...Title
Dept/ Agency: Law
Action: ( ) Ratifying (X) Authorizing ( ) Amending
Purpose: Accepting Funds -Settlement of Pre-Litigation
Docket No.: Pre-Litigation
Claimant: City of Newark
Claimant's Attorney: April C. Bauknight, Esq., 920 Mayor Kenneth A. Gibson Blvd., Room 316, City of Newark, New Jersey 07102
Settlement Amount: $329,327.00
Funding Source: City of Newark, Special Taxes
Additional Information:
Emergency contract, E2018-17, declared on July 31, 2018. There is no additional cost to the City of Newark.
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WHEREAS, Carjon and Direct Waste (hereinafter the “Companies” engaged the services of a PEO, namely, Insperity PEO Services, L.P. (“Insperity”) to, on a timely basis, file payroll tax returns and remit payment of the taxes due and owing as part of their services to the Companies; and
WHEREAS, the Companies learned that contrary to Insperity’s representations, payroll tax returns and the remittance of the taxes had not been timely undertaken due to an inadvertent oversight on Insperity’s part; and
WHEREAS, the Companies self-reported the deficiencies by filing tax returns for the following: (1) quarters two, three and four of calendar year 2021, (2) all four quarters of calendar year 2022, (3) all four quarters of calendar year 2023 and (4) all four quarters of 2024 had not been paid.
WHEREAS, the Companies have been operating their businesses in the City of Newark since 1958; and
WHEREAS, the Companies employ over one hundred employees, all of whom work in Newark daily and approximately twenty-five (25) of them reside in the City of Newark; and.
WHEREAS the Parties desire to compromise and amicably resolve the present dispute without protracted litigation delay, costs or additional expenses; and
NOW, THEREFORE, BE IT RESOLVED BY THE MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
The aforementioned whereas clauses are incorporated by reference as if set forth at length, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, Carjon, Direct Waste and Newark hereby agree as follows:
1. Recitals Incorporated. The recitals and “WHEREAS” clauses set forth above are hereby incorporated in full, and made a part of, this Agreement. The Parties admit that the Recitals are accurate.
2. Municipal Council Approval Required. The enforceability of the terms of this Agreement, including but not limited to the Release, are conditioned upon the passage of an approving Resolution by the Municipal Council of the City of Newark.
In the event that Municipal Council does not approve this Agreement within sixty (60) days of execution by Carjon and Direct Waste, the Parties shall return to their same position as they stood immediately prior to the execution of this Agreement without prejudice to their respective claims or defenses and shall reasonably cooperate with one another to agree upon an acceptable schedule for the Action to present to the Court for its approval (the “Enforcement Order”).
Payment by Carjon. Carjon shall only pay Newark the total outstanding tax due in the sum of One Hundred Fifteen Thousand, Six Hundred and Eight Dollars and Zero Cents ($115,608.00) (the "Carjon Settlement Payment") in monthly installments of Three Thousand Five Hundred Dollars and Zero Cents ($3,500.00) with an adjustment of the final payment as shown in EXHIBIT A. Carjon will not be required to pay any additional sums as long as the scheduled payments are made.
Payment by Direct Waste. Direct shall only pay Newark the total outstanding tax due in the sum of Two Hundred Thirteen Thousand, Seven Hundred and Nineteen Dollars and Zero Cents ($213,719.00) (the "Direct Waste Settlement Payment") in monthly installments of Six Thousand Five Hundred Dollars and Zero Cents ($6,500.00) with an adjustment of the final payment as shown in EXHIBIT B. Direct shall not be required to pay any additional sums as long as the scheduled payments are made.
Interest Payment from Insperity. Carjon shall undertake a good faith effort to have Insperity pay the interest which has accrued through October 15, 2025 in the amount of Forty-seven Thousand Seven Hundred and Seventy Dollars and Zero Cents ($47,770.00) from Insperity. Direct Waste shall undertake a good faith effort to have Insperity pay the interest which has accrued through October 15, 2025 in the amount of Eighty-six Thousand Two Hundred and Forty-seven Dollars and Zero ($86,247.00) from Insperity (total $134,017.00). Interest on the amounts owed by Insperity shall be tolled, and no penalties or fines shall be assessed or imposed. Upon receipt of Insperity’s payment of interest to Direct Waste / Carjon in the total amount of $134,017.00, Carjon and Direct Waste shall submit that payment to Newark, and Newark shall fully release Insperity with respect to Direct Waste and Carjon’s tax liability including interest, penalties and fines.
Payment Responsibilities. The Parties acknowledge that the failure or refusal of Insperity to pay the interest owed shall not relieve Carjon or Direct Waste of their respective obligations to make the Direct Waste Settlement Payment and Carjon Settlement Payment set forth in paragraphs 1 and 2 above. The Parties acknowledge and agree that they are solely responsible for paying any attorneys' fees and costs they incurred and that neither Party nor its attorney(s) will seek any award of attorneys' fees or costs from the other Party, except as provided herein.
Payment Mechanics. Each Settlement Payment shall be made by check with a notation set forth thereon noting which quarter each payment is applicable to. Each payment will be due on or before the first of each month as set forth on Exhibits A and B.
STATEMENT
This Resolution authorizes the Corporation Counsel on behalf of the City of Newark to enter into a Settlement Agreement and Release to receive payment from Carjon (the "Carjon Settlement Payment", $115,608.00) and Direct Waste (the "Direct Waste Settlement Payment", $213,719.00) in and shall only pay Newark the total outstanding tax due the total sum of Three Hundred Twenty Nine Thousand Three Hundred Twenty-Seven Dollars and Zero Cents ($329,327.00) monthly installments of Six Thousand Five Hundred Dollars and Zero Cents ($6,500.00) with an adjustment of the final payment as shown in Exhibits A & B. Carjon and Direct shall not be required to pay any additional sums as long as the scheduled payments are made, and a complete release, in exchange for dismissal of any and all claims against Carjon and Direct Waste and its employees, and a complete release.