Here is the scenerio:
Client agrees to pay a very large sum (5 figures)to a dentist on my behalf for services rendered. The dentist is very familiar with said client as he and his family have been going there for many years and he has paid dentist over 200k just this year in restoration work for the family. My services were completed in early December.
Client pays off half of debt and runs out of liquid cash. He still owes half of the amount to the dentist over 2 months later of which I have just found out about. Dentist was dealing directly with client but has started calling me to ask about the money owed. Client per a verbal conversation with dentist has still said he intends to pay the debt just cannot right now.
Question: What is my legal liability, if any for the remaining debt since the dentist has a written promissary note to them from the client and also numerous verbal conversations. Also client is an attorney himself and promiasary note was written on legal letterhead.
If I have no legal liability what do I say to the dentist who I am still going to when they ask about the funds?
Thank you for you help!
Sara
-- Modified on 2/2/2009 1:21:24 PM
Sara, I don't know if you are "legally liable" or not, But, do you really want to be in the middle & leave the dentist with the short end of the stick. it seems like on a moral level you might consider a payment plan with the dentist for the remaining amount, after all you got expensive dental work for 50% off.. and you may need that dentist in the future and do you want to burn a "bridge" pun ha ha.
I think the dentist will gladly work with your budget, (I had braces at age 40 / $5000) and I paid $150/month (no intrest) for around 2 1/2 years.
Did you guaranty payment or just the client? if the former, then you owe it too. If not, then it is just the client who owes; although the dentist may be able to claim that you were "unjustly enriched" - and if he sued for the amount remaining, would that not be embarrassing for all involved??
For a legal opinion as to your situation, be sure to consult a licensed attorney in your state – and not the guy that put you in this situation.
Without addressing your particular situation, I would invite discussion from the Board on the following analysis:
Whether patient is liable to dentist depends on the original contract, if any, between patient and dentist. Normally, patient agrees to pay dentist for services rendered either through express written agreement (my dentist always makes new patients sign the bill), oral agreement (“this root canal is going to cost $5000”), course of dealing (you’ve been his patient for years and always paid him directly), or that little sign in the office that says payment is due when services are rendered.
If third party also contracts with dentist through execution of a promissory note to pay patient’s obligation to dentist, then third party is simply a co-obligor, absent language in the note saying otherwise. Patient is still liable to pay dentist on the original contract, and there would be other theories of patient liability such as quasi contract, unjust enrichment, or quantum meruit.
If patient never contracted with dentist and instead the only contract was between third party and dentist –“you provide dental services to patient and I’ll pay you for them” – then patient has no liability to dentist.
Or, if you want to take it to another level of complexity, patient could avoid liability on her original contract with dentist if promissory note qualified as a “substituted contract” or “novation.” Ask your atty friend to explain those concepts to you.
For all practical purposes, patient is going to remain liable to the dentist unless the written documentation shows that the original contract was with third party only and not patient. Unlikely that atty was sophisticated enough to draft the note as a novation or substituted contract and a typical promissory note simply states a promise to pay a sum certain on demand for value received.
But that’s just my view. What says the Board?
Contracts are covered by UCC (Uniform Commercial Code) adopted by every state, except Louisiana (I think, haven't checked in a while).
so it would not govern the contract between patient and dentist, or between third party and dentist.
To the extent that third party executed a promissory note as payment, however, you are correct that the UCC would control many issues, including whether the note qualifies as a negotiable instrument.
But, even if the UCC did apply, there is nothing in the UCC that would change the result on the core question of whether patient is liable to dentist.
Yes I am well aware of the moral implications of this and I am quite certain that I know good and well how to handle this properly. This was not a moral question but rather a legal one.
Secondly, from the outset a typewritten letter on legal letterhead was given to the dentist office clearly stating that the client would be responsible for any and all bills for me from the dentist. I never signed anything. Moreover, the remaining fee is 24k not 5k which is a big difference and a procedure that I would have never agreed to undertake if I had been responsible for payment.
It appears that all is going to be handled promptly without too much more incident however for future verbal agreements such as this is there something in particular that I need to do to safeguard against anything coming back on me? This I'm afraid was a little too taxing on the nerves.
Best,
Sara
-- Modified on 2/2/2009 9:07:11 PM
Another wrinkle - The quantum meruit/unjust enrichment idea. While there may be a valid defense for the recipient of the dental services. There is also some cerstainty to the fact that the agreement to pay by the client is also a strong one.
There may be little defense for you under the theory of unjust enrichment. It's a simple quasi-contractual obligation that's part of every contract. Here, the dentist provided service and materials on your mouth. You received a benefit and the dentist has not been compensated. You may be liable for damages under this theory less any offset of what has already been paid to the dentist.
Finally, if you pay the dentist something to get him off of your back, you would have a damage claim against client.
But, practically, it may be best to send a letter to the dentist disputing any alleged debt owing and force him to do more than make phone calls. Hopefully it will take time and that may give your client time to get his cash together.
Just some thoughts, but not specific advice. Consult an attorney in your jurisdiction. Good luck.
large amounts, and tell him to put some TEETH in it.
(Sorry, couldn't resist.)
(still not a lawyer, but I love puns)
(no wonder they are so beloved), I can think of a different place where the TEETH should go.
No place for such scoundrels on this Board!
Personally from a layman's POV. I think she is in the clear both legally and morally. The ammount of money involved would require the dentist to sue her in state court not small claims. I can't imagine him taking such steps for $24k.
Her story rings true to me, the dentist made an agreement he's stuck with it. My advice to Sara would be to apolgize to the dentist on behalf of her benafactor, but under no circustances should she admit being liable for a single penny of the debt. Remember no good deed goes unpunished. If you agree to payments of any kind you are tacitly admitting the debt is valid. Stick to your guns, politely of course, but stick to your guns.
and no, it wasn't Jon Voight, or even John Voight.
My mout is awl num frum da novacaine, dough.
I hopf I don't drool on da flor and get decked by da Jimmy.
(oops, almost fagat: Still not a lawya)
-- Modified on 2/3/2009 1:52:25 PM
As a penalty-
No soup for you.
qualification that patient is liable to dentist -have missed the determining point.
As noted in the Contracts 101 post, the starting point is to determine who contracted to pay the dentist. If only third party contracted to pay dentist for the services rendered to patient – which is the way I read your second post – then patient has no liability to dentist on any theory.
There is no liability for breach of contract bc patient has not contracted with dentist.
There is no recovery against patient on quantum meruit bc the law implies a promise to compensate for services rendered only under such circumstances as reasonably notified the recipient that the plaintiff, in performing such services, expected to be paid by the recipient. Here the dentist did not expect to be paid by patient bc contract made the third party the sole obligor.
There is no liability for unjust enrichment bc dentist has a contractual right of payment from third party. There is nothing unjust about patient retaining the benefit in this situation even if third party does not pay. And, of course, patient is not unjustly enriched at all bc patient provided services to third party for promise to pay dentist.
The posts concluding patient is liable to dentist are correct only if patient contracted with dentist to pay for services, or if dentist expected payment from patient.
As to whether patient can recover from third party for breach of the agreement between patient and third party, the answer is clearly “yes” so long as the patient provided purely legal services to third party as consideration for the promise to pay dentist. If patient provided illegal services – well, we’ll save that one for another day.
Dear Sara: As a practicing lawyer for 30 years, Ican tell you that the dentist can pursue both you and your friend for payment if he so chooses. There is a legal cause of action called quantum meruit where the dentist can sue you for services rendered on your behalf. in addition, he can sue your friend based on the prommisory note if it meets the legal requirements in your state. The fact that it is handwritten should be irrelevant. If sued by the dentist, you can third-party your friend as a Defendant in the lawsuit if you choose to go there. Good luck.
I agree with ron here. Marikod summarized pretty well in his first post. However, I disagree with him when he says unjust enrichment wouldn't favor the dentist. Sara received a benefit from the dentist for which she has not paid the dentist. Assuming she provided a service to the friend to induce him to write the promissory note, I don't know if this would blunt the unjust enrichment argument. (Library research needed.)
The illegality of her service to her friend might be an issue in the unjust enrichment argument. She might not be able to use an illegal service in her defense.
Also the illegality of her service to friend might be a defense for the friend in her third party action. Her argument is that the promissory note was given in exchange for the service she provided him and therefore his non-payment is a breach of their contract. However, friend might say that their contract is unenforceable because it was illegal.
Law CAN be fun sometimes.
City hires clinic to give free health exams to the poor. After services have been provided, City refuses to pay clinic.
Or corporation hires IBM to train its employees. Corporation refuses to pay IBM.
By your reasoning, clinic could hold the poor liable on an unjust enrichment theory, a theory available only at equity and not at law. And IBM could hold employees liable bc they received the benefit of the service.
I say “no way.” Unjust enrichment only works in a two party situation where equity favors the party who received the benefit at the expense of the provider of the service. In a three party situation, it is not equitable to hold the poor or the employees liable in this situation. Clinic has its right against the City, and IBM against the corporation and if that does not work out, they cannot go against the poor, or the employees for unjust enrichment.
I'll wager you cannot find a single three party unjust enrichment case. They are almost always two party cases.
Remember Sara said she would not have elected the expensive procedure but for client’s promise to pay dentist. If client-dentist contact unambiguously says only client will pay, Sara is off the hook.
But I agree with you that, if illegal services were provided, a different analysis might apply.
I agree with first in time and ronpc. The dentist can sue the lawyer, based upon the promissory note, if it meets the minimum legal requirements for such an instrument. Also upon simple contract. May also be a case based upon a detrimental reliance theory, because the dentist only probably did the work on you, (a person with whom he had no longstanding relationship) based the representation that the lawyer patient would pay.
You can be sued based upon unjust enrichment.
The case is probably going to go away, and the lawyer will pay for all, given the interesting circumstances of the case.
The legal advice you just received is worth exactly what you paid for it. Consult an attorney in the State where this transaction was alleged to have occurred.
This is not a contract. It falls under commercial paper.
