McFarland v. Niekamp, Weisensell, Mutersbaugh & Mastrantonio, L.L.P.
2017 Ohio 8394
| Ohio Ct. App. | 2017Background
- Plaintiffs Catherine McFarland and Jennifer Folden engaged attorney Rami Awadallah to sue their former stockbroker; Awadallah drafted a complaint but never filed it, and the statute of limitations expired.
- Awadallah left his original firm, formed his own practice, then joined the defendant firm Niekamp without notifying the clients; clients discovered his new firm and communicated with him while he was employed at Niekamp.
- Over an approximately eight‑month period, Niekamp receptionists, secretaries, and an office manager took ~25 messages from the lead plaintiff, scheduled a meeting, and made calls to relay or schedule communications for Awadallah.
- Plaintiffs sued Awadallah for malpractice and alleged vicarious liability against Niekamp (and Mannion & Gray); summary judgment was granted for Niekamp on apparent authority grounds; other defendants’ motions were denied.
- The trial court certified the summary‑judgment order in favor of Niekamp under Civ.R. 54(B); on appeal the Ninth District reversed, holding genuine issues of material fact existed about whether Niekamp held Awadallah out with apparent authority.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Niekamp can be held vicariously liable under apparent authority | Awadallah’s affiliation was held out by Niekamp (website, business card) and firm staff handled calls/appointments, so plaintiffs reasonably believed firm representation existed | Awadallah was acting outside firm policies (moonlighting); firm did not take actions creating appearance of authority | Reversed trial court: genuine issues of material fact exist as to apparent authority; summary judgment improper |
| Whether plaintiffs failed to show proximate causation without expert testimony | Plaintiffs argued causation can be shown by record facts about the missed filing and resulting loss | Niekamp argued plaintiffs needed expert proof they would have prevailed in mandatory FINRA arbitration to prove causation | Not decided on appeal: issue not properly before this Court because trial court’s order with Civ.R. 54(B) only certified the apparent‑authority ruling as final |
| Whether malpractice claim (and thus vicarious liability) was barred by FINRA’s six‑year eligibility rule / statute of limitations | Plaintiffs contended claims were timely or that factual disputes preclude dismissal | Niekamp argued underlying claims were time‑barred and unsustainable as a matter of law, so the firm cannot be vicariously liable | Not decided on appeal: trial court did not rule on statute‑of‑limitations; appellate court declined to decide issues not resolved below |
Key Cases Cited
- Master Consol. Corp. v. BancOhio Natl. Bank, 61 Ohio St.3d 570 (Ohio 1991) (elements and focus of apparent authority; principal’s acts determine apparent authority)
- Grafton v. Ohio Edison Co., 77 Ohio St.3d 102 (Ohio 1996) (de novo standard for appellate review of summary judgment)
- Dresher v. Burt, 75 Ohio St.3d 280 (Ohio 1996) (summary judgment burden‑shifting framework)
- Temple v. Wean United, Inc., 50 Ohio St.2d 317 (Ohio 1977) (summary judgment standard under Civ.R. 56)
- Viock v. Stowe-Woodward Co., 13 Ohio App.3d 7 (6th Dist. 1983) (viewing facts in favor of nonmoving party on summary judgment)