Appraise the correctness of the following statement:

“Apparent authority comes from the actions of a principal, not the statements of an individual who claims to be an agent.”

Recovery Express and Interstate Demolition (IDEC) are two separate corporations located at the same business address in Boston. On August 22, 2003, Albert Arillotta, a “partner” at IDEC sent an e-mail to Len Whitehead Jr. of CSX Transportation expressing an interest in buying “rail cars as scrap.” Arillotta represented himself to be “from interstate demolition and recovery express” in the e-mail. And the e-mail address from which he sent his inquiry was “albert@recoveryxpress.com.” Arillotta went to CSX rail yard, disassembled the cars and transported them away. Thereafter CSX sent invoices for payment for the scrap railcars totaling $115,757.36 addressed to IDEC at its Boston office shared with Recovery Express. Whitehead believed Arillotta was authorized to act for Recovery Express, based on the e-mail’s domain name—“recoveryexpress.com.” Recovery claims that Arillotta never worked for it. Recovery’s president Thomas Trafton allowed the “fledgling” company to use telephone, fax, and e-mail services at its offices, but never shared anything with IDEC—assets, funds, books of business, or financials. CSX sued Recovery for the invoice amount on the doctrine of “apparent authority.” IDEC is now defunct. Recovery claims that Arillotta never worked for it, and it is not liable.

JUDICIAL OPINION

YOUNG, D. J.… The Case, then, rests on the doctrine of apparent authority. “Apparent authority is the power held by an agent or other actor to affect a principal’s legal relations with third parties when a third party reasonably believes the actor has authority to act on behalf of the principal and that belief is traceable to the principal’s manifestations.” Restatement at § 2.03. It “is not established by the putative agent’s words or conduct, but by those of the principal.”…

Moreover, apparent authority “may exist only when the plaintiff reasonably may believe as a result of the principal’s words or conduct that the agent is authorized to act on its behalf”…

In what looks to be an issue of first impression, the facts of this case set up the question whether an e-mail domain name, by itself, cloaks a purported agent with authority sufficient as matter of law to be called “apparent.” Because apparent authority depends on the knowledge held by Whitehead and CSX of Arillotta’s authority, which knowledge was derived from actions of Recovery, the only relevant conduct by Recovery is that it issued Arillotta an e-mail address with its domain name. Such associations as Recovery having the same offices, mailing address, phone number, or fax number are red herrings; these facts—if Whitehead even possessed them prior to entering the contract—emanated from Arillotta by way of his e-mail signature or telephone representations. There is no evidence of the manifestation of those facts by Recovery to Whitehead and CSX (i.e., by way of its website, as CSX asserted at oral argument) until after the contract was entered and collection efforts had begun.

The only act taken by Recovery known to Whitehead and CSX prior to entering the contract and upon which Whitehead could rely, was its issuance to Arillotta of an e-mail address sporting Recovery’s domain name (@recovery express.com). The Court holds that Whitehead and CSX were unreasonable, as matter of law, in their reliance solely on an e-mail domain name. Such a manifestation by Recovery cannot be sufficient to sustain a claim of apparent authority. Granting an e-mail domain name, by itself, does not cloak the recipient with carte blanche authority to act on ……………………