## Facts

- Taxpayers hired H & R Block to prepare tax returns and assist in obtaining refunds.
- During tax preparation, Block offered a “Rapid Refund” product that operated as a short-term refund anticipation loan (RAL) made by a third-party bank and secured by the expected tax refund.
- Plaintiffs alleged Block did not adequately disclose that the “Rapid Refund” was a loan and did not disclose Block’s financial interest in the loan fees/charges.
- Plaintiffs alleged the loans carried very high effective interest rates and that Block profited from the program.
- Plaintiffs brought multiple claims; the Pennsylvania Supreme Court addressed only whether Block was plaintiffs’ agent in the RAL transactions (a basis for fiduciary-duty liability).

## Issues

1. Whether Block acted as the taxpayers’ agent in connection with the RAL transactions, such that Block owed fiduciary duties in that loan context.

## Decision

- The court reversed the intermediate appellate court and reinstated summary judgment for Block on the agency/fiduciary-duty theory.
- As a matter of law, no agency relationship existed between Block and the taxpayers regarding the RAL transactions.
- Because agency was absent, fiduciary duties predicated on an agency relationship did not apply to Block’s conduct in facilitating the RAL program.

## Legal Principles

- Agency requires mutual assent that the agent will act on the principal’s behalf and subject to the principal’s right of control, plus the agent’s consent to that arrangement.
- A key indicator of agency is the principal’s right to control the alleged agent’s conduct in the relevant transaction and the agent’s power to affect the principal’s legal relations.
- A provider’s role as facilitator or intermediary (e.g., assisting with forms and transmitting information) does not create agency absent the principal’s control and authority to act on the principal’s behalf.
- A fiduciary or confidential relationship is not created solely by customer trust, reliance, informational imbalance, or the service provider’s undisclosed financial incentive; more is required than ordinary arm’s-length dealings.
- Summary judgment is proper when the undisputed facts, even viewed favorably to the nonmovant, cannot establish the essential elements of agency.

## Conclusion

The court held that Block’s assistance in obtaining refund anticipation loans through a third-party bank did not make Block the taxpayers’ agent because the taxpayers lacked control over Block’s conduct in the loan transaction and Block lacked authority to bind them; therefore, fiduciary-duty claims premised on agency failed as a matter of law.


Basile v. H & R Block, Inc., 761 A.2d 1115 (Pa. 2000)