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John Becker argued Affidavit of Merit in Paragon Contractors Inc.v. Peachtree Condominium Assoc.

The Supreme Court reverses summary judgment in favor of client because the trial court failed to conduct a Ferreira conference.

In Paragon Contractors, Inc. v. Peachtree Condominium Association, 202 N.J. 415 (2010), the New Jersey Supreme Court considered whether the trial court correctly dismissed the third-party complaint filed by defendant Peachtree Condominium Association (Peachtree) against third-party defendant Key Engineers, Inc. (Key) because Peachtree failed to timely file the affidavit required by the Affidavit of Merit statute, N.J.S.A. 2A:53A-26 to -29, or whether the court's failure to hold a conference pursuant to Ferreira v. Rancocas Orthopedic Associates, 178 N.J. 144 (2003), tolled the statutory period for filing the affidavit. John Becker argued the cause for Key Engineers, Inc.

"because of the confusion in the courts over the scheduling of the Ferreira conference and the effect of its omission, the Court concluded that relief should be afforded to the parties in the limited circumstances of this case."

Plaintiff Paragon Contractors, Inc. (Paragon) sued Peachtree for payment of 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, an entity that was hired to inspect and supervise Paragon's performance. With its third-party complaint, Peachtree filed a Case Information Statement (CIS) that identified the matter as a construction case. It did not respond to the question on the CIS whether the case involved professional malpractice.

Key's answer to the complaint raised the Affidavit of Merit statute as a separate defense and its CIS characterized the case as one involving professional malpractice. However, because the case was originally filed as a breach of contract action, the matter remained categorized by the court's civil case management staff as a construction case and it was assigned to that track. As a result, Key's counsel forwarded a Certification of Good Cause to Change Track Assignment, requesting that the case be moved to the professional liability track. Peachtree's counsel acknowledged receipt of the cover letter, but not the certification.

On January 31, 2008 more than 120 days after Key filed its answer to Peachtree's third-party complaint and before Peachtree filed an affidavit of merit or the court scheduled a case management conference Key filed a motion to dismiss the third-party action on grounds that Peachtree failed to provide an affidavit of merit within the time periods provided by N.J.S.A. 2A:53A-27. On February 21, 2008, before the motion hearing but outside the statutory period, Peachtree filed an affidavit. In defense of the late filing, 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 based on the untimeliness of the affidavit. The Appellate Division affirmed, rejecting "Peachtree's attempt to insulate its counsel's carelessness through the trial court's mistake in failing to schedule a case management conference." 406 N.J. Super. 568, 581 (App. Div. 2009). The Supreme Court granted certification. 200 N.J. 500 (2009).

The Supreme Court held that the conference instituted by the Court in Ferreira v. Rancocas Orthopedic Associates, 178 N.J. 144 (2003), was created to remind parties of their obligations under the Affidavit of Merit statute and to avoid the dismissal of meritorious claims through inadvertence. It is not a tolling device. However, because of the confusion in the courts over the scheduling of the Ferreira conference and the effect of its omission, the Court concluded that relief should be afforded to the parties in the limited circumstances of this case.

The entire opinion of the Appellate Division can be found here:

Thompson Becker, LLC provides a wide range of both transactional and litigation services for the construction related professionals and their businesses. We have successfully prosecuted and defended various types of construction related claims. Contact us at (856) 616-8886 to see how we can help you with your construction law needs.



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