Miscellaneous Professional Liability

Key Points:

• New Jersey Appellate Division grapples with construction of N.J.S.A. 2A:53A-27.
• Court holds that, regardless of pleadings, the statute requires that an Affidavit of Merit be served within 60 days (extendable for good cause to a maximum of 120 days) of a licensed professional’s answer.
• Court allowed for two exceptions to the AOM time limits: (1) substantial compliance and (2) extraordinary circumstances.

           New Jersey Statute N.J.S.A. 2A:53A-27 requires:

[i]n any action for damages for personal injuries, wrongful death or property damage resulting from an alleged act of malpractice or negligence by a licensed person in his profession or occupation, the plaintiff shall, within 60 days following the date of filing of the answer to the complaint by the defendant, provide each defendant with an affidavit of an appropriate licensed person that there exists a reasonable probability that the care, skill or knowledge exercised or exhibited in the treatment, practice or work that is the subject of the complaint, fell outside acceptable professional or occupational standards or treatment practices. The court may grant no more than one additional period, not to exceed 60 days, to file the affidavit pursuant to this section, upon a finding of good cause.

In the recent case of Yagnik v. Premium Outlet Partners, LP and Pennoni Associates, Inc., 249 A.3d 221 (N.J. Sup App. Div. 2021), the New Jersey Appellate Division grappled with the meaning of the statute in light of an Affidavit of Merit (AOM) filing that took place nine months after the case had been dismissed—a full 16 months after the defendant, an engineering firm, first filed its answer to the original complaint. Under normal circumstances, an AOM supporting the claims against a licensed professional must be served within 60 days of the date that the professional first files a responsive pleading. That time frame, per the statute’s language, can be extended for good cause to 120 days, regardless of whether the pleadings are subsequently amended to name other defendants or assert additional claims.

In Yagnik, the Pennoni Associates’ counsel made certain representations to plaintiff’s counsel about his client’s lack of liability. In addition, Pennoni provided a certification attesting that he was not involved in the construction phase of the project and, in particular, the construction of the staircase on which the plaintiff fell. Based on these representations and the certification, the plaintiff voluntarily dismissed its claims against Pennoni. At that time, the plaintiff had not filed an AOM against Pennoni.

Subsequent discovery in the case revealed that, contrary to his certification, Pennoni had been involved in the construction and design of the stairs. As such, the plaintiff moved to reinstate the complaint. Pennoni cross-moved to dismiss based on lack of an AOM, which it had affirmatively pleaded as a defense in it original pleading. The trial court reinstated the complaint, ruling that, based on an analysis of several federal cases, “the affidavit of merit does not come into play until the pleadings are [all] settled.” Here, the trial court reasoned that all pleadings were not settled because Pennoni had not yet answered the most recent amended complaint. As such, the trial court granted the motion to reinstate on that basis. Pennoni appealed, and the Appellate Division granted leave for the appeal.

The Appellate Division upheld the lower court’s ruling, but on a different basis. First, the Appellate Division reasoned that the statute “was designed as a tort reform measure and requires a plaintiff in a malpractice case to make a threshold showing that the claims asserted are meritorious…,” and that “[the AOM Statue] is designed to weed out frivolous lawsuits at an early stage and to allow meritorious cases to go forward.” More insightfully, the jurists noted:

Waiting until the very end of the pleadings stage for an AOM means that, in the interim, the licensed professional will have a possibly meritless lawsuit hanging over its head. During that often-protracted time frame it may have its malpractice insurance premiums raised or have to expend substantial funds on counsel fees out of its policy deductible for participating in the litigation. This is especially of concern in a construction accident case, in which months of discovery typically occur before all subcontractors and other potentially liable parties are identified and the pleadings are repeatedly amended on an ongoing basis. The public policies that underlie the AOM statute call for prompt verification that the malpractice claims have been deemed by an expert in the field to have merit.

            With that backdrop, the judges held that, regardless of pleadings that may be amended after initial pleadings to name other defendants or assert additional claims, the AOM statute requires the affidavit to be served within 60 days (extendable for good cause to a maximum of 120 days) of the licensed professional’s answer. However, that deadline is not draconian. It is subject to exceptions for substantial compliance and extraordinary circumstances.

            In Yagnik, the Appellate Division held that extraordinary circumstances existed. They consisted of the representations of Pennoni’s counsel, the certification provided by Pennoni and the newly discovered evidence of Pennoni’s role, which contradicted both of the aforementioned items.

            The takeaway from this decision, from a defense perspective, is that knowing your client’s involvement is key. The information learned after the dismissal in Yagnik was likely readily discernable beforehand. The costs associated with the appellate practice likely undermined the goal of the AOM statute—to save the professional time and money.

            Also note that the same applies in cases in which we, as design professionals’ counsel, have to third-party other professionals into litigation. In those instances, it is best to retain an expert early in the case on the AOM issue, have them author the AOM and then file it regardless. The overall cost of doing so is relatively minimal compared to the use of an expert in litigation proper. If a dismissal is later warranted, for whatever reason, it can be given. Filing the AOM in those situations protects not only the client, but the legal professional as well.

*Adam is special counsel in our Mount Laurel, New Jersey, office. He can be reached at 856.414.6015 or aelevy@mdwcg.com.

_{Defense Digest, Vol. 27, No. 4, September 2021 is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2021 Marshall Dennehey Warner Coleman & Goggin. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.}