Hoddeson v.
Koos Bros.
FACTS
Plaintiff and her family entered Defendant’s store to purchase bedroom furniture. A man approached Plaintiff purporting to be a salesman for Defendant store. Plaintiff gave salesman cash for furniture to be delivered to her home at a later date because the salesman said that it was out of stock. Plaintiff did not get a receipt for the transaction. After the delivery date lapsed without a delivery, Plaintiff contacted Defendant. Defendant did not have a record of the transaction, and Plaintiff and her family were not able to identify the salesperson from Defendant’s staff. A jury found for Plaintiff, and Defendant appealed, arguing that there was a lack of evidence to establish an agency relationship.
HOLDING
D can be estopped from asserting that no claim existed when there was no agency relationship established. Defendant, as a furniture store, still owed a duty of care to Plaintiff when she enters the store and has an expectation that she will be tend to by an actual salesperson rather than an impostor. Therefore, a new trial was ordered in order to allow Plaintiff to establish a duty of care.
Plaintiff and her family entered Defendant’s store to purchase bedroom furniture. A man approached Plaintiff purporting to be a salesman for Defendant store. Plaintiff gave salesman cash for furniture to be delivered to her home at a later date because the salesman said that it was out of stock. Plaintiff did not get a receipt for the transaction. After the delivery date lapsed without a delivery, Plaintiff contacted Defendant. Defendant did not have a record of the transaction, and Plaintiff and her family were not able to identify the salesperson from Defendant’s staff. A jury found for Plaintiff, and Defendant appealed, arguing that there was a lack of evidence to establish an agency relationship.
HOLDING
D can be estopped from asserting that no claim existed when there was no agency relationship established. Defendant, as a furniture store, still owed a duty of care to Plaintiff when she enters the store and has an expectation that she will be tend to by an actual salesperson rather than an impostor. Therefore, a new trial was ordered in order to allow Plaintiff to establish a duty of care.
ii.
Burden of Proof
– Party seeking to impose liability must prove existence of agency
relationship. “It is not the burden of
the alleged principal to disprove it.”
iii.
Three Kinds of Agency Relationships
1.
Express or real authority which has been definitely granted.
2.
Implied authority, that is, to do all that is proper, customarily incidental and
reasonably appropriate to the exercise of the authority granted.
3.
Apparent authority, such as where the principal by words, conduct, or other indicative
manifestations has held out the person to be his agent.
a.
“The apparency and appearance of authority must be shown
to have been created by the manifestations of the alleged principal, and not
alone and solely by proof of those of the supposed agent.”
b.
à No apparent authority because Koos’ failure to police its sales floor
does not constitute the requisite manifestation.
iv.
Estoppel/Proprietor’s
(Principal’s) Duty to Customer
1.
Equitable
doctrine. Binds defendant, but not
plaintiff.
2.
Definition – Some
behavior (act or omission) that creates an appearance or some reason to think
that there is authority, but it must have been reasonable for the third party
to rely (to its detriment) on the appearance.
3.
Duty – Proprietor must
exercise reasonable care and vigilance to protect customer from loss occasioned
by the deceptions of an apparent salesman.
a.
Focuses on proprietor’s failure to take reasonable steps.
4.
ESTOPPEL – When proprietor
breaches its duty, it cannot claim the defense of lack of an agency
relationship.
a.
Requires a change in position by the third party. (Hoddeson paid
money for the furniture, which the imposter stole.)
i.
Without this change, only apparent authority is available
if there is the requisite manifestation.
5.
Rest. (3d) of
Agency § 2.05 – “A person who has
not made a manifestation that an actor has authority as an agent and who is not
otherwise liable as a party to a transaction purportedly done by the actor on
that person’s account is subject to liability to a third party who justifiably
is induced to make a detrimental change in position because the transaction is
believed to be on the person’s account, if
a.
(1) the person intentionally or carelessly caused such belief, or
b.
(2) having notice of such belief and that it might induce others to
change their positions, the person did not take reasonable steps to notify them
of the facts.
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