Baker Donelson Bearman Caldwell & Berkowitz v. Seay


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Docket Number: 2008-IA-00768-SCT
Linked Case(s): 2008-M-00768-SCT2008-IA-00768-SCT2008-IS-00768-SCT
Oral Argument: 02-09-2010
 

 

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Supreme Court: Opinion Link
Opinion Date: 06-10-2010
Opinion Author: Randolph, J.
Holding: 2008-IA-00768-SCT: Reversed and remanded; 2008-IA-00999-SCT: Affirmed in part, reversed and remanded in part.
Additional Case Information: Topic: Breach of fiduciary duty - Liability of professional corporation - Section 79-10-63(2) - Section 79-10-67(2) - Vicarious liability - Section 228 of the Restatement (Second) of Agency - Properly authenticated documents - M.R.E. 902(8) - M.R.E. 901(b)(4) - M.R.A.P. 10 - Work product doctrine - M.R.C.P. 26(b)(3) - Attorney-client privilege - M.R.E. 502(b) - Motion to compel physical & mental examination - M.R.C.P. 35
Judge(s) Concurring: Waller, C.J., Carlson, P.J., Dickinson, Lamar and Chandler, JJ.
Non Participating Judge(s): Graves, P.J., and Kitchens, J.
Concur in Part, Dissent in Part 1: Pierce, J., With Separate Written Opinion.
Procedural History: Summary Judgment
Nature of the Case: CIVIL - OTHER
Trial Court: Date of Trial Judgment: 04-14-2008
Appealed from: Hinds County Circuit Court
Judge: Tomie Green
Disposition: The circuit court entered orders denying Reed’s Motion for Partial Summary Judgment and Baker Donelson’s Motion for Summary Judgment.
Case Number: 251-05-477
  Consolidated: Consolidated with 2008-IA-00999-SCT William N. Reed and Baker Donelson Bearman Caldwell & Berkowitz, P.C. v. Sam Seay; Hinds Circuit Court 1st District; LC Case #: 251-05-477; Ruling Date: 05/27/2008; Ruling Judge: Tomie Green
  Party Name: Attorney Name:  
Appellant: Baker Donelson Bearman Caldwell & Berkowitz, P.C. and William N. Reed




 MICHAEL W. ULMER, JAMES JOSEPH CRONGEYER, JR., JAMES MATTHEW TYRONE, JOHN P. SNEED, REUBEN V. ANDERSON, FRED L. BANKS, JR.



  
Appellee: Sam Seay PHILLIP J. BROOKINS, JOHN LEONARD WALKER, JR.  
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Topic: Breach of fiduciary duty - Liability of professional corporation - Section 79-10-63(2) - Section 79-10-67(2) - Vicarious liability - Section 228 of the Restatement (Second) of Agency - Properly authenticated documents - M.R.E. 902(8) - M.R.E. 901(b)(4) - M.R.A.P. 10 - Work product doctrine - M.R.C.P. 26(b)(3) - Attorney-client privilege - M.R.E. 502(b) - Motion to compel physical & mental examination - M.R.C.P. 35
Summary of the Facts: Sam Seay filed suit against William Reed and Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C. The complaint included separate counts of negligent infliction of emotional distress, alienation of affections, and breach of fiduciary duty as to Reed, and counts of breach of fiduciary duty, empowerment, negligent failure to supervise, and vicarious liability as to Baker Donelson. The circuit court entered orders denying Reed’s Motion for Partial Summary Judgment and Baker Donelson’s Motion for Summary Judgment. Reed and Baker Donelson appeal.
Summary of Opinion Analysis: Issue 1: Breach of fiduciary duty Sam argues that a genuine issue of material fact exists regarding a breach of fiduciary duty by Reed. A fiduciary duty must exist before a breach of the duty can occur. A fiduciary relationship may arise in a legal, moral, domestic, or personal context, where there appears on the one side an overmastering influence or, on the other, weakness, dependence, or trust, justifiably reposed. In this case, Sam’s breach-of-fiduciary-duty claims are specifically predicated upon the existence of an attorney-client relationship. An attorney-client relationship exists when a person manifests to a lawyer the person’s intent that the lawyer provide legal services for the person; and the lawyer manifests to the person consent to do so, or fails to manifest lack of consent to do so, knowing that the person reasonably relies on the lawyer to provide the services, or a tribunal with power to do so appoints the lawyer to provide the services. As such, fee payment by the client to the attorney is not required. In this case, a professional relationship arose when the relationship evolved from a personal, ordinary type of relationship to that of attorney-client for intervals of time. As lifelong friends, Reed occasionally had provided Sam with free legal services over the years. Following Sam’s termination from his job at BancorpSouth, Reed opened a pro bono file, repeatedly referred to Sam as his client in correspondence with BancorpSouth, allegedly advised Sam and Jones, and attended Sam’s deposition in September or October 2004. Thus, the professional relationship coexisted with the personal relationship for these intervals of time. Thus, Reed owed Sam a fiduciary duty. An attorney-client relationship imposes the following duties: the duty of care, the duty of loyalty, and duties provided by contract. The duty of loyalty is fiduciary in nature. Its breach may take one of two forms. The first involves situations in which the attorney obtains an unfair personal advantage, such as acquiring property from a client; the second involves situations in which the attorney or other clients have interests adverse to the client in question. Sam argues that Reed failed to safeguard confidential information regarding Sam’s impotence, and instead utilized such information to seduce Sam’s wife. There is no genuine issue of material fact regarding the claim of exclusive confidentiality of such information, as Sam admitted that his wife was aware of his impotence prior to the affair. Even if there were a confidential disclosure, it was unrelated to the representation undertaken and, thus, outside the attorney-client scope of this commingled relationship. No material facts have been presented to support that the subject affair was in any way related to the representation or arising therefrom. Thus, the circuit court erred in denying partial summary judgment to Reed as to Sam’s claim of breach of fiduciary duty. Issue 2: Professional corporation Section 79-10-63(2) provides that the relationship between a domestic or foreign professional corporation and the client or patient for whom its employee is rendering professional services is the same as that between the client or patient and the employee. Section 79-10-67(2) adds that a domestic or foreign professional corporation whose employees perform professional services within the scope of their employment or of their apparent authority to act for the corporation is liable to the same extent as its employees. Baker Donelson argues that it cannot be seriously contended that the consensual affair (or solicitation of that affair) between Reed and Sam’s wife – who had been friends for more than thirty years – was within the scope of Reed’s employment or within the scope of his apparent authority to act for Baker Donelson. Some actions are so clearly beyond an employee’s course and scope of employment that they cannot form the basis for a claim of vicarious liability, as a matter of law. Under Section 228 of the Restatement (Second) of Agency, conduct of a servant is not within the scope of employment if it is different in kind from that authorized, far beyond the authorized time or space limits, or too little actuated by a purpose to serve the master. If an employee deviates or departs from his work to accomplish some purpose of his own not connected with his employment – goes on a frolic of his own – the relation of master and servant is temporarily suspended. Given the fact that the subject affair was not in any way related to the representation or arising therefrom, along with Sam’s admission that the affair was not “motivated by a desire to benefit Baker Donelson” and the absence of any evidence that anyone at Baker Donelson other than Reed, was aware of the affair prior to Sam’s demand, this is the type of frolic so clearly beyond an employee’s course and scope of employment that it cannot form the basis for a claim of vicarious liability, as a matter of law. An employer’s duty to supervise does not include a duty to uncover his employees’ concealed, clandestine, personal activities. Sam acknowledged that the affair was “secret and covert,” and that Baker Donelson gained no “corporate benefit” therefrom. This concealed, clandestine, personal activity is the type which Baker Donelson had no duty to supervise. Thus, the circuit court erred in denying summary judgment to Baker Donelson on Sam’s claim of negligent supervision. Sam’s direct-breach-of-fiduciary-duty claim against Baker Donelson is based upon the law firm’s refusal to apologize for Reed’s actions, failure to formally discipline Reed, and act of hiring a private investigator to examine Sam’s claims, following Sam’s demand of payment. As to Sam’s claims regarding alleged failure to apologize or formally discipline Reed, Sam provided no authority to support his assertion that such actions give rise to a cognizable claim of breach of fiduciary duty. All defendants are legally entitled to defend themselves. Baker Donelson is no exception. Additionally, none of Sam’s claimed damages purport to relate to conduct arising on or after his demand on November 12, 2004, the initial date when Baker Donelson was apprised of the “secret and covert” affair. Thus, the circuit court erred in denying summary judgment to Baker Donelson on Sam’s claim of direct breach of fiduciary duty. Issue 3: Properly authenticated documents Sam argues that the Court has not been presented with properly authenticated documents – a DVD recording transcript and a letter - for purposes of appellate review. Regarding authentication of the DVD recording transcript, Reed maintains that the document is “self-authenticating,” pursuant to M.R.E. 902(8). As to authentication of the letter, Reed contends that the distinctive characteristics of the letter establish its authenticity pursuant to M.R.E. 901(b)(4). M.R.A.P. 10(a) provides that the parties shall designate the content of the record. While M.R.A.P. 10(b)(2) does require an appellant to provide a proper designation to allow the reviewing court to resolve the issues, an appellee has the opportunity to supplement the appellant’s designation if the appellee feels that it is deficient, and should not then be allowed to complain if he fails to do so. The circuit judge found that the DVD recording is protected by the attorney work product doctrine and not admissible at trial. The work product doctrine protects an attorney’s thoughts, mental impressions, strategies and analysis from discovery by opposing counsel. While Sam provided deposition testimony that an attorney had advised him to tape-record the confrontation between Sam and his wife, the Court is unpersuaded that the actual DVD recording of the subsequent confrontation represents mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation as provided by M.R.C.P. 26(b)(3). The work-product doctrine pertains to pretrial discovery, not admissibility, such that the circuit court abused its discretion in predicating its admissibility determination thereon. The admissibility of the DVD recording is to be determined at trial absent any consideration of the attorney work product privilege. With regard to the letter, the circuit judge found that the attorney-client privilege attached to the letter, such that it was not admissible as evidence or for use as impeachment. The attorney-client privilege under M.R.E. 502(b) relates to and covers all information regarding the client received by the attorney in his professional capacity and in the course of his representation of the client. Included are communications made by the client to the attorney and by the attorney to the client. At oral argument, counsel for Sam acknowledged that he did not receive the letter. Therefore, there is no evidence that the letter, not received by counsel, constituted a privileged communication to which the attorney-client privilege applies. The admissibility of the letter is to be determined at trial absent any consideration of the attorney-client privilege. Issue 4: Motion to compel physical & mental examination The defendants filed a Motion to Compel Physical and Mental Examination of Plaintiff, which the court denied. There is a dearth of Mississippi caselaw on M.R.C.P. 35. Given this fact and the limited nature of the record with respect to this issue, the circuit court did not abuse its discretion in denying the motion.


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