Frawley v. Nickolich
41 S.W.3d 420, 73 Ark. App. 231, 2001 Ark. App. LEXIS 271 (2001)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
An agency relationship is created by the conduct of two parties manifesting that one is willing for the other to act for them subject to their control, and the other consents to so act. A principal can be held liable for the agent's actions, even without a formal employment contract or payment, if the elements of authorization and control are present.
Facts:
- Elizabeth Frawley was a licensed bail bondsman employed by J & J Bonding, Inc.
- Frawley's friend, Dixie Hinerman, was not paid but frequently assisted Frawley by driving with her and answering her business cellular phone to gather information from potential clients.
- On December 16, 1997, Hinerman accompanied Frawley to the Pulaski County jail.
- Frawley went inside the jail on a bond matter, leaving her cellular phone and business cards with Hinerman who remained outside.
- While Frawley was inside, Hinerman distributed Frawley's business cards to an inmate trusty and other individuals around the facility, telling the trusty to pass them out to anyone who needed a bond.
- At least one of the distributed cards had Hinerman's name handwritten on it along with the abbreviation 'Sec.' to indicate she was a secretary.
- Both Frawley and J & J Bonding would have received the financial benefit from any business generated by Hinerman's distribution of the cards.
- Upon learning of the distribution, Frawley told Hinerman she was upset and instructed her never to do it again.
Procedural Posture:
- The Arkansas Professional Bail Bond Licensing Board charged Elizabeth Frawley and J & J Bonding, Inc. with illegal solicitation.
- Following a hearing on March 13, 1998, the Board found the parties guilty.
- The Board suspended Frawley's license for 90 days and imposed a $2,500 fine on J & J Bonding.
- Frawley and J & J Bonding (appellants) appealed the Board's decision to the circuit court.
- The appellants then appealed from the circuit court to the Arkansas Court of Appeals, seeking review of the administrative agency's decision.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does an agency relationship exist when an unpaid friend, with access to a bail bondsman's business cards and cell phone, distributes those cards at a jail for the bondsman's benefit, thereby making the bondsman legally responsible for the friend's violation of a no-solicitation statute?
Opinions:
Majority - Judge Karen R. Baker
Yes. An agency relationship existed because the parties' conduct demonstrated authorization and control, making the bondsman and her employer responsible for the friend's actions. The court found substantial evidence to support the administrative board's conclusion. The two essential elements of agency are authorization and right to control. Frawley provided authorization by giving Hinerman access to her business cards and phone and instructing her on how to handle calls. The right to control was demonstrated by Frawley's subsequent instruction to Hinerman to never again distribute cards at a jail, which implies Hinerman was subject to Frawley's control. Because Hinerman was acting on behalf of Frawley and J & J Bonding for their financial benefit and was subject to their control, her actions were properly imputed to them.
Analysis:
This case clarifies that an agency relationship can be established implicitly through conduct, even without a formal agreement or compensation. It puts licensed professionals on notice that they can be held responsible for the actions of informal assistants or friends if those individuals are acting on their behalf and under their general control. The decision broadens the scope of vicarious liability in a regulatory context, emphasizing that control can be established even by instructions given after the fact. This precedent requires professionals to be vigilant about the activities of anyone assisting with their business, formally or informally.
