Case Study 1 – Millan V. Dean Witter Reynolds, Inc.
Plaintiff: Maria Millan
Defendant: Dean Witter Reynolds, Inc.
Appellant: Maria Millan
Appellee: Dean Witter Reynolds, Inc.

History of the case
Trial Court: Dean Witter won. The broker was found 85% liable and the firm was found to be 15%.
Lower appellate court: Dean Witter won.
Overall winner: Decision upheld, the broker was found 85% liable and the firm was found to be 15%

Facts:
Maria Millian sued both her son and Dean Witter Reynolds, Inc. for negligence, gross negligence, conversion, and breach of fiduciary duty. Maria Millian opened two brokerage accounts with Dean Witter Reynolds, Inc. with her son. Her son Miguel forged her signature on an account application form and opened the account in her name. Miguel began to steal money from his mother’s account which totaled about $287,000. Trial court directed a verdict for Dean Witter on issues of vicarious liability. They found Dean Witter is 15% liable and Millan is 85% responsible due to not discovering the fraud sooner.

Plaintiff’s theory:
Miguel and Dean Witter Reynolds, Inc. stole money from Maria Millian by deceiving her. Because Miguel opened fraudulent accounts in the name of Maria Millian and wrote checks payable to cash, and because the company did not verify the signatures, Millian sued for negligence, gross negligence, conversion, and breach of fiduciary duty.

Defendant’s theory:
Dean Witter Reynolds, Inc. was not fully responsible for the fraudulent acts committed by Miguel because he was not acting within the scope of his position at the firm ultimately resulting in monies being stolen from Millian’s account.

Legal issue:

Should the brokerage firm be held vicariously liable for the fraudulent acts of one of its brokers, even though the customer defrauded was his mother?
The holding of the court:
Trial court: No