calculate the loan amount. Please consult with your advisor and bank regarding the final amount of the loan.