Goerke v. Vojvodich
| Decision Date | 04 March 1975 |
| Docket Number | No. 341,341 |
| Citation | 226 N.W.2d 211,67 Wis.2d 102 |
| Parties | Pearl GOERKE, Plaintiff, v. Gordon VOJVODICH et al., Defendants and Third-Party Plaintiffs-Appellants, Jerome F. KELLY, Defendant, Sidney Podell et al., Third-Party Defendants-Respondents. |
| Court | Wisconsin Supreme Court |
Herbert A. Eggie, Milwaukee, for defendants and third party plaintiffs.
Hayes & Hayes, Milwaukee, for third party defendants-respondents.
The salient allegations in the appellants' third party complaint are that the respondent-attorneys represented the plaintiff, Mrs. Georke, in the negotiations leading to the sale, knowing her to be mentally incompetent, and that they willfully and intentionally failed to reveal this fact to the appellants who had no knowledge of it and ask indemnification if they are liable for damages as a consequence.
A general statement of the liability of an attorney to third persons that we adhere to is stated in 7 C.J.S. Attorney and Client § 52b, page 834:
'While an attorney is not liable to a third person for acts performed in good faith, and mere negligence on the part of an attorney is insufficient to give a right of action to a third party injured thereby, an attorney is personally liable to a third party who sustained an injury in consequence of his wrongful act or improper exercise of authority where the attorney has been guilty of fraud or collusion, or of a malicious or tortious act . . .' 1
The appellants contend that the conduct of the respondents in the instant case amounted to fraud, or that it was wrongful, thereby bringing the case within the exception of the general rule. As authority, the appellants rely on Scandrett v. Greenhouse (1943), 244 Wis. 108, 11 N.W.2d 510. In that case the attorney represented a plaintiff suing the Chicago, Millaukee, St. Paul & Pacific Railroad Company for personal injuries. A compensation carrier had an interest in the plaintiff's claim. During settlement negotiations, the railroad offered $250 and the attorney stated he would take the matter up with the compensation carrier. On the following day, the attorney presented a release of the plaintiff's claim to the railroad and received a check for $250. The attorney never did obtain the consent nor pay the claim of the compensation carrier. The compensation carrier subsequently demanded payment from the railroad. The railroad paid the claim and then sued the attorney.
On appeal this court repeated the general rule at page 112, 11 N.W.2d at page 511 of Scandrett v. Greenhouse:
'. . . While it is true . . . that an attorney is not ordinarily liable to third persons for his acts committed in the exercise of his proper functions as attorney concerning the subject matter of his agency, to this rule, however, there are a number of exceptions.'
At pages 113, 114, 11 N.W.2d at page 512, the court stated:
'When the defendant in this case presented the release and demanded payment of $250, which was to be paid only upon condition that the compensation carrier consented thereto, that is, waived its claim, the defendant . . . thereby represented that the claim of the compensation carrier had been satisfied or waived and received the money in full settlement of all claims against the defendants in that action, the plaintiffs in this action, as stated in the release.
'It is not necessary for a person to make oral misrepresentation of fact in order to be guilty of fraudulent conduct--such representations may be made by the acts or conduct of the party. The rule is stated in 1 Bigelow on Fraud 467: See Leonard v. Springer (1902), 197 Ill. 532, 64 N.E. 299.
'. . .
'That the counsel for the plaintiffs in this action in accepting the release under the circumstances relied upon representation by the conduct of the defendant, appears as a matter of law. The conduct of the defendant although he acted as agent and attorney of Kelley, need not to be characterized by so harsh a term as fraud. It was certainly wrongful. By reason of the defendant's wrongful conduct the plaintiffs were obliged to pay the amount for which recovery was allowed in civil court in excess of the agreed settlement, and while it does not appear that the defendant now has or had the money nevertheless the wrong committed by him was his own wrong and he is...
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...whether and under what circumstances an attorney should be held liable to a nonclient. We adhere to our decision in Goerke v. Vojvodich, 67 Wis.2d 102, 226 N.W.2d 211 (1975), and hold that, under the facts present here, the defendant attorney may not be held liable to the nonclient plaintif......
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