Friday, November 16, 2012

Hoddeson v. Koos Bros. case brief

Hoddeson v. Koos Bros.

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.

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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