Defense Digest, Vol. 29, No. 1, March 2023

Message From the Executive Committee

John F. Kennedy once said, “Change is the law of life, and those who look only to the past and present are certain to miss the future.”

Indeed, every time we ring in a new year, there are inevitably new laws, regulations, or codes that take effect throughout the country. Typically, these changes are minor, perhaps new or different taxes, increased tolls, or similarly-mild alterations of the existing rules. As Americans, we tend to absorb such inconveniences and move on.

The changes wrought by 2023, however, have been different. Indeed, I do not recall another time when the laws that affect our business have changed so profoundly across so many of the jurisdictions in which we have offices. This column highlights a few of the most notable changes, both good and bad, that will shape litigation in 2023 and beyond. Importantly, Marshall Dennehey’s lawyers have been at the forefront of analyzing these changes and advising clients about their impact through timely articles, seminars, and individual consultations.         

The first major change involves the venue for Pennsylvania’s medical malpractice cases. In 2003, the Pennsylvania Supreme Court promulgated a rule that required all medical malpractice actions to be filed only in the venue where the cause of action arose. This rule meant that the venue in medical malpractice cases was different from the venue in all other civil cases. It was a significant part of a broader tort reform effort that sought to address the deleterious impact of litigation on the availability of both medical care and affordable malpractice insurance. The result of this rule was a sharp decline in medical malpractice filings across the state and, in particular, in Philadelphia County, which is considered to be plaintiff-friendly. Plaintiffs could no longer “venue shop” and were required to file in the county where the malpractice allegedly occurred. The reform worked and, for the past two decades, medical malpractice litigation and the availability of malpractice insurance have remained relatively stable.

However, effective January 1, 2023, the venue reform was rescinded, which again made medical malpractice cases subject to the same loose venue standards that apply to all other types of cases. Accordingly, as of the first of this year, medical malpractice cases can be filed in any county where a defendant can be served or where the cause of action or other relevant event occurred, a broadening of possible applicable venues, especially in suits against larger medical providers. This change has significantly expanded the counties in which medical malpractice actions can be filed, with expected increased filings in more plaintiff-friendly counties such as Philadelphia and Pittsburgh.

Marshall Dennehey’s Health Care Department, which not long ago won an award for the Pennsylvania Medical Malpractice Department of the Year, is monitoring the filing of new suits statewide. Even in the short period since January 1, we have seen a significant increase in filings in Philadelphia, in particular, and these cases are being brought against distant providers who could not have been sued in Philadelphia under the prior rule. The significance of this rule change cannot be overstated.

Not to be outdone, Florida promulgated a legislative change that also alters the law in an area of significant litigation. Effective at the end of December 2022, Governor Ron DeSantis signed into law sweeping changes to first-party property cases. Before this recent change, the law was in favor of the insureds and, most importantly, allowed for “one way” attorneys’ fees to be awarded. “One way” attorneys’ fees basically allow plaintiffs to collect all attorneys’ fees if they prevail, but there is no such reciprocal vehicle for insurance companies to recoup their fees if they win. Over the past few years, there has been a flood of first party-property litigation in Florida, motivated in large part by the desire to obtain attorneys’ fees.

The comprehensive and sweeping legislative reforms that went into effect at the end of 2022 will change the landscape in which first party-property claims are litigated going forward. Not only do the new laws eliminate “one way” attorneys’ fees, but they curtail the plaintiff’s ability to bring bad faith actions where a property insurer allegedly breaches the insurance contract. The changed law also modifies and reforms a number of nuanced aspects of the investigation and handling of these claims, including time periods to take action, binding arbitrations, assignment of benefits, and a homeowner bill of rights. But, the big takeaway from this sweeping legislative change is the anticipation of fewer first party-property cases being filed in Florida, which should benefit Florida property insurers.

New York also promulgated a new set of comprehensive insurance regulations that affect how our attorneys handle cases in the Empire State. Although this new statute is not as landscape-changing as in Pennsylvania and Florida, the New York Comprehensive Insurance Disclosure Act, which went into effect earlier in 2022, requires that within 90 days of a defendant filing an answer to a complaint, the defendant must produce any insurance policy (or declaration page, if the parties agree) that “may” apply to the claim being litigated, the name and address of the claims professional adjusting the claim, the policy limits, and, if the policy is eroding, the remaining limits. These disclosures must also be supplemented shortly before trial. This new law, on its face, appears to apply to all kinds of civil lawsuits, with the exception of no fault and PIP cases, although there appears to be some confusion, at present, concerning asbestos litigation in New York.

In Ohio, two opinions by the Ohio Supreme Court, published at the very end of 2022, significantly impacted litigation in that state. The first case, Clawson v. Heights Chiropractic Physicians, confirmed and clarified that, in a medical malpractice case, a health care provider’s employer may not be vicariously liable where the direct liability of the employee has been extinguished as a matter of law. Clawson found that because the plaintiff failed to timely serve the allegedly negligent doctor with a refiled complaint, the doctor’s employer could not be held vicariously liable even though that defendant had been timely served.

At almost the same time, the Ohio Supreme Court handed down its opinion in Brandt v. Pompa, which carved out another exception to Ohio’s cap on noneconomic damages. Specifically, as part of Ohio’s tort reform, the Ohio legislature placed a cap on a plaintiff’s ability to recover noneconomic damages unless the loss is for permanent and substantial physical deformity or another type of catastrophic physical injury. Brandt involved the sexual assault and abuse of a minor whose long-term, permanent and substantial injuries were psychological. The Ohio Supreme Court added “permanent and severe psychological injuries” to the type of noneconomic losses that are not subject to the cap. This is a significant change for cases being litigated in Ohio, as plaintiffs now have another type of loss, psychological injury, which may avoid the damages cap.

Lastly, and not to be outdone by neighboring states, New Jersey signed into law its form of a bad faith statute, the New Jersey Insurance Fair Conduct Act. This new law, which went into effect earlier in 2022, allows first party uninsured motorist (UM) and underinsured motorist (UIM) claimants to file suit directly against their insurance carriers for “unreasonable” delays or denials, or for any violation of the Unfair Claims Settlement Practices Act. Successful plaintiffs can now be awarded damages up to three times the available coverage limit plus attorneys’ fees and costs. Costs associated with compliance with this new law cannot be passed onto policyholders through rate increases. While this new statute, presently, is limited to UM and UIM cases, it is not beyond the imagination to foresee New Jersey extending statutory bad faith claims to other types of insurance matters.

In summary, as the calendar changed from 2022 to 2023, five of the states Marshall Dennehey has offices in—Pennsylvania, New Jersey, New York, Ohio, and Florida—are adapting to new and sweeping changes to their laws regarding insurance coverage, insureds rights, and the handling of personal injury cases. It must be emphasized and underscored that Marshall Dennehey has lawyers who have closely followed all of these changes, have advised clients about the changes through articles, webinars, and live presentations, and have the knowledge and experience to help clients successfully navigate the changes in new and pending litigation. In this regard, should you want more information or would like to read any of our firm’s publications, please contact Terré Montemuro, the curator of our Defense Digest.

“There is nothing permanent except change” – Heraclitus

 

Defense Digest, Vol. 29, No. 1, March 2023, 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. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2023 Marshall Dennehey. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.