Opinion ID: 852883
Heading Depth: 1
Heading Rank: 7

Heading: Liability of Agent for Unauthorized Acts

Text: As against Pollerts, Onyx's Amended Complaint sought damages of $143,800, alleging that Pollerts authorized Onyx to do the demolition work pursuant to its quote of $153,800, that Pollerts impliedly promised that Onyx would be paid, that Onyx reasonably relied on the promise and completed the demolition, that Pollerts frequented the site during the demolition, and that Onyx received only $10,000, paid by Penn-America. Appellant's Appendix at 91-92. In a separate count entitled Equitable Estoppel, Onyx alleged that Pollerts knowingly made false representations and concealed material facts, with the intention that Onyx would rely upon them, which it did, thereby suffering a loss of $143,800. Id. at 95. In Onyx's cross-appeal challenging the judgment denying its claim against Pollerts, Onyx contends only that Pollerts is responsible for the demolition costs up to the amount of coverage that Mr. Pollert represented. Br. of Appellee/Cross-Appellant Onyx at 6. Onyx argues that the undisputed evidence establishes that, at one point during the demolition, Pollert represented that there was $62,500 of insurance coverage for demolition, and that the trial court erred in not returning a verdict against Pollerts' Inc. for at least $62,500.00 plus interest. Id. at 7, Appellants' Appendix at 496. This Court has observed the well recognized general rule, that where one person assumes to act as agent of another, but without authority to do so, he makes himself personally liable as a principal in the transaction. Terwilliger v. Murphy, 104 Ind. 32, 34, 3 N.E. 404, 406 (1885). See Lewis v. Reed, 11 Ind. 239, 242 (1858); Pitman v. Kintner, 5 Blackford 250, 252 (1839). This principle is generally recognized. The Restatement of Agency Second § 329 states: A person who purports to make a contract, conveyance or representation on behalf of another who has full capacity but whom he has no power to bind, thereby becomes subject to liability to the other party thereto upon an implied warranty of authority, unless he has manifested that he does not make such warranty or the other party knows that the agent is not so authorized. Another expression of this general rule is expressed as follows: Where the agent, without authority or in excess of his or her authority, contracts with a third person, who sues upon the implied warranty of authority, recovery is measured by real damages sustained by the breach of warranty. The agent may be held accountable for money paid or work or labor performed under the contract, or for special damages sustained by reason of the wrong in assuming to act without authority. 3 Am.Jur.2d 700-01, Agency § 334. The evidence is undisputed that Fred Pollert, acting on behalf of Pollerts' Inc., purporting to be acting on behalf of Penn-America Insurance Company, engaged Onyx to commence demolition of the fire remnants of the Centennial Hotel. Pollerts thereafter expressly assured Onyx that the insurance provided coverage of $62,500, and later insisted that Onyx stay at work to complete the clean-up to minimize risk to the insurance company. While there is thus clear and undisputed evidence that Pollerts purported to act as an agent of another, the record is unclear whether he did so without authority. While the trial court had previously granted Penn-America and GAB summary judgment against Onyx upon its determination that Fred Pollert individually and d/b/a Pollerts, Inc. was not a broker, special agent, or general agent for Penn-America Insurance Company and/or GAB Robins North America, Inc., Appellants' Appendix at 170, said summary judgment was not sought or entered as against Pollerts, which is entitled to present evidence thereon at trial on remand.