New Gold Equities Corp. v. Jaffe Spindler Co., 453 N.J. Super. 358 (App. Div. 2018)

Judgment finding trustee’s duties limited to obligations spelled out in bond documents affirmed because they were associated, non-discretionary ministerial functions and trustee had no duty to advise mortgagor of deferred interest provision in bond docs.

The Appellate Division affirmed the trial court, holding that the Comparative Negligence Act, N.J.S.A. §§ 2A:15-5.1 to 2A:15-5.8, applied. Since the mortgagor’s lack of familiarity with the terms of the financing agreement constituted negligence greater than that of the bank, the mortgagor could not recover against the bank. The Appellate Division further held that the bank was not entitled to counsel fees it incurred in defending against claims of its own ordinary negligence.

In reaching its holding, the Appellate Division held that in New Jersey, “professionals may not diminish their liability under the Comparative Negligence Act when the alleged negligence of the client relates to the task for which the professional was hired.” Aden v. Fortsh, 169 N.J. 64, 78 (2001). Therefore, the comparative fault defense will not apply in a lawsuit alleging a professional’s malpractice, at least in those cases in which the defendant argues the plaintiff was at fault in failing to understand or to perform the task for which the professional was hired.

New Gold Equities has various implications that professional malpractice defense attorneys must be aware of in representing clients. The New Jersey Supreme Court premised the professional malpractice exception to the Comparative Negligence Act’s bar to recovery on the heightened responsibilities of professionals in New Jersey in order to prevent the fiduciary relationship between the professional and the client from being undermined.


Case Law Alerts, 1st Quarter, January 2019

Case Law Alerts is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2019 Marshall Dennehey Warner Coleman & Goggin, all rights reserved. This article may not be reprinted without the express written permission of our firm.