Opinion ID: 1673493
Heading Depth: 1
Heading Rank: 7

Heading: general principles of tennessee law of agency

Text: Having decided that this case should be resolved with reference to Tennessee agency law, it may be necessary to review the relevant principles of agency. In its broadest sense, the concept of agency includes every relation in which one person acts for or represents another. Kerney v. Aetna Cas. & Sur. Co., 648 S.W.2d 247, 253 (Tenn.Ct.App.1982). An agency relationship does not require an explicit agreement, contract, or understanding between the parties, Warren v. Estate of Kirk, 954 S.W.2d 722, 725 (Tenn.1997), and when the facts establish the existence of an agency relationship, it will be found to exist whether the parties intended to create one or not. Harben v. Hutton, 739 S.W.2d 602, 606 (Tenn.Ct.App.1987); see also Smith v. Tennessee Coach Co., 183 Tenn. 676, 680-81, 194 S.W.2d 867, 869 (1946). Whether an agency exists is a question of fact under the circumstances of the particular case; and whether an agency has been created is to be determined by the relation of the parties as they in fact exist under their agreement or acts. McCay v. Mitchell, 62 Tenn.App. 424, 434, 463 S.W.2d 710, 715 (1970). Important in the concept of agency, of course, is that a principal is generally bound by its agent's acts done in its behalf and within the actual or apparent scope of the agency. V.L. Nicholson Co. v. Transcon Inv. & Financial Ltd., 595 S.W.2d 474, 483 (Tenn.1980). The focus of this inquiry, however, is placed upon the actions and consent of the principal, rather than upon the agent's actions or the willingness of the agent to perform those actions. Haury & Smith Realty Co. v. Piccadilly Partners I, 802 S.W.2d 612, 615 (Tenn.Ct.App.1990). Although the principal's right to control the actions of the agent is an important factor in finding the existence of an agency relationship, Jack Daniel Distillery, et al. v. Jackson, 740 S.W.2d 413, 416 (Tenn.1987), the right of control is not necessarily as important as the principal's exercise of actual control over the agent, see Parker v. Vanderbilt Univ., 767 S.W.2d 412, 416 (Tenn.Ct.App. 1988). Indeed, a principal may be held liable for an agent's tortious act, even if that act occurs outside of the scope of the agency, if the act was commanded or directed by the principal. See Kinnard v. Rock City Const. Co., 39 Tenn.App. 547, 551, 286 S.W.2d 352, 354 (1955). As the Kinnard Court stated the rule: A master is liable for the tort of his servant where the tortious act is done in obedience to his express orders or directions, even though the service is not within the line of the servant's usual duties, and provided the injury to the third person occurs as the natural, direct, and proximate result of the directed or authorized act. Id. at 551-52, 286 S.W.2d at 354-55. The court also noted that the law did not strictly require that the principal or master should expressly direct or have knowledge of the act done; it is enough that the servant or agent was acting in the business of his superior. Id. at 551, 286 S.W.2d at 354 (citing Luttrell v. Hazen, 35 Tenn. (3 Sneed) 20, 25 (1855)). It is also well settled that an agent may serve two masters simultaneously, so long as the objectives of one master are not contrary to the objectives of the other. See Monroe County Motor Co. v. Tennessee Odin Ins. Co., 33 Tenn. App. 223, 241, 231 S.W.2d 386, 394 (1950). As section 226 of the Restatement (Second) of Agency states the rule, A person may be the servant of two masters, not joint employers, at one time as to one act, if the service does not involve abandonment of the service to the other. In so doing, the person serving two masters may cause both employers to be responsible for an act . . . . if the act is within the scope of employment for both. Id. § 226 cmt. a. To summarize these agency principles in terms of application to the issue in this case, we conclude that private employers may be held vicariously liable for the acts of an off-duty police officer employed as a private security guard under any of the following circumstances: (1) the action taken by the off-duty officer occurred within the scope of private employment; [12] (2) the action taken by the off-duty officer occurred outside of the regular scope of employment, if the action giving rise to the tort was taken in obedience to orders or directions of the employer and the harm proximately resulted from the order or direction; or (3) the action was taken by the officer with the consent or ratification of the private employer and with an intent to benefit the private employer. [13] Consistent with agency law, the private employer of an off-duty officer cannot generally be held vicariously liable for actions taken by the off-duty officer outside of the officer's regular scope of employment as a security guard. As such, when the officer is summoned to official duty by the municipality, or otherwise performs traditional police actions outside of the scope of his or her private employment, the private employer will not be generally liable. The private employer would be liable, however, for acts taken outside of the regular scope of private employment under the following two scenarios: (1) the employer ordered or directed the action; or (2) the employer gave consent to the action, which was taken by the officer with a primary intent to benefit the employer. As is the case with agency law in general, issues such as whether the officer acted within the scope of employment, or whether the officer acted at the direction or with the consent of his or her private employer, are questions of fact to be resolved by the jury. We also recognize that under the dual master doctrine, the municipality may also be vicariously liablealong with the private employerfor the actions taken by one of its off-duty police officers. Under Tennessee agency law, liability may also be imputed to the municipality when all of the following four circumstances are present: (1) the action taken by the off-duty officer involves exercise of a traditional police power, such as the power to arrest, the power to issue citations, or the power to command aid; (2) the municipality had knowledge, either actual or constructive, of the action taken by the off-duty officer; [14] (3) the action taken by the off-duty officer simultaneously serves the objectives of the private employer and the municipality; and (4) the objectives of the private employer and the municipality, which are both served by the officer's action, are not inconsistent with each other.