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Does the LLP shield protect Snyder’s personal assets from negligence committed by other partners?
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Should Snyder have been more active in regard to being aware of his partners’ deeds? did he have duty to inquire?
CASE SUMMARY 14. 4 First American Title V. Lawson , 827 A. 201230 ( N. J. 2003 )LLP INNOCENT PARTNERSWheeler, Lawson , and Snyder formed an LLP for their law practice . Wheeler was the managing partner for the LLP andoversaw the firm’s business affairs , including malpractice insurance coverage . When applying to First American Title forthe firm’s malpractice insurance , Wheeler made a material misrepresentation on the insurance application . Both Wheeler*and Lawson engaged in unethical and illegal conduct by failing to properly’ administer client trust funds and using thefunds for their own benefit. Snyder was located at a separate office and had little contact with his partners and noknowledge of their misrepresentations or illegal conduct . Eventually , the firm was sued for malpractice and damages byvarious clients . First American Title paid out several claims and then sought recovery from each of the partners andcanceled their policy based on the misrepresentation by Wheeler . Snyder argued that he should not be liable for thenegligent or intentional acts of his partners .CASE QUESTIONS1 . Does the LLP shield protect Snyder’s personal assets from negligence committed by other partners ?2. Should Snyder have been more active in regard to being aware of his partners " deeds ? Did he have a duty to inquire ?"
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