Opinion
Civil No. 3:99-CV-1015-H.
October 10, 2001.
MEMORANDUM OPINION AND ORDER
Before the Court is Defendant Hot Shot Express, Inc.'s ("Hot Shot") Motion for Summary Judgment, filed on March 30, 2001; Plaintiff's Response thereto, filed April 20, 2001; and Defendant's Reply, filed May 3, 2001. Upon review of the pleadings and the relevant authorities, the Court determines, for the reasons stated below, that Defendant Hot Shot's Motion for Summary Judgment should be GRANTED. I. Background
Plaintiff Benton sues Defendants Hot Shot, Russ Benet, Lona Benet, and R.E.B. Express, Inc. alleging breach of contract, fraud, and violation of the Texas Deceptive Trade Practices Act (TDTPA). (Pl.'s Compl at 4-5). Plaintiff claims she saw an advertisement of the Defendants Russ Benet, Lona Benet, and R.E.B. Express, Inc. ("Benet Defendants") in a national trucking publications, which also contained the name "Hot Shot Express." (Joint Pre-Trial Order at 1). After viewing the advertisement, Plaintiff purchased a truck and trailer from the Benet Defendants with alleged understanding that the trailer would be new and that the truck would be "very clean," pass all necessary safety inspections, and ready to drive. (Compl. at 2). After completing the purchase, Plaintiff found that the "clutch pin was ready to fall out, the king pins needed to be replaced, the transmission was in serious disrepair, and the truck could not be kept within the lines at sixty (60) miles per hour." (Compl. at 2). Plaintiff also alleges that the trailer was not new and found it to be impounded when she attempted to retrieve it from the Benet Defendants. (Compl. at 3). In addition, Plaintiff claims that the Benet Defendants represented that the purchase would lead to lucrative hauling contracts, which she never received. (Compl. at 3). Jurisdiction is based on 28 U.S.C. § 1332, and is undisputed.
The live pleadings in this case are as follows: Plaintiffs First Amended Complaint, filed January 21, 2001; Defendants Russ Benet, Lona Benet, and R.E.B. Express, Inc.'s Second Amended Original Answer and First Amended Counterclaim, filed June 27, 2001; Defendant Hot Shot Express, Inc.'s Original Answer to Plaintiff's Original Complaint and Cross Claim Against Defendant Russ Benet, filed July 6, 2001; and Plaintiff's Original Answer to Counterclaim, filed July 23, 2001. On January 18, 2001, the Court approved a non-suit of all claims between the Defendants.
The procedural history of this case is somewhat detailed. This case was originally set on the Court's February 2001 trial docket. On January 30, 2001, the action was stayed so that Plaintiff could obtain new counsel. On August 24, 2001, the Court granted the Benet Defendants' Counsel's Motion to Withdraw and stayed all proceedings again. Currently, this case is set on the February 2002 trial docket.
In a Joint Pre-Trial Order submitted on January 22, 2001, the parties stipulated to the following facts:
• Plaintiff contacted R.E.B. Express in late 1998.
• Plaintiff dealt with Defendants Russ Benet and Lona Benet in either their individual or employee capacities.
• During the course of the transaction, representations were made by all parties to the transaction.
• Plaintiff purchased a 53' trailer and 1989 Ford F-800 from R.E.B Express on January 12, 1999.
• Plaintiff paid cash for the trailer and financed the truck. The finance company has now been completely paid.
• Defendant Hot Shot employees regularly reviewed the national trucking publication that contained the advertisement responded to by the Plaintiff.
• Defendant R.E.B. Express's facsimile cover sheet used in communications between R.E.B. Express and Hot Shot, clearly includes "Hot Shot Express" on same.
• Plaintiff has not been engaged in hauling contracts for Hot Shot since January 12, 1999.
Defendant Hot Shot Express, Inc. seeks summary judgment and asserts that the Plaintiff cannot hold it vicariously liable for the actions of the Benet Defendants. (Mot. Summ. J. at 1-2). Specifically, Hot Shot claims that the Benet Defendants did not have express authority to enter into contracts on behalf of Hot Shot, and it supports this assertion with language from its contract with the Benet Defendants. (Mot. Summ. J. at 4). Furthermore, Hot Shot contends that it was not aware of the contract until after it was signed by the parties, and therefore, Plaintiff cannot prove implied authority. Lastly, Hot Shot asserts that Plaintiff cannot hold it liable under a apparent authority because it neither clothed the Benet Defendants with authority nor held them out to have such authority to enter into contracts on behalf of Hot Shot. Plaintiff argues that Hot Shot is vicariously liable for the acts of the Benet Defendants because the Benet Defendants were express, implied, and ostensible agents of Hot Shot.
II. Summary Judgment Standard
Summary judgment is appropriate where the facts and law as represented in the pleadings, affidavits and other summary judgment evidence show that no reasonable trier of fact could find for the nonmoving party as to any material fact. FED.R.CIV.P. 56; Lujan v. National Wildlife Federation, 497 U.S. 871, 888 (1990); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986); Innovative Database Systs. v. Morales, 990 F.2d 217 (5th Cir. 1993). "The moving party bears the initial burden of identifying those portions of the pleadings and discovery in the record that it believes demonstrate the absence of a genuine issue of material fact, but is not required to negate elements of the nonmoving party's case." Lynch Properties, Inc. v. Potomac Ins. Co. of III., 140 F.3d 622, 625 (5th Cir. 1998) (citing Celotex, 477 U.S. at 322-25). If the movant fails to meet its initial burden, the motion must be denied, regardless of the nonmovant's response. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994).
If the movant does meet its burden, the nonmovant must go beyond the pleadings and designate specific facts showing that a genuine issue of material fact exists for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Edwards v. Your Credit, Inc., 148 F.3d 427, 431 (5th Cir. 1998). A party opposing summary judgment may not rest on mere conclusory allegations or denials in its pleadings unsupported by specific facts presented in affidavits opposing the motion for summary judgment. FED. R. CIV. P. 56(e); Lujan, 497 U.S. at 888; Hightower v. Texas Hosp. Assn., 65 F.3d 443, 447 (5th Cir. 1995).
In determining whether genuine issues of fact exist, "[f]actual controversies are construed in the light most favorable to the nonmovant, but only if both parties have introduced evidence showing that a controversy exists." Lynch, 140 F.3d at 625; see also Eastman Kodak v. Image Technical Services, 504 U.S. 451 (1992). However, in the absence of any proof, the Court will not assume that the nonmoving party could or would prove the necessary facts. Lynch, 140 F.3d at 625. A party must do more than simply show some "metaphysical doubt as to the material facts." Matsushita, 475 U.S. at 586. "If the record, taken as a whole, could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Friou v. Phillips Petroleum Co., 948 F.2d 972, 974 (5th Cir. 1991).
III. Analysis
A. Texas Agency Law
Plaintiff asserts that Hot Shot is vicariously liable for the actions of the Benet Defendants because R.E.B. Express was an agent of Hot Shot. A principal is liable for the acts of an agent, when those acts are within the agent's authority. "Agency is a legal relationship created by an express or implied agreement or by operation of law whereby the agent is authorized to act for the principal, subject to the principal's control." Karl Rove Co. v. Thornburgh, 39 F.3d 1273, 1296 (5th Cir. 1994). The party asserting the existence of the agency relationship carries the burden of proof. See id. "The agency relationship does not depend upon express appointment or assent by the principal; rather, it may be implied from the conduct of the parties under the circumstances." Commercial Escrow Co. v. Rockport Rebel, Inc., 778 S.W.2d 532, 538 (Tex.App. — Corpus Christi 1989, writ denied). Nevertheless, the agency relationship is derived from the principal's right to control; the agent "cannot confer authority upon itself." Schrum v. Land, 12 F. Supp.2d 165, 582 (S.D. Tex 1997). An agent's authority to act on behalf of the principal can be manifested through express authority, implied authority, or apparent authority. See Toonen v. United Services Auto. Ass'n, 935 S.W.2d 937, 941 (Tex.App.-San Antonio 1996, no writ). Each of these forms of authority is addressed below.
B. Express Authority
"`Express authority' exists when the principal has made it clear that he or she desires that the act under scrutiny be done." Schrum v. Land, 12 F. Supp.2d 576, 583 (S.D. Tex. 1997). Defendant Hot Shot points to the contract between the Benet Defendants and itself to show the lack of express authority. (Mot. Summ J. at 4). The last sentence of the fifth page of the contract provides "I understand that I am not authorized to execute any contracts on behalf of the company." Plaintiff contends that because a contract exists between Hot Shot and the Benet Defendants, an agency relationship is established. (Resp. at 6). In addition, Plaintiff provides an Affidavit in which she states that she had a conversation with a representative of Hot Shot, and the representative told her that R.E.B. Express was Hot Shot's agent for "car transport" (although Plaintiff does not identify the representative or state when the conversation took place). (Resp. at 7, App. A at 3).
The mere existence of a contract between Hot Shot and the Benet Defendants does not give rise to an express agency relationship. The contract must contain language that the agent is authorized to enter into contracts on behalf of the principal. See Lubbock Feed Lots, Inc. v. Iowa Beef Processors, Inc., 630 F.2d 250, 269 (5th Cir. 1980) ("[A]gency is a legal relationship created by the express or implied agreement between the parties."). Absent such language, the Court cannot find that R.E.B. Express had express authority to enter into a contract with Plaintiff on behalf of Hot Shot.
The conversation with a representative of Hot Shot referred to in Plaintiff's Affidavit also cannot be said to raise an issue of fact as to the Benet Defendants' express authority. Clearly, an unambiguous contract cannot be changed by parol evidence. See Kelley-Coppedge, Inc. v. Highlands Ins. Co., 980 S.W.2d 462, 464 (Tex. 1998). Therefore, the Court concludes that Plaintiff has not established a genuine issue of fact as to the Benet Defendants' authority to enter into contracts under the principle of express authority and Defendant Hot Shot is entitled to summary judgment on this ground.
C. Implied Authority
Plaintiff alleges that the Benet Defendants (Russ Benet, Lona Benet, and R.E.B. Express) had implied authority to act as agent for Hot Shot. An agent can be found to have implied authority where there is "some indication from the principal that its agent has authority; from being the necessary implication of an expressed authorized act; or from a previous course of dealing." Schrum, 12 F. Supp.2d at 587. In support of her assertion that the Benet Defendants were agents for Hot Shot, Plaintiff states that the "stipulated facts" show that Hot Shot knew R.E.B. Express was holding itself out as an agent of Hot Shot, that the representative of Hot Shot told her that R.E.B. Express was Hot Shot's agent and that Hot Shot required the completion of certain documents before the sale of the truck and trailer to Plaintiff was completed. (Resp. at 9). Even so, and assuming what Plaintiff states is true, the Court finds that these "facts" do not support an implied agency relationship. The contract between Hot Shot and the Benet Defendants makes clear that there is an agency relationship; however, such relationship cannot be said to extend vicarious liability under the doctrine of implied authority to causes of action that arise under the contract between the Benet Defendants and the Plaintiff. Liability only affixes upon the principal under implied authority when the agent conducts activities that can be said to be reasonable and necessary to achieve performance of its required tasks. See Bankers Shippers Insurance Co v. Ellis Green Motor Co., 102 S.W.2d 294, 296 (Tex.App.-El Paso 1937, writ dism'd). Plaintiff only provides in her Affidavit that Hot Shot's representative stated that R.E.B. Express was its agent for "car transport." Plaintiff does not provide evidence that entering into contracts to sell trucks and trailers is a reasonable and necessary aspect of being an agent for car transport. Therefore, the Court concludes that there is no implied agency relationship and grants summary judgment for Defendant Hot Shot on this ground.
D. Apparent Authority
Plaintiff also claims that Defendant Hot Shot is liable under the doctrine of apparent authority, also referred to as agency by estoppel or ostensible agency. Apparent authority arises when a principal allows an agent to hold itself out as having authority, or by lack of ordinary care, clothes the agent with authority. See Ames v. Great Southern Bank, 672 S.W.2d 447, 450 (Tex. 1984). The Plaintiff must also show that she relied in good faith upon the representations of the principal. See Wells Fargo Business Credit v. Ben Kozloff, Inc., 695 F.2d 940 (5th Cir. 1982); Coffee v. Fort Wayne Pools, 24 F. Supp.2d 671, 681 (N.D. Tex. 1998) ("[R]eliance is an essential element of apparent agency."). In support of her assertion, Plaintiff provides summary judgment evidence that the name "Hot Shot" appeared on R.E.B. Express letter head, that the name Hot Shot was also present on the advertisement that enticed her to research the purchase of a truck and trailer, that a representative of Hot Shot said that R.E.B. Express was its agent, that Mr. Benet told Plaintiff that Hot Shot would need to approve her application, and that another purchaser of a truck from R.E.B. Express made out the check to "REB Hot Shot Express." The Court finds that none of these allegations give rise to an apparent agency relationship because Plaintiff has not established that Hot Shot (the alleged principal) knew that the Benet Defendants (the alleged agents) were entering into contracts on behalf of Hot Shot.
First, Plaintiff has not established that Hot Shot knew of its name or logo's presence on the Benet Defendant's advertisements, fax cover sheets, and letter head. See Coffee 24 F. Supp.2d at 681 (finding that a manufacturer is not liable under the theory of apparent agency where a customer views the dealer's promotional material that contain the manufacturer's logo). Second, Plaintiffs allegations as to conversations with a representative of Hot Shot, are not sufficient evidence to establish a genuine issue of fact. See supra at 7. Third, representations made by Mr. Benet are not sufficient to establish that apparent agency exists. "A Court may only consider the conduct of the alleged principal and not the conduct or representations of the alleged agent." Id. at 682. Lastly, Plaintiff provides evidence of a draft evidencing a payment to "REB Hot Shot Express" from Robert Stephens on January 7, 1999. Mr. Stephens' Affidavit given on April 10, 2001, says that he entered into a contract with R.E.B. Express to purchase a truck and trailer and states that Defendant Russ Benet told him that he was Hot Shot's agent. The existence of the draft cannot be said to raise a genuine issue of fact as to apparent authority because Plaintiff does not show that she relied on it in entering into her contract with the Benet Defendants. See Coffee, 24 F. Supp.2d at 682. Therefore, the Court concludes that the Benet Defendants did not have apparent authority and grants summary judgment for Defendant Hot Shot on this ground.
IV. Conclusion
For the reasons stated above, Defendant's Motion for Summary Judgment is hereby GRANTED. Defendant Hot Shot's Motion to Strike Plaintiff's Affidavit is DENIED AS MOOT.
SO ORDERED.