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Oliveira-Brooks v. Re/Max International

March 21, 2007


Appeal from the Circuit Court of Cook County. No. 01 L 15993 Honorable Diane J. Larsen, Judge Presiding.

The opinion of the court was delivered by: Presiding Justice Theis

Published opinion

Plaintiff, Christine Oliveira-Brooks, as guardian of the estate of Ana Maria de Oliveira Fernandes, a disabled person, appeals from the order of the circuit court granting summary judgment in favor of defendant, Re/Max International, Inc. (Re/Max International). Plaintiff alleged that Re/Max International was vicariously liable for injuries Fernandes sustained in a accident while a passenger in a car driven by defendant Antonio Nascimento, a real estate sales associate affiliated with a Re/Max franchise. On appeal, plaintiff contends that summary judgment is not warranted because there is a genuine issue of material fact as to whether she established an actual or apparent agency relationship sufficient to hold Re/Max International vicariously liable for the alleged negligent conduct of Nascimento. For the following reasons, we affirm the judgment of the circuit court.


At the outset, we set forth and delineate the identity of the various defendants. It is undisputed that Re/Max International is the owner and licensor of the Re/Max trademarks and is engaged in the business of selling Re/Max franchises. Nevertheless, in 1977, it assigned its right to sell franchises in Illinois to the predecessor of Roaring Fork Capital Partners, Inc. doing business as Re/Max Northern Illinois, under a regional licensing agreement. By assigning its right to franchise, Re/Max International cannot sell franchises in Illinois, it has no ownership interest in Re/Max Northern Illinois or its franchisees, and has no contractual relationship with its franchisees or their sales associates. Re/Max Northern Illinois is the exclusive subfranchisor of local Re/Max franchises in the northern Illinois region.*fn1

Re/Max Midtown is a real estate brokerage business that entered into a franchise agreement with Re/Max Northern Illinois to establish a local Re/Max franchise.*fn2 Nascimento was a licensed real estate sales associate affiliated with Re/Max Midtown through an independent contractor agreement.

On September 24, 2001, while Nascimento was driving Fernandes and her son, Alex, to view some real estate property for sale, Nascimento's car collided with another vehicle and Fernandes was seriously injured. In her third amended complaint, plaintiff alleged that Nascimento was an actual or apparent agent of the entities Re/Max Midtown, Re/Max Northern Illinois, and Re/Max International and that Nascimento was acting in the course of his agency at the time of the collision. Plaintiff further alleged that Nascimento, individually and as an actual or apparent agent of these entities, was negligent in failing to keep a proper and sufficient lookout and in failing to follow various rules of the road under the Illinois Vehicle Code (625 ILCS 5/11-100 et seq. (West 2000)).

During the pendency of the lawsuit, Re/Max International filed a motion for summary judgment against plaintiff, asserting that there was no actual or apparent agency relationship between Re/Max International and Nascimento. Therein, with respect to actual agency, it argued that the express provisions of the various agreements excluded an agency relationship, and it had no right to control or supervise the daily business activities of Re/Max Midtown or its sales associates. In support of its arguments, it attached the regional licensing agreement, the franchise agreement, the independent contractor agreement, and documents promulgated by Re/Max International, including trademark and graphic standards and its policy and procedure manual. Additionally, it attached deposition testimony from the following individuals: Re/Max International representatives, Re/Max Midtown's broker/owner, Nascimento, and Alex. Also attached was Nascimento's business card indicating that each Re/Max office was independently owned and operated. With respect to the apparent agency claim, Re/Max International denied that plaintiff had come forward with any evidence that it held Nascimento out as its agent or that there was any evidence that Fernandes actually relied on any apparent agency relationship between Re/Max International and Nascimento.

The various agreements attempt to set forth the relationship between and among the Re/Max entities and affiliated sales associates. Under the terms of the regional licensing agreement, Re/Max Northern Illinois was granted "complete control, authority, and the right to conduct the business as [it] deem[ed] appropriate." The franchise agreement between Re/Max Northern Illinois and Midtown provides that Re/Max International and Re/Max Northern Illinois do not "exercise control over or attempt to influence the day-to-day activities or business methods of [Re/Max Midtown] [or] assume responsibility for the actions of [Re/Max Midtown]." The franchise agreement further defines the relationship of Re/Max Midtown as an independent contractor. Under the terms of the franchise agreement, Midtown was obligated to identify its franchise as being an independently owned and operated real estate service office.

Additionally, Nascimento had entered into a written agreement as part of his affiliation with Re/Max Midtown. That agreement provided in pertinent part:

"[Nascimento] shall be deemed to be an independent contractor. [Nascimento] shall be free to devote to his real estate service business such portion of his entire time, energy, effort and skill as he sees fit and to establish his own endeavors. [Nascimento] shall not be required to keep definite office hours, attend sales meetings or training sessions or adhere to sales quotas or participate in 'floor time.' [Nascimento] shall not have mandatory duties except those imposed by law or regulation and those specifically set out in this Agreement. Nothing contained in this Agreement shall be regarded as creating any relationship (employer/employee, joint venture, partnership, shareholder) between the parties other than the independent contractor relationship as set forth in this Agreement."

Additionally, the contract provided that Nascimento was required to adhere to office policies of Re/Max Midtown and the "System Standards" set forth by Re/Max Northern Illinois and Re/Max International. The contract further provided:

"[S]uch Office Policies and System Standards have been established for the purpose of preserving the reputation, high standards and goodwill associated with the RE/MAX name and service marks, but they do not, and are not intended to, govern the specific means and manner by which [Nascimento] conducts his day-to-day real estate activities as an independent contractor on behalf of [Re/Max Midtown]."

The contract also contained provisions indicating that Nascimento would be compensated solely by commissions, would not be treated as an employee for federal tax purposes, and would not be covered by worker's compensation laws. Nascimento was also responsible under the agreement for his own automobile and the expenses related to it. He was required to obtain his own automobile insurance to protect himself against any liability which might arise in connection with the operation of his business as a real estate salesperson. He was also required to obtain a separate endorsement naming Re/Max Midtown, Re/Max Northern Illinois and Re/Max International as additional insureds on his ...

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