Opinion ID: 1604971
Heading Depth: 3
Heading Rank: 1

Heading: Were the IDB, the City, the County, and the State acting as agents of Hyundai in acquiring the property of the Russells and the McLemore group?

Text: When a defendant's liability is to be based on agency, agency may not be presumed; rather, when on a motion for summary judgment a defendant has made a prima facie showing that there was no agency relationship, the party asserting agency has the burden of presenting substantial evidence of the alleged agency. Malmberg v. American Honda Motor Co., 644 So.2d 888, 890 (Ala.1994). The authority of an agent to contract on behalf of a principal must be either expressed, implied or apparent. 2A C.J.S. Agency. ... It is stated in 2A C.J.S. Agency § 153 as follows: `Implied authority may be viewed as actual authority given implicitly by the principal to the agent; and, as otherwise stated, it is actual authority circumstantially proved, or evidenced by conduct or inferred from course of dealing between the alleged principal and agent. It differs from apparent authority in that it is authority which the principal intended that the agent should have. ... Implied powers, like any others, must be bottomed on some act or acquiescence of the principal, express or implied. They are created by act of the parties and in every case depend largely upon the particular circumstances involved. `They are not to be extended beyond the legitimate scope of implied authority, their existence or non-existence in any particular instance being always determinable by reference to the intention of the parties. So an agent has no implied authority unless he believes that he had such authority....'.... .... ... The doctrine of apparent authority rests upon the principle of estoppel, which forbids one by his acts to give an agent an appearance of authority which he does not have and to benefit from such misleading conduct to the detriment of one who has acted in reliance upon such appearance. We find in Am. Jur.2d, Agency, § 74, p. 476 the following: `The apparent power of an agent is to be determined by the acts of the principal, and not the acts of the agent; a principal is responsible for the acts of the agent only where the principal by his acts or conduct has clothed the agent with the appearance of authority and not where the agent's own conduct and statements have created apparent authority.' Patterson v. Page Aircraft Maint., Inc., 51 Ala.App. 122, 125-26, 283 So.2d 433, 436 (Ala.Civ.App.1973) (emphasis omitted). To avoid a summary judgment, a party relying on apparent agency must `show that he was misled by the appearances relied upon. It is not enough that he might have been, ... so misled. It must also appear that he had reasonable cause to believe that the authority existed; mere belief without cause, or belief in the face of facts that should have put him on his guard is not enough.' Brown v. St. Vincent's Hosp., 899 So.2d 227, 241 (Ala.2004) (quoting Union Oil Co. of California v. Crane, 288 Ala. 173, 180, 258 So.2d 882, 887 (1972), quoting in turn Birmingham News Co. v. Birmingham Printing Co., 209 Ala. 403, 405, 96 So. 336, 339 (1923)). The Russells and the McLemore group did not present substantial evidence indicating that the IDB, the City, the County, or the State were acting as Hyundai's express, implied, or apparent agent with regard to the acquisition of their property. The option agreements do not state that the IDB or Thornton, the chairman of the IDB, was acting as an agent of Hyundai; therefore, there is no evidence of express agency. Additionally, we find no evidence of implied agency. Nothing before us creates an inference that Hyundai participated in identifying the location of the property proposed for the project site, that it was involved in drafting the option agreements, that it met with the property owners, or that it was a party to the option agreements. Therefore, the Russells and the McLemore group did not present substantial evidence of express or implied agency. Likewise, the Russells and the McLemore group did not present substantial evidence of apparent agency. The evidence indicates that Hyundai was never involved in selecting the properties for acquisition, that it did not participate in any of the negotiations for the option agreements, and that no Hyundai representative was ever present or communicated with any property owner. Indeed, Thornton testified that the IDB's purpose in obtaining the option agreements was to acquire land on behalf of the City and County in order to serve the City of Montgomery and promote industry. Thus, the evidence indicates that the IDB, the City, the County, and the State were not acting to acquire the properties as an agent or under the direction of Hyundai, but at their own direction and on their own initiative to entice Hyundai to build an automobile plant in Montgomery County. The Russells and the McLemore group urge that evidence of an agency relationship is found in the project agreement. They direct this Court to a provision in the project agreement that required the IDB to exercise the option agreements, to unify the title of the property constituting the project site for transfer of the title of the property to Hyundai, to transfer title of the property to Hyundai, and to perform the site preparation for the property to Hyundai's specifications. Additionally, they point out that the option agreements were not exercised until after the project agreement was signed. The project agreement, however, does not evidence an agency relationship. The option agreements were acquired before the IDB, the City, the County, and the State had a relationship with Hyundai. The testimony indicates that they were executed as part of the creation of an incentive package to encourage Hyundai to select the Montgomery area as the site for its automobile plant, and the project agreement is evidence of Hyundai's acceptance of the package. As Ahn testified, the reason for the project agreement and its requirements was to allow Hyundai to obtain control over the property. Moreover, nothing in the project agreement indicates that Hyundai selected the location for the project or that it was bound by the option agreements or the sales agreements for the property. Thus, the project agreement does not provide substantial evidence of the existence of an agency relationship. A review of the record does not yield substantial evidence indicating that the IDB, the City, the County, or the State was acting as an agent of Hyundai in acquiring the property of the Russells and the McLemore group.