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Legal Updates for Lawyers' Professional Liability

Legal Update for Lawyers’ Professional Liability - RESULTS & THOUGHT LEADERSHIP

Legal Updates for Lawyers’ Professional Liability – April 2023

April 1, 2023

LAWYERS' PROFESSIONAL LIABILITY RESULTS

Jack Slimm (Mount Laurel, NJ) obtained, on pretrial motions, an order of dismissal of a legal malpractice action involving $12 million in liquidated damages. This case arose out of two underlying Law Division actions, two bankruptcy matters, a Federal District Court action, an appeal to the Third Circuit, an underlying foreclosure and note action, and an appeal to the Appellate Division. Jack represented a well-known bankruptcy practitioner in connection with claims made by the plaintiff-borrower against the lending bank, the bank officers and counsel. 

Josh Byrne (Philadelphia, PA) received the following results: 

  • February 14, 2023 – The Superior Court affirmed an order of the trial court sustaining preliminary objections handled by Josh, who successfully argued that the wrongful use of civil proceedings [Dragonetti] claim, which arose out of an underlying wrongful use of civil proceedings claim, was barred as a matter of law by the applicable statute of limitations. 
  • February 7, 2023 – Josh had preliminary objections sustained in a legal malpractice case on the basis that the plaintiff’s breach of contract claim was barred by the gist of the action doctrine and the statute of limitations had expired on any potential negligence claim. 
  • January 30, 2023 – Josh achieved dismissal of a disciplinary complaint. In this matter, our client was the victim of a sophisticated scam which caused the client to send IOLTA funds belonging to another client out of the country. 
  • January 25, 2023 – Josh achieved dismissal of a 99-paragraph disciplinary complaint which alleged lack of communications with clients over the course of a 12-year-long underlying matter. The response to the disciplinary complaint was over 100 single-spaced pages setting forth the details of the underlying matter and included more than 150 exhibits. 

Aaron Moore (Philadelphia, PA) obtained a nonsuit at the beginning of trial in a legal malpractice case. In the underlying matter, our client represented a subcontractor in connection with its efforts to collect payments on a project. The contractor who hired the subcontractor was terminated from the project. The project owner orally promised payment to the subcontractor if it completed the work. The work was completed, and the subcontractor did not get paid. Thereafter, the subcontractor retained our client to prosecute a civil action. Our client sued the owner by its trade name, and the subcontractor was awarded all amounts owed at the underlying trial. The subcontractor stopped paying our client’s legal fees; thus, execution on the judgment was not completed. The subcontractor then sued our client, claiming that its judgment was uncollectible because it was against a trade name. Before the jury came into the courtroom, the court granted Aaron’s motion for nonsuit based on the court’s orders granting our motions in limine seeking to preclude certain evidence and arguments. 
 
Jack Slimm and Jeremy Zacharias (Mount Laurel, NJ) were successful on February 28, 2023, before the New Jersey Appellate Division, which affirmed a decision dismissing a complex legal malpractice action arising out of an underlying first-party coverage action in the U.S. District Court involving hundreds of thousands of dollars in building damage caused by Super Storm Sandy. The plaintiffs filed a complaint against alleging claims for legal malpractice. At the close of discovery, a motion for summary judgment was filed on behalf of the defendants, asserting that an order for dismissal was entered. Upon affirming the trial court’s decision, the Appellate Division, reviewing de novo the grant of summary judgment, held that the plaintiffs had not established proximate cause as a matter of law and that expert testimony was necessary to prove proximate causation and damages. The causal relationship between the defendants’ alleged malpractice and plaintiffs’ asserted loss was not obvious and, therefore, the trier of fact could not resolve the issue as a matter of common knowledge without the assistance of expert testimony. The court held that the expert’s opinion was an impermissible net opinion with no evidential weight since the expert failed to explain the why and wherefore behind the opinion. 
 
*Prior Results Do Not Guarantee a Similar Outcome
 

THOUGHT LEADERSHIP

Kim Berman (Fort Lauderdale, FL) co-presented “Insurer Malpractice Claims Against Defense Counsel: Recognizing, Defending, and Preventing Potential Claims” on January 24, 2023, on behalf of Strafford. This webinar guided insurance defense counsel through the increasingly important topic of insurer claims against defense counsel for legal malpractice committed while defending the insured. The program reviewed common errors, whether a cause of action exists and who may assert it, how liability is established, whether and how work restrictions and counsel guidelines imposed on defense counsel affect liability, how damages are proved, and whether and how the attorney-client privilege or work product protection of the insured affects the case. 
 
Alesia Sulock and Josh Byrne (Philadelphia, PA), authored the article “When Disciplinary Counsel Knocks on Your Door, How Do You Respond?” in the Legal Intelligencer 
 
Josh Byrne (Philadelphia, PA) participated in the presentation “Ethics and Malpractice Avoidance” at the Pennsylvania Bar Association’s Mid-Year Meeting along with Justice Sallie Updyke Mundy and Michael Furlong of CNA. 
 
Josh Byrne (Philadelphia, PA) presented at the Philadelphia Bar Association’s Bench-Bar meeting on “Practicing with Integrity” with Chief Disciplinary Counsel Thomas Farrell, Judge Tiffany Palmer, and Judicial Candidate Kay Yu. 
 
Jeremy Zacharias (Mount Laurel, NJ) and Danielle Robinson (Fort Lauderdale, FL) presented a webinar on negotiation skills to a client’s national team of claims professionals. 
 
Jack Slimm (Mount Laurel, NJ) provided a case law update on recent civil cases that impact the Bench and Bar at the Camden County Bar Association Civil Practice Update. 

Jeremy Zacharias (Mount Laurel, NJ) moderated this panel discussion, which included practitioners and judges. 
 

Legal Update for Lawyers’ Professional Liability – April 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. 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 © 2023 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.

Firm Highlights

Event

CLM 2026 Focus Conference

Allison joins three insurance industry leaders to discuss how cyber coverage disputes, the growing impact of social inflation on bodily injury claim valuation, and the use of artificial intelligence are reshaping the bad faith landscape. The panel will examine emerging sources of extra-contractual exposure, including evolving cyber insurance coverage issues and the challenges of accurately valuing bodily injury claims. Practical approaches to claim evaluation using AI, along with defense strategies designed to help prevent or successfully defend against bad faith litigation, will also be addressed. 

business meeting photo

Result

Summary Judgment Obtained in Insurance Coverage Case

Bret E. Dubbert Joins Marshall Dennehey’s Orlando Office as Special Counsel in the Casualty Department

News

Bret E. Dubbert Joins Marshall Dennehey’s Orlando Office as Special Counsel in the Casualty Department

Thought Leadership

The Tolling Trap: Filing Alone Will Not Toll the Statute Without Good-Faith Service

The Eastern District of Pennsylvania recently reinforced a critical limitation on bad faith claims, holding that a timely filing alone will not preserve a cause of action absent a good-faith effort to serve the original process. The plaintiff had presented a claim for underinsured motorist benefits to his auto insurer. The insurer evaluated the claim and determined that the plaintiff’s accident-related damages did not exceed the bodily injury liability insurance limits of the at-fault driver and denied his claim. Among other claims, the plaintiff sought to present a claim for insurance bad faith under 42 Pa. C.S.A. § 8371, to which a two year statute of limitation applies. He first filed a praecipe for writ of summons before the expiration of the statute of limitation. However, the plaintiff did not attempt to serve the praecipe or writ until after the statute of limitations had expired. Additionally, the service failed as the plaintiff had mailed the original process to an incorrect address. Despite receipt of the Postal Service’s failure to deliver the original process, the plaintiff did not attempt to re-serve the writ. Two months later, the plaintiff filed a complaint and then successfully served that complaint. The insurer sought to dismiss the plaintiff’s bad faith claim as time-barred by the statute of limitations. The district court agreed. Though the plaintiff had filed a praecipe for a writ of summons prior to the expiration of the statute of limitations, the statute is only tolled if there is a good faith effort to serve that original process. In this case, the court determined that the plaintiff had failed to perform a “good faith effort to serve the original process”. Additionally, though the filing and service of a complaint can serve as alternative original process when the lawsuit is commenced by the filing of a praecipe for a writ of summons, the plaintiff filed his complaint after the statute of limitations had expired. The plaintiff’s bad faith claim was therefore determined to be barred by the statute of limitations and dismissed by the court, with prejudice. A key takeaway for the defense is not to assume that the statute of limitations has been successfully tolled by a plaintiff merely because a praecipe for a writ of summons or complaint has been filed prior to the expiration of the statute. A filed complaint or writ is only part of the equation. The defense should carefully review the docket and filings to confirm that the plaintiff also performed the requisite good faith effort to serve that original process. A thorough review of the docket may reveal that the plaintiff failed to make the good-faith service efforts necessary to toll the statute of limitations.

Complete Victory Obtained in a Workers’ Compensation Matter

Result

Complete Victory Obtained in a Workers’ Compensation Matter

Thought Leadership

New Jersey Appellate Division Affirms Recreational Immunity for County Under Landowners' Liability Act

In a recent unpublished decision in Matthew Kuzma, etc. v. Middlesex County Parks Department, et al., the New Jersey Appellate Division affirmed summary judgment in favor of Middlesex County Parks Department, holding that the county was immune from liability under New Jersey's Landowners' Liability Act (LLA), notwithstanding its failure to plead the immunity as an affirmative defense in its answer to the Complaint. The case arose from injuries sustained by fourteen-year-old plaintiff, Matthew Kuzma, while playing basketball at Spring Lake Park in South Plainfield on August 23, 2019. The plaintiff observed a crack in the basketball court before beginning to play but did not consider it dangerous. During the game, his foot became caught in the crack, causing him to fall and suffer a significant ankle injury. The plaintiff alleged that the injury resulted in ongoing physical limitations and deprived him of the opportunity to play collegiate basketball. The plaintiff filed suit alleging that the defendants negligently maintained the basketball court. Although the county did not assert LLA immunity as an affirmative defense in its answers, it later moved for summary judgment on that basis. The plaintiff opposed the motion, arguing that the county had waived the defense by failing to plead it. The county maintained that the plaintiff had received sufficient notice of its intent to rely on the LLA through discovery and therefore suffered no unfair surprise or prejudice. The trial court agreed and granted summary judgment, concluding that the county should be permitted to invoke statutory immunity notwithstanding its failure to formally plead the defense. Relying heavily on the New Jersey Supreme Court's guidance in Arias v. Cnty. of Bergen, holding a county park was subject to the immunity of the LLA, the Appellate Division affirmed, holding that the county's failure to plead LLA immunity did not preclude reliance on the defense under the circumstances presented. The court determined that the plaintiff had received adequate notice of the immunity claim through discovery and that permitting the defense furthered the public-policy objectives embodied in the LLA. In affirming dismissal, the Appellate Division acknowledged the seriousness of the plaintiff's injury and the general societal interest in maintaining parks and recreational facilities in a safe condition. However, the court emphasized that both the legislature and the New Jersey Supreme Court have expressed a clear policy choice to limit liability for public and private landowners who make recreational property available for public use. The decision reinforces the courts' continuing adherence to the Landowners' Liability Act and the principle that recreational lands and facilities should be broadly protected from liability exposure, even in cases involving significant personal injuries.

Marshall Dennehey Named a Standout in Litigation by BTI Consulting Group

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Marshall Dennehey Named a Standout in Litigation by BTI Consulting Group

Thought Leadership

Florida Supreme Court Rules Florida Statute §627.70152 Does not Apply Retroactively

In a decision that resolves years of appellate uncertainty and confirms that insurers and insureds alike can rely on the legal framework in place when a policy is issued, the Supreme Court of Florida last week found that Florida Statute §627.70152, which involves an insured’s requirement to provide an insurer with pre-suit notice before filing a suit, cannot be applied retroactively. In Universal Property & Casualty Insurance Company v. Hughes, the Court was presented with the issue of whether the statutory pre-suit notice requirement applied retroactively and whether it would apply to a breach of contract of an insurance policy that was issued before the statute went into effect. Before the Court was an appeal from a homeowner, Ms. Hughes, who sued her insurance carrier, Universal Property & Casualty Insurance Company (Universal) for breach of contract under an insurance policy that was in effect from April 24, 2019 through April 24, 2020. During the policy period, Ms. Hughes suffered a loss and, on May 29, 2019, made a claim for water damage. The carrier investigated the loss and issued payment; Ms. Hughes disputed the payment, finding the amount insufficient for repairs. On July 1, 2021, Florida Statute §627.70152 went into effect, which required insureds to provide notice of intent to initiate litigation against the carrier prior to filing a lawsuit; if an insured filed the lawsuit without complying with §627.70152, a court must dismiss the case without prejudice. On August 4, 2021, Ms. Hughes filed her lawsuit against Universal for breach of contract. Universal moved to dismiss based on her failure to comply with §627.70152. Ms. Hughes contended the notice requirement could not be applied retroactively. The trial court disagreed and dismissed the lawsuit without prejudice, and Ms. Hughes appealed. During the appeal, the Fourth District Court of Appeal, in Cole v. Universal Property & Casualty, 363 So. 3d 1089 (Fla. 4th DCA 2023), ruled that Florida Statute §627.70152 did apply retroactively to policies issued before the effective date of §627.70152. However, the Sixth District Court agreed with Ms. Hughes and overturned the trial court’s ruling, finding the statute could not retroactively apply to policies issued prior to the statute effective date. Thereafter, the other district courts weighed in, with the Third District Court agreeing with the Fourth District Court, and the First, Second and Fifth District Courts agreeing with the Sixth District Court. In resolving the conflict amongst the district courts, the Supreme Court advised “as a general rule, ‘the statute in effect at the time an insurance contract is executed governs substantive issues arising in connection with that contract.’ Hassen v. State Farm Mut. Auto. Ins. Co., 674 So. 2d 106, 108 (Fla. 1996). The Court applied the two-step test when deciding whether a statute has retroactive application: “First, the Court must ascertain whether the Legislature intended for the statute to apply retroactively. Second, if such an intent is clearly expressed, the Court must determine whether retroactive application would violate any constitutional principles.” Menendez v. Progressive Exp. Ins. Co., 35 So. 3d 873, 877 (Fla. 2010). In analyzing the Legislature’s intent, the Court must determine whether the Legislature has manifested a clear command for retroactivity in the statutory text.  In review of the statutory text, the Court found nothing in the language of the statute to indicate that the phrase “all suits” was serving another purpose of expanding its reach to suits based on policies that both predate and postdate the enactment of the statute. Buis v. Universal Prop. & Cas. Ins. Co., 394 So. 3d 738, 741 (Fla. 2d DCA 2024). Further, the Court noted the statute has an effective date, which has long been considered to be evidence against retroactive application of a statute. The Court concluded that, on its face, no provision of §627.70152 speaks to application of the statute to insurance policies issued before the statute’s effective date and therefore, the Legislature did not clearly command retroactivity of the statute to include insurance policies issued prior to the enactment of the statute. The Court briefly reviewed Universal’s argument that the presuit notice requirement was procedural, not substantive, and therefore should be applied retroactively; however, the Court agreed with the Sixth District Court’s finding that, in its entirety, §627.70152 transformed an insured’s ability to sue an insurance company under a property insurance policy and an insurer’s obligations to respond to and pay insurance claims, thus making the requirement a substantive change. The Court thereby upheld the decision of the Sixth District and disapproved the decision of the Fourth District in Cole.

Defense Victory Obtained in Workers’ Compensation Case

Result

Defense Victory Obtained in Workers’ Compensation Case

Marshall Dennehey Shareholders Recognized as Florida Trend Legal Elite Notable Women Leaders in Law

News

Marshall Dennehey Shareholders Recognized as Florida Trend Legal Elite Notable Women Leaders in Law