Opinion
DOCKET NO. A-1039-12T1
02-19-2014
LANDSCAPEWORKS, INC. and ADVANCED SERVICES INCORPORATED, Plaintiffs-Appellants, v. TAMBI STAS and TD BANK, N.A., as successor in interest to COMMERCE BANK, Defendants, and HOWARD E. GESSNER, C.P.A., Defendant-Respondent.
Harold P. Cook, III, and Associates, attorneys for appellants (Andrew B. Salib, on the brief). Podvey, Meanor, Catenacci, Hildner, Cocoziello & Chattman, attorneys for respondent (Robert L. Podvey and Lainie Miller, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Espinosa and O'Connor.
On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-5422-11.
Harold P. Cook, III, and Associates, attorneys for appellants (Andrew B. Salib, on the brief).
Podvey, Meanor, Catenacci, Hildner, Cocoziello & Chattman, attorneys for respondent (Robert L. Podvey and Lainie Miller, on the brief). PER CURIAM
Plaintiffs, Landscapeworks, Inc. and Advanced Services, Inc., appeal from an order dismissing two counts of their complaint that alleged breach of contract claims against their former accountant, defendant Howard E. Gessner. We affirm.
Plaintiffs' office administrator and bookkeeper, defendant Tambi Stas, embezzled over $250,000 by forging and cashing checks drawn on plaintiffs' accounts that were presented to defendant TD Bank, N.A. (TD Bank) for payment. Plaintiffs brought this action against Stas, TD Bank, and Gessner. The counts against Gessner alleged professional malpractice (counts 21 through 24), negligence (counts 25 and 26), breach of contract (counts 27 and 28), and breach of fiduciary duty (counts 29 and 30).
Plaintiffs did not file an affidavit of merit pursuant to N.J.S.A. 2A:53A-27. Gessner filed a motion to dismiss the complaint for failure to comply with the statutory requirements, which was denied. We granted Gessner's motion for leave to appeal, and summarily reversed and remanded the matter to the trial court to dismiss counts 21, 22, 23, 24, 25, 26, 29, and 30 with prejudice. After we denied plaintiffs' motion for reconsideration, the trial court entered an order that dismissed all counts against Gessner except for those alleging breach of contract.
According to plaintiffs' brief, the motion was denied in order to provide plaintiffs time to cure the failure to file an affidavit of merit.
Gessner filed a second motion to dismiss counts 27 and 28 of the complaint, arguing, in part, that plaintiffs' failure to comply with the requirements of the affidavit of merit statute required the dismissal of those counts. This motion was granted. In their appeal, plaintiffs argue the counts in question allege breach of an agreement "and arise from the defendant's complete and utter inaction and therefore do not implicate a professional standard of care." They also argue that the common knowledge exception applies here, excusing their failure to serve an affidavit of merit.
N.J.S.A. 2A:53A-27 states in pertinent part:
In any action for damages for . . . property damage resulting from an alleged act of malpractice or negligence by a licensed person in his profession or occupation, the plaintiff shall, within 60 days following the date of filing of the answer to the complaint by the defendant, provide each defendant with an affidavit of an appropriate licensed person that there exists a reasonable probability that the care, skill or knowledge exercised or exhibited in the treatment, practice or work that is the subject of the complaint, fell outside acceptable professional or
occupational standards or treatment practices.
As a licensed accountant, Gessner falls within the statutory definition of "licensed person." N.J.S.A. 2A:53A-26(a).
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It is well-established that the requirement to provide an affidavit of merit does not turn on the label attached to the allegation but rather, on the factual basis for the claim. In Couri v. Gardner, 173 N.J. 328 (2002), the Supreme Court rejected the argument that a claim against a doctor cast as a breach of contract claim did not require an affidavit of merit. Id. at 340-41; see also Alan J. Cornblatt, P.A. v. Barow, 153 N.J. 218, 236 (1998). The Court stated,
It is not the label placed on the action that is pivotal but the nature of the legal inquiry. Accordingly, when presented with a tort or contract claim asserted against a professional specified in the statute, rather than focusing on whether the claim is denominated as tort or contract, attorneys and courts should determine if the claim's underlying factual allegations require proof of a deviation from the professional standard of care applicable to that specific profession. If such proof is required, an affidavit of merit is required for that claim, unless . . . either the statutory, N.J.S.A. 2A:53A-28, or common knowledge exceptions apply.
[Couri, supra, 173 N.J. at 340-41 (citations omitted).]
The Court also provided guidance on distinguishing between claims against a licensed professional that fell within the statute and those that did not:
[B]y asking whether a claim's underlying factual allegations require proof of a deviation from a professional standard of care, courts can assure that claims against licensed professionals acting in a professional capacity that require proof of ordinary negligence but not of a deviation from professional standards are not encompassed by the statute. For example, while the former standard would include allegations that a psychiatrist failed to diagnose a patient properly or provide proper treatment, it would exclude allegations that a psychiatrist negligently tripped a patient when the patient entered the doctor's office, which clearly would be outside the scope of the statute.
[Id. at 341.]
Plaintiffs argue that the dismissed counts did not require proof of a deviation from the professional standard of care. This argument is belied by the factual basis for the breach of contract claim as alleged in counts 27 and 28:
115. Pursuant to the understandings and agreements between defendant accountants and Plaintiff, defendant Gessner agreed to perform his duties and render advice regarding Plaintiff's financial statements and records in a competent manner reflective of their stated skill, expertise and experience and to ensure plaintiffs books and records complied with generally accepted accounting principles.This not a case in which the breach of contract claim pertains to an agreement between the parties unrelated to the rendering of professional services akin to a negligence claim against a psychiatrist who negligently tripped a patient in his office. See Couri, supra, 173 N.J. at 341. On their face, the allegations seek to impose liability based upon Gessner's alleged failure to perform his professional duties in accord with the standard applicable to his skill, expertise, and experience in accounting. See Alpert, Goldberg, Butler, Norton & Weiss, P.C. v. Quinn, 410 N.J. Super. 510, 540 (App. Div. 2009), certif. denied, 203 N.J. 93 (2010). Accordingly, the requirements of the Affidavit of Merit statute apply to plaintiffs' claim.
116. Plaintiffs relied upon representations made by the defendant accountants as to their expertise in the area of accounting.
117. The defendant accountants failed to properly review Plaintiff's records.
118. The defendant accountants failed to properly implement such systems and controls as are necessary for the proper operation of a business such as that of Plaintiffs.
(Emphasis added.)
Plaintiffs argue further that no affidavit of merit was necessary here because the common knowledge exception applied to their claim. This exception applies when "'jurors' common knowledge as lay persons is sufficient to enable them, using ordinary understanding and experience, to determine a defendant's negligence without the benefit of the specialized knowledge of experts.'" Hubbard v. Reed, 168 N.J. 387, 394 (2001) (quoting Estate of Chin v. Saint Barnabas Med. Ctr., 160 N.J. 454 (1999)).
Plaintiffs contend that their allegations do not require expert testimony because a jury could "determine [Gessner's] negligence" without reference to a standard of care, arguing:
If Gessner had performed any of his book-keeping and monitoring duties the harm suffered by the Plaintiff would have been avoided. Showing that he was derelict in these duties would not require an expert's testimony. The inquiry here is not whether or not the Respondent acted reasonably and within the parameters of an established standard. The inquiry here is whether or not the Respondent's complete inaction when he had a duty to act, caused the Appellants to be damaged.This argument fails for two reasons. First, the flaw in the factual premise for this argument is evident in plaintiffs' argument. Plaintiffs continually characterize this as a case "where a party contracts for something and gets nothing" and Gessner's conduct as "complete inaction." But, plaintiffs also state, "a factual inquiry as to what Mr. Gessner failed to do would be necessary to properly adjudicate this matter[.]" Plainly, there can be no liability for a failure to act when there is no duty to act. See O'Neill v. Suburban Terrace Apartments, Inc., 110 N.J. Super. 541, 545 (App. Div.), certif. denied, 57 N.J. 138 (1970). Because plaintiffs' claim thus depends upon a factual determination as to whether Gessner failed to act when he had a professional duty to act, expert opinion is required to determine whether there was a deviation from the applicable standard of care and the common knowledge exception does not apply. Compare Palanque v. Lambert-Woolley, 168 N.J. 398, 407 (2001) (holding the existence of malpractice could be determined through the exercise of common knowledge because defendant acknowledged he had mistaken specimen identification numbers for lab results on two occasions and therefore incorrectly reported that plaintiff was pregnant), with Balthazar v. Atlantic City Med. Ctr., 358 N.J. Super. 13, 24 (App. Div.), certif. denied, 177 N.J. 221 (2003) (holding expert testimony was required as an aid to the jury in resolving professional negligence issue).
(Emphasis added.)
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION