On June 3, 2019, Catherine Shanahan received an unsolicited phone call on her cell phone. When she answered, she heard a prerecorded voice message advertising extended automobile warranties (Service Plans) and informing her to “press one” for more information. Shanahan did just that, and the caller connected her to an agent who reiterated that “he was selling vehicle service contracts for extended auto warranties.” After speaking with the agent, she decided to purchase a Service Plan. Based upon subsequent emails regarding her Service Plan, Plaintiff realized that National Auto had been the company that called and sold her the Service Plan. But when her Service Plan contract and brochure arrived, Plaintiff realized that although National Auto sold her the Plan, a company named “Matrix” administered the Plan, which she believes refers to the Matrix Defendants. Plaintiff also noticed that the Service Plan directed her to contact Matrix Warranty Solutions to obtain service but then listed Nation Motor as the administrator for all 24-hour roadside assistance. The Matrix Defendants and National Auto moved to dismiss over lack of personal jurisdiction, but Shanahan argues that the court can exercise personal jurisdiction over them because National Auto acted as their agent when it called her.
JUDGE BLAKEY Because principals may be subject to specific personal jurisdiction based upon the actions of its agent, Plaintiff contends that this Court may exercise jurisdiction over the Matrix Defendants and Nation Motor by virtue of their agency relationship with National Auto. Accordingly, this Court will now consider whether Plaintiff plausibly alleges an agencies relationship in order to confer specific personal jurisdiction.
Parties create an agency relationship when a “person (a ‘principal’) manifests assent to another person (an ‘agent’) that the agent shall act on the principal’s behalf and subject to the principal’s control, and the agent manifests assent or otherwise consents so to act.” An agent’s authority can be either actual or apparent…
A plaintiff may establish actual authority when “at the time of taking action that has legal consequences for the principal, the agent reasonably believes, in accordance with the principal’s manifestations to the agent, that the principal wishes the agent to so act.” Apparent authority, on the other hand, may vest when “a third party reasonably believes the actor has authority to act on behalf of the principal and that belief is traceable to the principal’s manifestations.”
Plaintiff first argues that an agency relationship exists by pointing to the contract between the Matrix Defendants and National Auto … Yet of the two Matrix Defendants and Nation Motor, only Matrix Warranty constitutes a party to the agreement. Thus, Plaintiff cannot plausibly claim that Nation Motor or Matrix Financial Services maintains an agency relationship with National Auto based upon actual authority vested in an agreement to which they are not parties.
Accordingly, this Court holds that Plaintiff fails to plausibly demonstrate that Matrix Financial and Nation Motor maintain an agency relationship with National Auto based upon actual authority.
Turning to Matrix Warranty, the Matrix Defendants argue that the contract between the Matrix Defendants and National Auto insufficiently establishes that the Matrix Defendants possess significant control and authority over National Auto … Although the contractual agreement grants Matrix Warranty some control over National Auto, it does not provide sufficient control to confer agency under an actual authority theory. For example, while the agreement prohibits National Auto from modifying terms of the Service Plans, these restrictions come as no surprise given that National Auto sells a product offered by Matrix Warranty (i.e., an extended warranty), which may require Matrix Warranty to perform certain future services. The mere fact that Matrix Warranty prohibits National Auto from changing its product does not make National Auto its agent …
Plaintiff claims that the Matrix Defendants and Nation Motor manifested apparent authority through her Service Plan contract and brochure which “included their names and made them parties to the Service Plan.” This Court remains unpersuaded that Plaintiff plausibly alleges that merely receiving a Service Plan from Matrix Warranty would cause a reasonable third-party to believe that the seller must have been their agent. First, Plaintiff does not identify any statements made by the Matrix Defendants or Nation Motor in her Service Plan materials—or at any other time—representing that they made National Auto their agent. This failure defeats her theory based upon apparent authority. Second, reasonable third parties frequently encounter scenarios where one party sells or markets the goods or services of another company without being an agent of that company. For example, when a television station runs an advertisement for Cheerios, reasonable consumers do not automatically understand the television station to be acting as Cheerios’ agent. Despite multiple amendments to the complaint and the availability of discovery on the relevant issues, Plaintiff fails to plausibly allege vicarious liability to create personal jurisdiction through a theory of apparent authority.
CRITICAL THINKING
Is any important information missing from this decision that might further clarify the nature of the issue of agency between the concerned parties? Could it change the acceptability of the judge’s reasoning?
ETHICAL DECISION MAKING
Does this ruling appear to follow a coherent ethical guideline? If so, what form does it take? Who are the stakeholders in this situation? Are they awarded proper consideration under the selected ethical guideline?