Case Law Summaries

Stevenson Lumber Yard, Inc. v. McLaren

• Opinion Date: July 6, 2001
• Business Law
• E-Mail

AGENCY—Even though two entities are similarly named and have an overlapping interest in the success of a single project, these commonalities do not create an agency relationship and the commonalities do not make either entity liable for the debts of the other.

A lumber supply company sued a developer and the owner of land on which the developer had planned to build a residential development. Although the developer operated under a trade name that was similar to the trade name used by the landowner, the developer and the landowner were dealing with each other at arm’s length. Both the developer and the landowner held separate accounts with the lumber supply company. After the developer declared bankruptcy, the lumber supply company sought relief from the landowner arguing that the trade names were used interchangeably to create apparent agency and that the land owner was therefore liable for the developer’s debt. The lower court dismissed the lumber supply company’s claim on the basis that the supply company made no showing of any agency relationship between the developer and the land owner. Further, all transactions were done under the account of the developer, not under the account of the land owner. The Appellate Division upheld the lower court’s ruling that the developer was acting on his own authority when he set up an account with the lumber supply company and that he was not acting as the landowner’s agent.

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