NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1309-17T2
MTK FOOD SERVICES, INC.
d/b/a THE PALACE
RESTAURANT, APPROVED FOR PUBLICATION
Plaintiff-Respondent, June 29, 2018
v. APPELLATE DIVISION
SIRIUS AMERICA INSURANCE
COMPANY; NORTH AMERICAN
RISK SERVICES; SPENCER
B. ROBBINS, ESQ.;
ROBBINS & ROBBINS, LLC;
CRAWFORD CLAIMS MANAGEMENT
SERVICES; ALLIED WORLD
ASSURANCE COMPANY (U.S.) INC.
and DARWIN SELECT INSURANCE COMPANY,
Defendants,
and
ARCHER & GREINER, PC, and
RICHARD GRUNGO, JR., ESQ.,
Defendants-Appellants,
and
JAVERBAUM WURGAFT HICKS KAHN
WIKSTROM & SININS, PC, and
DAVID WIKSTROM, ESQ.,
Defendants-Respondents.
___________________________________
Argued May 30, 2018 – Decided June 29, 2018
Before Judges Hoffman, Gilson and Mayer.
On appeal from Superior Court of New Jersey,
Law Division, Monmouth County, Docket No.
L-1227-12.
Ellis I. Medoway argued the cause for
appellants (Archer & Greiner, PC, attorneys;
Ellis I. Medoway, on the briefs).
Wendy M. Crowther argued the cause for
respondent MTK Food Services, Inc. (Schibell
& Mennie, LLC, attorneys; Wendy M. Crowther,
of counsel and on the brief).
Patrick J. Galligan argued the cause for
respondents Javerbaum Wurgaft Hicks Kahn
Wikstrom & Sinins, PC and David Wikstrom,
Esq. (Donnelly Minter & Kelly, LLC,
attorneys; Patrick J. Galligan, of counsel;
Jared J. Limbach, on the brief).
David R. Kott argued the cause for amicus
curiae New Jersey State Bar Association (New
Jersey State Bar Association, attorneys;
Robert B. Hille, President, of counsel and
on the brief; David R. Kott, William T.
Reilly and Christopher A. Rojao, on the
brief).
The opinion of the court was delivered by
HOFFMAN, J.A.D.
Plaintiff MTK Food Services, Inc. alleges defendants,
attorney Richard Grungo, Jr. and his former firm, Archer &
Greiner, P.C. (Archer),1 committed legal malpractice regarding an
insurance claim for fire damage at plaintiff's restaurant. The
malpractice claim against appellants required a choice-of-law
1
We refer to Grungo and Archer collectively as appellants.
2 A-1309-17T2
analysis because plaintiff sued appellants beyond Pennsylvania's
two-year statute of limitations, but within New Jersey's six-
year statute of limitations. By leave granted, appellants
challenge a May 10, 2017 Law Division order applying New
Jersey's six-year statute of limitations and therefore
reinstating plaintiff's malpractice claim against them. Because
we find Pennsylvania's two-year statute of limitations applies
under the circumstances presented, we reverse and dismiss
plaintiff's claims against appellants.
I
In December 2002, a fire damaged plaintiff's Bethlehem,
Pennsylvania restaurant. Plaintiff retained defendant Spencer
Robbins, a New Jersey attorney, to pursue an insurance claim
against defendant Sirius America Insurance Company (Sirius).
Robbins allegedly negotiated a settlement with Sirius for
$240,000, but neglected to inform plaintiff of the settlement
offer. Robbins eventually asked Grungo to assist with
litigation in Pennsylvania. Grungo is licensed in both New
Jersey and Pennsylvania. At his deposition, Grungo testified,
I recall Spencer Robbins calling me, [and]
asking me . . . to file a writ in
Pennsylvania as a placeholder in a matter
that he was involved in and . . . [was]
close to settling or resolving.
. . . .
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Under Pennsylvania rules you can file a writ
in order to toll a statute of limitations,
as opposed to filing a formal complaint.
In January 2006, Grungo accommodated Robbins' request and
filed a writ of summons in Pennsylvania on behalf of plaintiff
against Sirius. According to Grungo, he never had any contact
with plaintiff, explaining "my only point of contact was Spencer
Robbins." Approximately eighteen months after he filed the
writ, Grungo informed Robbins he could no longer remain as
counsel of record in the placeholder proceeding due to a
conflict. The Pennsylvania court eventually dismissed the
matter, and the statute of limitations on the insurance claim
had run by the time plaintiff learned of the dismissal.
Plaintiff next consulted with attorney Nick Sabatine, who
wrote to Grungo in March 2009, requesting a copy of his file and
alerting him of a possible "legal malpractice claim." In August
2010, plaintiff retained another attorney, defendant David
Wikstrom, to pursue the legal malpractice claim. Wikstrom never
filed a claim against Robbins or appellants; instead, in May
2011, Wikstrom informed plaintiff he believed plaintiff had a
legitimate malpractice claim, but he did not wish to pursue a
claim against Archer "for political reasons." In 2012,
plaintiff filed its initial complaint in Monmouth County. On
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October 10, 2014, plaintiff amended its complaint to join
appellants, asserting legal malpractice claims against them.
In December 2014, appellants moved to dismiss all claims
against them, arguing the Pennsylvania statute of limitations
barred the claims. On February 20, 2015, the trial court
granted appellants' dismissal motion. The court found an
undisputed "conflict between New Jersey and Pennsylvania
regarding the statute of limitations for a legal malpractice
claim." In determining whether Pennsylvania's two-year statute
of limitations or New Jersey's six-year statute of limitations
applied, the court applied the most-significant-relationship
test found in the Restatement (Second) of Conflicts of Laws §§
145 and 6 (Am. Law Inst. 1971).
In applying the most-significant-relationship test, the
court found "both states have a substantial interest in
regulating the conduct of attorneys [who] practice within their
borders"; however, the court concluded Pennsylvania had the more
significant relationship. As a result, the court applied
Pennsylvania's two-year statute of limitations and dismissed
plaintiff's complaint against appellants.
On January 24, 2017, our Supreme Court decided McCarrell v.
Hoffman-La Roche, Inc., 227 N.J. 569, 574 (2017), which held
courts should use the substantial-interest test to resolve
5 A-1309-17T2
statute-of-limitations conflicts, as set forth in the
Restatement (Second) of Conflicts of Laws § 142 (Am. Law Inst.
1971). Based upon McCarrell, plaintiff successfully moved for
reconsideration and the trial court vacated its order dismissing
the malpractice claims against appellants. The court concluded,
"Maintenance of the claim would serve a substantial interest of
the forum state[:] regulating licensed New Jersey attorneys
[who] practice law within the state." The court noted that it
previously found "both states have a substantial interest in
regulating the conduct of attorneys [who] practice within their
borders . . . ." The court therefore applied New Jersey's six-
year statute of limitations and reinstated plaintiff's
malpractice claims against appellants.
II
We apply a de novo standard when reviewing an order
dismissing a complaint for failure to state a claim. State ex
rel. Campagna v. Post Integrations, Inc., 451 N.J. Super. 276,
279 (App. Div. 2017). "The analytical framework for deciding
how to resolve a choice-of-law issue is a matter of law."
McCarrell, 227 N.J. at 583-84. We review issues of law de novo
and accord no deference to the trial judge's conclusions on
issues of law. Nicholas v. Mynster, 213 N.J. 463, 478 (2013).
6 A-1309-17T2
Here, the record reflects no dispute as to the underlying
facts of the case. The parties agree that if Pennsylvania's
two-year statute of limitations applies, then plaintiff's claims
against appellants fail. However, if New Jersey's six-year
statute of limitations applies, then plaintiff's claims against
appellants stand. This appeal therefore presents the narrow
issue of which state's statute of limitations applies; because
this constitutes a strictly legal issue, we review de novo.
III
In McCarrell, the Supreme Court held "that section 142 of
the Second Restatement is now the operative choice-of-law rule
for resolving statute-of-limitations conflicts . . . ." 227
N.J. at 574. Section 142 provides:
Whether a claim will be maintained against
the defense of the statute of limitations is
determined under the principles stated in
§ 6. In general, unless the exceptional
circumstances of the case make such a result
unreasonable:
(1) The forum will apply its own statute of
limitations barring the claim.
(2) The forum will apply its own statute of
limitations permitting the claim unless:
(a) maintenance of the claim would serve no
substantial interest of the forum; and
(b) the claim would be barred under the
statute of limitations of a state having a
more significant relationship to the parties
and the occurrence.
7 A-1309-17T2
[Restatement (Second) of Conflicts of Laws
§ 142 (Am. Law Inst. 1971).]
"Under Section 142(2)(a), the statute of limitations of the
forum state generally applies whenever that state has a
substantial interest in the maintenance of the claim."
McCarrell, 227 N.J. at 593. "Section 142's presumption in favor
of a forum state with a substantial interest in the litigation
can be overcome only by exceptional circumstances that would
render that result unreasonable." Id. at 596. The Court chose
Section 142 because it: "benefits from an ease of application;
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." Id. at
593.
McCarrell involved a products liability claim. Id. at 596.
The plaintiff alleged the defendants — both incorporated in New
Jersey — "designed, manufactured, distributed, and labeled" the
defective product in New Jersey. Id. at 596-97. The Court
found "New Jersey has a substantial interest in deterring its
manufacturers from developing, making, and distributing unsafe
products . . . ." Id. at 597. The Court therefore applied New
Jersey's statute of limitations. Id. at 599.
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The Court in McCarrell also discussed two previous products
liability cases decided under the most-significant-relationship
test, and concluded the outcome would remain the same under the
substantial-interest test. Id. at 595-96. First, in Heavner v.
Uniroyal, Inc., 63 N.J. 130 (1973), the Court "found that the
only connection between New Jersey and the products liability
action was [the defendant's] incorporation in this State."
McCarrell, 227 N.J. at 586 (citing Heavner, 63 N.J. at 134 n.3).
The allegedly defective product was manufactured and sold
outside of New Jersey. Id. at 585-86 (citing Heavner, 63 N.J.
at 134). The Court reaffirmed that incorporation of a defendant
in New Jersey, without more, does not establish a substantial
interest. Id. at 586 (citing Heavner, 63 N.J. at 141). In the
end, the Court held "plaintiff's complaint was time barred under
North Carolina law and therefore dismissed." Ibid. (citing
Heavner, 63 N.J. at 141-42).
Second, in Gantes v. Kason Corp., 145 N.J. 478 (1996), in
contrast to Heavner, the defendant manufactured the allegedly
defective part in New Jersey. McCarrell, 227 N.J. at 587
(citing Gantes, 145 N.J. at 481-82). The Court reasoned it
would not frustrate Georgia's public policy to allow a claim "to
proceed against a New Jersey manufacturer in a New Jersey
court." Id. at 587-88 (citing Gantes, 145 N.J. at 498). The
9 A-1309-17T2
Court found New Jersey had a "substantial interest in
deterrence," and applied New Jersey's statute of limitations
allowing the claim to proceed. Id. at 588 (citing Gantes, 145
N.J. at 493, 499).
IV
Here, the trial court initially found both New Jersey and
Pennsylvania "have a substantial interest in regulating the
conduct of attorneys [who] practice within their borders";
however, because it found Pennsylvania has a more significant
relationship, it applied Pennsylvania's statute of limitations.
After the Supreme Court decided McCarrell, the trial court
reconsidered its decision and repeated its finding that New
Jersey has a substantial interest. Therefore, it applied the
New Jersey statute of limitations in reinstating the claims
against appellants.
Appellants contend the trial court misapplied McCarrell in
finding New Jersey's statute of limitations applicable.
Plaintiff counters that New Jersey has a substantial interest in
regulating the conduct of New Jersey licensed attorneys. In
reply, appellants emphasize the absence of any "causal nexus"
between Grungo's New Jersey attorney license and plaintiff's
claimed damages.
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We agree with appellants that the trial court erred in
concluding the New Jersey statute of limitations applied to this
case. The only pertinent connection to New Jersey – that
Grungo, 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; Robbins enlisted Grungo because he is licensed in
Pennsylvania; and Grungo filed the underlying complaint in
Pennsylvania. The circumstances here are analogous to Heavner
where the only connection to New Jersey was the defendant's
incorporation in New Jersey. See Heavner, 63 N.J. at 134 n.3.
Also, unlike the defendants in McCarrell and Gantes that
manufactured allegedly defective products in New Jersey, here
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 we find New Jersey does not have a
substantial interest in plaintiff's claims against appellants.
Furthermore, as the New Jersey State Bar Association
contends in its amicus brief, applying New Jersey's six-year
statute of limitations here would frustrate the purpose of
11 A-1309-17T2
adopting the substantial-interest test and defy public policy.
In McCarrell, the Court 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. If Robbins had obtained
assistance from an attorney in Pennsylvania, the Pennsylvania
statute of limitations would apply without question. That
Robbins sought assistance from an attorney, who holds a New
Jersey license and works in New Jersey, bears no relation to the
malpractice allegation and therefore should not change the
outcome here. To hold otherwise would subject New Jersey
attorneys also practicing in other states to disparate, unfair
treatment.
We also note defendant Wikstrom filed a brief arguing the
Rules of Professional Conduct establish that New Jersey has a
substantial interest in regulating the conduct of New Jersey
attorneys, whether that conduct occurs within or outside New
Jersey borders. That argument lacks persuasion. While RPC
8.5(a) does provide for disciplinary action for conduct outside
of New Jersey, RPC 8.5(b) clarifies that disciplinary action
12 A-1309-17T2
based on claims filed outside of New Jersey should apply the
rules of the jurisdiction where the claim is filed.
For the reasons stated, we vacate the trial court's May 10,
2017 order, and remand for the court to enter an order
dismissing the claims against appellants as barred by
Pennsylvania's two-year statute of limitations. We do not
retain jurisdiction.
Vacated and remanded.
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