Paul Remmes v. The Mark Travel Corporation

MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 2015 ME 63
Docket: BCD-14-294
Argued: April 9, 2015
Decided: May 12, 2015
Panel: SAUFLEY, C.J., and ALEXANDER, MEAD, GORMAN, JABAR, and HJELM, JJ.
PAUL REMMES et al.
v.
THE MARK TRAVEL CORPORATION et al.
ALEXANDER, J.
[¶1] Plaintiffs Paul and Holly Remmes and Robert H. and Lucy Begin
appeal from a judgment entered in the Business and Consumer Docket (Horton, J.)
granting The Mark Travel Corporation’s motion for summary judgment. On
appeal, the plaintiffs contend that the trial court erred by determining that (1) the
plaintiffs’ travel agent was not an agent of Mark Travel; (2) the plaintiffs’ original
hotel accommodations, arranged through Mark Travel, were properly rescinded for
failure of consideration; and (3) releases signed by the plaintiffs as a precondition
for rebooking their accommodations barred their claims against Mark Travel.
[¶2] The trial court correctly determined that the plaintiffs’ breach of
contract and other claims against Mark Travel failed as a matter of law because the
plaintiffs’ travel agent never acted as Mark Travel’s agent and because Mark
Travel did not authorize the travel agent to act on its behalf, see Restatement
2
(Third) of Agency § 3.14 cmt. c (2006), ratify the travel agent’s fraudulent
conduct, see Perkins v. Philbrick, 443 A.2d 73, 75 (Me. 1982), or hold the travel
agent out as its agent, see Levesque v. Cent. Me. Med. Ctr., 2012 ME 109, ¶ 10 n.7,
52 A.3d 933. Therefore, we affirm the trial court’s judgment.
I. CASE HISTORY
[¶3] Viewing the record in the light most favorable to the non-prevailing
parties, see Beal v. Allstate Ins. Co., 2010 ME 20, ¶ 11, 989 A.2d 733, the
summary judgment record contains the following facts, which are undisputed
unless otherwise noted. Plaintiffs Paul and Holly Remmes and Robert H. and Lucy
Begin are residents of Maine. The Mark Travel Corporation is a corporation with
its principal place of business in Milwaukee, Wisconsin. It sells leisure tour and
travel products to consumers either directly or through the consumers’ travel
agents. Mark Travel, at times, did business under the names “Funway Holidays
Funjet Inc.” and “Funjet Vacations,” but is one entity.
[¶4] Beth Rogers was a travel agent who operated a travel agency in Saco
called TravelWise.1 There is no evidence in the record that Rogers or TravelWise
ever claimed to be an agent of Mark Travel or that any contract creating an agency
relationship existed between Rogers and/or TravelWise and Mark Travel.
1
Although Rogers was named as a defendant (“Beth M. Rogers, a/k/a Beth McInnis, d/b/a
TravelWise”) in the civil suits that resulted from the facts underlying this matter, Rogers did not appear in
either action.
3
Likewise, there is no evidence in the record that Mark Travel ever claimed that
Rogers or TravelWise was its agent for any purpose.
[¶5] In August or September of 2011, the Remmeses contacted Rogers at
TravelWise seeking an all-inclusive vacation for a party of nine. Rogers told the
Remmeses about a resort in the Dominican Republic that could accommodate the
party, which Rogers later advised could be booked only through a travel agent.
Rogers advised the Remmeses that they could reduce their costs if they paid by
check rather than credit card. The Remmeses then gave Rogers a check payable to
TravelWise for $26,517, covering the full cost of airfare and accommodations at
the resort for the group.
[¶6] The Remmeses invited the Begins to join them on the trip, and the
Begins contacted Rogers and asked her to book them the same trip. Again, she
recommended that they pay by check to save money, and the Begins gave her a
check payable to TravelWise for $8,801.92, covering their airfare and resort
accommodations. The trip was to begin the week of June 20, 2012.
[¶7] Rogers booked air travel and lodging at the resort for the plaintiffs
through Mark Travel. Rogers paid to Mark Travel some of the funds the plaintiffs
paid to her—about $10,000 of the Remmeses’ payment and about $4,000 of the
Begins’ payment—to pay for the airfare. Rogers paid Mark Travel for the lodging
by using the credit card information of other TravelWise clients, without those
4
clients’ knowledge or consent. The record does not reveal what happened to the
rest of the money the plaintiffs gave Rogers. Believing that it had received proper
payment from Rogers, Mark Travel sent “E-Travel” documents to Rogers, who in
turn gave them to the plaintiffs.2
[¶8] In early June of 2012, Mark Travel learned of the credit card fraud on
these and other vacations Rogers had booked. Mark Travel then reversed the
credit card charges and canceled the plaintiffs’ reservations at the resort, consistent
with its policy for unpaid bookings. Mark Travel had not yet paid the resort, and it
did not incur any fees, penalties, or costs in cancelling the reservation.
[¶9] On or about June 8, 2012, the plaintiffs, after hearing rumors about
Rogers and TravelWise, contacted Mark Travel to check on their reservations. The
plaintiffs were initially told that each of their reservations was “all set,” but later
that day they were told that there could be “a problem” with their reservations.3
On June 11, the week before their planned trip, an employee from Mark Travel
told the plaintiffs that the lodging payments sent by TravelWise had been
2
The parties dispute the character of these E-Travel documents. The plaintiffs characterize the
documents as tickets and vouchers that, standing alone, would gain them entry to their lodging, even after
the reservation was later cancelled. Mark Travel characterizes the documents as providing an itinerary,
confirmation numbers, and proof that the reservation had been made, that once the reservation was
cancelled the documents meant nothing, and that all the plaintiffs needed to do to gain entry to their
lodging was give their names. However, the character of the documents is not a material fact.
3
Mark Travel denies that any employee told the plaintiffs that their lodging reservations were all set
or otherwise, but the distinction is not material.
5
fraudulent, and that their resort reservations had been or would be cancelled for
nonpayment.4
[¶10] Mark Travel agreed to assist the plaintiffs in rebooking their resort
accommodations, but only if they paid for the lodging and signed a release. On
June 14, Paul Remmes and Robert Begin each signed a “Release and
Authorization” releasing and discharging claims against Mark Travel and
authorizing Mark Travel to charge their credit cards for the outstanding amounts
due for their resort accommodations: $16,926.15 for the Remmeses and $4,215.31
for the Begins.5 Mark Travel was able to rebook the plaintiffs’ lodging at the same
rate as the original booking.
4
The plaintiffs state that Mark Travel threatened to cancel the reservations if they did not sign
releases and pay for the rooms. Mark Travel states that it informed the plaintiffs that the resort
reservations had already been cancelled. Again, however, the distinction is not material.
5
The exact language of Paul Remmes’s release is as follows:
I, Paul Remmes, the undersigned, agree to release and forever discharge The Mark
Travel Corporation, its officers, directors, agents, representatives, employees, successors,
assigns, and affiliate and subsidiary corporations from any and all claims, demands and
actions of whatever kind and character.
I previously made a travel reservation through a travel agency who I believe
fraudulently took payment in cash and absconded with the money. I am now making a
similar if not exact travel reservation through Funjet Vacations. I have attached a credit
card authorization form and a copy of my Driver’s License each of which I have
personally signed under my own free will. In addition, attached please find a personally
signed Funjet Vacations Bill of Rights which I have read and agree to.
I acknowledge that I have carefully read this statement. I am of legal age and am
legally competent to execute this Release and do so of my own free will and accord.
Robert Begin signed a similar release. Each release was accompanied by a credit card authorization.
6
[¶11] The Remmeses and the Begins each filed a complaint against Mark
Travel and Rogers in the Superior Court (York County) on January 30, 2013, and
April 18, 2013, respectively. Each complaint contained three counts. Count I
alleged a breach of contract by Mark Travel and Rogers, alleging that Rogers was
acting as Mark Travel’s agent when she collected payment for the travel
accommodations and provided to the plaintiffs airline tickets and documents
confirming their resort lodging, and that the plaintiffs had wrongfully been forced
to pay twice for their lodging. Each complaint sought damages for the amounts the
plaintiffs had paid directly to Mark Travel.
[¶12] Count II alleged “economic duress,” asserting that Mark Travel was
responsible for the actions of its alleged agent, Rogers, and that the releases had
been signed under duress. Count II sought to void the releases.
[¶13] Count III set out a private claim pursuant to the Maine Unfair Trade
Practices Act (UTPA), 5 M.R.S. §§ 205-A to 214 (2014), alleging that Mark
Travel violated the UTPA and that Mark Travel’s conduct was “egregious and
unconscionable and exceeds the bounds of human decency.” Each complaint
sought damages under Count III for the amount the plaintiffs paid directly to Mark
Travel, plus attorney fees, costs, and punitive damages.
[¶14] Mark Travel answered each complaint and stated four affirmative
defenses: failure to state a claim upon which relief may be granted, improper
7
venue, lack of personal jurisdiction over Mark Travel, and lack of subject matter
jurisdiction. The cases were transferred to the Business and Consumer Docket and
consolidated.
[¶15] The plaintiffs filed a motion for summary judgment. Mark Travel
filed an opposition and two cross-motions for summary judgment. After a hearing,
the court entered an order denying the plaintiffs’ motion for summary judgment
and granting Mark Travel’s cross-motions for summary judgment. As to the
breach of contract claims, the court noted that Mark Travel and the plaintiffs
entered into two contracts with each other: the first contract was created when
Mark Travel “accepted their booking and issued the [p]laintiffs travel documents
for their vacation, including lodging at [the resort],” and the second was created
when Mark Travel accepted payments directly from the plaintiffs and rebooked
their lodging. The court held that Mark Travel “rescinded the lodging portion of
the [first] contract for failure of consideration after determining that payment for
[the] lodging had been fraudulent[].” It went on to hold that Mark Travel was
entitled to rescind the contract because Rogers was not acting as Mark Travel’s
agent when she caused the failure of consideration, and therefore Mark Travel had
not breached the first contract. The court determined that Rogers was the
plaintiffs’ agent, not Mark Travel’s agent, stating:
8
there is nothing in the record indicating Mark Travel authorized
[TravelWise] to issue tickets or collect payments on its behalf. In
fact, after [TravelWise] purported to pay for [the p]laintiffs’ travel, it
was Mark Travel that issued tickets and lodging vouchers to [the
p]laintiffs. TravelWise never issued tickets or vouchers to the
[p]laintiffs.
[¶16] The court also concluded that Mark Travel was entitled to summary
judgment on the alternative ground that the releases executed by the plaintiffs
barred their claims. Additionally, the court entered summary judgment against the
plaintiffs on their claims for economic duress and violation of the UTPA.
[¶17] Separately, the plaintiffs filed motions for default judgment against
Rogers. The court granted the plaintiffs’ motions for default judgment against
Rogers, entered a judgment of default against Rogers, and awarded the Begins
$4,215.31 with pre- and post-judgment interest and costs, and the Remmeses
$16,926.15 with pre- and post-judgment interest and costs. The plaintiffs then
brought this appeal from the judgment in favor of Mark Travel.
II. LEGAL ANALYSIS
[¶18] Summary judgment is appropriate when review of the parties’
statements of material facts and the record evidence to which the statements refer,
considered in the light most favorable to the nonprevailing party, demonstrates that
there is no genuine issue of material fact that is in dispute and the prevailing party
9
is entitled to judgment as a matter of law. Budge v. Town of Millinocket,
2012 ME 122, ¶ 12, 55 A.3d 484; Beal, 2010 ME 20, ¶ 11, 989 A.2d 733.
[¶19] When the material facts are not in dispute, we review de novo the trial
court’s interpretation and application of the relevant statutes and legal concepts.
See Blue Yonder, LLC v. State Tax Assessor, 2011 ME 49, ¶ 7, 17 A.3d 667.
“Cross motions for summary judgment neither alter the basic Rule 56 standard, nor
warrant the grant of summary judgment per se.” F.R. Carroll, Inc. v. TD Bank,
N.A., 2010 ME 115, ¶ 8, 8 A.3d 646.
[¶20] As already noted, there is nothing in the record here indicating that a
contract or any agency relationship existed between Rogers or TravelWise and
Mark Travel. Although the question is one of first impression in Maine, other
courts have found that an agency relationship between a travel agent and a travel
provider, usually an airline, existed only when there was a written contractual
relationship. See, e.g., State ex rel. Elson v. Koehr, 856 S.W.2d 57, 60-61
(Mo. 1993) (holding that a travel agent was an airline’s agent when there was a
written contract (“Certificate of Appointment”) between them); Rappa v. Am.
Airlines, Inc., 386 N.Y.S.2d 612, 613-15 (N.Y. Civ. Ct. 1976) (finding that a travel
agent was an airline’s agent when there was a sales agency agreement between
them). The Restatement (Third) of Agency notes:
10
[A] travel intermediary who purchases a plane ticket for a prospective
traveler acts as the prospective traveler’s agent in buying the ticket. If
an airline authorizes the intermediary to issue tickets on its behalf and
to collect and hold customer payments, the intermediary acts as the
airline’s agent in so doing.
Restatement (Third) of Agency § 3.14 cmt. c (giving an example of a situation
where an agency relationship is ambiguous because “[t]he same actor may occupy
different roles at successive points in an ongoing interaction among the same
parties”); see also, e.g., Simpson v. Compagnie Nationale Air France,
248 N.E.2d 117, 120 (Ill. 1969) (characterizing a travel agent as a broker and
finding he was the agent of the traveler for whom he planned a specific vacation).
Here, under the principle articulated in comment c to section 3.14 of the
Restatement, the record establishes as a matter of law that Rogers was the
plaintiffs’ agent because she purchased the travel packages on their behalf and the
exception to this general rule did not apply.
[¶21] With no evidence of any contractual relationship, if any agency
relationship is to be demonstrated, it must be demonstrated on the theory of
ratification or apparent agency. “For ratification of an agent’s actions to occur, it
is necessary that all material facts be known by the principal.” Perkins,
443 A.2d at 75. Here, Mark Travel did not learn of Rogers’s credit card fraud until
about the same time the plaintiffs learned of it in June of 2012. Therefore, Mark
Travel did not ratify Rogers’s fraudulent conduct.
11
[¶22] A claim of apparent agency is proved by the following elements:
“(1) the defendant either intentionally or negligently held a person out as [its] agent
for services, (2) the plaintiff did in fact believe the person to be an agent of the
defendant, (3) the plaintiff relied on the defendant’s manifestation of agency, and
(4) the plaintiff’s reliance was justifiable.” See Levesque, 2012 ME 109, ¶ 10 n.7,
52 A.3d 933; see also Williams v. Inverness Corp., 664 A.2d 1244, 1246-47
(Me. 1995) (citing Restatement (Second) of the Law of Agency § 267 (1958)).
Apparent authority is authority that, although not actually granted, the principal
knowingly permits the agent to exercise or that the principal holds the agent out as
possessing. Williams, 664 A.2d at 1246. Apparent authority exists only when the
conduct of the principal leads a third party to believe that a given party is the
principal’s agent. Id.; Libby v. Concord Gen. Mut. Ins. Co., 452 A.2d 979, 982
(Me. 1982).
[¶23] Here there is no evidence of conduct by Mark Travel that could have
led the plaintiffs to believe that Rogers was an agent for Mark Travel. The record
demonstrates, without dispute as to material fact, that the plaintiffs failed to
establish the necessary elements for a prima facie claim of apparent agency to get
that claim to a fact-finder. On the record presented, Rogers was acting as a travel
agent for the plaintiffs, not a sales representative for Mark Travel.
See Restatement (Third) of Agency § 3.14 cmt. c.
12
[¶24] As the plaintiffs recognized at oral argument, the question of Rogers’s
agency is determinative of their claims, and thus we need not reach their other
arguments on appeal.
The entry is:
Judgment affirmed.
On the briefs and at oral argument:
James L. Audiffred, Esq., Saco, for appellants Paul Remmes,
Holly Remmes, Robert Begin, and Lucy Begin
Christine Kennedy-Jensen, Esq., Douglas, Denham, Buccina &
Ernst, Portland, for appellee The Mark Travel Corporation
Business and Consumer Docket docket numbers CV-2013-29 & 34
FOR CLERK REFERENCE ONLY