On certification to the Superior Court, Appellate Division, whose opinion is reported at 303 N.J. Super. 81 (1997).
The opinion of the court was delivered by: Handler, J.
In 1995, the Legislature enacted a statute, the Affidavit of Merit Bill, that imposed requirements for initiating and maintaining certain professional malpractice actions. L. 1995, c. 139 (codified at N.J.S.A. 2A:53A-26 to -29). The statute by its terms applies to "causes of action which occur" on or after the effective date of enactment. A key provision of the statute requires the submission of an affidavit of merit within sixty days of the filing of the complaint. This case presents important issues concerning the application of the statute. These include the scope of the requirements of the affidavit of merit, whether a dismissal for failure to comply with those requirements is with prejudice, and whether the statute applies to cases filed on or after its effective date when the underlying facts constituting the alleged malpractice have occurred prior thereto.
In November 1989, defendant Aileen Barow retained plaintiff Alan Cornblatt, an attorney, to represent her in a divorce action. Barow claims that Cornblatt portrayed himself as completely competent in matrimonial matters, especially in the settlement of cases. Barow alleges that in the course of that representation Cornblatt required her to deal with one of his associates rather than with Cornblatt. Eventually, Barow grew frustrated with having his case handled by an associate and she confronted Cornblatt about it. She became "disillusioned" with Cornblatt when he allegedly told her that, contrary to his earlier representations, he really was better equipped to try rather than to settle matrimonial cases.
Barow's matrimonial case turned out to be very complex and ultimately required a lengthy trial. At the Conclusion of the case Cornblatt billed Barow $218,004.47 for his services. Barow elected to submit the fee to the District Fee Arbitration Committee (Committee). R. 1:20A-1 to -6. Barow retained attorney Michele Donato to represent her during the fee dispute. On September 14, 1995, after a three day hearing on the matter, the Committee found that Cornblatt engaged in duplication of billing in the amount of $5,475.25 and reduced the bill by that amount.
Barow had previously paid $40,817.60, so the remaining amount she owed Cornblatt was $171,711.62. Barow subsequently appealed the Committee's decision to the Disciplinary Review Board on December 13, 1995; the Board dismissed the appeal on April 16, 1996.
On November 13, 1995, when Barow had not paid the fee within thirty days, Cornblatt filed a complaint in the Law Division against Barow to recover the amount owed. Barow filed her answer on January 3, 1996. The answer included a counterclaim alleging that Cornblatt breached his contract with her by failing to carry out his duties and render services in a reasonable manner. Specifically, Barow claimed that Cornblatt negligently delayed the case, did not settle the matter, thereby forcing a trial, and charged an excessive fee by prolonging his representation. Cornblatt filed his answer to the counterclaim on February 5, 1996. In his answer, Cornblatt demanded that Barow submit an affidavit of merit within sixty days as required by the Affidavit of Merit Bill. N.J.S.A. 2A:53A-27. Subsequently, on February 13, 1996, the trial court entered a Differentiated Case Management Scheduling Order, specifically requiring Barow to produce an expert affidavit by April 5, 1996.
Defendant Barow did not comply, and on April 24, 1996, plaintiff moved to dismiss defendant's counterclaim. Because the Disciplinary Review Board had by then dismissed defendant's appeal of the arbitration award, plaintiff also moved for summary judgment on his complaint for his fee. On May 1, 1996, defendant cross-moved for an extension of the expert affidavit filing period pursuant to N.J.S.A. 2A:53A-27, which provides for an extension of the sixty day period "upon a finding of good cause." Alternatively, defendant claimed the statute did not apply to her case because her claim was for breach of contract rather than for damages resulting from personal injury. The trial court denied the cross-motion.
On May 8, 1996, the trial court dismissed defendant's counterclaim with prejudice on the ground that defendant failed to comply with the mandatory requirement of the statute. Thereafter, the trial court decided to reconsider its rulings.
Defendant submitted a certification by Michele Donato dated May 16, 1996, stating that Cornblatt's performance during his representation of Barow was negligent. Defendant also submitted a certification stating that she had experienced difficulty obtaining an expert to submit the affidavit. Defendant later submitted another certification from Donato stating that Donato had no financial interest in the outcome of the case.
On June 7, 1996, the trial court dismissed the counterclaim. It ruled that even though the court considered the certification as timely filed, the statute required an affidavit. *fn1 Further, the court found the substance of the certification to be deficient because the certifying expert did not state that Cornblatt had breached any standard of care, did not state that she had expertise in the area, and did not state that she had no financial interest in the matter.
Thereafter, in a written opinion dated July 30, 1996, the court dismissed Barow's counterclaim and entered summary judgment for Cornblatt on the fee claim. The court based the dismissal on the deficiencies in the certification and ruled that the dismissal was with prejudice because of the entire controversy doctrine. It also entered summary judgment for Cornblatt on the fee dispute based on the final arbitration decision by the Disciplinary Review Board.
Barow appealed the trial court's ruling only with respect to the dismissal of her counterclaim.
The Appellate Division affirmed the trial court, holding that the statute encompassed legal malpractice claims against attorneys, the certification in place of an affidavit did not satisfy the statute, the contents of the certification were deficient, and the dismissal with prejudice was appropriate. 303 N.J. Super. 81 (1997). In dicta, the court also concluded that the statute applies to all actions filed on or after the effective date of the statute regardless of when the underlying facts giving rise to the claims occurred. Id. at 92.
Barow petitioned this Court for certification. As amici curiae, the New Jersey State Bar Association, the Association of Trial Lawyers of America-New Jersey, and the Trial Attorneys of New Jersey (collectively, Bar Associations) urged the Court to stay all summary judgment motions based on the Appellate Division's opinion pending the Court's resolution of the matter. On September 16, 1997, the Court entered a stay of the Appellate Division's judgment pending resolution of the case. We granted certification on September 25, 1997. 151 N.J. 470.
On June 29, 1995, Governor Whitman signed into law a package of five tort reform bills to "bring common sense and equity to the state's civil litigation system." Office of the Governor, News Release 1 (June 29, 1995). The package included the Joint-And-Several Liability Bill, L. 1995, c. 140 (amending N.J.S.A. 2A:15-5.2, -5.3); the Retail-Sellers' Liability Bill, L. 1995, c. 141 (codified at N.J.S.A. 2A:58C-8 to -9); the Punitive Damages Act, L. 1995, c. 142 (codified at N.J.S.A. 2A:15- 5.9 to -5.17); the Health-Care Providers' Liability Bill, L. 1995, c. 143 (codified at N.J.S.A. 2A:58C-10 to -11); and, the subject of this action, the Affidavit of Merit Bill, L. 1995, c. 139 (codified at N.J.S.A. 2A:53A-26 to -29).
The Affidavit of Merit Bill defines "licensed person" to mean "any person who is licensed as: . . . c. an attorney admitted to practice law in New Jersey." N.J.S.A. 2A:53A-26. The statute, as determined by the lower courts, clearly applies to attorney legal malpractice.
The statute contains several provisions defining the scope of the requirements for the submission of an affidavit of merit. These state:
Affidavit required in certain actions against licensed persons.
In 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. 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.
Sworn statement in place of affidavit permitted
An affidavit shall not be required pursuant to [N.J.S.A. 2A:53A-27] if the plaintiff provides a sworn statement in lieu of the affidavit setting forth that: the defendant has failed to provide plaintiff with medical records or other records or information having a substantial bearing on preparation of the affidavit; a written request therefor along with, if necessary, a signed authorization by the plaintiff for release of the medical records or other records or information requested, has been made by certified mail or personal service; and at least 45 days have elapsed since the defendant received the request.
Failure to provide affidavit or statement
If the plaintiff fails to provide an affidavit or a statement in lieu thereof, pursuant to [N.J.S.A. 2A:53A-27 or 2A:53A-28], it shall be deemed a failure to state a cause of action.
The Affidavit of Merit Bill also specifies the cases to which it applies. L. 1995, c. 139, § 5 states:
This act shall take effect immediately [June 29, 1995] and shall apply to causes of action which occur on or after the effective date of this act.
Based on this provision, the Appellate Division determined that the statute applied to all cases filed on or after its effective date. 303 N.J. Super. at 92. That determination, made sua sponte by the Appellate Division, has drawn the close attention of attorneys across New Jersey. The Bar Associations estimate that since the enactment of the Affidavit of Merit Bill, many malpractice actions have been filed that did not comply with statutory requirements and that a substantial number of currently pending malpractice cases would be dismissed under the statute so construed.
Because the Legislature did not use the phrase "causes of action which accrue" and used the word "occur" instead, the Appellate Division concluded that the statute applied to all cases filed on or after the effective date of the statute. Ibid. We disagree with the Appellate Division's analysis and hold that the statute does not apply to malpractice actions filed on or after the effective ...