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Defense Digest

On the Pulse…Recent Appellate Victories*

Defense Digest, Vol. 32, No. 2, June 2026

June 30, 2026

by Audrey L. Copeland

Shane Haselbarth (Philadelphia) succeeded in obtaining summary judgment in a federal district court and an affirmance on appeal to the Third Circuit in a police shooting case resulting in a fatality. Dispatch relayed news of a 911 call for a stabbing, and two police officers approached the scene. Multiple bystanders informed them that the suspect had a gun, and the officers converged toward him. With the benefit of a body-mounted camera recording, the officers ordered the suspect to drop his gun. He did so, and the officers ordered him to step away from the gun, but the suspect inexplicably reached down and picked up the gun again. The officers held their fire and ordered him again to drop his gun—until the suspect raised his gun and aimed it in the direction of one officer and the suspect’s mother, whom the suspect had brutally stabbed (leading to the 911 call from the suspect’s terrorized sister). Since the suspect aimed his gun at his mother and/or the police officer, the officers used deadly force against him, and only did so when the suspect repeatedly raised his gun as though to shoot it.  The district court held that the police officers’ conduct violated no clearly established right under the Fourth Amendment despite the suspect’s death from gunshot wounds. On appeal, the Third Circuit went further and held that the police officers’ conduct did not violate any right at all under the Fourth Amendment. Their use of deadly force, while tragic, was wholly reasonable given the facts and circumstances which they encountered on the night in question. 

Carol VanderWoude (Philadelphia) succeeded in obtaining reversal of a trial court’s order overruling preliminary objections as to venue. The plaintiff filed suit in the Philadelphia County Court of Common Pleas alleging negligence for injuries sustained in a car accident. The accident occurred in Lebanon County between the plaintiff’s vehicle and a school bus driven by an employee of the defendant transportation company. The corporate defendant provided transportation services to school districts in Lebanon and Lancaster Counties, and had no clients in Philadelphia County. The trial court overruled the preliminary objections to venue, reasoning the act of transporting students into Philadelphia for approximately two-dozen field trips during the pertinent school-year satisfied the quality-quantity venue analysis. The Superior Court agreed with the arguments raised on appeal and held that the field trips simply aided in the corporate defendant’s main purpose of providing transportation services as directed by its clients located outside Philadelphia County and that those field trips were not conducted regularly enough to satisfy the quantity portion of the venue analysis.

Kimberly Berman (Fort Lauderdale) and Jonathan Kanov (Fort Lauderdale) succeeded in obtaining an affirmance by the Fourth District Court of Appeal of a final judgment entered in favor of Marshall Dennehey’s clients, a law firm and managing lawyer. The law firm and lawyer issued an opinion letter on behalf of his clients as part of a commercial loan transaction for $7.5 million. After the client defaulted on the loan, the plaintiffs, sophisticated lenders, sued 20 different named defendants involved in the transaction. They sued the law firm and lawyer for negligent misrepresentation and breach of fiduciary duty for its role in issuing the third-party opinion letter. The trial court granted summary judgment in the law firm and lawyer’s favor, finding in an arm’s length transaction, there was no duty owed to nonclients. The lender appealed, phrasing the issue as a pure legal question of an attorney’s professional responsibility: “When an attorney issues an opinion letter – (i) knowing that the letter is attendant to a transaction in which a non-client party to that transaction will necessarily rely on the letter (as a condition precedent to the transaction); and (ii) invites reliance on the letter without qualification—does that attorney owe any duty of care to the intended non-client recipient?” After oral argument, the Fourth District rejected the lender’s arguments attempting to extend a duty in these circumstances and affirmed the final judgment.

Kimberly Berman (Fort Lauderdale) and Dante Rohr (Orlando) succeeded in obtaining an affirmance by the Second District Court of Appeal of a final judgment on a cross-claim for defense and indemnity in a construction defect matter for Marshall Dennehey’s client, a window and door subcontractor. The plaintiffs were residential homeowners who sued the general contractor for construction defects following the construction of their luxury home. They also sued the window and door subcontractor for negligent misrepresentation in its recommendation to install windows and doors manufactured by a German manufacturer. The general contractor filed a cross claim against the window and door subcontractor and third-party claims against the other subcontractors involved in the construction for defense and indemnification. During litigation, the case was referred to nonbinding arbitration, where the arbitrator found that the general contractor was not negligent, but that it breached the contract and warranties. The arbitrator also found there was no negligent misrepresentation on behalf of the window and door subcontractor. The arbitrator awarded the plaintiffs $3.1 million in damages. The general contractor moved for trial de novo on the cross claim and third-party claims only, accepting the $3.1 million award entered against it. Thereafter, the window and door subcontractor moved for summary judgment on the cross claim, asserting there was no obligation to defend or indemnify based on the express terms of the indemnification clause in the subcontract. The court granted summary judgment in the window and door subcontractor’s favor. After oral argument, the Second District Court of Appeal affirmed the final judgment in the window and door subcontractor’s favor.

Patricia McDonagh (Roseland) succeeded in obtaining an affirmance by the Appellate Division of the Supreme Court of New York, First Department, of an order granting summary judgment to Marshall Dennehey’s client, a building owner. Plaintiffs brought suit against the building owner after allegedly sustaining injuries when ceiling tiles fell onto them. The First Department held that defendant established that it was an out-of-possession landlord with no course of conduct of making repairs after the tenant assumed possession and control of the premises. The court further held that plaintiffs failed to raise a triable issue of fact in opposition and improperly made arguments for the first time on appeal.

Walter Kawalec (Mt. Laurel) succeeded in obtaining an affirmance from the New Jersey Appellate Division of a directed verdict in a medical malpractice action. The plaintiff’s decedent was a patient in our client’s nursing home and suffered from dysphagia, or difficulty swallowing. As a result, he was on a mechanically soft diet along with moderate supervision by the nursing staff. Plaintiff’s nursing expert opined that this level of supervision required the nurse to be in the room or at least the doorway when the decedent ate. The decedent was fed an appropriate meal of eggs for his breakfast, but choked on the meal while the nurse was outside the room, and eventually died as a result. The Appellate Division agreed with our argument that because the plaintiff’s experts only established a breach of the standard of care, and the cause of death, but did not establish proximate causation between the breach and the decedent’s death, a directed verdict was warranted, and the case was properly dismissed.

*Results do not guarantee a similar result.

Firm Highlights

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. 

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.

Thought Leadership

SIU Gets a Boost: NJ Supreme Court Affirms Insurers' Right to Litigate, Not Arbitrate, Fraud Claims

In a significant win for insurers' Special Investigation Units, the New Jersey Supreme Court clarified that statutory insurance fraud and racketeering claims may proceed in court rather than through PIP arbitration. At issue was whether insurance fraud claims brought under New Jersey's Insurance Fraud Prevention Act (IFPA) and the state's Anti-Racketeering Act (NJ RICO) are subject to mandatory arbitration under the Automobile Insurance Cost Reduction Act’s (AICRA) PIP dispute-resolution framework. Allstate had sued a network of medical practices, physicians, and related corporate entities, alleging a scheme to extract more than $1.7 million in PIP benefits through fraudulent and misleading billing. The trial court dismissed Allstate's complaint and compelled arbitration, reading AICRA's arbitration clause — which covers "any dispute regarding the recovery of... benefits" under PIP coverage, N.J.S.A. 39:6A-5.1(a) — as sweeping in fraud and racketeering claims along with routine benefit disputes. The Supreme Court affirmed the Appellate Division's reversal, adopting Judge Gilson's opinion below (480 N.J. Super. 566 (App. Div. 2025)) as its own reasoning. The Court held that IFPA and RICO claims fall outside the scope of AICRA's PIP arbitration mechanism because that "streamlined and specialized" process cannot grant the relief those statutes contemplate — treble damages, injunctive relief, broad discovery, and joinder of third parties — and because arbitrators lack authority to award compensatory or treble damages to an insurer. The Court also rejected the argument that Allstate's own Decision Point Review Plans independently compel arbitration, finding those plan provisions no broader than AICRA's own arbitration clause. Notably, the Court expressly disagreed with the Third Circuit's contrary holding in GEICO v. Mt. Prospect Chiropractic Center, 98 F.4th 463 (3d Cir. 2024), concluding it is not bound by that federal interpretation of New Jersey law. Insurers retain the right to pursue IFPA and RICO claims in the Law Division, with a jury trial. For SIU units and NJ insurance carriers, this decision is a significant win: it forecloses defense clinics' primary procedural tool for shunting fraud investigations into limited-scope PIP arbitration, where treble damages, RICO relief, and meaningful discovery were never realistically available. Carriers building cases against fraudulently structured clinics, straw-owned practices, or coordinated billing networks can now proceed with confidence that a well-pleaded IFPA/RICO complaint stays in the Law Division rather than being diverted to arbitration on a motion to compel. Practically, this strengthens SIU's leverage in settlement negotiations, preserves civil discovery tools (subpoenas, depositions, joinder of related corporate entities) critical to unwinding complex ownership and referral schemes, and resolves the split with the Third Circuit in favor of NJ insurers — at least as a matter of state law. Expect increased reliance on IFPA civil actions, rather than PIP arbitration demands, as SIU's primary enforcement vehicle going forward.

Thought Leadership

New Jersey Expands Family Leave Protections Effective July 17, 2026

On January 17, 2026, Governor Murphy signed into law legislation expanding the New Jersey Family Leave Act (NJFLA). Beginning July 17, 2026, significant amendments to the NJFLA will expand job-protected family leave to smaller businesses and more employees across the state. The new law broadens coverage by lowering the threshold for private employers from 30 employees to 15 employees, meaning many smaller businesses will now be subject to the NJFLA. Employees of state and local government agencies will continue to be covered regardless of the size of the employer. The amendments also make it easier for employees to qualify for leave. Under the revised law, an employee will be eligible after three months of employment and at least 250 hours worked during the preceding 12 months, replacing the previous requirement of 12 months of employment and 1,000 hours worked. Currently, New Jersey's Temporary Disability Insurance (TDI) and Family Leave Insurance (FLI) programs provide eligible employees with wage replacement while they are on leave but do not independently guarantee job protection. The recent amendments to the New Jersey Family Leave Act (NJFLA) expand these protections by extending job-protected leave to additional employees. Under the amended law, employees receiving TDI or FLI benefits may be entitled to return to the same position they held before taking leave, or to an equivalent position with the same seniority, status, pay, and benefits. Although the legislation also states that it does not expand or modify an employee's reinstatement rights under the NJFLA, the amendments appear to provide job protection to eligible employees receiving TDI or FLI benefits without requiring them to separately satisfy the eligibility requirements of the NJFLA or the federal Family and Medical Leave Act (FMLA). As a result, some employees may be entitled to longer periods of job-protected leave than were previously available under existing law. With these amendments, New Jersey continues to strengthen workplace protections by expanding access to job-protected family leave for eligible employees. These changes significantly expand access to job-protected family leave and may require employers to update their leave policies, employee handbooks, and HR practices. Notably, employers who were previously not required to administer NJFLA may need to amend their policies and/or create new protocols to come into compliance with the NJFLA. Failure to do so would prove costly, as the penalties for non-compliance are significant.