JJ discussed a case yesterday filed against local attorneys Richard Scwhartz and Vann Leonard by a Shirley Douglas. Ms. Douglas suffered injuries and damages from an auto accidence several years ago and retained Mr. Schwartz. She subsequently filed bankruptcy. Mr. Schwartz negotiated a $500,000 settlement for her. He hired Vann Leonard to apply to the bankruptcy court for approval of his fees of $172, 414 and gave Mr. Leonard the remainder of the funds to deposit with the bankruptcy court. The bankruptcy trustee and Ms. Douglas filed separate lawsuits alleging Mr. Leonard kept the money for himself and thus misappropriated the funds.
The crack EIB research team found this lil ole 1993 ruling handed down by the Mississippi Supreme Court regarding whether an attorney is liable for other attorneys he hires in Duggins v. Guardianship of Maurice Kendall Washington (632 So.2d 420, 1993). W.B. Duggins was an attorney in Vicksburg who associated Douglas Barfield on a case to pursue a medical malpractice claim. Mr. Barfield lied to Mr. Duggins and said he filed the lawsuit when in fact it was never filed and he gave him a case number to an older Barfield case. Mr. Barfield negotiated a settlement for the plaintiff then proceeded to misspend most of the funds. Mr. Barfield was subsequently prosecuted and convicted for his misdeeds.
The Court ruled Mr. Duggins was liable for Mr. Barfield's misdeeds even though he himself did nothing wrong:
"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..."
The Court said "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 Court ruled they were partners and absent any written agreement to the contrary, which did not exist, Mr. Duggins was indeed liable for the actions of his "partner", Mr. Barfield. and that
"§ 79-12-27 (Mississippi Code) 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
(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)."
The Court also ruled Mr. Duggins was liable for punitive damages:
"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.."
It would seem Mr. Schwartz has something to worry about in terms of his association with Mr. Leonard.
Friday, December 3, 2010
Is Richard Schwartz liable for the alleged actions of Vann Leonard?
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15 comments:
EIB?
Excellence in Blogging? Perhaps a parody of Rush's broadcasting network?
Why did he get to take his full cut from the settlement before she went into bankruptcy? (35% for a settlement?) Wouldn't the fair thing be for Richard to get in line with all of the other creditors and get his equitable share? Wait, sorry, I forgot we were talking about lawyer fees.
bet this gets swept away faster than cam newton's daddy can say one hundred
show me the $$ money $$
I always wanted to know how lawyers who handle bankruptcy get paid. I got a letter once for an over due invoice from the bankruptcy court sent by their lawyer saying they had zero assets and would not be paying.
I asked the attorney if he got paid, and he said yes he gets the fee before the filing. I wrote a worthless letter (for fun) to the court stating that my invoice predated the attorney's and I should be ahead of him in line.
No response (or check) was ever recieved.
http://www.madison-co.com/elected_offices/chancery_clerk/court_house_search/fed_tax_lien_file_inquiry.php?serial=&name=klingler&do_search=Submit+Query
There are crooks everywhere...!!!
Read about this case for an Ethic's class. I could be wrong, but can't an attorney prevent being liable for the acts of an associated attorney, if the first attorney spells out the division of liability in the association contract.
You are right he can protect himslef with a written agreement. One wonders why RS didn't mention it in his response if he had done so..
Thought this type of protection also required disclosure to the client, and the client's participation in the contract? This is the problem in my view - client hires a lawyer that he or she trusts, and ought to be able to hold that lawyer accountable if another lawyer unknown to the client screws up the case.
If Richard Schw. has no written agreement with Mr. Leonard, there might is a good reason why he did not get one executed. There could be more here than meets the eye.
Schwartz was dumb/negligent to give the money to Leonard. He should have paid it to the Trustee.
You must be one desperate unemployed reporter to post this kind of innuendo without a single human source willing to speak on the record. Pathetic fail. JJ
2:15PM: Not disagreeing with that at all. Mr. Schwartz's response was posted here and as he makes further responses, they will be posted as well.
I guess one call didn't do it all.....
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