MIAMI BUSINESS LITIGATION: LIABILITY TO BUSINESSES FOR ACTS OF AGENTS

Agents are empowered to bind their principals to certain actions taken by the agents. 2 Fla. Jur. 2d Agency & Employment § 54 (2015). Agency relationships can form by written consent, oral consent, or implication from the parties’ conduct. Osorio v. State Farm Bank, F.S.B. 746 F. 3d 1242 (11th Cir. 2014). Principals empower their agents by providing them actual authority, implied authority, or apparent authority. D&M Carriers, LLC, v. M/V Thor Spirit, 586 Fed. App’x 564 (S.D. Fla. 2014). Actual authority is provided when (1) the principal informs the agent that he or she has the power to act on the principal’s behalf within certain parameters and (2) the agent understands that he or she has the power to act on behalf of the principal within the limitations imposed. 2 Fla. Jur. 2d Agency & Employment § 25 (1977). Implied authority is provided when the principal provides the agent discretionary power to do what is reasonably necessary to accomplish the particular purpose delegated to the agent. See 2 Fla. Jur. 2d Agency & Employment § 62 (2015). Apparent authority is provided to an agent by the principal’s communications to third-parties. Taco Bell of California v. Zappone, 324 So. 2d 121 (Fla. 2d DCA 1975). The principal “allows or causes others to believe the agent possesses [apparent] authority” even if the principal does not directly inform the agent about his or her empowerment. Id. Peter Mavrick is a Miami business litigation attorney, and represents clients in Fort Lauderdale, Boca Raton, and Palm Beach. The Mavrick Law Firm represents businesses and their owners in breach of contract litigation and related claims of fraud, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, employment litigation, and other legal disputes in federal and state courts and in arbitration.

The principal agent relationship is consequential because it extends a principal’s liability to those actions undertaken by his or her agent assuming the agent acted within the scope of empowerment. Trevarthen v. Wilson, 219 So. 3d 69 (Fla. 4th DCA 2017) (“General principles of vicarious liability establish that a principal is responsible for the wrongful acts of its agent if the agent was either acting (1) within the scope of [its authority], or (2) during the course of [the agency] and to further a purpose or interest of the [principal].”). An agent’s actions can bind the principal to a contract and all terms within that contract. Fi-Evergreen Woods, LLC v. Estate of Robinson, 172 So. 3d 493, 497 (Fla. 5th DCA 2015) (holding that the defendant was obligated to comply with the contract’s arbitration provision because the defendant’s agent entered the contract on the defendant’s behalf.”). An agent can also make a principal liable to a plaintiff for the negligent acts of the agent. Town of Largo v. L & S Bait Co. of Fla., 256 So. 2d 412, 413 (Fla. 2d DCA 1972) (A principal “is liable for its negligence under the doctrine of respondeat superior when such negligence is committed by its agent… in the performance or non-performance of a duty….”). Whether the in tort or contract, the agent’s actions can have far reaching effect for the principal.

The liabilities an agent imputes to his or her principal are not necessarily enforceable against the agent. Consider the two scenarios described above. In the first scenario, the agent entered a contract on behalf of the principal obligating the principal to pay certain sums to a third-party. Although the principal is obligated to pay the contractual debt, the agent is not liable for that debt. Sussman v. First Fin. Title Co. of Fla., 793 So.2d 1066 (Fla. 4th DCA 2001) (“[A]n agent acting within the course and scope of its agency relationship with a disclosed principal is not liable for the debts or obligations of the principal arising from contracts which the agent may negotiate or execute on behalf of such disclosed principal.”). In the second scenario, the agent committed a negligent act against a third-party that imposed liability on the principal. The agent will remain liable for his or her own negligence in addition to the principal’s liability. See White-Wilson Med. Ctr. v. Dayta Consultants, Inc., 486 So. 2d 659 (Fla. 1st DCA 1986) (“Individual officers and agents of a corporation are personally liable where they have committed a tort even if such acts are performed within the scope of their employment or as corporate officers or agents.”).

Peter Mavrick is a Miami business litigation lawyer, and represents clients in Fort Lauderdale, Boca Raton, and Palm Beach. This article does not serve as a substitute for legal advice tailored to a particular situation.