Court Opinion

ID: 9633158
Source: CourtListenerOpinion
Date Created: 2023-08-22 11:35:47.688597+00
Date Added: 2024-06-11T13:09:25.354865
License: Public Domain

HERNANDEZ, Judge (specially concurring). I concur in the reversal of the judgment of the trial court solely for the reasons stated below. The issue dispositive of this appeal is whether a genuine issue of fact exists with respect to the relationship between Chevron, the lessor, and Sharp, the lessee as this relationship affected the plaintiff. “Whether or not a genuine issue of fact exists depends on the peculiar facts of each case.” Goodman v. Brock, 83 N.M. 789, 498 P.2d 676 (1972). In ruling on a motion for summary judgment, all reasonable inferences drawn from the matters before the court are to be drawn in favor of the party opposing the motion. Goodman v. Brock, supra. Montoya v. City of Albuquerque, 82 N.M. 90, 476 P.2d 60 (1970). Plaintiff was the owner of a Toyota automobile which he had had repaired by defendant Sharp at the defendant’s service station. Sharp, in addition to operating the service station, also maintained a “four wheel drive center” on the premises and advertised this repair center by a sign on a jeep vehicle kept at the station. Sharp stated that as far as he was concerned the service station and the repair center were “all one business.” Sharp, operated the service station pursuant to a lease agreement between himself as lessee and Chevron Oil Company as lessor. The station was advertised as a Chevron station, sold Chevron products and dispensed gasoline and oil provided by the . Chevron organization. Both Sharp and his employees wore uniforms containing a Chevron emblem. Calling cards used as advertising materials by Sharp billed the station as “Lee Sharp Chevron.” Customers of the Sharp station were permitted to charge purchases of both products and repairs on Chevron credit cards. By the terms of the agreement running between Chevron and Sharp, Sharp was obligated to purchase his petroleum products from Chevron. He had an obligation to promote the sale of various other Chevron products and to display those products in prominent and convenient places. His hours of operation were regulated by the agreement and Chevron had the right of inspection of the premises to ensure that the Chevron image was not tarnished by improper or inefficient operation. The operation of the repair center was an integral part of the operation of the service station as a whole. An examination of the telephone book advertising for Chevron stations shows that the Sharp station was included in a listing entitled “Where to get service.” Moreover, Chevron owned the premises on which the Sharp station was located; and the Chevron organization operated other stations in the Albuquerque area directly without a lease arrangement. There is no evidence in the record that any advertising or publicity distinctions are drawn between the leased stations and those stations operated by Chevron sufficient to alert the general public to the differences. On this appeal Chevron has attempted to set up the lease and operating agreements running between itself and Sharp as dis-positive of the issue of Chevron’s liability to plaintiff. The “Dealer Lease” and the “Sales Agreement” set out in the record do, on their terms, significantly limit Chevron’s control and thereby limit its liability to third parties for the negligent acts or omissions of Sharp or Sharp’s employees. However, it appears from the record that neither of these agreements were made known to patrons of Chevron’s service stations or to the public generally. Secret or private agreements between principal and agent or master and servant cannot, as a general rule, be used to bind third parties who deal with the servants or agents with no knowledge of the agreements. Sterling v. B. & E. Constructors, Inc., 74 N.M. 708, 397 P.2d 729 (1964); South Second Livestock Auction, Inc. v. Roberts, 69 N.M. 155, 364 P.2d 859 (1961). If plaintiff had no knowledge in fact of the agreements between Chevron and Sharp, the agreements cannot be used by Chevron to insulate itself from liability to third parties. Sterling v. B. & E. Constructors, Inc., supra. I believe that Chevron may be liable under the doctrine of respondeat superior for Sharp’s actions. That doctrine “is applicable during the period of time in which the prinicpal has the right to control an agent’s or servant’s physical actions.” McCauley v. Ray, 80 N.M. 171, 453 P.2d 192 (1968). Since the relationship existing between Sharp and Chevron is crucial to a determination of liability I believe that the proper test is that set out in Shaver v. Bell, 74 N.M. 700, 397 P.2d 723 (1964) : “Whether a station operator is an employee of an oil company or an independent contractor depends on the facts of each case, the principal consideration being the control, or right to control, of the operation of the station.” Inferences drawn from the record give me reason to believe that Chevron by its various advertising schemes, encouraged its lessee/operators to establish automobile repair facilities on the station premises. The telephone book advertising, for example, lists the Chevron stations in the Albuquerque area under a subheading of “Where to Get Service." The advertising schemes of Chevron indicate that Chevron attempts to convey the idea that service stations carrying its emblem are “full-service” establishments able to perform most tasks of automobile maintenance and repair. Furthermore, there is evidence in the record from which it can be inferred that Chevron personnel knew of, and at least tacitly approved of, Sharp’s establishing of the repair center at the station. Under the terms of the “dealer lease” Chevron had the authority to make periodic inspections of the Sharp station premises to ensure that the facilities were kept clean and neat, that the Chevron products were given proper display and that the station’s operation conformed to the provisions of the agreements between Chevron and Sharp. There is evidence in the record that Chevron personnel did inspect the station while the repair center was in operation. No protests were lodged with Sharp and no complaints were made. At no time did Chevron contend that the operation of the repair center violates the terms of the “dealer lease.” Chevron argues that the case of Shaver v. Bell, supra, renders them immune from liability here because the New Mexico Supreme Court in that case held that the defendant lessor was not liable in a slip and fall accident which occurred on the premises of a leased station. In Shaver, the service station operator was a sub-lessee of the corporate defendant, Cosden Petroleum Corporation. The only significant aspects of control to be found in that record were the use of the oil company’s name and the sale of company products. “Cosden did not, at any time, send its personnel to check the premises, nor did it deal directly with the operator of the station on sales of its products to him.” Shaver v. Bell, supra. While I do not believe that plaintiff has shown such control by Chevron over Sharp as to make Sharp an employee as a matter of law, I do believe that there are sufficient indicia of control to be found in this record to warrant the submission of the issue to a jury. Moreover, the element of control is not the exclusive factor in determining whether Sharp’s actions may bind Chevron. Cf. Platco Corporation v. Shaw, 78 N.M. 36, 428 P.2d 10 (1967) (Concurring opinion by Moise, J.) Chevron may be liable on a theory of either apparent authority or agency by estoppel. There is a genuine question of material fact as to whether plaintiff here entered into the transaction under the reasonable belief that Sharp was authorized to bind Chevron in a valid contract or whether Chevron, having permitted Sharp to operate the repair center, should now be estopped from denying the agency. I agree with the reasoning in Gizzi v. Texaco, Inc., 437 F.2d 308 (3d Cir.), cert. denied, 404 U.S. 829, 92 S.Ct. 65, 30 L.Ed.2d 57 (1971), that “The concepts of apparent authority, and agency by estoppel are closely related. Both depend on manifestations by the alleged principal to a third person. . The manifestations of the principal may be made directly to the third person, or may be made to the community, by signs or advertising.” I further agree with Gizzi that the plaintiff must have relied on the “indicia of authority originated by the principal” and that “such reliance must have been reasonable under the circumstances.” The issues of apparent authority and agency by estoppel as well as the element of reasonable reliance by the plaintiff are essentially questions of fact and must be resolved by the jury. Pribble v. Aetna Life Ins. Co., 84 N.M. 211, 501 P.2d 255 (1972). I specifically disagree with the discussion of the issues captioned “dangerous activity” and “strict liability.” These issues were not raised by the pleadings, nor were they raised at the hearing on summary judgment or by any of the materials submitted by either party. Furthermore, they were not briefed or argued here.