July 18, 2018
In MTK Food Services, Inc. v. Sirius America Insurance Company, Superior Court of New Jersey, Appellate Division, Docket NoA-1309-17T2, Approved for Publication, June 29, 2018, the New Jersey Appellate Division considered whether the Pennsylvania’s two-year statute of limitation or whether New Jersey’s six-year statute of limitation applied to a legal malpractice claim. The complaint alleged that the attorneys involved allowed a Pennsylvania court to dismiss a case concerning a loss sustained by a Pennsylvania corporation to its Pennsylvania restaurant. It was undisputed that plaintiff then filed suit in New Jersey beyond the Pennsylvania two year statute of limitation. After a choice of law analysis, the trial court found that New Jersey’s six-year statute of limitation applied. The Appellate Division also engaged in a choice of law analysis, reversed the trial court and dismissed plaintiff’s malpractice claim by holding that the Pennsylvania two-year statute of limitation applied.
Relying on McCarrell v. Hoffman-La Roche, Inc., 227 N.J. 569, 574 (2017), (which held courts should use the substantial-interest test to resolve statute-of-limitations conflicts, as set forth in the Restatement (Second) of Conflicts of Laws § 142 (Am. Law Inst. 1971)), the Appellate Division held that the New Jersey two-year statute of limitation applied. It noted:
The only pertinent connection to New Jersey— that … a New Jersey licensed attorney, worked in a New Jersey office—falls short of establishing a substantial interest for New Jersey to apply its statute of limitations here. All other relevant facts point to Pennsylvania: the fire and resulting loss occurred in Pennsylvania; plaintiff is incorporated in Pennsylvania; …. [a Pennsylvania attorney enlisted a New Jersey attorney] because he is licensed in Pennsylvania; and … [the Pennsylvania attorney] filed the underlying complaint in Pennsylvania.
McCarrell explained that the substantial interest test “places both this State’s and out-of-state’s citizens on an equal playing field, thus promoting principles of comity; advances predictability and uniformity in decision-making; and allows for greater certainty in the expectations of the parties.” McCarrell, 227 N.J. at 593. McCarrell was distinguishable from this case because the “……appellants allegedly acted negligently in Pennsylvania by allowing a Pennsylvania court to dismiss a case concerning a loss sustained by a Pennsylvania corporation to its Pennsylvania restaurant. Therefore … New Jersey does not have a substantial interest in plaintiff’s claims against appellants.” In the within case, the fact that assistance was sought from a New Jersey attorney bore no relation to the malpractice allegation. “To hold otherwise would subject New Jersey attorneys also practicing in other states to disparate, unfair treatment.”
In further reliance of its holding, the Court cited Heavner v. Uniroyal, Inc., 63 N.J. 130 (1973), where the New Jersey Supreme Court “found that the only connection between New Jersey and the products liability action was [the defendant’s] incorporation in this State.” The Appellate Division found that the facts of the within case were analogous to Heavner.
Unless a plaintiff can demonstrate to a New Jersey court that New Jersey has a substantial interest in applying its six year statute of limitations to a legal malpractice claim where the alleged malpractice occurred out of state, a plaintiff’s claim may well be dismissed if suit was not timely filed under the other state’s statute of limitation