When Is an Affidavit of Merit Required for Claims Against Attorneys? A Deep Dive into Lowenstein Sandler, LLP v. Harmony Foundation of New Jersey, Inc.

Introduction: The Real Legal Issue

When a business or law firm sues an opposing attorney for interfering with a client relationship, is it always necessary to file an Affidavit of Merit (AOM) under New Jersey law? This question took center stage in the dispute between Lowenstein Sandler, LLP and Trif & Modugno, LLC (T&M) in a closely-watched case before Judge Lynott in the Complex Business Litigation Program. The court’s detailed opinion clarifies not just the technicalities of the AOM statute, but also how courts determine whether a claim against a licensed professional truly implicates professional standards—regardless of the label put on the cause of action.

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Factual and Procedural Background

Lowenstein Sandler, LLP, a prominent New Jersey law firm, represented Harmony Foundation of New Jersey, Inc. (“Harmony”), a cannabis distributor, in regulatory and litigation matters, including Harmony’s conversion from not-for-profit to for-profit status. Lowenstein alleges it is owed $766,276.13 in unpaid legal fees for its representation.

The dispute escalated when Secaucus Investors, LLC, a lender to Harmony represented by T&M, allegedly orchestrated a takeover of Harmony, secured a court-appointed Receiver, and facilitated a court-sanctioned sale of Harmony’s assets. Lowenstein claims these actions benefited Secaucus at the expense of other creditors, including itself.

Counts Three and Four of Lowenstein’s Amended Complaint specifically target T&M and Secaucus, accusing them of tortiously interfering with Lowenstein’s attorney-client contract with Harmony. The allegations include:

• T&M, for Secaucus, issued a Notice to Harmony to marshal all cash and assets, blocking payments to other creditors (including Lowenstein).
• T&M and Secaucus orchestrated a transfer of Harmony’s assets to Illicit Cannabis New Jersey LLC, allegedly without creating a required reserve for debts like Lowenstein’s fees.
• T&M and Secaucus allegedly misrepresented to the court and regulatory authorities that such a reserve existed.
• The $10 million promissory note from the purchaser was contingent on a dispensary approval in Hoboken, which was denied, rendering the note worthless.

Procedurally, after being granted leave to file an Amended Complaint, Lowenstein did so in June 2025. T&M had filed an Answer before the Amended Complaint was filed, then moved to dismiss Counts Three and Four, arguing Lowenstein failed to serve an AOM as required by statute.

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Legal Issues Before the Court

The court addressed three interrelated legal issues:

1. Does Lowenstein’s claim against T&M require an Affidavit of Merit under N.J.S.A. 2A:53A-26 et seq.?
2. Has the time for serving an AOM expired, considering the procedural posture and timing of pleadings?
3. Does the “common knowledge” exception to the AOM requirement apply to these claims?

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Legal Standards Applied

The Affidavit of Merit Statute: N.J.S.A. 2A:53A-27

This statute requires that in any action for damages for personal injuries, wrongful death, or property damage resulting from alleged malpractice or negligence by a licensed professional, the plaintiff must, within 60 days (or 120 days with leave) after the defendant files an Answer, provide an affidavit from an appropriately licensed person stating that there is a reasonable probability the professional’s conduct fell outside acceptable standards.

The Couri v. Gardner Three-Part Standard

The court relied heavily on the New Jersey Supreme Court’s framework from Couri v. Gardner, 173 N.J. 328 (2002), which directs courts to look beyond labels and consider:

1. Nature of Injury: Is the action for “damages for personal injuries, wrongful death, or property damage”?
2. Nature of Action: Is the action for “malpractice or negligence”?
3. Professional Standard: Do the underlying factual allegations require proof of a deviation from the professional standard of care?

If the claim’s factual basis requires expert testimony about professional standards, an AOM is required—regardless of whether the claim is styled as tort, contract, or otherwise.

The Common Knowledge Exception

An AOM is not required if the professional’s alleged breach is so obvious that a layperson can recognize it without expert input (e.g., missing a filing deadline). However, if the claim implicates complex professional judgment, the exception does not apply.

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The Court’s Analysis and Holding

Does the AOM Requirement Apply?

Judge Lynott meticulously applied the Couri v. Gardner standard to Lowenstein’s claims against T&M. The court found that, although the claims were framed as “tortious interference,” the factual allegations centered on T&M’s conduct as attorneys—specifically, actions taken in their professional capacity representing Secaucus in litigation, arbitration, and before regulators.

The court noted:

“When one examines the Amended Complaint, it is apparent that the action against T&M hinges upon alleged breach of a standard or standards of care by an attorney.”

The court rejected Lowenstein’s argument that the claims were really about fraud or intentional wrongdoing, pointing out that to prove tortious interference, Lowenstein would have to show T&M’s actions deviated from the professional standards owed by attorneys to clients, non-clients, and the court:

“There is simply no basis in law or logic to contend the conduct of T&M on which the Plaintiff relies ... does not implicate a professional standard or standards of care owed by an attorney, in the circumstances presented, to a client, a non-client and/or the court.”

Common Knowledge Exception Not Met

The court also rejected the argument that the “common knowledge” exception applied, noting the case involved “complex commercial relationships and transactions.” Determining whether T&M’s conduct breached professional standards would require expert testimony:

“The assessment in such circumstances as to whether T&M violated a professional standard or standards of care ... is a matter that a jury is not capable of understanding without the guidance of an expert.”

Has the Time to Serve an AOM Expired?

Crucially, the court determined that T&M’s Answer—filed before Lowenstein filed its Amended Complaint—was a legal nullity. The statutory clock to serve an AOM does not begin until a valid Answer to the operative complaint is filed.

“Strict application of the procedures for pleading – including a determination that a putative answer is a nullity when the opposing party has not yet filed the pleading to which such answer responds – is particularly appropriate ... given the consequences of a determination to the contrary.”

Therefore, Lowenstein’s obligation to serve an AOM had not yet matured.

The Holding

• An AOM is required for Lowenstein’s claims against T&M.
• The 60-day (or 120-day) period to serve the AOM has not begun because T&M has not filed a valid Answer to the Amended Complaint.
• Motion to dismiss denied; Lowenstein must serve the AOM within the statutory period after T&M files a valid Answer.

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Practical Implications for New Jersey Businesses

This decision has significant implications for businesses and professionals involved in litigation with (or against) licensed professionals, especially attorneys:

• Substance Over Labels: Courts will look past how a claim is labeled (e.g., “tortious interference” vs. “malpractice”) and focus on whether the facts require proof of deviation from professional standards. If so, the AOM statute applies.
• Procedural Precision Matters: The timing of the AOM requirement is tethered to the filing of a valid Answer to the operative complaint. Premature or improperly filed pleadings do not start the clock.
• Complex Professional Conduct Requires Expert Input: Claims arising from attorneys’ actions in complex transactions or litigation almost always require expert analysis of professional standards—meaning an AOM will be necessary.
• AOM Is a Shield, Not a Sword: The statute is designed to weed out meritless claims early, not to provide defendants with a technicality for dismissal where the plaintiff has not yet had the opportunity to comply.

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Actionable Takeaways for Business Owners and Practitioners

1. Assess Your Claims Carefully: If your business is considering a claim against a licensed professional (attorney, accountant, etc.), analyze whether the factual allegations implicate professional standards of care. If they do, plan to secure an AOM from an appropriate expert.

2. Monitor Procedural Deadlines: The 60-day (or 120-day) deadline to serve an AOM begins only after a valid Answer to the operative complaint is filed. Ensure you understand when this trigger occurs—especially if pleadings are amended or procedural maneuvers are ongoing.

3. Don’t Rely on Labels Alone: Even if you are bringing a claim for tortious interference, fraud, or another tort, courts will examine the conduct at issue to determine if it is “professional negligence” in substance.

4. Be Proactive With Experts: If there is any doubt as to whether an AOM is required, consult with qualified experts early in the litigation process to avoid dismissal risks.

5. For Defendants: Motions to dismiss for failure to serve an AOM will not succeed if the statutory period has not yet started; ensure any procedural argument lines up with the actual filing sequence and operative pleadings.

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Conclusion: Consult Experienced Counsel Early

The Lowenstein Sandler v. Harmony Foundation decision underscores the nuance and importance of the Affidavit of Merit statute in professional liability cases. Whether you are pursuing or defending such claims, a proactive and precise approach is critical. If your business is involved in litigation against a licensed professional or is facing such claims, consult with experienced New Jersey counsel to ensure compliance with procedural and substantive requirements—and to protect your legal rights.

Questions about how the Affidavit of Merit statute may impact your business litigation? Contact our firm today for tailored guidance and strategic representation.