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Legal Updates for Lawyers' Professional Liability

Legal Updates for Lawyers’ Professional Liability - CASE LAW UPDATE

Legal Updates for Lawyers’ Professional Liability – September 2025

September 1, 2025

by Jonathan E. Kanov

Arbitration Clause in Attorney Retainer Agreement Covering Professional Negligence Claims Found to Be Valid and Binding
Hill v. Farah & Farah, No. 2024-11972-CICI (Volusia)

A Florida state circuit court enforced a mandatory arbitration clause in a retainer agreement, thus dismissing a legal malpractice claims against a law firm filed by a former client. The agreement contained a mandatory arbitration clause, which stated that any and all legal disputes arising out of or relating to the agreement will be resolved through a binding arbitration proceeding administered in accordance with the Commercial Arbitration Rules of the American Arbitration Association. Rejecting arguments that the clause failed to comply with Florida Bar Rule 4-1.5(i) and that the firm waived its right to arbitrate by delay, the court held that the agreement was enforceable and compelled arbitration under Florida’s Revised Arbitration Code.

The law firm filed a motion to dismiss and/or to compel arbitration. In opposition, their former client, the plaintiff, argued that the agreement failed to comply with Florida Bar Rule 4-1.5(i), which provides required language notifying the client that he or she should consider consulting with another lawyer about the advisability of entering into an agreement with an arbitration provision concerning fee disputes. That language was included in the agreement, but the law firm added “and other” to the first sentence of the notice, which states in full: “NOTICE: This agreement contains provisions requiring arbitration of fee and other disputes.” 

Further, the plaintiff contended that the notice language in the agreement was ineffective since it was underlined rather than solely in bold type. These arguments were rejected by the court. 

The plaintiff also argued that the law firm waived its right to arbitrate her malpractice claims by failing to invoke the arbitration clause or to reserve the right to do so in the order of withdrawal as counsel, or in the two years before the plaintiff filed her complaint. 

Waiver of the right to arbitrate may be found if the party seeking arbitration first answered the complaint and then engaged in discovery regarding the merits of a claim before moving to compel arbitration. Olson Elec. Co. v. Winter Park Redev. Agency, 987 So. 2d 178, 179 (Fla. 5th DCA 2008); Ibis Lakes HOA, Inc. v. Ibis Isle HOA, Inc., 102 So. 3d 722, 731 (Fla. 4th DCA 2012) (“The active participation in litigation or the propounding of discovery would be circumstances where the right to arbitrate would be deemed waived.”). All doubts regarding waiver should be construed in favor of arbitration. Retail Detail Merch., LLC, v. Murphy, 373 So. 3d 670, 674 (Fla. 5th DCA 2023). 

The trial court also rejected the plaintiff’s position that the law firm waived its right to arbitrate, as the motion to dismiss and/or to compel arbitration was filed as the firm’s initial response to the malpractice complaint. The trial court held that the agreement required the plaintiff to submit her claims for professional negligence to binding arbitration. The case was dismissed pursuant to Fla. Stat. Chapter 682, Revised Florida Arbitration Code. The plaintiff has appealed the ruling to the 5th District Court of Appeal, which remains pending.  


 

Legal Updates for Lawyers’ Professional Liability – September 2025 is prepared by Marshall Dennehey to provide information on recent legal 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. We would be pleased to provide such legal assistance as you require on these and other subjects when called upon. ATTORNEY ADVERTISING pursuant to New York RPC 7.1 Copyright © 2025 Marshall Dennehey, all rights reserved. No part of this publication may be reprinted without the express written permission of our firm. For reprints or inquiries, or if you wish to be removed from this mailing list, contact tamontemuro@mdwcg.com.

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Ohio Supreme Court Holds That a Binding Appraisal Award May Not Be Set Aside Absent Specific Evidence of Manifest Mistake or Fraud

On July 23, 2026, the Ohio Supreme Court issued a rare opinion on the binding effect of an appraisal award in a property insurance policy.  The Court in One Church held: A binding appraisal award will not be set aside unless an error is so palpably wrong that it undermines the intent of the agreement, such as corruption or gross mistake, not a mere error of judgment—To plead a claim of mistake with particularity as required by Civ.R. 9(B), facts alleged in a complaint must constitute the elements of mistake—Allegation that additional, hidden damage was discovered after appraisal award failed to state a claim of mistake that could justify setting aside binding appraisal.  The case arose out of a claim brought by One Church against its insurer, Brotherhood Mutual Insurance Company for roof damage from a storm. Pursuant to the terms of the insurance policy, the parties agreed to submit the matter to appraisal. The two appraisers inspected the building, and both appraisers agreed that the damages were $313,271.98. The insurer paid the agreed appraised amount.  Thereafter, the insured submitted a claim for an additional $206,663.09 in damages. The insured argued that these additional damages were not discovered until after the repairs began, and that they should be permitted to submit an additional claim, even though there had already been a binding appraisal of damages. The insurer refused to pay the additional damages, and the insured sued for breach of contract and bad faith.  In the trial court, the insurer moved to dismiss for failure to state a claim, arguing that the binding appraisal award barred any further claims. The insured took the position that additional hidden damages could not be discovered until after the repairs began, and therefore there was a mutual mistake. The trial court dismissed the case on the insurer’s motion, because there was no “evidence of fraud, misfeasance, or mistake”. The Court of Appeals agreed that appraisal awards are generally binding, but noted that an appraisal award can be set aside for fraud or manifest mistake. The Court of Appeals reversed and remanded the case to the trial court, finding that the insured had pled mistake with sufficient particularity. The insurer appealed to the Ohio Supreme Court. On appeal, the Ohio Supreme Court reversed the Court of Appeals, and reinstated the trial court decision dismissing the case for failure to state a claim upon which relief can be granted. The Supreme Court found that since the insured had already demanded appraisal, and the appraisal award was binding, “something more than error of judgement, such as corruption in the arbitrator, or gross mistake” must be pled with particularity, and proven for the insured to override the appraisal award. Since the complaint did not allege fraud or manifest mistake with sufficient particularity, something more than a mere error of judgment, the complaint was insufficient to state a claim.  The complaint in this case did not challenge the appraisal award. It pled that additional damages were discovered that were not apparent when the appraisal was done. It did not specify “who discovered the damages, how they were discovered, where they were found, why they were previously hidden, or why they rise to the level of a manifest mistake that the “appraiser would have corrected...had it been called to his attention”. Id at ¶22 citing Lakewood Mfg. Co. v. Home Ins. Co. of New York, 422 F.2d 796, 798 (6th Cir. 1970). Cases deciding the effect of appraisal awards are unusual. The Ohio Supreme Court’s decision in One Church relies primarily on 19th century case law for its conclusion. This emphasizes the fact that there is minimal case law deciding the effect of binding appraisal clauses in property insurance policies, and makes this case all the more significant. A lengthy dissent was written by Justice Fisher, who would have affirmed the Court of Appeals decision reversing and remanding the case for a decision on the merits. Of course, the decision works both ways, and an insurer dissatisfied with a binding appraisal award will likewise be without further recourse absent evidence of corruption, fraud, misfeasance, or manifest mistake, which must be pled with particularity. To constitute manifest mistake, “the mistake must be of such character that the arbitrator or appraiser would have corrected it had it been called to his attention.”  Lakewood Mfg. Co. v. Home Ins. Co. of New York, 422 F.2d 796, 798 (6th Cir. 1970).  The majority opinion does not specifically identify what would have been sufficient to plead mistake with particularity, or if the insured could have amended the complaint to overcome the deficiencies. The dissent argues that this was not really a case alleging mistake, but rather a question of contract interpretation. The insured did not challenge the appraisal, but argued that the hidden damage was not part of the appraisal, and the appraisal only covered the known damages.  However, this argument did not carry the day with the majority.  *Thomas F. Glassman, a shareholder in Marshall Dennehey’s Cincinnati office, filed a brief in the Ohio Supreme Court on behalf of the Ohio Association of Civil Trial Attorneys, in support of the insurer’s position.

Result

No-Cause Jury Verdict Secured in Wrongful Death Trial

We successfully obtained a no-cause jury verdict in a 13-day wrongful death trial. The decedent, a 59-year-old man, was admitted to the emergency room on February 15, 2019, with complaints of abdominal pain, decreased appetite, and constipation, despite the use of laxatives. The patient did not complain of any nausea, vomiting, or diarrhea. He had a significant medical history including diabetes, hypertension, prior coronary artery stenting, morbid obesity (with past gastric bypass surgery), longstanding ventral hernia, and back pain. A CT scan revealed multiple hernias and a potential closed-loop bowel obstruction, leading to a surgery consultation. Our client, an emergency general surgeon, interpreted that the patient did not have a closed loop or any significant obstruction and recommended non-surgical management. The patient was approved to have clear liquids, and had a vomiting incident shortly after, but our client was not notified. The patient was returned to NPO status, and after improving overnight, he was returned to “clears” and additional medical and renal consults were ordered. Our client did not receive any communications from the residents/nurses of any changes in the patient’s condition. On February 18, 2019, two rapid responses were called due to increased heart rate and vomiting. It is believed that the vomiting resulted in aspiration, causing sepsis, ultimately leading to the patient’s death. During the trial, the plaintiff’s sole medical expert highlighted imaging on the wrong hernia, which called into question all of his opinions in the case. We made key objections related to the expert testimony, limiting what the allegations were, and preventing new allegations from being made. After approximately two and a half hours of deliberating, the jury returned a no-cause verdict.