Interlode Constructors, Inc. v. Bryant

974 P.2d 89, 132 Idaho 443, 1999 Ida. App. LEXIS 23
CourtIdaho Court of Appeals
DecidedFebruary 23, 1999
Docket24399
StatusPublished
Cited by5 cases

This text of 974 P.2d 89 (Interlode Constructors, Inc. v. Bryant) is published on Counsel Stack Legal Research, covering Idaho Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Interlode Constructors, Inc. v. Bryant, 974 P.2d 89, 132 Idaho 443, 1999 Ida. App. LEXIS 23 (Idaho Ct. App. 1999).

Opinion

PERRY, Chief Judge

Donald A. Bryant appeals from the district court’s memorandum decision holding him personally liable for a debt. Bryant claims that only a corporate entity, Don Bryant and Associates, Inc., should be held liable. We affirm.

I.

FACTS AND PROCEDURE

Stephen York is the president of Interlode Constructors, Inc., a Texas corporation involved in the business of performing equipment installation. York was contacted by Frazier Industrial Company, a steel storage rack manufacturer, and asked to submit a bid to install storage racks in Heyburn, Idaho. York submitted a bid in March 1993, on behalf of Interlode, to a business he knew as “Bryant and Associates” in Boise. Interlode was never informed that there was a corporate entity affiliated with Bryant and Associates, which Interlode believed was the assumed business name for Don Bryant, the individual.

The district court found that during negotiations York dealt primarily with Bob Pearson, an employee and agent of Bryant and Associates, “who made it clear to Mr. York that he (Pearson) was a salesman with Bryant and [Associates.” The district court also found:

At the request of Bryant and [Associates, and before the work was performed, Mr. York flew from Texas to Boise on April 28, 1993, and was introduced to Defendant Donald A. Bryant in the Boise office of *445 Bryant and [Associates. Although Mr. York and Defendant Donald A. Bryant spoke briefly in Bryant’s office, they discussed no details about the project. Thereafter, Mr. York left the Defendant Donald A. Bryant and proceeded by ground transportation with Bob Pearson to the Heyburn job site, returning to Boise late that evening, and leaving the next morning to fly back to Fort Worth. Mr. York knew that the Defendant Donald A. Bryant was the “Bryant” and the principal figure of “Bryant and [Associates,” but had a reasonable basis for believing that he had contracted with the Defendant Donald A. Bryant and his business Bryant and [Associates.

The parties agree on appeal that the contract was contained in two bids submitted by Interlode in March and April 1993, and a purchase order, which was signed by Pearson. These documents fail to indicate a corporate presence.

The work was satisfactorily completed and Interlode sought payment from Bryant for services rendered in the amount of $21,837. Bryant was having financial difficulty and initially only paid Interlode $6,000, of which $5,000 was paid with a Bryant and Associates check and personally signed by Don Bryant. From this stage forward, Interlode dealt exclusively with Don Bryant. In January 1994, Bryant signed two letters, in his individual capacity, recognizing the debt owed to Inter-lode and reaffirming Interlode’s need to be paid, without mentioning the corporate entity. The debt, however, was never paid.

Bryant’s letterhead used throughout this transaction contained the designation “Bryant and Associates” and failed to disclose the presence of a corporate entity. The only opportunity Interlode had to become aware of the corporate entity during the transaction was on March 16, 1993. Bryant sent a fax to Interlode on the customary Bryant and Associates letterhead. In the upper left-hand corner, in small capital letters, were the words “from Bryant and Assoc. Inc.” At trial, the district court found that York never noticed the logo and moreover, had he seen it, it would have been insufficient notice. 1

The district court determined that York first became aware of the corporate entity when he requested a credit check for the business Bryant and Associates. York did not request this credit check until he demanded payment and Bryant failed to pay. Only then, as a result of his own actions, did York learn that there was a corporate entity affiliated with Bryant.

Interlode filed suit against Don Bryant, d.b.a. Bryant and Associates, and later amended its complaint to include Don Bryant and Associates, Inc. A bench trial was held, and the district court issued a memorandum decision on October 20,1997, with findings of fact and conclusions of law.

The district court held Bryant hable on several theories. First, the district court determined that the contract was entered into on May 7, 1993, binding Interlode and Bryant, through his d.b.a. Bryant and Associates, as the contracting parties. The district court found that the corporation Don Bryant and Associates, Inc., was unknown to Inter-lode and was not a party to the contract. 2 Alternatively, the district court concluded that even if Bryant’s liability should be shielded by the corporation, Bryant later, through his letters, ratified the contract and agreed to be held personally hable. Finally, the district court held that Bryant gave Pearson the apparent authority to bind him to the contract in Bryant’s individual capacity. Bryant appeals.

II.

DISCUSSION

Bryant contends that Don Bryant and Associates, Inc., was a disclosed principal and *446 that Interlode had a duty to investigate Pearson’s authority. Bryant claims that because Pearson was only authorized to act on behalf of Don Bryant and Associates, Inc., and not on behalf of Bryant individually, Interlode can only hold the corporation liable on the contract. We disagree.

Bryant cites Hieb v. Minnesota Farmers Union, 105 Idaho 694, 672 P.2d 572 (Ct.App. 1983) in support of his claim. In Hieb, the agent was acting without the actual authority to bind the principal, who was located in Minnesota. This Court concluded that the agent also did not have the apparent authority to bind the principal because the principal did absolutely nothing to indicate it was supporting the agent’s actions. We stated:

There is in this record no indication of any activity on the part of the [principal] which placed [the agent] in a position such that “a person of ordinary prudence, conversant with the business usages and the nature of a particular business, [would be] justified in believing that the agent is ácting pursuant to existing authority.”

Hieb, 105 Idaho at 698-99, 672 P.2d at 576-77, quoting Clark v. Gneiting, 95 Idaho 10, 12, 501 P.2d 278, 280 (1972). Thus, we held that the principal could not be held liable.

Contrary to Bryant’s assertion, Hieb actually supports the conclusion that Bryant should be held liable as a principal in this case because of Bryant’s actions as principal. A third party cannot rely on the statement of the agent alone to establish apparent authority — only the acts of the principal bind it to the contract. Hieb, 105 Idaho at 699, 672 P.2d at 577.

Apparent authority exists when a principal voluntarily places an agent in a position where an ordinary business person is justified in believing that the agent is acting pursuant to existing authority. Hieb, 105 Idaho at 697, 672 P.2d at 575; Clark, 95 Idaho at 12, 501 P.2d at 280.

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Bluebook (online)
974 P.2d 89, 132 Idaho 443, 1999 Ida. App. LEXIS 23, Counsel Stack Legal Research, https://law.counselstack.com/opinion/interlode-constructors-inc-v-bryant-idahoctapp-1999.