Nuveen Mun. Trust v. Withumsmith Brown PC, No. 10-4633 (3d Cir. 2014)Annotate this Case
In connection with a loan, Bayonne provided Nuveen with an audit report by accounting firm, Withum and an opinion letter from Bayonne’s counsel, Lindabury. Later, Bayonne filed a Chapter 11 bankruptcy petition. Nuveen claimed that the audit report and opinion letter concealed problems. The district court dismissed claims of fraud (Withum), negligent misrepresentation, and malpractice (Lindabury) based on Nuveen’s noncompliance with N.J. Stat. 2A:53A-26 (AOM Statute), which requires an affidavit of merit for certain actions against professionals. The Third Circuit remanded for reconsideration of diversity jurisdiction. On remand, the court found that the action was “related to” Bayonne’s bankruptcy, establishing jurisdiction under 28 U.S.C. 1334(b), and again dismissed. The Third Circuit affirmed as to jurisdiction and held that the AOM Statute can be applied by a federal court without conflicting with FRCP 8. In 2012 the court certified to the New Jersey Supreme Court questions relating to the “nature of the injury” and “cause of action” elements of the AOM Statute. The state court declined. The Third Circuit then held that the AOM Statute applies and affirmed the dismissal. Although such statutes typically apply only to malpractice claims rooted in negligence resulting from harm to a known property, New Jersey courts go further.
This opinion or order relates to an opinion or order originally issued on August 16, 2012.