Quiz 38: Third Persons in Agency

Business

Richard Pawlus was an owner of Dutch City Wood Products, Inc., which did business as "Dutch City Marketing." Pawlus purchased merchandise from Rothschild Sunsystems from April 24 to June 24 using the designation "Richard Pawlus Dutch City Marketing" on orders and correspondence. In October, Rothschild was notified that Pawlus was acting on behalf of the corporation when the merchandise was purchased. Rothschild sued Pawlus for payment for the merchandise. Pawlus contended that he was an agent of the corporation and was thus not personally liable. Decide. [Rothschild Sunsystems, Inc. v Pawlus, 514 NYS2d 572 (App Div)]

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Refer to the case Rothschild Sunsystems, Inc. v Pawlus Case Issue The facts to this case are: • Defendant ordered items from plaintiff. • Defendant placed the order with his name and name of a company (the principal). • The order was never paid for. • Plaintiff sued defendant. Defendant argued he was an agent and not liable. The issue is whether the defendant is personally liable for payment when he did not fully disclose that he was an agent for the principal. Relevant Terms, Laws, and Cases Agent - is someone who is hired by a principal to act for the principal. • The agent is seen to be controlled by the principal. • Liability caused by the agent will make the principal liable. • However, there are exceptions to liability… Undisclosed Principal - when agent does not disclose he is working for a principal, the agent will be held personally liable for his/her actions. Opinion The court held for plaintiff. They argued that: • In order for the agent to avoid liability he must reveal that he is working for a principal. • The defendant in this case did not do so properly. • Defendant wrote his company name but did not mention he was placing an order for the company. Thus, the defendant is personally liable as he failed to disclose the principal.

Q 2

Myles Murphy was appointed by Cy Sinden, a famous developer, to purchase land for a shopping center near the intersection of I-95 and Route 1. Mary Mason, the property owner, contracted with Murphy for the sale of the property. Because of an economic downturn, Sinden was unable to provide the planned behind-the-scenes financing for the venture, and the contract was not performed. Mason's real estate experts determined that she lost $2 million because of the breach of contract. Mason also discovered that Sinden was "behind the deal." If Mason elects to sue Sinden, who turns out to be unable to pay the judgment because of the collapse of his business "empire," can she later bring suit against Murphy?

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Relevant Terms, Laws, and Cases Agent - is someone who is hired by a principal to act for the principal. • The agent is seen to be controlled by the principal. • Liability caused by the agent will make the principal liable. • However, there are exceptions to liability… Undisclosed Principal - when agent does not disclose he is working for a principal, the agent will be held personally liable for his/her actions. Discussion In this case, the facts are: • M made a contract with an agent working for an undisclosed principal. • The contract was breached. • M found out identity of the principal. If M had not found out the principal's identity, then she can only sue the agent. But, on discovering the principal's identity, M can sue both principal or the agent or both.

Q 3

Lowell Shoemaker, an architect, was hired by Affhouse to work on a land development project. In September Shoemaker contacted Central Missouri Professional Services about providing engineering and surveying services for the project. Central submitted a written proposal to Shoemaker in October. About a week later, Shoemaker orally agreed that Central should proceed with the work outlined in the proposal. When the first phase of the work was completed, a bill of $5,864.00 was sent to Shoemaker. Shoemaker called Central and requested that all bills be sent directly to the owner/developer, Affhouse. When the bills were not paid, Central sued Shoemaker and Affhouse. The trial court entered a judgment against Shoemaker for $5,864 and he appealed. Shoemaker acknowledged that he did not disclose the identity of the principal to Central at the time the transaction was conducted, and explained: Q. You never told Mike Bates or Central Missouri Professional Services that you were an agent for Affhouse or any other undisclosed principal? A. That ' s correct. I never did. Q. Another note I wrote down was that the subject of Affhouse came up in your conversations with Mike Bates of Central Missouri Professional Services after he sent the bill to you? A. The early part of the year, yes. Shoemaker contends that since he made clear to Central that he was an architect and not the developer, there was no binding oral contract between Central and him. Decide. [ Central Missouri Professional Services v. Shoemaker , 108 S.W.3d 6 (Mo. App.)]

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Case summary: Mr. LS is an architect and was hired by AF to work on a land development project. In September, LS contacted Central M professional services to provide engineering and surveying over the project assigned to him by AF. In October, Central sent him a proposal of this work and LS agreed to them orally stating that they should go for this work. Later on when the first phase of this work was completed, Central sent a bill to LS amounting $5864.00. Over this LS requested them to send all the bills directly to AF. When the payment of bill was not paid, Central sued both LS and AF. The court gave a summary judgment favoring Central and asks LS to pay a fine of $ $5864.00. Over this LS appealed and disclosed that he has not revealed the identity of the principal (AF) to Central at the time of agreeing to its proposal. But LS has also maintained that he has disclosed to Central that he is an architect and not the developer and thus there is no binding contract between central and him. Conclusion: As it is said that Central has not taken any written and signed document from LS at the time it started working on the first phase of the proposal thus it is not entitled to get any legal right to sue AF and LS for the non-payment of the bills. Secondly, when LS has disclosed to Central that he is an architect and not the developer and thus there is no binding contract, over this Central should have asked LS about the principal in this contract and the name of the land developer. But Central failed to do so and thus the court should gave punishment and held LS liable for this scandal but legally Central cannot sue LS for fraud in absence of any written proves with it stating about the agreement and binding contract between both of them.

Q 4

Beverly Baumann accompanied her mother to Memorial Hospital, where her mother was placed in intensive care for heart problems. A nurse asked Baumann to sign various documents, including one that authorized the hospital to release medical information and to receive the mother's insurance benefits directly. This form stated: "I understand I am financially responsible to the hospital for charges not covered by this authorization." Baumann's mother died during the course of her hospitalization. The hospital later sued Baumann to recover $19,013.42 in unpaid hospital charges based on the form she signed, which the hospital called a "guarantee of payment." Baumann contended that she signed the document as an agent for her mother and was thus not personally liable. Decide. [Memorial Hospital v Baumann, 474 NYS2d 636]

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Q 5

Mills Electric Co. signed a contract with S S Horticulture Architects, a two-person landscaping partnership operated by Sullivan and Smyth, to maintain the grounds and flowers at the Mills Electric Co. plant in Jacksonville, Florida. Mills checked references of S S and found the company to be highly reputable. The contract set forth that S S would select the flowers for each season and would determine when to maintain the lawns so long as they were properly maintained. The contract called for payments to be made to S S on the first workday of each month, and the contract stipulated that "nothing herein shall make S S an agent of the company." The contract also required that S S personnel wear uniforms identifying them as employees of S S. S S had other accounts, but the large Mills Electric plant took up most of its time. While working on a terraced area near the visitors' entrance to the plant, Sullivan lost control of his large commercial mower, and the mower struck Gillespie, a plant visitor, causing her serious injury. A witness heard Sullivan apologizing to Gillespie and saying that "running that mower on the terrace is a two-person job." Gillespie brought suit against Mills Electric Co., contending Mills should be held vicariously liable. Decide.

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Q 6

Bongers died intestate. Alfred Bongers and Delores Kuhl, Leo's nephew and niece, were appointed personal representatives of his estate. Leo left more than 120 antique cars, trucks, and motorcycles. The estate hired Bauer-Moravec to sell the vehicles at auction. Auctioneer Russ Moravec suggested that the vehicles be sold at an airstrip auction in May, June, or July. The estate rejected this recommendation and insisted that the sale be conducted in January on a farm owned by the estate. On January 30, the auction took place beginning at 9:30 A.M. with temperatures below freezing and some 800 people jammed into the bid barn. One auctioneer had purchased Putnam hitch balls to be used with mylar-type ropes so that small farm tractors could tow the vehicles into and out of the bid barn. One hour into the auction, Joseph Haag was seriously injured when a hitch ball came loose from the drawbar of the tractor towing an antique Studebaker truck. Haag sued the estate, claiming that Bauer-Moravec was acting as agent for the estate and that its negligence in not properly attaching the hitch ball and in using mylar-type tow rope rather than chains should be imputed to the estate under the doctrine of respondeat superior. The estate defended that it was not liable for the torts of the auctioneer and its employees because the auctioneer was an independent contractor. Decide. [Haag v Bongers, 589 NW2d 318 (Neb)]

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Q 7

July 11, 1984, Jose´ Padilla was working as a vacation-relief route salesperson for Frito-Lay. He testified that he made a route stop at Sal's Beverage Shop, where he was told by Mrs. Ramos that she was dissatisfied with Frito-Lay service and no longer wanted its products in the store. He asked if there was anything he could do to change her mind. She said no and told him to pick up his merchandise. He took one companyowned merchandise rack to his van and was about to pick up another rack when Mr. Ramos said that the rack had been given to him by the regular route salesperson. Padilla said the route salesperson had no authority to give away Frito- Lay racks. A confrontation occurred over the rack, and Padilla pushed Mr. Ramos against the cash register, injuring Ramos's back. Frito-Lay has a company policy, clearly communicated to all employees, that prohibits them from getting involved in any type of physical confrontation with a customer. Frito-Lay contended that Padilla was not acting within the course and scope of his employment when the pushing incident took place and that the company was therefore not liable to Ramos. Ramos contended that Frito-Lay was responsible for the acts of its employee Padilla. Decide. [Frito-Lay, Inc. v Ramos, 770 SW2d 887 (Tex App)]

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Q 8

Jason Lasseigne, a Little League baseball player, was seriously injured at a practice session when he was struck on the head by a poorly thrown baseball from a team member, Todd Landry. The league was organized by American Legion Post 38. Claude Cassel and Billy Johnson were the volunteer coaches of the practice session. The Lasseignes brought suit on behalf of Jason against Post 38, claiming that the coaching was negligent and that Post 38 was vicariously liable for the harm caused by such negligence. Post 38 contended that it had no right to control the work of the volunteer coaches or the manner in which practices were conducted and as a result should not be held vicariously liable for the actions of the coaches. Decide. [Lasseigne v American Legion Post 38, 543 So 2d 1111 (La App)]

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Q 9

Moritz, a guest at Pines Hotel, was sitting in the lobby when Brown, a hotel employee, dropped a heavy vacuum cleaner on her knee. When Moritz complained, the employee insulted her and hit her with his fist, knocking her unconscious. She sued the hotel for damages. Was the hotel liable? [Moritz v Pines Hotel, Inc., 383 NYS2d 704 (App Div)]

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Q 10

Steve Diezel, an employee of Island City Flying Service in Key West, Florida, stole a General Electric Credit Corp. (GECC) aircraft and crashed the plane while attempting to take off. GECC brought suit against Island City on the theory that it had negligently hired Diezel as an employee and was therefore legally responsible for Diezel's act of theft. Diezel had a military prison record as a result of a drug offense and had been fired by Island City twice previously but had been immediately reinstated each time. Island City claimed that the evidence was insufficient to establish that it had been negligent in employing Diezel. Decide. [Island City Flying Service v General Electric, 585 So2d 274 (Fla)]

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Q 11

Bay State Harness Horse Racing and Breeding Association conducted horse races at a track where music for patrons was supplied by an independent contractor hired by the association. Some of the music played was subject to a copyright held by Famous Music Corp. The playing of that music was a violation of the copyright unless royalties were paid to Famous Music. No royalties were paid, and Famous Music sued the association, which raised the defense that the violation had been committed by an independent contractor specifically instructed not to play Famous Music's copyrighted material. Decide. [Famous Music Corp. v Bay State Harness Horse Racing and Breeding Association, Inc., 554 F2d 1213 (1st Cir)]

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Q 12

Steven Trujillo, told by the assistant door manager of Cowboys Bar "to show up to work tonight in case we need you as a doorman," came to the bar that evening wearing a jacket with the bar logo on it. Trujillo "attacked" Rocky Medina in the parking lot of the bar, causing him serious injury. Prior to working for Cowboys, Trujillo was involved in several fights at that bar and in its parking lot, and Cowboys knew of these matters. Medina sued Cowboys on two theories of liability: (1) respondeat superior and (2) negligent hiring of Trujillo. Cowboys's defense was that respondeat superior theory should be dismissed because the assault was clearly not within the course of Trujillo's employment. Concerning the negligent hiring theory, Cowboys asserted that Trujillo was not on duty that night as a doorman. Decide. [Medina v Graham's Cowboys, Inc., 827 P2d 859 (NM App)]

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Q 13

Rubin, while driving his car in Chicago, inadvertently blocked the path of a Yellow Cab Co. taxi driven by Robert Ball, causing the taxi to swerve and hit Rubin's car. Angered by Rubin's driving, Ball got out of his cab and hit Rubin on the head and shoulders with a metal pipe. Rubin sued Yellow Cab Co. for the damages caused by this beating, contending that the employer was vicariously liable for the beating under the doctrine of respondeat superior because the beating occurred in furtherance of the employer's business, which was to obtain fares without delay. The company argued that Ball's beating of Rubin was not an act undertaken to further the employer's business. Is the employer liable under respondeat superior? [Rubin v Yellow Cab Co., 507 NE2d 114 (Ill App)]

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Q 14

Brazilian Colombian Co. (B C), a food broker, ordered 40 barrels of olives from Mawer- Gulden-Annis (MGA). MGA's shipping clerk was later told to make out the bill of lading to B C's customer Pantry Queen; the olives were shipped directly to Pantry Queen. Eight days after delivery, the president of B C wrote MGA to give it the name of its principal, Pantry Queen, and advised MGA to bill the principal directly. Pantry Queen was unable to pay for the olives, and MGA sued B C for payment. B C contended that it was well known to MGA that B C was a food broker (agent) and the olives were shipped directly to the principal by MGA. It stated that as an agent, it was not a party to the contract and was thus not liable. Decide. [Mawer-Gulden-Annis, Inc. v Brazilian Colombian Coffee Co., 199 NE2d 222 (Ill App)]

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