personal liability: agent vs employee - Posted by firefox

Posted by John Merchant on August 13, 2003 at 20:34:40:

Go to your closest courthouse law library and find Am Jur. It’s a large encyclopedia, and find the article on Agency therein. Probably 500 pp., so there’s plenty of material to occupy your mind.

Too involved a field of law to solve in few minutes.

personal liability: agent vs employee - Posted by firefox

Posted by firefox on August 12, 2003 at 17:47:59:

I’ve been told there are two problems when a lease is made between my management company & the tenant:

  1. Checks to entities must be deposited, not cashed. Extra turnaround time can be an issue if you’re concerned the money might not be there by the time the check winds its way through the system.
  2. Entities cannot file lawsuits (evictions etc) pro se. I’d rather avoid the expense of an attorney if possible.

Supposedly, if the lease is between “me, agent, management inc.” and the tenant, these problems can be solved. In other words, a check made out to “me, agent” can be cashed by me at the tenant’s bank (get it while it’s good), and I can file suit pro se as an agent since I’m now the principal in the contract.

First, are these issues & solutions real? Second, do I expose myself to additional personal liability (fire & dog maulings come to mind as worst-case scenarios) as an agent instead of being a mere employee?

agent vs employee - Posted by John Merchant

Posted by John Merchant on August 12, 2003 at 22:02:20:

Agent can always be sued, along with his principal, and I always found it a good idea to sue both of them when the agent personally did something that injured my client. Of course I really wanted BIG Co., and their insurance coverage & assets rather than Al Agent and his iffy assets.

But if I had just succeeded in getting a J against Agent, I could NOT have then attached any assets of the corp. Because agent’s actions don’t bind his principal.

Whereas with an employee, if I could nail him, while proving he WAS a corp employee, in the course and scope of his emloyer’s business, under the law of “respondeat superior” I would then have had the corp as well, as he was, in effect, the corp “alter ego”. and his acts were corp acts. All of which I alleged in my lawsuit which of course was against both employee and the corp.

When such a suit is filed, the plaintiff usually does NOT know whether you are agent or employee, so he alleges employee, and works to prove that.

On the Pro Se problem, there’s an easy way around that stumbling block-have the corp. give you a .0001% interest in the property.

Then you file suit for yourself, pro se, and incidentally you name the other owner too-the corp, which owns the other 99%. So any J you get would belong .0001% to you, 99.0009% to the corp.

The corp would not even need to appear, unless they were countersued, which on the typical LL/T deal, would NOT occur.

This should be done by corp. resolution and bylaws, and the corp could simultaneously state clearly therein, that you do NOT have the right to obligate the corp in any way for anything not previously authorized, in writing by the corp, and that under NO circumstances, could you be construed to be an employee. And clearly stating that you have no certain hours of work, can come and go as you want, are NOT under the control of the corp in any way, and you are not being paid a salary as you are NOT an employee.

Re: agent vs employee - Posted by firefox

Posted by firefox on August 13, 2003 at 03:16:44:

I appreciate your response. It was very informative. I am still wondering, however, whether an agent has more personal liability than an employee. I’m not going to personally harm a tenant, as most people understand that term. It’s liability for things that are beyond my control that worry me: criminal acts of third parties; a tenant’s self-inflicted injury; injuries caused by unauthorized pets; tenant removing the smoke alarm battery to put in their remote control.

I guess don’t quite understand agency. Is the lease properly between “tenant” and “agent”, or between “tenant” and “management, inc”? Does the agent bind himself or the party they’re agent for? A corporate President does not normally bind himself when he signs as President.