Opinion ID: 215200
Heading Depth: 2
Heading Rank: 2

Heading: psi’s individual liability

Text: In Florida, “[t]he law is well settled that an agent is not personally liable for the contract debts of a disclosed principal, absent an express agreement to the contrary.” Kanov v. Bitz, 660 So. 2d 1165, 1165-66 (Fla. Dist. Ct. App. 1995). “If the contracting party knows the identity of the principal, the principal is deemed disclosed.” Philip Schwartz, Inc. v. Gold Coast Graphics, Inc., 623 So. 2d 819, 820 (Fla. Dist. Ct. App. 1993). In the district court, PSI argued that it should not be individually liable on the contracts because it was the agent of the disclosed principal Bariven and “did not express or imply an intent to itself be bound by the Contracts.” Validsa, 632 F. Supp. 2d at 1239. Validsa contended, however, that PSI manifested an intent to be bound to the contracts, and the district court agreed. Id. at 1240. The district court pointed to: (1) testimony from PSI employees stating that they believed PSI would be liable in the event of a breach; (2) the fact that PSI negotiated the contracts; (3) a letter PSI gave to Validsa for presentation to third parties 25 describing PSI and Validsa’s business relationship; and (4) the draft agreement, which removed Bariven as an obligated party and made PSI solely responsible for the debts under the contracts. Id. at 1240-42. Given it is undisputed that PSI was the agent of the disclosed principal Bariven, the evidence in this case is not nearly the quantum required to hold the agent of a disclosed principal liable for the principal’s obligations under Florida law. In Florida, “[a]bsent an express agreement, an agent acting for a disclosed principal is not personally liable for the debts of the principal.” Andrew H. Boros, P.A. v. Arnold P. Carter, M.D., P.A., 537 So. 2d 1134, 1135 (Fla. Dist. Ct. App. 1989). While Florida courts do often cite the principle that an agent may be held liable when “circumstances show[] that personal responsibility was intended to be incurred,” First Auto. Serv. Corp., N.M. v. First Colonial Ins. Co., No. 3:07-cv682-J-32TEM, 2008 WL 816973, at  (M.D. Fla. Mar. 25, 2008), the courts rarely find liability in this situation.14 Instead, the courts treat liability for agents as the rare exception, resulting in Florida law that an agent is not liable for the obligations of a disclosed principal “absent an express agreement to the contrary.” Kanov, 660 So. 2d at 1165-66. 14 At oral argument, counsel for Validsa could point us to no published decision where the Florida courts actually held an agent liable for the obligations of a disclosed principal when the agent did not make an express indication of its intent to be bound. 26 In this case, Bariven was PSI’s disclosed principal, and PSI never expressly agreed to be liable for Bariven’s obligations. None of the evidence presented by Validsa—testimony from PSI employees, PSI’s negotiation of the contracts on Bariven’s behalf, the relationship-describing letter, and the draft agreement—shows any intent to be bound on PSI’s part. Instead, this activity falls squarely into the agent immunity carved out in Florida law for “debts or obligations of the principal arising from contracts which the agent may negotiate or execute on behalf of . . . [a] disclosed principal.” Sussman v. First Fin. Title Co. of Fla., 793 So. 2d 1066, 1068 (Fla. Dist. Ct. App. 2001). None of the evidence cited by Validsa demonstrates that PSI expressed an intent to be bound to the contracts, or manifested any intent contrary to its role as agent on behalf of disclosed principal Bariven.15 Given our determination that PSI did not express an intent to be bound by contracts 632 and 757, we conclude that the district court erred in granting Validsa’s motion for summary judgment and in denying PSI’s motion for summary judgment as to PSI’s individual liability to Validsa. We therefore reverse and 15 Validsa’s citation of cases from other jurisdictions is unavailing. In this diversity action, the Florida’s agency law governs. 27 remand to the district court with instructions to enter judgment in favor of PSI on Validsa’s claims in its Amended Complaint.