presented herself as being associated. Thus, the firm must expect the client to believe that the real estate professional who uses the tradename of the firm is the firm's agent.
Accordingly, the Court finds that the evidence and the law sustains the finding that Mount Vernon Realty, through its arrangement with the employer of Ms. Jacobsen, did represent that Ms. Jacobsen was its agent.
The Court also finds that the evidence showed that plaintiffs, through their agents, met the second prong of the apparent agency test -- justifiable reliance. Restatement (Second) of Agency § 267. Defendant Mount Vernon Realty admits that plaintiffs' listing agents, Ms. Madden and Ms. Wojciak, stated that they relied on Mount Vernon Realty's reputation. Far from being merely an "acknowledgment" of the existance of the licensing arrangement, such testimony should be accepted for exactly what it stated -- that Ms. Jacobsen's apparent authority as an agent of Mount Vernon Realty, a large and well-known real estate firm, sensibly played a significant role in the decision of plaintiffs and their agents to enter into the transaction.
Defendant Mount Vernon Realty argues, however, that plaintiffs did not meet their burden of showing that they would not have entered into the transaction "but for" their reliance on Mount Vernon Realty's reputation. Defendant cites no authority, and the Court believes there should be no such authority, for the existence of such a burden. Once apparent authority and reliance has been shown, it should not be incumbent on the plaintiff to try to prove the perhaps-impossible fact that they would have not have entered into the transaction had they not relied.
Again, defendant's citation to a case involving a gas station, Arceneaux v. Texaco, Inc., 623 F.2d 924 (5th Cir. 1980), is not on point. In that case, the Fifth Circuit sensibly held that advertisements about Texaco did not in themselves prove that plaintiff "entered the service station because he believed that Texaco was its operator." Id. at 927. In the instant case, there was direct evidence that plaintiffs' agents relied, and sensibly so, on the representation that Ms. Jacobsen was an agent for, and backed by the reputation of, Mount Vernon Realty.
Finally, the Court concludes that the reliance was "justifiable," viewed within the required objective constraints. See Porter v. Sisters of St. Mary, 756 F.2d 669, 674 (8th Cir. 1985). Defendant Mount Vernon is incorrect in apparently arguing that plaintiffs had to prove that their agents were reasonable in assuming that Ms. Jacobsen, by reason of her apparent agency, could "guarantee" the ability of Mr. Weisman to met his obligations. No such "guarantee" is at issue; rather, the Court finds that plaintiffs and their agents clearly were justified in relying on the apparent agency of Ms. Jacobsen and the reputation of Mount Vernon Realty.
In sum, the Court finds that the law and the evidence support the finding of liability under negligence for Mount Vernon Realty through the apparent agency created by its licensing arrangement.
Accordingly, this 15th day of December, 1988, it is
ORDERED that defendants' motions to amend judgment regarding the amount of damages is GRANTED; it is further
ORDERED that the amount of damages awarded to plaintiffs is hereby remitted from $ 400,000 to $ 195,000; it is further
ORDERED that defendant Betty Jacobsen's motion for a judgment notwithstanding the verdict is GRANTED and that judgment on the fraud count be entered in her favor; it is further
ORDERED that plaintiffs' motion for a new trial or for a judgment notwithstanding the verdict is DENIED; it is further
ORDERED that defendant Mount Vernon Realty's motion to set aside judgment on the negligence count against Mount Vernon Realty is DENIED.