In Wildasin v. Mathes, 2016 U.S. Dist. LEXIS 31672 (M.D. Tenn. Mar. 11, 2016), a federal court was called to decide whether an association of lawyers could be held vicariously liable for the malpractice of a member. The court found that it could.
In this case, a member (Mathes) of an “association of attorneys” was alleged to have committed malpractice as administrator of the plaintiff’s mother’s estate by misrepresenting a piece of property in advertisements and by not showing up at the auction sale, so that the property was sold for almost 1/3 less than its market value. Plaintiff sued Mathes for negligence and his “association” as “vicariously liable for Mathes’s negligent failure to provide legal services.”
Edward Hiland, Mike Urqhart, and Mathes (“HUM”) were Tennessee attorneys practicing law in Nashville. Several years ago, they formed “a limited-liability company designed to help share business expenses”, they “work[ed] together in a Nashville office space, where they split the cost of rent.” They co-owned the office furniture and the copy-machine and they shared a receptionist. They shared the same “letterhead—bearing the phrase ‘Hiland, Urqhart, and Mathes: an Association of Attorneys’ —and have sometimes ‘inadverten[tly]’ included the name of the association on state-court pleadings. But they point out that they have no shared bank account, nor do they file shared tax returns for business expenses.” (internal citations omitted)
In the words of the court “[d]espite some appearance otherwise, Hiland, Urqhart, and Mathes maintain that they are not a law firm, but ‘an association of attorneys.’” (internal citations omitted). On this basis, they moved for summary judgment.
The court did not have to find that HUM was a law firm to deny the motion.
HUM’s position was that they were not a partnership and for this simple reason they could not be held vicariously liable. The court disagreed: it is not true that “only a partnership—and no other business organization—may be held vicariously liable for a member”s tortious conduct.” The court noted that under Tennessee law “unincorporated associations are legal entities capable of being sued”, they are not “not exempt from liability when a member violates a state statute or regulation” and “may be liable for the debts that its members assume” (citations omitted).
Looking at Tennessee law, the court wonderer why “[i]f vicarious liability can attach when a member of an unincorporated association violates a statute or breaches a contract, [it should not be the same]… when a member commits a tort?” and denied the motion for summary judgment.
Later on, however, the court on reconsideration granted the summary judgment: because Plaintiff could not prove her negligence claim against Mathes (Wildasin v. Mathes, 2016 U.S. Dist. LEXIS 43524 (M.D. Tenn. Mar. 31, 2016), the vicarious liability claim had to fail. Wildasin v. Mathes, 2016 U.S. Dist. LEXIS 49112 (M.D. Tenn. Apr. 12, 2016).
The final result of the case support however the proposition that an “association of attorneys” can be vicariously liable for the torts of its members.
For more information, Nathan M. Crystal
