## Facts

- Hunter Mining Laboratories, Inc. purchased “Basic Four” computer equipment and software through contracts with Hubco Data Products Corp., an authorized distributor of the manufacturer.
- Hubco agreed to sell the equipment, install it, and customize software for Hunter, but delivered most equipment and ceased operations in Nevada before completing installation and programming.
- Hunter then contracted with The Data Doctors Corp., another licensed distributor, to finish the programming; Data Doctors also failed to perform.
- The products were manufactured by Management Assistance, Inc. and its subsidiary, M.A.I. Application Software Corp. (collectively, the MAI companies).
- Hunter had no direct contract with the MAI companies; Hunter sought to hold them liable for the distributors’ nonperformance on an agency theory.
- A jury found the MAI companies liable for breach of the distributor contracts, but the district court entered judgment notwithstanding the verdict (JNOV) for the MAI companies for lack of evidence of agency and conditionally granted a new trial if JNOV were reversed.

## Issues

1. Whether substantial evidence supported a reasonable jury finding that Hubco and/or Data Doctors acted as agents of the MAI companies, making the MAI companies liable for breach of the distributors’ contracts with Hunter.
2. Whether the evidence supported apparent authority—i.e., representations by the MAI companies and reliance by Hunter sufficient to bind the MAI companies to the distributors’ contracts.

## Decision

- The Nevada Supreme Court affirmed the district court’s JNOV in favor of the MAI companies.
- The court held there was no substantial evidence of an agency relationship between the MAI companies and either Hubco or Data Doctors.
- The court concluded the relationship reflected an independent distributor (buyer–seller) arrangement, not principal–agent control and fiduciary status.
- The conditional new-trial order was moot because JNOV was upheld.

## Legal Principles

- JNOV is proper where, viewing the evidence in the light most favorable to the verdict, there is no substantial evidence to support it.
- Agency requires (1) the principal’s right to control the agent’s conduct and (2) the agent’s consent to act on the principal’s behalf as a fiduciary within the scope of the relationship.
- Contractual provisions commonly found in manufacturer–distributor agreements (e.g., premises requirements, reporting, advertising oversight, termination rights) typically reflect permissible brand/quality control and do not, without more, establish the right to control day-to-day performance required for agency.
- A distributor that purchases goods and resells them for its own account generally stands in a buyer–seller relationship, not a fiduciary agency relationship.
- An express disclaimer that a distributor lacks authority to create contractual relationships between the manufacturer and customers is strong evidence against agency when consistent with the parties’ actual dealings.
- Apparent authority requires representations by the alleged principal and reasonable reliance by the third party; absent such proof, the principal is not bound by the intermediary’s contracts.

## Conclusion

The court affirmed JNOV because the record lacked substantial evidence that the MAI companies controlled the distributors’ performance or that the distributors acted as fiduciaries on the MAI companies’ behalf, and it also lacked proof of principal representations and reliance needed for apparent authority.


Hunter Mining Laboratories, Inc. v. Management Assistance, Inc., 104 Nev. 568, 763 P.2d 350 (1988)