ÿWPCI 7# UN %k 0 (qw@™4Ùí 1müU:i 0¶£ 0DY 0c 0JU:JB„Æ 0TÎ 0^" 0h€ 0rè 0|Z 0†Ö 0\ 1uì 0da BÅ U>â U * J L×Ð#°ó£T¤v~øvÓv˜HP LaserJet 5/5M - StandardHPPCL5G,,,,0nLlÎ(ÖÃ9 Z ‹6Times New Roman RegularX($¡¡ G?G@GDAGBGDGUEGDFGURrƒ"xúÿÿú, ú3|xFG #,e37=CIQYag­­1.a.i.(1)(a)(i)1)a),c½¬AZ‹"Arial Regular(f(2i$¤¤Ý ƒ!ÝÝ  ÝÓ  ÓÔ€XGXXXÔÔ€ô¡“ôXXGÔà  àòòÚ  Ú0Ú  Úóó(#Ã$òòÚ  Ú0Ú  Úóó(;³º$´´Ô2,eÔÚ  Ú0Ú  Ú.Ô3  Ôà0  à2 ÿÿ0Indent1Ô2ÔÔ3  Ô, øð AZ‹"Arial RegularC:\WPWIN60\TEMPLATE\STANDARD.WPT2" ÿÿ0Indent2à0 àÔ2ÔÔ3  Ô2, ÿÿ0Indent3à0 àà0 àÔ2ÔÔ3  Ô26 ÿÿ0Indent4à0 àà0 àà0 àÔ2ÔÔ3  Ô2@ ÿÿ0Indent5à0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2J ÿÿ0Indent6à0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2T ÿÿ0Indent7à0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô2^ ÿÿ0Indent8à0 àà0 àà0 àà0 àà0 àà0 àà0 àÔ2ÔÔ3  Ô ÿÿ?AGMSYaioIndent0I.A.1.a.(1)(a)i)a)P ÿÿ8Mac DefaultMac DefaultÓ ` °šXÓ d< Œ 9p`(&Times New Roman< Œ 9p`(Arial ƒÝ ƒ!ÝÑ#€d#ÑÔ€*ÔÝ  ÝÝ ƒ $ÝÓ  ÓÔ€-ÔÔ€-ôÔà àòòÚ  ÚÚ  ÚóóÝ  ÝCreekmore€also€denied€exercising€any€control€over€Oakmont,€Monarch,€or€their€employees.€ÏCreekmore€admitted,€however,€that€he€intervened€in€at€least€one€other€dispute€regarding€OakmontððsÏfailure€to€pay€its€bills,€this€one€involving€a€local€pharmacist.€€Creekmore€further€acknowledged€thatÏAshlandððs€parent€company,€Medical€Holdings,€Inc.,€hired€a€former€golf€pro€to€promote€goodwill€betweenÏOakmont€and€community€leaders€in€Ashland€City.€Ì BÝ ƒ!ÝÑ#€d#ÑÔ€*ÔÝ  ÝÝ ƒ $ÝÓ  ÓÔ€-ÔÔ€-ôÔà àòòÚ  ÚÚ  ÚóóÝ  ÝòòSee€generallyóó€T.C.A.€ðððð€68„11„101€to€„250€(1996);€Tenn.€Comp.€R.€&€Regs.€tit.€1200,€ch.€8„6„.01€(revised€1992).Ì ÆÝ ƒ!ÝÑ#€d#ÑÔ€*ÔÝ  ÝÝ ƒ $ÝÓ  ÓÔ€-ÔÔ€-ôÔà àòòÚ  ÚÚ  ÚóóÝ  ÝLeasing€the€facility€apparently€was€not€an€option€during€the€initial€license€period€because,€forÏlicensing€purposes,€a€lease€was€considered€to€be€a€change€in€ownership.€€€òòSeeóó€Tenn.€Comp.€R.€&€Regs.Ïtit.€1200,€ch.€8„6„.01(2)(e)(3)(ii)€(revised€1986).Ì ¦Ý ƒ!ÝÑ#€d#ÑÔ€*ÔÝ  ÝÝ ƒ $ÝÓ  ÓÔ€-ÔÔ€-ôÔà àòòÚ  ÚÚ  ÚóóÝ  ÝUnder€Tennessee€law,€no€person€may€construct€a€nursing€home€or€other€health€care€institutionÏwithout€first€applying€for€and€receiving€a€certificate€of€need€from€the€commission.€€òòSeeóó€T.C.A.€ððÏ68„11„106(a)(1)€(1996).Ì ÷Ý ƒ!ÝÑ#€d#ÑÔ€*ÔÝ  ÝÝ ƒ $ÝÓ  ÓÔ€-ÔÔ€-ôÔà àòòÚ  ÚÚ  ÚóóÝ  ÝThe€Brewers€and€Brown€were€officers€of€Monarch.€Ì JÝ ƒ!ÝÑ#€d#ÑÔ€*ÔÝ  ÝÝ ƒ $ÝÓ  ÓÔ€-ÔÔ€-ôÔà àòòÚ  ÚÚ  ÚóóÝ  ÝThis€lack€of€reliance€on€facts€known€at€the€time€of€the€transaction€similarly€defeats€SouthernÏRehabððs€claim€that€Prins€had€ostensible€authority€to€bind€Ashland€to€the€contract.€€òòSeeóó€òòSouthern€Ry.€Co.€v.ÏPickleóó,€197€S.W.€675,€677€(Tenn.€1917);€òòRich€Printing€Co.€v.€Estate€of€McKellaróó,€330€S.W.2d€361,€376Ï(Tenn.€App.€1959).€€We€further€reject€Southern€Rehabððs€suggestion€that€Ashland,€through€theÏsubsequent€actions€of€Creekmore,€somehow€ratified€the€contract€after€its€execution.€€òòSeeóó€òòAbsar€v.€Jonesóó,Ï833€S.W.2d€86,€89„90€(Tenn.€App.€1992);€òòOsborne€Co.€v.€Bakeróó,€245€S.W.2d€419,€421€(Tenn.€App.Ï1951).ÌPtPtHHÚ(ÿáÿâùFG(üHHÚ(d'hStyl{WP}01•ÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃà Ãà Ãà Ãà Ãà ÃÃÃÃÃÃÃÃÃÃÃÐ ÐÐHHÐÐ  ÐÐ2ÐÐÿÿ¸æ$ÿÐÐHHÐÐÐÐÐÐÐÐ  ÐÐ ÐÐ ÐÑÑÑGenevaÑÑ ÑÑ € ÑÑ<Px–ÈÑÒÒÒ443!#4ÒÒ$ *$ÒÒ$*$ÒÒ ÿKK ÒÒ  Geneva ÒÒ  Geneva ÒÓ.,ÓÓÓÓ6ÓÓ ÓßßßßßßßßßßßßßßßßßßÑGenevaÑÑ ÑÒ  h HD: Geneva ÒÒ  h HD: Geneva ÒÝ ƒ!ÝÔ . ÔÔ€*ÔÝ  ÝÑ\R AØ'\ÑÑ  ÑÓ  ÓÓ ` p›XÓÑ\R AØ'\ÑÔ€-ÔÑ7€ÐXXdðdÈ7Ñ›Þ ÞÌà@ àò òIN€THE€COURT€OF€APPEALS€OF€TENNESSEEÌà@ àWESTERN€SECTION€AT€NASHVILLEÌÌÌSOUTHERN€REHABILITATIONà àà à)ÌSPECIALISTS,€INC.,à àà àà à)€€Ìà àà àà àà àà àà à)Ìà àà àó óPlaintiff/Appelleeà àà àò ò)€€Cheatham€Chancery€No.€7856Ìà àà àà àà àà àà à)ÌVS.à àà àà àà àà àà à)€€Appeal€No.€01A01„9607„CH„00345Ìà àà àà àà àà àà à)ÌASHLAND€HEALTH€CARE€CENTER,à à)ÌINC.,€d/b/a€OAKMONT€CAREà àà à)ÌCENTER;€and€DON€L.€BREWER,€à à)ÌGARY€BREWER,€GARY€G.€BROWN,à à)Ìand€S.€W.€CREEKMORE,€JR.,à àà à)ÌPARTNERS€d/b/a€OAKMONT€CAREà à)ÌCENTER,à àà àà àà àà à)Ìà àà àà àà àà àà à)Ìà àà àó óDefendant/Appellant,à àò ò)ó óÌà àà àà àà àà àà àò ò)ÌMONARCH€NURSING€HOME,€INC.,à à)Ìà àà àà àà àà àà à)Ìà àà àó óThird€Party€Defendant.à àò ò)ó óÌÌÌà@ àAPPEAL€FROM€THE€CHANCERY€COURT€OF€CHEATHAM€COUNTYÌà@ àAT€ASHLAND€CITY,€TENNESSEEÌà@ àTHE€HONORABLE€LEONARD€W.€MARTIN,€CHANCELLORÌÌÌÌÌÌò òROBERT€A.€ANDERSONÌó óNashville,€TennesseeÌAttorney€for€Appellant,€Ashland€Health€Care€Center,€Inc.ÌÌÌò òROBERT€L.€PERRY,€JR.Ìó óAshland€City,€TennesseeÌAttorney€for€Appellee,€Southern€Rehabilitation€Specialists,€Inc.ÌÌÌÌÌÌÌò òREVERSED€AND€REMANDEDÌÌÌó óà àà àà àà àà àà àà àà àà àò òALAN€E.€HIGHERS,€J.ÌÌÌÌCONCUR:ÌÌDAVID€R.€FARMER,€J.ÌÌHOLLY€KIRBY€LILLARD,€J.ÌÑ7€ ·o XXdðXXdð7ÑÌÓÓó óà àDefendant€Ashland€Healthcare€Center,€Inc.€(Ashland),€appeals€the€judgmentÏentered€against€it€in€this€breach€of€contract€action.€€The€contract€at€issue€was€betweenÏPlaintiff/Appellee€Southern€Rehabilitation€Specialists,€Inc.€(Southern€Rehab),€andÏOakmont€Healthcare€Center€(Oakmont).€€In€imposing€liability€against€Ashland,€the€trialÏcourt€ruled€that€Pete€Prins,€the€administrator€of€Oakmont€and€an€employee€of€third„party€defendant€Monarch€Nursing€Homes,€Inc.€(Monarch),€had€the€authority€to€bindÏAshland€to€the€contract€between€Southern€Rehab€and€Oakmont.€€For€the€reasonsÏhereinafter€stated,€we€reverse€the€judgment€against€Ashland€and€remand€for€furtherÏproceedings.ÌÌà àSouthern€Rehab€provides€rehabilitation€services€to€hospitals,€nursing€homes,Ïand€other€health€care€institutions.€€€In€May€1993,€Michael€Waldrop,€Southern€RehabððsÏcorporate€secretary,€visited€Ashland€City,€Tennessee,€to€solicit€business.€€There,ÏWaldrop€met€with€a€nursing€home€administrator€named€John€Pugh,€whose€office€wasÏlocated€across€from€the€courthouse.€€€During€the€meeting,€Pugh€showed€Waldrop€theÍblueprints€of€a€new€nursing€home€facility€being€constructed€in€Ashland€City,€and€PughÏpointed€on€the€plans€to€where€rehabilitation€services€would€be€offered€at€the€facility.€ÏThe€title€on€the€blueprints€included€the€name,€ð ðAshland€Healthcare€Center,€Inc.ðð€€œWhen›ÏWaldrop€inquired€about€Ashland€Healthcare€Center,€Inc.,€Pugh€explained€thatÏAshland,€which€had€purchased€the€land€and€was€building€the€facility,€was€a€reputableÏcompany€based€in€Fort€Smith,€Arkansas.€€œPugh›€also€took€Waldrop€to€the€constructionÏsite€to€view€the€facility€while€it€was€being€built.€œÌ›Ìà àWaldrop€subsequently€submitted€a€proposal€to€provide€rehabilitation€services€atÏthe€new€nursing€home€facility,€but€he€did€not€receive€a€response€to€his€proposal€forÏseveral€œmonths.›€€Then,€in€late€September€1993,€Waldrop€received€a€telephone€callÏfrom€someone€named€Pete€Prins,€who€informed€Waldrop€that€Southern€Rehab€hadÏbeen€awarded€the€contract€at€ð ðOakmont.ðð€€Prins€explained€that€ð ð[t]he€state€was€comingÏin€to€inspect€and€unless€he€had€a€rehab€contract€on€the€premises,€then€he€wouldnððt€beÏgranted€the€license.ðð€€œAfter›€further€discussion,€Waldrop€realized€that€Prins€was€referringÏto€the€nursing€home€facility€recently€built€by€Ashland€in€Ashland€City.€Ìà àWaldrop€and€Prins€negotiated€and,€on€September€29,€1993,€executed€aÏcontract€wherein€Southern€Rehab€agreed€to€provide€rehabilitation€services€at€the€newÏfacility.€€œOn›€the€contract,€Prins€instructed€Waldrop€to€fill€in€the€name€ð ðOakmontÏHealthcare€Centerðð€as€the€contracting€facility.€œWaldrop›€did€not€question€Prins€about€theÏfacilityððs€name€as€it€appeared€on€the€contract,€and€he€did€not€ask€any€questions€aboutÏthe€relationship,€if€any,€between€Ashland€Healthcare€Center,€Inc.,€and€Oakmont.€ÏBased€on€the€previous€information€which€he€had€received€from€John€Pugh,€WaldropÍassumed€that€Oakmont€and€Ashland€were€the€same€entity.€€œSouthern›€Rehab€beganÏproviding€services€to€Oakmont€under€the€contract€in€October€1993.€ÌÌà àBy€January€1994,€Waldrop€was€experiencing€difficulties€collecting€paymentsÏdue€from€Oakmont€under€the€contract.€€œWhen›€Waldrop€talked€to€Prins€about€theÏcollection€problems,€Prins€gave€Waldrop€two€telephone€numbers,€one€to€AshlandððsÏoffices€in€Fort€Smith€and€the€second€number€to€an€entity€named€Monarch€NursingÏHomes,€Inc.,€in€Dallas,€Texas.€€œWaldrop›€called€both€numbers,€and€within€a€week,ÏWaldrop€received€a€check€from€Oakmont€for€about€$5000.€œWhen›€Waldrop€againÏexperienced€problems€collecting€payments,€he€again€contacted€Ashlandððs€offices€inÏFort€Smith.€œThis›€time,€the€party€answering€the€phone€put€Waldrop€in€touch€withÏAshlandððs€president,€S.W.€Creekmore,€Jr.€€œDuring›€his€subsequent€conversation€withÏCreekmore,€Waldrop€expressed€reservations€about€the€ð ðpeople€[who]€were€managingÏ[the€nursing]€home.ðð€€Creekmore€responded€by€indicating€that€he€would€talk€to€ð ðMr.ÏBrewerðð€about€the€problems€Waldrop€was€having.€€œWaldrop›€later€received€anotherÏcheck€from€Oakmont,€this€one€for€about€$4150.€ÌÌà àAfter€he€began€experiencing€problems€collecting€payments€due€under€theÏcontract,€Waldrop€decided€to€obtain€more€information€about€Oakmont.€€In€JanuaryÏ1994,€Waldrop€visited€the€offices€of€the€Board€for€Licensing€Health€Care€Facilities€inÏNashville.€œWhile›€there,€Waldrop€examined€the€licensing€file€on€Oakmont,€and€heÏdiscovered€that€the€license€application€was€made€in€the€name€of€Ashland€HealthcareÏCenter,€Inc.,€d/b/a€Oakmont€Care€Center.€€œThe›€application€listed€the€names€andÍaddresses€of€Ashlandððs€officers,€including€Creekmore,€as€well€as€financial€and€otherÏreferences.€€The€application€also€indicated€that€Monarch€had€a€management€contractÏto€operate€the€facility.€€œPete›€Prins€signed€the€application€as€facility€administrator.€ÏWaldrop€also€obtained€a€copy€of€the€United€States€Department€of€Health€and€HumanÏServices€ð ðDisclosure€of€Ownership€and€Control€of€Interest€Statement,ðð€which€showedÏthe€name€of€the€facility€to€be€Ashland€Healthcare,€Inc.,€d/b/a€Oakmont€Care€Center,Ïand€the€owner€of€the€facility€to€be€Ashland€Healthcare,€Inc.,€in€Fort€Smith€œ.€€Again,›€theÏform€was€signed€by€Pete€Prins€as€facility€administrator.€ÌÌà àOnce€Waldrop€satisfied€himself€that€Ashland,€in€fact,€owned€the€facility,€heÏdecided€that,€despite€the€payment€problems,€Southern€Rehab€would€continue€toÏprovide€services€to€Oakmont€under€the€contract.€€œFrom›€his€examination€of€OakmontððsÏlicensing€file,€Waldrop€knew€that€Monarch€had€a€contract€to€manage€the€facility,€butÏsuch€management€contracts€were€common€in€the€nursing€home€industry.€€œIn›€WaldropððsÏview,€Ashland,€as€owner€of€the€facility€and€holder€of€the€nursing€home€license,€hadÏultimate€responsibility€for€Oakmontððs€financial€obligations.€€œOakmont›€continued€to€fail€toÏmake€payments€under€the€contract,€however,€and€Waldrop€terminated€the€contract€inÏMay€1994.€ÌÌà àAfter€Waldrop€terminated€the€contract,€he€discovered€that€Prins€and€Pugh€wereÏemployees€of€Monarch,€not€Ashland.€€œWaldrop›€also€discovered€that,€rather€than€havingÏa€contract€to€manage€the€facility,€Monarch€actually€leased€the€facility€from€Ashland.€€ÏS.W.€Creekmore,€Jr.,€Ashlandððs€president,€denied€authorizing€Monarch€to€license€theÍfacility€in€Ashlandððs€name.œ× ƒ/ ××  ×›€€œ€Certain›€circumstantial€evidence,€however,€supportedÏSouthern€Rehabððs€contention€that€such€authority€was€given.€€Don€Brewer,€an€officerÏand€one€of€the€owners€of€Monarch,€testified€that€Monarch€was€responsible€for€takingÏthe€necessary€steps€to€obtain€the€initial€license€for€the€nursing€home.€€œAt›€some€pointÏearly€in€the€licensing€process,€Brewer€learned€that€the€original€license€had€to€be€inÏAshlandððs€name€and€that,€during€the€initial€license€period,€Monarch€could€operate€theÏfacility€only€under€a€management€contract€and€not€under€a€lease€arrangement.× ƒ0 ××  ×€€œ€ÏBrewer›€testified€that€Creekmore€also€became€aware€of€these€requirements€early€in€theÏlicensing€process.€€€To€circumvent€the€limitation€against€leasing€the€facility,œ× ƒ1 ××  ×›€MonarchÏinitially€managed€the€facility€under€an€oral€management€contract.€€œAfter›€obtaining€theÏinitial€license,€however,€Monarchððs€relationship€with€Ashland€reverted€to€a€true€leaseÏrelationship,€as€was€the€intent€from€the€beginning.€œÌÌà àIn€addition€to€Brewerððs€testimony,€another€key€piece€of€evidence€supportedÏSouthern€Rehabððs€claim€that€Ashland€authorized€Monarch€to€license€the€facility€inÏAshlandððs€name.€€Less€than€one€week€before€Pete€Prins€submitted€the€initial€licenseÍapplication€in€the€name€of€Ashland€Healthcare€Center,€Inc.,€d/b/a€Oakmont€CareÏCenter,€Ashlandððs€attorney,€E.€Graham€Baker,€Jr.,€sent€a€letter€to€the€general€counselÏfor€the€Tennessee€Health€Facilities€Commission€informing€the€commission€that€theÏowner€of€the€nursing€home€had€decided€ð ðto€use€the€d/b/a€ððOakmont€Care€Centerðð€asÏthe€working€name€of€the€facility.ðð€€Baker€requested€that€the€certificate€of€need× ƒ2 ××  ×€for€theÏnursing€home€be€reissued€to€reflect€this€change.€€The€letter,€a€copy€of€which€was€sentÏto€the€licensing€board,€may€have€facilitated€the€boardððs€approval€of€Monarchððs€initialÏlicense€application€because€the€board€could€have€denied€the€license€if€the€name€onÏthe€application€did€not€match€the€name€on€the€certificate€of€need.€€Such€assistance€byÏAshland€would€have€been€consistent€with€provisions€of€the€lease€between€AshlandÏand€Monarch€which€required€them€to€ð ðcooperate€with€each€other€in€obtaining€theÏnecessary€governmental€licenses€and€permits€required€to€operate€a€nursing€home€onÏthe€leased€premises.ðð€ÌÌà àThe€licensing€board€eventually€learned€of€the€lease€arrangement,€and€MonarchÏfiled€a€new€license€application€in€its€own€name.€€At€all€times€relevant€to€this€litigation,Ïhowever,€Ashland€Healthcare€Center,€Inc.,€d/b/a€Oakmont€Care€Center,€was€theÏlicensee€for€the€facility.€ÌÌà àAs€a€result€of€the€foregoing€events,€in€July€1994€Southern€Rehab€brought€thisÏbreach€of€contract€action€against€Ashland€Healthcare€Center,€Inc.,€d/b/a€Oakmont€CareÍCenter,€and€against€Don€L.€Brewer,€Gary€Brewer,€Gary€G.€Brown,× ƒ3 ××  ×€and€S.W.ÏCreekmore,€Jr.,€as€the€alleged€partners€of€Oakmont€Care€Center.€€After€filing€theirÏrespective€answers€denying€liability,€Ashland€and€Creekmore€filed€a€third„partyÏcomplaint€against€Monarch€in€which€they€asserted€that€Monarch€was€ultimately€liableÏfor€any€judgment€entered€against€Ashland€or€Creekmore€because€Monarch,€a€MissouriÏcorporation€doing€business€as€Oakmont€Care€Center,€was€the€contracting€agency.€ÏMonarch€answered€the€third„party€complaint€and€admitted€that€it€was€responsible€forÏthe€payment€of€monies€owed€to€Southern€Rehab€for€services€rendered€at€Oakmont.€ÌÌà àPrior€to€trial,€non„suits€with€prejudice€were€entered€as€to€the€individualÏdefendants,€Don€L.€Brewer,€Gary€Brewer,€Gary€G.€Brown,€and€S.W.€Creekmore,€Jr.€ÏBefore€proceeding€to€trial,€the€remaining€parties,€Southern€Rehab,€Ashland,€andÏMonarch,€stipulated€that€the€total€amount€owed€to€Southern€Rehab€under€the€contractÏwas€$111,303.04,€including€all€interest€which€had€accrued€through€January€4,€1996.€ÌÌà àAt€the€trialððs€conclusion,€the€trial€court€ruled€that€Ashland€was€liable€under€theÏcontract€between€Oakmont€and€Southern€Rehab.€€As€grounds€for€its€ruling,€the€trialÏcourt€first€found€that€Ashland€had€acquiesced€in€Monarchððs€action€of€obtaining€theÏnursing€home€license€in€Ashlandððs€name:ÌÓÓà8 àà8 àI€am€not€persuaded€at€all€that€these€people€[MonarchððsÏemployees]€were€so€brazen€that€they€just€obtained€thisÏlicense€in€the€name€of€Ashland€without€havingÏacquiescence€on€the€part€of€someone€connected€withÏAshland€to€do€that.€€And€I€think€[Ashland]€did€acquiesce.€ÓÓÌThe€court€then€reasoned:ÌÓÓà8 àà8 àI€believe€Ashland€to€be€culpable€because€I€believeÏ[Ashland]€acquiesced€in€using€[its]€name€for€the€purposes€ofÏobtaining€the€license€as€a€matter€of€convenience€toÏexpedite€the€situation.ÌÌà8 àà8 àà àAnd€I€believe€that€when€some€other€company,€or€aÏmember€of€the€public€comes€in€there,€relying€on€that€stateÏlicense,€knowing€that€whoever€has€got€that€state€license€isÏwho€[theyððre]€dealing€with€because€[Monarch]€canððt€operateÏa€nursing€home€without€a€state€license.€€And€I€believe€theyÏare€entitled€to€rely€on€[the€license].€€And€I€believe€thatÏAshland,€thereby,€exposed€[itself].€ÓÓÌIn€accordance€with€its€ruling,€the€trial€court€subsequently€entered€an€order€awardingÏSouthern€Rehab€a€judgment€against€Ashland€in€the€amount€of€$111,303.04,€plusÏ$21,000€in€attorneyððs€fees€and€costs.€€The€trial€court€awarded€Ashland,€in€turn,€aÏjudgment€against€Monarch€in€the€amount€of€$132,303.04,€plus€$20,000€in€attorneyððsÏfees.ÌÌà àOn€appeal,€Ashland€contends€that€the€judgment€against€it€cannot€be€sustainedÏunder€any€of€the€agency€theories€advanced€by€Southern€Rehab€at€trial.€€As€an€initialÏmatter,€we€must€agree€with€Ashlandððs€contention€that€the€doctrine€of€apparent€authorityÏhas€no€application€to€this€case.€€A€principal€is€bound€by€contracts€made€by€its€agent,Ïprovided€the€agent€is€acting€within€the€scope€of€his€actual€or€apparent€authority.€€òòBellsÏBanking€Co.€v.€Jackson€Centre,€Inc.óó,€938€S.W.2d€421,€424€(Tenn.€App.€1996).€It€is€well„established,€however,€that€ð ð[i]n€determining€questions€of€apparent€agency,€theÏapparent€power€of€the€agent€is€determined€by€acts€of€the€principal.ðð€€òòDurham€v.ÏWaddell€&€Reed,€Inc.óó,€723€S.W.2d€129,€130€(Tenn.€App.€1986).€€ð ðActs€of€the€agentÍalone€will€not€constitute€apparent€authority.ðð€€òòIdóó.;€òòaccordóó€òòSouthern€Ry.€Co.€v.€Pickleóó,Ï197€S.W.€675,€677€(Tenn.€1917);€òòFranklin€Distrib.€Co.€v.€Crush€International€(U.S.A.),ÏInc.óó,€726€S.W.2d€926,€931€(Tenn.€App.€1986).€€To€prove€apparent€agency,€the€plaintiffÏgenerally€must€establish€that:ÌÓÓà8 àà8 à(1)€the€principal€actually€or€negligently€acquiesced€inÏanother€partyððs€exercise€of€authority;€(2)€the€third€personÏhad€knowledge€of€the€facts€and€a€good€faith€belief€that€the€ÌÌÌà8 àà8 àapparent€agent€possessed€such€authority;€and€(3)€the€thirdÏperson€relied€on€this€apparent€authority€to€his€or€herÏdetriment.ÌÌÓÓòòWhite€v.€Methodist€Hosp.€S.óó,€844€S.W.2d€642,€646€(Tenn.€App.€1992)€(citationsÏomitted).ÌÌà àAt€trial,€Southern€Rehab€sought€to€establish€apparent€agency€through€AshlandððsÏaction€in€allowing€Monarch€to€license€the€facility€in€the€name€of€Ashland€HealthcareÏCenter,€Inc.,€d/b/a€Oakmont€Care€Center.€€The€trial€court€apparently€adopted€thisÏagency€theory€because€the€court€found€that€Ashland€acquiesced€in€Monarchððs€use€ofÏAshlandððs€name€to€obtain€the€initial€license€for€Oakmont€and,€further,€that€SouthernÏRehab€was€entitled€to€rely€on€the€information€contained€in€the€license€when€it€executedÏthe€contract€with€Oakmont.€€It€was€undisputed,€however,€that€Waldrop€had€not€learnedÏof€Ashlandððs€action€at€the€time€that€Southern€Rehab€entered€into€the€contract€withÏOakmont.€€When€Southern€Rehab€executed€the€contract,€the€only€alleged€acts€uponÏwhich€Waldrop€had€relied€were€those€of€Monarchððs€employees,€Pugh€and€Prins.€ÏInasmuch€as€Waldrop€did€not€rely€to€Southern€Rehabððs€detriment€on€any€acts€ofÍAshland,€Ashland€could€not€be€held€liable€to€Southern€Rehab€under€the€doctrine€ofÏapparent€authority.× ƒ4 ××  ×ÌÌà àWe€also€have€considered€whether€the€judgment€against€Ashland€is€sustainableÏunder€a€theory€of€express€or€actual€authority.€€If€Prins€had€the€actual€authority€toÏexecute€the€contract,€then€the€trial€courtððs€judgment€may€be€affirmed€regardless€ofÏWaldropððs€knowledge€because,€ð ðwhere€an€agent€has€the€actual€authority€to€perform€anÏact,€the€one€dealing€with€him€need€not€know€of€that€authority€at€the€time€of€theÏtransaction€to€bind€the€principal€if€that€authority€actually€existed.ðð€€òòMcConnico€v.€ThirdÏNatððl€Bankóó,€499€S.W.2d€874,€883€(Tenn.€1973).€€We€conclude,€however,€that€both€theÏevidence€and€the€trial€courtððs€findings€preclude€us€from€holding€that€Prins€had€expressÏor€actual€authority€to€bind€Ashland€to€the€contract€between€Oakmont€and€SouthernÏRehab.€€As€this€court€previously€stated,ÌÓÓà8 àà8 àà àThe€burden€of€proving€an€agency€relationship€is€onÏthe€person€alleging€its€existence....€€The€scope€and€extentÏof€an€agentððs€real€and€apparent€authority€are€questions€toÏbe€determined€by€the€trier€of€fact€from€all€of€the€facts€andÏcircumstances€in€evidence.ÌÌÓÓòòSloan€v.€Hallóó,€673€S.W.2d€548,€551€(Tenn.€App.€1984)€(citations€omitted).ÌÌà àEven€if€Ashland,€through€Creekmore€or€another€person,€authorized€Monarch€toÏobtain€the€initial€nursing€home€license€for€Oakmont€in€Ashlandððs€name,€SouthernÏRehab€presented€no€evidence€that€this€grant€of€authority€extended€beyond€allowingÏMonarch€to€use€Ashlandððs€name€in€the€license€application.€€To€the€contrary,€the€trialÏcourt€found€that€the€authority€granted€relative€to€the€licensing€process€ð ðwas€just€a€short„term€thing€until€they€could€get€the€paperwork€straightened€outðð€and€that€there€was€ð ðnoÏquestion€that€it€[was]€Monarch€that€was€running€the€place€that€contracted€withÏ[Southern€Rehab].ðð€€While€Ashland€may€have€authorized€Monarch€to€file€the€licenseÏapplication,€the€record€contains€no€evidence€that€Creekmore,€or€anybody€elseÏassociated€with€Ashland,€authorized€Monarch€employees€to€enter€into€contracts€withÏthird€parties€on€behalf€of€Ashland.ÌÌà àThe€trial€courtððs€judgment€against€Ashland€is€hereby€reversed,€and€this€cause€isÏremanded€for€further€proceedings€consistent€with€this€opinion.€€Costs€on€appeal€areÏtaxed€to€Southern€Rehab,›€for€which€execution€may€issue€if€œnecessary.ÌÌÓÓà àà àà àà àà àà àà àÌà àà àà àà àà àà àà àà àòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€Ïà àà àà àà àà àà àà àà àóóHIGHERS,€J.ÌÌÌÌCONCUR:ÌÌÌÌòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€óóÌFARMER,€J.ÌÌÌÌòò€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€€ÌóóLILLARD,€J.€›