Case Study 1 – Millan V. Dean Witter Reynolds, Inc.
Plaintiff: Maria Millan
Defendant: Dean Witter Reynolds, Inc.
Appellant: Maria Millan
Appellee: Dean Witter Reynolds, Inc.
History of the case
Trial Court: Dean Witter won. The broker was found 85% liable and the firm was found to be 15%.
Lower appellate court: Dean Witter won.
Overall winner: Decision upheld, the broker was found 85% liable and the firm was found to be 15%
Maria Millian sued both her son and Dean Witter Reynolds, Inc. for negligence, gross negligence, conversion, and breach of fiduciary duty. Maria Millian opened two brokerage accounts with Dean Witter Reynolds, ...view middle of the document...
stole money from Maria Millian by deceiving her. Because Miguel opened fraudulent accounts in the name of Maria Millian and wrote checks payable to cash, and because the company did not verify the signatures, Millian sued for negligence, gross negligence, conversion, and breach of fiduciary duty.
Dean Witter Reynolds, Inc. was not fully responsible for the fraudulent acts committed by Miguel because he was not acting within the scope of his position at the firm ultimately resulting in monies being stolen from Millian’s account.
Should the brokerage firm be held vicariously liable for the fraudulent acts of one of its brokers, even though the customer defrauded was his mother?
The holding of the court:
Trial court: No
Lower Appellate court: No
Appellate court ruling: No
I believe that this case was decided correctly because the individual that committed the fraudulent acts was Miguel and although he was working for the firm, he indeed made those decisions himself. It was not Dean Witter Reynolds, Inc. that forged signatures and wrote fraudulent checks out of the accounts of Maria Millian’s. However, with this being said, I do feel that Dean Witter Reynolds, Inc. should be held somewhat liable due to the firm not always following their own company policies, this helped Miguel in committing these acts because if the firm were to have followed their company policies, these fraudulent acts may have been avoided or caught sooner and could have been dealt with accordingly.