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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 plaintiff’s 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 plaintiff’s 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 than the motion should be granted.

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

The basis for the argument of the plaintiff’s that the tour company was related was not legal but apparent. The plaintiff’s 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’s has been informed that the defendant hotel was not associated with the tour company.

No one every 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 state:

…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 plaintiff’s 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 leads 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 up front with your relationship with your customers.

What do you think? Leave a comment.

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

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

MALLERIA CASH and FREDERIKA HARRELL, Plaintiffs, v. SIX CONTINENTS HOTELS, Defendant.

CIVIL ACTION NO. 03-3611

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

2004 U.S. Dist. LEXIS 2901

February 19, 2004, Decided

February 19, 2004, Filed

DISPOSITION: Defendant’s motion for summary judgment granted.

COUNSEL: [*1] For MALLERIA CASH and FREDERIKA HARRELL, Plaintiffs: HOWARD M.

GIRSH, STEINBERG & GIRSH, P.C., PHILADELPHIA, PA.

For SIX CONTINENTS HOTELS, BY ITS AGENT OR SUBSIDIARY HOLIDAY INN, Defendant:

FRANCIS H. GREY, JR., JENNIFER M. BROOKS, LAVIN COLEMAN O’NEIL RICCI FINATELLI & GRAY, PHILADELPHIA, PA.

JUDGES: RONALD L. BUCKWALTER, S.J.

OPINION BY: RONALD L. BUCKWALTER

OPINION:

MEMORANDUM

BUCKWALTER, S.J.

February 19, 2004

Presently before the Court is Defendant Six Continents Hotels’ Motion for Summary Judgment, Plaintiffs Malleria Cash’s and Frederika Harrell’s (collectively “Plaintiffs”) Opposition thereto and Defendant’s Reply to Plaintiffs’ Opposition. For the reasons set forth below, Defendant’s motion is granted.

I. BACKGROUND

On or around April 30, 2001, Plaintiffs were staying at the Holiday Inn Sunspree Hotel (“Hotel”) while they vacationed in Montego Bay, Jamaica. The Hotel is owned by SC Hotels & Resorts (Jamaica) Ltd., which is an affiliate of Defendant. While staying at the Hotel, Plaintiffs arranged to take a tour of the Dunns River Falls in Ocho Rios, Jamaica. Plaintiffs booked the tour with a local tour company, Harmony Tours Ltd. For the convenience of its guests, the Hotel [*2] permitted Harmony Tours to maintain a desk in the Hotel lobby where guests could purchase tours. It is undisputed that the Hotel and Harmony Tours have no legal affiliation.

On or around April 30, 2001, Harmony Tours transported Plaintiffs to Dunns Rivers Falls. Plaintiffs allege that they were dropped off at the Falls “for a long period of time without any guidance or assistance.” (Compl. at P 3.) Plaintiffs claim that while they were trying to climb the waterfall – without the assistance of a guide – they slipped, fell and sustained injuries.

On May 13, 2003, Plaintiffs filed a one count complaint in state court alleging that Defendant was negligent for failing to provide a guide as they toured the Falls. On June 12, 2003, Defendant removed the case to this Court.

The parties do not dispute that Pennsylvania law controls this case.

II. STANDARD OF REVIEW

A motion for summary judgment will be granted where all of the evidence demonstrates “that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c). A dispute about a material fact is genuine [*3] “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). Since a grant of summary judgment will deny a party its chance in court, all inferences must be drawn in the light most favorable to the party opposing the motion. United States v. Diebold, Inc., 369 U.S. 654, 655, 8 L. Ed. 2d 176, 82 S. Ct. 993 (1962).

The ultimate question in determining whether a motion for summary judgment should be granted is “whether reasonable minds may differ as to the verdict.” Schoonejongen v. Curtiss-Wright Corp., 143 F.3d 120, 129 (3d Cir. 1998). “Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Anderson, 477 U.S. at 248.

III. DISCUSSION

The parties do not dispute that Defendant and Harmony Tours are not legally affiliated in any way. Additionally, there is no dispute that Harmony Tours was not a servant or actual agent of Defendant. Rather, Plaintiffs’ sole contention is that Harmony Tours was an apparent agent of Defendant; therefore, [*4] Defendant should be held liable for Harmony Tours’ alleged negligence. (Pls.’ Mot. P 5.)

The Restatement (Second) of Agency § 267 outlines the rule for apparent agency and states, “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.” Drexel v. Union Prescription Centers, Inc., 582 F.2d 781, 790-91 (3d Cir. 1978)(citing Restatement (Second) of Agency).

While Pennsylvania has not formally adopted § 267, it has adopted the theories of apparent authority and agency by estoppel, which state that “a principal who clothes his agent with apparent authority is estopped to deny such authority.” Myszkowski v. Penn Stroud Hotel, Inc., 430 Pa. Super. 315, 634 A.2d 622, 629 (Pa. Super. Ct. 1993). As the Myszkowski Court noted, apparent agency, “as embodied in § 267, is substantially similar to the doctrines of apparent authority and agency by estoppel. [*5] “ n1 Id.

– – – – – – – – – – – – – – Footnotes – – – – – – – – – – – – – – –

n1 The Court also noted that “both apparent authority and agency by estoppel are customarily only relevant in the context of business transactions.” Id.

– – – – – – – – – – – – End Footnotes- – – – – – – – – – – – – –

Plaintiff has not offered any evidence whatsoever to show that Harmony Tours had apparent authority or that Harmony Tours was Defendant’s apparent agent.

Plaintiffs have not even alleged, let alone offered evidence to show, that Defendant made any representation to Plaintiffs that Harmony Tours was its agent. Rather, Plaintiffs stated in their depositions that they just assumed that Harmony Tours was affiliated with Defendant because Harmony Tours had a desk in the Hotel’s lobby. (Pls.’ Br. P 5.) In fact, Plaintiff Harrell testified that nobody at Harmony Tours or the Hotel ever represented that the two entities were affiliated. (Harrell Dep. Tr. at 34-35.) Plaintiffs have simply not offered any evidence that shows Defendant held out Harmony Tours as its agent.

Additionally, the undisputed evidence shows that Harmony Tours actually supplied [*6] Plaintiffs with direct information that Harmony Tours was not an agent of Defendant. Both parties submitted photographs of Harmony Tours’ display desk in the Hotel. (Pls.’ Br. Ex. 4; Def.’s Br. Ex. D.) Behind the desk was a large sign that listed each of the tours that were available. In large capital bold letters, the top of the sign stated “HARMONY TOURS.” Furthermore, the following language was printed on the tour tickets that Plaintiffs purchased:

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. n2 (Def.’s Br. Ex. C.)

Not only is there no evidence that Defendant made representations that it was Harmony Tours’ principal, but Harmony Tours directly represented to Plaintiffs that it was an independent contractor that was not affiliated with Defendant.

Accordingly, Plaintiffs cannot meets its burden of proving apparent authority or agency by estoppel.

– – – – – – – – – – – – – – Footnotes – – – – – – – – – – – – – – –

n2 Plaintiffs argue that this language is an exculpatory clause, and that the validity of such clauses should be determined by a jury. Plaintiffs argument, however, misses the point. Defendant does not offer this language to show that it cannot be held liable for negligence. Rather, Defendant offers this language to show that Harmony Tours informed its customers that it was an independent contractor and not an agent of Defendant; therefore, Plaintiffs cannot succeed on a theory of apparent authority.

– – – – – – – – – – – – End Footnotes- – – – – – – – – – – – – – [*7]

Lastly, even if Plaintiffs could show that Defendant made a representation that it was affiliated with Harmony Tours, Plaintiffs must then show that they justifiably relied on the representation. Myszkowski, 634 A.2d at 629.

Plaintiffs have not supplied any evidence that they relied on any representation made by Defendant. In fact, during her deposition, with regard to purchasing a ticket for the tour, Plaintiff Frederika Harrell testified as follows:

Q. Would you have not bought that ticket if you found out Harmony Tours was not affiliated with Holiday Inn?

A. I don’t know. I mean, I probably would have, because I wanted to take the tour. (Pls.’ Mot. P 5.)

Plaintiff Harrell’s own testimony shows that even if Defendant had made a representation that it was affiliated with Harmony Tours, she did not rely on that representation in any way. She would have taken the tour regardless of who was offering it.

IV. CONCLUSION

For the foregoing reasons, Defendant’s Motion for Summary Judgment is granted and judgment is entered against Plaintiffs and on behalf of Defendant. An appropriate Order follows.

ORDER

CIVIL ACTION NO. 03-3611 [*8]

AND NOW, this 19th day of February, 2004, upon consideration of Defendant Six Continents Hotels’ Motion for Summary Judgment (Docket No. 7), Plaintiffs Malleria Cash’s and Frederika Harrell’s Opposition thereto (Docket No. 10) and Defendant’s Reply to Plaintiffs’ Opposition (Docket No. 11), it is hereby ORDERED that Defendant’s Motion for Summary Judgment is GRANTED and judgment is entered on behalf of Defendant and against Plaintiffs. This case is now CLOSED.

BY THE COURT:

RONALD L. BUCKWALTER, S.J.