Tuesday, August 2, 2011

Know when and how to give MAI 18.01 when authority to make a contract is at issue

Agri Process Innovations, Inc. v. Envirotrol, Inc., 338 S.W.3d 381, 388 (Mo. App. 2011):

Missouri Approved Instruction 18.01 provides that, when agency is in issue, the verdict director shall be modified to submit to the jury the question of whether the agent acted within the "scope and course of his [agency]." Though the example given by MAI 18.01 relates to a negligence case, the instruction also applies to a breach of contract case when agency is in issue. Rice, 116 S.W.3d at 609-10. Further, when agency is at issue, "scope and course of agency" shall be defined. Id.; see also MAI 13.07 (relating to apparent authority). Defining "scope and course of agency" is not all that the trial court must do: it must also actually submit the agency question in a verdict director, Galemore, 513 S.W.2d at 167-68; i.e., it must require the jury to find that the alleged agent acted within the scope and course of his agency. Accordingly, in this case, (1) the verdict director should have been modified to submit the issue of whether Hoover acted within the scope and course of his agency with Envirotrol; and (2) the term "scope and course of agency" should have been specifically defined. See Rice, 116 S.W.3d at 609-10; Galemore,513 S.W.2d at 167-68; MAI 18.01; MAI 13.07(1) & (2).
Here, the jury instructions met one of these requirements but not both. The term "scope and course of agency" was defined in a separate instruction, but the question of whether Hoover acted within the scope and course of his alleged agency with Envirotrol was not actually submitted to the jury in the verdict director. Defining a necessary term does not constitute submission of a necessary issue, Galemore, 513 S.W.2d at 167-68; and, as explained above, Missouri law requires both.

Key Missouri Agency Citations/Top Ten Cases

#1:  Law Reporting Co. v. Elwood Grain Co., 115 S.W. 475, 477 (Mo. 1909):
 [T]he scope of an agency is to be determined not alone from what the principal may have told the agent to do, but from what he knows or ought to know, in the exercise of ordinary care and prudence, the agent is doing in the premises
#2:   Kahn v. Royal Banks of Missouri, 790 S.W.2d 503 (Mo.App.1990) (adopts inherent authority)

#3:  Linam v. Murphy, 360 Mo. 1140, 232 S.W.2d 937, 941 (1950) (even if employee acts contrary to principals instruction, he is still acting within scope of employment).

#4: Gleason v. Seaboard Air Line Ry., 278 U.S. 349, 49 S.Ct. 161, 73 L.Ed. 415 (1929) followed by Marvel Ind. v. Boatmen's Nat'l Bank, 239 S.W.2d 346, 350 (Mo. 1951).

#5: Tietjens v. General Motors Corporation, 418 S.W.2d 75, 84 (Mo.1967) (respondeat superior, distinct from doctrine of Gleason v. Seaboard Air Line, applicable in cases of fraud).

#6:  Premium Fin. Specialists, Inc. v. Hullin, 90 S.W.3d 110, 113 (Mo. App. W.D.2002) (adopts Restatement (Second) Agency Sections 257 and 261 (1958); accord Mark Twain Plaza Bank v. Lowell H. Listrom & Co., Inc., 714 S.W.2d 859, 864 (Mo. App. 1986).

#7: Hamilton Hauling, Inc. v. GAF Corp., 719 S.W.2d 841, 847 (Mo.App.1986).

#8: Dudley v. Dumont, 526 S.W.2d 839, 844 (Mo.App.1975)  (Implied or inferred agency is authority given implicitly by the principal to his agent, circumstantially proved, or evidenced by conduct, or inferred from a course of dealing between the alleged principal and agent.) The key to authority implied from course of conduct is the knowing acquiescence of the principal in the past acts. Id. at 845. See also National Plumbing Supply Co. v. Torretti, 237 Mo.App. 570, 175 S.W.2d 947, 951 (1943). (Conduct with reference to the particular subject matter and a previous course of dealings relevant in determining agency); accord Mark Twain Plaza Bank v. Lowell H. Listrom & Co., Inc., 714 S.W.2d 859, 864 (Mo. App. 1986) ("by its conduct, [principal] entered into an implied agency relationship").

#9: West v. Sharp Bonding Agency, Inc., 327 S.W.3d 7 (Mo. App. 2010 ("competing inferences" as to right to control make actual agency issue for jury and preclude summary judgment).

#10: Shook v. Retail Hardware Mut. Fire Ins. Co., 154 Mo. App. 394, 134 S.W. 589, 592 (Mo. App. 1911) (restrictions on agents authority not brought home to third party are not binding; and, the power of agent is determined by nature of business intrusted to him and is prima facie coextensive with its requirements).

Missouri Follows Comment C to Restatement (Second) Agency Section 49

Inferences from agent's position. Acts are interpreted in the light of ordinary human experience. If a principal puts an agent into, or knowingly permits him to occupy, a position in which according to the ordinary habits of persons in the locality, trade or profession, it is usual for such an agent to have a particular kind of authority, anyone dealing with him is justified in inferring that he has such authority.

Adopted: Trail v. Industrial Commission, Division of Employment Security, 540 S.W.2d 179, 181 n.1 (Mo.App.1976).