Here is an interesting blog blurb  from the North Carolina Appellate Blog on how an innocent client was seriously hurt by the acts of its attorney.

"Today the Court of Appeals (COA) issued a harsh reminder that a client is, under the law of agency, responsible with the bad conduct of its counsel in almost all instances. The case is Purcell Int’l Textile Group, Inc. v. Algemene AFW N.V., et al.

Here’s what happened. Plaintiff sued a number of businesses alleging contract, tort, and Chapter 75 claims after Defendants terminated certain commercial agreements. Attorney W. Rickert Hinnant were retained by Defendants to represent them in the litigation.

Hinnant began settlement negotiations, reached a settlement, and announced the settlement in open court on the trial date. Hinnant then prepared a settlement agreement, committing Defendants to pay $850,000 in three installments over a 6-month period. Hinnant sent Plaintiff settlement agreement signed by Defendants. Or so it seemed.

The trouble is, Hinnant never sent them the written settlement agreement or even told his clients about the settlement. Instead, he forged their names to the agreement after negotiating it without their consent or knowledge. He never had authority to settle for the amount he did.

Unsurprisingly, Defendants defaulted on the payment under the settlement agreement, since they didn’t know about it. This prompted Plaintiff to file a motion to enforce the agreement, which resulted a judgment for $850,000 plus attorneys fees of 15% (as provided in the settlement agreement) as well as an order attaching assets of Defendants.

The first time Defendants learned of the settlement agreement was when they learned the court had entered that judgment against them. They moved under Rule 60(b) for relief from the judgment, urging that Hinnant committed fraud on the court and exceeded his authority. The trial court rejected the motion, and the COA affirmed