Opinion ID: 1102999
Heading Depth: 1
Heading Rank: 3

Heading: Should Duggins be held vicariously liable for the actions of Barfield?

Text: In this age of specialization of attorneys, it is not uncommon for the association of counsel in areas in which an attorney might not possess the required knowledge to pursue his client's claim. With this association goes the sharing of control and responsibilities, the work involved, and the rewards. However, too often overlooked are the liabilities and the possible exposure that go along with association. Such is the case with this present appeal. Necessary to an association of counsel is the client's knowledge and consent to this association. An agreement, preferably in writing, with the client concerning the division of legal representation may prevent the liability of one attorney for any errors committed by the other. See Ronald E. Mallen & Jeffrey M. Smith, Legal Malpractice, § 5.6 at p. 279 (3rd ed. 1989); see also Foster v. McLain, 198 So.2d 463 (La. 1967). However, if the division of responsibility is not clearly spelled out, the client's consent to the association does not prevent vicarious liability between or among counsel when the attorneys share the representation and legal fees. See Mallen & Smith, supra at pp. 279-80. Even an attorney who retains a supervisory role in the pursuance of a claim may be directly liable for negligent supervision. Id.; see also Tormo v. Yormark, 398 F. Supp. 1159 (D.N.J. 1975). The question at the heart of this case is whether an attorney who associates another attorney remains vicariously liable for the associated attorney's actions. The appellant Duggins asserts that the answer is no, claiming that his relationship with Barfield was that of an independent contractor, and as such, he is not liable for the actions of Barfield. The Guardianship, on the other hand, argues that Duggins remains vicariously liable for Barfield's actions according to partnership and joint venture law. An independent contractor is one who contracts to do work according to his own methods without being subject to the control of his employer except as to the results of the work. Miss. Code Ann. § 71-3-3(r) (1972). Consequently, the beneficiary of work performed by an independent contractor is not liable for acts or omissions of the contractor. Webster v. Mississippi Publishers Corp., 571 So.2d 946, 951 (Miss. 1990); Fruchter v. Lynch Oil Co., 522 So.2d 195, 199 (Miss. 1988). However, the key issue which needs to be analyzed between the parties is control. Duggins initiated Barfield's association in the case, not the guardians. The employment contract, executed by Mary and Willie, was with Duggins, not Barfield. The contract gave Duggins the power to associate whomever he wanted without having to get client consent. Therefore Barfield's participation in the case is solely attributed to Duggins. When Duggins associated Barfield, it was not as an independent contractor, but an equal. Duggins was to handle the client contact and do all the necessary leg work such as compiling medical records. Barfield was to use his experience in the area of medical malpractice to draft and file the complaint and to negotiate with the insurance company in the hopes of settling the claim. Although a written agreement was never executed between Duggins and Barfield, it was mutually agreed upon that the fees be split 50/50 between them. It was therefore inherent in the agreement that each attorney would have an equal stake in the outcome of the case and there would be joint control of the case. Were Barfield an independent contractor, his likely fee would not have been a percentage of the outcome but a set figure determined at the outset. The nature of the partnership's business establishes the apparent scope of the partner's authority. Apparent authority is limited to the normal business of the law firm. See Mallen & Smith, supra, § 5.3, p. 267. Duggins' and Barfield's relationship can be described as a joint venture, at the least. In Hults v. Tillman, 480 So.2d 1134 (Miss. 1985), this Court compared a joint venture to a partnership, stating: There is no difference between a partnership and a joint venture except the latter has limited and circumscribed boundaries. Indeed, the only purpose in distinguishing a joint venture from a partnership is to define a business relationship which is limited to specified undertakings for profit, rather than a general and continuing business of a particular kind. [Citations omitted] The legal principles for determining the existence of each are identical. [Citations omitted]. 480 So.2d at 1141-42. In simplest form, a joint venturers can be defined as a single purpose partnership, whereby the joint ventures undertake a single project for profit. Whittington v. Whittington, 535 So.2d 573, 586 (Miss. 1988). Because of these similarities, this Court has stated on several occasions that the Uniform Partnership Act (UPA), which this state adopted in 1976, is applicable to joint ventures. Whittington, 535 So.2d at 585-86; Hults, 480 So.2d at 1144-45. This being the case, we should look to the applicable portions of the UPA for guidance. The statutory definition of a partnership is an association of two or more persons to carry on as co-owners a business for profit. Miss. Code Ann. § 79-12-11 (1972). Deeply embedded in partnership law is that of agency law. Section 79-12-17(1) illustrates this, stating: Every partner is an agent of the partnership for the purpose of its business, and the act of every partner, including the execution in the partnership name of any instrument, for apparently carrying on in the usual way the business of the partnership of which he is a member binds the partnership, unless the partner so acting has in fact no authority to act for the partnership in the particular matter, and the person with whom he is dealing has knowledge of the fact that he has no such authority. Miss. Code Ann. § 79-12-17(1) (1972). According to this code section, a partner is an agent of the partnership and therefore binds the partnership if acting within the usual scope of the partnership. The UPA addresses liability among partners in § 79-12-25 stating: Where, by any wrongful act or omission of any partner acting in the ordinary course of the business of the partnership or with the authority of his copartners, loss, or injury is caused to any person, not being a partner in the partnership, or any penalty is incurred, the partnership is liable therefor to the same extent as the partner so acting or omitting to act. Miss. Code Ann. § 79-12-25 (1972). Therefore, a loss or injury caused by an individual partner acting within the scope of the partnership is imputed to the partnership. Next, § 79-12-27 states: The partnership is bound to make good the loss: (a) Where one partner acting within the scope of his apparent authority receives money or property of a third person and misapplies it; and (b) Where the partnership in the course of its business receives money or property of a third person and the money or property so received is misapplied by any partner while it is in the custody of the partnership. Miss. Code Ann. § 79-12-27 (1972). This code section requires that one partner make good for another partner's misappropriation of money or property while in the custody of the partnership. Finally, the UPA provides that all partners are jointly and severally liable for all debts and obligations of the partnership. Miss. Code Ann. § 79-12-29 (1972). In applying the UPA to this case, Barfield's acts can be clearly imputed to Duggins. Barfield's misappropriation of the guardianship's funds was well within the scope of the partnership's business. Barfield's involvement was procured solely by Duggins, and they agreed that any attorneys' fees would be split equally. Both attorneys had an equal stake in the case and depended upon each other's abilities in proceeding with the case. Even if this Court did not choose to apply the UPA to this situation, Duggins could be found accountable for Barfield's actions by applying the principles of vicarious liability. In support of Duggins' argument against vicarious liability being applicable to this case, he relies on the case of Idom v. Weeks & Russell, 135 Miss. 65, 99 So. 761 (1924). In Idom, one partner shot an alleged burglar outside of the partnership's store. This Court held the innocent partner not liable for his partner's actions which were committed outside the scope of the partnership. While Idom remains good law, it is distinguished from the present case. In this case, Barfield's actions were committed while in furtherance of the partnership and was certainly within the partnership business. The handling of client funds is clearly within the realm of an attorney's representation of a guardianship in a legal action. The cases on which the guardianship relies are more applicable to the circumstances sub judice. Although the cases are old, they remain good law. In Heirn v. McCaughan, 32 Miss. 17 (1856), this Court held that compensatory and exemplary (punitive) damages assessed because of a wrongful act of a copartner committed in pursuit of the partnership business could be recovered from a partner who had not actually participated in the act. Id. at 43. Heirn involved one partner's issuance of a letter stating that his ship would pick up certain passengers in Pascagoula on a certain day. However, the boat failed to make the scheduled stop. When the injured passengers filed suit, this court allowed compensatory and punitive damages against another partner who had not issued the letter. The reasoning behind this Court's decision was that the wrongful act was connected with the business of the firm, that the tort of one partner is considered the joint and several tort of all partners, and that the partner doing the act was considered the agent of the other partners. Id. at 50. Also, in Robinson v. Goings, 63 Miss. 500 (1886), this Court held that the conversion of three bales of cotton by one member of a firm in the furtherance of the business made the other members of the firm equally liable even though they took no part in the illegal act. Id. at 504. Moreover, punitive damages were allowed against the other partners. A search of other jurisdictions reveals several cases involving similar facts to the case sub judice. In Fitzgibbon v. Carey, 70 Or. App. 127, 688 P.2d 1367 (1984), review denied 298 Or. 553, 695 P.2d 49 (1985), the Oregon district court found that a law partnership who associated a professional legal corporation to pursue a class action constituted a joint venture. The court reasoned that a joint venture is in essence a contract, whether implied or expressed, and the intention of the parties is therefore controlling. Id. at 1370. The parties in Fitzgibbon agreed to carry on the business of representing the client as a business, for profit. Id. This intent may be demonstrated by showing joint rights of control, joint liability for losses and a right to share the profits. Id. The evidence showed an intent to share the decision-making process as well as the costs involved. Absent a specific agreement to divide the profits in a manner other than equally, it was determined that the fee would be divided equally. Although the issue in this case revolved around fee allocation, the principles of joint ventures are applicable to the case at bar. The same basis of intent to share both the responsibility and the profits from this representation clearly demonstrate the presence of a joint venture. Duggins was to do much of the preliminary work such as compiling medical records and maintaining client contact and Barfield was to draft and file the complaint and handle the negotiation process with the insurance company. Although the two attorneys were to handle different aspects of the case, they were both working for the same common goal, the maximization of the client's claim. Both attorneys were cognizant that their fee would be directly tied to the amount of the settlement of the claim. Likewise, in Floro v. Lawton, 187 Cal. App.2d 657, 10 Cal. Rptr. 98 (1960), the California District Court of Appeals held that in a legal malpractice action, a plaintiff could recover against both the initial attorney hired to represent the party as well as another attorney associated by the initial attorney. Due to a scheduling conflict, the initial attorney was not able to perform the necessary trial work for the case so he associated another attorney to represent the client at trial. Following the client's consent to this association, the attorneys agreed to divide the fee from the case on an equal basis. The plaintiff was successful in recovering a judgment for a slander claim, but was unsuccessful in his pursuit of his malicious prosecution and false arrest claims. Although the district court judge held that both attorneys were not proven to be negligent in their handling of the case, he did find that both attorneys could have been liable for the actions or omissions of the associated attorney with respect to the unsuccessful claims. Id. 187 Cal. App.2d at 671, 10 Cal. Rptr. at 106. An attorney who decides to associate other counsel can incur liability concerning the matter in which counsel is selected or recommended. See Mallen & Smith, supra at p. 281. In Tormo v. Yormark, 398 F. Supp. 1159 (D.N.J. 1975), a case not totally analogous to the case at hand but factually similar, the New Jersey court went further than we are called on to do today in that the issue before the court involved a New Jersey attorney calling to solicit business from a New York attorney. The New York attorney referred the case to the New Jersey attorney without investigating the New Jersey attorney's qualifications other than his being licensed to practice law in the State of New Jersey. Had the New York attorney made further inquiry, he would have found out that the New Jersey attorney had just been indicted for fraud. Following the referral of the case, the New Jersey attorney was convicted of the crime and subsequently disbarred. During the interim, the New Jersey attorney settled the case and embezzled a substantial portion of the proceeds. The New Jersey federal district court held that an attorney must exercise ordinary skill and care when referring a client to another attorney. The court did note that the New York lawyer was correct in relying on the State of New Jersey's granting a license to practice law since the license created a presumption that the attorney was fit to practice law. However, the district court did find liability based upon the New York attorney's failure to investigate the attorney who participated in the unethical conduct of client solicitation. That red flag should have alerted the New York attorney to check out the New Jersey attorney further. As the chancellor stated in his opinion, there were sufficient red flags which should have caused Duggins to realize that something was amiss. Duggins' negligence and inaction in investigating Barfield's suspicious conduct allowed the guardianship to be stripped of all its assets. Contrary to Duggins' claims of being victimized by Barfield, he is not the true victim. The true victim is the guardianship that Duggins was sworn to protect. There is no question that the guardianship relied on Duggins to pursue its best interests. Rather than spending his time trying to save his own dollars, Duggins should have given more energy to the efforts which would have restored all guardianship assets. His first duty as a member of the bar and as an employed attorney is to his client, the guardianship.