.

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

Thought Leadership

PA Middle District Dismisses Claims Against School District and its Superintendent, Principal, Special Education Director, and Classroom Teacher

A five-year-old special education student was enrolled in the Wyoming Valley West School District and attended the State Street Elementary School during the 2024-2025 school year. The student refused to clean up classroom toys at dismissal. When his teacher allegedly grabbed him by the wrist to walk him back to his seat, the student dropped to the floor and began crying. The teacher then allegedly grabbed the student by the ankle and dragged him across the floor. Following an investigation, criminal charges were not advanced by the county DA, and the school permitted the teacher to return to the classroom. The student’s parents sued, lodging thirteen legal counts under both state and federal law, which sought monetary damages from the teacher, the school district, the superintendent, the principal, and the director of special education. The plaintiff’s 42 USC 1983 claims were dismissed as to the school district for failure to allege a policy or custom violation, and the failure to alleged deliberate indifference in the failure-to-train context. As to the superintendent, building principal, and special education director, the Section 1983 claims were also dismissed for failure to allege personal involvement on the part of the individuals. Regarding an equal protection claim asserted against all defendants, the motion to dismiss was also granted for a failure to advance a plausible equal protection claim, holding that “plaintiffs' single-act allegations do not include a factual basis to even infer that the act was motivated by discriminatory animus rather than some other non-discriminatory impulse.” The court further dismissed the plaintiff’s negligence-based claims including negligence against the teacher and district administrators, NIED, and vicarious liability under the Political Subdivision Tort Claims Act (PSTCA). The federal claims under the IDEA, Section 504, and the ADA were also dismissed in various respects. The IDEA claim was dismissed against all defendants with prejudice for failure to exhaust administrative remedies. The Section 504 claims against the individual defendants were also dismissed with prejudice, as districts, not individuals, are the recipients of federal funds under Section 504. However, the Section 504 and ADA claims were dismissed without prejudice as to defendant Wyoming Valley West, and the plaintiff was permitted leave to amend.

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.

blue facade of a hospital sign against blue sky

Result

Defense Verdict in Complex Medical Malpractice Trial

Event

29th Annual FDLA Florida Liability Claims Conference

Jim and Erica will team up to present, "Supporting the Next Generation: Connecting with Associates." This panel-style presentation will explore communication best practices from the perspective of a senior shareholder and newer associate. The discussion will focus on the communication styles of different generations and effective strategies to avoid communication breakdowns. Topics to be discussed include the hiring process, perceptions of defense work among newer lawyers, work-life balance issues after hiring, and mentoring.

Thought Leadership

Marijuana Legalization and Workplace Risk: What New Jersey Employers Need to Know

While the legalization of recreational marijuana usage poses a risk of increased work-related accidents for younger workers, employers can work to curb this increase by investing in education, effective drug policies, and employee assistance programs.

Thought Leadership

U.S. Supreme Court Decides Key Issue Regarding Interstate Freight Broker Liability

Freight brokers are intermediaries.  They connect shippers of goods with trucking companies that transport those goods.  Freight brokers match a load of freight with a trucking company and oversee the logistics of the transportation. For a number of years there has been a division among the Federal Circuits regarding the potential liability of freight brokers when the trucking companies that they retain for interstate loads are involved in accidents.  At the center of this division was the Federal Aviation Administration Authorization Act of 1994 (FAAAA).  Some Federal Circuit Courts have held that state law negligent hiring claims against freight brokers were preempted by the FAAAA .  Other Federal Circuits Courts have held that even if preemption applied, the “safety exception” in the FAAAA saved state law negligent hiring claims from federal preemption.  On May 14, 2026, the U.S. Supreme Court addressed the conflict in Montgomery v. Caribe Transport II, LLC, et al, No24-1238. In that case freight broker C.H. Robinson selected Caribe Transport to haul an interstate load. The commercial truck driver employed by Caribe Transport allegedly caused an accident and the plaintiff, Montgomery, was seriously injured. Montgomery brought an action against the driver, Caribe Transport and C.H. Robinson. The allegation against C.H. Robinson was that it negligently retained Caribe Transport when it knew, or should have known, that it was an unsafe company. The Seventh Circuit Court of Appeals held that Montgomery’s claims against C.H. Robinson were preempted by the FAAAA. The plaintiff appealed to the U.S. Supreme Court.  The U.S. Supreme Court’s decision focused primarily on the safety exception in the FAAAA.  That provision provides that the FAAAA preemption “…shall not restrict the safety regulatory authority of a State with respect to motor vehicles.” C.H. Robinson argued, as freight brokers historically have, that their function was not “with respect to motor vehicles” because they do not own trucks or employ drivers. They are merely intermediaries, connecting entities who need freight moved with entities who can do that job. Therefore, C.H. Robinson argued that preemption applied, not the safety exception. The U.S. Supreme Court did not accept that argument. The Court focused on the meaning of the phrase “with respect to” in the safety exception. The Court held that it means “referring to”, “concerning” or “regarding”. Therefore, writing for a unanimous Court, Justice Barrett concluded that “[r]equiring C.H. Robinson to exercise ordinary care in selecting a carrier therefore “concerns” motor vehicles—most obviously, the trucks that will transport the goods. So, Montgomery’s negligent-hiring claim falls within the FAAAA’s safety exception, which saves it from preemption.” Justice Kavanaugh, in his concurring opinion, noted the effect this ruling may have on freight brokers and their insurers throughout the country: Importantly, the Court's decision today should not be read to mean that brokers will routinely be subject to state tort liability in the wake of truck accidents. As even plaintiff's counsel stressed, brokers should be able to successfully defend against state tort suits if the brokers have acted reasonably and arranged transportation with reputable trucking companies. Tr. of Oral Arg. 27-29. In plaintiff's counsel's words, the brokers "just have to hire carriers that actually have a reasonable policy," and "the broker is not going to have a problem if it's asking the hard questions of the carrier." Id., at 42, 45. In addition, the proximate-cause requirement in typical state tort law should help protect brokers from excessive liability. Id., at 25. That said, the brokers rightly caution against naivete. In the real world, as the brokers forcefully respond, state tort law can be unpredictable, and the costs to brokers of litigation and insurance may be significant even when brokers prevail in lawsuits. Moreover, the costs of litigation and insurance, as well as the costs of brokers' conducting more substantial inquiries into trucking companies, will cascade through the economy and be paid in part by American consumers in the form of higher prices. The concerns expressed by the brokers are legitimate and weighty. The key point here is that freight brokers can no longer claim they are protected from negligent retention claims by the FAAAA (in cases involving interstate transportation). The challenge will be to determine what is considered ”reasonable efforts” used by brokers when retaining transportation companies. 

graphic with Maria Granaudo photo text announces she has joined the firm as a shareholder in the Health Care Dept.

News

Maria R. Granaudo Joins Marshall Dennehey’s Wilmington Office As a Shareholder in the Health Care Department

News

Christina Gonzales To Speak at the Women of Color Roundtable at DRI’s Diversity and Inclusion Seminar

News

Marshall Dennehey Again Earns Recognition in Distinguished Chambers USA

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.