Can a corporate officer hire a lawyer for the corporation?
A corporate officer is sued individually and in his corporate capacity. The officer hires a lawyer, who agrees to represent the officer in both capacities. The corporation is a party to the agreement. Does the corporation have an obligation to pay the lawyer?
Earlier this week, the Missouri Court of Appeals for the Eastern District tackled this question when law firm Teasdale & Associates sued the Richmond Heights Church of God in Christ. Teasdale wanted to be paid for work it had done for James Hunt, the Church's pastor and president. The Church's primary defense was that Hunt may have hired Teasdale, but he did so for himself, not the Church.
The trial court, and ultimately the appellate court, held the Church was bound by Hunt's actions. A key element for the appellate court reaching this decision, however, was that the Church's bylaws authorized the pastor/president to enter contracts on behalf of the Church. One has to wonder if the courts would have reached a different decision if it turned out the pastor/president lacked such authority -- particularly if the lawyer had some reason to know such authority had not been conferred.
The case is Teasdale & Associates v. Richmond Heights Church of God in Christ, Case No. ED96633 (Mo. App. E.D. May 29, 2012), available here: http://www.courts.mo.gov/file.jsp?id=54422