Paragon Contractors, Inc. v. Peachtree Condominium Association et al., New Jersey Supreme Court, June 28, 2010
Facts: Plaintiff Paragon Contractors, Inc. sued defendant Peachtree Condominium Association for payment for construction work it performed on Peachtree’s premises. Peachtree answered and counterclaimed for damages for Paragon’s failure to properly complete drainage work at the site. Peachtree also filed a third-party complaint against Key Engineers, Inc., an entity that was hired to inspect and supervise Paragon’s performance. With its third-party complaint, Peachtree filed a Case Information Statement which identified the matter as a construction case and did not respond to the question: "Is this a professional malpractice case?"
In its answer, Key raised the Affidavit of Merit statute as a separate defense. Further, in its Case Information Statement, Key characterized the case as one involving professional malpractice. Nevertheless, because the case originally was filed as a breach of contract action, the matter remained categorized by the civil case management staff as a construction case and was assigned to that track.
More than 120 days after Key filed its answer to Peachtree’s third-party complaint and before Peachtree filed an affidavit of merit or a case management conference had been scheduled — Key filed a motion to dismiss the third-party action on the basis that Peachtree had failed to provide a timely affidavit of merit. In defense, Peachtree argued that the failure to schedule a Ferreira conference tolled the time frames in the Affidavit of Merit statute.
The trial judge rejected that argument and dismissed Peachtree’s third-party complaint and all cross-claims against Key. The Appellate Division affirmed and Peachtree appealed to the New Jersey Supreme Court.
Issue: Whether the failure to hold a conference pursuant to Ferreira v. Rancocas Orthopedic Associates, tolls the filing period provided in the Affidavit of Merit statute?
Ruling: No. The Supreme Court held that the lack of a Ferreira conference would have no effect on plaintiff’s responsibility to file an Affidavit of Merit within 120 days of the date of defendant’s answer in a professional negligence action:
[P]arties are presumed to know the law and are obliged to follow it…Further, our creation of a tickler system to remind attorneys and their clients about critical filing dates plainly cannot trump the [Affidavit of Merit Statute].
The Court recognized the "confusion" over the issue and afforded relief to Peachtree. It warned, however, that "lawyers and litigants should understand that, going forward, reliance on the scheduling of a Ferreira conference to avoid the strictures of the Affidavit of Merit statute is entirely unwarranted and will not serve to toll the statutory time frames".
Lesson: The lack of a Ferreira conference will no longer be a successful defense to the failure to timely comply with NJ’s Affidavit of Merit statute.