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Is there an “Independent Agent”
by Michael Blahy

“Risk and Release” provisions within agreements do not necessarily protect everyone from liability due to negligence.

Amey Nelson (Nelson) joined an Anytime Fitness in Idaho Falls in late January, 2014 at which time she signed a membership agreement which contained the following “Membership Assumption of Risk and Release” clause.

    I HEREBY RELEASE, INDEMNIFY, AND HOLD HARMLESS Anytime Fitness, LLC and its affiliates, ABC Financial Services, INC., AND THE OWNERS OF ALL CLUBS WITHIN THE ANYTIME FITNESS SYSTEM, as well as all sponsors and advertisers, and all owners and lessors of the premises of such clubs, and their respective officers, affiliates, agents and employees WITH RESPECT TO ANY AND ALL INJURY, DISABILITY, DEATH, LOSS OR DAMAGE to person or property that may arise out of or in connection with my use of any of the equipment products and machines or the facilities of the CLUB of any other Anytime Fitness club, or any incident that occurs while using such facilities, or otherwise related to my membership.
Two months later Nelson attended her first “circuit class” which was taught by a contracted trainer, Stefani Kaufman (Kaufman).

Nelson received instruction from Kaufman on the use of a triceps press machine. While using the machine, a handle slipped out of Nelson’s left hand. Her left hand hit somewhere on the machine fracturing the fifth metacarpal bone, requiring multiple surgeries to repair.

Two years after the incident, Anytime Fitness, AT Fitness, LLC and Kaufman were sued by Nelson for the negligent instruction by Kaufman, causing her injury. AT Fitness, LLC replied to the suit, and in mid April, 2017 filed for summary judgement, relying on the signed membership agreement and an affidavit by Tayson Webb indicating that Kaufman was an “independent contractor”. No written contract was produced. Early July, 2017 the motion was granted, ending the case against Anytime Fitness and AT Fitness, LLC.

Kaufman, by May 2016, had moved to New Mexico. She was served notice by publication. End of July 2017, she too filed a reply, and in September 2017, moved for summary judgement, arguing that she was an agent of AT Fitness and also covered by the signed Membership Agreement. At the beginning of November 2017, the district court finding that Kaufman “possessed both actual and apparent authority from Anytime Fitness to conduct the circuit training class at Anytime Fitness’ facility” granted summary judgement, and mid November denied Nelson’s request for reconsideration.

Nelson appealed arguing:

  1. Kaufman is an independent contractor, not an agent

  2. that the district court did not have the power to find that an agency relationship existed

  3. that the apparent agency doctrine should not be applied defensively in Idaho

The Supreme Court of the State of Idaho decided that it had three questions to answer:

  1. whether the district court had the power to make an affirmative finding of an agency relationship

  2. whether the legal status of “independent contractor” is mutually exclusive with the legal status of “agent”

  3. whether Kaufman has met her burden at summary judgment to establish that she was an agent of Anytime Fitness

The Supreme court findings included:

  1. [W]hile the district court had the power to make such a finding, the district court erred in concluding that no genuine issue of material fact existed as to establish an express agency relationship.

  2. The terms “independent contractor” and “agent” describe the legal status of an actor. They carry significant and discrete connotations . . .(“The distinction between an independent contractor and an agent is not always easy to determine, and there is no uniform criterion by which they can be differentiated.”).. . .(“We have long instructed that the ‘important factor is the control or right of control reserved by the [principal] over the functions and duties of the agent.’”) .

    Notwithstanding this confusion, we have cited the Restatement (Second) of Agency for the proposition that an independent contractor “may or may not be an agent”. . .However, before today we have not examined when these legal statuses overlap.

    The Restatement (Second) of Agency identifies three “essential characteristics” of the principal-agent relationship: (1) the agent’s power to alter legal relations between the principal and third persons, (2) a fiduciary duty owed by the agent to the principal to act primarily for the principal’s benefit in matters connected with her undertaking, and (3) the principal’s right to control the physical conduct of the agent.. . .

    Accordingly, while it is clear that in certain circumstances an independent contractor may also be considered an agent, saying one is an agent does not make it so. Where, as here, the purported principal (Anytime Fitness) states that the purported agent (Kaufman) is an independent contractor, the purported agent must establish that she fits into the narrow set of circumstances where these legal statuses overlap. At the very least, she must establish the essential characteristics of the principal-agent relationship.

  3. When Kaufman moved for summary judgment, she asserted that she was an agent “because [Anytime Fitness] hired her to teach the [circuit training] class.”. . .However, Kaufman never provided a contract governing the terms of her relationship with Anytime Fitness, even though the only evidence provided by Anytime Fitness characterizes Kaufman as an “independent contractor.”

    Drawing all reasonable inferences in favor of Nelson, Kaufman has not met her burden at summary judgment to establish that her relationship with Anytime Fitness bears the essential characteristics of an express agency. . .

    Summary judgment is improper when the existence of an express agency relationship is unclear and based on the conclusory statements of the purported agent. A jury must decide this question. . . Because there is still a question of fact as to whether she was an express agent of Anytime Fitness, rather than an independent contractor providing services for Anytime Fitness, the district court erred by granting Kaufman’s motion for summary judgment on the basis that Kaufman was an express agent of Anytime Fitness.

The Supreme Court of the state of Idaho concluded:
    . . .we reverse the district court’s summary judgment order and remand the case for further proceedings because the district court erred in concluding that the undisputed facts established an express agency relationship, and because the district court erred as a matter of law in applying the apparent agency doctrine to protect Kaufman from liability.

    Neither party requested attorney fees. Costs are awarded to Nelson as the prevailing party on appeal pursuant to I.A.R. 40(a).

(Amey J. Nelson v. Stefani Kaufman, Anytime Fitness, and AT Fitness, LLC (The Supreme Court of the State of Idaho, Docket: 46027))

Decided: February, 2020
Published: February, 2020

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