DocketNumber: 2395
Judges: Cavanaugh, Wieand, Cirillo
Filed Date: 11/30/1993
Status: Precedential
Modified Date: 10/19/2024
This is an appeal from an order of the Court of Common Pleas of Monroe County which granted summary judgment in favor of appellee Best Western International, Inc. (“Best Western”). Appellant Christine Myszkowski filed suit against, inter alia, appellee Penn Stroud Hotel, Inc. (“Penn Stroud”) t/a Best Western Pocono Inn and Best Western after she was sexually assaulted in the ladies’ room of the Best Western Pocono Inn on the theory that the Inn had failed to provide adequate security. The main issues raised in this appeal involve two questions of agency: (1) whether Best Western had an actual agency relationship with Penn Stroud; and (2) whether Best Western had an apparent agency relationship •with Penn Stroud. Having found that summary judgment was appropriately granted by the trial court, we affirm.
Appellant, and her two partners, were hired by a campus ministry group to work as disc jockeys at a social function the group was sponsoring on the night of April 24, 1987. The group contracted with the Best Western Pocono Inn in Stroudsburg, Monroe County to use its ballroom for this event. Appellant and her associates, as they had been hired to do, showed up at the Inn on the designated night, set up and began work. At about 1:30 AM, appellant left the ball
Best Western is a non-profit corporation organized under the laws of Arizona and registered to do business in the Commonwealth of Pennsylvania. Penn Stroud, by virtue of a marketing agreement with Best Western, is a member of the Best Western organization which allows it to use the “Best Western” name and participate in the Best Western reservation network. Following the commencement of this suit, Best Western moved for summary judgment on the grounds that, as a matter of law, an agency relationship did not exist between itself and Penn Stroud. The trial court agreed with Best Western and entered summary judgment in their favor. This appeal followed.
Before we can address the agency issues, we must first dispose of a preliminary issue raised by appellant. It is her contention that she was severely prejudiced when the trial court entered summary judgment without giving her the opportunity to either file a brief or argue in opposition to Best Western’s motion. We have held, that when ruling on a motion, it is within the discretion of the trial court to decide whether briefs and/or oral argument are required or whether the matter can best be disposed of from a review of the record alone. Gerace v. Holmes Protection of Phila., 357 Pa.Super. 467, 475, 516 A.2d 354, 359 (1986). Here, there was an extensive record before the trial court and it was aware of the legal positions of the parties as they were afforded the opportunity to argue this motion at a pretrial conference. Having reviewed the record and considered the arguments made by
The two remaining issues raised by appellant require us to determine whether the trial court erred in ruling that, as a matter of law, neither an actual nor apparent agency relationship existed between Best Western and Penn Stroud so as to implicate Best Western of vicarious responsibility. When reviewing the grant of summary judgment, we review application of the following standard:
A motion for summary judgment may be granted only if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact, and*320 that the moving party is entitled to judgment as a matter of law. In passing on a motion for summary judgment, the court must examine the record in the light most favorable to the non-moving party. [However], it is clear that to survive a motion for summary judgment, the non-moving party may not rely merely upon the allegations of the contested pleadings, but must set forth specific facts by way of affidavit, or in some other way as provided by the rule, demonstrating that a genuine issue exists.
Kerns v. Methodist Hospital, 393 Pa.Super. 533, 536, 574 A.2d 1068, 1069 (1990) (citations omitted). “[T]he grant of summary judgment -will only be reversed for an error of law or a clear abuse of discretion.” Carns v. Yingling, 406 Pa.Super. 279, 282, 594 A.2d 337, 339 (1991) (citation omitted).
We now focus on appellant’s second issue; whether the trial court erred in ruling that, as a matter of law, an actual agency relationship did not exist between Best Western and Penn Stroud. Appellant argues that an agency relationship existed because Best Western had the right to substantially control Penn Stroud pursuant to their marketing agreement. She maintains that Best Western concerns itself with the total operation of Penn Stroud through the workshops and programs it conducts, the rules and regulations it imposes and its ability to sanction for noncompliance with its quality standards.
We begin our analysis by recognizing that, “not every relationship of principal and agent creates vicarious responsibility in the principal for acts of the agent.” Gajkowski v. Intern. Broth. of Teamsters, Etc., 350 Pa.Super. 285, 301, 504 A.2d 840, 848 (1986), aff'd on rehearing, 519 Pa. 320, 548 A.2d 533 (1988). “A principal and agent can be in the relationship of a master and servant, or simply in the status of two independent contractors.” Juarbe v. City of Philadelphia, 288 Pa.Super. 330, 335, 431 A.2d 1073, 1076 (1981) (citations omitted). “If a particular agent is not a servant, the principal is not considered a master who may be held vicariously liable for the negligent acts of the agent.” Id. Thus, in order for' Best Western to be held vicariously liable for the alleged
In determining whether the Best Western-Penn Stroud relationship was one of master and servant or simply that of two independent contractors, we are given guidance by our Supreme Court, which has declared:
the basic inquiry is whether such person is subject to the alleged employer’s control or right to control with respect to his physical conduct in the performance of the services for which he was engaged.... The hallmark of an employee-employer relationship is that the employer not only controls the result of the work but has the right to direct the manner in which the work shall be accomplished; the hallmark of an independent contractee-contractor relationship is that the person engaged in the work has the exclusive control of the manner of performing it, being responsible only for the result.
Green v. Independent Oil Co., 414 Pa. 477, 483-4, 201 A.2d 207, 210 (1964) (citations omitted).
Appellant is correct insofar as she contends that the hallmark of a master-servant relationship is that the master possesses the right to control the manner in which the servant’s work shall be accomplished. However, she urges us to apply what we believe is an overly-broad conception of what constitutes “control.” Best Western does not “direct the manner in which the work is to be accomplished” simply by having a marketing agreement with Penn Stroud. “It is the element of continuous subjection to the will of the principal
We find additional support for the proposition that the inquiry for actual agency focuses on the day-to-day control of the purported servant’s conduct from the reasoning of the seminal case in Pennsylvania on this issue, Green v. Independent Oil Co., supra. In Green, our Supreme Court ruled that a lower court erred in submitting to a jury the relationship between Independent Oil Co. and one of its franchisee/dealers. Significant to its decision was: (1) the agreement between the parties specifically disclaimed the existence of an agency relationship; (2) all profits went to the dealer; (3) the sales tax permits and the electric bills were in the dealer’s name; (4) the dealer hired and fired his own employees and paid them; (5) all monies were kept in the dealer’s personal bank
Here, the owners of Penn Stroud managed the day-today operations of the business and made all of the decisions incidental to this operation. The employees of the Inn were hired, fired, paid, and supervised by Penn Stroud managers. Penn Stroud managers set the prices for the various services and accommodations they provide. Best Western has no ownership interest in Penn Stroud. To the contrary, one hundred percent of the stock in Penn Stroud is owned by defendant Lee Andrews and the Inn is run by various members of the Andrews family in Stroudsburg; Best Western is only paid a fixed amount each year ($23,500) for its services. Moreover, the agreement between Best Western and Penn Stroud specifically provides that their relationship is one of independent contractor, and that Best Western has, inter alia, “no responsibility for the ... safety of the premises.” It also affords Penn Stroud the right to voluntarily end its association with Best Western at any time for any reason. For these reasons, there is clearly not the necessary control by Best Western of day-to-day operations to establish a master-servant relationship. See Green, supra.
Appellant points to incidental duties of the Best Western-Penn Stroud marketing agreement to state that a master-servant relationship may exist between the parties. Specifically, she contends that the Best Western program of quality
Appellant also stresses the fact that if Penn Stroud failed to adhere to these quality control requirements which were checked in biannual inspections, Best Western could terminate the Inn from using its trade name. Such a sanction, however, does not indicate that there is continuous subjection to the will of the alleged master so as to constitute a master-servant relationship. See Green, supra, note 4 supra. Rather, it merely reemphasizes that Penn Stroud, which has the ability to voluntarily terminate its relationship with Best Western at any time, is an independent entity which controls its own destiny.
We find particularly persuasive the decision in Sckear, supra, where the Maryland court addressed a fact pattern similar to the present one. In Sckear, the plaintiffs had certain valuable items stolen from their room while in the Holiday Inn at Chevy Chase, Maryland. The Hotel was not
The control element was totally lacking in this case. The management and operation of the Chevy Chase Holiday Inn were vested entirely in Associates, which in turn contracted with Management, Craig’s employer, to manage the running of the hotel. Although Holiday retained the right to conduct periodic inspections as a means of insuring adherence to Holiday Inn standards, it took no part in the day-to-day operation of the hotel. Associates merely purchased a product from Holiday — a uniform system of inn service— that carried with it an obligation to maintain certain standards prescribed by the seller. But “the fact that one of the parties has subsidiary duties to act for the interests of another, as where a purchaser of goods from a manufacturer agrees that he will advance the interests of the manufacturer in certain respects, does not create an agency relation with respect to the sale.” Restatement (Second) of Agency § 13, comment c (1958). The right possessed by Holiday to insure compliance with its franchise standards constitutes no more than the right to enforce such a subsidiary duty.
Schear, supra, at 688, 487 A.2d at 1249.
A situation with almost identical facts as the case at bar was presented in Hayman, supra. In Hayman, a woman was assaulted on the premises of a Ramada Inn in Winston-Salem, North Carolina. She sued, inter alia, Ramada Inn Inc., asserting that it was vicariously liable for the alleged negligence of its franchise. In affirming the grant of summary judgment, the court declared:
Having carefully reviewed the Licensee Agreement between defendant and [the Inn’s owner], we find no evidence that defendant retained or exercised the kind of detailed control over the daily operation of the Akron Drive Ramada Inn*326 that would establish a principal-agent relationship. The general purpose of the contract is the maintenance of uniform service within, and public good toward, the Ramada Inn system. Otherwise, [the Inn’s owner] operates the facility on its own behalf. The agreement primarily requires [the Inn’s owner] to comply with certain standards in the construction, furnishing, and advertising of the facility. Apart from the imposition upon [the Inn’s owner] to maintain its accommodations “in a clean, attractive, safe and orderly manner,” the twenty-page contract imposes no standards nor makes any other provision with respect to security of the premises. Under the agreement, defendant neither retained authority over, nor established standards for, hiring, firing, supervision, or discipline of personnel or myriad other details of the day-to-day operation. Moreover, although defendant has retained the right to conduct regular inspections of the accommodations to insure compliance with the contract and rules of operation, defendant’s actual control is limited to a right to terminate the franchise agreement and collect damages for any noncompliance [by the Inn’s owner]. Under these circumstances, we conclude that no actual agency relationship existed that would justify holding defendant responsible for [the Inn’s owner’s] security arrangement.
Hayman, supra, at 277, 357 S.E.2d at 397.
Similarly, for the reasons articulated supra, Best Western did no more than enter into a marketing agreement with Penn Stroud. The nature of this marketing agreement is that Best Western, in exchange for a fixed payment each year ($23,500) and adherence to certain rules concerning the quality of the accommodations, provides Penn Stroud with the right to use its trade name. This is not a master-servant relationship. It is clear from the record that Penn Stroud owned and operated the Inn and had full, day-to-day control, while the most significant “control” Best Western possessed was a threat to take away the use of its trade name. As such, Best Western did not have the necessary control over Penn Stroud to establish the existence of a master-servant relationship; consequently, Best Western cannot be held vicariously liable for
The final issue raised for our consideration is whether the trial court erred in ruling that, as a matter of law, an apparent agency relationship did not exist between Best Western and Penn Stroud. Appellant contends that Best Western held itself out as the owner/operator of Penn Stroud, that she relied on this representation and therefore, Best Western could be held vicariously liable for the negligent acts and/or omissions of Penn Stroud.
Both appellant and Best Western refer our attention to the Restatement (Second) of Agency, § 267 (1975), which outlines the rule of apparent or ostensible agency.
Agency by estoppel is defined by section 8B. of the Restatement (Second) of Agency and the doctrine has been embraced by this court:... [We have] emphasized two basic elements of agency by estoppel: (1) there must be negligence on the part of the principal in failing to correct the belief of the third party concerning the agent; and (2) there must be justifiable reliance by the third party.... Agency by estoppel is generally deemed to be closely related to apparent authority. Thus, alternatively stated, a principal who clothes his agent with apparent authority is estopped to deny such authority.
Juarbe, supra, quoting Turnway Corporation v. Soffer, 461 Pa. 447, 457, 336 A.2d 871, 876 (1975) (citations omitted) (emphasis added).
In the present case, the doctrine of apparent authority is simply not applicable. Both apparent authority and agency by estoppel are “customarily [only] relevant in the context of business transactions.” Juarbe, supra.
Order affirmed. Jurisdiction relinquished.
. Spahr was sentenced to a term of imprisonment following his conviction on charges stemming from this attack.
. Appellant also contends that only part of the record certified to this court was before the trial court when it ruled on Best Western’s summary judgment motion because she was not given the opportunity to submit to the trial court, the admissions, depositions and an affidavit upon which she based her argument in opposition to this motion. Appellant, however, does not specifically point out what documents in the certified record were allegedly not before the trial court and our review of the original record indicates that all of the documents, depositions, interrogatories and admissions contained therein were, in fact, filed with the lower court long before summary judgment was entered.
Appellant has made this argument in the most general terms, but from what we have been able to glean from her brief, the original record and the reproduced record, it appears that what has occurred is that appellant has included in the reproduced record documents which were never before the trial court and were never docketed below and made a part of the original record. At page 24 of appellant’s brief, reference is made to page 249a of the reproduced record which is an affidavit sworn out by appellant. Our review indicates that this affidavit is not part of the original record. See Pa.R.A.P., Rule 1921, 42 Pa.C.S.A. (only those documents filed in the lower court are properly a part of the record on appeal). We also note that the affidavit was not attached to appellant’s motion to reconsider the entry of summary judgment. Furthermore, while appellant maintains that her argument in opposition to summary judgment relied heavily on this affidavit, it is clear that it was not attested to until November 2, 1992, which was nearly five months after summary judgment was entered. As such, appellant’s argument is without merit and we will only review those materials contained in the original record in our disposition of the issues raised by appellant. See note 10, infra, for further reference to this affidavit.
. While Pennsylvania courts have drawn an important distinction between the relationships of principal and agent and master and servant, some jurisdictions do not recognize this differentiation and use these terms interchangeably. Several cases from other jurisdictions, cited infra, which we have made reference to in our disposition of appellant’s actual agency issue, use the terms principal-agent and master-servant interchangeably. We note that for the purposes of our analysis, these other courts’ use of the more generic terms principal and agent, implicate the more specific legal concept of master and servant as they are defined in Pennsylvania. Additionally, we point out that “actual agency” refers specifically to a master-servant relationship and not the more general principal-agent relationship.
. We also note, that similar to the present agreement, there was a contract provision which stated that Independent Oil Co. could terminate the relationship if the dealer failed to uphold his part of the agreement. Id., 414 Pa. at 485, 201 A.2d at 211. The court did not find this fact dispositive of a master-servant relationship. Id.
. All contracts contain respective rights and obligations. In many contracts, one party’s duties often outweigh the corresponding duties of the other; Notwithstanding, the presence of these rights and duties does not necessarily create the existence of a master-servant relationship.
. Appellant relies principally on two federal cases which purport to attempt to predict Pennsylvania law in this area, Drexel v. Union Prescription Centers, Inc., 582 F.2d 781 (3rd Cir.1978) and Drummond v. Hilton Hotel Corp., 501 F.Supp. 29 (E.D.Pa.1980). The former case does not speak to our fact scenario, having had to deal with a franchise agreement which was so broadly drawn that it gave the franchisor such broad discretionary power as to be able to impose on the franchisee virtually any measure it deemed warranted. Drexel, supra, 582 F.2d at 789. Accordingly, we do not find it analogous to the case sub judice, as the respective rights and duties in the contract at issue herein, clearly indicate that Best Western does not control Penn Stroud’s business conduct.
In the latter case, the Drummond court denied the franchisor’s motion for summary judgment based on the following facts: (1) the franchisee was required to use the franchisor’s name in all advertising and promotion; (2) the right of the franchisor to consult with the franchisee hotel on operating problems; (3) the right of the franchisor to inspect the franchisee hotel to maintain its standards of quality; and (4) the fact that an express denial of an agency relationship is not of itself determinative of the existence of such a relationship. Drummond, supra, at 31. We believe this analysis to be erroneous. Without more, these factors do not indicate that the franchisor had the right to control the day-to-day operations of the franchisee. At most, these factors only speak to the franchisor’s desired result, which is the maintenance of a uniform level of quality in its franchisees. None of the factors cited by the Drummond court directly concerns the manner in which the franchisee must meet this result. Thus, the presence of these factors alone, does not give rise to a genuine issue of material fact with respect to the right to control the day-to-day operations of the franchisee. Because we believe the reasoning of Drummond is flawed, we do not find it persuasive in our resolution of appellant’s actual agency issue.
. § 267 of the Restatement (Second) of Agency states:
*328 One who represents that another is his servant or other agent and thereby causes a third person justifiably to rely upon the care or skill of such apparent agent is subject to liability to the third person for harm caused by the lack of care or skill of the one appearing to be a servant or other agent as if he were such.
. We note, however, that apparent or ostensible agency, as embodied in § 267, is substantially similar to the doctrines of apparent authority and agency by estoppel. Capan v. Divine Providence Hospital, 287 Pa.Super. 364, 369 n. 4, 430 A.2d 647, 649 n. 4 (1980).
. In Juarbe, plaintifh'appellant brought a negligence action against Exxon Company and an Exxon service station after she had slipped and
. As noted supra, appellant has submitted an affidavit to this court which is not a part of the original record. Although we have held that we will not consider it in disposing of the issues appellant has raised, we believe it warrants one further comment. The affidavit reads, in pertinent part:
*330 At all times I was under the belief that I was to be working at a hotel owned and operated by Best Western, a nationwide chain of hotels, /s/ Christine Myszkowski
Appellant offers this affidavit in order to show that she relied on the fact that the hotel carried the name Best Western. However, all that her statement indicates is that she was aware that the place she would be working was a Best Western. It does not, in any way or to any degree, indicate that she relied on the Best Western name in choosing to work there so as to create a genuine issue of material fact which would defeat the motion for summary judgment. Thus, even if we were to consider appellant’s affidavit in our disposition of her claim of apparent agency, it would not affect our resolution of this issue.