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tpa owner suing employee


Guest sue1jeff
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Guest sue1jeff

i use to own a tpa firm. recently the tpa firm was sue by a client due to the negligent work of an employee. ( i am still on the hook for the lawsuit) is there any way I can sue my ex employee?

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Although I am not a lawyer, I would doubt very much that you could sue an ex-employee for work done while they were an employee. However, you might very well be able sue the employer of that employee. After all, isn't the principal responsible for the action of its agents? It might not be a practical solution but at least you get to sue.

If you could sue the ex-employee, What would you hope to recover anyway? The most that you might recover would be your costs and losses associated with the client lawsuit, but that is covered by the insurance that you carry anyhow. Since you most likely cannot collect from both, there seems to be very little that could be recovered from the ex-employee, if you could sue.

How about suing the General Liability and E&O (or Fiduciary Liability) carrier instead?

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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GBurns, perhaps I misunderstood the original post but I think sue1jeff was the employer of the employee they would like to sue and it seems you are suggesting sue1jeff sue themselves as the employer?

I do agree that if the tpa firm had the general liability and E&O insurance that this should be used to reimburse the client for the neglegence of the former employee.

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Since sue1jeff so desperately feels the need to sue, that the obvious recourse to their insurance carrier did not arise, I suggested the other just as obvious thing, Sue Yourself!!

It is amusing that an employer does not understand that they have the responsibility to supervise the work of all their employees. Why do they think that they get to be the Boss, make the rules and keep any profit?

It is also amusing that people buy insurance coverage and do not know what the purpose was. Unless, they had no insurance. A TPA with no E&O or Fiduciary Liability coverage? A business with employees and no General Liability?

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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Guest ptpnthr

Have you considered that maybe your ex-employee was a co-fiduciary under ERISA or even a fiduciary and joint tort-feasor and that you may have a right to a contribution from your ex-employee for the liability?

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ptpnthr,

Wow! Where have you been all this time?

From the wording of the post, this seems like a regular employee not a partner or co-owner. There is also no mention of that ex-employee being also on the hook in the lawsuit, so I read no equity nor Officer status.

How would a regular employee become joint tort feasor? Regular employees are not party to the contract for services etc between a corporate entity and its customers. And under the agency concept, the principal is responsible for the actions of the agent (employee).

I also question the possibility of being a co-fiduciary under ERISA. How do you see this?

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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Guest sue1jeff
Have you considered that maybe your ex-employee was a co-fiduciary under ERISA or even a fiduciary and joint tort-feasor and that you may have a right to a contribution from your ex-employee for the liability?

thank you for your interesting reply, i should more fully explain. tpa firm x which i us to own until year 2000 was sued by client y.

I am still responsible since there is an indemnity agreement with buyer z.

in 1998 employee terminated clients db and transferred assets into dc plan without offering distribution to employees.

clients attorney did vcr and we are currently in binding arbitration.

on what basis would the employee be a fiduciary and what is a joint tortfeasor. thanks

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Did client's (current or former) attorney have any involvement at the time of the "transaction"? If not, did you/tpa put in writing your disclaimer that you are not engaging in the practice of law and that you recommend the client/sponsor have their own counsel review the transaction/documentation/plan amendment(s), etc.??????

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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Guest Pensions in Paradise

I find it interesting that of all of the responses to the original post, sue1jeff only responds to the one post which implies that the ex-employee might be liable.

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I vote that sue1jeff should 1) retain an attorney who specialized in civil actions; 2) lay out all the pertinent facts; 3) discuss issues of contract; liability, and agency; and then 4) return to this forum to make a report (without presenting any identifying information) on possible causes of action and theories of recovery.

Who's with me on this?

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I understand that but how did the clients tax liability result? If the IRS did not audit the DB plan how would this failure create tax liability to the client which could not be corrected in a less burdensome way than a VCR filing? For example if the client did nothing when it found out that the options were not offerred could the problem be solved by expiration of the s/l? The reason this is significant is that in law a Plaintiff has a duty to mitigate their loss and not attempt to fix the problem with the most expensive solution available.

mjb

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