.

Legal Updates for Lawyers' Professional Liability

Legal Updates for Lawyers’ Professional Liability - RESULTS & THOUGHT LEADERSHIP*

Presented by the Lawyers’ Professional Liability Practice Group

February 1, 2024

LAWYERS' PROFESSIONAL LIABILITY RESULTS*

Josh J.T. Byrne (Philadelphia, PA)

  • Obtained a verdict for the defense following trial on a wrongful use of civil proceedings (Dragonetti Act) claim in the Court of Common Pleas, Philadelphia County. The action arose out of an underlying FDCPA claim. 
  • Achieved a dismissal of a disciplinary complaint against a family law attorney. The disciplinary complaint arose out of issues relating to the safekeeping of client funds and whether Rule 1.15 funds were properly maintained in an appropriate escrow/IOLTA account. 
  • Achieved a dismissal of a disciplinary complaint against an attorney who served as the guardian of a disabled person. The 60-paragraph complaint included assertions of multiple violations of the Rules of Professional Conduct arising out of alleged failures to pay bills on behalf of the disabled person and provide timely reports on the guardianship required by the court.

Howard Mankoff and Fred Mason (Roseland, NJ) 

  • Obtained a dismissal of a legal malpractice claim where we represented an attorney whose client was a housekeeper for the plaintiff. The housekeeper purchased a house from the plaintiff, who later claimed the parties agreed the seller could live in the house the rest of his life (he was 85) and the agreement was not included in the closing documents. The plaintiff sued the attorneys, the housekeeper and the realtors. We moved, in lieu of an answer, to dismiss the complaint. The court accepted our argument that our client did not owe a duty to the plaintiff, based on case law holding that the circumstances in which an attorney owes a duty to a non-client third party are limited to those in which the attorney knows or should know that the non-client third party is relying on the attorney’s work. The court also accepted our arguments, based on the statute of limitations and the entire controversy doctrine.

Jack Slimm (Mount Laurel, NJ) 

  • With the assistance of Justyn Coddington (Mount Laurel, NJ), successfully handled an extremely complex case involving the value of an ultrasound company in an underlying equitable distribution case. At the close of evidence, the court granted our motion for involuntary dismissal, finding that the plaintiff’s experts had offered net opinions. The court dismissed the claims and took the case away from the jury. 
  • Obtained a defense jury verdict in a complex legal malpractice action arising out of two wrongful termination trials. The trial took place in Burlington County, NJ. This extremely complicated legal malpractice action arose out of two underlying employment trials for wrongful termination claims, as well as an appeal, and involved intellectual property. Jeremy Zacharias (Mount Laurel, NJ) handled a significant amount of the pretrial and key Motions on this case. In addition, Sydney Larsen (Mount Laurel, NJ) handled the evidence exhibits at trial. There were numerous evidence issues with there being two underlying trials. However, we were successful on pretrial hearing in limiting plaintiff’s proofs and in barring significant damages claims asserted by plaintiff’s expert. The jury rejected plaintiff’s claims, and awarded all of our client’s fees, with interest and costs.
  • Obtained an order from the Superior Court in Ocean County, New Jersey, on the eve of trial, granting our motion for summary judgment in a complex legal malpractice action arising out of an underlying equitable distribution arbitration. The case involved $14 million in damages. The court ruled in connection with our argument that the plaintiff’s expert’s opinion was speculative and, therefore, not admissible. Accordingly, the court granted our motion for summary judgment. 
  • Obtained an order from the Superior Court in Burlington County, New Jersey, on the eve of trial granting our motion to dismiss in a multiparty complex legal malpractice action. This suit was filed against a court-appointed administrator of an estate, the sellers of the property, the beneficiaries of the estate, and the estate itself. The case involved two actions in the Chancery Division, two actions in the Law Division, and an appeal arising out of the same, all involving claims for breach of contract, breach of fiduciary duty, negligence and legal malpractice against the administrator. The case was filed because the property was contaminated, and it was alleged that the estate and the administrator knew or should have known about the unlawful dumping but ignored those activities, allowed the property to become damaged, and kept the information about the contamination from the plaintiff’s beneficiaries. However, the court found that the claims against the lawyer/administrator were barred because in the underlying probate action, the court had held that the administrator fulfilled his duties and was discharged from all duties and obligations under New Jersey’s Probate Code. Accordingly, the court dismissed the Law Division action based upon the Entire Controversy Doctrine, res judicata, collateral estoppel and judicial estoppel.

Jack Slimm and Art Wheeler (Mount Laurel, NJ)

  • Won a decision from the Superior Court of New Jersey Appellate Division, which affirmed an order for summary judgment in a complex multi-party legal malpractice action involving financial ventures that led to two legal malpractice actions with economic losses at $11,583,180. The dismissal was affirmed, with the Appellate Division agreeing with the trial judge that the plaintiff’s expert reports were net opinions and inadmissible. Since the plaintiff could not demonstrate his actual damages to the jury, the trial court’s orders were affirmed.

Jack Slimm and Jeremy Zacharias (Mount Laurel, NJ) 

  • Obtained an order of dismissal on a motion to dismiss for failure to state a claim in the Superior Court in Monmouth County, New Jersey, in a complex legal malpractice action. This action arose out of a remand from the New Jersey Supreme Court in the matter of Schwartz v. Menas, et al., 251 N.J. 556 (2022). The court agreed with our argument, as well as the argument of the co-defendant, a national home builder, that all claims (conspiracy and fraud) for alleging stealing the plaintiffs’ development rights were barred under the Entire Controversy Doctrine and the Doctrine of Res Judicata, based upon the ruling of the court in the reported decision of Schwartz v. Menas, et al., 251 N.J. 556 (2022), which we argued before the New Jersey Supreme Court. 
  • Obtained a dismissal, prior to trial, of a complex legal practice action arising out of a multiparty medical malpractice failure-to-diagnose case in Burlington County, New Jersey. In this case, Jack and Jeremy represented one of Philadelphia’s most well-known and highly respected plaintiffs’ medical malpractice firms. Prior to granting dismissal, the trial court found that the plaintiff’s expert’s opinion was net. In addition, the court barred the plaintiff’s malpractice expert from testifying at trial. The court also denied plaintiff’s motion for reconsideration, notwithstanding the fact that the plaintiff submitted a new amended expert report, attempting to cure the deficiencies in the deposition we took of plaintiff’s expert. It is significant that in its decision, the court relied upon the Appellate Division’s decision in Morris Properties, Inc. v. Wheeler, et al., No. A-2653-20, 2023 WL 2249975, at *1 (N.J. Super. Ct. App. Div. Feb. 28, 2023) (approved for publication August 22, 2023), an appeal handled by Jack and Jeremy Zacharias. The court found that the Appellate Division decision was dispositive, and required the court to strike the plaintiff’s expert report and precluded his testimony at trial. The court then dismissed the case with prejudice. 

Carly Edman (Pittsburgh, PA) 

  • Obtained a dismissal of plaintiff’s legal and accounting malpractice claims in the U.S. District Court for the Western District of Pennsylvania. The plaintiff filed suit against a number of defendants as a result of tax liability stemming from a prior unrelated legal settlement. The plaintiff claimed that our attorney client was negligent in providing legal and accounting advice in regard to corrective tax filings following a legal settlement with a state entity. The plaintiff asserted claims of legal malpractice, accounting malpractice, fraud, and a host of constitutional violations. Carly sought dismissal via a number of arguments, including a lack of subject matter jurisdiction. After multiple rounds of amended pleadings and briefing, the court entered an order adopting our jurisdictional argument and dismissed the plaintiff’s latest complaint without prejudice based upon a Rule 8 violation for his failure to plead a proper jurisdictional basis. While the dismissal order was without prejudice, the running of the statute of limitations results in our client obtaining the win. 

*Prior Results Do Not Guarantee a Similar Outcome

 

LAWYERS’ PROFESSIONAL LIABILITY THOUGHT LEADERSHIP

On January 27, 2024 - Josh Byrne (Philadelphia, PA) was part of a panel which presented on avoiding legal malpractice at the Pennsylvania Bar Association’s Mid-Year Meeting. The panel focused on the benefits and risks of generative AI in the practice of law.

January 26, 2024 - Alesia Sulock (Philadelphia, PA) co-presented “The Business and Ethics Basics of Law Firm Management 2024” for the Pennsylvania Bar Institute CLE.

December 1, 2023 - Josh J.T. Byrne (Philadelphia, PA) joined a Pennsylvania Bar Institute panel to record the webinar “Continuity of Legal Services for Solo and Small Firm Attorneys 2023.” 

November 21, 2023 - Michael Turner (Philadelphia, PA) presented “Jury Selection: What You Need to Know!” for the Philadelphia Association of Defense Counsel. Participants learned the voir dos (and don’ts) of the voir dire process.

November 17, 2023 - Alisia Sulock’s and Josh J.T. Byrne’s (Philadelphia, PA) article, “Probable Cause as a Matter of Law in Dragonetti Cases,” was published in the The Legal Intelligencer. You can read their article here.


 

Legal Update for Lawyers’ Professional Liability – February 2024 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 © 2024 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

Complete Victory Obtained in a Workers’ Compensation Matter

Result

Complete Victory Obtained in a Workers’ Compensation Matter

Defense Victory Obtained in Workers’ Compensation Case

Result

Defense Victory Obtained in Workers’ Compensation Case

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.

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. 

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.

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

Marshall Dennehey Named a Standout in Litigation by BTI Consulting Group

News

Marshall Dennehey Named a Standout in Litigation by BTI Consulting Group

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.

business meeting photo

Result

Summary Judgment Obtained in Insurance Coverage 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