In Holmes v. Gary Goldberg & Company , the Appellate Division, Second Department, overturned the dismissal of a lawsuit seeking to recover money stolen by the plaintiffs' own sister.
The Holmes's -- all siblings -- had deposited funds into a brokerage account with Gary Goldberg & Company, where their sister was employed as a financial adviser. Sis is alleged to have "converted" the monies that were maintained in that account.
Rather than sue their own relative, the siblings filed suit in Rockland County Supreme Court against Gary Goldberg & Company, seeking to hold it vicariously liable for their sister's misconduct.
Although the Rockland County Supreme Court granted defendant's motion to dismiss the case, the Appellate Division, Second Department, reversed and allowed the case to proceed to trial.
Goldberg's liability was based on the doctrine of "respondeat superior," which is a legal doctrine which makes an employer responsible for the conduct of employees committed "in furtherance of the employer's business and within the scope of employment." (Acts "within the scope of employment" include those "which the employer could reasonably have foreseen.")
In an unfortunate commentary on human nature, the AD2 concluded that "it is certainly foreseeable that an agent entrusted with significant sums of money might convert such funds to his [or her] own use."
The next Holmes family reunion is certain to be doozy.
For a copy of the Appellate Division's decision, please use this link: Holmes v. Gary Goldberg & Company