## Facts

- Kansallis Finance Ltd. financed a loan/lease transaction after receiving a legal opinion letter on a Massachusetts law firm’s letterhead.
- The opinion letter contained intentional misrepresentations and was part of a fraud conspiracy involving one partner, Stephen Jones, and others not sued in the proceeding.
- Jones arranged for a third party to sign the letter, but factfinders determined Jones adopted or ratified its issuance.
- Kansallis incurred an $880,000 loss and could not recover from Jones or his co-conspirators.
- Kansallis sued Jones’s other law partners, asserting vicarious liability based on apparent authority, acts within the scope of the partnership, and liability under Mass. Gen. Laws ch. 93A.
- In federal court, the jury found Jones lacked apparent authority and acted outside the scope of the partnership; judgment entered for the partner-defendants.
- On appeal, the First Circuit certified to the Supreme Judicial Court of Massachusetts questions concerning (1) the scope-of-partnership standard for vicarious liability and (2) vicarious liability and enhanced damages under ch. 93A.

## Issues

1. For partnership vicarious liability under Massachusetts law, must a plaintiff prove the partner’s act was undertaken at least in part with intent to serve or benefit the partnership to be “within the scope” of the partnership?
2. May partners be held vicariously liable under Mass. Gen. Laws ch. 93A for a partner’s authorized unfair or deceptive conduct even if the other partners were unaware of and uninvolved in it, and what is required for multiple damages?

## Decision

- The court answered the first certified question yes: an act is within the scope of the partnership for vicarious liability only if taken at least in part with intent to serve or benefit the partnership.
- The court answered the second certified question yes in part: a partnership (and partners) may be vicariously liable under ch. 93A for a partner’s acts when traditional agency criteria (apparent authority or scope of partnership) are satisfied, even if other partners lacked knowledge or involvement.
- The court further stated that multiple damages under ch. 93A require more than imputed liability; they require additional culpability (such as knowing or wilful misconduct) by the persons against whom multiple damages are sought.

## Legal Principles

- “Scope of partnership” vicarious liability requires proof that the partner’s conduct was actuated at least in part by a purpose to serve or benefit the partnership.
- Apparent authority is a distinct basis for vicarious liability focused on the principal’s manifestations and the third party’s reasonable reliance, not the actor’s subjective intent to benefit the partnership.
- Chapter 93A liability may be imputed to a partnership and its partners under agency principles when the violating conduct is within the scope of the partnership or undertaken with apparent authority.
- Enhanced (multiple) damages under ch. 93A are not imposed solely through vicarious liability; they require a showing of knowing or wilful wrongdoing (or comparable culpability) attributable to the defendants charged with multiple damages.

## Conclusion

The court clarified that Massachusetts scope-of-partnership vicarious liability turns on whether the partner acted at least partly to benefit the partnership, recognized that apparent authority remains an independent route to imputed liability, and held that while ch. 93A liability may be vicariously imposed through agency principles without partner knowledge, multiple damages require proof of additional culpability by those targeted for enhanced damages.


Kansallis Fin. Ltd. v. Fern, 421 Mass. 659, 659 N.E.2d 731 (1996)