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Dennegar Liability

Published on Jun 07, 2019

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Dennegar Liability

 By: Kareem Ellis 
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 Overview

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Mr. Dennegar is currently being held responsible for paying back $14752.93 to New Century Financial services due to a credit card opened in the name of Lee Dennegar. That card was opened in February 2001 where the statements were sent to the proper address of Mr. Dennegar and payments were received sometimes for the card opened through AT&T Universal. Mark Knutson who had an agreement with Dennegar to take care of their home financial affairs was the person responsible for all mail in and out of the house as well as opening the card in Mr. Dennegars name. Mark has passed away and now the company is seeking to get the money spent on that card back by requesting it from the actual card owner Mr. Dennegar.

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Mr. Dennegar was unaware of the AT&T universal credit card that was opened in his name and then used to make purchases. The card was opened by someone Mr. Dennegar trusted to take care of his finances. Mark Knutson passed away and left the balance on this card leaving Mr. Dennegar responsible for it even though he had no idea of it. Given that Mark was over the finances and received consent from Mr. Dennegar there was no reason for anyone to think that something suspicious was going on.

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Under what theory could Dennegar be liable for the charges?

 
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 Agency Law

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In this case, we are looking at Agency law which is a relationship between an agent and principal in which the agent works solely on the behalf of the principal. There are different types of agents such as a general agent, special agent, and a servant agent all completely similar yet opposite agents. A general agent is one who possesses the authority to do multiple transactions on behalf of and in the name of the principal. A Special agent is one who is designated to do a certain transaction assigned or designated to them. The servant agent is one who has been told what to do and how to do as well as being under control of a principal or master.

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Most agencies are operating under a contract but in this case, Mr. Dennegar was the principal and Mark was the agent, and their agreement was an implied agency. An implied agency is one where no contract is physically available but the agreement between the two parties is present and understood. Mr. Dennagar being fully aware of Mark taking care of their household financial affairs left him under the impression that Mark was doing things to solely benefit and help them out around their home.

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Types of Authority

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There are different types of authority when it comes to Agency law, those are implied, express, and apparent. Implied authority is when an agent has the authority to act on behalf of a principal and make decisions reasonably necessary to benefit the principal. Express authority is when a principal gives permission to an agent through oral, written, partly oral, and partly written consent allowing them as well to reasonably take care of the principal's needs. Apparent authority is when a principal is liable for the actions of an agent who deals with third parties and operates under implied or express authority.

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Mr. Dennegar allowed Mark Knutson the authority of implied authority where the agent acts on behalf of the principal to perform necessary transactions to take care of the business affairs. Although Knutson was given implied authority per their agreement it's more that he had taken on the role of apparent authority when he opened and used a credit card in the name of Mr. Dennegar. Apparent authority allows the agent to legally act on behalf of the principal which could affect the principal's rights legally.

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 How It ties in to Dennegar vs NCFS

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According to Principal's Contract Liability to be liable, the principal must have authorized the agent in some manner to act in his behalf, and that authorization must be communicated to the third party by the principal. Mr. Dennegar allowed Knutson to be his agent and act on his behalf pertaining to his finances. this leaves him liable for the amount of money spent on the card. although he has no recollection of the card this is when authority to agents comes into play leaving Mr. Dennegar liable for all charges. He allowed Knutson the chance to take his finances into his own hand by giving him implied authority.

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Conclusion

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Mr. Dennegar is liable and responsible for repaying New Century Financial Services for the credit opened in his name with a remaining balance of $14752.93 due to Agency Law. Most oral agency contracts are legally binding; the law does not require that they be reduced to writing. In practice, many agency contracts are written to avoid problems of proof. The negligence of Mr. Dennegar regarding his credit card and statements in concurrence with his agreement to have Mark Knutson take care of their financial affairs was good enough reason alone to leave Mr. Dennear responsible for the repayment of the credit card. Also as stated during the trial “cardholder's failure to examine credit card statements that would reveal fraudulent use of the card constitutes a negligent omission that creates apparent authority for charges that would otherwise be considered unauthorized under the TILA.”, leaving Mr. Dennegar with no way out of the debt whether he knew about it or not.

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References:

Kareem Ellis