Heath v. Craighill, Rendleman, Ingle & Blythe, P.A.
North Carolina Court of Appeals
388 S.E.2d 178 (1990)
Attorney Francis Clarkson, of the law firm Craighill, Rendleman, Ingle & Blythe, P.A. (defendant), provided legal services to Lee Heath (plaintiff) and separately recommended Heath make a series of oil-deal investments, promising at least a two-to-one return and giving Heath promissory notes reflecting that promise (for instance, a $25,000 investment for a $50,000 note). Clarkson resigned from the firm around this time. When the notes came due, Clarkson personally wrote checks to cover them, but the checks bounced. Heath sued Craighill, seeking to hold the firm liable for his losses, but the firm's charter limited its business to providing legal services and said nothing about handling client investments. A jury found for Heath, but the trial court granted the firm's motion for judgment notwithstanding the verdict, and Heath appealed.
Whether a law firm partnership is liable for a partner's investment scheme with a client when the firm's charter does not authorize investment activities and there is no evidence the other partners knew of or approved the scheme.