New Jersey Appellate Court Analyzes "Common Knowledge" Doctrine to Overrule Dismissal of Legal Malpractice Action

SWAIN v. ALTERMAN (Sup. Ct. N.J. App. Div., Dec. 9, 2011)

In Swain v. Alterman, the plaintiffs sued their former attorney for negligently representing them in a personal injury action stemming from a car accident. The attorney never filed a complaint, thereby allowing the statute of limitations to expire. The plaintiffs proceeded to file a legal malpractice claim against the attorney. The attorney claimed that he had forwarded a letter to the clients terminating his representation before the statute of limitations had expired, which the clients denied.

Pursuant to New Jersey law involving professional negligence actions, a plaintiff in a legal malpractice suit usually must submit an affidavit of merit alleging that the attorney’s conduct fell below the standard of care. An affidavit is not required, however, if the breach can be proved without expert testimony (i.e. based on common knowledge). This falls under the aptly named common knowledge exception. The plaintiffs had not filed an affidavit of merit in their case, believing that the attorney’s failure to timely file a lawsuit within the statute of limitations fell within this narrow exception.

The trial court granted the attorney’s motion to dismiss and the plaintiffs appealed. The trial court agreed with the attorney that the common knowledge exception did not apply because there was no attorney-client relationship following his termination letter. Therefore, expert testimony was required regarding the existence of an attorney-client relationship, whether it was properly terminated, and the scope of any duty owed by the attorney. The appellate court disagreed, finding that the failure to file a complaint within the statute of limitations could be decided without expert testimony and fell under the common knowledge doctrine. The thrust of the court’s analysis lay in the principal that in a common knowledge case, an expert is no more qualified to attest to the merits of a claim than someone who would be considered a non-expert. The court stated that no expert was needed on behalf of plaintiffs “to establish they were deprived of seeking compensatory damages for their personal injury claims when the complaint was not filed within the statute of limitations.” The court also ruled that an expert was not needed to testify as to the formation of an attorney-client relationship. On this point, the court ruled that the plaintiffs had provided competent evidence that a retainer agreement was signed (even if there was a dispute whether the attorney provided a copy of that agreement to the plaintiffs). The court also reasoned that the complaint sufficiently alleged the existence of an attorney-client relationship, and that the core issues the attorney relied on in favor of arguing for an affidavit of merit were topics for the fact-finder to determine. In short, the plaintiffs had pleaded a cause of action that fell within the common knowledge doctrine. The trial court’s ruling was reversed and the case was remanded.

Impact: This case illustrates that not all professional negligence actions require an expert affidavit of merit but those cases may be difficult to identify because what may or may not require expert testimony is difficult to identify. Therefore, counsel for the defendantattorney should always consider filing a motion to dismiss if a plaintiff relies on the common knowledge exception (or its equivalent in other jurisdictions).