An agent is acting within the scope of employment if he is doing what is necessarily incidental to the work that has been assigned to him or which is customarily within the business in which the employee is engaged. In addition, a principal may be held liable for the torts of an agent if the tortious conduct was within the scope of the agent's authority.
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Whether such apparent authority existed is a question of fact, and the trial court's determination of this issue is binding if supported by sufficient competent evidence. However, an exception to this rule exists if an agent has apparent authority to make the representation at issue. In Colorado, a principal may not be bound by the false representations of his agent made without his knowledge, consent, or authority. Fall River Industries, Inc., 502 F.2d 731 (10th Cir.1974).Īlthough this section of the Restatement of Agency has not been adopted expressly by our supreme court, Colorado case law leads us to conclude that its application was appropriate here. Attorney Title Guaranty Fund, Inc., 866 F.2d 1570 (10th Cir.), cert. Restatement (Second) of Agency § 261 states:Ī principal who puts a servant or other agent in a position which enables the agent, while apparently acting within his authority, to commit a fraud upon third persons is subject to liability to such third persons for the fraud.Īccording to Restatement (Second) of Agency § 261 comment a, a principal may be liable under this rule even though the principal had no knowledge of the fraud, did not authorize the fraud, and did not receive any benefit from the transaction. It contends the trial court's reliance on this section was unsupported by existing Colorado law and, therefore, must be reversed. Grease Monkey first contends that the trial court erred in applying Restatement (Second) of Agency § 261 (1958) to find it liable for payment of the debt owed to plaintiffs by Sensenig. After trial to the court, plaintiffs prevailed on their fraud and misrepresentation *488 claims, and their other claims were dismissed. 8B), breach of duty of good faith and fair dealing, promissory/equitable estoppel, extreme and outrageous conduct, and negligent hiring retention and supervision. Plaintiffs brought this action against Grease Monkey, as Sensenig's employer, for various contract claims, breach of implied contract, fraud, misrepresentation, treble damages pursuant to § 18-4-405, C.R.S., (1986 Repl.Vol.
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Plaintiffs have not been repaid the principal amounts of these loans, nor have they received full payment of the interest due on the notes. Sensenig defaulted on the loans made by plaintiffs. Sensenig executed promissory notes to evidence the loans made by plaintiffs. Sensenig," based on Sensenig's representation that because Grease Monkey was a new company, it did not have its own account, and as President and Chairman, Sensenig used his own account as the corporate account.
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Rather, Sensenig used plaintiffs' money for his personal benefit.įor each of the loans made by plaintiffs, plaintiffs wrote checks payable to "Arthur P. In fact, none of these loans was invested in Grease Monkey. During that time, Sensenig secured loans from plaintiffs under the guise that the funds were "investments" in Grease Monkey, a growing corporate franchisor. Sensenig acted as Chairman of the Board, President, and Chief Operating Officer of Grease Monkey from 1983 to 1991. Plaintiffs cross-appeal the trial court's holding that defendants were not liable for treble damages under § 18-4-405, C.R.S.
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(collectively Grease Monkey), appeal the judgment entered in favor of plaintiffs, Nick and Aver Montoya, on their claims of fraud and misrepresentation. Lampert, Denver, for amicus curiae Colorado Trial Lawyers Ass'n.ĭefendants, Grease Monkey Holding Corporation and Grease Monkey International, Inc. Schaden, Lampert & Lampert, Susanna Meissner-Cutler, Brian J. Morales, Denver, for defendants-appellants and cross-appellees. Zoltanski, Denver, for plaintiff-appellee and cross-appellant. GREASE MONKEY HOLDING CORPORATION and Grease Monkey International, Inc., Defendants-Appellants and Cross-Appellees.Īs Modified on Denial of Rehearing March 10, 1994.Ĭross-Petition for Certiorari Denied November 7, 1994. Nick MONTOYA and Aver Montoya, Plaintiff-Appellee and Cross-Appellant,