Is association of office-sharing lawyers liable for member's alleged malpractice? Maybe, judge says
An unincorporated association of lawyers who share an office isn’t entitled to summary judgment in a suit claiming it is liable for a member’s alleged malpractice, a federal judge has ruled.
U.S. District Judge Kevin Sharp of Nashville ruled against the association of three lawyers in a March 11 decision, reports the ABA BNA Lawyers’ Manual on Professional Conduct.
The lawyers—Edward Hiland, Mike Urqhart and Peggy Mathes—formed a limited liability company to help share expenses at the Nashville office where they work together. They share a receptionist, but they have no shared bank account and do not file shared tax returns. Their letterhead bills the group as “Hiland, Urqhart, and Mathes: an Association of Attorneys.” The association’s shortened name is “HUM.”
Because they are not partners, there is no shared liability under Tennessee law, the HUM lawyers argued.
“This logic is not exactly drum-tight,” Sharp wrote. “HUM’s conclusion hinges on its unspoken proposition that only a partnership—and no other business organization—may be held vicariously liable for a member’s tortious conduct. Unfortunately, HUM does not provide any legal authority to support that proposition.”
Sharp also noted that Tennessee law allows unincorporated associations to be sued; to be liable for a member’s statutory violation; and to be liable for debts of members contracted for in the name of the association. “If vicarious liability can attach when a member of an unincorporated association violates a statute or breaches a contract, can it also attach when a member commits a tort? HUM argues that it cannot, but offers nothing to support that argument,” he wrote.
The Lawyers’ Manual examined the malpractice plaintiff’s brief and said she appeared to be arguing liability through partnership by estoppel, though she didn’t use those specific words. Partnership by estoppel commonly arises in shared office arrangements where separate identities of individual lawyers aren’t apparent to the public, according to a treatise noted by the publication.
The malpractice plaintiff claims that Mathes, who was appointed administrator of the plaintiff’s mother’s estate, was negligent for misstating the size of the mother’s house in a real estate auction listing and for failing to attend the auction.
