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Highland Lakes Country Club and Community Association v. Nicastro

SUPREME COURT OF NEW JERSEY


December 8, 2009

HIGHLAND LAKES COUNTRY CLUB AND COMMUNITY ASSOCIATION, PLAINTIFF,
v.
FRANK W. NICASTRO, SR. AND LISA ANN NICASTRO, DEFENDANTS/THIRD-PARTY PLAINTIFFS-RESPONDENTS,
v.
SUBURBAN CONSULTING ENGINEERS, INC. AND MARTIN SIKORSKI, P.L.S., THIRD--PARTY/DEFENDANTS-APPELLANTS.

On appeal from the Superior Court, Appellate Division, whose opinion is reported at 406 N.J. Super. 145 (2009).

SYLLABUS BY THE COURT

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

Lisa Ann and Frank W. Nicastro, Sr. are defendants in an action filed by Highland Lakes Country Club and Community Association (Highland Lakes) to resolve a dispute over the boundary line separating the parties' lots that implicates a six-acre area of the Nicastros' thirty-three acre property. Suburban Consulting Engineers, Inc. and Martin Sikorski, P.L.S. (collectively, SCE) surveyed the Nicastros property, prepared a metes and bounds description and marked its corners with "pins." The Nicastros retained SCE to do this work in 2004, after they purchased the lot but before undertaking work in preparation for the construction of a new residence. In September 2006, Highland Lakes notified the Nicastros that it believed they were excavating on its property. The Nicastros responded by producing the SCE survey.

On February 27, 2007, Highland Lakes began its litigation to establish the boundary line and obtain damages, restitution, and injunctive relief for the Nicastros' alleged trespass on, conversion of, and damages of its property. Highland Lakes also claimed that the Nicastros acted in willful, malicious, wanton and reckless disregard of its property rights. The complaint does not allege direct claims against SCE, yet Highland Lakes relies on a discrepancy between the line shown on SCE's survey and the line shown on a 1999 subdivision plat and a 2006 "sketch" prepared by Dana J. Behre, also a professional land surveyor, and a letter from Behre expressing and explaining his confidence in the correctness of the line shown on his 1999 subdivision plat. Behre's 2006 "sketch" includes disclaimers noting that the area is shown "approximately" and the sketch was prepared "for discussion purposes," without "any field work on the site since approximately 1999" and based on a review of SCE's survey, a "map [that] was never filed" and recorded deeds.

On May 10, 2007, the Nicastros filed the third-party complaint against SCE. They did not allege that SCE's work was inaccurate; rather, they claimed that they retained SCE to prepare the boundary survey and set pins and subsequently relied on SCE's work in developing their property. The Nicastros asserted that any liability they had to Highland Lakes would be "secondary and vicarious" to SCE's primary liability. The Nicastros sought indemnification and compensatory damages and demanded contribution pursuant to the Comparative Negligence Act, N.J.S.A. 2A:15-5.1 to -5.8, and the Joint Tortfeasor Contribution Law, N.J.S.A. 2A:53A-1 to -5.

SCE filed its answer to the Nicastros' third party complaint on June 18, 2007. The Nicastros did not file, within the statutory period, an affidavit of merit, pursuant to the Affidavit of Merit Statute (Statute) N.J.S.A. 2A:53A-26 to -29. After the deadline to file the affidavit of merit but before Highland Lakes had provided an expert report or complied with a discovery order compelling it to provide a survey, SCE moved to dismiss the Nicastros' third-party complaint. SCE contended that the third-party complaint failed to state a cause of action because the Nicastros had failed to file an affidavit of merit. The Nicastros argued that their claims for indemnification, contribution and damages will not accrue until error in SCE's survey is established and contended that SCE was not entitled to a dismissal for failure to comply with the Statute. The trial court denied SCE's motion. Relying on Diocese of Metuchen v. Prisco & Edwards, and noting that Highland Lakes had yet to produce an expert report supporting the boundary it sought to establish, the trial court concluded that the Nicastros should not be compelled to make Highland Lakes' case against themselves while they continued to defend on the ground that the boundary line shown in SCE's survey is accurate. In denying reconsideration, the trial court indicated its willingness to consider SCE's application if and when the Nicastros' claims of professional negligence ripen.

SCE appealed. The Appellate Division affirmed the decision of the trial court, finding that the application of the Affidavit of Merit Statute would be inconsistent with its overall purposes under the present circumstances in this case. In reaching its decision, the Appellate Division noted the general goals and requirements of the Statute -- to weed out frivolous lawsuits early in the litigation while, at the same time, ensuring that plaintiffs with meritorious claims will have their day in court. A plaintiff in an action for damages to property resulting from an alleged act of malpractice or negligence by a licensed person in his profession or occupation must file an affidavit of merit within sixty-days of the defendant's answer. The affidavit must assert that a reasonable probability exists that the care, skill or knowledge exercised in the work that forms the basis of the complaint fell outside acceptable professional standards. Absent extraordinary circumstances, failure to comply is deemed a failure to

state a cause of action and requires dismissal of the complaint with prejudice.

The Appellate Division found that an affidavit of merit would be required in this case and that the Nicastros' claims depend largely on proof of SCE's professional negligence. The panel noted that a literal interpretation of the Statute has been rejected if it will lead to "results inconsistent with the overall purpose" of the Statute. The panel reasoned that the Nicastros' claims against SCE are contingent on Highland Lakes' proof that SCE's boundary line on the survey was incorrect. Because the Nicastros did not file a direct claim of negligence against SCE, the third-party complaint should be viewed as an effort to avoid future litigation over its failure to join SCE in this action if Highland Lakes establishes an error in SCE's survey work. Further, since Highland Lakes had not yet produced evidence to establish SCE's error, no independent claim of professional negligence had accrued or any claims for contribution and indemnification. According to the Appellate Division, if and when Highland Lakes produces evidence of SCE's error, the Nicastros' claim for professional negligence will accrue and a different analysis may be required.

The Supreme Court granted SCE's motion for leave to appeal.

HELD: Judgment of the Appellate Division is affirmed substantially for the reasons expressed in Judge Grall's written opinion. Application of the Affidavit of Merit Statute, N.J.S.A. 2A:53A-26 to -29, would be inconsistent with its overall purposes under the present circumstances of this case.

1. The Court adds the following. On appeal, SCE suggests that the better route in this case is for the Nicastros to have deferred any claim against SCE until the conclusion of the litigation with Highland Lakes. That suggestion must be rejected as it ignores the entire controversy doctrine. Applying the dual purposes of encouraging the fair and singular resolution of controversies while promoting judicial economy, the piecemeal litigation suggested by SCE solely for the sake of perceived procedural advantage runs afoul of all of the salutary effects the entire controversy doctrine is designed to advance: it would create delay in the complete adjudication of the controversy at issue: it would harass the Nicastros by forcing them into serial litigation with possible inconsistent results; it would unnecessarily clog our courts with multiple lawsuits arising out of the same transaction and having a common nucleus of facts; it would waste the time and efforts of all of the parties involved; and it would render null any concept of fundamental fairness. (Pp. 1-4)

Judgment of the Appellate Division is AFFIRMED.

CHIEF JUSTICE RABNER and JUSTICE LaVECCHIA, ALBIN, WALLACE, RIVERA-SOTO and HOENS join in this PER CURIAM opinion. JUSTICE LONG did not participate.

Per curiam.

Argued October 27, 2009

The judgment of the Appellate Division is affirmed substantially for the reasons expressed in the thorough and thoughtful opinion by Judge Grall. Highland Lakes Country Club & Cmty. Ass'n v. Nicastro, 406 N.J. Super. 145 (App. Div. 2009).

The panel correctly embraced and applied the principles powerfully presented in Diocese of Metuchen v. Prisco & Edwards, AIA, 374 N.J. Super. 409 (App. Div. 2005), aptly concluding that "application of [the Affidavit of Merit Statute, N.J.S.A. 2A:53A-26 to -29] would be inconsistent with its overall purposes under the present circumstances of this case."

Highland Lakes, supra, 406 N.J. Super. at 148. We add only the following.

Third-party defendants Suburban Consulting Engineers, Inc. and Martin Sikorski, P.L.S. have suggested that the better route in this case is for defendants/third-party plaintiffs Frank W. and Lisa Ann Nicastro to have deferred any claim against third- party defendants until the conclusion of the action between plaintiff Highland Lakes Country Club and Community Association and the Nicastros. That suggestion must be rejected out of hand, as it ignores the entire controversy doctrine.

That doctrine "embodies the principle that the adjudication of a legal controversy should occur in one litigation in only one court; accordingly, all parties involved in a litigation should at the very least present in that proceeding all of their claims and defenses that are related to the underlying controversy." Cogdell v. Hosp. Ctr. at Orange, 116 N.J. 7, 15 (1989) (citation omitted). We have explained that "[t]he purposes of the doctrine include the needs of economy and the avoidance of waste, efficiency and the reduction of delay, fairness to parties, and the need for complete and final disposition through the avoidance of 'piecemeal decisions.'"

Ibid. (citation omitted). In its application, the entire controversy doctrine requires us to consider fairness to the parties, as the polestar of the application of the rule is judicial fairness. Consequently, the boundaries of the entire controversy doctrine are not limitless. It remains an equitable doctrine whose application is left to judicial discretion based on the factual circumstances of individual cases.

[Oliver v. Ambrose, 152 N.J. 383, 396 (1998) (citations and internal quotation marks omitted).]*fn1

Applying the dual purposes of encouraging the fair and singular resolution of controversies while promoting judicial economy, the piecemeal litigation suggested by the third-party defendants solely for the sake of a perceived procedural advantage runs afoul of all of the salutary effects the entire controversy doctrine is designed to advance: it would create delay in the complete adjudication of the controversy at issue; it would harass the Nicastros by forcing them into serial litigation with possible inconsistent results; it would unnecessarily clog our courts with multiple lawsuits arising out of the same transaction and having a common nucleus of facts; it would waste the time and efforts of all of the parties involved; and it would render null any concept of fundamental fairness.

The judgment of the Appellate Division is affirmed.

CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, WALLACE, RIVERA-SOTO, and HOENS join in this opinion. JUSTICE LONG did not participate.

Chief Justice Rabner PRESIDING


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