NJ: Lawyer's Vicarious Liability for Independent Contractors?
Toth v. Vazquez, 3 N.J. Super. 379 (Ch. Div. 1949) (PDF with permission of Thomson West)
Student Contributor: Anthony J. Forzano
NJ Underlying Real Estate Transaction
Facts: Plaintiff, a potential land buyer, brought an action for legal malpractice against the defendant-attorney, Arthur A. Wolpin, who had been engaged by the plaintiff to examine the title and procure a survey of the premises prior to closing. Plaintiff alleged that Wolpin failed and neglected to obtain an accurate survey.
Issue: Can an attorney be held liable for malpractice for failing to find a deficiency in the work of another professional, even though he acted in a prudent manner in selecting that professional on behalf of his client?
Ruling: No. Although it is the duty of an attorney who is retained to examine the title to real estate to make a reasonably diligent and zealous investigation of the public records, and to impart to his client all of the observable defects, deficiencies, and imperfections of the title, he is required only to exercise ordinary care, skill and diligence.
Given that Wolpin inspected all pertinent records and rendered an accurate report of record title, he had satisfied the standard of “ordinary care, skill, and knowledge”. The Court further noted:
“Nor is it evident that this defendant in acting for the plaintiffs failed to exercise reasonable care and precaution in the selection of a competent surveyor, even assuming a duty so to do. Assuredly, this defendant did not expressly agree to warrant the precision and accuracy of the survey”.
Lesson: An attorney must act in a reasonably diligent fashion in terms of his investigation of the pertinent issues and retention of other professionals, and cannot be held liable for malpractice as a result of damage incurred by his client owing to the negligence of others involved in the transaction.
Editor's Note: What if the attorney had engaged a process server who negligently failed to properly serve a complaint and the statute of limitations ran? The lawyer's immunity for the negligence of an independent contractor hired to aid in the representation of a client is not so clear. See, e.g., Kleeman v. Rheingold, 81 N.Y.2d 270 (1993):
As plaintiff's attorneys, defendants had a non-delegable duty to her and, accordingly, they cannot evade legal responsibility for the negligent performance of that duty by assigning the task of serving process to an "independent contractor."
I think that this court got it right. An attorney should not be held for the negligence of third parties. A lawyer should not be held responsible for the mistakes of others. As long as he was diligent and zealous in his investigation of marketable title than he shouldn't be held liable for another person's mistake. Even though the attorney was the one who retained the other professional, I feel that he still shouldn't be held responsible.
The general rule is that an employee is not accountable for the acts of independent contractor has some exceptions. The attorney was not negligent in selecting or instructing the other professional, nor was the employment inherently dangerous and the duty was not a non-delegable duty. In this case I feel that the exceptions do not apply; therefore, I agree with the court's decision.
I agree with the court's holding in the NY Court of Appeals case Kleeman v. Rheingold that held the attorney liable to the client for negligent service of process, even though it was an independent contractor who had failed to properly serve a complaint. I think a client will reasonably believe that his/her attorney will exercise care in the service process. Also the court here limited the non-delegable duty of care to the function of commencing an action through service of process so it's not saying that the attorney is liable for all the wrongs that a retained process server may commit.
The court stated in its conclusion that "under established principles, the client's reasonable expectations and beliefs about who will render a particular service are a significant factor in identifying duties that should be deemed to be 'non-delegable.'" This is helpful in understanding how the court will identify which duties may be deemed non-delegable where the attorney is liable if negligent in representing a client's case.
I think that lawyers will appreciate the ruling in this case, while laymen will not like the outcome at all. When a lawyer is retained, the client expects the lawyer to perform in accordance with a high standard of care. Understandably, the court determined that the lawyers conduct met the appropriate standard of care, but how exactly is that standard of care measured?
This case presents lawyers with a "safe harbor" of sorts, but leaves clients in the dark as to what is reasonably expected of lawyers and their overall performance. This is not to say that I, personally, am averse to the holding, but rather, I think that legal decisions should also pertain to laymen in assisting them in seeking justice.
I do not feel you can compare the process server and land surveyor in the same blog entry. They each serve a particular purpose, but that they are hired by an attorney is the only similarity. As a Land Surveyor, I have dealt with numerous attorneys who have no ability to read a survey, let alone understand what goes into the production of one. Its noteworthy that attorneys can add up fees rather quickly but cannot add up the corner tie to a piece of property. On the other hand, process servers perform their work under the instructions of an attorney. They are told what to deliver, when to deliver it and who to deliver the item to.
In New York, Land Surveyors must be licensed by the NY State Education Department. Currently the state will not even permit an individual to sit for the exam without a specialized engineering degree or a minimum of 8 years in an apprenticeship. Many Land Surveyors carry malpractice insurance policies which are prohibitively expensive. Clearly, the required skill and licensing of the independent contractor is dispositive of the issue.
Lastly, it should go without saying that the failure of an attorney to order a new survey altogether is actionable as malpractice. I am always amazed that the purchaser of a $500,000 home in New York and her attorney will balk at the prospect of paying $500 for a Land Survey to insure that what they think they are buying is what they are actually buying. The neighboring homeowner that erected a driveway, fence or shed that one weekend probably gave no thought to the location of their lot line. Though the law of adverse possession is shrinking, do not think that it is gone.
I agree with Mr. Henn's opinion in that you cannot compare a land surveyor and a process server when considering an attorney's liability for the negligence of an indapendent contractor. The work of a process server is within the expertise of an attorney; in fact their duties are completely under the direction of an attorney. It is the attorney's responsibility to follow up with a process server to make sure the service was sucessful, particularly when an impending statute of limitations is involved as seemed to be the case in Kleeman v. Rheingold. To fail to do so unquestionably makes the attorney liable in my opinion. However, the ability to detect negligence within the work of a land surveyor should not be expected of an attorney. To impose such a duty on attorneys would be too burdensome. In dealing with indapendent contractors who do work that an attorney himself could never perform (unlike a process server) and which is outside of an attorney's expertise, the attorney should only be responsible for using reasonable diligence in hiring such a professional.
I think Mr. Henn and Ms. Neuman spoke directly to the point that I wanted to make, which is that I see a significant difference between a service processor and a land surveyor and while the layman may feel as if the lawyer should be liable for the negligence of both, I do not. In the case with the process server, I agree that this should be viewed as a non-delegable duty of the attorney. A client has a reasonable expectation that their lawyer will either properly commence the action himself or hire someone who will do the same. However, as Mr. Henn pointed out, a land surveyor must be licensed and is considered a professional, which means he probably has his own standard of care to meet. The attorney should not be expected to know all everything that a land surveyor is responsible for, nor should a client have a reasonable expectation that the attorney should. There is going to come a point where the court has to draw a line, or else attorneys could be held liable for the mistakes of everyone they involve in their client's case. I think the these two rules/cases establish that difference.
I neither remember the case, nor the details, but while studying for the MPRE, I distinctly remember reading about an attorney that was held liable for malpractice when an attorney that he referred to a client, was negligent in representing that client. And I agree with holding an attorney responsible in some form or fashion for the referrals she makes. In our future line of work, when we start engaging in referring other professionals to clients or former clients, the potential for impropriety is high. Laypeople rely blindly on the advice given them by their attorneys or by professionals they believe know better than them. Some level of responsibility on behalf of the referring attorney acts as a guarantee of sorts for the client and I believe it is unfair for an attorney to refer someone and then shrug off the referred professional's negligence when but for the attorney's stamp of approval, they would more than likely not have selected that particular professional.