Frontier Leasing - (HW-3) PDF

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FRONTIER LEASING CORP. v. LINKS ENGINEERING, LLC. 781 N.W.2d 772 (Iowa Sup. Ct. 2010) CAUSE OF ACTION: Challenge to the Iowa Court of Appeals reversal regarding Dave Flemings authority to act as an agent for Bluff Creek Golf Course. FACTS: Dave Fleming, director of golf for Links Engineering doing business as Bluff Creek Golf Course, was solicited by Royal Links USA for a lease on a nonmotorized beverage cart. Fleming, on behalf of Bluff Creek, applied for financing on the beverage cart and singed a Royal Links USA credit application. In 2004, C&J Leasing and Fleming signed a lease agreement for the beverage cart. In 2005, Bluff Creek defaulted on the lease payments. The managing owner of Bluff Creek, Lance Clute then learned of the lease. He requested a copy, stopped all payments, and requested C&J Leasing to remove the beverage cart removed from his property. PROCEDURAL HISTORY: Bluff Creek was sued for breach of contract. A summary judgement was issued by the district court that Fleming HAD the authority to bind Bluff Creek to the contract. The Iowa Court of Appeals later REVERSED, and Frontier Leasing appealed to the Iowa Supreme Court. ISSUE: Did Fleming have the authority to bind Bluff Creek to the lease? The issue of agency relationship is examined. Agency relationship can be established through the agents apparent or actual authority to act on behalf of the principal, which would be Bluff Creek. The district court said Fleming had actual and apparent authority on behalf of Bluff Creek. HOLDING: Yes, remanded to trail. RATIONALE: Lance Clute mentioned that Fleming was in charge of the day-to-day operations of the course in an affidavit. It is important to note that Clute did not ratify the transaction and refuted the existence of actual authority. Clute’s statement included that Fleming was not authorized to enter any financing agreements or transactions for the beverage cart, especially given the large lease amount of $19,000. The absence of testimony of Fleming goes to the weight of Bluff Creek’s evidence, which is something for a jury to decide. Reasonable minds could draw different inferences whether Fleming had the authority to bind Bluff Creek.

DISPOSITION: Judgement for Bluff Creek affirmed. Remanded to trail....