Opinion ID: 1102999
Heading Depth: 1
Heading Rank: 4

Heading: Is Duggins vicariously liable for punitive damages?

Text: If the partner acted within the course and scope of actual or apparent authority, then even liability for fraudulent wrongs can be imputed to the partnership. See Mallen & Smith, supra at p. 268; see also Cook v. Brundidge, Fountain, Elliott & Churchill, 533 S.W.2d 751 (Tex. 1976); Smyrna Developers, Inc. v. Bornstein, 177 So.2d 16 (Fla.App. 1965). The other partners, though innocent without knowledge of the act or omission, can be vicariously liable. See Mallen & Smith, supra at p. 268. Duggins argues that punitive damages should not be assessed against him since he was an innocent partner to the misappropriation of the guardianship's funds. He again cites Idom as supporting authority. However, it seems apparent that if Duggins can be found to be vicariously liable for the actions of Barfield, he can also be found liable for punitive damages. The venerable cases of Heirn and Robinson both found punitive damages appropriate against an innocent partner for actions done by another partner while engaged in work within the scope of the partnership. Although these cases are quite old, they have both withstood the test of time, with their legal reasonings and conclusions intact. The same statutory arguments used in finding Duggins vicariously liable for Barfield's actions can be applied for the imposition of punitive damages. Specifically, § 79-12-27 of the UPA imposes a liability on a partner to make good a loss of another partner's actions when acting with the scope of the partnership. The chancellor in this case awarded punitive damages in the amount of $500 against both Duggins and Barfield. The chancellor based this determination on the statutory law which makes partners liable for each other's acts. The guardianship presented evidence concerning Duggins' office building, home, automobiles, and law practice. The testimony regarding Duggins' financial condition was of a general nature, not specifically elaborating on the actual value of each asset or liability. The court also received evidence concerning Duggins' insurance policies, although the policy itself was later withdrawn from evidence. As it has been determined that punitive damages can be assessed against partners when one partner's actions fall within the scope of the partnership, we must next ascertain whether guardianship proved the requisite net worth to support the imposition of punitive damages. In doing so, we must first determine if sufficient evidence of Duggins financial condition was presented to warrant the award of punitive damages. In Whittington v. Whittington, 535 So.2d 573 (Miss. 1988), this Court held that a lack of evidence as to the defendant's net worth (assets minus liabilities) to serve as a measure for punitive damages precludes such an award. However, in Beta Chapter of Beta Theta Pi Fraternity v. May, 611 So.2d 889 (Miss. 1992), this Court in essence overruled the strict and technical requirement of proving net worth as found in Whittington, stating: Only to the extent that Whittington requires proof of net worth to support an award of punitive damages, it is overruled so that all proof of assets, liabilities, income, accounting procedures that tend to diminish or expand any of those figures, and access to or denial of funds and properties may be considered if properly admitted into evidence. To the extent that Whittington requires a precise determination of net worth, May could not offer such proof in accordance with a conventional accounting method; however, the jury had enough information to determine that Beta was capable of paying a punitive damage award. 611 So.2d at 897. Because of the Beta fraternity's conduit-like cash flow basis, the fraternity's net worth could not be proven in a technical sense using conventional accounting methods. Although Duggins' net worth could technically be proven, the proof offered was of a general nature. When specifically asked about his home, cars, and office building, Duggins responded that he was still paying notes on them. No evidence of the amount of equity or the amount of debt associated with the assets was specifically presented, nor was any sort of financial statement. However, when Beta is applied to the present case, and the amount of punitive damages awarded is considered, it is evident that the guardianship presented enough proof of Duggins' net worth to support the imposition of the $500 punitive damage award. The amount awarded is sufficient to notice the defendant and the Bar in regard to the subject matter.