AGENTS BEWARE: FAILURE TO DISCLOSE YOUR PRINCIPAL LEADS TO PERSONAL LIABILITY
In January 2016, Judge Smith with the Fairfax County, Virginia Circuit Court issued an opinion letter in Flood Doctor, Inc. v. Winters, et al. that rendered an agent personally liable for his principal’s debts after the agent failed to disclose the individual for whom he was acting when he signed a contract.
The Defendant, Bryan Winters was a resident of Florida who was an agent under a power of attorney for his aunt, Doris Acree. Bryan Winters contracted for services at his aunt’s residence, signing the contract as “authorized agent”, and then failed to pay the $24,553.81 outstanding balance for services performed. After Flood Doctor, Inc. brought suit to collect against Bryan Winters and Doris Acree, Bryan Winters argued that, among other things, since he was contracting on behalf of his aunt, with whom he held an agency relationship, that he was not personally liable for the unpaid balance.
The court, relying on Lambert v. Phillips & Son, 109 Va, 632 (1909) and Mechem on Agency, reasoned that it has long been held that, in general, an agent acting on behalf of a disclosed principal is not personally liable for any breach of contract by the agent. However, the court found that Bryan Winters failed to disclose the principal for whom he was acting, and that the mere disclosure of the fact that one is acting as an agent will not protect an individual from personal liability.
The attorneys and staff of the Hook Law Center attempt to stress the importance of an agency relationship and how an agent should act on behalf of his principal. We provide literature to our clients about the duties of agents, and assist agents in understanding how they should sign on behalf of their principal. We typically recommend that an agent sign on behalf of their principal as follows: “John Doe, by Jane Doe, his power of attorney who acts without personal liability” or “Jane Doe, as power of attorney for John Doe, who signs without personal liability.” This discloses to the vendor with whom you are contracting that you are acting in an agency role on behalf of another named individual, and that you do not sign in a personal nature. While this detail may take some extra time to write out, it could save you money in the long run.
Hook Law Center: Kit Kat, what can you tell us about the new Beatrix Potter tale which will be coming out later this year?
Kit Kat: Well, I am happy to report that her final tale, written when she lived in the Lake District of England, is about one of my own species—the cat! It is called “The Tale of Kitty-in-Boots.” Kitty is the heroine as the title suggests, and according to Jo Hanks, the publisher who discovered the story, the best of Potter’s animal tales. Kitty is a rather independent black cat, who dresses in a gentleman’s jacket and fur-lined boots. She carries out various escapades, and Peter Rabbit reappears as well. The book will be available in hardback in September in Britain, the US, Canada, and Australia.
So how did it happen that the story has just come to light? Jo Hanks, the publisher who found the tale at the Victoria and Albert Museum (V & A) in London in 2013, says it happened like this. Ms. Hanks had seen a reference to the story in a book by Leslie Linder. While in the archives at the V & A, Hanks was thumbing through old manuscripts and found it. It was almost complete, and only needed a touch of editing. There was also a drawing of Kitty done by Ms. Potter. The story was written in 1914, the year WWI began, and also the year Ms. Potter’s father died. Personally, a lot was going on in Ms. Potter’s life. She had recently gotten married, and was beginning a new life as a sheep farmer in the Lake District. She succeeded tremendously as a sheep farmer and evolved to become a prize-winning breeder. At her death, her farm was given to Britain’s National Trust. Today, that property makes up the bulk of the Lake District National Park. So, the busy Ms. Potter probably just didn’t get around to putting the finishing touches on it.
2016 was chosen as the release date to coincide with the 150th anniversary of Ms. Potter’s death. We, the reading public, are indeed fortunate to have this new morsel to digest. It sounds like the best was saved until last.
(Daniela Deane, The Washington Post, as it appeared in The Virginian-Pilot, Jan. 27, 2016, p. 11)
- February 15th, 2016 – Stephan J. Lipskis will be speaking on “Protecting the Money You Leave to Your Children from Their Divorce” at Crowne Plaza Hotel, 4453 Bonney Road, Virginia Beach, VA 23462.
- February 16th, 2016 – Shannon Laymon-Pecoraro is presenting on Veteran’s Aid and Attendance again with the Crossings at Independence at 10am. Crowne Plaza Hotel, 4453 Bonney Road, Virginia Beach, VA 23462.
- February 18th, 2016 – Stephan J. Lipskis will be speaking on “Protecting the Money You Leave to Your Children from Their Divorce” at Hilton Gardin Inn, 5921 Harbour View Blvd., Suffolk, VA 23435.
- February 20th, 2016 – Andrew H. Hook is traveling to Charlottesville for the 2016 UnProgram with VAELA. He will be giving a presentation on Advance Medicaid Planning Strategies, as well as addressing nuances of gifting by Power of Attorney.
- February 23rd, 2016 – Andrew H. Hook will be speaking on Long-Term Care Planning at The Crossings of Harbour View at 10AM.
- March 5th, 2016 – Andrew H. Hook will be speaking at the SNA Meeting in Hawaii on “Residential Planning for the Adult Disabled Child of an Elder or Decedent.”
- March 14th, 2016 – Elizabeth Q. Boehmcke will be speaking on “Protecting Your Children’s Inheritance” at Crowne Plaza Hotel, 4453 Bonney Road, Virginia Beach, VA 23462.
- March 15th, 2016 – Elizabeth Q. Boehmcke will be speaking on “Protecting Your Children’s Inheritance” at Hilton Gardin Inn, 5921 Harbour View Blvd., Suffolk, VA 23435.
- March 16th, 2016 – Andrew H. Hook will be speaking at the Hampton Roads Chapter Enrollment Society Meeting about Trust and Decedent’s Estate taxation issues.
- March 24th, 2016 – Andrew H. Hook will be speaking on Long-Term Care Planning at The Crossings of Harbour View at 10AM.
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