THE CASE OF CARZ BAZAAR 

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Author’s Note 

 

Part 1 – Case for the Plaintiffs

The plaintiffs are two occupants in a car who suffered injury when the car they were travelling in was rear-ended a car stopped at a stop light by Charles Wilson, an employee of the defendant. As a result of this accident, the plaintiffs suffered injuries. They have fled a suit against Carz Bazaar, the defendant for compensation of injuries suffered as a result of the accident.

The issue in the present case is; whether Carz Bazaar is responsible for the injuries and loss suffered by the plaintiffs that were caused by their employee Charles Wilson. The plaintiffs submit that Carz Bazaar is responsible for the actions of their employee Wilson, as they have an agency relationship.

Agency is defined as the fiduciary relationship that exists between two persons, where one expressly or impliedly establishes assent that the other should act on his behalf so as to affect his relations with third parties, and the other of whom similarly manifests assent so to act or so acts pursuant to the manifestation (Fridman, G. H. L. 1996).  In an agency relationship, one party (the agent) acts on behalf or on the instruction of another party (the principal). Agency is based on consent by both parties, the principal consenting to the agent to act on his/her behalf and the agent consenting to act on the principal’s behalf and instruction. 

The agent may act under actual or implied authority. Actual authority is a legal relationship between the principal and the agent created by a consensual agreement to which they alone are parties (Freeman & Lockyer v Buckhurst and Kapoor, 1964). This is mainly contractual and follows the laws of contract. An agent acts as directed and instructed by the principal and can only act on the authority of the principal (Ireland v Livingston, 1872). For instance, in a more formal form, employment contracts may designate that certain actions be carried out by the agent on the principal’s behalf. The contract will stipulate specific powers and how the authority will arise. Furthermore, incase of injury or loss to a third party, the principal is only liable if the agent was acting on actual authority of the principal.

Although contractual relationships may create a principal-agent agreement, contracts are are not an express requirement in agency. The agency relationship and its obligations arise out of consent. As long as the principal has consented to the agent acting on his/her behalf, the agent has power and authority to carry out the principal’s duties (Yasuda fire and Marine Insurance Co of Europe Ltd V Orion Marine Insurance Underwriting Agency, 1995). The agent can hence act under implied authority. Here the agent has implied authority to do all actions that are necessary or in the ordinary sense incidental to the execution of his/her authority. This means that the agent can act to do what is common in his/her trade or profession for the purpose of carrying out his/her authority. This also includes what is customary in the field or practice. 

In general, a principal is liable for tortious acts committed by his agent. In the present case, Carz Bazaar is the principal and Charles Wilson their employee. Wilson’s duties include cleaning and gassing vehicles, moving vehicles from one lot to another, and maintaining the showroom and vehicle lots. In this position, Wilson had access to keys to the vehicles through a key-control procedure. It can therefore be concluded that there is a contractual relationship arising between the employer, Carz Bazaar and Wilson making Carz Bazaar the principal and Charles the agent. 

In that respect, Wilson as an agent acts under the instruction and authority of Carz Bazaar his principal. Above and beyond his authority to clean, gas and move cars he has an implied authority to carry out other tasks, incidental to his actual contractual authority. In doing so, the principal who is the defendant in this case is liable for his actions and omissions that may cause injury or loss to a third party.

On the day the injury was suffered, Wilson borrowed the keys to car so that he may go for a lunch break. As stated by the attendant, Gina Mitchell, Wilson asked her if he could use a car for 30 minutes on his lunch break to go to his mother’s house. The attendant told him it was okay as long as he brought it back because, otherwise, she could get in trouble. Since Wilson only wanted the car for 30 minutes and she trusted him, she did not make any entry about this trip on the computer.

Admittedly, such an action is contrary to the power and authority accorded in their employment contract and the authority afforded in their agency relationship. The procedure for checking out keys was not followed and Wilson’s use of the car was not sanctioned by the authority of his principal and employer Carz Bazaar. Therefore, when the accident occurred on his way back, he was acting without the authority of his employer. 

However, the agent, Wilson was acting under the assumption that he had permission to use the car. This can be noted from the fact that Wilson informed the police officer at the time of the accident that he was on a lunch break from his job and that he had permission to drive the car, but his boss was not aware he had the car. This would mean that the principal had ratified the use of the car and hence is liable to indemnify the plaintiffs for their injuries. From the facts, it understood the procedure for taking keys and checking out vehicles is loosely followed. The expected time for return of vehicles is only indicated when said vehicle is taken for a long period of time. Also, employees will at times leave car keys with other employees rather than the attendant, a practice accepted and sanctioned by the defendant in this case. 

Wilson took out the car with an understanding that his action was sanctioned by the principal. His use of the car was not in line with the duties and authority but was a ratified by the principal as permission was given to take out the car and go for the lunch break. Furthermore, where ratification is to be implied by the principal, the principal must have had full knowledge of the unauthorized acts (Keighley, Maxsted and co. v Durant 1901). 

In the present case, the attendant is fully aware that the action is unauthorized but still issues the key. Also, the defendant is aware that car keys are normally not returned to the attendee but by employees who may later return the keys. Short usage of vehicles that are normally not for long periods of time like that of Wilson’s thirty-minute trip are also not indicated which the defendant is fully aware of. Therefore, the defendant has ratified Wilson’s use of the vehicle and is liable to indemnify for any and all injuries and losses that result from the actions of its agents. Carz Bazaar is therefore liable to indemnify the plaintiff for injuries suffered to both for the injuries and losses suffered.

Part 2 – Case for the Defendants 

  The defendant in the present case is Carz Bazaar, a new and used car dealership. The plaintiffs have filed a suit against the defendant for injuries suffered when Charles Wilson, the defendant’s employee rear-ended their vehicle at a stop light. The defendant has hired Charles Wilson who performs various duties, such as cleaning and gassing vehicles, moving vehicles from one lot to another, and maintaining the showroom and vehicle lots. In this position, Wilson had access to keys to the vehicles through a key-control procedure.

The plaintiff relies on the law of agency and claims that a principal is liable for the tortious acts of his/her agent. In the present case there is a contractual agency relationship between Car Bazaar, the principal and Charles Wilson the agent. In this agreement, the principal gives his consent to the agent to act on his behalf and to exercise power and authority in acting for the principal. In the present case, Wilson is hired by the defendant as an employee and he has power and authority limited to gassing, cleaning and moving of cars and maintenance of the showroom. Alongside this authority, Wilson has implied authority to carry out any other duties incidental to gassing, moving and cleaning vehicles and maintenance of the showrooms. 

Wilson’s access and use of vehicles is limited by the key check out system which follows a strict procedure. Also, every time an employee checks out a vehicle, the reason must be for company business use. By taking the car out for his 30-minute lunch break, Wilson acts above and beyond his authority and the responsibility given by the defendant. A principal is not liable for injuries caused where the agent acted outside his authority (Commerford v Britanic Assurance 1908). 

The defendant can hence argue that the actions of his agent were a frolic and/or detour (Joel v Morison 1834). The doctrine of frolic and detour provides that the principal should not be held responsible for the tortious acts of the agent where the agent is acting outside the scope of her employment and for the benefit of someone other than the employer (O’Connor v. McDonald’s Restaurants 1990). Where the employee follows his own pursuits in a frolic or detour, he/she is no acting for the employer but on his own.  Consequently, the agent is liable for any loss he may cause during this frolic or detour (Behaney v. Travelers Ins. Co., 1941).

In the present case, the use of the vehicle is unauthorized. From the facts, a clear procedure for acquiring keys has been laid out. The attendant is only to bound to give out a key and check out a car for business purposes and only when the procedure is followed. On the day of the incident, Gina Mitchell was the attendant in charge, Wilson asked her if he could use a car for 30 minutes on his lunch break to go to his mother’s house. The attendant told him it was okay as long as he brought it back because, otherwise, she could get in trouble. Since Wilson only wanted the car for 30 minutes and she trusted him, she did not make any entry about this trip on the computer. Wilson took the car and left.

Where the plaintiff may claim that the defendant is liable under the doctrine of respondeat superior. Where an employee acts in excess of his responsibilities such actions do not fall within those granted to him by the employer (Ramos v. Jake Realty Co., 2005 and Hopkins Vs Dallas Group Ltd 2004). Where the employee acts beyond his responsibilities, he has to show that these actions were in furtherance of a legitimate business interest of the employer. This would mean that the employee was acting to benefit the employer and not himself (Sourwine v. McRoy Clay Works 1908, Danko v. Forest Lake Camp, Inc., 2009). 

Where the employee does not demonstrate this the employer is not liable for his actions. In such cases, the employer is not liable for injuries or loss caused where the employee acted above his responsibilities. Therefore, there has to be a distinction between between actions taken for personal reasons, and those taken for reasons relating to the employment of the tortfeasor. As a result, the employee is held solely liable for the loss as he acted in his own capacity (Krioutchkova v. Gaad Realty Corp., 2006, Kresser v. the Boeing, 2010). 

Applying this to our present case, it is clear that Wilson’s actions were personal. He was not acting in furtherance of implied or actual authority of the defendant. The use of the vehicle here is not in line with authority of the defendant, furthermore, it seeks to serve Wilson’s personal interests. The doctrine of respondeat superior cannot be used to hold the defendant liable as the action leading to the accident was not sanctioned by the defendant. 

Also, where the plaintiffs argue that his actions were ratified by the principal. The defendant is only aware of the fact that keys are nor returned to the attendant directly and also the fact that vehicles may bot have their return time recorded where there are short trips. The attendant is also aware of the fact that it is not common for workers to take vehicles for non-commercial purposes. This is seen from her fear of losing her job if it was discovered that the car had been taken the permission to use the vehicle in this sense is neither ratification nor is it proof that the defendant consented to the use of the car by his agent. 

The defendant is unaware of the use of the fact that Wilson is driving the car at the time of the accident as the use is not recorded by the attendant. The use of the car is also not among the commonly ratified actions in his business. The attendant does not have the power to give out the vehicle for such a use. Wilson is aware of who the principal is and hence there is no case for undisclosed principal. He receives his responsibilities from his contract of appointment and can only act under and within those responsibilities. At the time of the accident therefore, his actions were not ratified by the defendant and the defendant was unaware of Wilson’s actions. Consequently, the defendant cannot be held liable for the injuries sustained as a result of the accident.

 

REFERENCES

Fridman, G. H. L. (1996). The law of agency. Lexis Pub.

Freeman & Lockyer v Buckhurst and Kapoor (1964) 2 QB 480 at CA

Ireland v Livingston (1872)

Yasuda fire and Marine Insurance Co of Europe Ltd V Orion Marine Insurance Underwriting Agency (1995) QB 174

Keighley, Maxsted and co. v Durant 1901 AC 240.

Signs-o-lite Plastics ltd V Metropolitan Life Insurance co. 1990 73 DLR 541.

Commerford v Britanic Assurance 1908

O’Connor v. McDonald’s Restaurants (1990)

Joel v Morison [1834] EWHC KB J39

Behaney v. Travelers Ins. Co., 121 F.2d 838 (3d Cir. 1941)

Ramos v. Jake Realty Co., 21 A.D.3d 744, 801 N.Y.S.2d 566 (1st Dept. 2005)

Danko v. Forest Lake Camp, Inc., 63 A.D.3d 1099, 882 N.Y.S.2d 280 (2nd Dept. 2009)

Hopkins Vs Dallas Group Ltd 2004 EWHC 1389.

Sourwine v. McRoy Clay Works, 42 Ind. App. 358, 85 N. E. 782 (1908)

Kresser v. the Boeing, 158 Wn. App. 1053, (Wash. Ct. App. 2010)

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