Auer v. Paliath (Slip Opinion), 17 N.E.3d 561

Paliath began working for Home Town in 2006 as a licensed real-estate salesperson; contract allowed her to pursue clients and set methods, but required giving 30 percent of commissions to the broker.
Auer, a California investor, met Paliath online and sought Dayton, Ohio properties; Paliath listed properties and proposed a joint rehab/management venture funded by Auer.
Between Oct-Dec 2007, Paliath assisted Auer in purchasing five properties; Home Town earned commissions on each sale.
Auer later discovered that rehabilitation work was minimal and properties were deteriorating; investments totaled over $430,000 and, by 2012, properties were devalued or set for destruction.
Auer sued Paliath and Home Town for fraud; trial ultimately focused on vicarious liability, with the jury instructed on respondeat superior rather than Home Town’s direct actions.
The jury found Paliath fraudulent three of five deals and Home Town vicariously liable for Paliath’s fraud; $135,200 in damages awarded.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Scope of agency: fact or law?	Scope is a factual issue for the jury to determine.	R.C. 4735.21 fixes scope as a matter of law for real-estate brokers.	Scope is a question of fact for the jury; statute does not resolve all scope questions.
Jury instruction on scope of agency was correct?	Instruction should require finding both fraud and within-scope conduct for vicarious liability.	The instruction as given was sufficient to guide verdict.	Instruction was incomplete/incorrect; reversible error necessitating remand.
Effect of R.C. 4735.21 on scope determination?	Statute demonstrates that a salesperson’s actions within the broker’s name fall within the scope as a matter of law.	Statute does not address whether all acts during a transaction fall within scope; remains fact-intensive.	Statute does not compel a legal-within-scope conclusion; scope remains fact-dependent.

Groob v. KeyBank, 108 Ohio St.3d 348 (2006) (approval of complete and accurate jury instructions on scope of employment)
Byrd v. Faber, 57 Ohio St.3d 56 (1991) (scope of employment required for respondeat superior liability)
Osborne v. Lyles, 63 Ohio St.3d 326 (1992) (scope of employment as a factual, case-specific inquiry)
Posin v. A.B.C. Motor Court Hotel, Inc., 45 Ohio St.2d 271 (1976) (scope of employment turns on whether acts promote the employer’s business)
Theobald v. Univ. of Cincinnati, 111 Ohio St.3d 541 (2006) (employee actions outside scope if self-serving or unrelated to employer’s business)
Bunch v. Tom Althauser Realty, Inc., 55 Ohio App.2d 123 (1977) (collection of commissions can place acts within salesperson’s authority; limits of scope )
Tarlecka v. Morgan, 125 Ohio St.319 (1932) (ordinary/ natural incidents of the service as scope indicators)
Little Miami R.R. Co. v. Wetmore, 19 Ohio St.110 (1869) (principle that scope depends on whether conduct serves the employer)