Apparent Agency requires actual acts to hold a hotel liable for the injuries allegedly caused by a tour company

Apparent agency requires actual cloaking by the principal with the cloth of agency on the agent so that third parties believe what they are assuming. The third parties must then reply on the agency to their detriment.

Cash v. Six Continents Hotels, 2004 U.S. Dist. LEXIS 2901

State: Pennsylvania, United States District Court for the Eastern District of Pennsylvania

Plaintiff: Malleria Cash and Frederika Harrell

Defendant: SIX CONTINENTS HOTELS

Plaintiff Claims: Negligence

Defendant Defenses: No relationship with the true defendant

Holding: For the defendant

Year: 2004

The plaintiffs in this case were in Montego Bay Jamaica. They were staying with the defendant, Holiday Inn Sunspree Hotel. Through the hotel, they arraigned a tour to Dunns River Falls in Ocho Rios, Jamaica with Harmony Tours, Ltd.

Harmony Tours Ltd maintained a desk in the hotel lobby. However, there was no other legal connection between Holiday Tours and the defendant hotel.

The plaintiffs were transported to the falls and dropped off “for a long period of time without any guidance or assistance.” While they were there, the plaintiffs claimed they were trying to climb the waterfall without the assistance of a guide, slipped, fell, and sustained injuries.

They filed this suit in Federal District Court for the Eastern District of Pennsylvania, which the parties agreed was the correct court and that Pennsylvania law, controlled the case.

Analysis: making sense of the law based on these facts.

The court started out going through the requirements as the court to grant a motion for summary judgment filed by the defendant. The issue that must be answered on whether to grant a motion for summary judgment is “whether reasonable minds may differ as to the verdict.” If there are no facts that are in dispute and no reasonable mind can find differently then the motion should be granted.

However, if the facts can be interpreted differently or a reasonable mind might find them differently, then a motion for summary judgment should not be granted.

The basis for the argument of the plaintiffs that the tour company was related was not legal but apparent. The plaintiffs argued the tour company was an apparent agent of the tour company. An apparent agent is defined as:

…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 an 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.

If the principal “clothes his agent with apparent authority is estopped to deny such authority.” However, the court could find nothing that supported this argument.

In looking at the facts the court identified all the ways the plaintiff has been informed that the defendant hotel was not associated with the tour company.

No one ever represented that the tour company was an agent or affiliated in any special way with the hotel. The ticket the plaintiffs were given after purchasing the tour states:

…take notice that Harmony Tours Ltd. which conducts tours and excursions sold at this desk is an independent contractor. Holiday Inn (Jamaica) Inc. is not responsible for any loss, damage or injury which anyone may suffer arising out of, or in the course of, or in connection with any such tour or excursion.

On top of that, there was no evidence offered by the plaintiff to support its theory.

Even if there was evidence to support facts showing apparent authority, the plaintiffs must then prove that they justifiably relied upon the representation. The plaintiffs would have to argue that they relied upon representations that the tour was the principal of the hotel and that the hotel made a representation that led to the injury.

In this case, that is a reach based on the facts and the court did not buy it.

The case was dismissed.

So Now What?

The critical part is whenever it may appear that you are in a relationship with another business, and you are not; you need to make all customers of both or yours aware of the facts.

Notices posted at the cash register of a retail store that the store is not related to any of the third parties soliciting business in the store.

If you are a hotel, then a sign in the lobby explaining the relationship or near any brochures as well as in this case, printing that notice on the receipt.

Always be upfront with your relationship with your customers.

What do you think? Leave a comment.

James H. “Jim” Moss

Jim Moss is an attorney specializing in the legal issues of the outdoor recreation community. He represents guides, guide services, and outfitters both as businesses and individuals and the products they use for their business. He has defended Mt. Everest guide services, summer camps, climbing rope manufacturers; avalanche beacon manufacturers, and many more manufacturers and outdoor industries. Contact Jim at Jim@Rec-Law.us

Jim is the author or co-author of eight books about the legal issues in the outdoor recreation world; the latest is Outdoor Recreation Insurance, Risk

Outdoor Recreation Insurance, Risk Management and Law

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