Court Limits Vicarious Liability For Actions Of Putative Agent

Oravecz v. New York Life Ins. Co. Cal. App., 2009 WL 1277742 (2nd Dist., June 10, 2009).

In a case litigated by Robert J. McKennon, a partner of Barger & Wolen, LLP and editor of this blog, the California Court of Appeals recognized significant limits on the vicarious liability of a principal based upon the acts or omissions of a putative agent.

Paul Oravecz sued his investment advisor, Steven Roth, and Roth's purported principals New York Life Insurance Company and NYLife Securities, Inc. (Roth was a registered representative of the latter) after learning that his investment in a foreign currency trading operation known as "Tradex" was a Ponzi scheme. Oravecz alleged that New York Life was Roth's employer at the time Roth purportedly made negligent misrepresentations to him about Tradex, and that New York Life was, thus, vicariously liable for Roth's conduct under various theories, including respondeat superior. Oravecz, who never had any direct dealings with