Opinion ID: 1604971
Heading Depth: 2
Heading Rank: 1

Heading: Whether the trial court erred in entering a summary judgment for Hyundai.

Text: The Russells and the McLemore group contend that the trial court erred in entering a summary judgment for Hyundai because, they say, the IDB, the City, the County, and the State were acting as agents of Hyundai or were involved in a joint venture with Hyundai to acquire the land for the project site; therefore, they maintain, Hyundai is also liable for the alleged breach of the contract.
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.
The Russells and the McLemore group contend, in the alternative, that Hyundai is liable for breach of contract because, they say, Hyundai was engaged in a joint venture with the IDB, the City, the County, and the State to acquire their property. According to the Russells and the McLemore group, they presented substantial evidence of the existence of a joint venture through the language in the project agreement indicating a sharing of efforts, property, skill, money, and knowledge to purchase and develop property for a manufacturing plant for a community of interest. `This Court wrote in Arndt v. City of Birmingham, 547 So.2d 397 (Ala. 1989): ``A joint venture is an association of persons with intent, by way of express or implied contract, to engage in and carry out a single business venture for joint profit, for which purpose they combine their efforts, property, money, skill, and knowledge, without creating a partnership or a corporation, pursuant to an agreement that there shall be a community of interest among them as to the purpose of the undertaking, and that each participant shall stand in the relation of principal as well as agent as to each of the other coadventurers, with an equal right of control of the means employed to carry out the common purpose of the venture.' `46 Am.Jur.2d Joint Ventures § 1 (1969). As we stated in Moore v. Merchants & Planters Bank, 434 So.2d 751, 753 (Ala.1983), `while every element is not necessarily present in every case, it is generally agreed that in order to constitute a joint venture, there must be a community of interest and a right to joint control.' (Emphasis added [in Arndt ].) `What constitutes a joint venture is a question of law, but whether a joint venture exists has been held to be a question of fact for the jury. 46 Am.Jur.2d Joint Ventures § 7 (1969). Unless the trial court can say that the parties were or were not engaged in a joint venture as a matter of law, the question must be presented to the jury. As between the parties themselves, the relationship of joint venturers is a matter of intent. As to third persons, it is generally the rule that the legal rather than the actual intent of the parties controls. 46 Am. Jur.2d Joint Ventures § 9 (1969). `The burden of establishing the existence of a joint venture is upon the party asserting that the relation exists.' Moore v. Merchants & Planters Bank, 434 So.2d 751, 753 (Ala.1983); Kim v. Chamberlain, 504 So.2d 1213 (Ala.Civ.App.1987). `547 So.2d at 399-400; see Moore v. Merchants & Planters Bank, 434 So.2d 751, 753 (Ala.1983).'  Environmental WasteControl, Inc. v. Browning-Ferris Indus., Inc., 657 So.2d 885, 887-88 (Ala.1995). `The elements of a joint venture have been held to be: a contribution by the parties of money, property, effort, knowledge, skill, or other assets to a common undertaking; a joint property interest in the subject matter of the venture and a right to mutual control or management of the enterprise; expectation of profits; a right to participate in the profits; and usually, a limitation of the objective to a single undertaking or ad hoc enterprise. While every element is not necessarily present in every case, it is generally agreed that in order to constitute a joint venture, there must be a community of interest and a right to joint control.'  Moore v. Merchants & Planters Bank, 434 So.2d 751, 753 (Ala.1983) (citing 46 Am.Jur.2d Joint Ventures § 12 (1969)). Flowers v. Pope, 937 So.2d 61, 65-66 (Ala. 2006). The record does not contain substantial evidence to create a jury question with regard to the existence of a joint venture involving Hyundai. Nothing in the evidence supports a finding of a community of interest. Hyundai never had a joint ownership interest with any of the alleged joint venturers in the property of the Russells or the McLemore group upon the closings on the property. Additionally, Hyundai did not provide financing for the purchase of the property, and it had no risk or expenses with regard to the purchase. Thus, nothing supports a finding of a community of interest involving Hyundai with regard to the acquisition of the property to constitute the project site. Cf. Flowers v. Pope, 937 So.2d at 68 (holding that there was no community of interest because the alleged joint venturers did not have an equal proprietary interest and only one of the alleged joint venturers bore the risks and paid the expenses). Moreover, the record indicates that Hyundai did not have a right of control with regard to how the property was obtained. Nothing indicates that Hyundai controlled the actions of the IDB or other governmental entities with regard to the selection of the property for the project site, the negotiation of the option agreements on the property, or the drafting of the option agreements. Thus, substantial evidence of right of control by Hyundai is not presented in the record. Although the evidence does tend to establish that a joint venture may have existed between the IDB, the City, the County, and the State for the purpose of enticing Hyundai to locate an automobile-manufacturing plant in Montgomery County, substantial evidence does not exist to create a jury question as to whether Hyundai was a participant in the joint venture. The evidence indicates that Hyundai merely evaluated Montgomery's incentive package, compared it to the incentive packages offered by other communities, and determined that Montgomery provided the best place to build its plant. Thus, the Russells and the McLemore group have not presented substantial evidence indicating that Hyundai was a participant in a joint venture; therefore, Hyundai cannot be liable for the alleged breach of contract. Because substantial evidence of neither an agency relationship nor a joint venture is present in the record, the summary judgment for Hyundai is affirmed.