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Two recent cases have added to the developing bodies of law regarding Pennsylvania's and New Jersey's Affidavit of Merit statutes governing malpractice actions against professionals.  In a case of first impression interpreting Pennsylvania's very young statute (adopted January 27, 2003), the Superior Court of Pennsylvania had the opportunity to decide in Parkway Corporation v. Margolis Edelstein1 whether a plaintiff's own attorney may certify plaintiff's legal malpractice cause of action under the statute, and in Fink v. Ritner2 the United States District Court of New Jersey further determined when New Jersey's statute even applies to actions against attorneys.


The legal malpractice allegations in Parkway stemmed from a 1996 wrongful death action in which the Margolis Edelstein firm represented Parkway.  A $7 million verdict was entered against Parkway who, along with its insurer (Scottsdale Insurance Co.), subsequently claimed Margolis mishandled the defense.  When suit was filed on behalf of Parkway against Margolis in August 2003, the complaint lacked a certificate of merit, Margolis obtained a judgment of non pros and the case was dismissed.


On appeal, attorneys representing Parkway claimed their own outline of Margolis' alleged deficiencies, verified and filed with the complaint, satisfied Pennsylvania?s statute.  The Superior Court disagreed, finding the credibility and verification of a party's own attorney is "inherently suspect" and cannot adequately substitute for that of an "appropriate licensed professional" as required by the statute.  The decision is widely viewed as a "wake-up call" to all attorneys that Pennsylvania's statute will be strictly enforced. (Editor's Note: No word on whether Parkway intends to sue the attorneys who represented them in the action against Margolis.)


In Fink the plaintiff alleged fraud against the attorney defendants with respect to their handling of a series of financial  transactions  between  plaintiff  and corporations

represented by the attorney defendants.  Fink alleged he was retained by the corporations as an accountant in December 2000 and thereafter (April 2001) entered into a series of credit agreements with the corporations (who ultimately defaulted) including a loan, line-of-credit and security agreement.  The corporate CEO allegedly told him he would be granted different levels of priority status for these credit agreements.  Fink contended the defendant attorneys agreed to file appropriate financing statements to protect his security interests.


According to the plaintiff, contrary to the loan agreement (and amendments thereto), the defendants filed their own UCC financing statements on their own behalf that improperly gave them priority status ahead of Fink, thereby fraudulently obtaining superior credit rights.  Defendants moved to dismiss the plaintiff's complaint, arguing since plaintiff's claims arose directly out of their actions in the capacity of attorneys, plaintiff was required to file an affidavit of merit (which he did not).  The court disagreed, holding not every complaint against a licensed person acting in his professional capacity is subject to the statute - only claims requiring proof of a deviation from a professional standard of care.  Since plaintiff's counsel asserted at oral argument on the motion that plaintiff did not intend to rely upon expert testimony to substantiate his fraud claim, the court determined New Jersey's Affidavit of Merit statute did not apply and denied the defendants' motion.  The court's ruling is notable because it demonstrates the "loophole" available for plaintiffs to keep their action alive if they fail to submit an affidavit of merit.


Editor's Note:  One final point which must be noted when discussing Affidavit of Merit Statutes in Pennsylvania and New Jersey:  while both protect various medical professionals, accountants, architects, attorneys, land surveyors and engineers against frivolous actions, only New Jersey requires affidavits of merit in cases against insurance producers.  In connection with the New Jersey Supreme Court's recent ruling in President v. Jenkins (infra), the Garden State surely seems to be the more favorable of the two venues to broker insurance policies.


1 2004 WL 1739310, __ A.2d __ (Pa.Super., Decided Aug. 4, 2004)

2 318 F.Supp.2d. 225 (D.N.J., Decided May 24, 2004)            


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