United States District Court, D. Massachusetts
RICHARD G. STEARNS, District Judge.
Plaintiff Robert Smith and defendant RKelley-Law, P.C., have each brought motions for summary judgment. The sole issue to be decided on remand is the question of RKelley-Law's vicarious liability for the conduct of its attorney-employee, Louis Bertucci. In deciding this issue, the court is bound by the second branch of the law-of-the-case doctrine, which "stringently precludes a lower court from contravening the rulings of a higher court made at an earlier stage of the same controversy." Conley v. United States, 323 F.3d 7, 12 (1st Cir. 2003) (en banc).
While determining that "the district court correctly entered judgment in [Robert] Kelley's favor, " the First Circuit concluded that "[s]ufficient evidence was presented to warrant a finding that the firm was vicariously liable for Bertucci's fraud." See Smith v. Jenkins, 732 F.3d 51, 72 (1st Cir. 2013). Specifically, the Court offered the following guidance on the issue of vicarious liability.
Under Massachusetts law, an employer may be held vicariously liable for an intentional tort committed by an agent or employee within the scope of the employment. Worcester Ins. Co. v. Fells Acres Day Sch., Inc., 408 Mass. 393, 558 N.E.2d 958, 967 (1990). "[C]onduct of an agent is within the scope of employment if it is of the kind he is employed to perform; if it occurs substantially within the authorized time and space limits; and if it is motivated, at least in part, by a purpose to serve the employer." Wang Labs., Inc. v. Bus. Incentives, Inc., 398 Mass. 854, 501 N.E.2d 1163, 1166 (1986) (internal citations omitted).
The evidence would have permitted a jury to find that all three elements were satisfied: that Bertucci's acts as the closing agent were within the purview of his job, that both closings took place at the RKelley-Law office during regular business hours, and that Bertucci's participation in the fraudulent closings was motivated, at least in part, by a desire to serve RKelley-Law's interests (the firm received fees as the closing agent on both transactions).
Id. at 72-73 (emphasis added).
An examination of the statements of undisputed facts offered in support of the parties' cross-motions makes clear that the three elements of the "scope of employment" test articulated by the First Circuit are undisputed in any material respect, and no rational trier of fact could find otherwise.
The facts related to Bertucci's participation in the fraud against Smith and his employment at RKelley-Law are either affirmatively admitted by RKelley-Law,  or RKelley-Law has failed to respond to assertions of fact set out in Smith's 56.1 statement.
RKelley-Law, P.C. is a professional corporation that employed Bertucci as a full-time associate during both of the real estate closings at issue. Bertucci worked for RKelley-Law from the time he passed the bar exam in 2001 until August of 2005, when he left RKelley-Law to start his own law practice. RKelley-Law has acknowledged that conducting closings on behalf of the firm was among Bertucci's duties as an associate, and that Bertucci performed the majority of the firm's closings during the time period at issue, while RKelley-Law earned a fee for each closing. Tr. Trans. Day 7 (Kelley), 47:19-48:3. Real estate closings on behalf of mortgage lenders remained part of the practice at RKelley-Law through the trial of this case in 2010. Id. at 58:17-23. Until his departure, Bertucci was "a paid W-2 employee" of the firm. Id. at 48:9-12. Bertucci testified that he closed roughly between sixty to eighty transactions per month and ten to fifteen transactions with Dwight Jenkins while he was employed at RKelley-Law. See Tr. Trans. Day 6 (Bertucci), 177:14-20; Tr. Trans. Day 7 (Bertucci), 11:6-9.
Given the parties' statements of fact and the testimony of Kelley and Bertucci at the initial trial, it is clear that Bertucci's performance of the functions of a "closing agent" was "the kind of conduct he was employed to perform."
Nevertheless, RKelley-Law asserts that "[t]he indisputable record here is devoid of facts showing that Kelley Law gave express or implied authority to Bertucci to close loans involving straw buyers.... or  to engender the firm into a mortgage fraud scheme." Def.'s Mem. at 8. However, "[t]his argument misapprehends the test for scope of employment." McIntyre v. United States, 447 F.Supp.2d 54, 110 (D. Mass. 2006), aff'd and remanded sub nom., McIntyre ex rel. Estate of McIntyre v. United States, 545 F.3d 27 (1st Cir. 2008) ("Taken to its logical conclusion, the argument  is that if the conduct is wrongful,  it is beyond the [employee's] scope of employment, because the employee was not hired to engage in wrongful conduct."). The McIntyre court aptly pointed out that ...