NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE COMMITTEE ON OPINIONS

Transcription

1 NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE COMMITTEE ON OPINIONS TRENK DIPASQUALE, DELLA FERA & SODONO, P.C., Plaintiff/Counterclaim Defendant, vs. INDUSTRIAL URBAN CORP., ANTHONY FRISINA, LORI FRISINA, 35 SEVILLE SUPERIOR COURT OF NEW JERSEY LAW DIVISION: ESSEX COUNTY DOCKET NO.: L Civil Action OPINION DRIVE, LLC, INDUSTRIAL CONCRETE CONSTRUCTION OF NJ, INC., AND ARROW POWER BOATS, Defendants/Counterclaimants. Decided: February 19, 2016 By: Stephanie A. Mitterhoff, J.S.C. STATEMENT OF FACTS Presently before the court is Plaintiff Trenk, DiPasquale, Della Fera & Sodono, P.C. s motion to dismiss the Defendants counterclaim for failing to satisfy N.J.S.A. 2A:53A-27, the Affidavit of Merit ( AOM ) statute. Plaintiff was retained by Defendants to provide legal services in connection with various lawsuits brought by Valley National Bank arising out of a series of complex loan transactions. The terms of the agreement provided that Plaintiff would attempt to negotiate a favorable settlement with Valley National and, if unsuccessful, render 1

2 legal advice to Defendants as to their other options including filing for Chapter 11 reorganization. After a period of time, Defendants became dissatisfied with the progress of the negotiations with Valley National and indicated to Plaintiff that they wanted to consider filing a reorganization in lieu of continuing to attempt an amicable resolution with Valley National. Thereafter, Defendants stopped paying Plaintiff s legal fees, and they declined Plaintiff s invitation to resolve the fee dispute by way of fee arbitration. Accordingly, on March 12, 2015, Plaintiff filed a complaint against Defendants based on the retainer agreement between the parties. In response, Defendants filed an Answer including a counterclaim against Plaintiff. The counterclaim included two counts, the first for gross negligence and the second for legal malpractice. Both counts are premised on Defendants allegation that Plaintiff erred in advising Defendants that they qualified for reorganization under Chapter 11 of the United States Bankruptcy Code. Defendants allege that their reliance on Plaintiff s advice and false promises resulted in damages for which Plaintiff is liable. On August 17, 2015, Defendants timely filed an Affidavit of Merit ( AOM ) in support of their legal malpractice counterclaim, as required by N.J.S.A. 2A:53A-27. The affidavit was prepared by Andrew M. Epstein, Esq. an attorney with the law firm Lampf, Lipkind, Prupis & Petigrow, P.A. In his affidavit, Mr. Epstein attests that he is duly licensed as an attorney in the State of New Jersey and his curriculum vitae is attached to the affidavit as an exhibit. Mr. Epstein attests that, to his understanding, Defendants allegations are: a. Not complying with the instructions given by or on behalf of defendants, in particular regarding the failure to institute a proceeding on defendant s behalf in the United States Bankruptcy Court; b. Knowingly propelling defendants into meritless and costly litigation; c. Failing to give defendants candid advice. 2

3 Mr. Epstein attests that in order to analyze whether Defendants allegations have merit, the analyzing attorney should have a background in legal ethics and commercial litigation. Mr. Epstein attests that he has substantial experience in ethics proceedings and that he has concentrated in litigation throughout his career and is fully familiar with commercial litigation matters. Mr. Epstein s curriculum vitae supports his account of his qualifications, revealing that he co-wrote the New Jersey Rules of Evidence with Annotations (1972 Edition) and served as a member of the Union County Ethics Committee from 1987 to 1991 as well as on the Essex County Ethics Committee from 2007 to 2011, on which he was the Chair during the term. Mr. Epstein attests that if the allegations in the counterclaim are proven, it is his opinion that there exists a reasonable probability that the care, skill or knowledge exercised or exhibited in the treatment, practice or work by Plaintiff fell outside acceptable professional or occupational standards. On September 4, 2015, Plaintiff wrote a letter to the court, advising that it believed Mr. Epstein s AOM was deficient pursuant to N.J.S.A. 2A:53A-27 and requested a case management conference with the court and all parties pursuant to Ferreira v. Rancocas Orthopedic Assocs., 178 N.J. 144 (2003). A Ferreira conference was held on September 25, 2015, at which Plaintiff s counsel argued that Defendants AOM was deficient because the affiant, Mr. Epstein, does not practice in the field of bankruptcy law. The court tentatively agreed with Plaintiff during the conference and directed the Defendants to submit a new AOM from an attorney that practices in that area of law. Rather than submitting an AOM in compliance with the court s directions, Defendants wrote a letter to the court advising that it was their position that Mr. Epstein s affidavit complied with N.J.S.A. 2A:53A-27 and requesting the court make a definitive decision prior to October 3

4 30, 2015, the 120-day statutory deadline. Because Defendants never made a motion to obtain the court s determination, however, there was nothing pending before the court to make a ruling. Suffice it to say that Defendants were aware of the court s tentative decision and Plaintiff s objection to the AOM. Upon the expiration of the deadline, Plaintiff filed the present motion, requesting the court to dismiss Defendants counterclaim with prejudice for failing to comply with the requirements under N.J.S.A. 2A:53A-27. On January 8, 2016, the Court entertained oral argument for the case at hand. At the hearing, counsel for Defendants candidly advised the court that [m]y client has been speaking to a bankruptcy attorney for four weeks. She does not even have an opinion, now at this juncture, given all of the information that she has, whether or not reorganization was the appropriate thing to do. Thus it is evident that attempts to obtain an AOM from a bankruptcy attorney were unsuccessful. The parties do not dispute that an affidavit of merit is required for Defendants counterclaim. Rather, the central issue before the court is whether the affidavit of an attorney with sufficient experience in bankruptcy law is required to support Defendants legal malpractice counterclaim under N.J.S.A. 2A:53A-27. For the reasons that follow, the court concludes that given the allegations in the Complaint, the AOM is deficient and the counterclaim for legal malpractice must be dismissed. The court will grant the application to amend the Complaint to include a breach of contract claim and of course Defendants are free to defend the case based on their position that the fees were unreasonable. ARGUMENTS OF THE PARTIES In moving for dismissal, Plaintiff contends that, based on the factual allegations underpinning Defendants malpractice action, Defendants were required to submit a proper AOM executed by a licensed professional with particular expertise in the area of bankruptcy law, 4

5 which they have failed to do. In that regard, Plaintiff argues that in order to sustain their claims, Defendants will have to prove that Plaintiff gave erroneous advice regarding Defendants options under Chapters 11 and/or 13 of the Bankruptcy Code. Such allegations, Plaintiff asserts, will invariably entail a complicated analysis and interpretation of Chapters 7, 11, and 13 of the Code. Therefore, Plaintiff argues, because Mr. Epstein lacks the requisite experience in bankruptcy law, his AOM fails to satisfy the requirements set forth under N.J.S.A. 2A:53A-27. In opposition, Defendants agree that it is the underlying factual allegations made in the complaint that govern the sufficiency of an AOM. Defendants argue, however, that the factual allegations made in support of their claims involve the breach of a duty by an attorney to do what he represented he would do, which is the area of expertise of its affiant, Mr. Epstein. Defendants also request that, should the court find the AOM to be deficient, they be permitted to amend their counterclaim to include claims for breach of contract, a claim they contend is contained in their factual allegations. Defendants also request they be permitted to include an affirmative defense to Plaintiff s claims for monetary damages, namely, that Plaintiff s fees were unreasonable within the meaning of the Rules of Professional Conduct 1.5(a)(4) and 1.5(b). DISCUSSION I. The Affidavit of Merit Statute (N.J.S.A 2A:53A-27) First enacted by the Legislature in 1995, the AOM statute imposes a special requirement upon Plaintiffs bringing lawsuits claiming malpractice or negligence by certain enumerated professionals. The basic objective of the statute is to require Plaintiffs in malpractice cases to make a threshold showing that their claim is meritorious, in order that meritless lawsuits readily could be identified at an early stage of litigation. In re Hall by and Through Hall, 147 N.J. 379, 391 (1997). The Statute s essential goal is to put to rest unmeritorious and frivolous 5

6 malpractice lawsuits at an early stage of litigation while allowing worthy claims to proceed through discovery and, if warranted, to trial. Knorr v. Smeal, 178 N.J. 169, 176 (2003) (citing Planque v. Lambert-Woolley, 168 N.J. 398, 404 (2001)). To satisfy these policy objectives, a Plaintiff must file an affidavit of merit within 120 days of the filing of the answer or face dismissal of the complaint with prejudice, absent some equitable justification. Knorr, supra, 178 N.J. at 176. The salutary benefit to both sides in eliminating a non-genuine malpractice claim early on [by requiring an affidavit of merit] is the conservation of recourses. Plaintiffs and defendants should not be dragged through an expensive and burdensome discovery process...if the Plaintiffs cannot produce an expert to support their claims. In this way, the resources and time of the parties will not be wasted by the continuation of unnecessary litigation. Id. N.J.S.A. 2A:53A-27 specifically prescribes that: In any action for damages for personal injuries, wrongful death or property damages 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 case of a cause of action for medical malpractice, the person executing the affidavit shall meet the requirements of a person who provides expert testimony or executes an affidavit as set forth in section 7 of P.L. 2004, c. 17 (C. 2A:53A-41). In all other cases, the person executing the affidavit shall be licensed in this or any other state; have particular expertise in the general area or specialty involved in the action, as evidenced by board certification or by devotion of the person s practice substantially to the general area or specialty involved in the action for a period of at least five years. The person shall have no financial interest in the outcome of the case under review, but this prohibition shall not exclude the person from being an expert witness in the case. A licensed person is particularly defined in the statute as a defendant on an enumerated list of professionals, including any person who is licensed as... an attorney admitted to 6

7 practice law in New Jersey. N.J.S.A. 2A:53A-26(c). If a Plaintiff does not file and serve a timely AOM as required under the statute, it shall be deemed a failure to state a cause of action, thereby subjecting the malpractice complaint to dismissal. N.J.S.A. 2A:53A-29; Shamrock Lacrosse, Inc. v. Klehr, Harrison, Harvey, Branzburg & Ellers, LLP, 416 N.J. Super. 1 (App. Div. 2010). Although the statute refers to the Plaintiff, a counterclaimant is considered to be the same as a plaintiff for purposes of the AOM statute. Charles A. Manganaro Consulting Eng rs v. Carneys Point Twp., 344 N.J. Super. 343, 348 (App. Div. 2001). II. Analysis Questions regarding the necessary qualifications for an affiant of a legal malpractice claim arising from a specific field of law have not conclusively been settled in New Jersey. The court s research revealed only one case in which the specific issue of whether an attorney who did not practice in the same legal specialty as the defendant could attest to the merit of a legal malpractice action. In Manger v. Veisblatt, 2011 N.J. Super. Unpub. LEXIS 2639 (Law Div. 2011), the trial court held that a personal injury attorney had sufficient requisite qualifications to provide an AOM against a matrimonial attorney. In Manger, the defendant was represented by the plaintiff law firm in an underlying complex matrimonial action. After the law firm sued her for unpaid legal fees, she counterclaimed alleging the firm committed malpractice in the matrimonial case. The defendant moved to dismiss the complaint, arguing that a personal injury attorney did not have the requisite experience in matrimonial litigation, and therefore could not opine as to whether defendant s legal representation of the Plaintiff fell below acceptable professional standards. The Plaintiff claimed that the affiant, a certified civil trial attorney, was qualified to opine as to the competency of defendant s legal performance because the allegations 7

8 were couched in general civil litigation issues, including the defendant attorney s failure to diligently pursue discovery. As a starting point, the trial court in Manger observed that, unlike cases involving medical malpractice, N.J.S.A. 2A:53A-27 does not contain an explicit subspecialty requirement that applies to other types of professional malpractice. The court also observed that there is a dearth of case law in this area, musing that this dearth in applicable case law is not surprising, as the legislature seemed to evidence an intent to apply this requirement to medical malpractice claims only. The court recognized, however, that the statute does require the person executing the affidavit to have particular expertise in the general area or specialty involved in the action. (emphasis added). The Manger court concluded that the personal injury attorney s experience in general litigation could form the basis of an opinion regarding an attorney s duties regarding the pursuit of discovery, and therefore based on the specific allegations in the complaint the affidavit was sufficient even though the affiant did not practice matrimonial law. Manger, supra 2011 N.J. Super. at 8*. In so deciding, the Manger court reasoned, [a] general area could cover litigation, including discovery, precisely the type of practice [the affiant] engages in as an attorney. Although [the affiant] is not a family law attorney, his experience in litigation can form the basis of an opinion regarding an attorney s legal duties regarding discovery in matrimonial action. Id. at 7*. Thus, the Manger court recognized that where there is overlap between two legal specialties, and the allegations in the complaint allege a deviation in that area of overlap, the fact that the AOM affiant and the defendant attorney do not practice in the same field of law does not necessarily render the AOM deficient. Cf. Martinez v. Herbst, 2015 N.J. Super. Unpub. LEXIS 873 (App. Div. 2015)(holding that a doctor in one field may testify as to the standard of care 8

9 against a doctor in another field where there is an overlap between the practices or disciplines, depending on the claim involved, the specific allegations made, and the opinions that the expert proposes to offer at trial.); Borough of Berlin v. Remington & Vernick Engineers, 337 N.J. Super. 590, 592 (App. Div. 2001)(a hydrogeologist could offer an opinion that an engineering firm deviated from the standard of care in planning, designing and implementing a municipal well because the hydrogeologist s expertise was directly related to the lawsuit s subject matter). Where, however, the allegations of the complaint do not fall within the area of overlap between the legal specialties of the affiant and the defendant attorney, the court finds that a different conclusion must follow. Unlike Manger, the counterclaim in this case explicitly states that Plaintiff breached the standard of care applicable to practitioners in the field of bankruptcy. Specifically, the counterclaim alleges, in pertinent part, that, [a]t all times herein, [Plaintiff] professed the knowledge and skill of an expert in the area of bankruptcy law to [Defendant- Counterclaimant], and expressed confidence that the Law Firm could properly represent Defendant-Counterclaimant in a matter involving some degree of complexity. In addition, the counterclaim alleges that [a]t all times commencing in June, 2012 and continuing until September, 2013, Defendant-Counterclaimant relied upon [Plaintiff s] representations regarding his expertise in Bankruptcy law, and his specific representations regarding the course of action that Plaintiff chose to pursue. The complaint further alleges that Plaintiff, in holding themselves out as specialists in the field of Bankruptcy Law, and then failing to exercise the skill, prudence, and diligence exercised by other specialists of ordinary skill and capacity specializing in the same field... committed professional malpractice. (emphasis added). Thus, unlike Manger, the allegations in the counterclaim do not allege that Plaintiffs simply failed to fulfill a general duty that applies to all attorneys. To the contrary, Defendants allege Plaintiff deviated from the professional standard of care applicable to bankruptcy attorneys. 9

10 Similarly, Davis v. Ellis, 2014 N.J. Super. Unpub. LEXIS 192 (App. Div. 2014) does not compel a conclusion that there is never a specialty requirement for an AOM in a legal malpractice setting. In Davis, the defendant brought a counterclaim for legal malpractice arising from the plaintiff s representation of her in an underlying matrimonial lawsuit. In support of the claim, the plaintiff submitted the affidavit of an attorney who represented that he had served as corporation counsel to Jersey City and was engaged in private practice as a sole general practitioner. The trial court dismissed the counterclaim, concluding that the affidavit of a certified matrimonial attorney was necessary for a legal malpractice claim involving a matrimonial lawsuit. The Appellate Division reversed the dismissal, concluding that the trial judge erred in requiring an AOM from a certified matrimonial attorney as the sole demonstration of the expertise required by the statute. The court relied on the plain language of the statute in coming to this conclusion, which instructs that the affiant can evince his or her expertise by either board certification or by devotion of the person s practice substantially to the general area or specialty involved in the action for a period of at least five years. (emphasis added). The court did not hold, or even clearly discuss whether, in legal malpractice actions, the affidavit of an attorney in the specific area of law from which the underlying representation stems may in some cases be required to satisfy N.J.S.A. 2A:53A-27. It is clear to this court that, in cases involving an allegation of legal malpractice, whether the AOM affiant must practice in the same specialty as the defendant attorney must be decided on a case-by-case basis. That determination will require an examination of whether the allegations in the complaint involve an area of overlap between the practices of the affiant and the defendant, or whether the allegations arise from the defendant s deviation from accepted standards of care that apply to the particular specialty practiced by the defendant. The statute 10

11 itself recognizes that the affiant must practice in the same field or specialty. Were it otherwise, an attorney who exclusively performs real estate closings could attest that a maritime lawyer deviated from the accepted standard of care applicable to maritime practitioners. I agree with Plaintiffs in this case that any opinion whether they deviated from the standard of care by giving erroneous advice concerning Defendants options under Chapters 11 and/or 13 of the Bankruptcy Code necessarily would require the affiant to have a thorough familiarity of Chapters 7, 11, and 13 of the Code, something that it is conceded that Mr. Epstein lacks. Accordingly, Mr. Epstein lacks the requisite training and knowledge of the professional standards that apply to the situation under investigation to justify his expression of an opinion in this case. See Martinez v. Herbst, supra 2015 N.J. Super. Unpub Lexis at 24-25; citing Carey v. Lovett, 132 N.J. 44, (1993)(test of an expert s competency to testify in a malpractice action is whether he or she has sufficient knowledge of the professional standards that apply to the underlying conduct giving rise to the lawsuit). The fact that Defendants were unable to obtain an AOM from a bankruptcy attorney further buttresses the court s conclusion that dismissal of this malpractice claim furthers the salutary goals of the AOM statute to put to rest unmeritorious and frivolous malpractice lawsuits at an early stage of litigation while allowing worthy claims to proceed through discovery and, if warranted, to trial. Knorr v. Smeal, 178 N.J. 169, 176 (2003). CONCLUSION Plaintiff s Motion to Dismiss with Prejudice Defendants Counterclaim for gross negligence and malpractice is granted. Defendants Motion to Amend the Complaint to include a count for breach of contract and an affirmative defense that the fees were excessive is granted. 11