Duane Morris Appellate Review

December 28, 2021February 4, 2022 by Duane Morris

Update: In Recent Wave of COVID-19 Business Interruption Decisions in Federal Appeals, Carriers Enjoy Unanimous Success

Recently, we began to see real decisions being made by the appellate courts on COVID-19 Business Interruption issues. The U.S. Circuit Courts of Appeals have established a uniformly favorable trend for insurance carriers – these courts have affirmed the district court decisions that have ruled in favor of the insurers, and in one case, the Sixth Circuit vacated a district court’s decision that ruled in favor of the policyholder. Since our original blog post on this issue in October, this trend continued in December with a Tenth Circuit decision.

To read the full text of this post by Duane Morris attorneys Max H. Stern & Holden Benon, please visit the Duane Morris Insurance and Reinsurance Blog.

November 20, 2021January 10, 2022 by Duane Morris

Insurers Win on COVID-19 Business Interruption Claims

The first California state appellate decision on COVID-19 Business Interruption coverage is now in the books, and it’s one more victory for insurers. In The Inns by the Sea v. California Mutual Ins. Co., Case No. D079036 (Cal. Ct. App. 4th Dist., Div. 1, Nov. 15, 2021), the California Court of Appeal for the Fourth District found there was no coverage, notwithstanding the absence of a virus exclusion in the relevant policy. The court’s 36-page opinion provides a thorough and careful analysis of several important COVID-19-related business interruption issues.

To read the full text of this post by Duane Morris attorneys Max H. Stern and Holden Benon, please visit the Duane Morris Insurance Law Blog.

November 3, 2021 by Duane Morris

Ethical Considerations on Appeal

Most New York attorneys are familiar with Part §130, Costs and Sanctions, of the Rules of the Chief Administrator which requires that every pleading, written motion and other paper served on another party or filed or submitted to the court be signed by an attorney whose signature certifies that attorney’s good faith, informed belief that “the contentions therein are not frivolous.” 22 NYCRR §130-1.1(a). The intent of Part 130.1 is “to prevent the waste of judicial resources and to deter vexatious litigation and dilatory or malicious litigation tactics.” Kernisan v. Taylor, 171 A.D.2d 869 (2d Dept. 1999).

Regrettably, some attorneys do not understand that their ethical obligations do not come to an end when an appealable order or judgment is entered against their client in the trial court. Part 130 and the discretionary monetary sanctions it authorizes the court to impose-up to $10,000 for any single occurrence of frivolous conduct-also applies to motions and briefs filed and submitted to an appellate court.

To read the full text of this article by Duane Morris of counsel Thomas R. Newman, please visit the firm website.

September 13, 2021 by Duane Morris

Motions for Reargument in the Court of Appeals

It is a fundamental tenet of our system of jurisprudence that there must be an end to lawsuits. The law recognizes that “it is to the interest of the State that there should be an end to litigation.” Israel v. Wood Dolson Co., 1 N.Y.2d 116, 118 (1956). This principle pervades the judicial attitude toward motions for reargument, which were aptly described almost 70 years ago in Cohen & Karger, Powers of the New York Court of Appeals (rev. ed 1952), at page 694. “A motion for reargument is generally an act of desperation; it is a psychological device for raising hopes which are almost invariably doomed to defeat. The percentage of cases in which a motion for reargument has been granted in the Court of Appeals is very low—unquestionably less than one out of one hundred.”

Nothing has changed. The 2019 Annual Report of the Clerk of the Court of Appeals contains a table showing that during the period 2015-2019 of 131 motions for reargument of appeals, none was granted; of 317 motions for reargument of motions, only one was granted. (2019 Report, Appendix 7).

To read the full text of this article by Duane Morris attorney Thomas R. Newman, please visit the firm website.

August 30, 2021 by Leah Mintz

Pa. Supreme Court to Reconsider Validity of Legal Malpractice Claims Based on Settlement Advice

In 1991, the Pennsylvania Supreme Court created a bright-line rule barring certain types of legal malpractice claims. Specifically, if a client settled a lawsuit but ultimately was unhappy with the settlement, the client could only sue her lawyers for legal malpractice if the lawyers fraudulently induced her to settle. See Muhammad v. Strassburger, McKenna, Messer, Shilobod, & Gutnick, 587 A.2d 1346, 1358 (Pa. 1991). In such situations, claims based on negligence or breach of contract would not be cognizable. Id.

This bright-line rule has slowly eroded over the years. In Collas v. Garnick, 624 A.2d 117 (Pa. Super. 1993), for example, the Superior Court held that Muhammad did not bar claims based on inaccurate legal advice related to a settlement agreement. In that case, a lawyer advised that certain language in a settlement agreement would not affect the client’s ability to sue other potentially liable parties, but that advice turned out to be wrong. Id. at 119. After the plaintiff’s second lawsuit was dismissed based on the release she signed when settling the first lawsuit, the plaintiff sued her lawyer. Id. The trial court held that the plaintiff’s claims were barred by Muhammad, but the Superior Court reversed. The Superior Court noted that Muhammad dealt with clients who were dissatisfied with the amount of the settlement, whereas the clients in Collas were complaining that they were misinformed as to the effect of the settlement. Id. at 121. The Superior Court held that, in such circumstances, lawyers could be liable for malpractice if they failed to exercise the necessary degree of care. Id.

The Superior Court has since clarified when Muhammad bars legal malpractice claims arising from a settlement agreement and when it does not:

[If] a dissatisfied litigant merely wishes to second guess his or her decision to settle due to speculation that he or she may have been able to secure a larger amount of money, i.e.[,] “get a better deal[,]” the Muhammad rule applies so as to bar that litigant from suing his counsel for negligence. If, however, a settlement agreement is legally deficient or if an attorney fails to explain the effect of a legal document, the client may seek redress from counsel by filing a malpractice action sounding in negligence.

Banks v. Jerome Taylor & Assocs., 700 A.2d 1329, 1332 (Pa. Super. 1997).

The Supreme Court will now consider doing away with Muhammad altogether as part of its review of the Superior Court’s decision in Khalil v. Williams, 244 A.3d 830 (Pa. Super. 2021), allocatur granted 53 EAL 2021 (Pa. Aug. 3, 2021). In Khalil, the plaintiff claimed that she only signed the settlement agreement in question after asking her lawyers to add language making clear that her claims in a related lawsuit would not be affected. Khalil, 244 A.3d at 840-41. After the plaintiff signed the revised release, her counsel allegedly doctored the signed release to remove any limiting language. Id. Her claims thus sounded in fraud and were not barred by Muhammad. Id. Yet, the plaintiff also alleged legal malpractice claims based on negligence and breach of contract. While the plaintiff claimed on appeal that she pleaded facts alleging that her counsel gave incorrect advice about the legal effect of the settlement agreement in the alternative, the Superior Court disagreed. Id. The Superior Court found that the only allegations in the complaint supported the fraud claim, not any claims sounding in negligence or breach of contract. Id. at 841. The Superior Court thus affirmed the dismissal of those claims.

The Supreme Court has now agreed to consider two issues on appeal—whether the plaintiff sufficiently pleaded negligence or breach of contract and, if so, whether Muhammad continues to be valid. Depending on the Court’s outcome and reasoning, Khalil could prove to be very important for understanding both the pleading rules for legal malpractice claims in Pennsylvania, as well as the potential liability for lawyers when advising their clients to accept a settlement offer.

August 21, 2021August 21, 2021 by Robert M. Palumbos

Developments in the Pennsylvania Forum Non Conveniens Doctrine

On August 24, Duane Morris partner Rob Palumbos will present a CLE webinar at the Pennsylvania Defense Institute about developments in the forum non conveniens doctrine in Pennsylvania. Over the last several years, the Pennsylvania Superior Court has been extremely active on this issue, issuing approximately two dozen new precedential decisions. For more information or to register, please visit the Pennsylvania Defense Institute’s website.

August 2, 2021August 2, 2021 by Robert M. Palumbos

Changes to Notices of Appeal

On December 1, 2021, several welcome amendments to Rule 3 of the Federal Rules of Appellate Procedure will take effect (barring highly unlikely Congressional action). These changes clarify and simplify the requirements for notices of appeal.

First, the amendments make clear that a notice of appeal encompasses all interlocutory orders that merge into the designated judgment or appealable order. Appellants need not specifically designate such interlocutory orders in the notice.

Those provisions eliminate a waiver trap that some courts had created by holding that an appellant’s designation of certain interlocutory orders in the notice of appeal excluded review of undesignated orders. The amendments provide that designations of specific orders will not limit the scope of the notice of appeal without an express statement that the notice is so limited.

Second, the amendments make clear that a notice encompasses the final judgment when it identifies a final order that resolves all remaining claims or an order that resolves a post-judgment motion. That change removes waiver traps that had developed based on Rule 3’s prior requirement that a notice designate the “judgment.”

Some courts had held that where an appellant described a final order as an “order” rather than a “judgment,” the notice was limited to that order, excluding review of interlocutory orders that merged into the judgment. Likewise, some courts treated a notice of appeal that designated only an order disposing of a post-judgment motion as limited to that order, excluding review of the judgment itself. The amendments eliminate both traps.

While the amendments reflect the law that already governed in many jurisdictions, they are still a welcome change. The amendments eliminate ambiguity that had caused problems in certain jurisdictions and provide clarity for practitioners.

December 18, 2020 by Leah Mintz

Henry Schein, Inc., II: Post-Argument Analysis

The Supreme Court heard argument in the second iteration of Henry Schein, Inc. v. Archer & White Sales, Inc., Case No. 19-963, (Henry Schein II) on December 8, 2020, which was broadcast live on CSPAN and is available here. During the course of the argument and questioning, the Court made clear that it was only considering a narrow question: Assume that the contract generally says that an arbitrator decides if a particular dispute must be arbitrated, rather than be litigated in a court. Also assume that the contract says claims for injunctive relief are not subject to arbitration. The parties to the contract have a dispute, and they disagree on whether the dispute seeks injunctive relief. Who decides this threshold dispute—an arbitrator or a court? (For more background on this case, see our pre-argument discussion on the issues presented.)

The question presented to the Court in Henry Schein II seems to be one of pure contract interpretation, which makes it an odd choice for the Court to hear. The Court is ostensibly deciding whether the carve-out for injunctive relief claims in this contract limits just the scope of arbitration or also limits the scope of the contract’s delegation to the arbitrator to decide the threshold issues of arbitrability. Yet, the oral argument revealed a few themes that indicate some of the broader implications of this litigation.

Continue reading “Henry Schein, Inc., II: Post-Argument Analysis”

December 3, 2020December 4, 2020 by Leah Mintz

Arbitrability Returns to the Supreme Court in Henry Schein, Inc. v. Archer & White Sales, Inc., the Sequel

Arbitrability—or who decides what claims are subject to arbitration—is returning to the Supreme Court next week for the second time in as many years. The first time the matter reached the Court, the Supreme Court unanimously held that, where a contract clearly and unmistakably delegates questions of arbitrability to an arbitrator, a court cannot decide the issue in the first instance, even if the court thinks the argument for arbitration is “wholly groundless.” Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524 (2019).

The issue has now returned to the Supreme Court following remand and a new decision by the Fifth Circuit. Archer & White Sales, Inc. v. Henry Schein, Inc., 935 F.3d 274 (5th Cir. 2019). On December 8, 2020, the Court will hear the case again, this time to decide “[w]hether a provision in an arbitration agreement that exempts certain claims from arbitration negates an otherwise clear and unmistakable delegation of questions of arbitrability to an arbitrator.”

Continue reading “Arbitrability Returns to the Supreme Court in Henry Schein, Inc. v. Archer & White Sales, Inc., the Sequel”

March 13, 2020 by Paul J. Killion

COVID-19 and Emergency Extensions of Time in California State Courts (Just In Case)

In these troubling times of COVID-19, it’s useful to be reminded that the California Rules of Court have for some time contained provisions addressing extensions of time based on public emergencies and the illness of counsel.

Two rules in particular speak to this issue. Rule 8.63 of the California Rules of Court directs that the court “must consider” “illness of counsel” or “a personal emergency,” among many other factors, in determining good cause for a requested extension of time. (Cal. Rules of Court, rule 8.63(b) (10).) The rule also directs that “[i]f good cause is shown, the court must extend the time.” (Rule 8.63(a)(3).) And on a broader scale, Rule 8.66 authorizes the Chair of the Judicial Council (i.e., the Chief Justice of the California Supreme Court) to extend the time “to do any act required or permitted under the rules” up to 60 days on a statewide basis, if necessary.

Here’s the text of the rules:
Rule 8.63. Policies and factors governing extensions of time
(a) Policies
(1) The time limits prescribed by these rules should generally be met to ensure expeditious conduct of appellate business and public confidence in the efficient administration of appellate justice.
(2) The effective assistance of counsel to which a party is entitled includes adequate time for counsel to prepare briefs or other documents that fully advance the party’s interests. Adequate time also allows the preparation of accurate, clear, concise, and complete submissions that assist the courts.
(3) For a variety of legitimate reasons, counsel may not always be able to prepare briefs or other documents within the time specified in the rules of court. To balance the competing policies stated in (1) and (2), applications to extend time in the reviewing courts must demonstrate good cause-or an exceptional showing of good cause, when required by these rules-under (b). If good cause is shown, the court must extend the time.
(b) Factors considered
In determining good cause-or an exceptional showing of good cause, when required by these rules-the court must consider the following factors when applicable:
(1) The degree of prejudice, if any, to any party from a grant or denial of the extension. A party claiming prejudice must support the claim in detail.
(2) In a civil case, the positions of the client and any opponent with regard to the extension.
(3) The length of the record, including the number of relevant trial exhibits. A party relying on this factor must specify the length of the record. In a civil case, a record containing one volume of clerk’s transcript or appendix and two volumes of reporter’s transcript is considered an average-length record.
(4) The number and complexity of the issues raised. A party relying on this factor must specify the issues.
(5) Whether there are settlement negotiations and, if so, how far they have progressed and when they might be completed.
(6) Whether the case is entitled to priority.
(7) Whether counsel responsible for preparing the document is new to the case.
(8) Whether other counsel or the client needs additional time to review the document.
(9) Whether counsel responsible for preparing the document has other time-limited commitments that prevent timely filing of the document. Mere conclusory statements that more time is needed because of other pressing business will not suffice. Good cause requires a specific showing of other obligations of counsel that:
(A) Have deadlines that as a practical matter preclude filing the document by the due date without impairing its quality; or
(B) Arise from cases entitled to priority.
(10) Illness of counsel, a personal emergency, or a planned vacation that counsel did not reasonably expect to conflict with the due date and cannot reasonably rearrange.
(11) Any other factor that constitutes good cause in the context of the case.

Rule 8.66. Extending time because of public emergency
(a) Emergency extensions of time
If made necessary by the occurrence or danger of an earthquake, fire, or other public emergency, or by the destruction of or danger to a building housing a reviewing court, the Chair of the Judicial Council, notwithstanding any other rule in this title, may:
(1) Extend by no more than 14 additional days the time to do any act required or permitted under these rules; or
(2) Authorize specified courts to extend by no more than 30 additional days the time to do any act required or permitted under these rules.
(b) Applicability of order
(1) An order under (a) must specify whether it applies throughout the state, only to specified courts, or only to courts or attorneys in specified geographic areas, or applies in some other manner.