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Fourth Circuit Grants Corporation’s Motion for Summary Judgment Regarding Plaintiff’s Virginia Consumer Protection Act and Magnuson-Moss Warranty Act Claims Due to Plaintiff’s Failure to Present Sufficient Evidence that an Agency Relationship Existed Between a Corporation and a Third-Party Automobile Dealer

Wynn's Extended Care, Inc. v. Penny Bradley
No. 14-2334 (United States Court of Appeals for the Fourth Circuit, July 28, 2015)
by Nida Kanwal, Summer Associate
Semmes, Bowen & Semmes (www.semmes.com)

Available at: http://www.ca4.uscourts.gov/Opinions/Unpublished/142334.U.pdf

This case arises out of an appeal from a district court’s order which granted summary judgment to Wynn’s Extended Care, Inc., on Penny L. Bradley’s Virginia Consumer Protection Act and Magnuson-Moss Warranty Act counterclaims and denying her motion for leave to amend her counterclaim. The Fourth Circuit affirmed the district court’s opinion.

The Court noted that summary judgment is appropriate when there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Therefore, it is the nonmoving party’s, Bradley’s, burden to persuade the court that there is a dispute of fact from more than a mere scintilla of evidence.

With respect to the Virginia Consumer Protection Act claim, Bradley did not provide sufficient evidence that a third-party automobile dealer was the agent of Wynn’s Extended Care, Inc. and therefore, Wynn’s Extended Care, Inc. could not be held liable for such dealer’s actions. The Court found that under Virginia law an agency relationship can exist in two circumstances: (1) an actual agency is a “fiduciary relationship resulting from one person’s manifestation of consent to another person that the other shall act on his behalf and subject to his control, and the other person’s manifestation of consent so to act” or (2) an apparent agency is when an “agency [is] created by operation of law and established by a principal’s actions that would reasonably lead a third person to conclude that an agency exists, regardless of whether the principal and agent intended to establish an agency relationship.” Bradley maintains that there was an actual agency relationship present when she purchased her car from the dealer. The Court held that in order to find whether this existed, the principal’s right to control the methods or details of doing the work would be the determining factor. The Court found that Wynn’s Extended Care, Inc. did not have the right to control the dealer’s day-to-day operation.

The Court also declined to reach the issue of apparent agency and stated that no evidence demonstrated such a relationship existed. A reasonable jury could not find that the dealer had the apparent authority to represent that Bradley’s vehicle was covered by Wynn’s Extended Care, Inc.’s service program because the notice he gave to Bradley bluntly stated that the vehicle was ineligible for Wynn’s Extended Care, Inc.’s service program.

Bradley failed to present more than a mere scintilla of evidence to demonstrate an agency relationship existed.

In regard to the Magnuson-Moss Warranty Act claim, the Act “provides a civil action for damages against a service contractor who fails to comply with any obligation under a service contract.” The Court found that under these facts, a writing that would satisfy a service contract would be a Wynn’s Extended Care, Inc.’s service performance form signed by Bradley—and it would only qualify if the dealer’s representation regarding the program were imputed to Wynn’s Extended Care, Inc. through an agency relationship. Since Bradley did not provide sufficient evidence to raise a genuine dispute of material fact as to agency, it would also be insufficient for her Magnuson-Moss Warranty Act claim.

Moreover, the Court denied Bradley’s motion to amend her counterclaim in order to add a new Virginia Consumer Protection Act claim because her original claim relied on the existence of the same agency relationship that the Court had rejected and to allow it would be futile.