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Legal Updates for Lawyers' Professional Liability

Legal Updates for Lawyers’ Professional Liability – RESULTS

Legal Updates for Lawyers’ Professional Liability – January 2026

January 1, 2026

Carol VanderWoude (Philadelphia, PA) and Aaron Moore (Wilmington, DE) secured a Delaware Supreme Court affirmance of the dismissal of a complex legal malpractice claim. The plaintiffs—seven affiliated property development companies and their owners—had been sued by their bank for defaulting on multiple credit lines totaling about $7 million plus attorneys’ fees. Our client defended those suits, which ultimately settled for the full amount owed, plus interest and fees. The plaintiffs later alleged malpractice, claiming our client should have advised an earlier settlement to avoid legal fees, expert costs, additional interest, and lost business opportunities. The trial court dismissed the claims because the plaintiffs’ expert lacked relevant experience and their damages were speculative, and the Supreme Court affirmed.

Aaron Moore (Wilmington, DE) obtained dismissal of an unjust enrichment claim brought by a condominium unit owner against the attorneys who represented her condominium association. The unit owner claimed that the law firm was liable to her for unjust enrichment in connection with legal fees it received from the association for legal services provided in their efforts to collect on past due assessments owed by the unit owner. Pursuant to the association’s governing documents, the charges were passed on to the unit owner. The court agreed that the fees paid to our client by the condominium association were properly earned.

Michael Jacobson (New York, NY) obtained dismissal of a legal malpractice suit that also alleged breach of fiduciary duty, fraudulent misrepresentation, and a Judiciary Law § 487 violation. The plaintiff had retained our clients to pursue an employment discrimination claim, which was compelled to arbitration and ultimately rejected after a four-day hearing. We argued the malpractice complaint lacked allegations of negligence and causation, the additional claims were duplicative, and § 487 does not apply to arbitration. The court agreed and dismissed all claims.

Maria Nudelman and Michael Jacobson (both of New York, NY) were successful in having their motion to dismiss granted in a legal malpractice and breach of fiduciary duty case. Our client represented the plaintiffs in an underlying landlord-tenant proceeding commenced against them by the Department of Housing Preservation and Development of the City of New York (HPD). The plaintiffs allegedly failed to correct over 20 Building Code violations. Our client was retained by the managing agent of the buildings and appeared as counsel and executed a Consent Order on behalf of all the respondents proceeding, including the plaintiffs. The Consent Order gave the plaintiffs and the other respondents until June 30, 2021, to pay $37,500 to HPD, and if they failed to make the payment, a judgment for that amount could be entered against them. The plaintiffs claimed that they never knew about the Consent Order and as a result, a $375,000 judgment was entered against them. We moved to dismiss, arguing that the claim was barred by the statute of limitations and that the breach of fiduciary duty claim was simply duplicative of the malpractice claim and should also be dismissed. The court agreed and dismissed both counts.

Diane Toner and Matthew Flanagan (both of New York, NY) were successful in defending an appeal from the denial of the plaintiff’s motion to set aside the verdict following unanimous jury verdict in favor of our clients. The plaintiff, Hyon S. Yi, as administrator of the Estate of Chin W. Yi, commenced this action against our clients alleging causes of action for legal malpractice, breach of contract, breach of fiduciary duty, and a violation of Judiciary Law § 487. The plaintiff alleged that our clients committed legal malpractice by: (1) failing to assert claims in the underlying action; (2) changing the terms of the retainer agreement to a contingency agreement after discovering that settlement of the underlying action was imminent; (3) failing to assert direct shareholder claims against the corporate defendant in the underlying action; (4) failing to assert fiduciary duty claims against the majority shareholders of the corporate defendant; (5) failing to seek a receivership or attach the assets of Eastern Farms; (6) and failing to demand prejudgment interest in the second underlying action brought in 2015. The jury found in favor of our clients on all counts. Diane Toner was able to secure dismissal of the plaintiff’s appeal by arguing that the order denying the plaintiff’s motion to set aside the jury verdict was an intermediate order from which there was no right of direct appeal once the final judgment was entered, and that plaintiff did not appeal from the final judgment. The Appellate Division agreed and dismissed the appeal.

Jack Slimm (Mount Laurel, NJ) successfully defended an attorney who specializes in the representation of school boards in a grievance before the New Jersey Office of Attorney Ethics (OAE). The grievance was filed by a plaintiff’s attorney, who argued that our client violated the rules of professional conduct in connection with his arguments to the court at the trial level and on appeal. The OAE rejected the grievance, finding that the allegations of racist and misogynistic behavior by defense counsel were unfounded, that the attorney did not disrespect the court either at trial or on appeal, that the attorney did not lie about the defendant’s defenses, and did not make any false statements of fact in response to the plaintiff’s grievance. 

Josh J.T. Byrne (Philadelphia, PA) won a motion to dismiss a complaint with prejudice in the Eastern District of Pennsylvania in a legal malpractice action stemming out of the criminal investigation into Nicole Daedone and her “orgasmic meditation” company OneTaste.

Scott Eberle (Pittsburgh, PA) achieved a dismissal of a complaint alleging abuse of process on preliminary objections in the Court of Common Pleas of Allegheny County. The complaint alleged the defendant attorney abused process by filing a meritless complaint that contained false allegations for the purpose of “extorting” the insurance company and earning a fee. The trial court found that the plaintiff’s claim failed to state a claim upon which relief can be granted, stating that the primary focus of the plaintiff’s averments were not on alleged abuse of process after it was initiated, but on the alleged ill intentions in initiating the process in the first place. The court noted that the plaintiff had not and could not state a claim for wrongful use of civil proceedings because the plaintiff settled the underlying action and, therefore, could not allege a favorable termination. 

Scott Eberle and Gregory Graham (both of Pittsburgh, PA) obtained a damage-limiting ruling on a motion to dismiss in the District Court for the Western District of Pennsylvania. The case involved defamation per se allegations against our client, a local public broadcasting organization, that were claimed to have resulted in over $30 million in business losses. Via motion to dismiss, Scott and Greg were able to successfully argue that the claim had to be limited in time to a narrow window, thus limiting the plaintiffs’ ability to recover the extensive damages they sought.

Gregory Graham (Pittsburgh, PA) achieved a summary judgment dismissal in the Court of Common Pleas of Allegheny County. The case involved claims of legal malpractice arising from divorce proceedings. 

Nicholas Chrysanthem (New York, NY) obtained summary judgment in a legal malpractice case that arose from an underlying real estate deal that fell apart. The plaintiff claimed that our client failed to properly cancel a real estate contract and alleged the loss of a $175,000 security deposit and unspecified loss of opportunity income. The court initially dismissed the duplicative breach of fiduciary cause of action and the negligent infliction of emotional distress cause of action on our pre-answer motion to dismiss. After the conclusion of discovery on the malpractice cause of action, the court granted summary judgment to our client. 

Nick also obtained pre-answer dismissal of a legal malpractice case against our client who was sued for legal malpractice because his associate neglected to oppose a threshold motion in the underlying auto case. The underlying court granted that threshold motion, in part, and denied it, in part. The plaintiff retained a new attorney without firing our client. The new attorney commenced a malpractice action against our client and refused to substitute as attorney of record in the underlying action. We moved to dismiss the case on a number of issues pre-answer, but primarily because the legal malpractice action was premature and the plaintiff could not prove that “but for” the failure to oppose the underlying threshold motion he would have been able to prove that he had a “serious injury” or actual damages. The court granted our motion to dismiss the legal malpractice complaint. 

Dante Rohr (Orlando, FL) recently secured dismissal of the latest in a series of filings brought by a former client against his attorneys alleging malpractice in the handling of his workers’ compensation and potential American with Disabilities Act claims. The first complaint, filed in state court, was stayed pending final disposition of the plaintiff’s claims in arbitration pursuant to the arbitration provision in the parties’ Retainer Agreement. However, rather than bringing the action in arbitration as directed, the plaintiff refiled his complaint in federal court, adding a plethora of federal causes of action. We argued that none of the pled federal causes of action stated a cause of action under Rule 12(b)(6). The court agreed, dismissing all federal causes of action with prejudice. Because the remaining claims arose solely from state law, the court declined to exercise its subject matter jurisdiction over those claims. Back in state court, more than two years had passed since the entry of the order compelling the plaintiff to bring his claims in arbitration. Because the plaintiff failed to do so, the court dismissed the previously stayed action with prejudice.

*Prior Results Do Not Guarantee a Similar Outcome

Legal Updates for Lawyers’ Professional Liability – January 2026 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 © 2026 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 MEDeSatnick@mdwcg.com.
 

Firm Highlights

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.

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.

blue facade of a hospital sign against blue sky

Result

Defense Verdict in Complex Medical Malpractice Trial

Result

Summary Judgment Secured, Preserving $750,000 in Coverage for Insured in Major Trucking Liability Dispute

Ray Freudiger and Michael A. Roberts (both of Cincinnati) successfully obtained summary judgment on behalf of their client in a coverage dispute arising from a May 19, 2022, motor vehicle accident. A permissive driver operated a box truck for an interstate trucking company and caused severe injuries to two tort victims. Prior to the accident, the insured had procured a commercial auto policy for the trucking company with stated limits of $1,000,000. Following the accident, the insurer initiated a declaratory judgment action asserting that only reduced bodily injury limits of $25,000/$50,000 applied and later counterclaimed, alleging it would not have insured the driver had he been properly submitted for approval under the policy. After extensive discovery, briefing, and oral argument, the court rejected the insurer’s attempt to shift responsibility for the $750,000 in coverage it was legally required to provide for permissive drivers under Ohio law, granting summary judgment in favor of the insured and preserving $750,000 in liability exposure.

empty courtroom photo

Result

Summary Judgment Secured for Life Insurance Agent

Portrait of Carolyn Schweizer, with text below: Philadelphia Office Managing Attorney

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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. 

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