.

Estelle Kokales McGrath

Supervisor, Professional Liability - Western Pennsylvania

Chair, Real Estate E&O Liability Practice Group

Portrait of Estelle Kokales McGrath

Estelle is a Shareholder in the firm’s Professional Liability Department and serves as Supervisor of the Professional Liability Practice Group in Western Pennsylvania, where she oversees the operations and strategic direction of the Professional Liability attorneys in the firm’s Pittsburgh, Erie, Cincinnati, and Cleveland offices.  Her practice focuses on various miscellaneous professional liability matters, including errors and omissions, directors and officers liability and management liability.

Insurance Agents & Brokers Liability.  A significant portion of Estelle’s practice is dedicated to defending errors and omissions claims against insurance agents and brokers.  She represents agents and brokers of all sizes in both pre-suit matters and litigation and is skilled at managing the complex relationships among agents, insureds, and insurance carriers.

Real Estate E&O Liability.  As Chair of the firm’s Real Estate Errors and Omissions Liability Practice Group, Estelle represents real estate agents and brokers, appraisers, home inspectors, property management companies, homeowner associations, boards, and individual board members. Her work frequently involves detailed analysis of contracts, association governing documents, and the Uniform Planned Community Act.

Public Entity and Civil Rights.  Estelle also maintains a robust practice in public entity and civil rights defense.  She represents municipalities, school districts, universities, and other public entities, as well as police chiefs, police officers, constables, humane officers, volunteers, security personnel, and educators – including teachers, professors, and coaches– in a wide range of professional liability and civil rights matters.

Employment Law.  In the employment law arena, Estelle counsels employers pre-suit and defends public entities and private companies in claims alleging discrimination and retaliation, in addition to whistleblower claims and allegations of sexual assault.  She frequently appears before the EEOC and PHRC and continues representation through litigation in state and federal courts. She also previously served as a pro bono mediator for the Equal Employment Opportunity Commission.

Estelle also recently served a two-year term on the firm’s Executive Committee Advisory Council, a select group of firm leaders dedicated to strengthening communication between the Executive Committee and associates, special counsel, and junior shareholders.

    • Widener University Delaware Law School (J.D., 2001)
    • Juniata College (B.A., 1998)
    • Pennsylvania, 2001
    • West Virginia, 2011
    • U.S. District Court Southern District of West Virginia, 2011
    • U.S. District Court Western District of Pennsylvania, 2011
    • U.S. District Court Northern District of West Virginia, 2017
    • Pennsylvania Super Lawyer Rising Star (2008, 2012-2016)
    • Allegheny County Bar Association
    • Council on Litigation Management
    • FETA 2013-present
    • Pennsylvania Bar Association
    • Professional Liability Underwriting Society (PLUS) 2013-present
    • West Virginia Bar Association
    • Navigating Real Estate Claims from New York to New Jersey and Pennsylvania, Client Seminar, May 2026.
    • Anti-Harassment, Anti-Discrimination and Anti-Bullying /Workplace Conduct, Client Seminar, August 2025
    • Prohibition Against Discrimination and Harassment, Client Seminars, June 2025
    • Insurance Agent and Broker Webinar, Philadelphia Insurance Company, April 1, 2025
    • Risk Management for Insurance Agents & Brokers, Pittsburgh I-Day, October 8, 2024
    • How to Avoid Mistakes with Mismanagement of Life & Health Claims, Joint Webinar with National Association of Professional Agents, May 2023
    • Pandemic Coverage Litigation Update / Insurance Broker Best Practices, Client Webinar, September 2022
    • The Aftermath of the Pandemic For Carriers and Agents, Client Webinar, July 2021
    • Civil Litigation Updates in COVID-19 Litigation – Where Do We Stand One Year Later? Marshall Dennehey Webinar, May 2021
    • Supervisor Training on Discrimination, Client Seminar, June 2021
    • Impact of COVID-19 on Insurance Agents, Client Webinar, May 2021
    • Pandemic Coverage Litigation Update: Agent E & O Wars to Come, Client Webinar, March 2021
    • Pregnancy Discrimination, Client Seminar, March 2020
    • Promoting Diversity & Inclusion, Client Seminar, November 2019
    • Police:  Handling Critical Incidents, Client Seminar, May 2018
    • "Lessons From Accountant's Age Discrimination Suit," Pennsylvania CPA Journal, Spring 2024
    • "EEOC Mediation: Five Things to Consider Before Participating,"The Legal Intelligencer, Employment Law Supplement, October 2023
    • "Top 10 Ways an Insurance Broker Can Avoid Liability," National Association of Professional Agents, March 1, 2023
    • "Top Ten Ways an Insurance Broker Can Avoid Liability,"Legal Update for Insurance Agents & Brokers, December 21, 2022
    • “HOA Living. It Is Not For Everyone,” Defense Digest, June 2021, Vol. 27, No. 3
    • "Ten Ways An Employer Can Reduce Their Chances of Being Sued for Discrimination,"PLUS Blog, May 10, 2021
    • “HOA Living. It Is Not For Everyone.,” Defense Digest, March 2021, Vol. 27, No. 2
    • "House Bill No. 88 to be Signed by Governor Rendell," What's Hot in Workers' Comp, Volume 7, No. 12, December 2003
    • "Supreme Court Reverses Caso Decision," What's Hot in Workers' Comp, Volume 7, No. 12, December 2003
    • "Course of Employment Argument Saves Employer," Defense Digest, Volume 9, No. 2, June 2003
    • "Board's Decision Reversed Where Claimant Failed to Present Evidence," Lawyers Journal, The Journal of the Allegheny County Bar Association, June 27, 2003
    • "Borough of Lewistown v. Pennsylvania Labor Relations Board: The Supreme Court of Pennsylvania Holds Arbitration Award Final and Binding When Participating Joint Employer Failed to Appeal the Award," 9 WIDENER J. PUB. L 615 (2001).
    • Voluntary Dismissal of Insurance Agency and Agent, August 19, 2026. A client of the agency (plaintiff) filed a complaint in the Court of Common Pleas of Fayette County, Pennsylvania alleging that the agent and agency failed to properly insure his commercial property. After a storm caused damage to the property, the insurance company denied coverage for one of the structures because it was not included under the insurance policy. The plaintiff alleged that it told the agent about the structure and requested that it be included on the policy.  The plaintiff set forth various claims including negligence. During the corporate representative deposition, the plaintiff reluctantly admitted that the allegations in the complaint were false.  After providing the plaintiff with a motion for sanctions, it voluntarily dismissed the complaint with prejudice.
    • Secured Favorable Decision for Real Estate Agent from Pennsylvania Association of Realtors After Ethics Hearing, August 13, 2026. The prospective buyers’ real estate agent filed an ethics complaint against the listing real estate agent alleging a violation of Article 10 of the Ethics Code.  Article 10-5 references duties to the public and prohibits REALTORS® from denying equal professional services to any person based on race.  REALTORS® are prohibited from planning or agreeing to discriminate against a person based on race. After submitting a substantive response and producing evidence, a hearing was held before a Hearing Panel, which included an opening statement, presentation of witnesses along with cross-examination of witnesses presented by the buyers’ agent and a closing statement. After consideration of all the evidence, the hearing panel found that there was no violation of the Ethics Code and dismissed the Complaint.
    • Motion to Dismiss Granted with Prejudice for Borough and its Employees, March 26, 2026. An owner of a sexually oriented business, who did not own property in the Borough, but periodically booked events in the Borough, was prohibited by a permanent injunction from performing at a particular restaurant due to a zoning ordinance violation. Plaintiff then brought a Section 1983 action alleging that defendants violated his rights under the First Amendment, Fourteenth Amendment and Equal Protection Clause.  After filing a motion to dismiss arguing that the plaintiff lacked standing, the Court agreed and explained that plaintiff had no legally recognized property right in the Borough.  The Court further explained that the state proceedings were between the Borough and the restaurant – against whom the injunctions were directed – not plaintiff.  The lack of standing was fatal to all of his claims and his case was dismissed with prejudice.
    • Secured Voluntary Dismissal of Suit Against Domestic Violence Entity and its Employees, February 20, 2026. An individual, who had never received services and who had never been an employee, sued a domestic violence entity along with several of its employees alleging various claims including negligence, emotional distress, defamation, civil conspiracy, and retaliation.  After filing preliminary objections attacking the entire complaint as legally insufficient and arguing that the court should view the complaint as potentially violative of a protection from abuse order (which was available on the public docket), the plaintiff withdrew the complaint. 
    • Summary Judgment For Child Care Center In Employment Case, November 19, 2025. We obtained summary judgment on behalf of a child care center in an employment discrimination action brought by two former employees. Plaintiffs alleged multiple claims arising from their termination, including age and race discrimination and unlawful interference with leave, in violation of the Age Discrimination in Employment Act (ADEA), the Pennsylvania Human Relations Act (PHRA), Title VII, Section 1981, and the Family and Medical Leave Act (FMLA).  The Court agreed that Plaintiffs failed to establish a prima facie case of age discrimination, as they could not show they were replaced by sufficiently younger employees to support an inference of discriminatory animus.  Plaintiffs likewise failed to meet their burden on their race discrimination claims, as they did not demonstrate that the employer retained similarly situated employees who were not within the protected class.  Finally, the Court rejected Plaintiff’s FMLA interference claim, finding that the employee voluntarily ended her leave and that the employer would have continued to honor her FMLA rights had she not done so.  Accordingly, the Court held that Plaintiffs failed to present evidence to support their prima facie claims and granted summary judgment in favor of the employer.  
    • Preliminary Objections Sustained in Employment Suit for Public Entity, October 5, 2023. Obtained dismissal of employment case for public entity.  Plaintiff alleged a whistleblower claim and multiple wrongful discharge claims after being terminated.  The Judge sustained the employer’s preliminary objections, as the Court agreed that plaintiff failed to set forth any legally viable claims against her supervisor or prior employer.
    • Dismissal of Employment Discrimination Charge Before the Pennsylvania Human Relations Commission, August 24, 2023. A terminated employee filed a Charge of Discrimination with the Pennsylvania Human Relations Commission against her non-profit employer alleging age, sex and disability discrimination.  We were able to prove through the investigation process that there was no discrimination.  The Charge was accordingly dismissed.
    • Dismissal of Employment Discrimination Charge Before Pittsburgh Commission on Human Relations, August 14, 2023. A terminated employee filed a charge of discrimination with the Pittsburgh Commission on Human Relations against his non-profit employer alleging age and disability discrimination.  We were able to prove through the investigation process that there was no age or disability discrimination.  The Charge was accordingly dismissed.
    • Secured Voluntary Dismissal of Employment Suit for Public Entity, May 24, 2023. A terminated employee filed suit in the United States District Court for The Western District alleging violation of his First Amendment Rights as a result of retaliation based on political opposition and protected speech.  The employee also alleged a violation of the Equal Protection clause of the Fourteenth Amendment.  After filing a Motion for Sanctions, the employee voluntarily dismissed the entire federal lawsuit. 
    • Secured Voluntary Dismissal of Homeowners Association in Unjust Enrichment Suit, January 13, 2023. A contractor sued a homeowner's association for unjust enrichment because the builder failed to pay it for its services.  After discussions with counsel, the contractor agreed to voluntarily withdraw said suit against the homeowner's association.
    • Motion to Dismiss Granted in Employment Suit for Public Entity, December 19, 2022. Secured dismissal of First Amendment count in the United States District Court for The Western District on behalf of public entity alleged to have retaliated against plaintiff for exercising her First Amendment rights to freedom of speech and to petition the government for redress of grievances. The public entity employer was entitled to dismissal of the First Amendment Count because plaintiff’s complaints were only intended to protect her interests, not that of the public.  The court declined to exercise supplemental jurisdiction over the remaining state law claims.
    • Summary Judgment Granted for Vocational School, May 10, 2021. Obtained summary judgment in state court on behalf of a vocational school alleged to have violated the plaintiff’s procedural due process rights to continued enrollment.  The plaintiff alleged sexual assault by an instructor and asserted that she was dismissed from the school after reporting the alleged assault.  The school was entitled to judgment as a matter of law as the plaintiff was unable to prove that she had a recognized property right in continued enrollment in a commercial driver’s license program.
    • Complaint Dismissed Against Homeowners' Association and Property Management Company, January 28, 2020. A homeowner, Plaintiff, filed suit in Butler County Court of Common Pleas.  Plaintiff sued the Homeowners' Association, the Property Management Company, the Property Managers and individual board members alleging breach of contract, breach of fiduciary duty, gross negligence, intentional misrepresentation and negligent misrepresentation. After arguing preliminary objections to the 490-paragraph complaint, the Judge sustained the objections and dismissed the entire lawsuit with prejudice.  The Judge also granted the Defendants' Motion for Sanctions against Plaintiff for failing to voluntarily dismiss the individual defendants from the suit.
    • Motion to Dismiss Granted for Housing Authority Alleged to Have Violated Civil Rights of Tenant and Guest, January 13, 2020. Plaintiffs filed a lawsuit in the United States District Court for the Southern District of West Virginia alleging that the housing authority and their employee violated state and federal laws.  After filing a motion to dismiss all claims against the housing authority and their employee, the Judge granted the motion in its entirety dismissing three counts alleging violations of federal laws and four counts alleging violations of state laws.
    • Defeated Class Action Certification Against Property Management Company, November 20, 2019. Eight homeowners filed a class-action complaint in Washington County Court of Common Pleas averring claims of conversion and conspiracy against a property manager of their homeowners' association. The homeowners sought to certify a class-action lawsuit for all of the unit owners in the planned community.  They accused the property manager of wrongfully converting unit owner association fees and conspiring to delay the "turn over" of their homeowners' association. After a lengthy and contentious discovery process, the Judge denied the class certification against the property management company. 
    • Dismissal of Employee's Claims of Employee Status, August 2018. Claimant filed a claim petition alleging he was an employee of a newspaper. The case was bifurcated to determine whether the claimant was an employee versus an independent contractor. The Judge dismissed the claim petition finding that claimant was an independent contractor. The Judge’s decision was upheld by the Workers’ Compensation Appeal Board and the Commonwealth Court. 
    • Voluntary Dismissal of Real Estate Agent from Lawsuit, November 16, 2017. A buyer sued multiple defendants, in Westmoreland County Court of Common Pleas, including the seller's real estate agent alleging claims of misrepresentation and unfair trade practices in Pennsylvania state court.  During the discovery process, counsel was able to prove that the real estate agent was not liable. Thus, Plaintiff voluntarily agreed to discontinue the lawsuit as to the real estate agent.   
    • On Trial Team: Secured Defense Verdict for Police Officer and Hung Jury Verdict for Second Officer in Sixteen Day Jury Trial, September 2017. Plaintiff brought claims of excessive force under Section 1983 of the Civil Rights Act and the Fourth Amendment in addition to assault and battery claims against both officers and sought compensatory and punitive damages. The claims arose from a traffic stop that plaintiff ultimately fled from while one of the officers was still partially inside his vehicle, which caused plaintiff to be shot multiple times resulting in his paralysis from the waist down.
    • Voluntary Dismissal of Borough and Chief of Police, March 17, 2017. A prior employee (plaintiff) filed a complaint in the United States District Court For The Western District of Pennsylvania alleging that the borough, the mayor and chief of police unlawfully discriminated against him, which forced him to resign. The employee set forth various federal and state claims including a violation of his substantive due process rights and intentional infliction of emotional distress. After deposing the plaintiff, he voluntarily agreed to dismiss the complaint with prejudice. 
    • Employee Injuries Denied and Determined Fully Recovered, May 2016. A union president filed multiple petitions against the employer for accepted and unaccepted injuries. During a six-year battle, the employer was successful in its defenses before the workers' compensation judge, the workers' compensation appeal board, the Commonwealth Court and the Pennsylvania Supreme Court. 
    • Employee's Claims for Wage Loss Denied, March 17, 2015. An employee, truck driver, filed a claim in West Virginia for injuries he suffered in the course of his employment. The Employer was successful in proving that claimant's disc injury was preexisting in nature, which was affirmed by the Supreme Court of Appeals.
    • Preliminary Injunction Denied, November 24, 2014. Plaintiff, a manufacturer and seller of refractory products, filed a Motion for Injunctive Relief to prohibit their prior employees from working with a new company, which also manufactured and sold refractory products. The Judge denied Plaintiff's Motion for Preliminary Injunctive Relief after a contentious, speedy discovery stage of depositions and other motions. The trial team was successful in protecting the defendants' new business from being shut down. 

Results

Putative Class Action Lawsuit Dismissed

In a case where we represented a child care center, a federal district judge from the Western District of Pennsylvania granted our motion to dismiss with prejudice. The plaintiffs were nine minority employees who were involuntarily furloughed in the fall of 2020. They filed suit, alleging their employment was terminated in violation of Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, the Family Medical Leave Act, the Pennsylvania Human Relations Act, the Wage Payment and Collection Law, and Section 1981 of the Civil Rights Act. The court agreed with the arguments made by the center, finding that the plaintiffs’ class claims were not timely exhausted. The court disagreed with the plaintiffs’ arguments that their charges gave notice of their putative class claims because each charge only focused on the individual complainant’s alleged personal disparate treatment. The court also found that the plaintiffs were not entitled to equitable tolling as they did not exercise reasonable diligence in obtaining essential information bearing on their claim. Accordingly, the court dismissed the entire complaint with prejudice, finding no need to address the other bases for dismissal or the center’s request to strike the class action allegations. 

Lawsuit Against Insurance Broker Dismissed

In a case where we represented an insurance broker, a Federal District Judge from the Southern District of West Virginia granted our motion to dismiss and dismissed the suit in its entirety. The plaintiff was a women’s fashion and accessory boutique. The suit arose from a dispute over the plaintiff’s insurance coverage for damages it sustained while being ordered to close by West Virginia’s COVID-19-related orders. The insurance carrier filed a motion to dismiss, and, thereafter, the plaintiff voluntarily dismissed the carrier. The broker filed a motion to dismiss all of the claims plead against it, including bad faith, West Virginia’s Unfair Trade Practices Act, estoppel and breach of fiduciary duty. The court dismissed the counts of bad faith and Unfair Trade Practices Act, finding that the plaintiff failed to provide sufficient allegations to support such claims. The court further explained that the plaintiff alleged very few facts specific to the broker and that the allegations plead did not support any unreasonable conduct by the broker, which is required to establish bad faith or deception. For similar reasons, the court held that the plaintiff’s estoppel claim failed. The plaintiff alleged the broker advised that they would have coverage as a result of the COVID-19 orders. The court found that the plaintiff failed to allege how it relied on those representations or how that reliance was detrimental. The alleged representations occurred months after the plaintiff accepted the policy and did not appear to have any impact on the plaintiff’s request for payments from its insurance carrier. Finally, the court explained that the plaintiff failed to identify any West Virginia authority to establish a breach of fiduciary duty against the broker. Regardless, the court found that the plaintiff failed to allege that it requested specific coverage before the broker procured the policy.

Thought Leadership

Legal Updates for Real Estate E&O Liability

Pennsylvania Superior Court Confirms RESDL Claims Are Subject to a Two-Year Statute of Repose

August 17, 2026

The Pennsylvania Superior Court recently concluded that claims under the Real Estate Seller Disclosure Law (“RESDL”) are subject to a two-year statute of repose running from the settlement date. This decision will further assist defending errors and omission claims against real estate agents as it bars any RESDL action commenced more than two years after the settlement date regardless of when the defect was discovered.  In Hollinger v. Deitrich, 2026 Pa. Super. LEXIS 328 (June 23, 2026), the buyers entered into an agreement of sale in April of 2017 to purchase a residential property. The settlement occurred in June of 2017. The buyers reviewed the seller disclosures that revealed the property had a sump pump in working order and a sump pit. The disclosures further noted no water infiltration into the basement, but disclosed rehab, an addition to the property and prior sewage backup.  Shortly after the settlement and closing, the buyers experienced flooding in their basement. In March of 2020, the buyers filed suit against the seller, the buyers’ real estate agent and broker and the seller’s real estate agent and broker alleging various causes of action including a violation of RESDL. The buyers alleged that they sought assurances from the agent defendants that no water infiltration occurred on the property. They further alleged that both agents lived in the area and should have known about the neighborhood water infiltration issues. The trial court granted summary judgment for the seller and the seller’s agents and dismissed the RESDL violation.  Relying on the Supreme Court’s decision in Gidor v. Mangus d/b/a Mangus Inspections, 345 A.3d 629 (Pa. 2025), the court explained that a statute of limitation begins to run from the time of the injurious occurrence or a discovery of the same. However, a statute of repose runs for a statutorily determined period after a definitively established event. Notably, a statute of repose eliminates a cause of action regardless of when the claim accrues. Because of this, a plaintiff may not invoke the discovery rule or other equitable tolling considerations.  RESDL requires that an action for damages, as a result of a violation of this chapter, must be commenced within two years after the date of final settlement. The court found that Section 7311(b) was clear and unambiguous that an action for damages pursuant to this chapter must be commenced within a certain time after a definitely established event that is independent of any injury or discovery of any injury. Since the buyers sued over two years after closing on the property, their statutory claims were time-barred. The court explained that the seller disclosure statement could not support common law or consumer protection claims, as using it would improperly expand remedies beyond the statute’s terms. Accordingly, the court upheld the trial court’s summary judgment ruling that the buyers’ claims under RESDL were barred by the statute of repose.  Accordingly, defense counsel should scrutinize complaints involving RESDL claims to ensure that such claims have been timely brought within two-years of the settlement date. A plaintiff will no longer be able to invoke the discovery roll to expand the time frame.

Legal Updates for Real Estate E&O Liability

Protecting Real Estate Professionals with Renewed Strength and Expanded Reach

November 1, 2025

We are excited to announce the reinvigoration of our Real Estate Professional Liability defense team, servicing clients in eight states including Delaware, Florida, Maryland, New Jersey, New York, Ohio, Pennsylvania and West Virginia. Our Real Estate E&O Liability Practice Group represents real estate professionals and related service providers in high-stakes civil litigation across a wide range of claims. We have extensive experience defending real estate brokers, agents, and REALTORS® against malpractice and breach of duty allegations stemming from residential and commercial transactions, as well as those who play critical roles in facilitating these transactions, including title agents, abstractors, surveyors, mortgage brokers, appraisers, home inspectors and title insurance companies.  Our attorneys understand the complexities of real estate law and the nuances of professional standards in each of the jurisdictions in which we practice, allowing us to craft targeted defenses that protect our clients’ reputations and livelihoods. We are creative, proactive and strategic, working closely with our clients and their insurers to craft a formidable defense, often helping to resolve matters through negotiation or early motion practice pre-suit. When litigation is unavoidable, we bring deep courtroom experience and an unwavering commitment to defending our clients through trial and appeal, if necessary. We know that for professionals involved in real estate, litigation can be both financially and professionally disruptive. That’s why we prioritize efficient case management, cost-effective strategies and clear communication throughout the life of a case. Our goal is always to protect our clients’ interests while minimizing the impact on their business operations and professional standing. With a team that blends deep legal knowledge and real-world insight into the real estate industry, we are trusted counsel to professionals facing complex and often emotionally-charged disputes. Whether the matter involves a multimillion-dollar commercial deal or a single-family home transaction, our attorneys bring the same level of dedication and attention to detail. We are proud to be a reliable defense partner for real estate professionals and the businesses that support them. When your work is under scrutiny, you need a legal team that understands the stakes—and how to win.  Legal Update for Real Estate E&O – November 2025, 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 © 2025 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

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.

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.