Court Opinion

ID: 9531219
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:08:46.147869+00
Date Added: 2024-06-11T13:28:22.291989
License: Public Domain

SULLIVAN, Judge,
concurring.
I agree that the claims are not barred by the statute of limitations. I further agree that the grant of summary judgment in favor of the defendants was not erroneous. I do so, however, with some degree of misgiving.
It may be true that an attorney employed to represent a partnership is not counsel for the individual partners. As suggested by the majority opinion, imposition of a general fiduciary duty to all partners, no matter how numerous those partners may be and regardless whether individual partners have conflicting interests among themselves or with the partnership, would be extremely unwieldy and virtually impossible to effectuate.
Nevertheless, I am unable to agree that such attorney has no duty whatever to the individual partners. Implicit in the Rules of Professional Conduct is a duty to refrain from willfully misleading individual partners with respect to the affairs of the partnership. The concept of good faith and fair dealing runs throughout the Rules.
If an attorney participates in a fraudulent conspiracy which is certain to injure known third persons, the attorney should not find refuge in an attorney-client relationship with the partnership. See Scholes v. Stone, McGuire and Benjamin (1992) N.D.IIl., 786 F.Supp. 1385, 1395.
If the alleged malpractice constitutes fraud, collusion, or results from a malicious or tortious act, a defendant should not be permitted to shield himself with the legal principle that such claims fall into the category of all other legal malpractice claims, e.g., simple negligence. See Shideler v. Dwyer (1981) Ind., 275 Ind. 270, 417 N.E.2d 281.
With reference to the allegations of fraud here, it is quite probable that plaintiffs would be unable to establish at trial that Strunk *1156had defrauded them. That fact, however, does not justify summary judgment. Yang v. Stafford (1987) 4th Dist. Ind.App., 515 N.E.2d 1157. Rather, summary judgment was warranted because until the other partners had actually terminated Rice's employment, Strunk did not have knowledge of an existing or past fact. He merely had knowledge that the other partners intended to engage in an act in the future. In this sense, the failure of Strunk to make full disclosure of that intention was perhaps, as a matter of law, not the stuff of which a fraud recovery is made. Wisconics Engineering, Inc. v. Fisher (1984) 2d Dist. Ind.App., 466 N.E.2d 745. Cf. Cap Gemini America, Inc. v. Judd (1992) 1st Dist. Ind.App., 597 N.E.2d 1272 (applying California law); First National Bank of New Castle v. Acra (1984) 1st Dist. Ind.App., 462 N.E.2d 1345 (promise of future conduct coupled with past conduct justified reliance and supported fraud claim).
Even if Strunk's knowledge of the others' future intentions could be considered a present fact, the summary judgment was not erroneous. The matters before the trial court with reference to summary judgment, in my view, disclose the absence of a genuine issue as to whether any compensable injury was occasioned by the acts or nonfeasance of the attorneys. This is clearly true with regard to any claimed damages resulting from the termination of Rice's management contracts by the other partners. The attorneys clearly had no control or input with respect to that decision.
I also perceive no compensable injury to Rice regarding his assertion that, had he known of his prospective termination, he would not have agreed to the refinancing arrangement. Clearly, the refinancing was absolutely essential to the best interests of the partnership, including the partnership interest of Rice. Thus Rice, as a partner, has no viable claim for damages as a result of the refinancing. Additionally, his capacity as a management employee was unaffected by the refinancing.
A somewhat parenthetical thought is prompted by the fact that Strunk stood to benefit and, by accepting the offer to succeed Rice, did in fact benefit from the termination. Such cireumstance is susceptible to an inference that a claim may have been asserted upon a theory of tortious interference with Rice's management contract. See 1 Ronald E. Mallen & Jeffrey M. Smith, Legal Malpractice, § 6.23, p. 348 (3d Ed.1989). However, the claims asserted are clearly focused upon theories of fraud, breach of a fiduciary duty, conspiracy, and breach of a duty to advise of the need to obtain independent counsel.
Even if the allegations be construed to embrace the concept of tortious interference, recovery in Indiana requires proof that the defendant induced a breach of contract. Furno v. Citizens Insurance Co. of America (1992) 1st Dist. Ind.App., 590 N.E.2d 1137. Malice is also a required element. Mallen, supro at § 6.23. Here, there is no evidence or reasonable inference that Strunk mali-clously induced or advised the termination. The decision to terminate Rice's management contracts had already been made by the other partners. That Strunk benefitted from the termination may present ethical and moral questions, but it does not, of itself, provide the seeds for recovery under the complaint filed or the facts alleged. Not every breach of ethical conduct gives rise to a private cause of action.
Subject to the caveats expressed herein, I concur.