Marshall Dennehey is uniquely positioned to defend lawyers’ professional liability (LPL) claims, and we have been doing so for over three decades. In addition to defending civil matters, we also represent attorneys in disciplinary matters, and we furnish counseling and risk management advice to law firms.
Our familiarity with the bench and bar fosters our ability to manage sensitive issues inherent in many legal malpractice and bar complaint matters. Representing our colleagues at the bar requires tact, finesse, experience and poise, and our attorneys are especially sensitive to reputational issues.
The prototypical legal malpractice case involves two matters: the act or omission of the attorney and the underlying lawsuit or transaction. With approximately 50 distinct practice groups, Marshall Dennehey’s LPL clients benefit from our firmwide civil defense litigation practice. For example, when a legal malpractice claim derives from an underlying medical malpractice matter, members of our Health Care Liability Practice Group bring depth and added knowledge to the defense of the matter.
In addition to the firm’s prowess in defending attorneys and their firms, Marshall Dennehey is proud of its success in providing creative solutions to traditional legal issues. The attorneys within the practice group look for “business solutions” and have structured the resolution of cases by resurrecting the underlying transaction which gave rise to the legal malpractice claim.
The attorneys within this practice are involved in precedent-setting matters. Also, we are thought leaders in the professional liability industry as frequent authors and speakers on risk management and legal malpractice defense.
In addition to defending these claims in the seven states where our offices are located, we try cases as lead counsel on a national basis and associate with local counsel when necessary. The firm has provided counsel to respected lawyers from essentially every domestic insurance carrier and has represented lawyers through the London market.
Results
Successful Defense of High‑Profile Condo Board Election Challenge as Court Dismisses Claims With Prejudice
One Month – 4 Outstanding Results! Aaron Moore Obtained Four Successful Results on Behalf of Clients in the Span of One Month
Defense verdict on behalf of a real estate broker and agent. The plaintiffs, homebuyers, claimed that the sellers’ broker and agent were liable to them for the value of fixtures that were taken by the sellers when they vacated the property, which were alleged to have been included in the sale. At a bench trial, the judge determined that neither the broker nor the agent could be held liable to the plaintiffs because the representations regarding what was included in the sale were made by the sellers. Supreme Court affirmance of dismissal of a complex legal malpractice lawsuit. Aaron and Carol Vanderwoude obtained a Delaware Supreme Court affirmance of the trial court’s dismissal of a complex legal malpractice claim. The plaintiffs, seven affiliated companies and their owners in the business of developing property, had been sued by their bank for defaulting on multiple lines of credit. The bank filed multiple lawsuits against the property developers, claiming approximately $7 million in damages, plus attorneys’ fees, which were recoverable pursuant to the terms of the promissory notes. The property developers retained our client to defend the lawsuits, asserting that the amounts claimed to be owed to the bank were significantly overstated. Our client vigorously defended the bank’s underlying lawsuits. Ultimately, the property developers settled the bank’s lawsuits for the entire amount owed, plus interest and the bank’s legal fees. The developers argued that its attorneys should have advised them to settle the bank’s claims after the lawsuits were commenced and that, if they had done so, they would not have had to pay the bank’s legal fees, our client’s legal fees, or expert witness fees, or the additional interest on the loan. The property developers also claimed that not settling with the bank earlier caused them lost business opportunities valued at nearly $1 million. The plaintiffs’ legal malpractice claims were dismissed because their expert witness, a Maryland attorney with no business litigation experience, was not qualified to serve as an expert and because their damages claims were speculative. Motion to dismiss in complex matter involving claims of fraud, misappropriation of trade secrets, tortious interference with contractual relations, and piercing the corporate veil. The plaintiff, an investment fund, had purchased a business that was controlled and primarily owned by our client. The business ultimately went bankrupt, and the plaintiff claimed that the purchase was premised upon misrepresentation by our client. The plaintiff maintained that jurisdiction in Delaware was proper pursuant to the Asset Purchase Agreement. The District Court was persuaded by arguments reflecting that it lacked personal jurisdiction over our client, a citizen of Canada, even though he signed the Asset Purchase Agreement which included language conferring jurisdiction over claims arising from the sale in Delaware. The court agreed that our client did not sign the agreement in his individual capacity, and the plaintiff’s piercing the corporate veil allegations were insufficient to confer personal jurisdiction. Dismissal of an unjust enrichment claim. Obtained dismissal of an unjust enrichment claim brought by a condominium unit owner against the attorneys who represented her condominium association. The unit owner claimed that the law firm was liable to her for unjust enrichment in connection with legal fees it received from the association for legal services provided in efforts to collect on past due assessments owed by the unit owner. Pursuant to the association’s governing documents, the charges were passed on to the unit owner. The court agreed that the fees that were paid to our client by the condominium association were properly earned.
Thought Leadership
Legal Updates for Lawyers' Professional Liability
AI Misuse in Legal Filings Leads to Second Sanction and Mandatory CLE Requirements
May 7, 2026
In an order issued April 20, 2026, the Hon. Kai N. Scott of the Eastern District of Pennsylvania imposed sanctions on an attorney for including hallucinated AI-generated citations in a filing, for the second time in the same matter. First, following the imposition of attorney’s fees as an unrelated sanction, Raja Rajan, Esquire, who had represented the defendants, filed a motion for leave to appeal of sanctions of defense counsel and a motion to withdraw as attorney for all defendants. The court found five citations that were either wholly hallucinated or did not support the proposition for which they were cited. Bunce v. Visual Technology Innovations, Inc., et al, No. CV 23-1740, 2025 WL 4231632, at *1, n.1 (E.D. Pa. Jan. 21, 2025). The court ordered Mr. Rajan to show cause why the filing did not violate Federal Rule of Civil Procedure 11(b)(2), which holds that, “[b]y presenting to the court a pleading, written motion, or other paper. . .an attorney. . .certifies that to the best of [his] knowledge, information, and belief, formed after an inquiry reasonable under the circumstances: (2) the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law[.]” The court also noted that such citations in a filing potentially violated Pennsylvania Rule of Professional Conduct 3.3, Candor Toward the Tribunal. The court ultimately imposed sanctions of $2,500 for that violation. Following the conclusion of the underlying matter, the plaintiff sought travel costs for a cancelled deposition. In response, Mr. Rajan filed an omnibus motion seeking sanctions and objecting to the imposition of travel costs. That motion again contained AI-hallucinated citations, which the plaintiff noted in his response. The court explained that the standard for the review of conduct under Rule 11 is “reasonableness under the circumstances, [...] with reasonableness defined as an objective knowledge or belief at the time of the filing of a challenged paper that the claim was well-grounded in law and fact[;]” and that the Third Circuit has said that “Rule 11 requires only negligence[.]” Bunce, 2026 WL 1082135, at *2. The court ultimately held that there was no reasonable explanation for the inclusion of AI-generated citations, and that it is fundamental that attorneys verify that cited authority supports the proposition for which it is cited. For this Rule 11 violation, the court imposed sanctions of $5,000, and required Mr. Rajan to complete additional CLE courses on AI and legal ethics, and provide proof of relevant CLEs he had previously taken.
New Jersey Appellate Division Clarifies Limits of Transactional Attorneys’ Duties and Proof of Damages in Legal Malpractice Claims
April 21, 2026
On April 15, 2026, the New Jersey Appellate Division issued an important decision in Gonzalez v. DiBello, et al., A‑2334‑24 (App. Div. Apr. 15, 2026), affirming summary judgment in favor of a transactional attorney accused of legal malpractice and breach of fiduciary duty. Marshall Dennehey’s Jack Slimm and Jeremy Zacharias successfully represented the attorney‑defendant. The decision provides significant guidance to both the malpractice defense bar and transactional practitioners, particularly regarding the scope of an attorney’s duty of care, the role of expert testimony, and the proof required to establish causation and damages. The malpractice action stemmed from an underlying federal lawsuit arising out of a failed transaction to purchase a Kia dealership. An investor alleged that the purchasers and their counsel engaged in a fraudulent scheme, asserting claims including fraud, breach of contract, breach of fiduciary duty, aiding and abetting, and conspiracy. Although the federal complaint named the transactional attorney, the claims against her were dismissed, and she was never found liable. The attorney neither represented the investor nor provided him with legal advice and was unaware that he was the ultimate source of investment funds. Her role was limited to preparing transaction documents required by the manufacturer to reflect a transfer of ownership interests. Following dismissal of the federal action, purchaser Christopher Gonzalez filed a legal malpractice and breach of fiduciary duty action against the attorney. Gonzalez relied on expert reports asserting that the attorney had a duty to investigate the source of funds, determine whether her client was financially capable of consummating the transaction, and uncover any disqualifying relationships among investors. The trial court rejected those opinions, holding that New Jersey law does not impose upon transactional attorneys a duty to investigate the origins of funds passing through a trust account or to assess a client’s financial capacity absent specific circumstances. The Appellate Division affirmed, reiterating that an attorney’s duty in a transaction is “to exercise that degree of reasonable knowledge and skill that lawyers of ordinary ability and skill possess and exercise,” and that alleged violations of the Rules of Professional Conduct do not, standing alone, create a cause of action. The Appellate Division also affirmed dismissal based on the plaintiff’s failure to establish damages and causation through competent expert testimony. Gonzalez sought, among other things, to recover all legal fees incurred defending the federal action and alleged loss of investment. However, his expert offered what the courts deemed a classic “net opinion,” failing to analyze the reasonableness of the fees, allocate which fees were allegedly caused by the claimed malpractice, or quantify any lost benefit of the bargain. The court emphasized that when damages are an essential element of a legal malpractice claim, expert testimony must do more than assert conclusions—it must explain how and why specific damages were proximately caused by the attorney’s conduct. Absent such an analysis, allowing a jury to award all defense fees would impermissibly convert compensatory damages into speculative or liquidated damages. Finally, the Appellate Division rejected Gonzalez’s attempt to salvage his claims through a “suit‑within‑a‑suit” theory or a parallel breach of fiduciary duty claim. Citing Morris Properties, Inc. v. Wheeler, the court reaffirmed that plaintiffs cannot avoid their prima facie proof requirements by invoking trial methodologies, and that expert testimony remains necessary in esoteric malpractice cases. The court further held that Gonzalez could not show he would have recovered in the underlying federal action, particularly where he and the attorney were dismissed from that case. The fiduciary duty claim was properly dismissed as duplicative of the malpractice claim and failed for the same lack of proof on causation and damages. This decision is a significant reaffirmation of rigorous proof standards in transactional malpractice cases and provides meaningful protection against expansive and speculative damages theories.
