In the spring of 1984, appellant, Joseph B. Atkinson, Jr., became partners in an apartment complex known as Kings-bury with his friend and business associate, appellee, Daniel M. Haug, an associate attorney in appellee John T. Acton’s law firm, John T. Acton, P.C. (hereinafter, collectively, Acton). When the investment failed, in an attempt to recover his financial loss, appellant brought suit for misrepresentation and professional negligence against the appellees alleging Haug’s allegedly faulty business advice was offered within the scope of his employment thereby making Acton vicariously liable. The court rejected this argument when, on June 24, 1992, it granted summary judgment in favor of John T. Acton and John T. Acton, P.C. 1 Atkinson appeals from this Order and argues the court erred by finding, as a matter of law, Haug was acting outside his scope of employment so as to preclude Acton’s vicarious liability.
As an appellate court we are bound to consider certain principles which dictate when and under what circumstances a trial court may properly enter summary judgment.
Goebert v. Ondek,
Before a defendant law firm can be held liable for the tortious or negligent conduct of one of its attorneys, it must be established the attorney/employee was acting within the scope of his employment or apparent authority. Moreover, where an agent acts in his own interest and commits a fraud for his own benefit in a matter which is beyond the scope of his employment, the principal who has received no benefit therefrom will not be held liable for the agent’s tortious act.
Aiello v. Ed Saxe Real Estate, Inc.,
Acton’s liability turns on the relationship between appellant and Haug. Accordingly, the key issue in this case is whether there was an attorney/client relationship between appellant and Haug or, in the alternative, the men were merely partners in an unfortunate business enterprise. We find the record, when read in its entirety, supports the truth of the latter averment and, therefore, affirm the Order granting summary judgment in favor of Acton.
Haug, an attorney employed by Acton, dabbled in real estate investments in addition to pursuing his legal career. Appellant is a college graduate and owner and president of Atkinson Freight Lines, Inc., a cargo transportation business employing approximately ninety persons. The men met socially, through a mutual friend, in 1982 and they and their wives quickly became good friends. Between 1982 and 1984 Haug admittedly handled, pro bono, a few personal legal problems for appellant. Appellant became aware of the Kingsbury venture in late 1983 when he bumped into Haug and a mutual friend who were having lunch and discussing the project. Once appellant expressed his interest, Haug explained the Kingsbury venture and appellant decided to become a one-sixth partner. Appellant testified it was his
On the morning of the April 27, 1984 closing, a surety agreement was. messengered to Atkinson’s home for his and his wife’s signatures. (Id., pp. 67-68.) Although appellant questioned his wife’s involvement which heretofore had been nil, the Atkinsons signed without reading “some kind of loan form” for $185,000, aware they would be personally liable for one-sixth of the amount. (Id., pp. 68-71.) Appellant also testified that while driving to the closing he “speed-read” the partnership agreement before signing it. (Id., pp. 60-61.) When he and Haug arrived at the closing, four hours late, appellant testified he signed, while leaning up against a wall, a $2,840,000 note, the terms and amount of which he was unaware at the time. (Id., pp. 64-66.) Appellant testified he also signed, without reading, an indemnity agreement in favor of one of the partner’s wives. (Id., pp. 86, 89.) Sometime after the closing, appellant offered to and did personally borrow an additional $85,000, secured by Atkinson Freight Lines, to cover a bad check written by one of the partners. (Id., pp. 83, 89-90.) It was appellant’s testimony he had read the indemnity agreement executed to protect this $85,000 loan. (Id., p. 89.) Atkinson testified he never asked Haug for advice and never was billed for nor offered to pay for the legal services allegedly performed by Haug. (Id., pp. 94, 95, 100.)
By investing in Kingsbury, Attorney Haug merely donned his investor hat and recruited friends and acquaintances to join in what each investor believed would be a profitable venture. Appellant’s subjective belief an attorney/client relationship existed between he and Haug is an insufficient basis upon which to find there existed a genuine issue of material fact precluding summary judgment. Summary judgment on behalf of John T. Acton and John T. Acton, P.C., was properly entered.
Order affirmed.
Notes
. The motion for summary judgment was made by John T. Acton and John T. Acton, P.C., and did not include defendant, Daniel Haug. Moreover, although he is listed as an appellee in this appeal, Haug has not filed a brief.
. Having found there to be no attorney/client relationship, there is no need to reach the issue of the nature and extent of Haug’s apparent authority. Accordingly, reliance on
Turner Hydraulics, Inc. v. Susquehanna Construction Corp.,
