Court Opinion

ID: 9701208
Source: CourtListenerOpinion
Date Created: 2023-08-25 22:10:42.521387+00
Date Added: 2024-06-11T18:21:20.912360
License: Public Domain

Dissenting Opinion by
Chief Justice LAMBERT.
I respectfully dissent from the majority opinion on the view that Appellant stated a *58claim against the franchisor Papa John’s for apparent or ostensible agency based on his reliance on its name, advertising, and the external indicia of responsibility such as signage and uniforms. The basis for a claim of apparent agency should not, as the majority suggests, depend on the degree of actual control exercised by the franchisor; rather, it arises from the reliance of the party dealing with the ostensible agent of the franchisor. In this case, Appellant specifically stated that he did not arbitrarily choose a restaurant to order from, but specifically decided to order from Papa John’s.
The principle of ostensible agency, now in grave doubt, has long been recognized in Kentucky. In Paintsville Hospital,1 we adopted the section of the Restatement (Second) of Agency, § 267 (1958), dealing with reliance upon the apparent authority of an agent, as follows:
One who represents that another is his servant or other agent and thereby causes a third person justifiably to rely upon the care or skill of such apparent agent is subject to liability to the third person for harm caused by the lack of care or skill of the one appearing to be a servant or other agent as if he were such.
The 2006 version of this provision, Restatement (Third) of Agency § 2.03 (2006), states its formulation of the rule of apparent agency as follows:
Apparent authority is the power held by an agent or other actor to affect a principal’s legal relations with third parties 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.
(Emphasis added.)
Advertising and branding are the common means by which manifestations of apparent agency are made.2 The manifestations should be interpreted according to what a third party reasonably understands, not by what the principal or agent knows or should have known.3 Uniformity of signs, design and color scheme leads the public to believe that enterprises are under common ownership and that they conform to common standards.4 A jury could reasonably find that Papa John’s intended to persuade customers that it would provide the pizza McCoy purchased. The majority opinion fails to distinguish this case from the general rule of ostensible agency. Instead, it appears to have tailored a new rule, contrary to the Restatement and our decisions, to fit franchisors.
In this ease, Appellant stated a claim for ostensible agency based on his belief that he was dealing with a national food vendor and its employees. Appellant had no reason to know that he was actually dealing with an employee of an unknown company, RWT, Inc., rather than Papa John’s. He called a telephone number for Papa John’s listed in the local phone book. There was no way for Appellant or other customers to know that they were dealing with a franchisee rather than the franchisor Papa John’s. Nothing about the encounter informed McCoy that he would be dealing with an employee of a local franchisee rather than a Papa John’s employee.
*59Closely analogous to this case is a 1934 decision of this Court applying the doctrine of ostensible agency to an earlier era’s franchisor. In Middleton v. Frances5 a taxi cab owner arranged with the People’s Taxie Company to use its offices and display its sign on his car for the purpose of soliciting and providing taxi transportation. People’s Taxie did not own or control the car in question nor was the owner or operator of the car an employee of People’s Taxie. When the operator negligently injured another, the question of ostensible agency arose. After noting that neither People’s Taxie nor its owner had anything to do with the operation of the other car, the Court nevertheless held it liable for the damages.
Has not the People’s Taxie Company by allowing Harris from and after July 20, 1933, to operate this car from its central office, to cruise about over the city with the name “Peoples Taxi-cab Company” displayed upon it — though it be admitted he was doing all this for Ashley — been guilty of such want of ordinary care, and so held him out and so allowed Harris to hold himself out as to make Harris its agent as to third parties who perhaps took passage with him as a result of the appearances it allowed him to make? We think it has. Such seems to be the rule.6
It is naive to suggest that one who orders pizza from Papa John’s International is depending on only the “quality and expected taste of the pizzas ordered.” One who chooses to purchase a national name brand product, does so on the assurances of quality, safety, and trust associated with the national brand. This includes the employees who prepare, serve and deliver the product. The decision goes far beyond the taste of the pizza. Particularly is this true when delivery of the product requires the purchaser to open his door to a stranger.
Appellant should have been permitted to prove his reliance on Papa John’s. Questions of apparent agency are for the jury.7 Thus, I would reverse the trial court’s matter of law determination that Papa John’s was not liable, and submit the apparent agency question to the jury.

. Paintsville Hosp. Co. v. Rose, 683 S.W.2d 255, 257, 259 (Ky.1985).

. Billops v. Magness Const. Co., 391 A.2d 196, 198 (Del.1978).

. Paintsville Hospital, 683 S.W.2d at 259, citing Restatement (Second) of Agency § 267.

. Orlando Executive Park, Inc. v. P.D.R., 402 So.2d 442, 450-451 (Fla.App.1981) (Howard Johnson’s motor lodges).

. 257 Ky. 42, 77 S.W.2d 425 (1934).

. Id. at 426.

.City of Delta Junction v. Mack Trucks, Inc., 670 P.2d 1128, 1130 (Alaska 1983); Crinkley v. Holiday Inns, Inc., 844 F.2d 156 (4th Cir.1988); Billops, 391 A.2d at 199.