## Facts

- Joyce A. Green filed a putative class action on behalf of Maryland customers whose taxes H & R Block prepared and who obtained Refund Anticipation Loans (RALs) through Block’s “Rapid Refund” program from January 1992 forward.
- Block offered (1) electronic filing for a fee, and (2) faster access to cash by facilitating short-term bank loans secured by a customer’s anticipated tax refund.
- In Maryland, Block arranged RALs through a third-party bank; customers who qualified received a loan equal to the anticipated refund, subject to finance charges.
- The complaint alleged Block failed to disclose three financial benefits from the RAL arrangement: (1) a license fee paid by the bank for referred loans, (2) purchases of many loans by a Block affiliate, and (3) a percentage of check-cashing fees when RAL checks were cashed at a retail partner.
- Green alleged Block marketed itself as trustworthy and as obtaining the “highest and fastest refunds,” while steering customers into RALs without revealing its financial interests, amounting to deceptive conduct and concealment of material facts.

## Issues

1. Whether the complaint alleged facts sufficient to permit a finding that Block acted as customers’ agent in arranging RALs, creating a fiduciary duty to disclose conflicts of interest.
2. Whether Block’s alleged nondisclosure of its financial interests could support claims for breach of fiduciary duty, violations of the Maryland Consumer Protection Act, and fraudulent concealment.
3. Whether dismissal at the pleading stage was improper where well-pleaded allegations, taken as true, could establish liability.

## Decision

- The Maryland Court of Appeals reversed the trial court’s order granting Block’s motion to dismiss and remanded.
- The court held the complaint alleged sufficient facts to warrant a factual determination on whether a principal–agent relationship existed in connection with the RAL program.
- Because an agency relationship could give rise to fiduciary duties, the court ruled the fiduciary-duty, consumer-protection, and fraudulent-concealment claims should not have been dismissed at the pleading stage.

## Legal Principles

- The existence of an agency relationship turns on the parties’ intentions as shown by their agreements and conduct.
- Common indicators of agency include: (1) the agent’s power to affect the principal’s legal relations, (2) a duty to act primarily for the principal’s benefit, and (3) the principal’s right to control the result of the agent’s actions; these factors are assessed in the total circumstances, not mechanically.
- A principal need not control the details of performance; it is sufficient that the agent is subject to the principal’s control regarding the result.
- If an agency relationship is established, the agent may owe a fiduciary duty to disclose conflicts of interest, including the agent’s financial interest in a transaction arranged for the principal.
- Nondisclosure of an intermediary’s financial stake may constitute a material and misleading omission actionable under consumer-protection law and may support a fraudulent-concealment theory when material facts are intentionally withheld.

## Conclusion

The court held that allegations concerning Block’s role in arranging refund anticipation loans and its undisclosed compensation were sufficient to permit a finding of an agency-based fiduciary duty to disclose conflicts, and therefore the complaint’s fiduciary-duty, consumer-protection, and concealment claims could proceed beyond dismissal.


Green v. H & R Block, Inc., 355 Md. 488, 735 A.2d 1039 (Md. 1999)