February 2, 2009
NEW JERSEY PAN-AFRICAN CHAMBER OF COMMERCE & INDUSTRY, INC., AND VACCARO ASSOCIATES, LLC, PLAINTIFFS-RESPONDENTS,
HAROLD BERLOW, INDIVIDUALLY AND IN HIS OFFICIAL CAPACITY AS OWNER OF 700 BANGS AVENUE, LLC, MLB CONSTRUCTION AND CONSULTING, INC., FRENCH & PARRELLO ASSOCIATES, P.A., GRAY, WATT & PARTNERS, COLLECTIVE CONCRETE, INC., ATLANTIC SHEET PILE, INC., NORTHEAST, INC., STEVEN A. TARDY, INDIVIDUALLY AND IN HIS OFFICIAL CAPACITY AS AGENT/EMPLOYEE OF FRENCH & PARRELLO ASSOCIATES, P.A., JAMES WATT, INDIVIDUALLY AND IN HIS OFFICIAL CAPACITY AS AN AGENT/EMPLOYEE OF GRAY, WATT & PARTNERS, DAVID ZOLTAK, INDIVIDUALLY AND IN HIS OFFICIAL CAPACITY AS AGENT/EMPLOYEE OF NORTHEAST, INC., DEFENDANTS, AND DRESDNER ROBIN ENVIRONMENTAL MANAGEMENT, INC. AND JEFFERY D. REEVES, INDIVIDUALLY AND IN HIS OFFICIAL CAPACITY AS AGENT/EMPLOYEE OF DRESDNER ROBIN ENVIRONMENTAL MANAGEMENT, INC., DEFENDANTS-APPELLANTS.
On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-4943-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted January 14, 2009
Before Judges Fisher and C.L. Miniman.
Defendants Dresdner Robin Environmental Management, Inc., and Jeffrey Reeves (hereafter collectively "Dresdner Robin") have moved for leave to appeal: (1) the trial court's order of October 24, 2008, which denied their motion to dismiss the complaint because of the failure of plaintiff Pan-African Chamber of Commerce & Industry, Inc. (plaintiff) to timely serve an affidavit of merit pursuant to N.J.S.A. 2A:53A-27; and (2) the trial court's order of December 5, 2008, which denied Dresdner Robin's motion for reconsideration. We hereby grant the motion for leave to appeal and, having exercised our discretion to rule upon the merits, R. 2:11-2, we reverse the orders under review.
The record reveals that plaintiff commenced this action on February 25, 2008 against defendants alleging damages sustained to its building in Asbury Park during a construction project on an adjacent property. The complaint asserts that Dresdner Robin committed professional negligence. Dresdner Robin filed an answer to the complaint on June 2, 2008. When plaintiff failed to serve an affidavit of merit within 120 days of that date, Dresdner Robin and other defendants similarly situated moved for dismissal pursuant to N.J.S.A. 2A:53A-27.
In opposition, plaintiff asserted that an expert was not required because liability could be established through common knowledge and that the statutory time bar had been tolled.*fn1 At oral argument, counsel for plaintiff argued, without benefit of a supporting sworn statement, that an affidavit of merit was not timely supplied because his client did not have the funds necessary to secure it. He also argued his client had or was about to obtain the necessary funds and that an affidavit of merit could be provided in one week. Plaintiff's counsel also argued his client had substantially complied with the statute's requirements because he had provided two unsworn letters from his expert in opposition to the motion to dismiss and that these letters revealed the bases for plaintiff's professional negligence claims.*fn2
The trial judge denied all defendants' motions, including Dresdner Robin's. His oral decision, which we quote in part, did not dispose of plaintiff's argument of substantial compliance but instead rested only on plaintiff's alleged lack of funds as constituting an exceptional circumstance:
Now, is this substantial compliance or extraordinary circumstance? Either one is sufficient for the plaintiff to defeat this motion. I'm not sure if it's substantial compliance. Because the report is there and basically says, you know, the report's going to be turned into an affidavit. Is it substantial, I don't know.
But I do know there are extraordinary circumstances here. No money is an extraordinary circumstance. It's that simple. I'm a practical guy. The engineers gave these reports on the cuff. Eventually they say, hey, we haven't been paid yet. I mean, that's America. We haven't been paid. We're not going any further, we're not giving your affidavit of merit till we get paid. You can't fault them for that. . . .
Is it beyond the 120 days? Sure it is. But . . . the reason he didn't have it sooner is because they didn't have the money to pay for it. I find that's an extraordinary circumstance. And therefore, 120 days doesn't apply. So the motion is denied.
Plaintiff filed an affidavit of merit a week later -- 149 days after Dresdner Robin filed an answer to the complaint.
Dresdner Robin moved for reconsideration. This motion was also denied. In ruling, the trial judge referred to his earlier oral decision and mistakenly indicated that the earlier decision was based upon a finding of both substantial compliance and extraordinary circumstances. That is, as the judge said in his oral decision of December 5, 2008: "substantial compliance was [met] with the report[s] [of August 2, 2007 and November 8, 2007]," and "[t]he exceptional circumstance was [that the expert] wouldn't give [plaintiff] the report without the dollars." Overarching these conclusions was the judge's determination that the statute was not intended to encourage gamesmanship or slavish adherence to form over substance.
That's exactly what's going on here. The defendant is asking me to slavishly adhere to form over substance. What difference does it make? It's 29 days late. What's the big deal?
We find that the judge mistakenly interpreted and applied N.J.S.A. 2A:53A-27, and the surrounding case law.
In Ferreira, supra, and other cases, the Supreme Court discussed the Legislature's intent in adopting the statute in question and analyzed how it is to be applied in our courts. In Ferreira, the Court recognized that dismissal is required by N.J.S.A. 2A:53A-27 when a plaintiff fails to file an affidavit of merit within 120 days unless the doctrines of substantial compliance or exceptional circumstances may be invoked. 178 N.J. at 154. The Court considered, among other things, the application of the substantial compliance doctrine where plaintiff "was in possession of the affidavit of merit within ten days of the filing of the answer" but failed to serve it on opposing counsel within the 120-day statutory time period. Id. at 152. The Court held that "[a]lthough this case satisfies most of the factors necessary to establish substantial compliance with the statute, it nevertheless falls short of the mark" because "plaintiff's counsel did not, within the statutory time frame, take steps to forward the affidavit to opposing counsel." Id. at 152-53.
Here, plaintiff's alleged attempt to comply with the statute even falls short of what the Ferreira Court viewed as insubstantial. The record reveals that plaintiff's expert wrote to plaintiff eleven and fourteen months prior to the hearing on the motion to dismiss and that plaintiff's counsel had these letters in his possession prior to the expiration of the 120-day time period. As plaintiff's counsel conceded during oral argument on the motion for reconsideration, these letters were not served on Dresdner Robin until the 120-day period had elapsed. In short, in Ferreira, counsel possessed but did not serve an affidavit of merit; here, plaintiff's counsel possessed but did not serve two letters that were not in affidavit form. If the facts in Ferreira did not support a finding of substantial compliance, the facts here surely do not.
As a result, we are left to consider whether plaintiff's alleged lack of funds*fn3 constituted an exceptional circumstance that would permit an extension beyond the statutory deadline and until such time as plaintiff could afford to pay the expert's fee.*fn4 Although this precise point has not yet been decided by our appellate courts, there is nothing in the burgeoning case law related to the affidavit of merit statute to suggest that we should disregard the time frame announced by this State's Legislature when a plaintiff claims the financial inability to obtain an affidavit of merit anymore than we would permit suits to be commenced after the running of the statute of limitations upon a finding that the plaintiff could not at the time afford counsel or the required filing fee.
Lastly, we observe that the trial judge mistakenly concluded that a dismissal of the action against these defendants would foster "gamesmanship." We find nothing in the record to justify such a conclusion. Through no fault of its own, Dresdner Robin did not receive an affidavit of merit within the time limit adopted by the Legislature and did not even receive within 120 days the unsworn letters urged by plaintiff as representing substantial compliance with the statute. If gamesmanship alone is controlling, we note the absence of anything in the record to suggest that plaintiff had alerted Dresdner Robin or any other defendant to its alleged financial problems as the 120-day time period was running; as we have noted, plaintiff did not even assert its alleged inability to pay for an affidavit of merit in its opposing papers and never mentioned it until oral argument on the return date of the motion to dismiss. We make no findings in this regard; we merely observe that the record provides nothing to support the suggestion that Dresdner Robin engaged in gamesmanship and, if inferences are to be drawn, they are more reasonably drawn against plaintiff in that regard.
As the Court held in Ferreira, "[i]f defense counsel files a motion to dismiss after the 120-day deadline" -- as here --"and before plaintiff has forwarded the affidavit" -- as here --"the plaintiff should expect that the complaint will be dismissed with prejudice provided the doctrines of substantial compliance and extraordinary circumstances do not apply" -- as here. Id. at 154. As a result, the trial judge was required to grant Dresdner Robin's motion to dismiss the complaint and was not free to find inconsequential the passage of an additional twenty-nine days beyond the statutory deadline. We reject the judge's holding that an insistence upon compliance with the 120-day time limit constitutes a "slavish adherence to form over substance." The Legislature selected 120 days as the deadline, not 149. Our courts are not free to disregard that fact.
Reversed and remanded for the entry of an order dismissing the complaint, with prejudice, insofar as it seeks relief from Dresdner Robin.