Court Opinion

ID: 4880979
Source: CourtListenerOpinion
Date Created: 2021-09-02 16:28:17.70287+00
Date Added: 2024-06-11T08:03:11.375164
License: Public Domain

2021 UT 55

                                 IN THE

         SUPREME COURT OF THE STATE OF UTAH

                   LAMAR DREW and LARENE DREW,
                           Respondents,
                                   v.
                   PACIFIC LIFE INSURANCE COMPANY,
                                Petitioner.

                             No. 20190695
                         Heard March 5, 2021
                        Filed September 2, 2021

              On Certiorari to the Utah Court of Appeals

                     Fourth District, Utah County
                   The Honorable Darold J. McDade
                            No. 120402017

                              Attorneys:1
 Scott M. Petersen, David N. Kelley, Tanner J. Bean, Salt Lake City,
                           for petitioner
            Steven G. Loosle, Salt Lake City, for respondents

       JUSTICE PEARCE authored the opinion of the Court in which
             CHIEF JUSTICE DURRANT, JUSTICE HIMONAS, and
                        JUSTICE PETERSEN joined.
       ASSOCIATE CHIEF JUSTICE LEE authored a dissenting opinion.

   JUSTICE PEARCE, opinion of the Court:
                          INTRODUCTION
   ¶1 LaMar and LaRene Drew (Drews) claim they lost a
significant portion of their life savings after they followed bad
_____________________________________________________________
   1  Additional Attorneys: Sarah Elizabeth Spencer, Salt Lake City,
for amicus American Council of Life Insurers in support of
petitioner.
                DREW v. PACIFIC LIFE INSURANCE CO.
                        Opinion of the Court
financial advice peddled by employees of R. Scott National, Inc.
(RSN). The Drews claim, among other things, that RSN used
intentional and negligent misrepresentations to induce them to
purchase an insurance policy from Pacific Life Insurance Company
(Pacific Life or Pacific) that they did not need and could not afford.
The Drews also claim they followed RSN‘s advice to take out a
reverse mortgage on their home to pay the insurance policy
premiums. The question before us is whether and to what extent
Pacific Life can be held liable for RSN‘s alleged misdeeds.
    ¶2 The district court denied summary judgment to the Drews
and granted summary judgment to Pacific Life, reasoning that
nothing RSN did was within the actual or apparent authority Pacific
Life granted RSN.
    ¶3 The court of appeals reversed and granted partial summary
judgment to the Drews. Drew v. Pac. Life Ins. Co., 2019 UT App 125,
¶ 1, 447 P.3d 1257. The court of appeals held that RSN was Pacific
Life‘s agent and that RSN‘s actions fell within the scope of authority
Pacific Life had granted RSN. Id. ¶ 26. Pacific Life petitioned for
certiorari.
    ¶4 We agree with the court of appeals that the Drews were
entitled to partial summary judgment but disagree with the court of
appeals‘ analysis. We conclude that the court of appeals erred when
it ruled that Utah Code section 31A-1-301(88)(b) (2010) made RSN an
―agent‖ of Pacific Life. We further conclude that the court of appeals
misstepped when it injected respondeat superior principles into
Utah Code section 31A-23a-405(2), which presumes an insurer is
bound by the acts of its ―appointed licensee‖ within the scope of the
licensee‘s ―actual (express or implied) or apparent authority.‖ This
causes us to reverse the court of appeals‘ decision to reverse the
district court‘s grant of summary judgment to Pacific Life on the
issue of whether RSN acted with actual authority from Pacific Life.
We also vacate the court of appeals‘ decision to grant partial
summary judgment to the Drews. Instead, we rule on an alternative
ground the Drews assert and remand to the district court to enter
partial summary judgment to the Drews on the question of whether
RSN acted with apparent authority from Pacific Life.
                          BACKGROUND
                  Pacific Life’s Relationship with RSN
    ¶5 RSN is a business formed to provide various products and
financial services, with a focus on marketing insurance products to
senior citizens. Multiple insurance companies contracted with and
appointed RSN to act as an insurance producer for them—that is, to

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                         Opinion of the Court
solicit and procure applications for their products and services. One
such company was Pacific Life.
   ¶6 Pacific Life provides life insurance and annuity products. It
contracts with other businesses and individuals to help it solicit and
procure applications from potential customers in Utah. And,
pursuant to Utah law, it reports to the Utah Insurance Department
when it ―appoint[s]‖ such a business or individual ―as an insurance
producer, limited line producer, or managing general agent to act on
the insurer‘s behalf . . . .‖ See UTAH CODE § 31A-23a-115(1).
    ¶7 Pacific Life appointed RSN as an ―insurance producer‖ on
December 20, 2008. On January 5, 2009, Pacific Life and RSN entered
into a ―Producer‘s Contract‖ (Contract) that authorized RSN to
―solicit and procure applications for [Pacific Life‘s] insurance and
annuity products . . ., to deliver policies and to perform other duties
relating to the sale of such products as may be required by [Pacific
Life].‖ This seemingly broad grant of authority was tempered by the
Contract‘s general limitation on RSN‘s authority: ―[RSN] has no
authority except as is expressly granted in this contract.‖
    ¶8 Further, even though the Contract stated that RSN is an
―independent contractor,‖ not an ―employee,‖ and is ―free to
exercise independent judgment as to the time, place, and means of
performing all acts under this contract,‖ the Contract allowed Pacific
to intrude on RSN‘s autonomy in several ways. The Contract gave
Pacific Life the ―right to audit‖ RSN. It also required RSN to comply
with various rules, including ―all applicable Insurance laws and
regulations.‖ And RSN needed to abide by Pacific Life‘s
―underwriting and issue requirements‖ as well as its ―rules,
procedures and practices regarding the sale of the products and
delivery and servicing of the policies.‖ The Contract similarly barred
RSN from engaging in ―any act prohibited under this contract, by
[Pacific Life] rule, procedure or practice, or by law.‖
    ¶9 The Contract further narrowed RSN‘s authority with a
number of specific limitations. For example, the Contract limited
RSN to soliciting and submitting applications only for products that
are ―authorized‖ and that ―meet the customer‘s insurance needs and
financial objectives.‖ The Contract also required RSN to inform
Pacific Life ―of all material facts . . . relating to the insureds or
proposed insureds prior to issuance and delivery of policies.‖ And it
prohibited RSN from ―deliver[ing] any policy if [RSN] . . . knows, or
should know, that . . . facts are not as represented in the application.‖
   ¶10 In addition, the Contract restricted the statements and
materials RSN could utilize when interacting with prospective
customers. It barred RSN from binding Pacific Life ―by any promise

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                DREW v. PACIFIC LIFE INSURANCE CO.
                        Opinion of the Court
or agreement,‖ including ―any promises respecting any policy,
except when specifically authorized in writing to do so by an
authorized officer of [Pacific Life].‖ It also precluded RSN from
―issu[ing], circulat[ing] or us[ing] in any manner any sales,
advertising or marketing material without [Pacific Life‘s] prior
written consent.‖
    ¶11 Moreover, RSN could not ―incur any debt, expense, or
liability‖ in Pacific‘s name or account. Nor could RSN ―[m]ake,
modify, or discharge any insurance contract on behalf of [Pacific].‖
But the Contract required RSN to provide applicants ―with the
proper temporary insurance agreement‖ and ―[p]romptly effect
delivery of policies to policyowners.‖
    ¶12 The Contract also contemplated the possibility that RSN
might entangle Pacific in legal troubles. It required RSN to
―immediately notify‖ Pacific Life ―of any customer complaint, or of
the service of any paper or process regarding any legal or
administrative action, investigation, or proceeding against [Pacific
Life] or [RSN] that involves . . . [Pacific Life‘s] products.‖
           The Drews’ Relationship with RSN and Pacific Life
   ¶13 The Drews are retirees who saw an RSN advertisement.
Starting in November 2008, the Drews sought financial advice from
one of RSN‘s employees. During their relationship with RSN, the
Drews made numerous financial investments and transactions, only
some of which are relevant to the case before us.
   ¶14 Two of the transactions the Drews undertook with RSN‘s
advice and assistance were to purchase life insurance from PHL
Variable Insurance Company (PHL) and Pacific Life. The Drews
purchased the PHL policy in December 2008. The Drews submitted
an application to Pacific Life in April 2009 and purchased the Pacific
policy in July 2009.2
   ¶15 The Drews purchased the PHL and Pacific Life policies
based on their belief in RSN‘s representations that, after two years of
paying the policies‘ annual premiums, they could resell the policies
on the secondary market for a large profit. The Drews also followed

_____________________________________________________________
   2 Pacific Life paid RSN a commission for soliciting the Drews‘
business with Pacific.

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                        Opinion of the Court
RSN‘s advice to fund the premiums by taking out a reverse
mortgage on their home.3
   ¶16 The Drews testified in a deposition that they never spoke
directly with Pacific Life. Rather, the Drews relied on RSN to inform
them about Pacific‘s products and supply them with Pacific‘s
application forms. The application forms and a temporary insurance
agreement that RSN presented to the Drews had been supplied by
Pacific to RSN.
     ¶17 Pacific asserts that ―Mr. Drew signed the application
without reading any of its contents because [RSN] represented that
[it] would fill out the rest.‖ The Drews admit that they signed the
insurance forms with many details blank. But they claim they did so
after RSN assured them that RSN would fill in the details for them
later. Mr. Drew also testified that ―we didn‘t read most of the things‖
RSN provided.
    ¶18 However, the Drews assert that they ―believed that RSN
was the agent of Pacific because RSN had the forms and other
information necessary to sell Pacific‘s products.‖ Mr. Drew testified
that he ―felt‖ that RSN ―represented Pacific Life and had the
authority to do whatever it curtailed to sign‖ the forms, both because
RSN ―told us that [they] represented each‖ insurance company, and
because RSN ―gave me all the information.‖ Mr. Drew also testified
that his basis for believing that RSN was ―representing‖ Pacific was
―the same‖ as for his belief that RSN also represented another
company, Phoenix, because RSN had given him ―information and
the forms and so forth that we went through.‖ Mr. Drew further
testified that he believed RSN represented multiple insurance
companies and ―represented the company that he was talking about
insuring with me.‖
   ¶19 Similarly, when Mrs. Drew was asked if RSN ever told her
that RSN ―worked for Pacific Life,‖ she responded, ―Well, [RSN] was
_____________________________________________________________
   3 The precise timing of when the Drews took out this reverse
mortgage is not apparent in the record. Neither Pacific nor the
Drews provide a specific date in their briefing. Before the district
court, Pacific Life stated that the Drews met with a reverse mortgage
broker on December 16, 2008, but did not state when the reverse
mortgage was actually executed. Further, the parties agree that the
Drews used the reverse mortgage to fund not only the premiums for
the Pacific Life policy issued in July 2009, but also premiums for the
PHL policy issued on December 26, 2008. Neither party states when
the premiums were due or paid.

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                  DREW v. PACIFIC LIFE INSURANCE CO.
                          Opinion of the Court
selling your product and so it was on your papers.‖ Mrs. Drew
reiterated she believed RSN was an ―agent‖ of Pacific Life and other
companies because RSN ―had papers from‖ Pacific Life and other
companies.
    ¶20 Two years after purchasing the Pacific Life and PHL
policies, RSN failed to sell either policy on the secondary market.
The Drews then stopped paying the hefty annual premiums and the
policies lapsed. The profits the Drews had expected from these life
insurance investments never materialized. The Drews lost a portion
of their savings and the equity in their home.
                            The Drews’ Lawsuit
    ¶21 The Drews sued several entities and individuals, including
RSN and Pacific Life. The Drews‘ second amended complaint
(Complaint) alleged several causes of action against all defendants,
including Pacific Life, for ―common law fraud,‖ ―negligent
misrepresentation,‖ breach of fiduciary duty, negligence, unjust
enrichment, elder abuse, intentional infliction of emotional distress,
and ―constructive fraud.‖ The Complaint also included a claim for
―rescission of illegal insurance contract‖ solely against Pacific Life.
    ¶22 The Drews‘ Complaint alleged that they reasonably relied
on a number of RSN‘s misrepresentations and omissions and that
they suffered damages as a result. The Drews alleged that RSN failed
to disclose the ―significant risks‖ in RSN‘s ―scheme‖ to resell the life
insurance policies at a profit. The Drews also alleged that RSN
―[f]ailed to disclose that it is illegal to solicit or issue a life insurance
policy for the primary purpose of selling the policy‖ on the
secondary market.4 And they claimed that RSN misrepresented the
risks of using a reverse mortgage to finance the purchase of the
policies.
    ¶23 The Drews contended that Pacific Life was responsible for
―all actions‖ of RSN ―in soliciting and procuring insurance products
from the Drews.‖
_____________________________________________________________
   4 Between the time the Drews applied for the Pacific Life policy in
April 2009 and when they purchased it in July 2009, a statute went
into effect which made it illegal for any person to ―issue, solicit, or
market‖ a life insurance policy or annuity for the ―primary purpose
of or with a primary emphasis on‖ selling the policy on the
secondary market. See Insurance and Life Settlement Amendments,
H.B. 170, § 17, 2009 Utah Laws 1885, 1900 (effective May 12, 2009)
(codified at UTAH CODE § 31A-36-111(5)).

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                         Opinion of the Court
        The District Court Grants Summary Judgment to Pacific
   ¶24 Pacific Life moved for summary judgment. The Drews
cross-moved for partial summary judgment. Both motions focused
on whether Pacific Life could be held liable for RSN‘s alleged
wrongdoing.5
    ¶25 Pacific Life argued that RSN and its employees ―were not
Pacific Life‘s captive agents, but were instead independent
contractor[s].‖ Pacific Life also argued that RSN did not have actual
or apparent authority to act on its behalf. Pacific further contended
that some of RSN‘s ―bad acts‖—including convincing the Drews to
obtain a reverse mortgage and to put money into life insurance
annuities—occurred ―before [the Drews] were made aware of Pacific
Life.‖ Pacific explained RSN began recommending that the Drews
invest in life insurance annuities and began discussing the option of a
reverse mortgage in November 2008. Pacific Life argues that this
occurred before Pacific appointed RSN to sell its products on
December 20, 2008. Because these conversations began prior to
Pacific‘s appointment of RSN, Pacific contended that these acts
―cannot be attributed to‖ Pacific Life.
    ¶26 The Drews alleged that ―RSN‘s breaches of duty caused the
Drews to purchase insurance and pay premiums to Pacific.‖ And
they argued that ―Pacific is responsible for all actions of RSN in
selling Pacific‘s products.‖ The Drews contended that they were
―entitled to summary judgment on the issue of agency‖ because RSN
acted as Pacific‘s agent under Utah Code section 31A-1-301(88)
(2010) and as Pacific‘s appointed licensee under Utah Code section
31A-23a-115. The Drews further asserted that ―all of the misconduct
alleged in this case as to Pacific occurred in the scope of RSN‘s
authority as an appointed agent of Pacific in soliciting the sale of its
products.‖ Therefore, the Drews concluded, Pacific is liable under
Utah Code section 31A-23a-405(2) for RSN‘s actions in selling
Pacific‘s products to the Drews.
   ¶27 The district court denied the Drews‘ motion and granted
summary judgment to Pacific Life, disposing of all but one of the
Drews‘ claims. That claim later met the same fate. The court
reasoned that RSN‘s misdeeds were neither within the actual nor
apparent authority that Pacific Life granted RSN. The court
_____________________________________________________________
   5By that time, the Drews had already reached a settlement with
RSN, PHL, and multiple others. The Drews‘ summary judgment
motion was solely against Pacific and one of RSN‘s individual
employees. Only the claims against Pacific are at issue before us.

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                 DREW v. PACIFIC LIFE INSURANCE CO.
                         Opinion of the Court
determined that RSN lacked actual authority because the Producer‘s
Contract contained specific limitations on RSN‘s authority, including
prohibitions on: delivering policies if the ―facts are not as
represented in the application‖; soliciting policies that do ―not meet
the customer‘s insurance needs and financial objectives‖; ―making
any promises respecting any policy, except when specifically
authorized‖; binding Pacific Life ―by any promise‖; and engaging in
―any act prohibited under this contract . . . or by law.‖
   ¶28 The district court also concluded that RSN lacked apparent
authority by reasoning that
       Pacific Life made no manifestations to [the Drews] that
       the RSN Defendant‘s [sic] had authority to make
       promises to the [Drews] regarding the purchase of life
       insurance for the purpose of selling that insurance on
       the secondary market or for any other alleged illegal
       act or omission noted in the Second Amended
       Complaint.
The court further reasoned that the Drews ―dealt exclusively with
the RSN Defendants and relied solely on their representations.‖ The
court concluded that ―the RSN Defendants‘ use of Pacific Life‘s
insurance application forms, without additional representations
from Pacific Life to [the Drews], was insufficient to establish that the
RSN Defendants were acting with apparent authority from Pacific
Life.‖
    ¶29 The district court did not address whether RSN was Pacific
Life‘s agent. Nor did the court address Pacific‘s argument that some
of RSN‘s misdeeds began before the Drews were ―aware of Pacific
Life‖ and thus ―cannot be attributed to‖ Pacific Life.
                  The Court of Appeals Reverses and
            Grants Partial Summary Judgment to the Drews
    ¶30 The court of appeals reversed the district court and granted
partial summary judgment to the Drews on the question of vicarious
liability. Drew v. Pac. Life Ins. Co., 2019 UT App 125, ¶ 1, 447 P.3d
1257. The court of appeals held that the proper analytical framework
requires a court to first decide ―whether an agency relationship
existed between Pacific and RSN‖ and, if yes, ―then determine
whether RSN‘s employees acted within the scope of their authority
in their dealings with the Drews.‖ Id. ¶ 10. The court of appeals
concluded that RSN was an agent of Pacific Life based on a provision
of the Insurance Code that designates a person as a ―producer for the
insurer‖ if the person is ―compensated directly or indirectly by an
insurer for selling, soliciting, or negotiating an insurance product of

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                        Opinion of the Court
that insurer.‖ Id. ¶¶ 12–13 (quoting UTAH CODE § 31A-1-301(88)(b)(i)
(2010) (amended and renumbered as § 31A-1-301(98)(b))).6
   ¶31 The court of appeals next concluded that RSN acted within
the ―scope of their authority‖ granted by Pacific. Id. ¶¶ 24, 26. The
court of appeals quoted Utah Code section 31A-23a-405(2), which
makes every insurer ―bound by any act of its appointed licensee . . .
within the scope of the appointed licensee‘s actual (express or
implied) or apparent authority.‖ Id. ¶ 17. But the court of appeals did
not expressly examine whether RSN acted with actual express, actual
implied, or apparent authority.
   ¶32 Instead, the court of appeals concluded that RSN acted
generally ―within the scope of their authority.‖ Id. ¶¶ 24, 26. In so
concluding, the court primarily cited and applied the respondeat
superior ―scope of employment‖ test found in section 230 of the
Restatement (Second) of Agency (Am. L. Inst. 1958), section 7.07 of
the Restatement (Third) of Agency (Am. L. Inst. 2006), M.J. v. Wisan,
_____________________________________________________________
   6 We cite the version of the statute the court of appeals cited, see
Drew, 2019 UT App 125, ¶ 12 n.5, which is the same version of the
statute that was in effect when RSN solicited the Drews and
convinced them to purchase life insurance from Pacific in 2008 and
2009. Compare UTAH CODE § 31A-1-301(88)(b) (2010), with id. § 31A-1-
301(88)(b) (2008), and id. § 31A-1-301(88)(b) (2009). In 2011, the
legislature amended this statute, adding that a ―‗[p]roducer for the
insurer‘ may be referred to as an ‗agent‘‖ and a ―‗[p]roducer for the
insured‘ may be referred to as a ‗broker.‘‖ See Insurance Law Related
Amendments, H.B. 19, § 1, 2011 Utah Laws 1111, 1119–20 (currently
codified at UTAH CODE § 31A-1-301(98)(b), (c)). Even though the
court of appeals did not quote this new language, Pacific argues that
the court of appeals implicitly and wrongfully incorporated it into its
analysis. We do not address the potential effect of these amendments
to RSN‘s agency status because we determine that such questions are
not relevant under the Drews‘ theory of liability. See infra ¶ 41. We
also therefore need not address whether the court of appeals
improperly applied the 2011 amendments, because we vacate that
portion of the court of appeals‘ decision. See infra Part I.
Nevertheless, for the sake of thoroughness and transparency, and
because Pacific makes a point of it, we cite the version of the statute
in effect at the time of the alleged misconduct. See Carlucci v. Utah
State Indus. Comm’n, 725 P.2d 1335, 1336 (Utah 1986) (―The general
rule is that the law establishing substantive rights and liabilities
when a cause of action arises, and not a subsequently enacted
statute, governs the resolution of the dispute.‖).

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                 DREW v. PACIFIC LIFE INSURANCE CO.
                         Opinion of the Court
2016 UT 13, ¶ 54, 371 P.3d 21, Wardley Better Homes & Gardens v.
Cannon, 2002 UT 99, ¶ 19, 61 P.3d 1009, and Burlington Industries, Inc.
v. Ellerth, 524 U.S. 742, 756 (1998). See Drew, 2019 UT App 125, ¶¶ 18–
24; see also infra ¶¶ 59–61. The court of appeals also relied on cases
from outside of Utah which apply a blend of vicarious liability and
authority tests. See Drew, 2019 UT App 125, ¶¶ 22–23; see also infra
¶¶ 64–68.
              ISSUES AND STANDARD OF REVIEW
    ¶33 We granted Pacific Life‘s petition for certiorari on the
question of ―[w]hether the court of appeals erred in its construction
and application of former Section 31A-1-301(88) and Section 31A-
23a-405 of the Utah Code.‖ In plainer terms, the ultimate question
before us is whether or to what extent section 405 makes Pacific Life
liable for RSN‘s actions.
    ¶34 ―On certiorari, we review the court of appeals‘ decision for
correctness, focusing on whether that court correctly reviewed the
trial court‘s decision under the appropriate standard of review.‖
Cheek v. Iron Cnty. Att’y, 2019 UT 50, ¶ 9, 448 P.3d 1236 (citation
omitted). In other words, ―[i]n reviewing the court of appeals‘
decision[,] we apply the same standard of review that it would apply
in reviewing the decision of the district court.‖ Est. of Faucheaux v.
City of Provo, 2019 UT 41, ¶ 9, 449 P.3d 112.
    ¶35 Here, we review a grant and a denial of summary judgment.
See Drew v. Pac. Life Ins. Co., 2019 UT App 125, ¶ 1, 447 P.3d 1257.
Summary judgment is appropriate where ―there is no genuine
dispute as to any material fact and the moving party is entitled to
judgment as a matter of law.‖ UTAH R. CIV. P. 56(a). ―[W]hen an
appellate court reviews a district court‘s grant of summary
judgment, the facts and all reasonable inferences drawn therefrom
[are viewed] in the light most favorable to the nonmoving party,
while the district court‘s legal conclusions and ultimate grant or
denial of summary judgment are reviewed for correctness.”
Bangerter v. Petty, 2009 UT 67, ¶ 10, 225 P.3d 874 (second alteration in
original) (citation omitted). We assess whether the court of appeals
erred by looking at ―whether the trial court erred in applying the
governing law and whether the trial court correctly held that there
were no disputed issues of material fact.‖ Glover ex rel. Dyson v. Boy
Scouts of Am., 923 P.2d 1383, 1385 (Utah 1996) (citation omitted).7

_____________________________________________________________
   7 ―The filing of cross-motions for summary judgment does not
necessarily mean that material issues of fact do not exist.‖ Plateau
                                                    (continued . . .)

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                         Opinion of the Court
                             ANALYSIS
    ¶36 Pacific Life argues that the court of appeals erred when it
overturned the district court and granted partial summary judgment
to the Drews. Pacific Life primarily contends it cannot be held liable
for RSN‘s acts for two reasons. First, Pacific Life avers that the court
of appeals erred in determining that RSN was its ―agent.‖ Second,
Pacific Life asserts that the court of appeals applied an incorrect test
to assess RSN‘s authority under Utah Code section 31A-23a-405.
    I. RSN WAS PACIFIC LIFE‘S ―APPOINTED LICENSEE‖
   ¶37 The court of appeals, Pacific Life, and the Drews all believe
that, in order to hold Pacific liable for RSN‘s actions, the first
question the court should answer is whether RSN was Pacific‘s
―agent.‖ See Drew v. Pac. Life Ins. Co., 2019 UT App 125, ¶¶ 10–11, 447
P.3d 1257. But they disagree on the proper test to determine agency.
    ¶38 The court of appeals held that the Insurance Code makes
―the existence of an agency relationship turn[] on whether an
insurance salesperson is a ‗producer for the insurer‘ or a ‗producer
for the insured.‘‖ Id. ¶ 12 (quoting UTAH CODE § 31A-1-301(88) (2010)
(amended and renumbered at § 31A-1-301(98)). The court of appeals
believed that question hinged on whether the insurance ―producer‖
was ―compensated directly or indirectly by an insurer for selling,
soliciting, or negotiating an insurance product of that insurer.‖ Id.
(quoting UTAH CODE § 31A-1-301(88)(b)(i) (2010)). The court of
appeals concluded that, because Pacific paid RSN a commission,
RSN and its employees were ―producers for Pacific and were
therefore acting as its agents.‖ Id. ¶ 13.
    ¶39 Pacific Life contends that ―agency‖ is not defined by the
statutory terms ―producer for the insurer‖ and ―producer for the
insured‖ under Utah Code section 31A-1-301(88) (2010). Instead,
Pacific argues that a court should apply the common law test for
agency.
   ¶40 The Drews agree with the court of appeals that RSN was
Pacific‘s agent because it was a producer for the insurer under Utah

Mining Co. v. Utah Div. of State Lands & Forestry, 802 P.2d 720, 725
(Utah 1990) (citing Amjacs Interwest, Inc. v. Design Assocs., 635 P.2d
53, 55 (Utah 1981)). ―Cross-motions for summary judgment do not
ipso facto dissipate factual issues, even though both parties contend
for the purposes of their motions that they are entitled to prevail
because there are no material issues of fact.‖ Amjacs Interwest, 635
P.2d at 55.

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                 DREW v. PACIFIC LIFE INSURANCE CO.
                         Opinion of the Court
Code section 31A-1-301(88) (2010). But the Drews also reason that
RSN was Pacific‘s agent because Utah Code section 31A-23a-405(2)
makes an insurer ―bound by any act of its appointed licensee . . . that
is within the scope of the appointed licensee‘s actual (express or
implied) or apparent authority,‖ and Pacific appointed and
contracted with RSN to act on its behalf pursuant to Utah Code
section 31A-23a-115(1).
    ¶41 We agree with Pacific Life that the court of appeals erred in
asking whether Pacific Life was a ―producer for the insurer.‖ But we
disagree with Pacific that we must apply a common law agency test.
The relevant questions in this case are whether RSN was Pacific
Life‘s appointed licensee and whether RSN acted within its scope of
actual or apparent authority. This is because the Drews‘ theory of
liability is rooted in Utah Code section 31A-23a-405(2).8 The Drews
do not rely on any theory of liability that is untethered from that
statute. Indeed, the Drews argued to the district court and the court
of appeals that section 405(2) governed their claims.9

_____________________________________________________________
   8 Pacific appears to agree as well. Pacific asserts that ―[b]ecause
Section 31A-23a-405(2) is specifically directed toward the parameters
of insurer and agent liability, resort to Section 31A-1-301(88) is
unnecessary,‖ and ―[i]t is Section 31A-23a-405(2) . . . that governs
questions of agency under the Insurance Code, not Section 31A-1-
301(88) . . . .‖
   9  We note that, although the title of section 405 is ―Insurer
liability,‖ subsection 31A-23a-405(2) creates a ―rebuttable
presumption that every insurer is bound by any act of its appointed
licensee . . .,‖ and it does not use the words ―liable for.‖ See UTAH
CODE § 31A-23a-405(2) (emphasis added). And the subsequent
subsection discusses the remedies available when ―a licensee under
this chapter with authority to bind more than one insurer on a
particular risk agrees to bind coverage on a particular risk, but fails to
outwardly indicate the insurer with which the risk is placed, and
before the risk is placed with a particular insurer a loss occurs. . . .‖
Id. § 31A-23a-405(3) (emphases added). With that context, the phrase
―bound by‖ in section 31A-23a-405(2) could be read to speak to the
question of when an insurer must provide insurance, rather than
when an insurer can be liable for its appointed licensee‘s tortious
conduct. But both parties have briefed the case as if section 405(2)
governs this dispute and neither party, nor amicus, nor the court of
appeals in its opinion, has suggested that the statute is inapplicable
to the Drews‘ tort claims. We therefore analyze what section 405(2)
                                                         (continued . . .)

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                         Opinion of the Court
   ¶42 Because the questions the parties have put before us turn on
the meaning of section 31A-23a-405(2), we approach them as a
matter of statutory interpretation. We look first to the Act‘s plain
language. See, e.g., Olsen v. Eagle Mountain City, 2011 UT 10, ¶ 9, 248
P.3d 465; Dowling v. Bullen, 2004 UT 50, ¶ 8, 94 P.3d. 915.
   ¶43 Section 405(2) provides:
       There is a rebuttable presumption that every insurer is
       bound by any act of its appointed licensee performed in
       this state that is within the scope of the appointed
       licensee‘s actual (express or implied) or apparent authority,
       until the insurer has canceled the appointed licensee‘s
       appointment and has made reasonable efforts to
       recover from the appointed licensee its policy forms
       and other indicia of agency.
UTAH CODE § 31A-23a-405(2) (emphases added).
   ¶44 Section 405 thus speaks to two questions pertaining to when
an insurer is presumed to be bound. First, it addresses who can bind
the insurer under this section: ―appointed licensee[s].‖ Id. Second, it
speaks to what an insurer can be bound to: acts ―within the scope of
the appointed licensee‘s actual (express or implied) or apparent
authority.‖ Id.
    ¶45 The Insurance Code does not define ―appointed licensee.‖
See UTAH CODE § 31A-1-301 (definitions); id. §31A-23a-102
(definitions). However, we may glean its meaning from other related
sections of the Insurance Code. See, e.g., Olsen, 2011 UT 10, ¶ 9 (―In
[some] cases, the statutory text may not be ‗plain‘ when read in
isolation, but may become so in light of its linguistic, structural, and
statutory context.‖ (citation omitted)); id. ¶ 12 (―[W]e do not
interpret the ‗plain meaning‘ of a statutory term in isolation. . . . [We]
determine the meaning of the text given the relevant context of the
statute (including, particularly, the structure and language of the
statutory scheme).‖); Dowling, 2004 UT 50, ¶ 8 (―[S]ubsections of a
statute should not be construed in a vacuum but must be read as
part of the statute as a whole.‖ (citation omitted)).
    ¶46 The term ―appointed licensee‖ in section 405(2) appears to
relate to the requirement in section 115 that insurers ―shall appoint an
individual or agency with whom it has a contract as an insurance

requires to bind an insurer to the acts of its appointed licensee, but
we leave open the question of the statute‘s scope for a case in which
the parties have raised and briefed the question.

                                    13
                 DREW v. PACIFIC LIFE INSURANCE CO.
                          Opinion of the Court
producer, limited line producer, or managing general agent to act on
the insurer‘s behalf in order for the licensee to do business for the
insurer in this state.‖ UTAH CODE § 31A-23a-115(1)(a) (emphases
added). Insurers must report ―new appointment[s]‖ to the state
insurance commissioner. See id. § 31A-23a-115(1)(b). An ―insurance
producer‖ is defined as a ―person licensed or required to be licensed
under the laws of this state to sell, solicit, or negotiate insurance.‖ See
id. § 31A-1-301(88) (2010) (amended and renumbered at § 31A-1-
301(98)(a)).
   ¶47 Reading Utah Code section 31A-23a-405(2) in the context of
these statutory provisions, ―appointed licensee‖ refers to a person or
entity with whom an insurer ―has a contract as an insurance
producer, limited line producer, or managing general agent‖ and
who the insurer has ―appoint[ed]‖ in filings to the state insurance
commissioner ―to act on the insurer‘s behalf.‖ See id. § 31A-23a-
115(1).
    ¶48 There is no dispute that Pacific Life filed a notice of
appointment with the Utah Insurance Department and appointed
RSN as an ―insurance producer‖ on December 20, 2008. It is also
undisputed that, on January 5, 2009, Pacific Life and RSN entered
into a ―Producer‘s Contract‖ that authorizes RSN to ―solicit and
procure applications for [Pacific Life‘s] insurance and annuity
products, to deliver policies and to perform other duties relating to
the sale of such products as may be required by [Pacific Life].‖ Based
on these undisputed facts, RSN was an ―appointed licensee‖ of
Pacific Life within the meaning of Utah Code section 31A-23a-405(2).
    ¶49 Although Pacific Life conceded at oral argument that RSN
was its appointed licensee, it urged us to recognize an additional
hurdle that a plaintiff must clear before binding the insurer to the
acts of its appointed licensee. Pacific contends that an insurer cannot
be held liable for the acts of its appointed licensee unless that
licensee is also an ―agent‖ under common law principles. We see
nothing in the statute that supports that contention. The statute
binds an insurer to the acts of its ―appointed licensee‖ in certain
circumstances. Nothing in the statute suggests that the appointed
licensee must also meet the common law test for an agency
relationship before the insurer can be bound.10

_____________________________________________________________
   10 Pacific Life also argues that if we read the statute the way we
do, insurers will be strictly liable for the actions of their appointed
licensees. This again misreads the statute. The provision of the
Insurance Code the Drews put at issue creates a rebuttable
                                                         (continued . . .)

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                         Cite as: 2021 UT 55
                        Opinion of the Court
    ¶50 In sum, we conclude that the court of appeals erred by
looking to Utah Code section 31A-1-301(88) (2010) to determine
whether RSN was Pacific Life‘s agent for the purpose of assessing
liability under section 405(2). See Drew, 2019 UT App 125, ¶¶ 12–13.
The relevant question is whether RSN was Pacific‘s ―appointed
licensee.‖ It was.
     II. THE COURT OF APPEALS ERRED IN TURNING TO
      TESTS THAT UTAH CODE SECTION 31A-23A-405(2)
                 DOES NOT CONTEMPLATE
    ¶51 Pacific Life next contends that the court of appeals applied
an incorrect test to determine RSN‘s authority under Utah Code
section 31A-23a-405(2). Pacific argues that the court of appeals
should have, but did not, undertake separate analyses for actual
express, actual implied, and apparent authority. Pacific explains that
instead of following the statute‘s lead and looking at those questions,
the court of appeals applied respondeat superior principles. Pacific
also contends that the court of appeals distorted the statutory
analysis by relying on cases from outside Utah that do not reflect the
way this court has looked to see whether a party acted inside its
actual or apparent authority. We agree with Pacific that the court of
appeals strayed from the statute when it resorted to respondeat
superior principles and relied on ill-fitting cases from outside the
Beehive State.
   ¶52 Utah Code section 31A-23a-405(2) provides:
      There is a rebuttable presumption that every insurer is
      bound by any act of its appointed licensee performed
      in this state that is within the scope of the appointed
      licensee‘s actual (express or implied) or apparent authority
      ....
(Emphases added.) This is an express statutory mandate that
insurers are presumed to be bound by certain acts of their appointed
licensees: acts within the licensee‘s actual express authority, actual
implied authority, or apparent authority. Id. It does not expressly
premise insurer liability on the doctrine of respondeat superior.
   ¶53 Actual express authority, actual implied authority, and
apparent authority are all terms of art borrowed from common law.
When the legislature plants common law terms of art into a statute,

presumption that binds insurers only to those actions that their
appointed licensees takes within the scope of their actual or apparent
authority. UTAH CODE § 31A-23a-405(2).

                                  15
                 DREW v. PACIFIC LIFE INSURANCE CO.
                         Opinion of the Court
we presume that the legislature intends to incorporate the ―old soil‖
of those terms‘ common law meanings. See Maxfield v. Herbert, 2012
UT 44, ¶ 31, 284 P.3d 647 (citation omitted).
   ¶54 Actual and apparent authority are doctrines that bind a
principal to its agent‘s acts. See Zions First Nat. Bank v. Clark Clinic
Corp., 762 P.2d 1090, 1094 (Utah 1988). Actual authority includes
both express and implied authority. Id. ―Express authority exists
whenever the principal directly states that its agent has the authority
to perform a particular act on the principal‘s behalf.‖ Id. Implied
authority includes ―acts which are incidental to, or are necessary,
usual, and proper to accomplish or perform, the main authority
expressly delegated to the agent.‖ Id.
    ¶55 While actual authority ―relates to a principal‘s
manifestations to the agent,‖ apparent authority ―relates to a
principal‘s manifestations to a third party.‖ Burdick v. Horner
Townsend & Kent, Inc., 2015 UT 8, ¶ 21, 345 P.3d 531. Apparent
authority exists ―when a third party reasonably believes the actor
has authority to act on behalf of the principal and that belief is
traceable to the principal‘s manifestations.‖ Id. (quoting
RESTATEMENT (THIRD) OF AGENCY § 2.03 (AM. L. INST. 2006)).
    ¶56 The court of appeals looked past these doctrines and instead
inserted respondeat superior concepts into its analysis. ―Under the
doctrine of respondeat superior, employers are held vicariously
liable for the torts their employees commit when the employees are
acting within the scope of their employment.‖ Clover v. Snowbird Ski
Resort, 808 P.2d 1037, 1040 (Utah 1991); see also Phillips v. JCM Dev.
Corp., 666 P.2d 876, 881 (Utah 1983). We have maintained that at least
two factors are relevant to determining whether something was
within the ―scope of employment,‖ including whether the conduct is
―of the general kind the employee is employed to perform‖ and
whether the acts were ―motivated, at least in part, by the purpose of
serving the employer‘s interest.‖ Birkner v. Salt Lake Cnty., 771 P.2d
1053, 1056–57 (Utah 1989); Clover, 808 P.2d at 1040; see also M.J. v.
Wisan, 2016 UT 13, ¶¶ 54, 59, 371 P.3d 21.
   ¶57 Actual authority, apparent authority, and respondeat
superior are all distinct, yet sometimes overlapping doctrines. Actual
authority and apparent authority ―may exist concurrently or there
may be one and not the other.‖ Burdick, 2015 UT 8, ¶ 21 n.11 (quoting
RESTATEMENT (SECOND) OF AGENCY § 124A cmt. a (AM. L. INST. 1958)).
Apparent authority and the respondeat superior ―scope of
employment‖ tests also overlap but are ―not equivalent concepts,‖
and there may sometimes be liability under both, or under one and
not the other. See Kansallis Fin. Ltd. v. Fern, 659 N.E.2d 731, 735 (Mass.

                                   16
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                         Opinion of the Court
1996); see also Charles Davant IV, Employer Liability for Employee
Fraud: Apparent Authority or Respondeat Superior?, 47 S.D. L. REV. 554,
556, 567–76 (2002) (delineating situations in which respondeat
superior and apparent authority would result in the same outcome
and those that would yield different outcomes); Grease Monkey Int’l,
Inc. v. Montoya, 904 P.2d 468, 472–74 (Colo. 1995) (en banc)
(distinguishing between the kinds of acts and persons authorized
under respondeat superior and apparent authority).
    ¶58 Although there is overlap between respondeat superior and
actual and apparent authority, the legislature chose to include
explicit references to actual and apparent authority, but not to
respondeat superior.11 In the face of that seemingly deliberate
legislative choice, we agree with Pacific Life that the court of appeals
should not have turned to respondeat superior principles to assess
insurer liability under Utah Code section 31A-23a-405(2).
   ¶59 But it appears that it did. Indeed, it appears that the court of
appeals primarily relied on and applied respondeat superior
principles to decide whether RSN acted within the scope of authority
granted by Pacific. For example, the court cited section 230 of the
Second Restatement of Agency and section 7.07 of the Third
Restatement of Agency, both of which pertain to the respondeat
superior ―scope of employment‖ test for holding principals liable for

_____________________________________________________________
   11  The Drews argue that section 405(2) implicitly incorporates
respondeat superior. The Drews contend that section 405(2)
resembles the statute we interpreted in M.J. v. Wisan, 2016 UT 13,
¶ 48, 371 P.3d 21. That statute imposed liability on trusts for the torts
their trustees committed ―in the course of administering [the] trust.‖
See id. ¶¶ 47, 69 (emphasis added) (quoting UTAH CODE § 75-7-
1010(1), (2)). The Drews also point to Wardley Better Homes & Gardens
v. Cannon, 2002 UT 99, 61 P.3d 1009. There we held that an employer
was vicariously liable for its employee‘s frauds where the employee
acted within its ―[s]cope of authority.‖ Id. ¶¶ 26–27.
    The Drews argue that section 405(2)‘s reference to acts performed
―within the scope‖ of the appointed licensee‘s authority signals an
intent to incorporate respondeat superior principles. We credit that
there is some similarity in the language but ultimately find those
similarities unpersuasive given the very specific references to ―actual
(express or implied) or apparent authority‖ and the absence of a
similarly explicit reference to respondeat superior. See UTAH CODE
§ 31A-23a-405(2). This sends a strong signal about how the
legislature intended the statute to operate.

                                   17
                DREW v. PACIFIC LIFE INSURANCE CO.
                        Opinion of the Court
the acts of their ―servants,‖ or employers liable for the acts of their
employees. See Drew v. Pac. Life Ins. Co., 2019 UT App 125, ¶¶ 21–22,
447 P.3d 1257; RESTATEMENT (THIRD) OF AGENCY § 7.07; RESTATEMENT
(SECOND) OF AGENCY § 230; see also RESTATEMENT (SECOND) OF
AGENCY § 219(1) (―A master is subject to liability for the torts of his
servants committed while acting in the scope of their employment.‖).
    ¶60 The court of appeals also relied on a U.S. Supreme Court
case, Burlington Industries, Inc. v. Ellerth, which applied a ―scope of
employment‖ respondeat superior standard to determine an
employer‘s vicarious liability for the acts of its employees. See 524
U.S. 742, 755–56 (1998) (citing sections 219 and 230 of the Second
Restatement of Agency, which elaborate on the ―scope of
employment‖ test); see also Drew, 2019 UT App 125, ¶ 22. And the
court of appeals cited Wardley Better Homes & Gardens v. Cannon and
M.J. v. Wisan, see Drew, 2019 UT App 125, ¶¶ 18, 24, both of which
utilize a respondeat superior analysis. See Wisan, 2016 UT 13, ¶¶ 48–
49; Wardley Better Homes & Gardens v. Cannon, 2002 UT 99, ¶¶ 25–27,
61 P.3d 1009 (examining whether an employee‘s frauds fell within
his ―scope of authority‖ by citing cases that apply the respondeat
superior ―scope of employment‖ test (citing, e.g., Birkner, 771 P.2d at
1056)).
    ¶61 Further, when the court of appeals analyzed the facts of this
case, it concluded that RSN‘s representations and misrepresentations
about Pacific‘s policies to make a sale ―served Pacific‘s interest[s]‖
and were ―consistent with the general work with which RSN was
entrusted.‖ Drew, 2019 UT App 125, ¶ 24. That analysis applies the
factors this court has utilized when assessing respondeat superior
liability. See Wisan, 2016 UT 13, ¶ 54; Birkner, 771 P.2d at 1056–57
(explaining that two respondeat superior ―scope of employment‖
factors are whether the conduct is ―of the general kind the employee
is employed to perform‖ and whether the acts were ―motivated, at
least in part, by the purpose of serving the employer‘s interest‖).
    ¶62 The Drews acknowledge that the court of appeals applied
the respondeat superior test Wisan described. See 2016 UT 13, ¶¶ 54,
59. But the Drews also assert that the court of appeals additionally
―took into account‖ and properly applied ―both the actual express
and implied authority standard‖ from Zions First National Bank v.
Clark Clinic Corp., 762 P.2d 1090 (Utah 1988). We disagree.
   ¶63 The court neither explained, nor cited, nor otherwise
outwardly accounted for the test for actual express authority we
applied in Zions First National Bank. Second, although the court of
appeals did quote the actual implied authority test from Zions First
National Bank, 762 P.2d at 1094, and distinguished the facts of an

                                  18
                          Cite as: 2021 UT 55
                         Opinion of the Court
implied authority case, Bodell Constr. Co. v. Stewart Title Guaranty Co.,
945 P.2d 119, 124–25 (Utah Ct. App. 1997), the court‘s analysis was
infused with respondeat superior principles. See Drew, 2019 UT App
125, ¶¶ 19–21. In fact, in the process of factually distinguishing from
Bodell, the court of appeals cited section 230 of the Second
Restatement of Agency, id. ¶ 21, which, as discussed above, pertains
to respondeat superior. See supra ¶ 59. And the rest of the court‘s
analysis relied upon other respondeat superior sources, as discussed
above. See supra ¶¶ 60–61. Therefore, to the extent the court of
appeals, in the Drews‘ words, ―took into account‖ the potential that
RSN acted with implied authority when it quoted Zions National
Bank, it did so only superficially. Respondeat superior principles are
what dominated the court of appeals‘ analysis. And that was error.
    ¶64 Pacific Life also avers that the court of appeals erred when it
relied on several extra-jurisdictional cases that employ standards
that are inconsistent with the actual express, actual implied, and
apparent authority tests recognized in Utah caselaw. We agree.
    ¶65 For example, the court of appeals dedicated a paragraph to
analogizing the Drews‘ situation to that in an unreported California
Court of Appeals case, Weyand v. Union Central Life Insurance Co., No.
G051071, 2016 WL 750433 (Cal. Ct. App. Feb. 26, 2016). See Drew,
2019 UT App 125, ¶ 23.12 The Weyand court held that an insurer may
be vicariously liable for its ―agent‘s acts and representations within
the ordinary scope of the insurance business . . . even if the agent
violates the insurer‘s instructions or limitations on the agent‘s
authority unless the injured insured had actual or constructive notice
of the limits on the agent‘s authority.‖ 2016 WL 750433, at *1; see id.
at *7.
    ¶66 Weyand does not shed much light on liability under section
405 for several reasons. First, it appears that the California rule
applies to ―general agent[s],‖ not necessarily other types of agents.
See id. at *4. And, since it has not been argued here that RSN was a
―general agent,‖ it is not clear, even if Utah followed such a rule, that
it would apply here. Second, the vicarious liability test in Weyand
appears to be some blend of respondeat superior and apparent
authority. The court examined: whether an action falls within the
_____________________________________________________________
   12 Weyand is an unpublished opinion. See Weyand v. Union Cent.
Life Ins. Co., No. G051071, 2016 WL 750433 (Cal. Ct. App. Feb. 26,
2016). An unpublished opinion ordinarily cannot be cited or relied
upon in California courts. See CAL. CT. R. 8.1115(a). Its persuasive
effect with us, therefore, is yet further reduced.

                                   19
                  DREW v. PACIFIC LIFE INSURANCE CO.
                          Opinion of the Court
―ordinary scope of the insurance business,‖ see id. at *1, *4, *5, *7;
whether the agent ―represented he had such authority,‖ id. at *6; and
whether the plaintiff had ―notice of any limits the insurer placed on
the agent‘s authority,‖ id. at *7; see id. at *5; see also id. at *6 (―[T]he
absence of substantial evidence of apparent or actual authority . . .
eliminates any basis upon which to impose vicarious liability . . .
under the doctrine of respondeat superior.‖ (citation omitted)). We
do not see how the Weyand court‘s ―ordinary scope of the insurance
business‖ test or blended respondeat superior-apparent authority
test fits with Utah Code section 31A-23a-405(2). And neither the
Drews nor the court of appeals offer any persuasive reason why
Weyand would help us understand Utah law on the topic.
    ¶67 The court of appeals also invoked Dias v. Nationwide Life
Insurance Co., 700 F. Supp. 2d 1204 (E.D. Cal. 2010). The court of
appeals cited Dias to conclude that RSN had authority to ―induce the
purchase of a policy . . . by misrepresenting the nature of a product
or policy term.‖ Drew, 2019 UT App 125, ¶ 19 (alteration in original)
(quoting Dias, 700 F. Supp. 2d at 1221). Like Weyand, Dias does not
reflect our relevant precedent. The Dias court employed a rule that
appears to blend implied authority and apparent authority, stating
that ―an insurance agent . . . possesses such powers as have been
conferred by the company, or as third persons have a right to
assume that he possesses under the circumstances,‖ Dias, 700 F.
Supp. 2d at 1220 (citation omitted), whereas persons who have
―knowledge of the limitations‖ imposed by a principal on an agent
―are bound by the restrictions imposed.‖ Id. at 1219–20 (citation
omitted). We find this blended test in Dias to be unhelpful to an
understanding of Utah‘s common law tests for actual and apparent
authority, from which Utah Code section 31A-23a-405(2) borrows.
Cf. supra ¶¶ 53–55; infra ¶ 83. And neither the court of appeals nor
the Drews have persuaded us otherwise. See Drew, 2019 UT App 125,
¶ 19.
    ¶68 We likewise are unpersuaded by the court of appeals‘
citation to Chicago Title Insurance Co. v. Washington State Office of the
Insurance Commissioner, 309 P.3d 372 (Wash. 2013). See Drew, 2019 UT
App 125, ¶ 22. There, the Washington Supreme Court held an
insurer liable for the illegal acts of its agent under section 161 of the
Second Restatement of Agency. See Chicago Title Ins. Co., 309 P.3d at
381–82. That restatement section applies to ―general agents‖ but not
―special agents.‖ See RESTATEMENT (SECOND) OF AGENCY § 161; id.
§ 161 cmt. h. Neither the court of appeals nor the Drews offer an
explanation as to why that applies to the facts of this case. Second,
section 161 applies even where ―the agent has neither authority nor
apparent authority,‖ id. § 161 cmt. a, but Utah Code section 31A-23a-

                                    20
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                         Opinion of the Court
405(2) specifically bases liability on actual and apparent authority.
Neither the court of appeals nor the Drews square this inconsistency.
See Drew, 2019 UT App 125, ¶ 22. We are therefore unpersuaded that
Chicago Title applies here.
   ¶69 In addition to the caselaw, the court of appeals invoked a
normative rationale to justify its broad reading of Utah Code section
31A-23a-405(2), reasoning that ―[i]t makes little sense to allow
insurance companies to grant broad solicitation authority to their
agents . . . and accept the benefits therefrom without holding them
accountable for the damages resulting.‖ Drew, 2019 UT App 125,
¶ 25. The Drews similarly urge us to interpret the statute broadly
because, they say, the purpose of the statute was intended to protect
consumers.
    ¶70 We agree there are a variety of policy reasons for allowing
insurers to be held liable for their agents, employees, and/or for
their ―appointed licensees.‖ See Steven N. Bulloch, Fraud Liability
Under Agency Principles: A New Approach, 27 WM. & MARY L. REV. 301,
303–07 (1986) (describing the ―prevention,‖ ―loss spreading,‖ and the
―allocation of resources‖ theories justifying vicarious liability); see
also id. at 311–14 (discussing protection of reasonable expectations
and promotion of business expediency as justifications for apparent
authority liability); Johnny Parker, Company Liability for a Life
Insurance Agent’s Financial Abuse of an Elderly Client, 2007 MICH. ST. L.
REV. 683, 700 (2007) (explaining the ―control‖ and ―enterprise
liability‖ theories for justifying respondeat superior); see also Wisan,
2016 UT 13, ¶ 51 (reasoning that an employer is more likely to satisfy
a judgment than an employee and ―is in a better position to ‗insure
against liability,‘‖ and threat of liability incentivizes employers to
take measures to ―reduce the incidence of tortious conduct‖
(citations omitted)).
    ¶71 But our conclusion that Utah Code section 31A-23a-405(2)
does not prescribe respondeat superior liability does not leave
consumers high and dry. An insurer may indeed be bound under
section 405(2) for the acts of its appointed licensees; but the test of
liability to be used in analyzing a claim that invokes section 405(2) is
whether the licensee possessed actual or apparent authority. That is
the test the legislature has imposed, and where ―the legislature has
spoken our role is limited. In the face of duly-enacted legislation we
no longer have a primary policymaking role.‖ Wisan, 2016 UT 13,
¶ 69.
   ¶72 In sum, the court of appeals erred in applying a respondeat
superior vicarious liability standard and blending standards from
other jurisdictions, when the Drews‘ claims are based on a statute

                                   21
                 DREW v. PACIFIC LIFE INSURANCE CO.
                         Opinion of the Court
that specifically premises insurer liability on actual and apparent
authority. See UTAH CODE § 31A-23a-405(2). We accordingly vacate
the court of appeals‘ rationale for concluding that RSN had authority
from Pacific.13
    III. THE DREWS ARE ENTITLED TO PARTIAL SUMMARY
           JUDGMENT BECAUSE RSN HAD APPARENT
           AUTHORITY TO MAKE REPRESENTATIONS
               ABOUT PACIFIC LIFE‘S PRODUCTS
    ¶73 Pacific Life argues that RSN acted outside of its actual and
apparent authority and that the court of appeals should have upheld
the district court‘s grant of summary judgment to them. The Drews
contend that RSN‘s acts fall within the ―scope of authority‖ granted
by Pacific under the actual authority standard from Zions First
National Bank v. Clark Clinic Corp., 762 P.2d 1090 (Utah 1988), as well
as an apparent authority standard.
    ¶74 We agree with Pacific Life that the court of appeals should
have upheld the district court‘s grant of summary judgment to
Pacific on the question of actual authority. But we also conclude that,
on the question of apparent authority, the district court erred in
granting summary judgment to Pacific and should have instead
granted partial summary judgment to the Drews. We therefore
affirm the court of appeals‘ grant of partial summary judgment to
the Drews, but do so on this alternative ground.
                   A. RSN Lacked Actual Authority
   ¶75 Actual authority includes both express and implied
authority. Zions First Nat. Bank, 762 P.2d at 1094. ―Express authority
exists whenever the principal directly states that its agent has the
authority to perform a particular act on the principal‘s behalf.‖ Id.
Implied authority includes ―acts which are incidental to, or are
necessary, usual, and proper to accomplish or perform, the main
authority expressly delegated to the agent.‖ Id. In other words, when
―the performance of certain business is confided to an agent, such
authority carries with it by implication authority to do collateral acts

_____________________________________________________________
   13 We provide no opinion on whether or the extent to which,
outside of section 405, an insurer can be held liable under common
law respondeat superior principles. As we have noted throughout,
the Drews anchored their case to section 405. We have no briefing
before us on the extent to which the Insurance Code might or might
not entirely preempt common law theories of liability so we leave
those questions for another case.

                                  22
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                        Opinion of the Court
which are the natural and ordinary incidents of the main act or
business authorized.‖ Id. at 1095. ―This authority may be implied
from the words and conduct of the parties and the facts and
circumstances attending the transaction in question.‖ Id.
   ¶76 The Drews urge us to uphold the court of appeals‘ reversal
of the district court‘s grant of summary judgment to Pacific. The
Drews contend that RSN acted with express and implied authority
from Pacific Life because the Producer‘s Contract authorized RSN to
―solicit and procure‖ the purchase of Pacific‘s products, and
describing and discussing the product or policy is a necessary and
natural part of procuring or soliciting the sale. The Drews also argue
that ―[w]hen RSN represented to the Drews that they should
purchase Pacific‘s policy for the purpose of selling it on the
secondary market, RSN was explaining a feature in Pacific‘s policy,‖
and therefore ―RSN‘s conduct falls squarely within the express
authority granted by Pacific to RSN as a soliciting agent.‖
    ¶77 We disagree with the Drews‘ analysis. The Producer‘s
Contract contained a number of express limitations that barred RSN
from engaging in the precise conduct for which the Drews seek to
hold Pacific liable. This leads us to conclude that RSN lacked actual
authority, either express or implied, to make misrepresentations. For
example, it is undisputed that Pacific‘s policy did not meet the
Drews‘ insurance needs, as they already had other life insurance at
the time. Selling them this policy was, therefore, contrary to the
prohibition in the Producer‘s Contract on soliciting policies that do
―not meet the customer‘s insurance needs and financial objectives.‖
See supra ¶¶ 9, 27. It is also undisputed that when the Drews
purchased Pacific‘s policy for the primary purpose of selling it on the
secondary market for a profit, Utah law prohibited issuing,
soliciting, or marketing a life insurance policy or annuity for the
―primary purpose of or with a primary emphasis on‖ selling the
policy on the secondary market. See UTAH CODE §31A-36-111(5); see
also supra ¶ 22 n.4. Therefore, soliciting the Drews‘ purchase of this
policy with a purpose prohibited by law was contrary to the
contractual bar on engaging in ―any act prohibited under this
contract . . . or by law.‖ See supra ¶¶ 8, 27. Further, when RSN told
the Drews that they would be able to sell the policy for a profit, that
violated the Contract‘s prohibition on ―making any promises
respecting any policy.‖ See supra ¶¶ 10, 27. This is enough to defeat a
claim based on actual authority as a matter of law.
   ¶78 The Drews contend that contractual limitations cannot
eliminate Pacific‘s liability for RSN‘s acts. The Drews assert that,
when the Producer‘s Contract prohibited RSN from making
misrepresentations and from selling products that did not meet the

                                  23
                DREW v. PACIFIC LIFE INSURANCE CO.
                        Opinion of the Court
customer‘s needs, ―Pacific simply by contract required RSN to do a
good job as a soliciting agent, namely to not commit fraud and to
accurately assess the insurance needs of a customer.‖ And, the
Drews continue, these limitations cannot allow Pacific to escape
liability.
    ¶79 There is both logic and force to that argument, but we find it
misdirected as a rationale for concluding that RSN possessed actual
authority, as opposed to apparent authority. Indeed, the Drews cite
to no Utah authority, and we can find none, that establishes that an
agent can have express or implied authority in the face of an
uncontradicted express limitation on his or her ability to act.14 Cf.
Zions First Nat. Bank, 762 P.2d at 1094 (explaining that implied
authority flows from ―the main authority expressly delegated to the
agent‖).
    ¶80 Many other courts hold that actual authority—express and
implied—generally does not include things that are ―specifically
forbidden‖ by the principal. See, e.g., Wigfall v. City of Detroit, 934
N.W.2d 760, 766 (Mich. 2019). Nor does it generally include actions
that are ―contrary to the express intentions of the principal.‖ See
Wolverine World Wide, Inc. v. Wolverine Canada, Inc., 653 F. Supp. 2d
747, 763 (W.D. Mich. 2009); see also H. Wayne Palmer & Assocs. v.
Heldor Indus., Inc., 839 F. Supp. 770, 780 (D. Kan. 1993) (―[E]very
delegation of authority, whether general or special, carries with it,
unless the contrary be expressed, implied authority to do all of those
acts, naturally and ordinarily done in such cases, which are
reasonably necessary and proper to be done in order to carry into
effect the main authority conferred.‖ (emphasis added) (emphasis
omitted from ―implied authority‖) (citation omitted)); Old Standard
Life Ins. Co. in Rehab. v. Duckhunt Fam. Ltd. P’ship, No. 2:05-CV-00536
PGC, 2006 WL 3716110, at *5–6 (D. Utah Dec. 14, 2006) (finding no
express authority to do things ―specifically prohibited,‖ and no
implied authority to do things contrary to the ―carefully limited . . .
scope‖ of authority); see also RESTATEMENT (THIRD) OF AGENCY § 2.02
cmt. e (AM. L. INST. 2006) (―[T]he principal may revoke or limit
authority subsequent to granting it. An agent‘s understanding at the
time the agent acts is controlling. If an agent knows that the
principal‘s reason for previously authorizing the agent to do an act is

_____________________________________________________________
   14 The Drews cite many of the same sources on which the court of
appeals relied. But, as we explained before, we don‘t find those cases
terribly helpful to an understanding of the statute. See supra ¶¶ 64–
68.

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                         Opinion of the Court
no longer operative, the agent does not have actual authority to do
the act.‖).15
    ¶81 To be clear, the written contract between RSN and Pacific
may not necessarily be the exclusive source of RSN‘s actual
authority. ―[A]uthority may be implied from the words and conduct
of the parties and the facts and circumstances attending the transaction
in question.‖ Zions First Nat. Bank, 762 P.2d at 1095 (emphases
added). Thus, RSN might have had actual authority if there were
evidence of conduct or other statements by Pacific Life or other facts
or circumstances demonstrating that Pacific Life had overridden the
contractual limitations and actually authorized or ratified RSN‘s
actions. But the Drews point to nothing other than the contract as the
source of RSN‘s actual authority. And the contract contains many
express limitations on RSN‘s authority, which RSN violated.
Specifically, RSN lacked express and implied authority to solicit the
Drews‘ purchase of a policy from Pacific that they did not need and
could not afford, and that was for the illegal, primary purpose of
selling it on the secondary market. No reasonable trier of fact could
find otherwise. The district court was therefore correct in granting
summary judgment to Pacific on the question of actual express and
actual implied authority. To the extent any part of the court of
appeals‘ decision to grant summary judgment to the Drews was
based on a conclusion that RSN had actual authority from Pacific, we
reverse and partially reinstate the district court‘s decision to grant
summary judgment on the question of RSN‘s lack of express and
implied authority.
           B. RSN Acted With Apparent Authority, and Partial
            Summary Judgment to the Drews Should Have been
                        Granted on that Basis
     ¶82 Even though RSN lacked actual authority from Pacific, it is
still possible for it to have possessed apparent authority. See Burdick

_____________________________________________________________
   15We note, however, that ―[t]he effect of contractual language on
a principal‘s liability for tortious misrepresentations made by an
agent is determined by contract-law principles, as well as agency-
law doctrines.‖ RESTATEMENT (THIRD) OF AGENCY § 7.08 cmt. c(4).
Some types of exculpatory clauses may be unenforceable as a matter
of public policy. See id. Further, if a contractual limitation on
authority were to conflict with a grant of authority, we would turn to
contract principles to interpret whether the grant or the limitation
wins. Because we conclude that RSN had apparent authority, we
need not wrestle with these questions in this opinion.

                                  25
                 DREW v. PACIFIC LIFE INSURANCE CO.
                         Opinion of the Court
v. Horner Townsend & Kent, Inc., 2015 UT 8, ¶ 21 n.11, 345 P.3d 531
(explaining that actual authority and apparent authority ―may exist
concurrently or there may be one and not the other‖ (citation
omitted)). While actual authority ―relates to a principal‘s
manifestations to the agent,‖ apparent authority ―relates to a
principal‘s manifestations to a third party.‖ Id. ¶ 21. ―[A]pparent
authority when present trumps restrictions that the principal has
privately imposed on the agent. . . . Apparent authority is distinct
from the circumstances of an agency relationship known to agent
and principal, which may not be observable by a third party . . . .‖
RESTATEMENT (THIRD) OF AGENCY § 2.03 cmt. c.
    ¶83 Apparent authority exists ―when a third party reasonably
believes the actor has authority to act on behalf of the principal and
that belief is traceable to the principal‘s manifestations.‖ Burdick,
2015 UT 8, ¶ 21 (quoting RESTATEMENT (THIRD) OF AGENCY § 2.03).
The three elements of apparent authority recognized in Utah are:
        (1) that the principal has manifested his [or her]
        consent to the exercise of such authority or has
        knowingly permitted the agent to assume the exercise
        of such authority; (2) that the third person knew of the
        facts and, acting in good faith, had reason to believe,
        and did actually believe, that the agent possessed such
        authority; and (3) that the third person, relying on such
        appearance of authority, has changed his [or her]
        position and will be injured or suffer loss if the act
        done or transaction executed by the agent does not
        bind the principal.
Luddington v. Bodenvest Ltd., 855 P.2d 204, 209 (Utah 1993) (alterations
in original) (citation omitted); Burdick, 2015 UT 8, ¶ 23 (citation
omitted).
   ¶84 The court of appeals did not address apparent authority.
The Drews nevertheless urge us to find that RSN had apparent
authority and to affirm the court of appeals‘ grant of summary
judgment to them on that ground.16 The Drews contend that ―the
undisputed facts support that RSN acted with apparent authority
_____________________________________________________________
   16 We may ―affirm the judgment appealed from if it is sustainable
on any legal ground or theory‖ that is both ―apparent on the record‖
and ―sustainable by the factual findings of the trial court.‖ State v.
Topanotes, 2003 UT 30, ¶ 9, 76 P.3d 1159 (citation omitted) (internal
quotation marks omitted); see also Bailey v. Bayles, 2002 UT 58, ¶ 13,
52 P.3d 1158.

                                   26
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                         Opinion of the Court
when it misrepresented to the Drews that they should purchase
Pacific‘s insurance for the purpose of selling the policy on the
secondary market.‖ Pacific urges us to find that RSN lacked
apparent authority on the same grounds as the district court did.
Pacific asserts that ―the only representation made to the Drews was
Pacific Life‘s name on its policy application,‖ and that it is ―not clear
the Drews even saw the Pacific Life name on the policy application,‖
and even if they had, that would still be insufficient because there
was no direct communication between the Drews and Pacific Life.
   ¶85 The district court cited the test set forth in Luddington v.
Bodenvest Ltd., 855 P.2d 204, 209 (Utah 1993), and analogized to Bodell
Construction Co. v. Stewart Title Guaranty Co., 945 P.2d 119 (Utah Ct.
App. 1997). The district court reasoned:
       Pacific Life made no manifestations to [the Drews] that
       the RSN Defendants had authority to make promises
       . . . regarding the purchase of life insurance for the
       purpose of selling that insurance on the secondary
       market or for any other alleged illegal act or omission
       noted in the Second Amended Complaint.
The court further reasoned that the Drews ―dealt exclusively with
the RSN Defendants and relied solely on their representations.‖ The
court concluded that ―the RSN Defendants‘ use of Pacific Life‘s
insurance application forms, without additional representations
from Pacific Life to [the Drews], was insufficient to establish that the
RSN Defendants were acting with apparent authority from Pacific
Life.‖ In other words, the district court determined that the first and
third elements of the Luddington apparent authority test had not been
met.
   ¶86 We disagree with the district court‘s articulation and
application of the apparent authority test and conclude the district
court erred in granting summary judgment to Pacific on that basis.
1. Pacific‘s Manifestations of Consent to RSN‘s Authority
    ¶87 We disagree with the district court‘s conclusion and Pacific‘s
contention that RSN‘s use of Pacific‘s application forms cannot
constitute a manifestation of consent to RSN‘s authority. See supra
¶¶ 84–85. We further disagree with Pacific‘s argument, and the
district court‘s implication, that the only way for Pacific to manifest
consent to RSN‘s authority, for the purpose of apparent authority, is
through direct communication with the Drews. See supra ¶¶ 84–85.
   ¶88 First, the alleged principal need not directly interact with the
plaintiff to establish apparent authority. It is correct that the first
prong of apparent authority requires showing that the principal

                                   27
                 DREW v. PACIFIC LIFE INSURANCE CO.
                         Opinion of the Court
―manifested his [or her] consent to the exercise of such authority‖ by
the agent or apparent agent. Luddington, 855 P.2d at 209 (alteration in
original) (citation omitted); Burdick, 2015 UT 8, ¶ 23. And apparent
authority ―flows only from the acts and conduct of the principal.‖
Zions First Nat. Bank, 762 P.2d at 1095. We have also said that ―one
who deals exclusively with an agent has the responsibility to
ascertain that agent‘s authority despite the agent‘s representations.‖
Id. (citation omitted). But that does not always require a direct
interaction between the principal and the plaintiff.
    ¶89 We have said multiple times that ―[t]he doctrine of apparent
authority has its roots in equitable estoppel,‖ and ―is founded on the
idea that where one of two persons must suffer from the wrong of a
third[,] the loss should fall on that one whose conduct created the
circumstances which made the loss possible.‖ Luddington, 855 P.2d at
209 (citations omitted); Burdick, 2015 UT 8, ¶ 22 (citation omitted).17
Another justification underlying apparent authority is that of
―business expediency—the desire that third persons should be given
reasonable protection in dealing with agents.‖ Am. Soc. of Mech.
Eng’rs, Inc. v. Hydrolevel Corp., 456 U.S. 556, 567 (1982) (quoting
RESTATEMENT (SECOND) OF AGENCY § 262, cmt. a (AM. L. INST. 1958));
see also Grease Monkey Int’l, Inc. v. Montoya, 904 P.2d 468, 475 (Colo.
1995) (en banc).
    ¶90 It benefits both the principal and the public for ―persons
dealing with agents [to] be able to rely upon apparently true
statements by agents who are purporting to act and are apparently
acting in the interests of the principal.‖ Am. Soc. of Mech. Eng’rs, Inc.,
456 U.S. at 567 (quoting RESTATEMENT (SECOND) OF AGENCY § 262,
cmt. a). Apparent authority ―promotes business expediency and
ensures the free flow of commerce‖ because it avoids the delay and
―inconvenience‖ that both the principal and the third party would
experience if principals had to ―constantly . . . confirm the scope of
their agents‘ authority.‖ Steven N. Bulloch, Fraud Liability Under
Agency Principles: A New Approach, 27 WM. & MARY L. REV. 301, 311–
12 (1986). ―Commerce flows much more smoothly when third parties
are permitted to act upon reasonable representations made by an
_____________________________________________________________
   17   Scholars similarly reason that ―[w]hen the conduct of a
principal creates in a third party reasonable expectations that the
agent has the authority to enter into a particular contract, the third
party should be allowed to enforce that contract against the principal
if it was negotiated through the agent.‖ Steven N. Bulloch, Fraud
Liability Under Agency Principles: A New Approach, 27 WM. & MARY L.
REV. 301, 311 (1986).

                                   28
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                         Opinion of the Court
agent on behalf of a principal and when third parties need not
inquire into the agent‘s authority to make such statements.‖ Id. at
314.
   ¶91 If we were to hold that establishing apparent authority
requires persons dealing with apparent agents to contact the
principal to verify the agent‘s authority, we would undermine the
business expediency rationale behind apparent authority. Apparent
authority would cease to exist as anything more than an academic
idea.
    ¶92 Therefore, when we said that ―one who deals exclusively
with an agent has the responsibility to ascertain that agent‘s
authority despite the agent‘s representations,‖ Zions First Nat. Bank,
762 P.2d at 1095 (citation omitted), we cannot have meant that the
person dealing with the agent must directly contact the principal to
verify the agent‘s authority. Rather, we read that statement from
Zions First National Bank as relating to the requirement that the
plaintiff‘s belief in the agent‘s authority must be not only a
subjective, actual belief, but must also be objectively reasonable. See
Burdick, 2015 UT 8, ¶ 21 (explaining that apparent authority requires
a third party to ―reasonably believe[] the actor has authority to act on
behalf of the principal . . . .‖ (quoting RESTATEMENT (THIRD) OF
AGENCY § 2.03)); see also Luddington, 855 P.2d at 209. This reasonable
belief must still be based on manifestations by the principal as to the
agent‘s authority, and not solely the representations of the agent; but
those manifestations need not be made in a direct interaction
between the principal and plaintiff. See RESTATEMENT (THIRD) OF
AGENCY § 3.03 cmt. b (―[A]n indirect route of communication
between a principal and third party may suffice, especially when it is
consistent with practice in the relevant industry.‖).
    ¶93 Second, applications for a principal‘s products and
marketing materials produced by the principal may, in some
instances, be indicia of authority. True, we said in Zions First National
Bank that ―[t]he furnishing of a rubber stamp bearing the name and
address of the principal . . . did not cloak [the agent] with apparent
authority to endorse corporate checks and receive payment for
them.‖ 762 P.2d at 1095 (third alteration in original) (quoting Pargas,
Inc. v. Taylor’s Est., 416 So. 2d 1358, 1362 (La. Ct. App. 1982)). And
the court of appeals quoted that statement in Bodell, 945 P.2d at 124.
But the district court here misconstrued the full context of those
quotes.
   ¶94 We borrowed the quoted language from a Louisiana case:
Pargas, Inc. v. Taylor’s Estate, 416 So. 2d 1358, 1362 (La. Ct. App.
1982). It is unclear whether, in Pargas, the principal had given its

                                   29
                 DREW v. PACIFIC LIFE INSURANCE CO.
                         Opinion of the Court
employee-agent the rubber stamp bearing the principal‘s signature,
or whether the agent had created or used the stamp on his own.
Further, the Louisiana Court of Appeals also rested its conclusion on
the fact that it was ―not reasonable under the circumstances
presented‖ for the plaintiff to rely on the agent‘s authority ―to apply
corporate checks to his personal benefit.‖ Id. Nor would it be
reasonable, the court explained, to rely on the agent‘s employment
status as an indicia of authority to endorse checks for the principal
because ―[i]f mere employment furnished apparent authority to
endorse checks[,] no business would be safe.‖ Id. Given everything
else that was going on in Pargas, we are not convinced the Pargas
court declared a rule that a rubber stamp bearing the employer‘s
name could never be an indicia of authority. And we are certainly not
convinced that we intended to rubber stamp any such conclusion.
    ¶95 In Zions First National Bank, the bank attempted to bind the
defendant company to a promissory note that had been executed by
one of the defendant‘s employees using ―facsimile signature stamps
of [the defendant‘s] officers.‖ 762 P.2d at 1092. We held that the
district court had inappropriately granted summary judgment to
Zions Bank on the question of apparent authority. Id. at 1095–96. As
in Pargas, it is unclear whether the agent in Zions created the
signature stamps on his own or whether the bank had given them to
the agent to use. See id. Further, the bank‘s vice president had
admitted under oath that the bank did ―not know of any specific
authorization for Zions First National Bank to accept stamped
signatures on [the] defendant‘s checks.‖ Id. at 1095. Moreover, the
company indicated that its employee was ―never authorized to sign
promissory notes.‖ Id. These facts suggest a genuine issue of material
fact on whether it was reasonable for the bank to accept stamped
signatures as an authorization for the defendant, when there was no
record of that being an established or accepted practice for that client
or for the industry. We are therefore unconvinced that Zions created
an unbending rule that signature stamps can never constitute an
indicia or manifestation of apparent authority.
    ¶96 Finally, the district court relied on Bodell Construction Co. v.
Stewart Title Guaranty Co., 945 P.2d 119 (Utah Ct. App. 1997). There,
the court of appeals held that a title insurance agent‘s use of a title
insurer‘s name on letterhead, title policies, and settlement statements
was insufficient to establish that the agent had apparent authority to
act as the title insurer‘s agent in escrow, settlement, and closing
transactions. Id. at 124. But the district court missed the full context.
First, it appears that the agent created its own letterhead and placed
the title insurer‘s name on it and other documents on its own. See id.
at 122 (―First Title used Stewart Title‘s name on its settlement

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                          Cite as: 2021 UT 55
                         Opinion of the Court
statements and also its letterhead.‖); id. at 124 (―Any appearance of
authority to act as Stewart Title‘s agent in escrow, closing, or
settlement transactions came from First Title, not Stewart Title.‖).
Further, the dispute was about whether the agent had authority to
conduct certain actions that differed in kind from the principal‘s
primary business. That is, whether the alleged agent had authority to
conduct escrow, settlement, and closing transactions for a title
insurance company. See id. Those facts speak to the question of
whether it was reasonable for the plaintiff to believe the alleged
agent had such out-of-the ordinary authority, not necessarily
whether there were any indicia of authority in the first instance.
    ¶97 Similarly, when we said in Burdick that a business card
bearing the name of the defendant was, ―alone . . . not sufficient to
constitute a manifestation of authority‖ by the defendant, it again is
unclear whether the alleged agent manufactured the business card
on his own or whether the defendant had given him the card. See
Burdick, 2015 UT 8, ¶¶ 37–39. Further, the court‘s ultimate conclusion
there—that the agent lacked apparent authority—turned on the
totality of the circumstances indicating an absence of indicia of
authority. The court reasoned that, for one of the plaintiffs relying on
the business card as indicia of agency, that plaintiff also ―did not
open a regular account with [the principal], [he] did not send [his]
checks to the brokerage, and [he] never received a single receipt,
statement, or other communication bearing [the principal]‘s name.‖
Id. ¶ 39 (alterations in original) (citation omitted). That again appears
to speak to the reasonableness of the reliance on the business card,
and not a statement that materials from the principal cannot serve as
indicia of authority to act on the principal‘s behalf.
    ¶98 Further, the facts of this case are different from those on
which the district court relied. Unlike in Zions and the other cases
discussed above, the undisputed record here establishes that Pacific
provided RSN with insurance forms for use in selling its products,
and RSN provided those forms to the Drews. See supra ¶ 16. Nothing
indicates that RSN manufactured those application forms on its own
to create the appearance that it was working for Pacific. Therefore,
even though the Drews did not speak directly with Pacific, see supra
¶ 16, Pacific‘s act of giving its policy application forms to RSN could
constitute a manifestation of consent to RSN‘s authority to solicit
applications for Pacific‘s policies and provide information about
them. See RESTATEMENT (THIRD) OF AGENCY § 3.03 cmt. b (―[A]n
indirect route of communication between a principal and third party
may suffice, especially when it is consistent with practice in the
relevant industry.‖).

                                   31
                 DREW v. PACIFIC LIFE INSURANCE CO.
                         Opinion of the Court
   ¶99 Moreover, even if application forms were insufficient at
common law to constitute an appearance of authority, the statute at
the heart of the Drews‘ liability theory says otherwise:
        There is a rebuttable presumption that every insurer is
        bound by any act of its appointed licensee performed
        in this state that is within the scope of the appointed
        licensee‘s actual (express or implied) or apparent
        authority, until the insurer has canceled the appointed
        licensee‘s appointment and has made reasonable
        efforts to recover from the appointed licensee its policy
        forms and other indicia of agency.
UTAH CODE § 31A-23a-405(2) (emphasis added). In other words,
―policy forms‖ given by an insurer to its appointed licensee are
―indicia of agency‖ under the statute. We must, therefore, conclude
that the forms Pacific gave RSN may constitute a manifestation of
consent to RSN‘s authority to procure or solicit applications for
Pacific‘s policies.
    ¶100 The district court therefore erred in granting summary
judgment to Pacific on the ground that the forms could not, as a
matter of law, manifest an appearance of authority. The question
then becomes what the Drews actually saw, knew, and reasonably
believed about RSN‘s authority to act on behalf of Pacific Life.
2. The Drews‘ Knowledge of the Relevant Facts and Reasonable
   Belief in RSN‘s Authority
    ¶101 The second element of apparent authority requires that
the person relying on the authority ―knew of the facts and, acting in
good faith, had reason to believe, and did actually believe, that the
agent possessed such authority.‖ Luddington, 855 P.2d at 209
(citation omitted); Burdick, 2015 UT 8, ¶ 23 (citation omitted). In
other words, the person must have actually known of the relevant
facts establishing the principal‘s manifestation of consent to the
alleged agent‘s authority and, based on that knowledge, the person
must have actually, subjectively believed and objectively, reasonably
believed in that authority. Burdick, 2015 UT 8, ¶ 21.
    ¶102 To establish this second element of apparent authority,
the Drews primarily rest on their assertion that they ―believed that
RSN was the agent of Pacific because RSN had the forms and other
information necessary to sell Pacific‘s products.‖18 Pacific questions
_____________________________________________________________
   18The Drews also contend that Pacific manifested consent to
RSN‘s authority because it ―contracted with RSN and gave notice to
                                                   (continued . . .)

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                         Cite as: 2021 UT 55
                        Opinion of the Court
the Drews‘ actual knowledge of the relevant facts, asserting that it is
―not clear the Drews even saw the Pacific Life name on the policy
application.‖ Pacific also avers that ―Mr. Drew signed the
application without reading any of its contents because [RSN]
represented that [it] would fill out the rest.‖
   ¶103 The Drews admit that they signed the insurance forms
with many details blank after RSN assured them that RSN would fill
in the details later. Supra ¶ 17. Mr. Drew also testified that ―we
didn‘t read most of the things‖ RSN provided. Supra ¶ 17. Pacific
pointed to these pieces of testimony in their memorandum
supporting their summary judgment motion at the district court.
And they repeated those citations in their briefing to the court of
appeals and to us.
    ¶104 But even if the Drews signed Pacific‘s forms with details
left to be inserted, that would not negate the fact that Pacific‘s name
was on their form. Nor does the Drews‘ failure to read most things
necessarily mean that the Drews did not see Pacific‘s name on the
application forms. To the contrary, Mr. Drew testified that he ―felt‖
that RSN ―represented Pacific Life and had the authority to do
whatever it curtailed to sign‖ the forms, not only because RSN ―told
us that [they] represented each‖ insurance company,19 but also

the world through public filings that RSN was its agent.‖ We agree
with the Drews that Pacific‘s act of appointing RSN as its licensee
and making public filings with the state insurance commissioner
could constitute a manifestation of consent to RSN‘s authority under
the first element of apparent authority. But we also agree with
Pacific that those public filings, as well as the Producer‘s Contract,
are only relevant to apparent authority if the Drews actually knew of
those filings, the appointment, or the Producer‘s Contract. Under the
second element of apparent authority, notice to the world at-large—
without notice to the Drews—is insufficient. See Luddington, 855 P.2d
at 209 (requiring the injured party to establish that they ―knew of the
facts‖ (citation omitted)). The Drews do not provide us with any
record evidence that supports the conclusion that they actually knew
of Pacific‘s public filings or appointment of RSN as its licensee. We
therefore do not further consider this reference to Pacific‘s public
filings as a potential basis for concluding that RSN acted with
apparent authority.
   19 Mr. Drew also testified that he believed RSN represented
multiple insurance companies and ―represented the company that he
was talking about insuring with me.‖ Supra ¶ 18. To the extent the
                                                    (continued . . .)

                                  33
                 DREW v. PACIFIC LIFE INSURANCE CO.
                        Opinion of the Court
because RSN ―gave me all the information.‖ Supra ¶ 18. Mr. Drew
explained that his basis for believing that RSN was ―representing‖
Pacific was ―the same‖ as for his belief that RSN also represented
another company, Phoenix, because RSN had given him
―information and the forms and so forth that we went through.‖
Supra ¶ 18. Similarly, when Mrs. Drew was asked if RSN ever told
her that RSN ―worked for Pacific Life,‖ she responded, ―Well, [RSN]
was selling your product and so it was on your papers.‖ Supra ¶ 19.
Mrs. Drew reiterated that she believed RSN was an ―agent‖ of
Pacific Life and other companies because RSN ―had papers from‖
Pacific Life and other companies. Supra ¶ 19. The Drews cited these
portions of their depositions in their memoranda supporting their
motion for summary judgment. And they repeated this argument in
their briefing to the court of appeals and to us.
    ¶105 The district court did not address the knowledge element
of apparent authority in its summary judgment decision. However,
both parties cited the evidence on this point to the district court. We
conclude that the evidence in front of the district court on summary
judgment establishes that the Drews knew that they were signing
Pacific Life forms and, based on that, they actually believed RSN
had authority from Pacific to make representations about Pacific‘s
products. That is sufficient to establish the Drews‘ actual knowledge
of the facts relevant to Pacific‘s manifestation of RSN‘s authority,
and to establish the Drews‘ subjective belief therein. The only piece
of contrary evidence that Pacific Life used to argue against the grant
of summary judgment—that the Drews failed to read other details
on the forms—does not create a genuine dispute of material fact as
to the relevant question: whether the Drews saw Pacific‘s name on
the forms and, based on that, developed a belief about RSN‘s
authority.
    ¶106 The Drews‘ belief is also objectively reasonable to the
extent they believed that ―RSN acted with apparent authority when
it misrepresented to the Drews that they should purchase Pacific‘s
insurance for the purpose of selling the policy on the secondary
market.‖ A reasonable person of ordinary prudence could assume

Drews‘ belief in Pacific‘s authority was based on representations of
authority made by RSN, that is insufficient to establish apparent
authority. Apparent authority ―flows only from the acts and conduct
of the principal.‖ Zions First Nat. Bank, 762 P.2d at 1095. But, as
discussed above and in this section, apparent authority may flow
from Pacific‘s act of giving RSN its policy application forms for use
in soliciting applications.

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                          Cite as: 2021 UT 55
                         Opinion of the Court
that if a salesperson has authority to solicit and submit application
forms for a company‘s products, then the salesperson also has
authority to describe features, uses, and advantages and
disadvantages of the product. Otherwise, the salesperson would be
nothing more than a vessel for carrying forms. No reasonable juror
could conclude otherwise in the absence of additional facts that are
not present here. See RESTATEMENT (THIRD) OF AGENCY § 3.03 cmt. b
(―A principal may also make a manifestation by . . . placing an agent
in charge of a transaction or situation. Third parties who interact
with the principal through the agent will naturally and reasonably
assume that the agent has authority to do acts consistent with the
agent‘s position or role unless they have notice of facts suggesting
that this may not be so. A principal may make an additional
manifestation by permitting or requiring the agent to serve as the
third party‘s exclusive channel of communication to the principal.‖).
Pacific Life has pointed to nothing in the record that would create a
genuine issue of material fact on the question of the reasonability of
the Drews‘ belief that RSN had authority to make representations
about Pacific Life‘s products.
3. The Drews‘ Change in Position Based on Their Reliance on
   RSN‘s Appearance of Authority
    ¶107 The third and final element of apparent authority is that
the plaintiff, ―relying on such appearance of authority, has changed
his [or her] position and will be injured or suffer loss if the act done
or transaction executed by the agent does not bind the principal.‖
Luddington, 855 P.2d at 209 (alteration in original) (citation omitted).
―[A] plaintiff must establish that he relied on the manifestation of
authority—that is, that he changed his position as a result of the
appearance of authority.‖ Burdick, 2015 UT 8, ¶ 27.20
   ¶108 At the district court, the Drews asserted in their summary
judgment memorandum that ―Pacific‘s conduct caused the Drews to
have the belief that . . . RSN w[as] authorized to represent Pacific,‖
and that the Drews ―suffered significant losses as a result of RSN‘s
misconduct.‖ The Drews also explained that they chose to purchase
a $1.5 million policy from Pacific Life not because they needed or
wanted life insurance, but solely because of the ―representations
from RSN about profiting from selling insurance policies on the
_____________________________________________________________
   20 We note that this differs from the Restatement (Third) of
Agency, which does not require reliance to establish apparent
authority. We considered and rejected that specific piece of the
Restatement in Burdick, 2015 UT 8, ¶ 27.

                                  35
                 DREW v. PACIFIC LIFE INSURANCE CO.
                         Opinion of the Court
secondary market,‖ citing the multiple times Mr. Drew repeated this
assertion in his deposition. Pacific did not materially dispute that
assertion.21
    ¶109 In their briefing to the court of appeals, the Drews more
expressly connected the dots by asserting that, ―[i]n reliance on
Pacific‘s manifestation of RSN‘s authority, the Drews entered into an
insurance contract with Pacific and paid Pacific large sums of
money.‖ In their briefing to us, the Drews argue that they believed
RSN had apparent authority to advise the Drews to ―purchase
Pacific‘s insurance for the purpose of selling the policy on the
secondary market.‖ See supra ¶¶ 102–06. The Drews further assert,
and Pacific agrees, that they submitted an application to purchase
life insurance from Pacific ―[b]ased upon the representations from
RSN about profiting from selling the policy on the secondary
market,‖ and that they subsequently purchased a $1.5 million policy
from Pacific.
    ¶110 Pacific did not squarely address the reliance element of
apparent authority in their summary judgment memoranda. The
closest Pacific came was its statements that Mr. Drew had testified
that ―he did not care who issued the policy. He simply followed
[RSN‘s] recommendations,‖ and that Mr. Drew ―bought the
insurance not for the insurance fact itself, but as to what [RSN]
suggested that [they] do and that [they] would be able to make some
additional monies,‖ and that it ―wasn‘t the insurance per se‖ that the
Drews cared about, ―it was what it would sell for.‖ Pacific repeated
this statement to the court of appeals. Pacific‘s briefing to us appears
not to address the reliance and injury element of apparent authority
at all.
   ¶111 The district court addressed this element only tangentially.
The court concluded that the Drews ―dealt exclusively with the RSN

_____________________________________________________________
   21  Pacific responded that the Drews‘ deposition testimony
mentioned representations made by an RSN employee, not RSN. But
Pacific did not dispute the Drews‘ assertion that they purchased the
Pacific policy based on representations about selling the policy on
the secondary market. And Pacific does not argue to us that the acts
of RSN‘s employees should not be attributed to RSN. We therefore
consider the relevant point—that the Drews purchased the Pacific
Life policy based on their belief in and reliance upon RSN‘s
representations about the opportunity to profit from selling the
policy on the secondary market and that the Drews believed RSN
had authority to make such representations—to be undisputed.

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                         Cite as: 2021 UT 55
                        Opinion of the Court
Defendants and relied solely on their representations,‖ and ―did not
rely on any representation from Pacific Life as to the authority of the
RSN Defendants to act on behalf of Pacific Life.‖ But this speaks
more to the question of whether Pacific made any manifestations of
consent to RSN‘s authority. See supra ¶¶ 87–100. It does not really
counter the argument that the Drews changed position as a result of
their reliance on the statements RSN made with the appearance of
authority.
    ¶112 In other words, the Drews placed evidence before the
district court demonstrating that they believed RSN had authority
from Pacific to make representations about Pacific‘s products. They
pointed to evidence in the record that showed they reasonably
believed that Pacific Life had authorized RSN to act in its name
because RSN had Pacific‘s forms. The Drews also placed evidence
before the court that they relied on RSN‘s appearance of authority
and its representations about Pacific Life‘s products when they
decided to purchase a policy with sizable premiums. At no time has
Pacific Life pointed to anything in the record that would create a
genuine issue of material fact on that question. 22 As a result, the
Drews were entitled to summary judgment on the question of
whether RSN acted with apparent authority from Pacific Life when it
made representations about buying and reselling Pacific‘s
products—it did. And the Drews are entitled to summary judgment
on the question of whether they are entitled to the benefit of the

_____________________________________________________________
   22  But we note that the question of whether the Drews reasonably
relied on RSN’s appearance of authority to make representations about
Pacific‘s products for the purpose of establishing apparent authority
is different than the question—one not before this court—of whether
the Drews justifiably relied on the substance of RSN’s representations
(that they could sell the policies on the secondary market for a
sizeable profit) for the purpose of establishing the underlying
substantive claim of fraudulent misrepresentation. See RESTATEMENT
(SECOND) OF TORTS § 525 (AM. L. INST. 1977) (―One who fraudulently
makes a misrepresentation of fact, opinion, intention or law for the
purpose of inducing another to act or to refrain from action in
reliance upon it, is subject to liability to the other in deceit for
pecuniary loss caused to him by his justifiable reliance upon the
misrepresentation.‖ (emphasis added)). Our opinion does not speak to
that second question.

                                  37
                 DREW v. PACIFIC LIFE INSURANCE CO.
                         Opinion of the Court
rebuttable presumption that Pacific Life is bound by RSN‘s actions—
they are.23
                           CONCLUSION
   ¶113 We vacate the court of appeals‘ determination that RSN
was an ―agent‖ of Pacific Life based on Utah Code section 31A-1-
301(88)(b) (2010). See Drew v. Pac. Life Ins. Co., 2019 UT App 125,
¶¶ 12–13, 447 P.3d 1257. The Drews‘ theory of insurer liability is
premised on Utah Code section 31A-23a-405(2). To assess whether

_____________________________________________________________
   23 At oral argument before us, Pacific Life argued that it cannot be
held liable for RSN‘s actions under Utah Code section 31A-23a-
405(2) because RSN began having conversations with the Drews
about buying life insurance policies to sell on the secondary market
before Pacific Life appointed RSN as its licensee. While this
argument resembles an argument Pacific made to district court, see
supra ¶ 25, Pacific did not raise this argument in their briefing to us.
Although the background section of Pacific‘s brief outlined the
chronology, Pacific did not develop a legal argument based on that
timeline. In other words, Pacific Life offered no argument in its
appellate briefs that section 405(2)‘s rebuttable presumption would
not bind an insurer where the scheme to defraud began prior to the
appointment of a licensee, but continued and culminated after
appointment. We offer no opinion on that question because Pacific
waived the argument by not raising it on appeal until oral argument.
See State v. Johnson, 2017 UT 76, ¶ 16, 416 P.3d 443.

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                         Cite as: 2021 UT 55
                       LEE, A.C.J., dissenting
Pacific Life is presumed to be bound by RSN‘s actions under that
statute, a court must examine whether RSN was Pacific‘s ―appointed
licensee‖ and, if so, whether RSN acted within its ―actual (express or
implied) or apparent authority.‖ We hold that RSN was Pacific‘s
―appointed licensee.‖ And we hold that, although RSN lacked actual
authority, either express or implied, from Pacific, RSN acted with
apparent authority when it made representations about Pacific‘s
products in an effort to sell a policy to the Drews.
    ¶114 Because there are no genuine issues of material fact that
would prevent the entry of partial summary judgment on the issue
of RSN‘s apparent authority from Pacific Life, we remand with
instructions to the district court to enter partial summary judgment
to the Drews on that issue.

   ASSOCIATE CHIEF JUSTICE LEE, dissenting:
    ¶115 This is an important case raising significant questions
under our law of vicarious liability in tort. Such questions generally
are governed by our common-law cases. As pleaded by the plaintiffs
and argued by the parties, however, these issues come to us under a
statute—Utah Code section 31A-23a-405.
   ¶116 It is by no means clear, however, that the cited statute has
any application to this case. The statute may have nothing to do with
an insurer‘s vicarious liability in tort. It may speak only to whether
an insurer is contractually ―bound‖ to provide insurance coverage for
a given ―loss‖ or ―risk.‖ See UTAH CODE § 31A-23a-405(1)–(3) (using
these terms).
    ¶117 That seems implied by the statute‘s focus on what an
insurer is ―bound by‖—and its lack of any reference to the tort
notion of ―liability.‖ See id. And it seems reinforced by the specific
remedy provided in the event that a ―licensee‖ with ―authority to
bind more than one insurer on a particular risk agrees to bind
coverage on a particular risk, but fails to outwardly indicate‖ where
―the risk is placed,‖ and ―a loss occurs‖ ―before the risk is placed
with a particular insurer‖: the ―court may equitably apportion the
loss among all insurers with which the licensee had binding
authority as to the particular type of risk.‖ Id. § 31A-23a-405(3).
   ¶118 No party has questioned whether this statute‘s terms
apply to the vicarious liability issues presented for our review. ―And
the court lacks the power to second-guess the pleading decisions of
the parties—to search the record for claims that were not pleaded by
the parties but that we might prefer to resolve.‖ Utah Stream Access

                                   39
                DREW v. PACIFIC LIFE INSURANCE CO.
                        LEE, A.C.J., dissenting

Coal. v. VR Acquisitions, LLC, 2019 UT 7, ¶ 42, 439 P.3d 593 (citation
omitted) (internal quotation marks omitted).
   ¶119 That said, the Drews have pleaded and presented a claim
for vicarious liability in tort. And it is the court‘s ―province and
duty‖ to ―get the law right‖ in our disposition of that claim, ―even if
in so doing we establish a standard that differs from either of the
approaches presented in the briefing on appeal.‖ McDonald v. Fid. &
Deposit Co. of Md., 2020 UT 11, ¶ 33, 462 P.3d 343.
    ¶120 I see substantial room to doubt whether the vicarious
liability issues presented in this case are controlled by the cited
statute. With that in mind, I would ask the parties to address that
question on supplemental briefing. See State v. Johnson, 2017 UT 76,
¶ 45, 416 P.3d 443 (stating that ―an appellate court should typically
allow some form of argument from the parties,‖ as under a
supplemental briefing order, before resolving an issue on a standard
―of the court‘s own invention‖). And if we decided that the Drews‘
claims are governed by the common law, I would remand the case to
the district court for further proceedings consistent with our opinion.
See id. (noting that remand may be an effective means of preserving
fairness to the parties, ―particularly when further factual
determinations are necessary‖).

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