CERTIFICATE OR AFFIDAVIT OF MERIT REQUIRED WHEN SUING LICENSED PROFESSIONALS IN NEW JERSEY, TEXAS AND SEVERAL OTHER STATES

CERTIFICATE OR AFFIDAVIT OF MERIT REQUIRED WHEN SUING LICENSED PROFESSIONALS IN NEW JERSEY, TEXAS AND SEVERAL OTHER STATES

Quite a few cases have been dismissed with prejudice by the courts for failure to file an affidavit of merit or certificate of merit.

An affidavit of merit is necessary for any design defect claims in this case because those claims implicate professional negligence involving a licensed professional, an architect, an engineer, an accountant, a doctor, a licensed insurance broker, and other licensed professionals.

See Calender v. NVR Inc, et al., Case No. 12-4132, Third Circuit Court of Appeals, December 13, 2013.  The Third Circuit has concluded that the New Jersey Affidavit of Merit Statute (“the AMS”), N.J.S.A. § 2A:53A-26 et seq., at issue in the instant case, constitutes substantive state law.  Chamberlain v. Giampapa, 210 F.3d 154, 161 (3d Cir. 2000).  As such, the AMS “must be applied by federal courts sitting in diversity.

The AMS reads in pertinent part:

In any action for damages for personal injuries . . . 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.

N.J.S.A. § 2A:53A-27. 

The AMS provides guidance by defining a “licensed person.” N.J.S.A. § 2A:53A-26. This list includes architects, doctors, and engineers, among other professionally licensed occupations. Id.

The New Jersey courts have interpreted the main purpose of the AMS as “requir[ing] plaintiffs in malpractice cases to make a threshold showing that their claim is meritorious, in order that meritless lawsuits readily could be identified at an early stage of litigation.”

Failure to provide an affidavit of merit in the required instances and within the prescribed time period will be deemed a failure to state a cause of action. N.J.S.A. § 2A:53A-29.  When a complaint is dismissed under the AMS, it is done “with prejudice,” and “[s]uch a dismissal concludes the rights of the parties as if the suit had been prosecuted to final adjudication adverse to the plaintiff.” Cornblatt v. Barow, 708 A.2d 401, 413 (N.J. 1998).

CERTIFICATE OF MERIT IS ALSO REQUIRED UNDER TEXAS LAW

A recent Texas appellate court opinion has given greater protections to licensed engineers working in the oil patch. In 2003, at the behest of lobbyists for architects and engineers, the Texas Legislature enacted special legislation to insulate certain professionals from “meritless” lawsuits. Basically the legislation requires anyone suing a licensed or registered architect, engineer, land surveyor, or landscape (i.e., a “licensed registered professional” or “LRP”) to obtain a “Certificate of Merit” from a like professional. This Certificate of Merit must filed with the Court at the time of the filing of any lawsuit against the LRP. This legislation did not get a lot of press. Many lawyers and litigants are unaware of it. 

If suit is filed without a Certificate of Merit, LRP may file a Motion to Dismiss the lawsuit which the trial court is required to grant. The Court may even dismiss the case with prejudice; meaning that the party filing the lawsuit cannot belatedly get a Certificate of Merit and refile the claim. Similarly, the LRP may wait for the statute of limitations to run and then file a Motion to Dismiss. Then, it does not matter whether the Court dismissed with prejudice or without prejudice. Either way, upon dismissal of the lawsuit, the claim is time-barred. If the Court declines to grant the dismissal, he LRP may appeal immediately. The appellate courts addressing these issues have been favorably disposed toward the architects, engineers, and other LRPs, ordering the trial court to grant the dismissals.

A recent Texas appellate court opinion has arguably expanded those rights and protections. As is common in the oil patch, a party drilling or operating a well will hire a contract operator or consultant to oversee the operations. Many of the companies providing this service are owned by licensed professionals. In the case of Cimarron Engineering, LLC v. Miramar Petroleum, Inc., [2014 WL 2937012, Texas Court of Appeals, Corpus Christi-Edinburg, June 26, 2014] the well owner hired one such service company. The owner then claimed that the consultant failed to adequately supervise and direct operations resulting in a well blowout. Even though the company admitted that its owner – the licensed professional engineer – performed no professional engineering consulting services, the Court of Appeals held that a Certificate of Merit was required anyway. 

The Court held that the entity “… is a licensed or registered professional because it is the business entity in which its owner, a licensed professional engineer, practices.” Citing the Texas Occupations Code, the Court defined the practice of engineering to mean “… the performance of or an offer or attempt to perform any public or private service or creative work, the adequate performance of which requires engineering education, training, and experience in applying special knowledge or judgment of the mathematical, physical, or engineering sciences to that service or creative work.”

 The Court found that supervising of the drilling and completion of the well would necessarily include the monitoring of pressures in the well, the monitoring of drilling, the calculating of the weights of mud necessary to maintain the stability of the well and similar conduct. The Court gave a very broad definition of the practice of engineering in order to bring the type of work being performed within the definition of the provision of “engineering services” or the “engineering sciences.” The Court held that since the damages “implicate the special knowledge and training of an engineer” then any claim for damages necessarily arises out of the provision of such professional services. This is true even when – as here – the professional engineer admits he did not perform any professional engineering services.

As a result of this claim, companies that are owned by or have licensed professionals in their employ should tailor their agreements to include references to the provision of such services. This will require any dissatisfied client to find someone within the same discipline willing essentially to provide an affidavit and testify that the services performed fell below the appropriate standard. Conversely, companies hiring service companies should be careful and do their due diligence in selecting firms or individuals who may be licensed professionals. If you hire such firms or individuals, and you become dissatisfied with the quality of the services performed – even if those services have nothing to do with their professional licensing – you will likely have to find a comparably licensed professional willing to testify against them and have him prepare a Certificate of Merit to be filed with any lawsuit.

The statute involved is very expansive. An “LRP” includes a licensed architect, a licensed professional engineer, a registered professional land surveyor, a registered landscape architect, or any firm in which the LRP practices. Based upon this recent opinion, anything that involves applying “special knowledge or judgment of the mathematical, physical, or engineering sciences to the service or creative work” arguably falls within the protections of the statute. According to the Court, so would “… a service, design, analysis or other work performed for a public or private entity in connection with a utility, structure, building, machine, equipment, process, system, work, project or industrial or consumer product or equipment of a mechanical, electrical, electronic, chemical, hydraulic, pneumatic, geotechnical, or thermal nature … any other professional service necessary for the planning, progress or completion of an engineering service.” 

Any and all of the above fall within the purview of providing engineering services and are subject to the Certificate of Merit requirement. It is hard to envision any step in the drilling or completion of a well that would not involve services falling within this extremely broad definition.

Shortly after the foregoing Texas appellate court opinion was handed down, the Texas Supreme Court handed down another opinion in this area [Jaster v. Comet II Construction, Inc., 2014 WL 2994503, Texas Supreme Court, July 3, 2014] In that case, the Court determined that a Certificate of Merit did not need to be filed if the claim was being filed by a defendant in a lawsuit against a co-defendant or against a non-party. 

In other words, if the plaintiff sued defendants A and B and defendant B was a licensed professional engineer, defendant A could file a cross-action against defendant B without having to file a Certificate of Merit. Similarly, if the plaintiff simply sued defendant A, defendant A could file a third party action against the licensed professional B and not have to file a Certificate of Merit. It is only the plaintiff who actually institutes the lawsuit that is required to file the Certificate of Merit against a licensed professional. Other parties joined to the lawsuit who are not the plaintiff initially filing the lawsuit do not have to comply.

Certificate of Merit Statutes 
Enacted legislation in several states requires a tort plaintiff, prior to instituting a lawsuit, to obtain an opinion from a professional consultant regarding the validity of the tort plaintiff’s underlying professional negligence claim. This Legislative Update surveys the states that have enacted what these organizations refer to as a “certificate of merit” statute, which is a component of their tort reform efforts.


Model “Certificate of Merit” Statute Defined


A model “certificate of merit” statute as one that would require a plaintiff who intends to sue a design professional for professional negligence to consult with a third-party design professional so that the third-party consultant could review the facts of the plaintiff’s claim and render an opinion regarding whether the claim is meritorious or not. See NSPE Issue Brief, July 2004, Publication #4038, Certificate of Merit; see also AIA Government Affairs, Model Architect & Engineer Liability Laws. If the third-party consultant determines that the plaintiff’s claim has merit, then the plaintiff will be permitted to bring the action against the targeted design professional.


States With Certificate or Affidavit of Merit Statutes

Currently, eleven states have enacted a certificate of merit statute of some form. These states are Arizona, California, Colorado, Georgia, Maryland, Minnesota, Nevada, New Jersey, Oregon, Pennsylvania, and Texas.


Arizona
ARIZ. REV. STAT. sections 12.2601 and 12-26021 (2004) comprise the certificate of merit legislation of Arizona. These statutes govern claims against a “licensed professional” that are based on the alleged “breach of contract, negligence, misconduct, errors or omissions in rendering professional services.” ARIZ. REV. STAT. section 12-2601 (1)(b). The term “licensed professional” includes architects, engineers, and landscape architects. Id. sections 12-2601 (3); 32-101(B)(2), (11), and (25). Only if expert opinion testimony is necessary to prove a plaintiff’s prima facie claim must the plaintiff file a “preliminary expert opinion affidavit” within forty days after the filing of a responsive pleading to the lawsuit. Id. section 12-2602(B); ARIZ. R. Civ. P. 26.1. The expert opinion affidavit must include the expert’s qualifications, the factual basis of the claim, and a statement regarding how the defendant violated the applicable standard of care resulting in liability and causing damages to the plaintiff. ARIZ. REV. STAT. section 12-2602(B)(1)-(4)(2004).


California
CAL. CIV. PROC. CODE section 411.35 (Deering 2004) is the California certificate of merit statute. Section 411.35 concerns actions for professional negligence against architects, engineers, and land surveyors. The statute requires a certificate of merit be sent contemporaneous with or before the service of plaintiff’s lawsuit on the defendant. Id. section 411.35(a). The certificate must be executed by the plaintiff’s lawyer where he or she must state, in pertinent part, that he or she has reviewed the facts of the case and consulted with a third-party design professional “in the same discipline as the defendant” and “that the attorney has concluded on the basis of this review and consultation that there is a reasonable and meritorious cause for the filing of this action.” Id. section 411.35(b)(1). A plaintiff’s failure to comply with this statute will be grounds for a demurrer, i.e., dismissal for failure to state a cause of action. Id. section 411.35(g). It should be noted that this statute applies to claims against a design professional based upon equitable indemnity. Id. section 411.35(i).


Colorado
COLO. REV. STAT. section 13-20-602(1)(a) (2003) is the Colorado certificate of merit statute. Section 13-20-602(1)(a) requires a plaintiff to file a “certificate of review” within sixty days after service of the lawsuit on the defendant. The statute applies to all “civil actions for negligence brought against those professionals who are licensed by [Colorado] to practice a particular profession and regarding whom expert testimony would be necessary to establish a prima facie case.” Id. section 13-20-601. The trial court has discretion in deciding if a certificate of review is required for a plaintiff’s case. Miller v. Rowtech, LLC, 3P.3d 492, 494 (Colo. Ct. App. 2000) (citing Shelton v. Penrose/St. Francis Healthcare System, 984 P.2d 623, 627 (Colo. 1999)). If the trial court determines that a certificate is required, it must be executed by the plaintiff’s attorney and state, in pertinent part, that the lawyer has consulted a third-party expert “in the area of the alleged negligent conduct” and that the expert has concluded, based on his review of the relevant facts and documents, that the plaintiff’s claim “does not lack substantial justification...” COLO. REV. STAT. section 13-20-602(3)(a)(I),(II). Once the trial court determines that expert testimony is required to establish a prima facie case of professional negligence, a plaintiff’s failure to file a certificate of review will result in the case being dismissed. Id. section 13-20-602(4).


Georgia
GA. Code ANN. section 9-11-9.1(a)(2002) is the Georgia certificate of merit statute. Section 13-20-602(1)(a) requires that a plaintiff bringing a professional malpractice claim “shall be required to file with the complaint an affidavit of an expert competent to testify, which affidavit shall set forth specifically at least one negligent act or omission claimed to exist and the factual basis for each such claim.” The statute applies to actions for professional negligence against different professionals, including architects and professional engineers. Id. Section 9-11-9.1(f)(1),(19). The statute withstood constitutional attack and was upheld in Lutz v. Foran. 427 S.E.2d 248, 251-52 (Ga. 1993). In a recent appellate decision, a Georgia court held that a plaintiff’s failure to file the requisite affidavit would properly result in the trial court’s dismissal of the action with prejudice. Stamps v. Johnson, 535 S.E.2d 1,2-3 (Ga. Ct. App.2000).


Maryland
MD. Code ANN., CTS. & JUD. PROC. section 3-2C-02(2003) is the Maryland certificate of merit statute, which Maryland refers to as a “certificate of qualified expert.” Section 3-2C-02 applies to any claim against a licensed architect, interior designer, landscape architect, professional engineer, or professional land surveyor that is based on the defendant’s alleged professional negligence. Id section 3-2C-01(b), (c). The requisite certificate must “[c]ontain a statement from a qualified expert attesting that the licensed professional against whom the claim is filed failed to meet an applicable standard of professional care...” Id. section 3-2C-02(a)(2)(i). The certificate must be filed within ninety days after the suit is filed. Id. section 3-2C-02(a)(2)(ii).


Minnesota
MINN. STAT. section 544.42 subds. 1 and 2 (2003) is the Minnesota certificate of merit statute. Section 544.42, subds. 1 and 2, requires a plaintiff who files a malpractice action against a lawyer, architect, certified public accountant, engineer, land surveyor, or landscape architect to serve upon the defendant a “certificate of expert review” with the complaint. The certificate must be prepared by the plaintiff’s lawyer and state, in pertinent part, that the lawyer has consulted with a qualified expert and that in the opinion of the expert “the defendant deviated from the applicable standard of care and by that action caused injury to the plaintiff...” Id, section 544.42 subd. 3(a)(1). A plaintiff’s failure to serve defendant with the requisite affidavit mandates a dismissal with prejudice upon the filing of a motion by defendant. Id. section 544.42, subd.6(a).


Nevada
NEV. REV. STAT. ANN. 40.6884 (LEXIS 2004) is the Nevada certificate of merit statute. Section 40.6884 requires a plaintiff who commences an action against “a design professional or a person primarily engaged in the practice of professional engineering, land surveying, architecture or landscape architecture, including, without limitation, an action for professional negligence,” to file an affidavit contemporaneously with service of the complaint. The plaintiff’s lawyer must prepare the affidavit and he or she must state, in pertinent part, that after consulting with a third-party design professional, he or she has concluded that the action “has a reasonable basis in law and fact.” Id. section 40.6884(1)(a)-(d).


New Jersey
N.J. STAT. ANN. sections 2A:53A-26 to 2A:53A-29 (West 2004) constitute New Jersey’s certificate of merit legislative scheme. These laws apply to professional malpractice actions against different professionals, including those against architects and engineers. N.J. STAT. ANN. section 2A:53A-26(b), (e). Thus, in a professional malpractice action against an architect or engineer, a plaintiff must file, within sixty days following the date of the defendant’s filing of a responsive pleading, an “affidavit of an appropriate licensed person” that must state, in pertinent part, that the defendant’s alleged conduct “fell outside acceptable professional or occupational standards or treatment practices.” Id. section 2A:53A-27. The person executing the affidavit, among other requirements, must “have particular expertise in the general area or specialty involved in the action, as evidenced by board certification or by devotion of the person’s practice substantially to the general area or specialty involved in the action for a period of at least five years.” Id. If the plaintiff fails to provide the requisite affidavit, it shall be deemed a failure to state a cause of action Id. section 2A:53A-29.


Oregon
OR. REV. STAT. ANN. section 31.300 (2003) governs actions against “an architect, registered landscape architect, professional engineer or professional land surveyor.” OR. REV. STAT. ANN. section 31.300 (1). In any action arising “out of the provision of services within the course and scope of the activities for which the person is licensed,” the plaintiff’s attorney must certify, in pertinent part, that he or she has consulted with a “licensed construction design professional” and this consultant “is available and willing to testify that” the defendant failed to meet the applicable standard of care under the facts alleged and such failure caused plaintiff’s damages. Id. section 31.300(2)(a), (b). The certificate must be filed with or be incorporated in the original complaint Id. section 31.300(2). A plaintiff’s failure to comply with the certification requirement will result in a dismissal of its lawsuit upon the defendant’s motion. Id. section 31.300(4.).


Pennsylvania
PA. R. Civ. P. Nos. 1042.1 to 1042.8 et seq. (2003) is Pennsylvania’s certificate of merit statutory scheme. These rules of court govern “a civil action in which a professional liability claim is asserted against a licensed professional.” Id 1042.1(a). The term “licensed professional” includes architects, engineers, and land surveyors. Id. 1042.1(b)(1)(iii), (vi). Accordingly, in a professional malpractice action against an architect or engineer, the plaintiff must file “a certificate of merit signed by the attorney” within sixty days after the filing of the complaint. Id. 1042.3(a). If expert testimony is necessary to prove the claim, the plaintiff’s lawyer must certify that “an appropriate licensed professional has supplied a written statement” that there is a “reasonable probability” that the defendant’s alleged conduct “fell outside acceptable professional standards and that such conduct was a cause in bringing about the harm...” Id. 1042.3(a)(1).


Texas
TEX. CIV. PRA. & REM. CODE ANN. SECTIONS 150.001-.002 (Vernon 2004) is Texas’ certificate of merit statute. Sections 150.001 and 150.002 govern any professional malpractice action against a registered architect or licensed professional engineer. To commence such an action, a plaintiff must file with its complaint “an affidavit of a third-party registered architect or licensed professional engineer competent to testify and practicing in the same area of practice as the defendant. The affidavit shall set forth specifically at least one negligent act, error, or omission claimed to exist and the factual basis for each such claim” Id. section 150.002(a). A plaintiff’s failure to file the requisite affidavit “may result in dismissal with prejudice of the complaint against the defendant.” Id. section 150.002(d).
Related Legislation Regarding Professional Liability Claims
Three states—Hawaii, Kansas and Wyoming—have enacted legislation requiring plaintiffs to file their professional negligence claims with a review or screening panel made up of laypersons and professionals before filing suit against a licensed professional such as an architect or professional engineer.

Merit Affidavit Absence Ends Insurance Agent Error & Omission Claim

Policyholders insured home including the garage and personal property located therein.  Their agent did not advise them that the policy did not provide coverage for equipment used for agricultural purposes.  Fire destroyed the garage and contents.  They sued when coverage for off-road vehicles as well as machinery and equipment used to assist plaintiffs in gardening and farming activities was denied.  The professional negligence complaint alleged the agent failed to secure proper coverage.  New Jersey law requires filing of an affidavit of merit in malpractice cases, which did not occur.  A discovery dispute arose and concomitantly the agent filed a motion to dismiss for failure to file the merit affidavit.  Plaintiffs' counsel wrongly assumed it was a discovery motion that he solved by serving the requested discovery responses.  The motion was not opposed.  Motion to vacate the judgment failed.

On appeal in Galfo v. Cumberland Mut. Fire Ins. Co., 2014 WL 4251871 (N.J. App. 2014) the court affirmed.  It ruled the merit affidavit was required in insurance agent E&O claims because "professional licensed insurance brokers at Bowling Green were there to provide them with the benefit of their training and experience as to what type of homeowner's insurance policy best served their unique use of this property as both a personal residence and a part-time farmer's market. These matters are complex and the people authorized to dispense this form of professional advice are licensed and regulated by the State Department of Banking and Insurance."  Thus the common knowledge exception did not apply and failure to file the affidavit was fatal to the claim.

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