Parsons v. Malpass CV-98-102-JD 03/19/99
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Gardner W. Parsons, Jr., et al.
v. Civil No. 98-102-JD
Charles U. Malpass, et al.
O R D E R
The plaintiffs, Gardner Parsons, Jr., and his wife, Mary
Parsons, brought this personal injury action against the
defendants, Charles Malpass, Vernon Malpass, and Second Hand Rose
Vehicle ("Second Hand Rose"), asserting claims of negligence and
loss of consortium. Before the court is the motion of defendants
Vernon Malpass and Second Hand Rose seeking dismissal of counts
three through ten (document no. 15).
Background1
On November 28, 1997, Gardner Parsons was operating a motor
vehicle owned by his wife, Mary, on Route 1 in North Hampton, New
Hampshire. Charles was operating a 1995 Mercedes wagon purchased
1The motion to dismiss before the court addresses claims against defendants Vernon Malpass and Second Hand Rose Vehicle predicated upon the their liability for the actions of Charles Malpass. The background section therefore discusses at length the relationship between the parties. To avoid confusion the court hereinafter refers to the Malpasses by their first names. by his wife, Ann, on Hobbs Road and was turning onto Route 1 when
his automobile collided with the Parsons' automobile.2
The automobile that Charles was operating at the time of the
accident bore Second Hand Rose dealership plates. Vernon owns
Second Hand Rose Vehicle, an unincorporated used car dealership
located in Delaware. He began the enterprise in July, 1996, in
part with funds loaned to him by Ann. The loan is outstanding,
not evidenced by any notes, and is interest free. Evidence
indicates that repayment is expected, although unscheduled.
Charles had just dropped off Jay Megan, a family friend, at
Megan's home, and was on his way either to a liguor store to pick
up some champagne for an engagement party or to his home.3 Megan
had purchased an automobile from Ann some months prior to the
accident. Charles facilitated this but did not receive any
compensation for his actions.
Although the automobile Charles was driving was purchased by
Charles's wife in April 1997, it was not registered in any state.
Charles testified that he had delayed registering the car because
2The record is inconsistent as to whether Ann actually purchased the car herself or whether she had the car purchased for her by Charles. In any event the Retail Certificate of Sale identifies her as the purchaser of the automobile and her status as purchaser is corroborated by testimony in the record.
31he record contains conflicting evidence on Charles's destination.
2 it had mechanical problems.4 After failed attempts to repair it,
Charles contacted his brother and inquired whether Vernon might
be able to sell the vehicle if Charles and Ann were unsatisfied
with it. The record indicates that at the time of the accident
Charles and Ann were still unsure whether they would keep the
vehicle, although they were preparing to bring the vehicle to
Delaware to sell it through Second Hand Rose should they decide
not to keep it. Vernon indicated that he would be willing to try
to sell the vehicle and that he might have success as his store
is on a busy highway, but that it might prove difficult to sell a
1995 Mercedes as he generally sells older cars. In any event,
neither Vernon nor Second Hand Rose would earn a profit from the
transaction.
Both Charles and Vernon state that Charles was not an
employee or partner of Second Hand Rose. However, on occasion he
assisted Vernon with financial accounts, helping Vernon set up
financial books when Second Hand Rose initially opened. On five
or six dates, when Charles was living in New Hampshire and
visited Vernon in Delaware, if Vernon did not have time to spend
at home with Charles, Charles would drop by Second Hand Rose and
4Ihere is evidence that at one point Charles had attempted to register the car in Maryland but was unsuccessful as the application was not completed in full.
3 assist him by updating some automobile accounts and by driving
Vernon to acguire vehicles for Second Hand Roses's inventories.5
In addition, he gave Vernon advice on filling out titles for
automobiles. He was never paid for his services and Vernon
characterized the assistance as a favor to a brother.
Charles was also given power of attorney to purchase
automobiles for Second Hand Rose if he should come across a
favorable deal. Vernon and Charles had an agreement whereby
Charles would "keep an eye out" for good automobile deals. If
Charles found one and purchased the automobile, Vernon agreed to
reimburse him, although Charles understood that confirmation with
Vernon was necessary.6 To this end, Vernon sent him books on
automobile values. There was never any written or formal
agreement between Vernon and Charles regarding this arrangement
besides the power of attorney, which is not in the record.
5Charles was listed on Second Hand Rose's insurance policy as an "owner, employee, or relative who will operate owned autos," Pis.' Opp., Ex. 0 at 4. Elsewhere in the policy Vernon states that Second Hand Rose had one full time employee and one part time employee, although it does not identify the part time employee. Vernon denies having any employees beyond himself, although the record indicates he received help from friends who would assist him in repairing automobiles, all for no compensation. Neither Vernon nor Second Hand Rose has ever filed any tax or benefits documents for any alleged employees.
6Charles characterized himself as an authorized representative of Second Hand Rose in his statement to an insurance company. Pis.' Opp., Ex. M at 1, and he signed his name as such. Pis.' Ex. I at 4.
4 The record indicates that Charles did not make any purchases
for Vernon or Second Hand Rose, with one possible exception. At
one point in time Charles called Vernon, asked him if he could
sell a Chevrolet Caprice station wagon, and when Vernon stated
that he could, Charles and his son drove it to Wilmington,
Delaware, and left it for Vernon at the Wilmington airport. The
record is ambiguous as to the origin of the automobile because
Vernon could not recall with absolute certainty whether it was an
automobile already owned by the family or not, although he
believed it was. Nor could Vernon recall whether there were
dealer plates on the automobile. It is therefore unclear whether
Charles purchased the Caprice.
Second Hand Rose had been issued six dealer plates by the
State of Delaware. Vernon did not have a use for six dealer
plates and therefore permitted Charles to use them if he needed
them. He anticipated that they would be used to acguire vehicles
for Second Hand Rose. When Charles came to Delaware he would
occasionally take a dealer plate. Vernon never reguested that
the plates be returned and never reguested that he be notified if
Charles used the plates. Vernon never refused to give Charles
permission to use the plates.
Charles had one or two in his possession at the time of the
5 accident, including the plate on the car involved in accident.
Charles had a history of using the dealer plates on various
automobiles, including another Mercedes station wagon owned by
his wife and a Mercedes coupe. Although Vernon authorized
Charles to use the plates, Vernon was generally unaware of
Charles's use of the plates, and was unaware that the plates were
on the car at the time of the accident.
On February 25, 1998, the plaintiffs filed this action
asserting ten counts. Counts one and two, not contested here,
assert that defendant Charles is liable for negligence in the
accident and resulting loss of consortium. Counts three through
ten assert the liability of Vernon individually. Second Hand
Rose, Vernon Malpass d/b/a Second Hand Rose, and Vernon Malpass
and Charles Malpass, d/b/a Second Hand Rose, for Charles's
alleged negligence and resulting loss of consortium. Defendants
Vernon and Second Hand Rose move to dismiss the claims against
them, asserting a lack of agency or employment relationship and
contesting whether the trip at issue was within the scope of such
a relationship.
Discussion
A. Standard of Review
Although the defendants move to dismiss counts three through
6 ten of the complaint without specifying in their motion the
Federal Rule of Civil Procedure pursuant to which they move, in
their reply to the plaintiffs' objection the defendants
characterize their motion as a Rule 12(b)(6) motion. However,
the defendants have attached numerous exhibits and their motion
is premised upon the evidence in the record, repeatedly citing to
depositions or interrogatories.
"Rule 1 2 (b) provides that a court shall convert a motion to
dismiss for failure to state a claim into one for summary
judgment if 'matters outside the pleadings are presented to and
not excluded by the court.'" C.B. Trucking, Inc. v. Waste
Management, Inc., 137 F.3d 41, 43 (1st Cir. 1998) (guoting Fed.
R. Civ. P. 12(b)(6)). The First Circuit "employ[s] a functional
approach to the conversion process." Id. "Accordingly, [it] has
not reguired a district court to give express notice of
its intention to convert if the surrounding circumstances
effectively place the parties on notice that the court has the
option of treating the motion as a motion for summary judgment
and the parties have been given 'reasonable opportunity to
present all material made pertinent to such a motion by Rule
56.'" I d . (guoting Rodriguez v. Fullerton Tires Corp., 115 F.3d
81, 83 (1st Cir. 1997) ) .
Under the circumstances of this case the court will convert
7 the defendants' motion to one for summary judgment. They have
supplied additional documentary materials, their arguments are
replete with citation to exhibits and are premised upon evidence
therein, and they have been allowed the opportunity to file
additional reply memoranda. Moreover, the plaintiffs' objection
expressly identified the issue of conversion for the defendants
and notified them that their motion had to be treated as one for
summary judgment because of the defendants' inclusion of
supporting evidentiary materials. Indeed, the defendants' notice
of the likelihood of conversion is indicated by their reply to
the plaintiffs' opposition where they stated "[e]ven if the court
treats this motion as one for summary judgment, the Plaintiffs,
in responding to a motion for summary judgment, have the burden
of setting forth specific facts demonstrating that there is a
genuine issue for trial." Reply at 3.
The role of summary judgment is "to pierce the boilerplate
of the pleadings and assay the parties' proof in order to
determine whether trial is actually reguired." Snow v.
Harnischfeger Corp., 12 F.3d 1154, 1157 (1st Cir. 1993) (guoting
Wynne v. Tufts Univ. Sch. of Med . , 976 F.2d 791, 794 (1st Cir.
1992)). The court may only grant a motion for summary judgment
where 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
that the moving party is entitled to a judgment as a matter of
law." Fed. R. Civ. P. 56(c). The parties seeking summary
judgment bear the initial burden of establishing the lack of a
genuine issue of material fact. See Celotex Corp. v. Catrett,
477 U.S. 317, 323 (1986); Quintero de Quintero v. Aponte-Rogue,
974 F.2d 226, 227-28 (1st Cir. 1992). The court must view the
entire record in the light most favorable to the plaintiffs,
"'indulging all reasonable inferences in [their] favor.'"
Mesnick v. General Elec. Co . , 950 F.2d 816, 822 (1st Cir. 1991)
(guoting Griqqs-Rvan v. Smith, 904 F.2d 112, 115 (1st Cir.
1990)). However, once the defendants have submitted a properly
supported motion for summary judgment, the plaintiffs "may not
rest upon mere allegation or denials of [their] pleading, but
must set forth specific facts showing that there is a genuine
issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
256 (1986) (citing Fed. R. Civ. P. 56(e)).
The defendants have premised their motion on their
contention that: (1) Charles was neither an agent nor an
employee of Vernon, nor of Second Hand Rose; and (2) even if he
was an agent or employee, he was not acting within the scope of
his agency or employment relationship at the time of the
accident. In their objection, the plaintiffs assert four grounds upon which Charles can allegedly be found to be an agent of
Vernon and/or Second Hand Rose. They contend that there are
genuine issues of material fact as to whether Charles was a
partner, joint venturer, employee or general agent of Vernon
and/or Second Hand Rose. They further contend that genuine
issues of material fact exist as to whether Charles was acting
within the scope of the agency or employment relationship at the
time of the accident.
In addressing the parties' arguments, the court first
resolves the issue of whether there is a genuine issue of
material fact regarding the existence of an agency relationship,
be it in the form of a partnership, a joint venture, an
employment relationship, or a general agency relationship. The
court considers the arguments seriatim. See infra, sections B,
C, and D. The court then addresses the issue of whether Charles
was acting within the scope of such an agency relationship at the
time of the accident. See infra, section E.
As a preliminary issue, however, the court notes thatthe
parties fail to address the issue of what law. New Hampshire or
Delaware, they believe controls particular aspects of the case.
Although at times the parties cite New Hampshire and Delaware
law, without specifying which governs the issue presented,the
parties generally rely upon New Hampshire law. The court
10 accordingly applies New Hampshire law unless otherwise noted.
B. Partnership and Joint Venture
The plaintiffs argue that Second Hand Rose and Vernon can be
held liable based upon the alleged existence of a partnership or
a joint venture between Vernon and Charles and the agency
relationship resulting therefrom. The defendants fail to contest
Charles's status as a partner of Vernon's in Second Hand Rose or
as a joint venturer with Vernon, and supply no law or analysis on
the issue beyond their general agency and employee arguments.7
It is the burden of the movant to identify for the court
those issues upon which there are no genuine issues of material
fact and to demonstrate that they are entitled to summary
judgment. See Celotex Cor p ., 477 U.S. at 323. The court
therefore does not reach the issue of whether the record could
reasonably support an inference that Charles was a partner in
Second Hand Rose or involved in a joint venture to sell the
automobile. For the purposes of this order the court assumes
that such agency relationships existed. Liability may flow
therefrom if Charles could reasonably be found to have been
7Nor do the defendants raise any objection as to the breadth of the complaint and its ability to encompass allegations of a joint venture.
11 acting within the scope of such an agency relationship at the
time of the accident as discussed further in section E.
C. Employment
In Boissonnault v. Bristol Federated Church, 138 N.H. 476,
477-78 (1994) the New Hampshire Supreme Court discussed the
elements of an employment relationship under New Hampshire law.
New Hampshire has adopted "what is now referred to as the
totality of the circumstances test, reguiring consideration of
many factors, including the criteria set forth in Restatement
(Second) of Agency § 220 (1958)." I d . (guotations and citations
omitted). The Restatement identifies as relevant factors, among
other things: (1) the control exerted over the performance of
the services; (2) whether it is a distinct occupation or
business; (3) whether in the occupation the work is performed
under direct supervision or by a specialist; (4) the skill
reguired; (5) the instrumentalities provided; (6) the length of
time the person is employed for; (7) payment; and (8) whether the
parties believe they are forming a master servant relationship.
Restatement (Second) of Agency, § 220 (1958) .
Control, although no longer given the dispositive weight
courts once attributed to it, is still a factor central to the
determination of an employment relationship. In the case at hand
12 the record indicates that Vernon exercised very little control
over Charles. He had given Charles power of attorney and
authorized him to purchase automobiles for Second Hand Rose.
However, as is evident from Vernon's deposition, the
authorization was extremely informal:
I was just getting going, you know. I was trying to entertain something of maybe getting automobiles from up here that aren't available down there. I said look, you see older cars that you think I could use, buy them for me. I will reimburse you or whatever. Call me. I'll send you the money or whatever . . . .
Vernon D e p . at 78-79. Broad discretion was obviously conferred.
The record does not indicate that Vernon could direct Charles to
actively look for and acguire automobiles, or that he could tell
him how to look for automobiles. Indeed the evidence indicates
that the only control Vernon had over Charles was the power to
tell him not to purchase an automobile, as Charles testified at
his deposition that he had to obtain Vernon's approval before
using the power of attorney. See Charles Dep. Vol. II at 94.
Nor did Vernon supervise Charles's actions or lack thereof.
Charles's work on behalf of Second Hand Rose was sporadic at
best. He assisted Vernon when Second Hand Rose was first opened
and on occasions when he visited Vernon and Vernon did not have
leisure time to spend with him. Other than perhaps securing the
Caprice, the circumstances of which are ambiguous, the record
13 indicates that over Second Hand Rose's existence up to the date
of the accident Charles never exercised his authorization to
purchase automobiles for Second Hand Rose.8
The record indicates that the parties certainly did not
consider Charles an employee of Second Hand Rose. See Vernon
Interrogatories at 1, 8, 9. This is corroborated by the lack of
evidence that Charles was paid, received wages, or was otherwise
compensated for any labor he offered Vernon, and the lack of
control Vernon exercised over Charles.9
Nor does the record indicate that Vernon supplied Charles
with instruments necessary to secure automobiles such as would
support finding an employer/employee relationship. He did not
provide Charles with funds to purchase the automobiles. There is
no evidence that Vernon provided Charles with gas mileage or
lists of auctions or other such places to look for automobiles.
81he court also notes that Charles's labor valuing automobiles and their potential for resale and updating financial accounts is not unskilled labor such as would indicate an employment relationship. See Restatement (Second) of Agency, § 22 0 comment h.
9Given, inter alia, the facts of this case and Second Hand Rose's tendency to have various people stop by and assist Vernon, and the lack of any other documentation such as tax documents which could indicate employment, the statement on Second Hand Rose's insurance application that it had a part time employee does not, without more, create a genuine issue of material fact that Second Hand Rose employed Charles on a part time basis.
14 Vernon did occasionally mail car value booklets to Charles but
this, even considering Charles's power of attorney and his
listing as an occasional driver on the Second Hand Rose insurance
policy, hardly supplied Charles with the instrumentalities to
look for and purchase cars for Second Hand Rose or Vernon.
Regarding the potential instrumentality of the car, the
plaintiffs contend that there is a genuine issue of material fact
surrounding the ownership of the automobile involved in the
accident, and that this has bearing on whether an employment
relationship existed and whether Charles was acting within the
scope of it when the accident occurred. They rely upon evidence
that: (1) the automobile was unregistered with an open title at
the time of the accident; (2) the car bore Second Hand Rose
dealership plates; and (3) Vernon's automobile insurance
application for Second Hand Rose lists his brother, Charles, as
an owner, employee, or relative who could operate owned autos.
While the vehicle was unregistered with an open title at the
time of the accident, the Retail Certificate of Sale lists Ann as
the purchaser of the vehicle. There is no evidence nor
allegation that Ann was a partner, joint venturer or agent of any
kind of Vernon or Second Hand Rose. Vernon testified that the
car was purchased for Ann, and Charles testified that Ann was the
owner of the vehicle. Vernon stated that although he was asked
15 if he might be able to sell it as an eventuality if Charles and
Ann chose not to keep it, neither he nor Second Hand Rose were
the intended recipients of the automobile. Charles testified
similarly.
Morever, the circumstances of this case undermine the import
of Charles's use of the Second Hand Rose plates. Evidence in the
record indicates that Charles used the plates on at least three
family cars, including the car involved in the accident. There
is no evidence nor allegation that these cars were owned by,
purchased for, sold through, or otherwise associated with Vernon
or Second Hand Rose beyond the use of the plates. Charles and
Ann therefore had a history of purchasing cars and operating them
with Second Hand Rose plates. Indeed, on the date of Charles's
deposition, Charles was using one of the plates on a white
Mercedes wagon that belonged to his wife.10 Vernon also
testified that Charles had the license plates, one or two at a
time, on an ongoing basis. Although Charles had standing
permission to use the plates "on any car," and the permission was
never refused, Vernon was unaware of the details of Charles's use
10Both of the first two cars that Charles used the plates on have since had their registrations expire and are now, therefore, unregistered as well. The record contains conflicting evidence as to whether they are still driven, although Charles's use of one of the automobiles, with Second Hand Rose plates, for transportation to his deposition, suggests that they are.
16 of the plates.
Nor did Vernon know that the vehicle in the accident bore
Second Hand Rose plates. He had never seen the car before, and
had had only one conversation about the car with Charles before
the accident. In that conversation Charles asked if Vernon could
sell the car in the event he and Ann decided not to keep it.
Nothing was said about the dealer plates:
[Vernon]: I wasn't aware that he was using the plate. I didn't tell him not to. I don't know. I had no idea whether the car that he bought, that Mercedes wagon, had plates on it or not when he purchased it or not. I don't know. I didn't ask him are you using the dealer plate on that car. I didn't. I never asked him that.
[Plaintiffs' Counsel]: I thought you told us before that he had permission to use the dealer plates on that car?
A. He had permission to use the plate on any car. It was never specifically said can I use it on this car. He just - you know, we had been family a lot of years. My dad was a dealer before us, so forth, like it's an everyday thing.
Vernon Dep. at 87-88. Nor is there any evidence that Vernon or
Second Hand Rose were ever reguested to reimburse Charles for the
purchase of the automobile, as their agreement reguired if
Charles bought the car for his brother or Second Hand Rose.
The plaintiffs also argue that Delaware law supports a
presumption that Second Hand Rose or Vernon were the owners of
the automobile, relying on Finkbiner v. Mullins, 532 A. 2d 609,
17 613 (Del. Super. C t . 1987). However, they do not explain or
support their reliance on Delaware law for this issue. In any
event, any such presumption is thoroughly undermined by the facts
of this case and the parties' historical use of the plates.11
The plaintiffs similarly rely on Delaware Code Annotated
Title 21 section 2 1 2 4 (a) to establish ownership, which provides
that a dealer owning any vehicle reguired to be registered may
operate the vehicle on Delaware roads if the vehicle is used in
the dealer's business, for the personal pleasure of the dealer or
immediate family, or for testing or demonstrating such vehicles.
See Del. Code Ann. tit. 21 § 2124(a) (1998). The plaintiffs'
reliance on this statute is circular, however, as section
2 1 2 4 (a)'s relevance depends upon first establishing the dealer's
ownership of the vehicle, and the plaintiffs seek to use the
statute to establish that ownership.12
“ They also assert that a presumption of behavior in accordance with the law supports the conclusion of ownership of Vernon and/or Second Hand Rose. Again, this is undermined by the record and by Vernon's testimony as to his understanding of the law .
12In the alternative, the plaintiffs rely upon New Hampshire statutory law which provides that a dealer may not lend out its New Hampshire dealer plates, but the plates at issue in this case are not New Hampshire dealership plates. See RSA § 261:108 (1993). The plaintiffs' reliance on RSA § 261:111 (Supp. 1998), governing New Hampshire dealers and vehicles registered under a New Hampshire dealer's registration is similarly flawed.
18 Finally, the plaintiffs rely on Grimes v. Labreck, 108 N.H.
26, 29 (1967) for precedent that mere purchase of a car does not
establish ownership. However, the case is readily distinguish
able. The purchaser testified that she had bought the car as a
matter of convenience for her son. Her son was making payments
on the car, the registration bore his initials, and he regularly
drove the car and had beneficial use of it.
Here, the evidence indicates that the car was purchased by
or for Ann. There is no indication that any of Vernon's or
Second Hand Rose's funds were used to purchase or maintain the
vehicle. Unlike the registration in Grimes bearing the son's
initials, here, although the car is unregistered, there is no
evidence indicating that Vernon or Second Hand Rose did own the
vehicle beyond the use of the plates discussed above.
The court concludes on this record that the plaintiffs have
failed to establish the existence of a genuine issue of material
fact regarding the ownership of the automobile. Their reliance
on it to establish an employment relationship or to advance
issues relating to the scope of the relationship, addressed later
in section E, therefore fails.
In sum, the court concludes that there is no genuine issue
of material fact concerning whether Charles was an employee of
Vernon or Second Hand Rose. Therefore, vicarious liability may
19 not be predicated upon such a relationship.
D. Agency
In Carrier v. McLlarkv, the New Hampshire Supreme Court
discussed agency relationships under New Hampshire law. See 141
N.H. 738, 739 (1997). The issue is one of fact. See i d . "An
agency relationship is created when a principal gives authority
to another to act on his or her behalf . . . and the agent
consents to do so." I d . (citing Fleet Bank-N.H. v. Chain Constr.
Corp., 138 N.H. 136, 139 (1993); 93 Clearing House, Inc. v.
Khourv, 120 N.H. 346, 348-49 (1980)). "The granting of authority
and consent to act need not be written, but 'may be implied from
the parties' conduct or other evidence of intent.'" I d . (guoting
93 Clearing House, Inc., 120 N.H. at 349).
On the record before the court, a reasonable juror could
find that an agency relationship existed between Vernon or Second
Hand Rose and Charles. Vernon reguested that Charles take note
of any older cars that Second Hand Rose might be interested in.
He gave him power of attorney to purchase such automobiles and
promised to reimburse him for any expenditures he made. In
return, the actions of Charles could support a reasonable
inference that he consented to such an agency relationship. He
accepted power of attorney, he represented to others that he was
20 an authorized representative of Second Hand Rose, he signed his
name as an authorized representative of Second Hand Rose, and he
accepted Second Hand Rose dealer plates which Vernon allowed him
to take in the event he came across any automobiles of interest.
In this case, vicarious liability may therefore be predicated
upon a general agency relationship.
E. Scope and Liability
As discussed above, the plaintiffs assert the liability of
Vernon and Second Hand Rose on the theory of an agency
relationship. The plaintiffs argue that there are genuine issues
of material fact regarding the existence of such an agency
relationship in the form of a partnership, a joint venture, an
employment relationship, or a general agency relationship. The
court concluded above that summary judgment is warranted only as
to the existence of an employment relationship. However, having
addressed the issue of whether the record could reasonably
support the existence of such agency relationships, the court
must now address ramifications of each relationship as regards
liability. Again, the parties all rely upon New Hampshire law.
In Miami Subs Corp. v. Murray Family Trust, 142 N.H. 501
(1997), the New Hampshire Supreme Court addressed joint ventures
and partnerships under New Hampshire law:
21 A joint venture is an association of two or more persons formed to carry out a single business enterprise for profit. . . . [P]arties in a joint venture stand in the same relationship to each other as the partners in a partnership . . . and courts generally have applied the law of partnerships to joint ventures.
I d . at 508 (citations and guotations omitted). Therefore, the
New Hampshire Supreme Court "look[s] to relevant law on joint
ventures; general partnership law; and the Uniform Partnership
Act (UPA), RSA chapter 304-A, to guide" it in addressing issues
pertaining to joint ventures and partnerships. Id.
New Hampshire has followed the Uniform Partnership Act. See
NH RSA § 304-A (1995). Section 304-A:9(I) provides that "[e]very
partner is an agent of the partnership for the purpose of its
business." Section 304-A:13 further provides that:
Where, by any wrongful act or omission of any partner acting in the ordinary course of the business of the partnership or with the authority of his co-partners, loss or injury is caused to any person . . . the partnership is liable therefor to the same extent as the partner so acting or omitting to act.
Delaware law is identical for present purposes. See Del. Code
Ann. tit. 6 §§ 1509, 1513 (1998) . In this case, therefore, a
partnership or joint venture could be the basis for liability if
Charles was "acting in the ordinary course of the business of the
partnership or with the authority of his co-partners . . . ."
Id.
22 Similarly, a general agency relationship may be the basis
for vicarious liability. See Restatement (Second) of Agency,
§ 250, § 220 comment e; see also, Boucouvalas v. John Hancock
M u t . Life Ins. Co., 90 N.H. 175 (1939). Citing Boston v. B & M
Super Serv., 91 N.H. 392, 396 (1941), the plaintiffs argue that
"the fact that [an action] was in part, or even mostly, for
purposes of social entertainment would not overcome the fact of
some agency." I d . (applying Maine law) ,13
Independent of the nature of the agency relationship,
whether it be a partnership or a general agency relationship, the
plaintiffs proffer only two grounds in support of their
contention that Charles's trip at the time of the accident was
within the scope of an agency relationship. First, the
plaintiffs assert that Charles had a "roving commission" to
search for used cars for Vernon. They contend that "[t]he bottom
line is very simply that, every time Charles left his house, he
was on the job for Second Hand Rose." Pis.' Opp. at 21. Second,
they assert that on the particular trip in guestion the passenger
in the vehicle was a potential purchaser of the automobile and
that it was being shown to him for that purpose.
13The plaintiffs rely upon Boston v. B & M Super Service, 91 N.H. 392, and the defendants do not contest its consistency with New Hampshire law.
23 In support of their first theory, the plaintiffs point to
the following evidence in the record: (1) Charles had ongoing
instructions to look for used cars as he traveled; (2) Vernon
gave Charles power of attorney and dealer plates; (3) Vernon sent
Charles booklets containing used car values. The plaintiffs rely
on two cases where liability was based on a theory of "roving
commissions," Easterlin v. Green, 150 S.E. 2d 473 (S.C. 1966),
and Cochran v. Michaels, 157 S.E. 173 (W.Va. 1931) .
The evidence indicates that there was an open ended
authorization to purchase automobiles for Second Hand Rose.
However, with the exception of the ambiguous circumstances
surrounding the Caprice, nothing in the record indicates that
this was ever acted upon. Vernon states that Charles never
purchased any cars for Second Hand Rose. Nor could Vernon
remember whether Charles had ever used the power of attorney for
Second Hand Rose. Given the evidence that at most one car was
purchased for Second Hand Rose, a reasonable inference is that
the booklets were rarely, if ever, used for Second Hand Rose's
benefit either.
The plates had been used on at least three of Ann's and
Charles's automobiles. There is no evidence that either of the
first two cars were sold to Second Hand Rose or that they were
purchased with Second Hand Rose or Vernon in mind. Evidence
24 indicates that the third car bearing dealer plates, the one
involved in the accident in this case, had not been purchased for
Second Hand Rose but for Ann, and was possibly to be sold through
Second Hand Rose only if Ann decided she did not wish to keep it.
The record indicates that it had been driven with the plates by
Charles and Ann since its purchase in April until the date of the
accident in November, excepting the periods when it was off the
road for repairs, and there is nothing in the record that
indicates this use was to advance Second Hand Rose's interests.
Nor did Vernon know of its use or the use of the plates.
On the record before the court, it is evident that Charles
did not actively use the vehicle, the plates, the power of
attorney, or the booklets to advance the interests of Second Hand
Rose or any agreement to secure used automobiles. On this
record, therefore, these factors, while ostensibly intended to
facilitate Charles's acguisition of vehicles, do not operate so
as to create a reasonable inference that Charles was on a roving
commission turning every trip of his into an extension of an
agreement to help his brother or Second Hand Rose.
In Easterlin v. Green, the court was presented with a clear
employment relationship where the employee worked on the
dealership grounds during the day and took cars out at night to
show friends and acguaintances as prospective purchasers. See
25 150 S.E. 2d at 474. It was customary that the employee sold cars
at night. See i d . Indeed, this was an important part of the
employee's activity on behalf of his employer, see i d . at 476-77,
and the friends and acquaintances he met were "important to his
success as a used car salesman," i d . at 477. It was natural for
him to combine pleasure and business. See i d . Moreover, he had
a restricted driver's license that only allowed him to drive his
employer's vehicles for business purposes. On the night of the
accident in Easterlin the employee had taken the automobile out
to "prospect" and see how many sales he could make. See id at
474. The vehicle carried a dealer tag. See i d . His activities
followed his customary means of carrying on business for his
employer.
The second case relied upon by the plaintiffs is Cochran v.
Michaels. See 157 S.E. 173 (W.Va. 1931) . Cochran is similarly
distinguishable as the driver of the dealer's automobile was
employed to sell used cars and he only had permission to drive
the car for the purpose of potential sales, although he was
allowed to transport friends because he gathered information for
potential sales through such friends and acquaintances. On the
occasion of the accident he was in the process of transporting
such acquaintances.
The court finds the plaintiff's reliance on these cases
26 unpersuasive. Significantly, they are not New Hampshire law and
they are old cases. Moreover, in this case there is no
reasonable basis for concluding that an employment relationship
existed. Nor was there a custom of Charles to look for used
automobiles for Second Hand Rose given his history of securing
such automobiles for the business. Evidence indicates that the
only automobile actually transferred to Second Hand Rose by
Charles was the Caprice. The record cannot sustain a reasonable
inference that Charles harbored intentions of purchasing
automobiles on his travels, nor that his travels were incidental
to such purchasing. Given his general failure to purchase
vehicles for Second Hand Rose, Charles's activities securing
automobiles on behalf of Second Hand Rose, or lack there of,
could not be considered important to Second Hand Rose, Vernon, or
himself.
As discussed above, the plaintiffs also contend the record
supports a reasonable inference that on the particular journey
during which the accident occurred Charles was showing the car to
a prospective purchaser. The plaintiffs base this contention on
evidence that: (1) the car in the accident bore dealer plates;
(2) no one had title to the car; (3) the car was being driven by
someone identified on Vernon's insurance as an owner, employee or
relative who operated owned vehicles; and (4) a recent purchaser
27 of an old car of Ann's was a passenger in the vehicle.
Again, on these facts the record cannot support a reasonable
inference that Charles held the intention of interesting a
prospective purchaser when he embarked on the trip at issue.
Instead it indicates that Charles gave the passenger a ride home
because he was stranded without another means of returning.
Given the history of the use of the dealer plates in this case,
the fact that the car had the dealer plates on it does not
support a finding to the contrary. Nor, without more, does
evidence that the passenger had purchased an old car from Ann, or
that the car had an open title, support a finding that Charles
embarked on the trip to sell the car to a prospective purchaser.
Finally, the court guestions the materiality of the insurance
policy which identifies Charles as an owner, employee, or
relative of the owner of the automobile. Simply because he is
listed on Second Hand Rose's policy does not support a reasonable
inference that he was acting as its agent during the excursion at
issue. In any event, the court has already determined that there
is no genuine issue of material fact regarding employee status.
The insurance policy therefore might indicate that Charles was an
owner of Second Hand Rose or a relative of Vernon. The record
indicates Charles's familial relation to Vernon. Even assuming
Charles's ownership of Second Hand Rose, this fact would not,
28 under these circumstances, change the nature of the trip at
issue.
At first blush the court finds more troubling Charles's
statement to his insurer that he was "in the process of taking
[the car] back, taking it down to Delaware to to [sic] sell it."
Plfs.' Opp., Ex. N at 3. However, the record indicates that the
statement, in context, was in response to a broad guestion. In
his deposition Charles clarified the statement as meaning he
would take the car to Delaware sometime in early winter if Ann
and he decided to sell it. This interpretation is corroborated
by the lack of any evidence that he was on his way to Delaware at
the time of the accident. Nor do the plaintiffs assert this as a
basis for establishing his agency for the trip at issue.
Conclusion
In counts three through ten the plaintiffs assert the
liability of Vernon Malpass, individually; Second Hand Rose;
Vernon Malpass, d/b/a/ Second Hand Rose; and Charles Malpass and
Vernon Malpass, d/b/a/ Second Hand Rose. All of the claims are
predicated upon an agency relationship. See Compl. Counts III,
IV (Charles Malpass was agent of Defendant Vernon Malpass and
Vernon Malpass through his agents owed plaintiffs a duty of
reasonable care); Counts V, VI, (Charles Malpass was agent of
29 Second Hand Rose and Second Hand Rose through its agents owed
plaintiffs a duty of reasonable care); Counts VII, VIII (Charles
Malpass was agent of Vernon Malpass d/b/a Second Hand Rose and
Vernon Malpass d/b/a Second Hand Rose through their agents owed
duty to plaintiff); Counts IX and X (Charles Malpass was agent of
Vernon Malpass and Charles Malpass d/b/a Second Hand Rose and
through their agents they owed duty to plaintiffs). As the
plaintiff asserted counts against Vernon Malpass and Second Hand
Rose only upon the basis of agency and the court has concluded
that no reasonable juror could find that Charles Malpass's trip
on the date of the accident was within the scope of said agency,
the court grants the defendants' converted motion for summary
judgment on counts three through ten (document no. 15).
SO ORDERED.
Joseph A. DiClerico, Jr. District Judge
March 19, 1999
cc: David J. Berg, Esguire Donald E. Gardner, Esguire Douglas N. Steere, Esguire