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Florida Fourth DCA reverses summary judgment in favor of brokerage firm, rules that material issue of fact exists with respect to allegation of vicarious liability

On May 3, 2017, in Trevarthen v. Wilson, No. 4D16-2032, the Florida Fourth DCA reversed a trial court’s summary judgment in favor of a defendant brokerage firm. ruling that material issues of fact existed with respect to whether the brokerage firm was vicariously liable for alleged misconduct by one of its associates. The plaintiff claimed that the associate exploited and abused her by using her money to pay for his personal expenses, causing her to engage in multiple real estate transactions for his benefit and purchasing a condominium in his own name with her money. The brokerage firm successfully argued before the trial court that that the alleged wrongful acts of its associate were outside the scope of his work on behalf of the brokerage firm and were done to accomplish his own goals.

On review, the Florida Fourth DCA noted that general principles of vicarious liability establish that a principal is responsible for the wrongful acts of its agent if the agent was either acting “(1) within the scope of [its authority], or (2) during the course of [the agency] and to further a purpose or interest of the [principal].” Valeo v. E. Coast Furniture Co., 95 So. 3d 921, 925 (Fla. 4th DCA 2012). Additionally, a principal may be still be liable for the acts of its agent which were outside the scope of the agent’s authority if the principal subsequently ratifies the actions. See McDonald v. Hamilton Elec., Inc. of Fla., 666 F.2d 509, 514 (11th Cir. 1982). A principal may ratify an agent’s actions which would have otherwise been outside the scope of its authority by accepting the benefit of the agent’s actions. See Mercury Ins. Co. of Fla. v. Sherwin, 982 So. 2d 1266, 1270 (Fla. 4th DCA 2008) (“A principal may not accept the benefits of a transaction negotiated by the agent and disavow the obligations of that same transaction.”). In reaching its decision, the Fourth DCA focused specifically on the fact that the brokerage firm had received commissions on the real estate transactions referred to in the complaint, as well as on factual questions about the brokerage firm’s knowledge of the underlying circumstances involved in the associate’s purchase of the condo in his own name.