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NJSBA Urges Appellate Division to Re-Evaluate Conflicts of Law on Malpractice Statute of Limitation Claim

The New Jersey State Bar Association urged the Appellate Division to reverse the trial court’s decision and apply Pennsylvania’s two-year statute of limitations for an attorney malpractice claim rather than New Jersey’s six-year statute  for a Pennsylvania legal action concerning an attorney holding both a Pennsylvania and New Jersey license to practice law. The NJSBA filed for leave to appear as amicus curiae in MTK Food Services, Inc. v. Sirius America Insurance Co., et al., Docket No. A-001309-17T2. The brief was drafted by David R. Kott, William T. Reilly and Christopher A. Rojao.

In this case that evaluates the application of conflicts of laws analyses in statutes of limitations matters, the NJSBA urged the Appellate Division to overturn the trial court’s decision, cautioning the court that the trial court’s erroneous expansion of the McCarrell v. Hoffman-La Roche, Inc., 153 A.3d 207 (N.J. 2017) decision could “frustrate the public policies of other jurisdictions that have enacted shorter statutes of limitations to regulate legal representation occurring within their borders.” It also warned of additional issues that could harm New Jersey attorneys or individuals who want to become licensed in New Jersey.

At issue is the alleged malpractice by attorneys in negotiation and litigation with a restaurant’s insurance carrier following a fire that led to the partial destruction of a diner in Pennsylvania. The diner owner received no remuneration under its insurance policy. The defendant attorney—who holds both Pennsylvania and New Jersey licenses—argued that the malpractice claims were time barred because the action was filed after Pennsylvania’s two-year statute of limitations.

The argument focused on the conflicts of laws analysis and which state has a substantial interest in regulating its attorneys. The trial court held, in a motion for reconsideration, that the New Jersey statute of limitations applied despite the fact that the incident and all parties occurred and were located in Pennsylvania because “[m]aintenance of the claim would serve a substantial interest of the forum state; regulating licensed New Jersey attorneys that practice law within the state.” The court cited to the newly decided McCarrell decision, which relied upon Restatement (Second) Conflict of Laws, Section 142 for conflicts of laws analysis in statutes of limitations challenges.

The NJSBA argued that the trial court misapplied McCarrell because it overlooked the other elements of the conflicts of law analysis. “In this case, the trial court acknowledged that plaintiff’s cause of action arises out of an allegedly negligent legal representation that occurred in Pennsylvania in connection with the partial destruction of plaintiff’s diner…,” said the NJSBA in its brief. “Nevertheless, the court relied on its previous Statement of Reasons (in which it dismissed plaintiff’s claims) to note that ‘in the field of legal malpractice both states have an interest in applying [their own laws] regulating malpractice to resident attorneys practicing within their borders.’”

The association commented that the trial court based its decision on this “general interest” without any discussion of the Pennsylvania-specific facts of the case. “[M]aintaining a New Jersey bar license alone is insufficient to provide the ‘substantial interest’ to have a New Jersey statute of limitations apply to a claim,” said the association.

There is no date set for oral argument. The NJSBA continues to monitor this matter.