In J.M.K. 6, Inc. v. Gregg & Gregg, P.C., No. 14-04-00849-CV, 2006 Tex. App. Lexis 2338 (Tex. App.–Houston [14th Dist.] 2006), the court held that both an individual lawyer and a law firm are capable of committing torts not encompassed in an attorney-client relationship, and can be held liable when they do so. For example, a lawyer can be liable to a non-client for negligent misrepresentation.

One who, in the course of his business, profession or employment, or in any transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.

See McCamish, Martin, Brown & Loeffler v. F.E. Appling Interests, 991 S.W.2d 787, 791, 42 Tex. Sup. Ct. J. 597 (Tex. 1999) (citing Restatement (Second) of Torts § 552).

In J.M.K., the client was in the business of acquiring apartment complexes, converting them to condominiums, and selling the condominium units to third parties. The client, Karam, hired Gregg to incorporate the legal entities that would own the condominiums. The corporation would then hire Gregg to convert the apartments to the condominium form of ownership. Condominium units were sold to third parties. The City subsequently asserted that the condominium conversion was ineffective. The purchasers sued the client, who in turn sued the lawyer, asserting a contribution claim.

J.M.K. submitted the affidavit of Jerome Karam testifying, without objection, that he was a party to a conference call between Dick Gregg, Jr., and agents for the third-party condominium purchasers, during which Gregg represented to the purchasers that J.M.K. "had complied with all legal requirements to effect the conversion of the apartments in the [complex] to condominiums, and that the closing could proceed." Karam further testified Gregg made the same representations to him, adding that the units "could be sold to and occupied by the third-party purchasers." Karam concludes, "When J.M.K. 6, Inc. represented to the Plaintiffs that the conversion had been properly done and that it had complied with all legal requirements in connection with this conversion, J.M.K. 6, Inc. merely relayed to the Plaintiffs what it had been told by its attorney, Mr. Gregg."

The court found that a contribution claimed was stated against the lawyer. The court also found, without much discussion, that an indemnity claim was stated against the lawyer, apparently on the theory that (1) the lawyer was acting as the agent of the seller when he made the statements to the purchasers, (2) the purchasers alleged, in part, that the seller was vicariously liable for the lawyer’s statements, and (3) under ordinary principles of indemnity law, an innocent principal held vicariously liable for the act of an agent may obtain indemnity from the agent.