Eppler, Guerin & Turner, Inc. v. Kasmir
1985 Tex. App. LEXIS 6307, 685 S.W.2d 737 (1985)
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Rule of Law:
When an attorney contracts with a third party for the benefit of a client for services related to the attorney's representation, and the third party is aware of the client's identity, the attorney is not personally liable on the contract unless they expressly or impliedly assume some type of special personal liability.
Facts:
- Eppler, Guerin and Turner, Inc. (plaintiff) is an investment banking firm.
- C.D. Kasmir, Esq., and Kasmir, Willingham & Krage (defendants) are attorneys.
- Defendants represented Intercontinental Industries, Inc. (client) in a lawsuit against the Internal Revenue Service.
- Defendants hired plaintiff to render an opinion on the value of certain securities that were the subject of their client's suit.
- Plaintiff knew at the time it was hired that defendants were attorneys representing Intercontinental Industries, Inc., in the pending suit.
- Plaintiff prepared a letter agreement addressed to defendants, styled 'Re: Intercontinental Industries vs. The Internal Revenue Service,' outlining its employment details.
- The letter agreement stated that plaintiff would render a valuation opinion on specified securities 'to be received and ultimately received by Intercontinental Industries, Inc.'
- The letter agreement also stated that billings for the opinion and court testimony 'shall be rendered to your firm' (defendants’ firm).
- Defendant Cyril David Kasmir signed the agreement under the firm name 'KASMIR WILLINGHAM AND KRAGE' without expressly stating a representative capacity.
Procedural Posture:
- Eppler, Guerin and Turner, Inc. (plaintiff) sued C.D. Kasmir, Esq., and Kasmir, Willingham & Krage (defendants) in the trial court (court of first instance) for appraisal fees.
- Defendants filed a motion for summary judgment.
- Plaintiff also filed a motion for summary judgment.
- The trial court granted the defendants’ motion for summary judgment, denied the plaintiff’s motion for summary judgment, and ruled that plaintiff take nothing on its claim.
- Eppler, Guerin and Turner, Inc. (appellant) appealed the trial court's summary judgment decision.
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Issue:
Does a contract provision stating that billings for services 'shall be rendered to your firm' or an attorney's signature without explicit representative capacity language, establish personal liability for the attorney when the third party knows the attorney is acting for a disclosed client?
Opinions:
Majority - Guittard, Chief Justice
No, a contract provision stating that billings 'shall be rendered to your firm' or an attorney's signature without explicit representative capacity language does not establish personal liability for the attorney when the third party knows the attorney is acting for a disclosed client. The general rule is that an agent is not liable on contracts made for the benefit of a disclosed principal unless the agent expressly or impliedly agrees to assume personal responsibility. The court applied this rule to attorneys, holding that an attorney is not liable on such contracts unless they expressly or impliedly assume special liability. The court reasoned that a provision for billings to be sent to the attorney's firm is a common practice and simply designates the attorney as the client's agent for receiving bills, not an assumption of personal liability. Furthermore, the court distinguished Seale v. Nichols, noting that in this case, the agency relationship and the client's identity were clearly disclosed on the face of the contract and by extrinsic circumstances, unlike Seale where the agency was undisclosed. Therefore, explicit language negating personal liability is not required when the principal is known, and the defendants did not undertake a special obligation for payment.
Analysis:
This case reinforces the well-established principles of agency law, specifically as they apply to attorneys contracting on behalf of their clients. It clarifies that attorneys are generally treated as agents for disclosed principals, shielding them from personal liability for third-party services unless they explicitly or implicitly assume that liability. The decision provides important guidance for both attorneys and third-party vendors, emphasizing the importance of clear contractual language if personal liability is intended. Future cases will likely rely on this precedent to determine whether specific contractual terms or circumstances indicate an attorney's intent to assume personal responsibility beyond their role as an agent for a client.
