An Oklahoma appellate court rejected a trial court’s decision that had found Ford Motor Company vicariously liable to disgruntled customers of a now-defunct dealership.
Thornton v. Ford Motor Co. The Oklahoma Court of Appeals ruled that Ford Motor Company was not liable to customers for the fraudulent actions of one of its dealerships. The dealership in question had forged checks and failed to deliver vehicles, leading to lawsuits by several customers.
At trial, the customers won on a theory of apparent agency, arguing that Ford’s actions led them to believe that the dealership was acting as an agent of Ford rather than as an independent dealer. The appellate court overturned this ruling, however, finding instead that customers could not reasonably have believed that the dealership was acting under Ford’s authority.
Although Ford’s internal documents showed a more substantial connection to the dealership, the court said that the documents could not have induced reliance on the part of customers because it was not observable by customers at the time of sale.