AGENCY

Somerset Legal Journal headnotes from approximately 1991 through the present.

For earlier cases, please visit the Somerset County Law Library.

 

GENERALLY

 

The existence of an agency relationship is a question of fact. Larson v. Asperline Imagineering Service, Inc., 59 Som.L.J. 146 (2001) (Gibson, J.).

 

An agency relationship may be created under different theories of authority, as set forth in section 140 of the Restatement (Second) of Agency: (a) the agent was authorized; (b) the agent was apparently authorized; or (c) the agent had a power arising from the agency relationship and not dependent upon authority or apparent authority. Larson v. Asperline Imagineering Service, Inc., 59 Som.L.J. 146 (2001) (Gibson, J.).

 

Apparent authority is defined in section 267 of the Restatement (Second) of Agency as follows: One who represents that another is his servant or other agent and thereby causes a third person justifiably to rely upon the care or skill of such apparent agent is subject to liability to the third person for harm caused by the lack of care or skill of the one appearing to be a servant or other agent as if he were such. Larson v. Asperline Imagineering Service, Inc., 59 Som.L.J. 146 (2001) (Gibson, J.).

 

The Pennsylvania Supreme Court has defined apparent authority as "authority which although not actually granted, the principal (1) knowingly permits the agent to exercise or (2) holds him out as possessing." Larson v. Asperline Imagineering Service, Inc., 59 Som.L.J. 146 (2001) (Gibson, J.).

 

An employer is vicariously liable for the negligent acts of an employee that cause injury to a third party, provided that the acts of the employee were taken during the course of and within the scope of his employment. Wiedenhoft v. Honeywell, et al., 59 Som.L.J. 310 (2001) (Gibson, J.).

 

An agency relationship may be created under different theories of authority, set forth in 140 of the Restatement (Second) of Agency. Wiedenhoft v. Honeywell, et al., 59 Som.L.J. 310 (2001) (Gibson, J.).

 

In determining whether an agency relationship exists based upon actual authority, the basic inquiry by the court is whether the alleged servant/agent is subject to the alleged master's / principal's control, or right to control, with respect to his physical conduct in the performance of the services for which he was engaged. Wiedenhoft v. Honeywell, et al., 59 Som.L.J. 310 (2001) (Gibson, J.).

 

In a master-servant relationship, the master controls not only the result of the work but also has the right to direct the manner in which it shall be accomplished. Wiedenhoft v. Honeywell, et al., 59 Som.L.J. 310 (2001) (Gibson, J.).

 

In an independent contractor relationship, the person engaged in the work has the exclusive control of the manner of performance, and is responsible for the result. Wiedenhoft v. Honeywell, et al., 59 Som.L.J. 310 (2001) (Gibson, J.).

 

Factors which can be considered by a court in determining whether an agency relationship exists, based upon actual authority, include the following: (a) the nature of the work or occupation; (b) skill required for performance; (c) whether one is engaged in a distinct occupation or business; (d) which party supplies the tools; (e) whether payment is by the time or the job; (f) whether the work is party of the regular business of employer; and (g) the right to terminate the employment at any time. Wiedenhoft v. Honeywell, et al., 59 Som.L.J. 310 (2001) (Gibson, J.).

 

Apparent authority, the agency relationship and the liability which can result from apparent authority are discussed in 267 of the Restatement (Second) of Agency. Wiedenhoft v. Honeywell, et al., 59 Som.L.J. 310 (2001) (Gibson, J.).

 

The Pennsylvania Supreme Court has defined apparent authority as "authority which, although not actually granted, the principal (1) knowingly permits the agent to exercise or (2) holds him out as possessing. Wiedenhoft v. Honeywell, et al., 59 Som.L.J. 310 (2001) (Gibson, J.).

 

An agent cannot, simply by his own words, invest himself with apparent authority because such authority emanates from the actions of the principal and not the agent. Wiedenhoft v. Honeywell, et al., 59 Som.L.J. 310 (2001) (Gibson, J.).

 

Pennsylvania case law, as well as statutory law, provides that the statute of frauds requires that the authority of an agent to sell or lease real estate for more than three years, must be in writing in order to bind the principal. Reckner v. Baker, 59 Som.L.J. 327 (2002) (Gibson, J.).

 

Ratification of the unauthorized acts of an alleged agent must also be in writing based upon the requirements of the statute of frauds. Reckner v. Baker, 59 Som.L.J. 327 (2002) (Gibson, J.).

 

While it is necessary to plead all the various details of an alleged agency relationship, a complainant must allege, as a minimum, facts which: (1) identify the agent by name or appropriate description; and (2) set forth the agent's authority, and how the tortious acts of the agent either fall within the scope of that authority, or, if unauthorized, were ratified by the principal. Cugini v. Kearcher and Mardis Ford-Lincoln-Mercury, Inc., 60 Som.L.J. 402 (2002) (Cascio, J.).

 

The elements of agency may be plead generally. Cugini v. Kearcher and Mardis Ford-Lincoln-Mercury, Inc., 60 Som.L.J. 402 (2002) (Cascio, J.).

 

Based on an agency theory, a principal may be found vicariously liable for punitive damages assessed against its agent. Cugini v. Kearcher and Mardis Ford-Lincoln-Mercury, Inc., 60 Som.L.J. 402 (2002) (Cascio, J.).

 

MASTER-SERVANT RELATIONSHIPS

 

The four factors to be used in evaluating whether employee conduct is within the scope of the employee's employment are: 1) it is of the type and nature for which the employee was hired to perform; 2) it occurs substantially within the authorized time and space limits; 3) it is conducted to serve the employer; 4) where force is intentionally used by an employee against another, the use of force is not unexpected by the employer. Restatement (Second) of Agency 228; R.A. v. First Church of Christ, 748 A.2d 692 (Pa.Super. 2000). Johnson v. Dudenak & Geibig t/d/b/a Sassy's, 60 Som.L.J. 333 (2002) (Gibson, J.).

 

Restatement (Second) of Torts 317 states: A master is under a duty to exercise reasonable care so to control his servant while acting outside the scope of his employment as to prevent him from intentionally harming others or from so conducting himself as to create an unreasonable risk of bodily harm to them if a) the servant i) is upon the premises in possession of the master or upon which the servant is privileged to enter only as his servant, or ii) is using a chattel of the master, and b) the master i) knows or has reason to know that he has the ability to control his servant, and ii) knows or should know of the necessity and opportunity for exercising such control. Johnson v. Dudenak & Geibig t/d/b/a Sassy's, 60 Som.L.J. 333 (2002) (Gibson, J.).

 

VICARIOUS LIABILITY

 

A claim of vicarious liability exists where the plaintiff shows an agency relationship or an employee-employer relationship between the actor and the defendant. Cugini v. Kearcher and Mardis Ford-Lincoln-Mercury, Inc., 60 Som.L.J. 402 (2002) (Cascio, J.).

 

Based on an agency theory, a principal may be found vicariously liable for punitive damages assessed against its agent. Cugini v. Kearcher and Mardis Ford-Lincoln-Mercury, Inc., 60 Som.L.J. 402 (2002) (Cascio, J.).