In a case requiring the court to tackle New Jersey’s and Pennsylvania’s divergent statutes of limitation on legal malpractice claims, a state appeals panel has handed Archer & Greiner a win.
A three-judge Appellate Division panel on June 29 said the Haddonfield firm and onetime partner Richard Grungo Jr. could not be held liable because Pennsylvania’s two-year statute of limitations should apply rather than New Jersey’s six-year statute of limitations.
“[W]e find New Jersey does not have a substantial interest in the plaintiff’s claims,” wrote Appellate Division Judge Richard Hoffman. Judges Robert Gilson and Jessica Mayer joined in the ruling.
At issue in the malpractice suit is the manner that Grungo handled a fire insurance claim by the owner of a diner in Bethlehem, Pennsylvania.
Two other New Jersey firms—Robbins & Robbins of Woodbridge and Javerbaum Wurgaft Hicks Kahn Wikstrom & Sinins of Springfield—were also defendants in the suit, as was David Wikstrom of Javerbaum Wurgaft. But Archer & Greiner brought the appeal on behalf of itself and Grungo, who is now with Grungo Colarulo in Cherry Hill.
Last year, the New Jersey Supreme Court directed the Appellate Division to hear the case. The Appellate Division had previously declined Archer & Greiner’s appeal bid.
Superior Court Judge Joseph Quinn ruled in February 2015 that Pennsylvania law applied to legal malpractice claims brought against Archer & Greiner, Javerbaum Wurgaft, and Robbins & Robbins in MTK Food Services v. Sirius America Insurance. Quinn, in a motion for reconsideration filed by MTK lawyer Wendy Crowther of Schibell & Mennie in Ocean Township, later reversed his position, finding that New Jersey’s six-year window applied.
The June 29 ruling reverses Quinn’s latter holding.
Crowther declined to comment on the appeals court’s decision.
Archer & Greiner’s attorney, Ellis Medoway, who is with the firm, also declined to comment.
Grungo didn’t return a call seeking comment.
According to the court, the dispute stems from a December 2002 fire that partly destroyed the diner, known as The Palace. Its owner, Menelaos Kontos, a New Jersey resident, retained Spencer Robbins of Robbins & Robbins to assist him with an insurance claim. Robbins had represented Kontos in other matters but was not admitted in Pennsylvania. Robbins, in turn, retained Grungo, who worked out of his firm’s Princeton office, but was admitted in Pennsylvania.
Grungo filed a coverage suit against Sirius America Insurance Co. in Philadelphia’s Court of Common Pleas in 2006. But that suit was dismissed, and the insurance carrier never made a payment to Kontos. Kontos claimed in court papers that the insurance company made a $240,000 settlement offer but it was never relayed it to him. Kontos said in a court document that Archer & Greiner withdrew from the case without telling him, and that neither Robbins nor Archer & Greiner told him his case was dismissed.
Kontos later retained Javerbaum Wurgaft to bring a malpractice claim in the case. That firm brought a suit against Robbins & Robbins but not against Archer & Greiner, with which it had a referral relationship, according to court documents.
Archer & Greiner said that Pennsylvania law should apply in the case because MTK Food Services, the diner’s owner of record, is a Pennsylvania corporation, and owns and operates a diner in that state.
MTK contended that the six-year statute of limitations should apply because New Jersey has a substantial interest in the case, and Archer & Greiner failed to show any extraordinary circumstances to dictate otherwise.
Hoffman, in the June 29 ruling, said the only connection to New Jersey was that Grungo happened to be licensed in Pennsylvania.
“All other relevant facts point to Pennsylvania: the fire and resulting loss occurred in Pennsylvania; plaintiff is incorporated in Pennsylvania; Robbins enlisted Grungo because he is licensed in Pennsylvania; and Grungo filed the underlying complaint in Pennsylvania,” he said.
The claim alleging that New Jersey law should apply “falls short of a substantial interest for New Jersey to apply its statute-of-limitations here,” Hoffman said.
The panel remanded the case for an order of dismissal to be entered.