Suing Principals Alone for the Acts of Agents

Abstract

Some Illinois precedents indicate that agents need not always be joined, or be continued in a lawsuit if earlier joined, when claims are also presented against principals based on their vicarious liability for the acts of the agents. Yet other precedents indicate that res judicata can bar claims against principals when agents are sued and then dismissed based on defenses that are not “personal” to them. Perhaps, as well, in Illinois there are be barriers to suits against principals when agents are never sued, but would have had defenses not personal to them if they were sued. Given these precedents, what should plaintiffs so? In particular, how should they differentiate between defenses that are and are not personal to agents? We suggest the safest road is to join agents [even those without money] when suing principals and to continue to sue them until the vicarious liability claims against the principals are resolved, unless it is absolutely clear the agents are not suable due to their “personal” defenses. Even with such “personal” defenses, joinder of agents is wise as then discovery from the agents is available. As to what constitutes a personal defense, we suggest caution. It clearly does not encompass a defense that absolves the agent of fault. It likely does not include a defense that could have absolved the agent of fault if the agent had ever been sued. For now at least, it may not include a defense of a sued agent that never prompted for the principal “the inconvenience of having to prepare for trial.” Pleading deficiencies and statute of limitations defenses promoting dismissals with prejudice seemingly are “personal” when successfully raised by agents, though here plaintiffs should seek dismissal orders indicating there was no adjudication upon the merits in order to avoid the effects of Illinois Supreme Court Rule 273 [like FRCP 41] on involuntary dismissals. We note that written norms could address better when the vicarious liability of a principal ends with the end of the liability of an agent, whether due to the nonjoinder of the agent and the running of the limitations period, or via a settlement postsuit with the agent, or via a dismissal with prejudice postsuit of a claim against the agent involving no settlement, or otherwise. Illinois Supreme Court Rule 103(b) expressly recognizes that a suit against a principal can continue when an agent is dismissed from the suit due to a failure of a reasonable diligence in service of process (clearly a “personal” defense). As well, the Illinois Civil Procedure Code, 735 ILCS 5/2-403(d), expressly recognizes a judgment in an action conducted by a subrogee by virtue of subrogation is not a bar in a related action by subrogor, though not saying that a judgment in an action by a subrogor will not bar a later action by a subrogee. If there is no new general written norms governing all cases, regardless of any personal or nonpersonal actual or potential defenses of agents, there could at least be a new written norm on the effects of settlements with agents alone. Here, there already appears significant discord in the Illinois courts.

Keywords: agents, principals, tort, joinder, res judicata, claim preclusion, judgments, vicarious liability, respondeat superior, civil procedure, preclusion