.
Professional Liability

Legal Updates for Lawyers' Professional Liability

Courts in New York Continue to Crack Down on Attorneys’ Faulty Reliance on Generative Artificial Intelligence

July 29, 2026

by Matthew Flanagan

The latest instance occurred in Landberg v. City of New York, 2026 NY Slip Op 03935, 2026 LX 36495 (2d Dept., June 23, 2026), which was a fairly simple trip and fall case. The plaintiff tripped and fell on a loose brick on a sidewalk and brought an action against the City of New York and the abutting landlord, both of which were awarded summary judgment. The Appellate Division, Second Department, affirmed the grant of summary judgment in a relatively short decision issued in early June. 

The court spent far more time later in the month addressing the contents of the brief submitted on behalf of the plaintiff and the conduct of plaintiff’s attorney. In a lengthy decision, the court dissected the plaintiff’s brief, finding that it cited and/or quoted from three cases which did not exist, and then misrepresented the holdings of cases which actually did exist.  One of the fictious quotes purported to be from the court of appeals, but was “directly contrary to what the court of appeals has actually said.” After being confronted with the non-existent cases at the oral argument, the plaintiff’s attorney was offered an opportunity to take a 15-minute recess to come up with an explanation of where the nonexistent cases came from, but he declined the opportunity and said that he had “found them either on Westlaw or Lexis or in a book, a previous case, or another brief.” The court concluded that the attorney was not being candid, and that he should have said (as he later admitted) “that the cases were hallucinated by artificial intelligence.”

The court imposed a monetary sanction of $8,000 on the attorney, but the court did not stop there. Although the handling attorney’s actions were contrary to the policies of the law firm he worked for, the firm was sanctioned, too (for $2,500). The attorneys for the defendants, while not sanctioned, were chastised for not alerting the court to the AI hallucinations in plaintiff’s brief.  The court wrote: “Although the attorneys for the owner and the City, who are officers of the court, submitted respondents’ briefs, neither of them alerted this Court about the fabricated citations, fabricated quotations, misstatements of law, and misrepresentations regarding the holdings of real cases contained in the plaintiff’s brief.”  

Not surprisingly, the sanction exceeded the sanction which the same court had assessed a few weeks earlier against a pro se litigant. In Matter of Julien v. Arthur, 2026 NY Slip Op 03308, 2026 LX 287806  (2d Dep.t, May 27, 2026), the Second Department sanctioned a pro se litigant in the amount of $250 for his reliance on generative AI. The pro se litigant cited only one nonexistent case, but the court ruled that that was sufficient to warrant the imposition of a sanction. The Julien court noted that the pro se litigant (a father in a custody dispute) acknowledged responsibility for his conduct and that it only occurred once, which undoubtedly factored into the lower monetary sanction. The following month, in distinguishing the much lower sanction awarded in Julien, the Landberg court said: “This case is obviously much more egregious in that the person who filed the subject brief is a trained attorney with access to legal research materials, including Westlaw, and who is bound by the Rules of Professional Conduct.”

Attorneys practicing in the Second Department can expect a sanction greater than $250 for even a single AI hallucination or fabricated citation in a brief. The court made it clear in Landberg that attorneys are on notice of the unreliability of generative AI: “stories about the unreliability of GenAI in performing legal work, leading to fictitious citations, misrepresentations of the law, and sanctions, have been widespread in the media for years.”  The court also made it clear that attorneys are expected to alert the court to the AI hallucinations and fabricated cases and quotations in their adversary’s briefs. 

The foregoing cases coincide with the New York State Unified Court System’s adoption of a new rule, Part 161, regulating the use of AI. The new rule provides that attorneys cannot be prohibited from using artificial intelligence tools in preparing papers submitted to a court, but the tools must be used “in accordance with the duties and responsibilities that apply to individuals who submit papers to a court.”

The rule goes on to suggest that individual judges should adopt a Part Rule which provides: “Every attorney or party who uses an artificial intelligence (AI) tool in preparing any paper submitted to this court is expected to understand that tool's capabilities and limitations. Attorneys and parties need to be aware that AI tools, among other risks and limitations, can generate fabricated information or fictitious citations to authority (commonly known as hallucinations)… Accordingly, any attorney or party who uses an artificial intelligence tool, as defined in 22 NYCRR 161.2(a), in preparing any paper, as defined in 22 NYCRR 161.2(b), filed in or submitted to this court or served on another party in a case before this court is required to carefully review the paper and independently ensure that it contains no fabricated or fictitious cases, statutes, or other material.”

Attorneys are on notice of the pitfalls of blind reliance on generative AI and can expect to be sanctioned if they mis-cite or misquote cases in submissions which are prepared with the assistance of AI tools.    

Firm Highlights

graphic announcing our 6 2027 Super Lawyers & Rising Stars

News

Marshall Dennehey Announces 2027 New Jersey Super Lawyers And Rising Stars

Complete Victory Obtained in a Workers’ Compensation Matter

Result

Complete Victory Obtained in a Workers’ Compensation Matter

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.

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

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.

Marshall Dennehey Named a Standout in Litigation by BTI Consulting Group

News

Marshall Dennehey Named a Standout in Litigation by BTI Consulting Group

Defense Victory Obtained in Workers’ Compensation Case

Result

Defense Victory Obtained in Workers’ Compensation Case

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

Commonwealth Court Reaffirms the Constitutionality of Act 111's IRE Provisions

In this case, the claimant sustained a work injury of January 6, 1994, which was acknowledged by Notice of Compensation Payable (NCP). After the claimant’s receipt of 104 weeks of temporary total disability benefits, the employer filed a Request for an Impairment Rating Examination (IRE). The IRE was performed in May 2023 and the IRE physician found that the claimant had a 5% whole person impairment, under the AMA Guides. The employer filed a Petition based on the IRE results, and the Petition was granted by the WCJ. During litigation, the claimant argued that the IRE provisions of Act 111 (Section 306(a.3) of the Act) were not applicable to her injury, since it predated June 24, 1996, the date Act 57 went into effect, and that the IRE provisions were unconstitutional. The Workers’ Compensation Judge (WCJ)) granted the Petition and the Board affirmed. On appeal to the Commonwealth Court, the claimant argued that Act 111 violated the nondelegation doctrine and that its retroactive application to the claimant’s injury was unconstitutional. The court rejected the arguments on the basis that they had already found the same arguments without merit in multiple, prior cases. The court also addressed an argument made by the claimant that Act 111 was procedurally defective under the Pennsylvania Constitution because it was only considered on two days in each House after having undergone amendments and reassignments. The court noted that the Pennsylvania Constitution requires every bill to be considered on three different days in each House. The claimant maintained that, according to the legislative history, the bill did not receive three separate days of consideration from each House when it was assigned a new bill number. The court pointed out, however, that the bill number, H.B. 1840 remained constant and was considered on three occasions by the House. Further, the court concluded that minor amendments to the bill were germane to its original subject, which was to modify the Act’s IRE process, in accordance with Protz II.