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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

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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.

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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.

News

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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.

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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. 

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.

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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.