Citation. Roach v. Mead, 722 P.2d 1229, 301 Ore. 383, 1986)
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Brief Fact Summary.
David J. Berentson, (Appellant), appeals the decision of the Oregon Court of Appeals affirming the trial court holding that Appellant was vicariously liable for the negligent acts of his partner, Kenneth Mead.
Synopsis of Rule of Law.
If a third person reasonably believes that the services he has requested of a member of a law partnership is undertaken as a part of the partnership business, the partnership should be bound for a breach of trust incident to that employment even though those engaged in the practice of law would regard as unusual the performance of such services by a law firm.
Facts.
Kenneth E. Mead, (Mead), was Appellant’s former law partner. Roach, (Appellee), asked Mead’s advise on investing his $20,000. Mead offered to take the money at 15% interest stating that he expected to receive a large sum of money with which he would repay Appellee. Mead did not repay the loan and declared bankruptcy. Appellee sued Appellant’s partnership for negligence alleging that the partnership failed to advise Appellee on the legal aspects of the loan.
Issue.
Whether Mead’s failure to advise Appellee of the legal aspects of the loan falls within the scope of the legal partnership.
Held.
Yes. Mead’s failure to advise Appellee of the legal aspects of the loan falls within the scope of the legal partnership and therefore responsibility for Mead’s negligence was properly charged to Appellant as Mead’s partner.
Discussion.
Plaintiff thought Mead was giving him investment advice. The giving of advice regarding legal aspects of loans and investments in general is a normal part of law practice. Plaintiff reasonably believed that investment advice was within the scope of the partnership’s business. When a lawyer borrows money from a client, the court requires that the lawyer advise the client about the legal aspects of the loan. Mead’s failure to do so was within the scope of the legal partnership. Responsibility for Mead’s negligence was therefore properly charged to Appellant as Mead’s law partner.
