Written by attorney Geoffrey Trachtenberg

Legal Malpractice and Nondelegable Duties

We recently filed suit in a case where a lawyer himself did nothing wrong, but hired an independent contractor to file a lawsuit -- that is, a process server. The process server negligently failed to file the lawsuit on time and, as a result, the lawsuit was time-barred. Worse, the process server was uninsured.

Most people know that employers are generally liable for the negligence of their employees, but what about independent contractors? As a general rule, employers are not liable for the actions of independent contractors absent some independent negligence on behalf of the employer (e.g., improper selection of the contractor). Ft. Lowell-NSS Ltd. Partnership v. Kelly, 166 Ariz. 96, 100, 800 P.2d 962, 966 (1990).

Like most states, Arizona recognizes an exception to this rule, generally referred to as the "nondelegable duty exception." Id. "The policy reasons justifying such a departure are that the employer is the one who primarily benefits from the contractor's work, the employer is free to select the contractor and may insist on one that is financially responsible and competent, and the employer has the ability to internalize the cost of insurance necessary to distribute the risk as a cost of doing business." Miller v. Westcor Ltd. Partnership, 171 Ariz. 387, 391, 831 P.2d 386, 390 (App.1991).

As the Arizona Supreme Court held in Ft. Lowell, the nondelegable duty exception arises in situations involving a "special relationship between persons," such as "persons who engage in relationships that are 'protective by nature' (e.g., the common carrier, innkeeper, employer) [who] are often held to possess an affirmative duty to guard the safety of their respective charges." Ft. Lowell, 101, 800 P.2d at 967. The Court explained:

The nondelegable duty exception is somewhat of a misnomer because it refers to duties for which the employer must retain responsibility, despite proper delegation to another. Such situations exist where the employer is under a higher duty to some class of persons. This duty may be imposed by statute, by contract, by franchise or charter, or by the common law. If the employer delegates performance of a special duty to an independent contractor and the latter is negligent, the employer will remain liable for any resulting injury to the protected class of persons, as if the negligence had been his own. The exception is premised on the principle that certain duties of an employer are of such importance that he may not escape liability merely by delegating performance to another.

The type of situation -- i.e., negligence of a process server -- was addressed inKleeman v. Rheingold, 614 N.E.2d 712 (1993), where a client brought a legal malpractice action against a law firm based upon negligence of process server in failing to serve medical malpractice defendant within statute of limitations. The sole issue addressed by the Court was "whether an attorney may be held vicariously liable to his or her client for the negligence of a process server whom the attorney has hired on behalf of that client." Id. at 714.

The Court in Kleeman recognized that "[t]here are no clearly defined criteria for identifying duties that are nondelegable . . . [and] whether a particular duty is properly categorized as 'nondelegable' necessarily entails a sui generis inquiry, since the conclusion ultimately rests on policy considerations." Id. at 715 (citations omitted). Like the Court in Ft. Lowell, the Court in Kleeman observed that "[t]he most often cited formulation is that a duty will be deemed nondelegable when 'the responsibility is so important to the community that the employer should not be permitted to transfer it to another.' This flexible formula recognizes that the 'privilege to farm out [work] has its limits' and that those limits are best defined by reference to the gravity of the public policies that are implicated." Id. at 716 (citations omitted).

The Kleeman Court - after examining the nature of the attorney-client relationship, ethical rules, reasonable expectations and policy considerations - held that the nondelegable duty exception was applicable to attorneys for the negligence of a process servers hired by attorneys.

First, the Kleeman Court concluded that "the duty at issue here - that owed by an attorney to his or her client to exercise care in the service of process - fits squarely and neatly within the category of obligations that the law regards as 'nondelegable.'" Id.(emphasis added). The Court explained that, "[m]anifestly, when an individual retains an attorney to commence an action, timely and accurate service of process is an integral part of the task that the attorney undertakes." Id. Indeed, the Court noted that "proper service of process is a particularly critical component of a lawyer's over-all responsibility for commencing a client's lawsuit, since a mistake or oversight in this area can deprive the client of his or her day in court regardless of how meritorious the client's claim may be." Id. The Court concluded, "[g]iven the central importance of this duty, our State's attorneys cannot be allowed to evade responsibility for its careful performance by the simple expedient of 'farming out' the task to independent contractors." Id.

Second, the Kleeman Court pointed to ethical rules precluding lawyers from "seek[ing], by contract or other means, to limit prospectively the lawyer's individual liability to a client for malpractice," forbidding lawyers from "[n]eglect[ing] legal matter[s] entrusted to [them]" and enjoining lawyers to assist in "secur[ing] and protect[ing] available legal rights." Id.; see generally Rule 42, Ariz.R.Sup.Ct., ER 1.1, 1.3, 1.8(h) and Preamble. The Court found that such "ethical and disciplinary considerations are implicated when a client's lawsuit is undermined - or even defeated - as a consequence of carelessness in the service of process." Id.(emphasis added).

Third, the Kleeman Court noted that application of the nondelegable duty exception was also "supported by the perceptions of the lay public and the average client, who may reasonably assume that all of the tasks associated with the commencement of an action, including its formal initiation through service of process, will be performed either by the attorney or someone acting under the attorney's direction." Id.(emphasis added). To be sure, "[w]hile it may be a common practice among attorneys to retain outside agencies . . . to assist them in effecting service, that custom is not necessarily one of which the general public is aware." See id. Moreover, "[e]ven where a client is expressly made aware that a process serving agency will be retained, it is unlikely that the client will understand or appreciate that the process serving agency's legal status as an 'independent contractor' could render the retained attorney immune from liability for the agency's negligence." Id. The Court concluded that "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 'nondelegable.'"Id.

And fourth, the Kleeman Court explained that "permitting lawyers to transfer their duty of care to process servers would be contrary to sound public policy." Id.(emphasis added). The Kleeman Court observed the "exclusive franchise" enjoyed by attorneys:

[L]icensed attorneys have been granted an exclusive franchise to practice law, with the understanding that they have both the specialized knowledge and the character required to represent clients in a competent, diligent and careful manner. Under this system, lawyers are authorized to hold themselves out as being uniquely qualified to manage their clients' legal affairs, a task that unquestionably includes the commencement of lawsuits . . . .

In light of the almost identical legal and policy issues in Arizona as set forth in Ft. Lowell,we expect the Arizona courts will reach the same conclusion as theKleeman Court.

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