inquire for purposes of finding that eternal reportedly owed if you shared unity individual deferment clients with whom you had no involvement with and perform no work for this fictitious duty resulted in the  that stanley was individually liable for the concealed torts of another firm officer which he had no knowledge of nor actively participated and so i have a question for you this law firm was a corporation correct correct and stanley was president and under the by laws he was charged with supervision and control over the business affairs of that corporation as well as the employees isn't that right no and he hired the employees or he paid the employees and his wife was one of the employees isn't that correct wife is one hundred percent owner of the stock and was also an officer before peroration so there were two co equal officers who were the two primary tourney's yes you're right but in his position as president why did he not at least have a duty to inquire regarding the funds based on the knowledge that he did have that there were huge amounts of money being paid out to mining companies that he knew had nothing to do with the business of the firm well that's not established in the record that you didn't have anything to do with business the firm the record establish that they were not firm clients but it certainly is not unusual for transactions to occur in the course of business where money is wired out to non from clients any time obviously a transaction occurs or in this tas as the core is we're looking to buy real estate property the money would have been wired to not i'm firm clients obviously firms deal with noncompliance in different transactions so it never happens that millions of dollars over a period of time millions of dollars fairly regularly around the same time the record indicates that there were other large transactions going in and out of the firm my old two accounts and there's nothing in the record suggests those were improper transactions oversee and i hope to counter otherwise having to wire about every single transaction that occurs within a firm and attempting to ferret out whether there's anything nefarious about it who are in this case concealed fraud that professional conduct five point once so rule professional conduct five point one is what the trial work relied upon here to hold stanley responsible the case law is very clear that a rule of professional zero five point one c to specifically a lawyer is only really obligated for the torts of another attorney in the firm if he has actual knowledge of the  inquire well st the record i think at minimum reflected that there was a fact question as to whether stanley was in fact doing all he was required under rule one hundred and fifteen the record the facts of this case are that stanley attended seminars to ensure that the firm complied with the rules once a month he would meet with the firm bookkeeper and go over the count ledger he would always ask the bookkeeper if there was anything you need it's know and importantly the corey's admitted in this case that they had no evidence that stanley in any way violated any professional standard rule as to how the i also counts he what the court here is created this must if he was doing all that it was required to do why wasn't there any written policy regarding did ministration of the firms i would count as required thank you i don't think they're saying in the record that there was something not that there was something missing or absent from the requirements of how the reflects one way or another whether there was a written policy i know that the the foreign policy was to follow all the written rules and regulations for ailes accounts and the poor has admitted that they had no evidence that somehow aisle any anything any rule one point one five or otherwise relating to the administration's count and somehow violet you can imagine your think about this is a smaller law firm think of a larger law from the duty that would be established year where there are hundreds of thousands of transactions that occur i met a seventy five person firm there are there are thousands of transactions going in and out of my firm from various different departments involved in various clients not clients to have since a situation where someone supervising you know it's account we have to inquire as to every single transaction to try to detect or ferret out fraud is the standard that's been established here it's essentially a strict liability standard that an officer of a corporation if they fail to detect fraud somehow is strictly liable for the acts of the tortfeasor and to the victim and there's nothing that establishes that rule in illinois there's no law finding that he had a fiduciary duty individual to firm clients that he never dealt with and to say that he had a standard that he some amorphous standard to enquire as to every single transaction try to tax the concealed supervisory or manage management role to essentially turn a blind eye to the the current legal violation of the other attorneys with the nurse firm not at all because the two there are two different avenues here where attorneys can be held responsible there are professional malpractise claims which importantly here the corys expressly disclaimed quote stanley seems to think that this case is a legal malpractise case that depends largely upon the existence of an attorney client relationship between plaintiff and stanley however this case is not a legal malpractise case indeed it has little if anything to do with the negative provisional legal services so you have one avenue of relief for recourse of malpractise and you claim against a corporate officer individually and holding him individually liable for an act he had nothing to do with which he was concealed from him which he had is the record reflect that he took all reasonable steps to administrate the and was did not detect that the fraud was occurring somehow then hold him strictly liable which is really the standard here the trial court has set down again is not supported by any illinois law d any case we've that there was absolutely no law whatsoever in illinois or otherwise that would support the ability of the court to somehow consider marital status as a basis to somehow  institute some sort of heightened or extra legal duty marital status does not confer knowledge indeed as demonstrated in this case not only did kathleen conceal all of her acts from stanley  plaintiff concealed the crimes that he was committing from his wife lida at the same time spouses can and do conceal things we set forth in our brief justice burka numerous examples of various relationships where there would be no clear demarcation point as to where court may draw the line as to the relevance of considering a relationship simply to presume that there are extra legal duties for mary lawyers who are practicing together has no support under illinois law  well my understanding is in the criminal matter against kathleen you brought in the northern district of illinois yes there was a forensic audit ing the firm accounting there was some restitution to the plaintiffs and so forth turning back to the crew case though i think it's very important that this court set forth the standards of when a corporate officer may be held individually live and what this court said very clearly in that case is that if there is an officer who is supervising a subordinate a subordinate officer who is not a co equal there is potential liability if the officer failed to exercise ordinary here however if the officer is a co equal tortfeasor as you had a situation here officer actively participate in the wrongdoing that's not what happened here the facts are very clear stanley had nothing to do this and importantly and solvers prove that that was a case where the plainest brought claims for breach of contract fraud and negligent hiring and a to do share relationship you either have to have an attorney client relationship which the court has conceded here that stanley was not representing or you have to establish to clear and convincing evidence that they place such trust incompetence and stammering that he gained influence and superiority over them and they admitted in this case that stanley didn't exert any influence over them including with respect to decisions they made regarding the work they hired kathleen to perform or the funds they transferred that standard was crafted by the court pulling together various different factors which are not supported under illinois law and as i stated i think that the work needs to consider what will occur here  if this ruling is affirmed you have a situation where me ask you why should we compare conflicts of interests checks which firms conduct honor it's an excellent question so there's a distinction between running a conflict check to be able to represent the client and actually representing point firms large and small run conflicts checks to make sure there is no conflict business or otherwise in order to initiate the representation but that shot which for textbook the client in the firm doesn't create a fiduciary duty between the client and every single member of that firm there is a fiduciary relationship between the client the specific attorney and the best but the rest of the lawyers cannot possibly be held to such a duty and again here it would be a situation where you would be holding an attorney who had absolutely nothing to do with the underlying torts and never represented the attorney somehow they would be held strictly liable for the concealed torts of another firm member which to me ask you this because as you know conflicts of interest on all of the attorneys and firms in the same firm why should you sherry duty the similarly apply to all of the attorneys in front because you're you're comparing two different things your honor you're comparing want to rule of professional conduct which is a standard that governs the conduct of attorneys and how they conduct their practice as attorney in the field or profession of law separate and apart from however tort law which governs conduct towards a rd party and the courts have been very clear including b prospect funding holding case that you can't in this make sense tort law like the new shared duty is designed to address and provide remedies for parties conduct directed towards a rd party here stanley didn't do anything towards a rd party conversing the rules of professional conduct provide guidance of how an attorney supposed to act professionally standard stanley was bound by those rules of freshman conduct here but that can't substitute for a cause of action wondered for towards a rd party of which he was not that sort of user and he did nothing wrong towards them and i think you're be setting a very dangerous precedent if you were somehow allowing future litigants to seek to hold attorneys individually liable under tort hereis based on the rules of professional conduct in other words utilizing honour's may please the court i'm william server yanno and i represented the currys in the underlying case and here on appeal i think we have to keep in mind what the trial court did here the trial court did not rely on any specific factor but look at all of the undisputed facts and circumstances of this case and those were many and diverse we've already mentioned judge per cat mention that stanley and kathleen were husband and wife they they lived together they worked together in not a large firm it was a two person firm you know you know operate out of a single location  all the facts and circumstances and the existence of a rule of professional conduct was one factor that the judge took into account but i don't think that was the sole factor that the court relied upon what was the satish  obviously extends to the lawyer who represents a client and i think what the court said is based on the undisputed facts and circumstances of this case it also is extended just stanley knew he was  i agree judge said but it and i am going to resist any effort to point to one particular backed undisputed fact as case as the basis for if i do share relationship because i don't think that's what the court was doing i think the trial court looked at everything in this case all of the circumstances including the rules of professional conduct including that he was a president including that he exercised authority over the count has signature authority on it including the fact that he was married looked at all of those things and said in the circumstances of this case and i think judge burkett you referred to it earlier as being a unique situation in the r as a matter of fact it really is kind of i think a combination of both but i think what the trial court did was it said as a matter of the undisputed the appellate rely to say there was no if i do sherry duty in this case and we were pointing out that those cases essentially don't apply those of those are just general principles of when if i do share you duty  to the case is that you say none of them say anything about the duty of an attorney to safeguard the client's funds do they they do need your point you're saying is he do any of those cases say that the duty to safeguard a client's funds extend to other lawyers in a firm i don't i don't have a case that specifically says that so but but in the circumstances of this case and the undisputed facts of this uni case i think it was fair for the judge to stand that well the because the air d c is not looking at the same cause of action that they have this court for and the underlying court look at they're looking at a breach for you sure a duty you rely upon  so the fact is you're talking about as they were married it was president there's a rule of professional conduct that's it that's what i think about no i i think but there what what else was there well there was there was one aisle to account stanley knew his signature authority on it he reviewed the account every every at least once a month according to his test for any testimony the ledger that he had he saw identified funds coming in specifically from the currys and going out to mining companies that he said they don't do any business with he was prior to the deposits as you pointed out earlier judson off there were there were massive deposits coming in and out of that account that were the currys prior to that there have been very little activity in that account then after that there was very little activity in that account so all of these factors and i think our brief really cites one thousand or so effect factors including the past disciplinary history of a bow stanley and kathleen court looked at all of those things and they were undisputed and said those are the things that i'm i'm looking at it's not just that they're married that they're in the firm it's all of these things or have repairs disciplinary action be relevant to what happened here i think what the trial court looked at they have for purposes purposes of was to say there was some heightened conservatives should have been some heightened concern on the part of stanley new for the that the prior conduct of kathleen knew she was a signatory on this account with play pes disciplinary proceedings including one in which she signatures of clients that perhaps she should not have been on the account and when mr marx talks about all this going to be horrible for big firms i was a partner in general block i did not have access to the handled with with absolute discretion all the way through and we're not imposing some huge burden on mr marks a seventy five person firm i'd be willing to to wager that mr marks can't my personal view is and i know from my experience as i'm sure mr mark status is that large firms don't have this problem because they don't permit access to client trust accounts by everybody in the firm they're strictly managed they're highly controlled they do the sorts of things that stanley knew never did as the court said he did nothing this is trying to understand so where do we draw the line i'm not here to advocate for a general rule necessarily i'm here to say wherever you draw that line stanley knew falls within the ambit of somebody who should be held personally responsible because of the unique jackson circumstances of this case so i would encourage your honour's based again on the unique circumstances of this case and given the way that the trial court considered all of those facts and circumstances which were undisputed relevant i think we're not using five point one c the way bet that the that the appellant here says we're using it we're not using it to create a cause of action otherwise that for an attorney to zero a client if you share a duty you're either asked to be an attorney client relationship or through clear and convincing evidence the client's place such trust incompetence and that attorney that the attorney gained influence and superiority over the standards simply not met here there's no suggestion that there's lawfully otherwise we've cited both sat cases one example where summary judgment was granted in favor of an attorney as that was not clear and convincing evidence of the existence of the new sherry relationship point number two it seems on that mr soriano is largely relying on because he seems to have backed away that five point one somehow created cause of action he's largely relying on the fact that stanley was the firm's president that somehow that created lawyer in a professional corporation and partners in a law firm oh a fiduciary duty to the law for so his role as president would have created duty to the firm it doesn't create necessarily an individual to do surely duty to a firm client he doesn't represent and had no dealings limit the scope of this court's decision to affirm the trial court and mr siriano here a couple times said oh mr marks firm they don't have this problem larger firms don't have this problem i worked at general pop we didn't have this problem the ruling that would be affirming here  i think will create a grave risk for any small firm continuing to operate because what's going to happen is someone in a small firm is going to look at this ruling and say wait i'm if you're telling me contrary illinois law i think iowa buescher a duty to some client i didn't do any work for and i'm going to be held individual liable if i don't catch and ferret out in discern the fraud one of the partners in my firm may be doing despite i'm doing everything else right why would i ever work at a small for i'm going to go to the general block as mr serrano said because they don't have these problems you can't possibly make a ruling that somehow the unique facts of a small firm somehow raise a heightened standard of duty above and beyond what would be held corys have that relief they started against the firm and the actual court fees are kept we knew but to hold an individual tourney individual liable for the top concealed torts of someone else is a strict liability standard that is going a step too far  conflating two different issues and mixing apples and oranges by point one c certainly applied stanley as it applied to any officer of corporate or any any of attorney supervising a firm you have a duty a rule under rules relationship number one number two i agree with him in the sense that a five point one c doesn't apply here because five point one c gives rise to supervisory liability only when there's actual knowledge of the tort that's being committed in here it doesn't apply because the evidence is very clear that this was concealed not only from stanley as it was going on but the record reflects he didn't even have knowledge of this lawsuit until it was many months in any in kathleen indicated what she hid and caused to be concealed in misrepresented her scheme to defraud and so stanley certainly there's nothing in the record indicate that stanley had any knowledge of the so i would agree that five point one c doesn't apply from the standpoint that there would be no reason to have a disciplinary proceeding against stanley in a supervisory role because he didn't have actual  the additional questions just as i don't know and i have no questions the court at this time wish to thank both parties for your arguments this morning and the case will be taken under advisement just position will be