Stiles v. Onorato

• Court: South Carolina Supreme Court
• Writing for the Court: WALLER; FINNEY, C.J., TOAL and MOORE, JJ., and A. LEE CHANDLER
• Citation: Stiles v. Onorato, 318 S.C. 297, 457 S.E.2d 601 (S.C. 1995)
• Decision Date: 22 March 1995
• Docket Number: No. 24243,24243
• Parties: Beverly J. STILES, Plaintiff, v. Robert C. ONORATO, Appellant, v. John R.C. BOWEN, Respondent. . Heard

Page 601

457 S.E.2d 601

Beverly J. STILES, Plaintiff, v. Robert C. ONORATO, Appellant, v. John R.C. BOWEN, Respondent.

No. 24243.

Supreme Court of South Carolina.

Heard March 22, 1995.

Decided May 1, 1995.

A. Camden Lewis and Thomas A. Pendarvis, Lewis, Babcock & Hawkins, Columbia, for appellant.

James W. Alford, R. Lewis Johnson, and Curtis W. Dowling, Barnes, Alford, Stork & Johnson, Columbia, for respondent.

WALLER, Justice:

Robert C. Onorato (Onorato) appeals an order dismissing his third party complaint against Respondent, John C. Bowen (Bowen) pursuant to Rule 12(b)(6), SCRCP, for failure to state a cause of action. We affirm.

FACTS

Beverly Stiles, represented by attorney John Bowen, instituted this defamation ¹ action against Onorato. Onorato counterclaimed against Stiles and filed a third-party complaint against Bowen alleging civil conspiracy and initiation of a frivolous lawsuit. ² The circuit court dismissed the third-party complaint finding that it failed to state a cause of action under Gaar v. North Myrtle Beach Realty Co., Inc., 287 S.C. 525, 339 S.E.2d 887 (Ct.App.1986).

ISSUE

Did circuit court err in dismissing Onorato's complaint for failure to state a cause of action?

DISCUSSION

In Gaar v. North Myrtle Beach Realty Co., Inc., 287 S.C. 525, 528-29, 339 S.E.2d 887, 889 (Ct.App.1986), the Court of Appeals held that "an attorney is immune from liability to third persons arising from the performance of his professional activities as an attorney on behalf of and with the knowledge of his client. Accordingly, an attorney who acts in good faith with the authority of his client is not liable to a third party in an action for malicious prosecution." (Emphasis supplied). The Gaar Court further noted,

"The attorney normally conducts the litigation solely in his professional capacity. He has no personal interest in the suit. In his professional capacity the attorney is not liable ... for injury allegedly arising out of the performance of his professional activities.... Even if the attorney who initiates civil proceedings for his client has no probable cause to do so, he is still not liable if he acts primarily for the purpose of aiding his client in obtaining a proper adjudication of the client's claim."

Id. (Emphasis supplied).

Onorato concedes that, under Gaar, he may not maintain an action against Bowen for actions taken in his professional capacity as Stiles' attorney. However, he claims that nothing in Gaar renders an attorney immune for acts taken outside the scope of the professional relationship. We agree.

A number of jurisdictions recognize that an attorney may be held liable where he acts in bad faith or for his own personal motivations. See generally Annotation 97 ALR 3rd 688 (attorney's liability for abuse of process); Annotation 46 ALR 4th 249 (attorney's liability for malicious prosecution). See also RESTATEMENT (SECOND) OF TORTS § 674, comment d (attorney who acts without probable cause for an improper purpose is subject to same liability for the wrongful use of civil proceedings as any other person). Moreover, several courts have held that an attorney may be held liable arising out of a conspiracy with his client. See e.g., Wolfrich Corp. v. U.S. Automobile Assn., 149 Cal.App.3d 1206, 197 Cal.Rptr. 446 (1983) (attorneys may be liable for participation in tortious acts with their clients, and such liability may rest on a conspiracy); Doctors' Co. v. Superior Court, 49 Cal.3d 39, 260 Cal.Rptr. 183, 775 P.2d 508 (1989); Fraidin v. Weitzman, 93 Md.App. 168, 611 A.2d 1046 (1992) (attorney liable for conspiracy if actively involved in wrongful conduct). Additionally, attorneys have been held liable for fraud and conversion in conjunction with their representation of clients. See, e.g., L & H Airco, Inc. v. Rapistan Corp., 446 N.W.2d 372 (Minn.1989) (attorney who makes affirmative misrepresentations to an adversary or conspires with his or her client may be held liable for fraud); Pew v. First National Bank, 827 F.2d 1488 (11th Cir.1987); Bongard v. Winter, 516 So.2d 27 (Fla.App.1987); Guillebeau v. Jenkins, 182 Ga.App. 225, 355 S.E.2d 453 (1987) (implying that an attorney may be sued by an adversary for fraud); LaBarre v. Gold, 520 So.2d 1327 (Miss.1987) (attorney liable for conversion for improperly paying real estate proceeds only to his client).

Consistent with Gaar and the above cited cases, we find that an attorney may be held liable for conspiracy where, in addition to representing his client, he breaches some independent duty to a third person or acts in his own personal interest, outside the scope of his representation of the client. Accordingly, we hold that the trial court erred in dismissing the complaint on the basis that Gaar provides absolute immunity to an attorney under any and all circumstances. However, we affirm in result since the complaint here fails to set forth sufficient facts to remove Bowen from the ambit of Gaar.

The ruling on a Rule 12(b)(6) motion to dismiss must be based solely upon the allegations set forth on the face of the complaint. State Board of Medical Examiners v. Fenwick Hall, Inc., 300 S.C. 274, 387 S.E.2d 458 (1990). A Rule 12(b)(6) motion may not be sustained if facts alleged and inferences reasonably...