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Defense Digest

Message From the Executive Committee

Defense Digest, Vol. 28, No. 1, April 2022

April 1, 2022

by Craig S. Hudson

Over this past year, much has been written and said about what employees of today want from their employer, regardless of the industry. While every so-called expert and pundit has their own perspective, a few consistent themes emerge. Employees want their employer to be invested in their professional and personal development. Employees want constant feedback, affirmation and direction. Employees want to be treated with respect and dignity. Employees want their workplace to have a sense of community and to believe they are a part of a team.

To Marshall Dennehey, the aspirations of today’s employees are nothing new. What today’s employees are purportedly looking for in their workplace environment has always been found at Marshall Dennehey. A staple of our culture has been to treat each and every employee, regardless of their position, with respect and dignity. We have long believed in creating a positive workplace environment that fosters a sense of community and teamwork. We have a tradition of making and keeping our commitment to every employee’s professional development. Our culture is why so many of our professional and non-professional staff spend their entire working life at Marshall Dennehey. It is why we have a number of shareholders who have spent their entire careers at Marshall Dennehey. It is why, when lateral attorneys join us, they lament that they failed to make the jump sooner. It is why many of our administrative directors and managers, who started at an entry level position, now find themselves responsible for numerous employees and key operational functions. 

Our desire is to attract employees who we believe will thrive at Marshall Dennehey. Our process is to involve a number of employees in recruitment and interviewing to bring different perspectives and life experiences to the table. This ensures that we embrace each potential employee’s differences. The paramount reason for doing so is to identify potential employees who will be successful regardless of their background. We look for individuals who have the potential to be long-term employees and who are themselves sincerely looking for such an opportunity. 

Our commitment to the long-term success of our employees is evident immediately after a person is hired and begins working at Marshall Dennehey. Long before “on-boarding” became a catch phrase, we expended a great deal of time, energy and expense in the training of new employees. Every new employee goes through our on-board program. The initial training includes sessions by our administrative departments on our structure, systems and best practices. The training also includes presentations on our history and culture. Additionally, the on-boarding process provides every new employee the opportunity to establish a rapport with other employees at Marshall Dennehey to facilitate teamwork. 

For attorneys, the on-boarding process does not end with their initial training session. Twice a year, we hold a “New Attorney” orientation, where we bring every newly-hired attorney, regardless of their experience, back to Philadelphia for a two-day meeting and dinner. At this two-day session, hosted by Larry Schempp, our Director of Professional Development and Training, recently hired attorneys meet the members of the Executive Committee, the practice group directors, our CFO, COO and other administrative directors. There are workshops and training sessions that are incorporated to enhance their professional development, as well as sessions dedicated to explaining Marshall Dennehey’s structure, history, and culture. 

For our associates in Philadelphia, Larry Schempp hosts frequent in-house “Lunch and Learn” CLEs that not only provide training and professional development, but they also create an opportunity for the associates, regardless of their practice group, to get to know one another and to establish relationships that serve them well during their careers. For the associates in our offices outside of Philadelphia, we hold similar training sessions. In addition, we hold annual two-day conferences that bring associates from several of our offices together. The program, designed by Larry, includes presentations from shareholders, administrative directors, and at least one member of the Executive Committee, all geared to enhance their professional development and success at Marshall Dennehey. 

Every associate is assigned to one of our four Practice Departments, and they are then assigned to work in smaller practice groups within their department. Every new associate is assigned a supervising attorney. Assigning a new associate to work with a limited number of attorneys allows each associate the opportunity to specialize in a particular area and to receive one-on-one training from a more seasoned lawyer. Supervising attorneys are charged with finding opportunities for the associates to interact with claims professionals, clients, opposing counsel, judges, and, when appropriate, to handle depositions and arguments on motions. We want our associates out front, and working with senior attorneys—not confined to working behind the scenes. We believe this is how you effectively train associates. In granting these opportunities, the associate becomes part of the team, and their hard work and accomplishments are recognized. Supervising attorneys and other senior lawyers are encouraged to provide constant feedback and mentoring to the associates in their group. 

Relatedly, every associate has formal mid-year and end-of-year review meetings with their supervising attorney. This lets the associate know what they are doing right and identifies areas that need improvement. During their review, the associate is encouraged to identify their accomplishments, raise any concerns they may have and specify how the firm can assist them in their professional development.

Mentoring of associates at Marshall Dennehey has always played a key role in the development and retention of lawyers. I know that every shareholder at Marshall Dennehey recognizes that they had mentors who were instrumental in their success. Consequently, our more experienced attorneys embrace being a mentor themselves. While we have always encouraged and stressed the importance of mentorship to the success and retention of associates, our Executive Advisory Committee and our Diversity, Equity and Inclusion Committee are both actively engaged in working with our Executive Committee to identify opportunities to further enhance the mentoring process. 

Perhaps nothing demonstrates our desire to create a workplace environment that is collaborative and provides opportunities for success better than having a compensation system for attorneys that is not origination-based. This has always been the foundation of our compensation system. Every attorney’s year-over-year compensation is based on their overall contribution to the firm, not just the hours they have billed or the work they have generated. In determining each attorney’s compensation, a number of factors are considered, including how an attorney treats staff members and other attorneys, and whether they are a team player, willing to assist others. Our system encourages our associates to help one another. Because our compensation system is not origination-based, our lawyers are more apt and, in fact, are encouraged to share opportunities with each other. The lack of an origination-based compensation system is also why our senior attorneys are so receptive to having associates communicate and work directly with clients and claims professionals. A non-origination-based compensation system also serves our desire to become a more diverse and inclusive workforce. 

When I interview associates from other firms, I am surprised to hear that at some firms, associates are not permitted to communicate directly with the client or claims professional. Apparently, this grows out of some concern that the associate may establish a relationship with the client or claims professional and someday take the client away from the partner. Such a concern does not exist at Marshall Dennehey. We want our associates to have direct communications with claims professionals and clients. In doing so, we make associates part of the team and invest them in serving our clients’ best interests. 

Another part of our firm structure and culture that creates a sense of being part of a team is that every shareholder owns one share of stock. We don’t have equity and non-equity shareholders. And we do elevate associates to shareholder. In fact, we do it every year. Just this past year, we welcomed 17 new shareholders. Many of them have spent their entire legal careers at Marshall Dennehey. These 17 newly-elected shareholders have demonstrated that they possess the talent, drive, and dedication to be successful attorneys and, importantly, that they have the qualities that enhance our firm’s culture. 

Perhaps there is no better example of Marshall Dennehey’s sense of commitment to its professional and non-professional staff than the fact that, back in the early stages of the pandemic, when we went into a “lockdown” of unknown duration, we decided that we would not lay off any employees or cut compensation. This was done because we at Marshall Dennehey are a community that stands together. 

As a community, we emphasize that we talk to each other face-to-face and not through a computer screen or during a scheduled Zoom call. We need to confront issues together and share our insights and experiences. None of this happens if we are working from home. This is why we adopted a hybrid return-to-the-office policy that requires professional and non-professional staff to work a specified minimum number of days in the office. A majority of our professional and non-professional staff have elected to return to their pre-pandemic routine of working in the office every day. This is a testament to our positive and fulfilling working environment.

Marshall Dennehey’s desire to create a positive and enriching workplace environment is nothing new. We described our culture and our continued aspirations for that culture on our website well over a decade ago: 

•    It’s a culture that treats employees fairly and respectfully, be they shareholders, associates, administrative assistants, receptionists or file clerks. 
•    It’s a culture that recognizes and promotes diversity among its members. 
•    It's a culture in which lawyers like and trust one another and like and trust their leadership.
•    It's a culture that hires employees with the hope and expectation they will finish their careers at the firm. 
•    It's a culture that encourages and rewards loyalty, humility and teamwork. 

This statement of Marshall Dennehey’s culture remains just as accurate and important today as it did many years ago. It is a culture we are dedicated to preserving. 
 

Defense Digest, Vol. 28, No. 1, April 2022 is prepared by Marshall Dennehey Warner Coleman & Goggin 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. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2022 Marshall Dennehey Warner Coleman & Goggin. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.

Firm Highlights

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.

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.

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.