Reagan v. Keller Williams Realty

Filed 8/30/07 Reagan v. Keller Williams Realty CA2/5

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FIVE

APPEAL from an order of the Superior Court of Los Angeles County, Stanley M. Weisberg, Judge. Reversed.

Zukor and Nelson, Abram Charles Zukor and Marilyn H. Nelson for Plaintiff and Appellant.

La Follette, Johnson, De Haas, Fesler & Ames, Alfred W. Gerisch, Jr., Mark M. Williams, and David J. Ozeran for Defendant and Respondent Keller Williams Realty, Inc.

Bradley & Gmelich, Barry A. Bradley, Owen E. Giarard, John Flock, and Arnold S. Levine for Defendant and Respondent Rafeh Corporation.

I. INTRODUCTION

Plaintiff, Natalia Reagan, appeals from summary judgments entered in favor of defendants, Keller Williams Realty, Inc. (Keller Williams) and its franchisee, Rafeh Corporation, doing business as Keller Williams Realty (Rafeh Corporation). Plaintiff sustained injuries as a result of a vehicle accident caused by defendant, Victoria Szuch, who worked as a real estate sales agent. The trial court granted summary judgment on the ground Keller Williams and Rafeh Corporation were not vicariously liable for plaintiffs injuries. Keller Williams and Rafeh Corporation contended Ms. Szuch was an independent contractor or, alternatively, was not acting in the scope of her employment at the time she was involved in the accident. The trial court also granted summary judgment in favor of Keller Williams on the ground it was neither the employer, principal, or joint venturer of Ms. Szuch. We reverse.

II. BACKGROUND

A. The Parties

Plaintiff filed a negligence complaint against Ms. Szuch on February 15, 2005. Rafeh Corporation and Keller Williams were named as defendants on August 9, 2005, and September 15, 2005, respectively. After they answered the complaint, Keller Williams and Rafeh Corporation filed separate summary judgment motions.

B. The Keller Williams Motion

Keller Williams asserted it was only a franchisor or licensor of Rafeh Corporation and as such was not a principal which could be held vicariously liable. Alternatively, Keller Williams argued that Ms. Szuch was not acting in the course and scope of her employment at the time of the accident.

Plaintiff and Keller Williams agreed that the following facts are undisputed. On January 22, 2005, Ms. Szuch was a licensed real estate agent. Rafeh Corporation is a licensed real estate broker. Keller Williams is a Texas corporation with its principal place of business in Austin, Texas. Keller Williams does not have offices in the State of California nor is it licensed as a real estate broker or agent in this state.

Rafeh Corporation is a licensee and franchisee of Keller Williams. Ms. Szuch worked in the Palmdale office of the Rafeh Corporation. On the day of the accident, Ms. Szuch was transporting balloons in her automobile, which she intended to place on an open house sign at a home that was listed for sale in Sylmar. When she opened the sun roof of her automobile, the balloons moved into her field of vision distracting her attention to the road ahead of her. Ms. Szuch then collided into the rear bumper of the plaintiffs pick-up truck.

Further, Keller Williams relied on section 19.01 of the franchise agreement which states: (a) The parties mutually agree that this Agreement does not create a fiduciary relationship between them, that Licensee shall be an independent contractor, and that nothing in this Agreement is intended to constitute either party an agent, legal representative, subsidiary, joint venturer, partner, employee or servant of the other for any purpose. [] (b) Throughout the term of the license, Licensee shall hold itself out to the public as an independent contractor operating the Market Center pursuant to the license from Company. Licensee agrees to take such action as may be necessary to do so, including exhibiting a notice of that fact in a conspicuous place in the Market Center, the content of which Company reserves the right to specify.

There was also evidence that: Mr. Rafeh declared that Keller Williams had no control over the day-to-day operations of Rafeh Corporation including hiring, firing, and disciplining agents; Keller Williams had no role in determining agent listings nor did it assist agents such as Ms. Szuch in obtaining listings; section 11.02(d) of the franchise agreement gave Rafeh Corporation the right to sell its products and services at any prices it determined; Ms. Szuch paid for all advertisements on her listings; Mr. Rafeh declared that Rafeh Corporation paid all operating expenses and was exclusively obligated on the business lease; Rafeh Corporation was responsible for complying with federal, state, and local laws and regulations under section 18.01(c) of the franchise agreement; Keller Williams did not participate in net profits or losses but received an initial license fee of $18,000 and a monthly royalty based on the Market Centers gross revenue; section 6.01(h)(1) of the franchise agreement required key employees of Rafeh Corporation to complete orientation; but section 6.01(h)(6) made Rafeh Corporation responsible for training its agents in accordance with the procedures set forth in the Manuals; section 6.01(m) of the franchise agreement provided that Rafeh Corporation was maintain business hours and days as it may from time to time specify in the Manuals; section 6.01(k) of the franchise agreement required Rafeh Corporation to establish and maintain a depository account at a bank approved by Keller Williams; sections 6.01(j) and 10.01(b) of the franchise agreement required Rafeh Corporation to obtain and maintain computer hardware and software for accounting and financial statements and reports; and section 10.01 of the franchise agreement gave Keller Williams the right to examine the franchisees books, records, and tax returns.

In support of its motion, Keller Williams also relied on declarations from Mo Anderson, its Vice-Chairman and Chief Executive Officer, and Samir Rafeh, the operating principal of Rafeh Corporation. Keller Williams also attached a copy of its Market Center License Agreement (the franchise agreement) with Rafeh Corporation. Also, Keller Williams introduced a document entitled Independent Contractor Agreement (Between Broker and Associate-Licensee). The independent contractor agreement was executed by Ms. Szuch and Mr. Rafeh on behalf of Rafeh Corporation.

Mr. Anderson declared that the relationship between Keller Williams and Rafeh Corporation was that of a licensor-licensee. Rafeh Corporations agents were not employed by Keller Williams. The franchise agreement was not terminable at will. The franchise agreement governs the operation of real estate Market Centers that use the Keller Williams trade name. Mr. Anderson declared Keller Williams: did not operate the Market Center; did not hire or terminate real estate agents working for Rafeh Corporation; did not have day-to-day control over the activities of the agents working on behalf of the Rafeh Corporation; did not pay to list or to advertise any real property listed or advertised by the agents working for the Rafeh Corporation; did not participate in net profits or losses of the Rafeh Corporation; and only exercised control over the use of its own trademark and its marketing system.

Mr. Anderson further declared that Ms. Szuch had created and used magnetic signs on the doors of her motor vehicle advertising her agency for Keller Williams Realty without authorization. According to Mr. Anderson, use of the trademark and trade name was licensed to Rafeh Corporation but not Ms. Szuch. Keller Williams did not authorize, endorse, or ratify the use of balloons for the open house.

Mr. Rafeh also filed a declaration supporting the summary judgment motion filed by Keller Williams. The declaration for the most part reiterated Mr. Andersons statements concerning the level of control by Keller Williams (or lack, thereof) over Rafeh Corporation. Mr. Rafeh stated that Keller Williams: had no control over real estate agents who work for the Rafeh Corporation including hiring, terminating, and disciplining; did not participate in the net profits and losses of the Rafeh Corporation; and retained control over Rafeh Corporation only to the extent necessary to protect its trade name, trademark, goodwill, and marketing system. Rafeh Corporation was contractually obligated to hold itself out as an independent member broker. Rafeh Corporation paid all operations expenses and was exclusively obligated on the lease for its business premises.

In opposing the summary judgment motion, plaintiff asserted triable issues of material fact existed as to whether Ms. Szuch was an ostensible or actual agent of Keller Williams. Plaintiff argued that evidence existed that Ms. Szuch was instructed to and held herself out as an agent of Keller Williams. Plaintiff also argued that Keller Williams controlled Ms. Szuchs activities through the training manuals and workbooks.

Plaintiff conceded that certain facts were undisputed: Ms. Szuch worked out of the Palmdale office of Rafeh Corporation; Rafeh Corporation was a licensee/franchisee of Keller Williams; Rafeh Corporation is a licensed California broker; Keller Williams is a Texas corporation with its principal place of business in Austin, Texas; Keller Williams has never had offices in California and is not a licensed broker in this state; Rafeh Corporation exercised full and complete control of its agents; this control included the power to hire, discipline, and terminate its employees and agents; the license agreement with Keller Williams required Rafeh Corporation to hold itself out as an independent member broker. . . ; Rafeh Corporation paid all of the expenses for its Market Center; Rafeh Corporation was exclusively obligated on the lease for the Market Center in Palmdale. But plaintiff disputed other factual assertions including that: Keller Williams had no control over Ms. Szuchs activities; Rafeh Corporation was solely responsible for training under the license agreement with Keller Williams; Rafeh Corporation was not a joint venturer with Keller Williams; Rafeh Corporation exercised complete control over its real estate operations; and Keller Williams did not participate in Rafeh Corporations net profits and losses.

Plaintiff relied on the following evidence. Keller Williams collected a percentage of any commissions earned on the sale of property. Six percent of any commission earned by a salesperson is paid to Keller Williams with an annual cap of $3,000. Also, Ms. Szuch paid a 40 per cent of her commission to Rafeh Corporation with an annual cap of $18,950. This six percent payment by the salesperson to Keller Williams is called a production royalty. The salesperson has the authority to reduce the commission but still Keller Williams would collect its $3,000 annual production royalty. Rafeh Corporation, which operated under the name of the Market Center, would deduct the moneys owed to it and Keller Williams. The Market Center would then forward the production royalty to Keller Williams. The manner in which the commissions were split was set forth in the Keller Williams Policies and Guidelines Manual. Further, Keller Williams operates a profit sharing program which is international in scope and applies to brokers such as the Rafeh Corporation and salespersons such as Ms. Szuch. If a salesperson such as Ms. Szuch brought in a new agent to the Market Center, both Rafeh Corporation and Keller Williams would profit.

Moreover, plaintiff cited to evidence that Keller Williams had control of over the conduct of Rafeh Corporation and salespersons such as Ms. Szuch. Keller Williams produced lengthy comprehensive policy manuals which Rafeh Corporation and salespersons such as Ms. Szuch were required to abide by. Among the manuals were: the Keller Williams Market Center Launch Kit which describes organizational, marketing, and profitability growth issues; the Keller Williams Market Center Operations Systems book which discusses accounting, business management, training and accountability, and personnel systems; and Keller Williams Company Identity Standards Manual which governed the operation of the Rafeh Corporation Market Center in Palmdale.

Also, Keller Williams had control over the operations of Rafeh Corporation in material ways. Examples of this control include: Mr. Rafeh executed an irrevocable power of attorney in favor of Keller Williams, Rafeh Corporation was required to purchase a $1 million per occurrence comprehensive general liability upon entering into the 95-page license agreement with Keller Williams; Keller Williams had the power to approve the Market Center location selected by Rafeh Corporation; Rafeh Corporation was required to use a specific software known as the M.O.R.E. Software; as noted, both Ms. Szuch and Rafeh Corporation had a duty to pay production royalties on gross revenues to Keller Williams; Rafeh Corporation was required to make involuntary payments to a Keller Williams profit sharing plan; Keller Williams had the authority to examine the financial records of Rafeh Corporation; and the Keller Williams manuals established training requirements for agents. Mr. Rafeh testified that Keller Williams had the authority to make inspections of the Palmdale Market Center. Additionally, Mr. Rafeh testified that Rafeh Corporation was obligated to operate the Palmdale Market Center in strict compliance with the written standards promulgated by Keller Williams. The Market Center could not use the Keller Williams name if the license agreement were terminated. Mr. Rafeh was required to enter into a noncompetition agreement as a condition of securing the benefits of the Keller Williams license agreement.

Furthermore, the telephone at the Palmdale Market Center is answered: Its a great day at Keller Williams Realty. Can I help you? Agents at the Palmdale Market Center have business cards that say Keller Williams Realty. New agents are trained using the Keller Williams training manuals. The bank accounts used by the Rafeh Corporation were approved by Keller Williams.

At the Palmdale Keller Williams Market Center, Ms. Szuch was supervised by an office manager. Ms. Szuchs business card identified her as a Keller Williams Realty Inc. agent. Ms. Szuchs car had decals displaying the Keller Williams Realty Inc. logo and her name and pager number. Ms. Szuch was required to represent herself to the public as a Keller Williams agent. Each page of Ms. Szuchs website had the Keller Williams logo on it. It was mandatory that if a user clicked on the logo, it would link to the Keller Williams home page. Underneath the Keller Williams logo on each page of her Website are the words, Your Personal Real Estate Consultant For Life. Underneath the word Welcome, Ms. Szuchs Webpage stated: Voted the Most Innovative Real Estate Company by Inman News, Keller Williams Realty takes a different approach, one that is built on personal touches, a professional approach and positive results. [] Victoria Szuch utilizes the latest technologies, market research and business strategies to meet your expectations. However, more importantly, we listen and that means we find solutions that are tailored to you. At the bottom of each page are the words, Copyright 2000-2006 Keller Williams Realty.

Further, there was evidence Ms. Szuch was acting within the course and scope of her employment at the time of the accident. She was on her way to an open house carrying balloons. The balloons were to be used at the open house. Ms. Szuch was going to attach the balloons to open house signs. The balloons were intended to draw attention to the open house signs. Before proceeding to the open houses, Ms. Szuch intended to stop at the home of a close friend, Brittany Robinson, in Sylmar. Ms. Szuch was involved in the accident prior to arriving at Ms. Robinsons home. Ms. Szuch intended to go to the open house in Sylmar after visiting a friend. The balloons were red and white which are the colors of the Keller Williams logo. The open house started at 11 a.m. and the accident occurred at 10:15 a.m. Ms. Szuch testified at her deposition that the vehicle she was driving had decals displaying the Keller Williams logo. At his deposition, Mr. Rafeh testified, I would assume that it is a part of the [real estate] business to be able to have a vehicle. Ms. Szuch was required to have automobile insurance and to name Rafeh Corporation as an additional insured to her policy.

In reply, Keller Williams argued that it did not participate in net profits and losses. This is because Keller Williams is paid off the top of the Market Centers profits. Thus, according to Keller Williams, the production royalty is an expense of the Market Center. Keller Williams argued it only created the profit sharing program. Keller Williams admitted the profit sharing plan it has with brokers and agents is part of its proprietary system of real estate sales. The plan is administered by the Market Center using the M.O.R.E. system computer software which is part of the Keller Williams proprietary system purchased by Rafeh Corporation. Keller Williams argued that there was no evidence to support the claim that defendants were engaged in a joint venture. Rather, Keller Williams reasoned that it sold the right to brokers and agents to use its proprietary system. Keller Williams reiterated its argument that: Ms. Szuch was an independent contractor; she was not acting in the course and scope of any relationship with Rafeh Corporation at the time of the accident; at the time of the accident, Ms. Szuch had left her boyfriends residence; Ms. Szuch was going to visit Ms. Robinson before driving to the open house; the going and coming rule bars vicarious liability for employers when employees are traveling to and from work absent an exception; and the dual or combined purpose rule did not apply to the facts of the case because Ms. Szuch was driving to Ms. Robinsons friends home for a purely social visit before beginning the work day.

C. The Rafeh Corporation Motion

Rafeh Corporation argued Ms. Szuch was an independent contractor but, in any event, was not acting in the course and scope of her agency at the time of the accident. Plaintiff did not dispute that Ms. Szuch and the Rafeh Corporation entered into an independent contractor agreement. Further, plaintiff did not dispute that: Ms. Szuch obtained her own property listings without the aid or assistance of the Rafeh Corporation; Rafeh Corporation did not instruct Ms. Szuch as to the manner, means, method, or mode of conducting open houses on her property listings; the Rafeh Corporation did not require Ms. Szuch or any agent to work inside the office or to rotate floor days in the office; or Ms. Szuch had not driven into the office on the date of the accident.

Plaintiff argued the accident was not outside the scope of her employment. Plaintiff argued triable issues of material fact existed because Ms. Szuch had balloons in the car to use at the Sylmar open house. Sylmar was the same city where Ms. Robinson, Ms. Szuchs best friend, lived. Ms. Szuch was also driving a vehicle for which the Rafeh Corporation was an additional named insured. Rafeh Corporation required Ms. Szuch name it as an additional insured. The accident occurred at 10:15 a.m. and the open house was to begin at 11 a.m. Also, plaintiff challenged the Rafeh Corporation characterization of the relationship with Ms. Szuch as an independent contractor under standards set forth in Gipson v. Davis Realty Company (1963) 215 Cal.App.2d 190, 203-214.

D. The Rulings

The trial court granted defendants summary judgment motions because: the accident occurred during non-work hours or during transit to and from the workplace for which there can be no respondeat superior liability; Ms. Szuch was not an employee, agent, or joint venturer of Keller Williams at the time of the accident; and Ms. Szuch was not acting within the scope and course of her employment at the time of the accident. This timely appeal followed.

III. DISCUSSION

A. The Standard of Review

In Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850-851, our Supreme Court described a partys burdens on a summary judgment motion as follows: [F]rom commencement to conclusion, the party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law. That is because of the general principle that a party who seeks a courts action in his favor bears the burden of persuasion thereon. [Citation.] There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof. . . . [] [T]he party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact. . . . A prima facie showing is one that is sufficient to support the position of the party in question. [Citation.] (Fns. omitted, see Kids Universe v. In2Labs (2002) 95 Cal.App.4th 870, 871, 878.) We review the trial courts decision to grant the summary judgment motion de novo. (Johnson v. City of Loma Linda (2000) 24 Cal.4th 61, 65, 67-68; Sharon P. v. Arman, Ltd. (1999) 21 Cal.4th 1181, 1188, disapproved on another point in Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 853, fn. 19.) The trial courts stated reasons for granting summary judgment are not binding on us because we review its ruling not its rationale. (Continental Ins. Co. v. Columbus Line, Inc. (2003) 107 Cal.App.4th 1190, 1196; Dictor v. David & Simon, Inc. (2003) 106 Cal.App.4th 238, 245.) In addition, a summary judgment motion is directed to the issues framed by the pleadings. (Turner v. Anheuser-Busch, Inc. (1994) 7 Cal.4th 1238, 1252; Ann M. v. Pacific Plaza Shopping Center (1993) 6 Cal.4th 666, 673.) Those are the only issues a motion for summary judgment must address. (Turner v. Anheuser-Busch, Inc.,supra, 7 Cal.4th at p.1253; Ann M. v. Pacific Plaza Shopping Center, supra, 6 Cal.4th at p. 673; Goehring v. Chapman University (2004) 121 Cal.App.4th 353, 364.)

B. The Respondeat Superior Doctrine

Under the respondeat superior doctrine, an employer is vicariously liable for the torts of an employee which are committed within the scope of the employment. (Lisa M. v. Henry Mayo Newhall Memorial Hospital (1995) 12 Cal.4th 291, 296; Farmers Ins. Group v. County of Santa Clara (1995) 11 Cal.4th 992, 1003.) The California Supreme Court explained the scope of employment principles under the respondeat superior doctrine as follows: In Perez v. Van Groningen & Sons, Inc. (1986) 41 Cal.3d 962,  . . . , we explained scope of employment principles under the respondeat superior doctrine as follows: [A]n employer is liable for risks arising out of the employment. [Citations.] []  A risk arises out of the employment when in the context of the particular enterprise an employees conduct is not so unusual or startling that it would seem unfair to include the loss resulting from it among other costs of the employers business. [Citations.] In other words, where the question is one of vicarious liability, the inquiry should be whether the risk was one that may fairly be regarded as typical of or broadly incidental to the enterprise undertaken by the employer. [Citation.] [Citation.] Accordingly, the employers liability extends beyond his actual or possible control of the employee to include risks inherent in or created by the enterprise. (Perez, supra, 41 Cal.3d at p. 968, italics added [employer vicariously liable for injuries sustained by plaintiff when he was knocked from a tractor driven by employee while disking employers orchard].) (Farmers Ins. Group v. County of Santa Clara, supra, 11 Cal.4th at p. 1003.)

In Farmers Ins. Group, the Supreme Court set forth the foreseeability test for evaluating a respondeat superior court claim: As the Court of Appeal elaborated in Rodgers v. Kemper Constr. Co. (1975) 50 Cal.App.3d 608, 618-619 (Rodgers): One way to determine whether a risk is inherent in, or created by, an enterprise is to ask whether the actual occurrence was a generally foreseeable consequence of the activity. However, foreseeability in this context must be distinguished from foreseeability as a test for negligence. In the latter sense foreseeable means a level of probability which would lead a prudent person to take effective precautions whereas foreseeability as a test for respondeat superior merely means that in the context of the particular enterprise an employees conduct is not so unusual or startling that it would seem unfair to include the loss resulting from it among other costs of the employers business. [Citations.] (Italics added.) We find the Rodgers foreseeability test useful because it reflects the central justification for respondeat superior: that losses fairly attributable to an enterprise-those which foreseeably result from the conduct of the enterprise-should be allocated to the enterprise as a cost of doing business. [Citations.] (Farmers Ins. Group v. County of Santa Clara, supra, 11 Cal.4th at pp. 1003-1004.)

In Farmers Ins. Group, the Supreme Court explained the application of the respondeat superior doctrine to the employment context: In California, the scope of employment has been interpreted broadly under the respondeat superior doctrine. For example, [t]he fact that an employee is not engaged in the ultimate object of his employment at the time of his wrongful act does not preclude attribution of liability to an employer. [Citation.] Thus, acts necessary to the comfort, convenience, health, and welfare of the employee while at work, though strictly personal and not acts of service, do not take the employee outside the scope of employment. [Citation.] Moreover, where the employee is combining his own business with that of his employer, or attending to both at substantially the same time, no nice inquiry will be made as to which business he was actually engaged in at the time of injury, unless it clearly appears that neither directly nor indirectly could he have been serving his employer. [Citations.] [Citation.] It is also settled that an employers vicarious liability may extend to willful and malicious torts of an employee as well as negligence. [Citations.] Finally, an employees tortious act may be within the scope of employment even if it contravenes an express company rule and confers no benefit to the employer. [Citations.] (Farmers Ins. Group v. County of Santa Clara, supra, 11 Cal.4th at pp. 1004 see Mary M. v. City of Los Angeles (1991) 54 Cal.3d 202, 209; John R. v. Oakland Unified School Dist. (1989) 48 Cal.3d 438, 447-450; Alma W. v. Oakland Unified School Dist. (1981) 123 Cal.App.3d 133, 139.)

The Supreme Court identified the circumstances where the respondeat superior doctrine is inapplicable as matter of law in the employment context: where an employee engages in malicious or tortious conduct for personal purposes which substantially deviates from employment duties; if an employee inflicts an injury out of personal malice, not engendered by the employment; if the employee acts out of personal malice unconnected with the employment; or if the misconduct is not an outgrowth of the employment. (Farmers Ins. Group v. County of Santa Clara, supra, 11 Cal.4th at p. 1005; accord John R. v. Oakland Unified School Dist., supra, 48 Cal.3d at p. 447; Hinman v. Westinghouse Elec. Co. (1970) 2 Cal.3d 956, 960; Carr v. Wm. C. Crowell Co. (1946) 28 Cal.2d 652, 656.) Citing Alma W. v. Oakland Unified School Dist., supra, 123 Cal.App.3d at page 140, a case involving molestation of a student by a school janitor, the Supreme Court in Farmers Ins. Group, synthesized the applicable rule: Stated another way, [i]f an employees tort is personal in nature, mere presence at the place of employment and attendance to occupational duties prior or subsequent to the offense will not give rise to a cause of action against the employer under the doctrine of respondeat superior. (Alma W., supra, 123 Cal.App.3d at p. 140.) In such cases, the losses do not foreseeably result from the conduct of the employers enterprise and so are not fairly attributable to the employer as a cost of doing business. (Farmers Ins. Group v. County of Santa Clara, supra, 11 Cal.4th at p. 1005.)

In Farmers Ins. Group, the Supreme Court identified situations where employers were held liable for an employees negligence: Our review of the case law discloses that an employer may be subject to vicarious liability for injuries caused by an employees tortious actions resulting or arising from pursuit of the employers interests. (E.g., Perez, supra, 41 Cal.3d 962 [tractor operator carried unauthorized passenger while serving the employers business]; De Rosier v. Crow (1960) 184 Cal.App.2d 476 [waitress employed by bowling alley/liquor bar attempted to stop fight involving patrons and owner of bowling alley/bar]; Caldwell v. Farley (1955) 134 Cal.App.2d 84 [union steward struck union member who expressed opinion against strike]; Sullivan v. Matt (1955) 130 Cal.App.2d 134 [railroad superintendent, acting to further the interests of his company, assaulted yardman for attentions to superintendents secretary]; Stansell v. Safeway Stores, Inc. (1941) 44 Cal.App.2d 822 [assault during dispute with customer over an order]; Pritchard v. Gilbert (1951) 107 Cal.App.2d 1 [traveling salesman, while driving car on employers business, lost temper and beat motorist over near accident]; Martin v. Leatham (1937) 22 Cal.App.2d 442 [private detective, hired to maintain order in skating rink, engaged in altercation with patron seeking admission, and shot decedent, who had intervened to stop the fight].) Vicarious liability may also be proper where the tortious conduct results or arises from a dispute over the performance of an employees duties, even though the conduct is not intended to benefit the employer or to further the employers interests. (E.g., Fields v. Sanders (1947) 29 Cal.2d 834 [employee truck driver beat motorist with wrench during dispute over employees driving on a company job]; Carr v. Wm. C. Crowell Co., supra, 28 Cal.2d 652 [employee of general contractor threw hammer at subcontractor during dispute over construction procedure].) Vicarious liability may even be appropriate for injuries caused after work hours where a dispute arises over the rights and privileges of off-duty employees. (Rodgers, supra, 50 Cal.App.3d 608 [injuries inflicted by off-duty employees of general contractor during dispute over right to use subcontractors equipment].) In these types of situations, the tortious actions are engendered by events or conditions relating to the employment and therefore are properly allocable to the employer. (Farmers Ins. Group v. County of Santa Clara, supra, 11 Cal.4th at pp. 1005-1006.)

C. Rafeh Corporations Liability

As for Rafeh Corporation, the existence of the independent contractor agreement cannot be used as a defense against a third party liability claim as a matter of law. Business and Professions Code section 10032 states: (a) All obligations created under Section 10000, and following, all regulations issued by the commissioner relating to real estate salespersons, and all other obligations of brokers and real estate salespersons to members of the public shall apply regardless of whether the real estate salesperson and the broker to whom he or she is licensed have characterized their relationship as one of independent contractor or of employer and employee. []  (b) A real estate broker and a real estate salesperson licensed under that broker may contract between themselves as independent contractors or as employer and employee, for purposes of their legal relationship with and obligations to each other. Characterization of a relationship as either employer and employee or independent contractor for statutory purposes, including, but not limited to, withholding taxes on wages and for purposes of unemployment compensation, shall be governed by Section 650 and Sections 13000 to 13054, inclusive, of the Unemployment Insurance Code. For purposes of workers compensation the characterization of the relationship shall be governed by Section 3200, and following, of the Labor Code. (Italics added.) The Court of Appeal has held: It is settled that for purposes of liability to third parties for torts, a real estate salesperson is the agent of the broker who employs him or her. The broker is liable as a matter of law for all damages caused to third persons by the tortious acts of the salesperson committed within the course and scope of employment. [Citations.] (California Real Estate Loans, Inc. v. Wallace (1993) 18 Cal.App.4th 1575, 1581; accord Gipson v. Davis Realty Co., supra, 215 Cal.App.2d at pp. 201-203; see also 2 Miller & Starr, Cal. Real Estate (3d. ed.)  3:18, 3:19 at pp. 93-104.)

Thus, for purposes of tort liability, a real estate agent-broker relationship may not be characterized as that of an independent contractor when the salesperson is acting within the scope of employment. (Bus. & Prof. Code,  10032, subd. (a); California Real Estate Loans, Inc. v. Wallace, supra, 18 Cal.App.4th at p. 1581; Gipson v. Davis Realty Co., supra, 215 Cal.App.2d at pp. 206-209; 10A Cal.Jur.3d Brokers  7; also2 Miller & Starr, Cal. Real Estate, supra,  3:18, 3:19 at pp. 93-104.) Insofar as liability to a third party is concerned, any provision purporting to change the relationship from agent to independent contractor is invalid. (California Real Estate Loans, Inc. v. Wallace, supra, 18 Cal.App.4th at p. 1581; Resnik v. Anderson & Miles (1980) 109 Cal.App.3d 569, 572-573; Payne v. White House Properties, Inc. (1980) 112 Cal.App.3d 465, 470; Gipson v. Davis Realty Co., supra, 215 Cal.App.2d at pp. 206-209.) If Ms. Szuch was acting within the course and scope of employment at the time of the accident, the broker, Rafeh Corporation, is potentially liable for plaintiffs injuries. (California Real Estate Loans, Inc. v. Wallace, 18 Cal.App.4th at p. 1581; Gipson v. Davis Realty Co., supra, 215 Cal.App.2d at pp. 206-209.)

D. Keller Williams Liability

Keller Williams argues: the franchise agreement establishes that the relationship with Rafeh Corporation was solely that of a franchisor and franchisee; the evidence shows it had no relationship with Ms. Szuch; and it retained control only to the extent of protecting and maintaining its trademark, trade name, and goodwill. Keller Williams also contends that the franchise agreement along with the other evidence established its control was limited to maintaining its reputation through quality control. Under these circumstances, Keller Williams asserts the trial court properly ruled that Ms Szuch was not its employee, agent, or joint venturer at the time of the accident.

In Cislaw v. Southland Corp. (1992) 4 Cal.App.4th 1284, 1288, the Court of Appeal explained: The general rule is where a franchise agreement gives the franchisor the right of complete or substantial control over the franchisee, an agency exists. [Citation.] [I]t is the right to control the means and manner in which the result is achieved that is significant in determining whether a principal-agency relationship exists. (Wickham v. Southland Corp. (1985) 168 Cal.App.3d 49, 59.) In the field of franchise agreements, the question of whether the franchisee is an independent contractor or an agent is ordinarily one of fact, depending on whether the franchisor exercises complete or substantial control over the franchisee. [Citations.] (Kuchta v. Allied Builders Corp. (1971) 21 Cal.App.3d 541, 547.) Only when the essential facts are not in conflict will an agency determination be made as a matter of law. (Wickham v. Southland Corp., supra, 168 Cal.App.3d at p. 55.)

For similar reasons, we agree with plaintiff that she produced sufficient evidence to raise a triable issue of material fact as to an ostensible agency relationship. As we explained in Gulf Ins. Co. v. TIG Ins. Co. (2001) 86 Cal.App.4th 422, 438-439: Actual authority is such as a principal intentionally confers upon the agent, or intentionally, or by want of ordinary care, allows the agent to believe himself to possess. (Civ. Code, 2316.) Civil Code section 2317 states, Ostensible authority is such as a principal, intentionally or by want of ordinary care, causes or allows a third person to believe the agent to possess. The Court of Appeal has synthesized the law as follows: . . . To establish ostensible authority in an agent, it must be shown the principal, intentionally or by want of ordinary care has caused or allowed a third person to believe the agent possesses such authority. (Civ. Code, 2317; Hill v. Citizens Nat. Trust & Sav. [ Bank] (1937) 9 Cal.2d 172, 176.) [] . . . [] Ostensible authority must be established through the acts or declarations of the principal and not the acts or declarations of the agent. (People v. Surety Ins. Inc. (1982) 136 Cal.App.3d 556, 562.) However, the doctrine of ostensible authority extends to subagents; hence the principal is similarly liable to third persons for representations made by subagents. (Hartong v. Partake (1968) 266 Cal.App.2d 942, 963.) Also, where the principal knows that the agent holds himself out as clothed with certain authority, and remains silent, such conduct on the part of the principal may give rise to liability. (Leavens v. Pinkham & McKevitt (1912) 164 Cal. 242, 247-248.) (Preis v. American Indemnity Co. (1990) 220 Cal.App.3d 752, 761.)

We need not reiterate plaintiffs showing of Keller Williams substantial control over Rafeh Corporation. (See pp. 8-11, supra.) Further, there is evidence that implicit representations were made to the public concerning Ms. Szuchs connection to Keller Williams. Keller Williams had a number of written policies and manuals concerning advertising. The Identity Standards Manual set forth rules to follow in advertising and the use of the logo on vehicle signs, building signs, stationery, and business cards. Although the franchisee was required to place the disclaimer An Independent Member Broker on advertisements and marketing materials, there was evidence that Ms. Szuchs business card contained no such disclaimer. In addition, the balloons were purchased to display over a sign containing the Keller Williams name and logo. Ms. Szuch testified that, at the time of accident, she was driving a vehicle with the Keller Williams logo on its side. Moreover, the Keller Williams name appeared on stationary, business cards, and signs pursuant to its express requirements. While the different inferences can be reached, from the conflicting evidence, the conclusions are to be drawn by a trier of fact. Plaintiff produced sufficient to raise triable issues of fact on the agency theory to defeat a summary judgment. We need not address plaintiffs alternative theories that Keller Williams is liable on an employment or joint venture basis.

E. The Scope Of Employment

As previously noted, the trial court granted both summary judgment motions on the ground that Ms. Szuch was not acting within the scope of employment at the time of the accident. Generally, the scope of employment is a factual question which is decided as a matter of law only when the facts are undisputed and no conflicting inferences may be drawn. (Farmers Ins. Group v. County of Santa Clarasupra, 11 Cal.4th at p. 1019; Myers v. Trendwest Resorts, Inc. (2007) 148 Cal.App.4th 1405, 1428; Baptist v. Robinson (2006) 143 Cal.App.4th 151, 162.) Here, the undisputed evidence established that, at the time of the accident, Ms. Szuch was carrying balloons in her car which she intended to use at an open house at Sylmar. Plaintiff was injured because the inflated balloons obstructed Ms. Szuchs view. No doubt, Ms. Szuch intended to stop at a Sylmar residence prior to going to the open house. But, she was carrying balloons that would be displayed on an open house sign advertising defendants business. She was also driving a vehicle with the Keller Williams Realty logo.

In the context of this case, we cannot say, as a matter of law, that utilizing the balloons to place on such a sign in order to attract potential real estate purchasers is a substantial deviation from Ms. Szuchs duties as a salesperson. Under the circumstances, it is foreseeable that a real estate agent might utilize and transport balloons to an open house in order to attract the attention of any prospective buyers. Ms. Szuchs conduct of transporting balloons to an open house is not so unusual and there is nothing unfair about including plaintiffs injuries as a cost of defendants business operations. (Farmers Ins. Group v. County of Santa Clara, supra, 11 Cal.4th at p. 1004; Perez v. Van Groningen & Sons, Inc., supra, 41 Cal.3d at p. 968; Myers v. Trendwest Resorts, Inc., supra, 148 Cal.App.4th 1403, 1428; Bussard v. Minimed, Inc. (2003) 105 Cal.App.4th 798, 803; Bailey v. Filco, Inc. (1996) 48 Cal.App.4th 1552, 1559.) Moreover, the fact that Ms. Szuch was driving a vehicle when she caused plaintiffs injury cannot be said to be a substantial deviation from the real estate business. Mr. Rafeh testified that driving a car was something he considered to be a part of the real estate business. Furthermore, Rafeh Corporation required Ms. Szuch to name it as an additional insured on her automobile insurance policy.

There is no merit to defendants assertion that summary judgment could not be entered because, as a matter of law, Ms. Szuch was driving to Ms. Robinsons residence. Defendants reason as follows. Ms. Szuch was intentionally driving to Ms. Robinsons residence before proceeding to the open house. Thus, defendants assert that given Ms. Szuchs intent at the moment the accident occurred, her conduct was outside the course and scope of her employment. As the Supreme Court noted in Farmers Ins. Group, to constitute conduct outside the course and scope of employment: the deviation or departure from the employers business to pursue a personal errand must be substantial and complete; a mere deviation for personal reasons from a business related task is insufficient to bring the conduct outside the respondeat superior rule as a matter of law; and pursuing a business errand and a personal objective simultaneously can potentially be conduct within the scope of employment. (Farmers Ins. Group v. County of Santa Clara, supra, 11 Cal.4th at p. 1004; see Mary M. v. City of Los Angeles, supra, 54 Cal.3d at pp. 202, 209.) As noted in Farmers Ins. Group, the Supreme Court held: [W]here the employee is combining his own business with that of his employer, or attending to both at substantially the same time, no nice inquiry will be made as to which business he was actually engaged in at the time of injury, unless it clearly appears that neither directly nor indirectly could he have been serving his employer. [Citations.] (Farmers Ins. Group v. City of Santa Clara, supra, 11 Cal.4th at p. 1004 citing John R. v. Oakland Unified School Dist., supra, 48 Cal.3d at p. 447.)

Here, a jury could reasonably infer that Ms. Szuch was serving the broker, Rafeh Corporation, at the time of the accident. The cause of the accident, which occurred at 10:15 a.m., was an obstructed view due to the inflated balloons. The inflated balloons were to be placed on a Keller Williams open house sign in Sylmar. The open house began at 11a.m. Ms. Szuch was driving the inflated balloons specifically to attract attention to a Keller Williams sign advertising an open house. Defendants would have obtained a direct benefit from balloons attracting attention to the Keller Williams business.

Defendants argue they are not liable because the going and coming rule which provides an employer is not liable for an employees tortious conduct during the normal commute to and from work by ordinary members of the work force. (Ducey v. Argo Sales Co. (1979) 25 Cal.3d 707, 722; Hinman v. Westinghouse Elec. Co., supra, 2 Cal.3d 956, 961; Kephart v. Genuity, Inc. (2006) 136 Cal.App.4th 280, 291.) However, the following is an exception to this rule, A well-known exception to the going-and-coming rule arises where the use of the car gives some incidental benefit to the employer. (State Farm Mut. Auto Ins. Co. v. Haight (1988) 205 Cal.App.3d 223, 241 accord Singh v. Board of Retirement (1996) 41 Cal.App.4th 1180, 1187; Huntsinger v. Glass Containers Corp. (1972) 22 Cal.App.3d 803, 811.) The Court of Appeal has held: [W]hen a business enterprise requires an employee to drive to and from its office in order to have his [or her] vehicle available for company business during the day, accidents on the way to and from the office are statistically certain to occur eventually, and the business enterprise having required the driving to and from work, the risk of such accidents are risks incident to the business enterprise. (Huntsinger v. Glass Containers Corp., supra, 22 Cal.App.3d at p. 810; accord Singh v. Board of Retirement, supra, 41 Cal.App.4th at p. 1188.) In this case, a jury could conclude that the Rafeh Corporation obtained a direct benefit from the commute to the Sylmar open house. Furthermore, the result is no different because Ms. Szuch combined a personal errand with the trip. Whether Ms.Szuch intended to perform a personal errand does not preclude the application of the exception to the coming and going rule as a matter of law because it did not determine the scope of employment.

Likewise, the going and coming rule does rule does not bar liability under agency law as a matter of law because the record supports the inference that Ms. Szuch was required to furnish a vehicle as part of her duties. The Court of Appeal has held: If an employer requires an employee to furnish a vehicle as an express or implied condition of employment, the employee will be in the scope of his employment while commuting to and from the place of employment. (Hinojosa v. Workmans Comp. Appeals Bd. (1972) 8 Cal.3d 150, 160; Huntsinger v. Glass Containers Corp., supra, 22 Cal.App.3d 803, 810.) (Felix v. Asai (1987) 192 Cal.App.3d 926, 932-933.) As previously noted, Mr. Rafeh testified that he considered a car to be necessary to perform a real estate agents duties. In addition, Ms. Szuch was required to name Rafeh Corporation as an additional insured on her automobile insurance policy.

Furthermore, we disagree with Keller Williams that Ducey v. Argo Sales Co., supra, 25 Cal.3d 707, 711-723, a case arising out a of jury trial where the defense prevailed, required the pre-trial summary judgment motion be granted. Ducey was a personal injury action caused by an automobile accident. (Id. at p. 711.) Plaintiffs sued the employer of the other vehicle. The driver had been employed to clean model homes at various locations. (Id. at p. 714.) There was evidence that the employee sometimes carried cleaning equipment in her car. (Ibid.) There was no evidence that her employer required her to do so. Also, there was evidence the employee was not reimbursed for travel expenses or the time spent driving to work. (Ibid.) A jury found that the employer was not liable because the driver was not acting within the scope and course of her employment at the time of the accident. (Id. at pp. 711, 721-723)

Keller Williams has misplaced its reliance on Ducey. This is because the issue of employer liability arose in Ducey after a jury trial in which plaintiffs asserted that employer liability should be imposed as a matter of law. (Id. at pp. 711, 721.) By contrast, the issue here is whether a triable issue of material fact existed. Moreover, Ducey rejected plaintiffs argument the employer was liable as a matter of law. Instead, the Supreme Court held that issue was factual and must be upheld because it was supported by substantial evidence. (Id. at pp. 721-723.) Ducey supports our conclusion that summary judgment was inappropriately entered because of the conflicting inferences raised by the evidence; i.e. the issue is factual in nature given the conflicting inferences.

IV. DISPOSITION

The judgment is reversed. Plaintiff, Natalia Reagan, is entitled to her costs on appeal from defendants, Keller Williams and Rafeh Corporation doing business as Keller Williams Realty.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

TURNER, P. J.

I concur:

KRIEGLER, J.

MOSK, J., Concurring

I concur and set forth my views of the applicable legal principles.

[I]t may be a question of fact whether in each case a real estate salesman is an employee within the common law definition of master and servant, the Legislature has, by virtue of statutory enactment, made such a salesman an agent of the broker as a matter of law. (Gibson v. David Realty Co. (1963) 215 Cal.App.2d 190, 196.) Accordingly, Rafeh Corporation would be liable for the torts of Ms. Szuch that took place within the scope and course of her agency relationship. (3 Witkin, Summary of Cal. Law (10th ed. 2005) Agency and Employment,  165, p. 208.)

Only if Ms. Szuch is deemed an employee and not just an agent, do we consider the rule that an employee going to and from work is generally considered outside the scope of employment during the period (the going and coming rule). (3 Witkin, Summary of Cal. Law, supra,  181, p. 229.) Even if she were an employee, the going and coming rule does not apply. An exception to the going and coming rule is when the employer requires the employee to use his or her own vehicle for work. That exception applies when a business enterprise requires an employee to drive to and from its office in order to have his vehicle available for company business during the day. . . . (Huntsinger v. Glass Containers Corp. (1972) 22 Cal.App.3d 803, 810.) Here, there is no indication that Ms. Szuch drove to and from the office. So there is a question of whether the going and coming rule applies to an employee who has no fixed work site. (See Henderson v. Adia Services, Inc. (1986) 182 Cal.App.3d 1069.) If it does, the exception should apply. (See, e.g., Hinojosa v. Workers Comp. Appeals Bd. (1972) 8 Cal.3d 150, 160-161; Lazar v. Thermal Equipment Corp. (1983) 148 Cal.App..3d 458.)

The liability of Keller Williams Realty, Inc. (Keller Williams) presents other issues. It may be that in certain instances a franchisor could be considered to be in an agency relationship with a franchisee. The issue is whether Keller Williams exercised the necessary complete or substantial control over Rafeh Corporation for there to be an agency relationship. (Cislaw v. Southland Corp. (1992) 4 Cal.App.4th 1284, 1288.) The doctrine of ostensible authority has no application in this case because the plaintiff was not led to believe in any authority or agency between or among the defendants. (See 3 Witkin, Summary of Cal. Law, supra,  144, p. 188.) This is an accident case in which the plaintiff had no knowledge regarding any of the defendants prior to the accident.

The court in Kaplan v. Coldwell Bank Residential Affiliates, Inc. (1997) 59 Cal.App.4th 741, 745 (Kaplan) states as follows: Under the Franchise Investment Law, a franchise agreement confers the right to use a trade name, service mark, or logo pursuant to a marketing plan prescribed by the franchisor. (Corp. Code,  31005, subd. (a)(1).) [T]he franchisors interest in the reputation of its entire [marketing] system allows it to exercise certain controls over the enterprise without running the risk of transforming its independent contractor franchise into an agent. (Cislaw v. Southland Corp., supra, 4 Cal.App.4th 1284, 1292, 6 Ca.Rptr.2d 386.) [] In determining whether a true agency relationship exists between a franchisor and franchisee, the courts focus on the right to control. [Citations.] If the franchise agreement gives the franchisor the right of complete or substantial control over the franchisee, an agency relationship exists. [Citation.] [I]t is the right to control the means and manner in which the result is achieved that is significant in determining whether a principal-agency relationship exists. [Citation.] (Cislaw v. Southland Corp., supra, 4 Cal.App.4th 1284, 1288, 6 Cal.Rptr.2d 386.)

In Kaplan, supra, 59 Cal.App.4th 741, the court held that the franchisor was entitled to summary judgment on the issue of agency on facts similar to those here. The fact that Coldwell Banker received a royalty based on Marshs gross receipts did not create a true agency relationship. [Citation.] If the law was otherwise, every franchisee who independently owned and operated a franchise would be the true agent or employee of the franchisor. [] Here it was undisputed that Marsh independently owned and operated the franchise. Marsh hired and fired employees, set office wages and commissions, and determined his business hours. The franchise agreement recited that he was an independent contractor and that Coldwell Banker could only terminate for cause. This was an important factor in determining whether Marsh was an agent or an independent contractor. [Citation.] [] The franchise agreement further required that Marsh hold his real estate office out as an independently owned and operated business. Marsh testified that his business cards and office letterhead contained the standard disclosure: Independently Owned and Operated Member of Coldwell Banker Residential Affiliates Incorporated. The Coldwell Banker logo did not appear on any of the real estate forms or transactional documents used by Marsh. [] The declarations and deposition testimony indicated that Coldwell Banker did not control or have the right to control Marshs business activities. (Id. at p. 746.)

Plaintiff has supplied evidence that Keller Williams provided training manuals, and had required procedures for bank accounts, software, locations and advertising. This evidence may not show anything more than a franchise relationship, or it may show sufficient control to constitute an agency relationship. Because the question of whether there is an agency relationship is factual, and we are to draw such inferences in the light most favorable to the party opposing summary judgment, I conclude that there is a triable issue of fact as to whether the franchise was also an agency relationship.

If Rafeh Corporation is the agent of Keller Williams, Ms. Szuch would be a subagent of Keller Williams. Under California law, it appears that a principal can be liable for the torts of subagents. (Mallory v. Fong (1951) 37 Cal.2d 356, 375-379; see Civ. Code,  2351; 3 Witkin, Summary of Cal. Law, supra,  174, p. 219.)

For the foregoing reasons, I concur in the reversal.

MOSK, J.

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