4-11 "Rogue" Attorney

JurisdictionUnited States

4-11 "Rogue" Attorney

At times, an attorney in a law firm may be found to have engaged in improper acts without the firm's knowledge or consent.287 If these acts prejudice a client, it is likely that the client will try to hold the law firm accountable. In such instances, the firm may be able to escape liability by arguing that the malfeasant lawyer was a "rogue." The success of such a defense generally turns on: (1) the extent to which the lawyer hid his or her activities from the firm and (2) whether the firm had proper safeguards in place to deter, detect, and derail such acts.

In Saralegui v. Sacher, Zelman, Van Sant Paul, Beily, Hartman & Waldman, P.A.,288 for example, two men from Uruguay purchased investment contracts at the suggestion of Martin Doyle, a partner in the Sacher, Zelman law firm. Doyle told them that if they invested, they would receive a 50% return on their money in 30 days. Doyle also told them that the investments were being guaranteed by Sacher, Zelman.

When the investments did not pan out, Doyle lost his license to practice law and the two men sued Sacher, Zelman. In finding that the firm had no liability, the Third District Court of Appeal wrote:

While "apparent agency" is not a magic phrase or the exclusive incantation necessary to assert the claim, facts supporting all three elements must be alleged: "1) a representation by the purported principal; 2) reliance on that representation by a third party; and 3) a change in position by the third party in reliance on the representation." Ocana v. Ford Motor Co., 992 So. 2d 319, 326 (Fla. 3d DCA 2008). The second amended complaint alleged that Doyle acted in the course and scope of his employment with Sacher Zelman, but this was contradicted, not established, by the parties' submissions before the summary judgment hearing. Sacher Zelman's representations . . . lnvolved Doyle's authority to render legal advice to firm clients, not his authority to commit the firm as a party to loan agreements. Further, any representations regarding the specific loan transactions were made by Doyle, not by the firm. Finally, the appellants concede that . . . Doyle's . . . alleged promises were made . . . with no authorization or ratification by Sacher Zelman.
Had Sacher Zelman retained proceeds of Doyle's fraudulent scheme in its trust account, the appellants could have chosen from a menu of legal remedies to freeze and obtain recovery of the funds. But in light of the uncontroverted fact that the firm

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