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Kevin M. McGoldrick

Portrait of Kevin M. McGoldrick

Kevin is a shareholder with the firm's Casualty Department where he practices in the areas of premises liability, motor vehicle liability, UM/UIM litigation and medical provider fraud and special investigation as well as Personal Injury Protection (PIP) litigation. He has extensive experience in motor vehicle liability and auto negligence, premises liability litigation, as well as handling PIP litigation for several carriers.  He has successfully handled hundreds of cases ranging from motor vehicle accidents, UM/UIM litigation, PIP litigation and slip and fall liability.  His practice in the area of fraud investigation consists of assessing and analyzing fraud by both medical providers and falsified claims brought by his client's insureds.  He has handled countless auto negligence claims including M.I.S.T. cases involving minor impact soft tissue damage claims.  He has represented a broad range of individual carriers in a wide range of law suits, including some high exposure dealing with commercial carriers. 

In the course of his career, Kevin has taken several matters to trial, including many jury trials for both auto negligence and UM/UIM litigation.  He is also skilled in alternative dispute resolution forums including mediation and arbitration. 

After receiving his Bachelor of Science degree from Pennsylvania State University in Administration of Justice in 1994 where he was Deans List 1993-1994, Kevin completed an internship with the Abington Police Department where he was involved in multiple investigations and worked with detectives in questioning witnesses, obtaining evidence and providing information to prosecutors for criminal trials.  Kevin received his juris doctor from Widener University in Wilmington, Delaware, while attending the extended/night division program and maintaining a full -time position as a paralegal/law clerk for a plaintiff's personal injury firm.  Kevin participated and was a member of the Widener Law rugby team where he played for the four years he attended law school.  He received the Certificate of Achievement Award in Pre-Trial Methods for excellence in legal writing. 

Kevin is frequently asked by clients and industry organizations to lecture on a variety of topics concerning auto negligence law, UM/UIM litigation and PIP litigation.  He has lectured for various organizations including the South Jersey Claims Association, Camden County Bar Association and  New Jersey Special Investigators Association (NJSIA).

Kevin is an active member of the Swedesboro Woolwich Little League (SWLL) and volunteers his time coaching his children in softball, baseball and flag football. 

    • Widener University Delaware Law School (J.D., 2001)
    • The American Institute for Paralegal Studies (Paralegal Certificate, 1996)
    • The Pennsylvania State University (B.S., 1994)
    • New Jersey, 2001
    • U.S. District Court District of New Jersey, 2001
    • Pennsylvania, 2023
    • American Bar Association
    • Camden County Bar Association
    • New Jersey Special Investigators Association (NJSIA)
    • South Jersey Claims Association
    • Widener University School of Law Alumni Association
    • The Pennsylvania State University Alumni Association
    • Metrics Driven SIU UMBI, New Jersey Special Investigators Association (NJSIA), Atlantic City, NJ, July 2015
    • “New Jersey Appellate Division Rejects Contention that Ongoing Storm Rule Does Not Apply to Privately Owned Commercial Property,” Defense Digest, Vol. 29, No. 3, September 2023
    • “The Impact of the DiFiore Case on Defense Medical Exams,” Defense Digest, Vol. 28, No. 12, December 2022
    • "Superior Court or Forthright? That is the Question," New Jersey Law Journal, Automobile Law Supplement, January 27, 2016
    • "A Comparative Analysis Is Not Required Under AICRA Unless Aggravation Of Pre-Existing Injuries Is Pled As A Cause Of Action," Defense Digest, June 2007
    • Plaintiff tripped and fell on raised sidewalk in front of defendant’s private residence. Plaintiff suffered significant injuries including a displaced fracture of the shoulder and humeral head fracture requiring a complete shoulder reverse arthroplasty. Plaintiff’s demand was $750,000.  Defendants assert that it is undisputed that Defendants did NOT perform any work, maintenance or construction to the sidewalk prior to Plaintiff's alleged fall in May 2020, thereby, creating or exacerbating, a condition on the sidewalk which would have contributed to or caused the plaintiff's fall. The general rule is that a residential property owner owes no duty to keep a sidewalk abutting his property in repair. Norris v. Borough of Leonia, 160 N.J. 427, 431 (1999). While the Court has created an exception to the rule of non-liability in the case of an abutting commercial property owner as in Stewart v. 104 Wallace Street, Inc., 87 N.J. 146 (1981), it has consistently declined to extend that liability rule to abutting residential and non-profit owners. Additionally, New Jersey Courts have recognized that "[r]esidential homeowners can safely rely on the fact that they will not be liable unless they create or exacerbate a dangerous sidewalk condition…." Luchejko v. City of Hoboken, 207 N.J. 191, 210 (2011). The judge found that there are no genuine issues of material fact to support a theory of liability on behalf of Defendants and granted our motion for summary judgement. 
    • Secured stipulation of dismissal with prejudice in federal court for personal injuries alleged by plaintiff in an automobile accident. The  plaintiff was alleging to have sustained significant, permanent injuries as a result of a minor impact accident that occurred in a bank parking lot.  Filed a motion to dismiss after the plaintiff failed to cooperate and appear for multiple defense medical exams.  The magistrate agreed and dismissed the plaintiff's complaint with prejudice.
    • Successfully tried to verdict an automobile accident claim where plaintiff was seeking $125,000 originally when Complaint was filed.  Non-binding arbitration awarded plaintiff $45,000.  Minimal offer was extended and rejected by plaintiff.  Jury found for the defense confirming plaintiff did not pierce the verbal threshold pursuant to N.J.S.A. 39:6A-8 et seq.
    • Secured dismissal of two plaintiffs claims for personal injuries as a result of a slip and fall in a parking lot of the insured's business.  Plaintiffs were seeking $100,000 each for their alleged injuries.  Kevin filed a Motion for Summary Judgment arguing the "Snow in Progress Doctrine" and the Superior Court agreed that the insured did not have an obligation or duty to perform snow removal services during a significant snow storm. 
    • Secured dismissal of plaintiff's claim for personal injuries in a slip and fall in front of the insured's business.  Plaintiff suffered significant injuries including a dislocated and fractured wrist and head contusion.  Plaintiff was seeking $250,000 in damages.  Kevin filed a Motion for Summary Judgment arguing plaintiff could not establish any negligence on the insured through the proofs submitted into evidence.  Plaintiff was rendered intoxicated in the hospital records, knew of the existence of the alleged "hazard" beforehand and was the only eye witness to the fall.  The Superior Court agreed that the evidence did not support plaintiff's allegations and there were no issues of fact that a jury could conclude the insured was responsible for plaintiff's injuries. 
    • Secured voluntary dismissal from plaintiff for a PIP suit filed by plaintiff with her bodily injury claims.  Kevin was able to establish plaintiff had no standing to bring the suit against the carrier as the medical providers had taken an Assignment of Benefits from the plaintiff and pursued their claims for reimbursement in the Forthright Forum. 
    • Successfully resolved a claim for personal injuries in a trip and fall suffered at the insured's roller skating rink.  The plaintiff tripped over a coin left on the skating rink floor used in the arcade machines at the insured's business.  Plaintiff suffered a bimalleolar fracture to his ankle requiring surgery including plate and screws.  Plaintiff made a demand for $250,000 and the case resolved for $31,500 which included a health care lien and wage claim.  We were able to establish that the insured had no actual or constructive notice of the coin being on the floor and had adequate security and personnel on the floor at the time of plaintiff's floor. 
    • Obtained a defense verdict in Monmouth County on behalf of a trucking company and their driver in a serious motor vehicle accident.  The jury found no liability on Kevin’s client and thereafter, found plaintiff did not pierce the Verbal Threshold, pursuant to N.J.S.A. 39:6A-8, as to the co-defendant.
    • Obtained Summary Judgment on multiple PIP suits filed against the client/carrier based on the policy limits being exhausted pursuant to N.J.S.A. 39:6A-4.3. 

Results

Homeowner Not Liable for Sidewalk Fall in Front of Residence

We obtained a summary judgment on behalf of our client in a trip and fall matter where the plaintiff tripped and fell on a raised sidewalk in front of the defendant’s private residence. The plaintiff suffered significant injuries, including a displaced fracture of the shoulder and humeral head fracture, requiring a complete shoulder reverse arthroplasty. The plaintiff’s demand was $750,000. The defendants asserted that it is undisputed they did NOT perform any work, maintenance or construction to the sidewalk prior to the plaintiff's alleged fall in May 2020, thereby, creating or exacerbating a condition on the sidewalk which would have contributed to or caused the plaintiff's fall. The general rule is that a residential property owner owes no duty to keep a sidewalk abutting his property in repair. Norris v. Borough of Leonia, 160 N.J. 427, 431 (1999). While the court has created an exception to the rule of non-liability in the case of an abutting commercial property owner, as in Stewart v. 104 Wallace Street, Inc., 87 N.J. 146 (1981), it has consistently declined to extend that liability rule to abutting residential and nonprofit owners. Additionally, New Jersey Courts have recognized that "[r]esidential homeowners can safely rely on the fact that they will not be liable unless they create or exacerbate a dangerous sidewalk condition…." Luchejko v. City of Hoboken, 207 N.J. 191, 210 (2011). The judge found that there were no genuine issues of material fact to support a theory of liability on behalf of the defendants and granted our motion for summary judgment.

Thought Leadership

Defense Digest

New Jersey Appellate Division Rejects Contention that Ongoing Storm Rule Does Not Apply to Privately Owned Commercial Property

September 1, 2023

Key Points: The Appellate Division rejects contention that the “ongoing storm rule” does not apply to privately owned commercial property. Appellate court confirms that the holding in Pareja v. Princeton International Properties was not that the ongoing storm rule should apply only to public property. Appellate Division affirmed that commercial property owners, whether privately owned or publicly owned, “do not have a duty to remove the accumulation of snow and ice until the conclusion of the storm.”  In adopting this rule, the court relieved commercial landowners of the duty to continuously clear snow and ice from their properties throughout the duration of an inclement winter weather event.  In Smith v. Costco Wholesale, 2023 WL4307729 (N.J. Super. App. Div. July 3, 2023), the New Jersey Appellate Division upheld the ruling of the trial court that had granted summary judgment to the defendant, Costco, holding that the plaintiff could not establish the defendants owed her a duty of care under the ongoing storm rule adopted by the Supreme Court in Pareja v. Princeton International Properties, 252 A.3d 184 (N.J. 2021). The court held the plaintiff’s argument that the ongoing storm rule does not apply to privately owned commercial property lacked merit and that no exception to the ongoing storm rule applied. On March 7, 2018, Smith slipped and fell on snow and ice on the sidewalk in front of a Costco in North Plainfield, New Jersey, while exiting the store. On the day of the incident, the Governor of New Jersey had declared a state of emergency for all of the state due to inclement weather from a major snowstorm. Between 1:30 a.m. and 12:00 p.m., approximately one-half inch of snow fell. After 12:00 p.m., as the temperature settled at freezing, snowfall became heavy, accumulating at a rate of one-to-two inches per hour. By 5:30 p.m., the rate of precipitation started to lessen, ceasing entirely at approximately 8:30 p.m. A total of approximately eight inches of snow accumulated throughout the duration of the storm.  During the storm, Smith drove to Costco, parked, and went inside to shop. The storefront was not far from where she parked her vehicle. Her receipt demonstrated she left the store at 2:13 p.m. Carrying only her purse, Smith left the store to get her car, intending to drive it back to the entranceway in order to load the items she bought into her vehicle. She stated she was told by one of the store employees to leave her cart in the exitway of the store. As Smith walked to her vehicle, and before she entered the parking lot, she slipped backwards and fell in the area between the entrance doors and the red bollards, injuring herself. Smith stated there were several inches of snow on the ground when she fell.  Before the trial court, Smith argued that Pareja only applies to public property. The per curiam Appellate Division opinion, issued by Judges Richard J. Geiger and Maritza Berdote Byrne, agreed with Judge Lynott that the question of whether a sidewalk is public or private is immaterial to the Supreme Court’s holding in Pareja.  The Appellate Division stated, “[t]he New Jersey Supreme Court adopted the ongoing storm doctrine in Pareja, holding that ‘commercial landowners do not have a duty to remove the accumulation of snow and ice until the conclusion of the storm.’” In adopting this rule, the court relieved commercial landowners of the duty to continuously clear snow and ice from their properties throughout the duration of an inclement winter weather event.  The court opined that “[p]laintiff seems to derive the support for her argument from a single sentence in Pareja: ‘For the first time, this court considers the adoption of the ongoing storm rule, under which a landowner does not have a duty to remove snow or ice from public walkways until a reasonable time after the cessation of precipitation.’” “It is axiomatic ‘public walkways’ are not synonymous with public property.” Later in the Pareja opinion, the court held that “under the ongoing storm rule, commercial landowners do not have a duty to remove the accumulation of snow and ice until the conclusion of the storm.” “The first statement is merely a recitation of the issue,” the court held. “There is no indication anywhere in the opinion that the court intended to apply the ongoing storm rule only to public property, nor does logic or case law support such a conclusion.” The trial court also found no exception to Pareja was applicable, ruling that no evidence existed to prove that the defendants “exacerbated the risk of harm to the plaintiff,” other than the risk presented by the snowstorm itself, or that “a pre -existing condition, such as uncleared remnants of prior snow events, caused or contributed in any way to the [p]laintiff’s accident.” The Appellate Court noted that it was undisputed by the parties that Smith’s slip and fall occurred during the snowstorm. In fact, the storm did not end until many hours after she fell. Thus, the ongoing storm rule applied, relieving the defendants of any duty of care they may have owed the plaintiff. Smith argued the ongoing storm rule did not apply because her injury occurred on private property owned by the Costco defendants. In Smith’s view, Pareja was meant to apply only to incidents occurring on public property, not private property. The appellate court found this argument without merit, holding that, “[b]ased upon a plain reading of Pareja, there is no indication the Supreme Court’s ruling was limited in this manner.” Smith’s attorney has said that he intends to file for certification with the New Jersey Supreme Court. For now, the law for commercial property owners, whether privately owned or publicly owned, is that “commercial landowners do not have a duty to remove the accumulation of snow and ice until the conclusion of the storm.” In adopting this rule, the court relieved commercial landowners of the duty to continuously clear snow and ice from their properties throughout the duration of an inclement winter weather event. If the Supreme Court grants the plaintiff’s request for certification, then there is a possibility the court may adopt a new standard. Until then, commercial landowners can and will continue to rely upon the “ongoing storm doctrine” as a safe haven to protect them from liability exposure during an inclement weather event.  *Kevin is a shareholder in our Mount Laurel, New Jersey, office. He can be reached at 856.414.6406 or kmmcgoldrick@mdwcg.com.     Defense Digest, Vol. 29, No. 3, September 2023, 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. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2023 Marshall Dennehey. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.

Defense Digest

The Impact of the DiFiore Case on Defense Medical Exams

December 1, 2022

Key Points: New Jersey Appellate Division holds plaintiffs bear the burden of justifying the presence of third parties or recording devices at defense medical exams. New Jersey Appellate Division issues guidelines for third-party recording in defense medical exams. New Jersey Appellate Division updates guidelines for defense medical exams. New Jersey Appellate Division rules that plaintiffs require court permission to record or have a third party observe independent medical exams. New Jersey Rule 4:19 permits an adverse party to require the party whose physical or mental condition is in controversy to submit to a physical or mental examination by an expert. Defense medical exams (DMEs) and the reports generated following the exam are often at the crux of developing a defensive strategy. Aside from the notice and scheduling requirements, the rule offers little in terms of the manner in which the exam is to be conducted. On May 3, 2022, the New Jersey Appellate Division decided the matter of DiFiore v. Pezic, 275 A.3d 58 (N.J. App. Div. May 3, 2022). The court revisited whether injured plaintiffs are allowed to bring a third party or a recording device to a DME. Prior to DiFiore, the Appellate Division had not addressed this issue since deciding B.D. v. Carley, 704 A.2d 979 (N.J. Super. App. Div. 1998), 24 years ago. In DiFiore, the Appellate Division reexamined this issue in three unrelated personal injury cases: DiFiore v. Pezic, Remache-Robalino v. Boulos, and DeLeon v. The Achilles Foot and Ankle Group. In all three cases, the plaintiffs had cognitive limitations, psychological impairments or language barriers, and plaintiffs’ counsel, over defense objections, requested that their clients be accompanied by a third party and/or be permitted to record the DME by audio or visual means. In all three cases, the trial courts issued different rulings on how the DME should proceed. In DiFiore, the trial court precluded the plaintiff from bringing a third party or recording the DME by video, but allowed her to make an audio recording of the DME. In Remache-Robalino, the trial court denied the plaintiff’s request to record the DME by audio means. Lastly, in DeLeon, the trial court denied the plaintiff’s request to have a third party at the DME and issued an order requiring the plaintiff’s DME to proceed unmonitored and unrecorded. All three decisions were appealed and consolidated by the Appellate Division. Upon review, and with participation of the New Jersey Association for Justice, New Jersey Defense Association, and Office of Attorney General, the DiFiore court held: A disagreement over whether to permit third-party observation or recording of a DME shall be evaluated by the trial judge on a case-by-case basis with no absolute prohibitions or entitlements; Despite the contrary language in B.D. v. Carley, it shall be the plaintiff’s burden henceforth to justify to the court that third-party presence or recording, or both, are appropriate in a particular case; Given the advances in technology since 1998, the range of options should include video recording, using a fixed camera that captures the actions and words of both the examiner and the plaintiff; To the extend that examiners hired by the defense are concerned that a third-party observer or a recording might reveal alleged proprietary information about the content and sequence of the exam, the parties shall cooperate to enter into a protective order, so that such information is solely used for the purposes of the case and not otherwise divulged; If the court permits a third-party to attend the DME, it shall impose reasonable conditions to prevent the observer from interacting with the plaintiff or otherwise interfering with the exam; and If a foreign or sign language interpreter is needed for the exam, the examiner shall utilize a neutral interpreter agreed upon by the parties, or, if such agreement is not attained, an interpreter selected by the court. What we can take from DiFiore is that it now overturns the previous parameters set forth in B.D. v. Carley. Since 1998, Carley has long held that plaintiffs were entitled to have the DMEs recorded by an unobtrusive recording device. DiFiore notes what has often been questioned by Carly, that it offers little guidance as to the exams themselves, the manner in which they are to be conducted and what potentially could lead to conflicting trial court interpretation. The question becomes, does DiFiore provide more clarity than what has been in place for 24 years or does it leave more questions to be answered? Although it does not completely prohibit third-party observation or the recording of an examination, it does place the burden upon the plaintiff to justify the condition being sought in the event of a dispute between parties, and, thereafter, the court is to decide whether to permit the observation or recording on a case-by-case basis. By placing the burden on plaintiffs to establish special conditions that warrant the presence of third parties and recording devices, the court’s decision makes clear that the use of such measures is the exception rather than the rule. We expect that the presence of third parties and recording devices at DMEs will be limited to circumstances where the plaintiff is very young or very old, or where he or she has significant cognitive impairments, psychological problems, or language barriers that warrant the use of such measures. DiFiore comes more than two decades after Carley and reflects how litigation has changed since. The New Jersey Supreme Court has granted leave to appeal, and only time will tell if DiFiore becomes the new norm, or if the Supreme Court will fill in the gaps that the case leaves behind.

Firm Highlights

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. 

Thought Leadership

Court Allows Recklessness and Punitive Damages Claims to Proceed After Work‑Zone Crash

In a case where a defendant filed preliminary objections against allegations of recklessness and punitive damages, the Susquehanna County Court of Common Pleas denied these preliminary objections. This case stems from a motor vehicle accident, where the defendants car struck the plaintiffs car after the defendant allegedly fell asleep at the wheel, going at a high rate of speed, through a construction work zone. Defendant first objected to the general allegations throughout the plaintiff’s complaint pertaining to “reckless” conduct contending that there were insufficient factual allegations to support the claim of reckless conduct. Defendant next objected to the plaintiffs claim for punitive damages, as punitive damages may only be assessed against a motorist for falling asleep while driving if there is further evidence to prove driver was aware of their drowsiness and risk of falling asleep. Lastly, defendant objected to plaintiffs complaint, claiming it lacked specificity. The court here found that the plaintiff had included in the complaint specific allegations related to the defendant’s alleged recklessness, including allegations regarding speeding in a work zone, almost striking the flagger, falling asleep at the wheel, and striking the plaintiffs vehicle which was stopped. Additionally, the court noted that falling asleep does not come without warning. The court found that these allegations were sufficient to support an allegation of recklessness at the pleadings stage.

Thought Leadership

New Jersey Appellate Division Affirms Exclusion of Legal Malpractice Expert as Impermissible Net Opinion

Jack Slimm and Jeremy Zacharias obtained a favorable decision on behalf of their client in a case centering on the admissibility of expert testimony in legal malpractice actions. In Martin v. Loury, the New Jersey Appellate Division affirmed the exclusion of a plaintiff's legal malpractice expert, holding that the expert's opinions on causation and damages were too speculative to support the malpractice claim. The legal malpractice action arose from an underlying employment dispute involving claims for damages stemming from the breach of an employment agreement. The plaintiff alleged that defense counsel committed malpractice during a second trial by failing to recall the plaintiff as a rebuttal witness after the employer's CEO testified. According to the plaintiff's expert, additional rebuttal testimony would have bolstered the plaintiff's damages claims and led to a more favorable result. Both the trial court and the Appellate Division rejected that theory. The courts found that the expert could not explain how the proposed rebuttal testimony would have altered the outcome of the underlying case or resulted in any additional recoverable damages. Notably, the trial judge in the underlying employment matter had already rejected the CEO's testimony as not credible and had accepted the damages analysis advanced by the plaintiff. The court had also determined that the amount of damages was not genuinely disputed. As a result, the expert's opinion that additional rebuttal testimony would have produced a better outcome was unsupported by the record and based on speculation rather than evidence. The Appellate Division agreed that neither the plaintiff nor the expert could identify any actual damages attributable to the alleged malpractice or demonstrate the required element of proximate causation. The court further upheld the trial court's application of New Jersey's net opinion doctrine, finding that the expert failed to provide the necessary "why and wherefore" supporting his conclusion that the attorney's conduct caused a compensable loss. Because the opinions rested on unquantified possibilities rather than demonstrable facts, they were inadmissible. Key Takeaway for Legal Malpractice Defendants For attorneys and firms defending legal malpractice claims, Martin v. Loury underscores the importance of closely scrutinizing an opponent's expert report on the critical elements of proximate causation and damages. The decision demonstrates that a malpractice claim cannot survive where an expert merely speculates that different litigation tactics might have produced a better result. Instead, the plaintiff must present admissible expert testimony grounded in the record that explains how the alleged attorney error probably changed the outcome of the underlying matter and resulted in measurable damages.

Thought Leadership

Supreme Court of Pennsylvania Holds That Public Policy Does Not Prevent Insurance Coverage for Sex Trafficking Claims

On July 21, 2026, the Supreme Court of Pennsylvania issued an opinion emphasizing the limited circumstances in which courts may invoke public policy to bar insurance coverage, holding in Samsung Fire & Marine Insurance Co., Ltd. (U.S. Branch) v. RI Settlement Trust that Pennsylvania public policy does not preclude coverage for claims alleging that insureds enabled or profited from human sex trafficking. The decision rejects a line of federal district court decisions predicting otherwise and reinforces that Pennsylvania courts will invoke the public policy doctrine only in the clearest of circumstances. RI Settlement is particularly significant because it arose on certified questions from the United States Court of Appeals for the Third Circuit, giving the Supreme Court the opportunity to resolve an issue on which federal courts had predicted Pennsylvania law differently. RI Settlement arose out of four separate civil complaints in which the underlying plaintiffs alleged that, as minors, they were the victims of human sex trafficking at various hotels in Philadelphia. The plaintiffs claimed that the hotel owners were negligent in failing to stop the sex trafficking from happening at their hotels. After the filing of the lawsuits, the hotel owners sought coverage under their Commercial General Liability policies. The insurers initially defended the hotels under Reservation of Rights letters, though the carriers later filed Declaratory Judgment actions seeking declarations that they did not owe a duty to defend or indemnify. In short, the insurers argued in the alternative that they did not owe any obligation to provide coverage based upon Pennsylvania public policy (because the claims violated the Human Trafficking Law – 18 Pa.C.S. § 3011) and the terms and conditions of the policy. On motions for judgment on the pleadings, the District Court found for the insurers on the basis of public policy: There is no duty to defend or indemnify against actions arising out of an insured's criminal conduct related to the sex trafficking of minors. The Court appreciates that it may make public policy the basis of a judicial decision only in “the clearest of cases.” See Minnesota Fire & Cas. Co. v. Greenfield, 589 A.2d 854, 868 (Pa. 2004) (quoting Hall v. Amica Mut. Ins. Co., 648 A.2d 755, 760 (Pa. 1994)). Yet, the Court strains to imagine a clearer case than the one presented here in which the facts alleged indicate that Policyholders engaged in criminal conduct in violation of Pennsylvania's Human Trafficking Law. The hotel owners appealed the matter to the Third Circuit, which petitioned the Supreme Court of Pennsylvania to grant review of two certified questions of law: (1) whether Pennsylvania law had an “overriding public policy” against sex trafficking, such that an insurer’s duty to defend and/or indemnify is abrogated when an insured is alleged to have enabled or profited from such trafficking; and (2) if yes, is that duty abrogated whenever the insured’s alleged conduct would constitute a violation of the Pennsylvania Human Trafficking statute. Importantly, the certified questions did not ask the Supreme Court to determine whether the policies afforded coverage under their terms. Rather, the court was asked only whether Pennsylvania public policy independently barred coverage. As a result, the court assumed for purposes of answering the certified questions that the insurers otherwise owed a duty to defend and addressed only the public policy issue, leaving all policy-based coverage defenses for further proceedings. Because the court concluded that the answer to the first certified question was “no”, it did not reach the second issue. In reaching its determination that Pennsylvania public policy does not prohibit insurance coverage for sex trafficking claims, the court limited the impact of its decision in Minnesota Fire & Cas. Co. v. Greenfield, 855 A. 2d 854, 855 (Pa. 2004), which the RI Settlement opinion emphasized as having been an “Opinion Announcing Judgment of the Court” – or a plurality opinion. In Greenfield, the insured homeowner was sued by the estate of his houseguest who overdosed from heroin that he sold to her. The matter wound its way to the Supreme Court, which determined that the insurer did not owe a duty to defend or indemnify based upon Pennsylvania public policy, which criminalized the sale and use of heroin as a Schedule I narcotic. In RI Settlement, the court “decline[d] the invitation” to extend the rationale of the three-justice plurality in Greenfield beyond cases involving Schedule I controlled substances. In so holding, the justices in RI Settlement refused to “divine an overriding public policy pronouncement by the General Assembly by virtue of its enactment of the Human Trafficking Law.” The opinion further states that it is not “within the purview of this Court to rank the magnitude of the public policy underlying the various crimes defined in the Crimes Code. It is sufficient for the work of the courts to know that the General Assembly has identified conduct it deems harmful and dangerous to the maintenance of an orderly society and criminalized it.” While the court declined to declare that Pennsylvania public policy prohibits coverage for sex trafficking claims, the opinion in RI Settlement expressly states that insurers are free to include appropriate exclusionary language for such causes of actions in their policies if they desire to do so. It will certainly be interesting to see whether the insurance industry accepts the court’s invitation, or perhaps whether the Pennsylvania legislature steps in to clarify that sex trafficking claims are indeed of the type or magnitude that they should not be covered by insurance. In any event, we will, of course, continue to monitor this and other insurance coverage issues that arise before courts in Pennsylvania, New Jersey and throughout our firm’s geographic footprint and around the country.