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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

July 1, 2024

Lawyers’ Professional Liability RESULTS*

Samuel Cohen (Philadelphia, PA) and Jeremy Zacharias (Mount Laurel, NJ) obtained an Appellate Division decision affirming the trial court’s order dismissing a fraud and fraudulent concealment case filed against their clients, various attorneys and broker dealers. In its decision, the Appellate Division agreed with the trial court’s orders and opinions dismissing the case based on entire controversy, collateral estoppel and litigation privilege grounds. In this comprehensive decision, the Appellate Division held that the plaintiff’s claims were mirrored claims that had been fully litigated in a prior proceeding, where Sam’s and Jeremy’s clients either represented the litigants in the first case or were directly involved in the first case as defendants.   

Alesia Sulock (Philadelphia, PA) successfully defended an attorney in a disciplinary matter arising from the attorney’s alleged failure to properly maintain client funds and records of the attorney’s IOLTA account. By emphasizing the client’s long history of practice without disciplinary history, mitigating factors and remedial measures, Alesia was able to secure dismissal of the disciplinary complaint on behalf of her client.     

Jack Slimm and Jeremy Zacharias (both of Mount Laurel, NJ) successfully defended an appeal from a trial court’s order that granted our motion to dismiss a contribution claim filed by predecessor counsel against successor counsel. We represented successor counsel who tried to fix the error of the predecessor attorney in drafting and documenting a complex real estate transaction. This case reinforces the New Jersey Rule that successor counsel owes no duty to predecessor counsel. 

Jack Slimm (Mount Laurel, NJ) obtained a dismissal of a complex legal malpractice action on the eve of trial. The case arose out of an underlying New Jersey Department of Environmental Protection claim for remediation of contamination of a commercial site owned by the plaintiff. The plaintiff’s remediation and clean-up costs were estimated in the hundreds of thousands of dollars. Jack then successfully defeated the plaintiff’s motion for re-hearing.   

Josh J.T. Byrne (Philadelphia, PA) obtained dismissal on preliminary objections of a legal malpractice claim. The claim arose out of allegations that the attorney improperly created a will for plaintiff’s 90-year-old mother, who allegedly had dementia. The will did not include any legacy for the plaintiff. Josh successfully argued that the plaintiff did not have standing to maintain the action and that the plaintiff was collaterally estopped by prior decisions of the Orphan’s Court on the same issues.     

*Prior Results Do Not Guarantee a Similar Outcome
 

 

Lawyers’ Professional Liability THOUGHT LEADERSHIP

  • June 25—Alesia Sulock (Philadelphia, PA) presented, with the Pennsylvania Bar Association’s Professional Liability Committee, “Avoiding Legal Malpractice” to the Monroe County Bar Association 
  • June 14—Jack Slimm (Mount Laurel, NJ) joined an all-star panel to present the New Jersey State Bar Association’s CLE program, “Legal Malpractice Update.” The seminar touched on ethical issues in legal malpractice, including claims and proofs involving the New Jersey Lawyers Fund for Client Protection, problems arising from accepting electronic payments, fee splitting and referral fees, emotional distress damages, the impact of artificial intelligence on legal malpractice, and appellate malpractice. 
  • June 4—Jack Slimm (Mount Laurel, NJ), Alesia Sulock (Philadelphia, PA) and Jeremy Zacharias (Mount Laurel, NJ) presented a webinar to firm clients titled “The Defense of Appellate Counsel in Legal Malpractice Actions.” The webinar discussed recent and emerging case law in New Jersey, New York and Pennsylvania, as well as effective strategies for defending appellate counsel when facing legal malpractice lawsuits. 
  • May 29—Alesia Sulock (Philadelphia, PA) joined an international panel of attorneys and members of Insurance Law Global to present the webinar “The Assessment of Damages in Professional Liability Claims.” This panel of experts compared and contrasted how damages are calculated in Argentina, Australia, Italy, Spain, the UK and the USA. 
  • May 22—Josh J.T. Byrne and Alesia Sulock (Philadelphia, PA) presented a CLE for Attorney Protective on the Ethical Use of Social Media in the Practice of Law. The presentation attracted over 1,300 attendees. 
  • May 20—Josh J.T. Byrne (Philadelphia, PA) gave a CLE on communicating with unrepresented parties to the Lawyers’ Club of Philadelphia. This was a panel with Judge Idee Fox, Judge Thomas Street and Robert Tintner of Fox Rothschild. 
  • May 15—The Legal Intelligencer published “Your Well-Being Matters: Attorney Mental Health and Professional Competence” by Alesia Sulock and Josh J.T. Byrne (both of Philadelphia, PA). You can read their article here.

     


 

Legal Update for Lawyers’ Professional Liability – July 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.

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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.

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.

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. 

business meeting photo

Result

Summary Judgment Obtained in Insurance Coverage Case

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.

Complete Victory Obtained in a Workers’ Compensation Matter

Result

Complete Victory Obtained in a Workers’ Compensation Matter