Fergus v. Ross (Lawyers Weekly No. 10-127-17)
NOTICE: All slip opinions and orders are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports. If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, John Adams Courthouse, 1 Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557- 1030; SJCReporter@sjc.state.ma.us SJC-12231 JOSEPH FERGUS vs. STEVEN A. ROSS.[1] Suffolk. April 4, 2017. – August 2, 2017. Present: Gants, C.J., Lenk, Hines, Gaziano, Lowy, & Budd, JJ. Agency, Scope of authority or employment. Attorney at Law, Attorney-client relationship. Civil action commenced in the Superior Court Department on August 31, 2010. The case was heard by Frances A. McIntyre, J. After review by the Appeals Court, the Supreme Judicial Court granted leave to obtain further appellate review. Arnold E. Cohen for the defendant. Gordon E. Feener (Danielle F. Wehrli also present) for the plaintiff. LOWY, J. In a jury-waived trial, a Superior Court judge determined that the defendant, Attorney Steven A. Ross, was negligent for his part in financing a real estate loan to the plaintiff, Joseph Fergus. The judge found that the defendant had conferred apparent authority on an individual, Bernard Laverty, Jr., to act as his agent for the loan. In the course of arranging the loan, unbeknownst to the defendant, Laverty asked the plaintiff to use a portion of the loan from the defendant to make a secured “side loan” to Laverty. The plaintiff agreed. Ultimately, however, the side loan was unsecured and Laverty defaulted. Relying on the rule that imputes the knowledge of an agent to the principal, the judge found that the defendant was negligent for failing to inform the plaintiff prior to the closing that the side loan was not secured. We now reverse, concluding that the facts found by the trial judge failed to establish that Laverty had the apparent authority to bind the defendant with respect to the side loan. Background. The judge made the following factual findings, which the parties do not dispute on appeal. The plaintiff, a regular purchaser and seller of real estate, needed between $ 75,000 and $ 100,000 to complete renovations of a property in the Dorchester section of Boston. Unable to acquire conventional financing for the project, he inquired about private financing through a mortgage broker, who referred the plaintiff to Laverty. Laverty had an existing relationship with the defendant, who operated a private lending operation through his law firm. Laverty had received five or six loans from the defendant and had previously referred potential borrowers to the defendant. Laverty informed the […]