Green v. H & R BLOCK, INC.

This case involves the tax preparation and refund services provided by H & R Block to thousands of Maryland residents. The primary issue for our consideration relates to whether H & R Block may have a duty to disclose to customers the benefits it receives from lending institutions to which it refers customers who are seeking a bank loan in the amount of their anticipated tax refund. The trial court granted H & R Block’s motion to dismiss, finding, inter alia, that H & R Block had no duty to disclose the benefits because no fiduciary obligation exists between H & R Block and its customers. For the reasons set forth below, we reverse, finding that sufficient facts have been alleged to warrant a factual determination regarding the existence of a principal-agent relationship that gives rise to a fiduciary duty to disclose any conflict of interest.

I. Factual Background

A.

This class action lawsuit was filed in the Circuit Court for Baltimore City on behalf of all those in Maryland for whom H & R Block prepared taxes and who participated in its “Rapid *496 Refund” program by obtaining a “Rapid Anticipation Loan” (RAL) any time from January 1992 to present. The named plaintiff, Joyce A. Green, the appellant in this appeal, used H & R Block’s tax preparation and filing services in 1993, 1994, and 1995. Because we are reviewing the trial court’s dismissal of Green’s complaint, we will assume the truth of the facts alleged in the complaint. See Part II, infra.

H & R Block’s tax filing services allow customers to obtain faster tax refunds than would otherwise occur by simply mailing the return to the Internal Revenue Service (IRS). H & R Block offers two such services. A customer can pay $25 for H & R Block to file the return electronically, enabling the customer to obtain the refund in two weeks. For customers who want to obtain an even faster refund, H & R Block arranges bank loans in the amount of the customer’s refund through its RAL program. H & R Block’s RAL program lies at the center of this dispute, and so we describe it in detail.

Through its RAL program, H & R Block facilitates loans between its customers and a third-party bank that are secured by the taxpayer’s anticipated refund. In Maryland, H & R Block arranges the loans through Beneficial National Bank (BNB). H & R Block informs the taxpayer of his or her eligibility for the loan after preparing a customer’s return and learning that the taxpayer is entitled to a refund payment from the IRS. Interested customers then fill out a loan application. A paragraph on the reverse side of the loan application explains:

“Upon approval of your rapid Refund Anticipation Loan by Beneficial National Bank an account is opened in your name at Beneficial National Bank. This account is established to receive the Direct Deposit of your Federal Tax Refund from the IRS. When you endorse the Refund Anticipation Loan check you have authorized Beneficial National Bank to withdraw the amount deposited into this account by the IRS and apply this amount to your Refund Anticipation Loan balance. If your IRS refund is greater than your RAL, a check in such excess amount will be sent to you shortly after the bank receives your refund.”

*497 H & R Block transmits the loan application to the bank for the customer. H & R Block then files the refund electronically with the IRS, and the IRS is informed to send the customer’s tax refund check directly to the bank. The customer picks up the loan check at H & R Block’s offices within a day or two after filing. The service allows customers to obtain the amount of their refund in a loan within a few days rather than waiting approximately two weeks for the IRS to send the actual refunds that are electronically filed.

The cost of an RAL is described in the loan materials as a “finance charge” of BNB. For the tax years 1993-95, when Green used the RAL program, the finance charges ranged from $29 to $89. The finance charge is deducted directly from the taxpayer’s refund by the bank. The annual percentage rate of interest that corresponds to the finance charge ranged from approximately 25% to 500%, depending on the amount of the refund and the amount of the finance charge to the particular customer. 1

The loan application, entitled “A Refund Anticipation Loan Program Offered by Beneficial National Bank in Association with H & R Block,” authorizes H & R Block to disclose to the bank the customer’s federal income tax return “for the purpose of enabling BNB to determine whether or not to make a Refund Anticipation Loan (“RAL”) to me in response to my application for such loan which is a part of this form.” As a result of H & R Block’s and the bank’s screening of potential RAL customers, customers who for one reason or another may not receive their IRS refund are deemed ineligible for the RAL program. Because of this screening process, and because the IRS deposits the tax refunds directly into the customers’ account at the lending bank which may then with *498 draw the proceeds to pay the loan, lenders take on few risks by lending money to the taxpayer.

The 1993 application requires the H & R Block customer to sign an “acknowledgment,” stating:

“By signing below, I acknowledge that the FINANCE CHARGE for my RAL is $_and I further acknowledge that I have read and understand the important disclosures above and on the reverse side of this Loan Application form.... ”

For each RAL that it arranges between the taxpayer and the bank, H & R Block benefits financially in at least one, and up to as many as three ways. First, for every RAL referred to a lending bank, H & R Block receives a “license fee” that is not disclosed to the H & R Block taxpayer/customer. The “license fee” is a payment by the lending bank to H & R Block for each loan customer referred to it by H & R Block. The fee has ranged from $3 to $9 per loan. Second, through its subsidiary, H & R Block Financial, H & R Block purchases about one-half of the RALs from the lender banks. This fact is also not disclosed to the H & R Block customer. Finally, H & R Block has arranged with Sears, Roebuck & Company (Sears) for H & R Block to receive 15% of the check-cashing fee that Sears charges for cashing BNB loan checks. Many H & R Block offices are located at Sears, and H & R Block encourages RAL customers to cash their RAL checks there. This arrangement with Sears is also not disclosed to H & R Block customers. Thus, for each RAL it procures, the lending banks effectively return a portion of the finance charge back to H & R Block, and H & R Block may additionally benefit as a result of profits earned from its purchase of RALs through its subsidiary or from the RAL customer’s cashing of the check at a Sears store.

B.

Green’s claims turn on H & R Block’s failure to disclose the various ways it may benefit from the RAL program. She labels these various benefits illegal “kickbacks” and asserts *499 that they are in violation of the fiduciary obligations H & R Block owes to its customers as a result of an agency relationship. The complaint generally alleges that H & R Block’s fiduciary obligations arise out of the contract by which H & R Block prepares and files the tax returns, H & R Block’s role with respect to the loan application, H & R Block’s advertising campaigns, and H & R Block’s procedures for encouraging customers to use its RAL service.

According to the amended complaint, for consumers who contract with H & R Block for tax preparation and filing, H & R Block undertakes a fiduciary duty in the form of an agency relationship “to both explain and/or prepare ... the various options, elections, forms and documents involved in an individual’s tax preparation matters, including those involved with the taxpayer obtaining back any tax refund he or she was owed by the government.” This duty pertains to all matters within the scope of the taxpayer/tax preparer relationship, including assuring that the amount of refund a customer receives is the maximum amount or the additional taxes required to be paid is the minimal amount. As evidence of the agency relationship, Green points out that H & R Block agrees to accompany the taxpayer to any IRS audit should one be required. 2 Further, H & R Block’s tax preparers offer general tax advice for retirement and for the sale of residences. Regarding the RAL program, Green alleges that H & R Block acts as the customer’s agent in preparing and explaining the loan application and forwarding the application to the lender bank.

As further support for her claim that a fiduciary relationship exists between H & R Block and its customers, Green emphasizes the context in which H & R Block offers and provides its services, particularly its promotional activities. H & R Block’s advertising campaigns create “the impression that *500 [H & R] Block and its tax preparation offices and personnel are trustworthy,” Green alleges. These advertisements tell consumers to “[d]o what millions of Americans do. Trust H & R Block.” H & R Block also advertises its ability to obtain tax refunds quickly. Green quotes H & R Block advertisements stating, “WHY WAIT? IT’S YOUR MONEY!” Signs placed at storefronts in Maryland declare: “RAPID REFUND. REFUND IN 2 DAYS,” and “GET YOUR REFUND FAST!” Once these advertisements provoke interest in a consumer who wants a fast refund, H & R Block’s goal is to get the consumer to participate in the loan program. The complaint asserts that

“[H & R Block ejmployees are instructed that, regardless of the reason for the customer’s visit, if a return meets RAL Lender’s loan requirements, offer the RAL first (i.e., before other means of more quickly obtaining a refund back, including [H & R] Block’s electronic filing service and direct deposit), and if the client says yes to that, go no further.”

Finally, Green alleges that the RALs are marketed as one of H & R Block’s Rapid Refund products even though they are really loans secured by the recipient’s anticipated tax refund.

Green concludes that these various advertisements and interactions create an agency relationship between H & R Block and its customers who participate in the RAL program. As discussed below, an agency relationship may carry with it a duty on the part of the agent to disclose information to the principal; it is this duty to disclose which Green asserts that H & R Block has breached. The alleged breaches include, inter alia, H & R Block’s failure “to disclose the fact that [H & R] Block was receiving money, in the form of kickback payments, from the lenders for the refund anticipation loans entered into by Plaintiff and the Class and/or from Sears in connection with the cashing of the RAL checks”; its failure “to disclose the true nature of the [H & R] Block Defendants’ relationship with the lenders as broker or agent for the lenders”; its representation “that obtaining a refund anticipation loan was the only or best means of receiving an expedited tax refund”; its failure to inform consumers that an expedited *501 return would be available through electronic filing alone, and that an RAL is not in the consumer’s best interest.

The amended complaint contained five claims, all of which were dismissed by the trial court on H & R Block’s motion to dismiss. We are concerned with Green’s appeal of the trial court’s dismissal of three of those claims. Those three claims include: (1) breach of fiduciary duty based on an alleged agency relationship between Green and H & R Block; (2) violation of the Maryland Consumer Protection Act; and (8) fraudulent concealment. We granted the writ of certiorari on our own motion prior to consideration of the matter by the Court of Special Appeals.

II. Standard of Review

The trial court dismissed Green’s complaint for failure to state a claim upon which relief may be granted. See Maryland Rule 2-322(b)(2). The granting of a motion to dismiss “is proper only if the facts alleged fail to state a cause of action.” A.J. Decoster Co. v. Westinghouse Elec. Co., 333 Md. 245, 249, 634 A.2d 1330, 1332 (1994). The granting of a motion of dismiss therefore depends solely on the adequacy of the plaintiffs complaint. The trial court’s memorandum opinion, however, contains various references to materials outside of Green’s complaint. For example, the trial court referred to exhibits filed with the court by H & R Block. Because the trial court referred to matters outside of the pleadings, the motion should have been treated as a motion for summary judgment.

Maryland Rule 2-322(c) states in pertinent part:

“If, on a motion to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 2-501, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 2-501.” (Emphasis added).

*502 When the court considers matters outside the pleading in ruling on a motion to dismiss and the motion, therefore, should be considered as one for summary judgment, there is a risk that the non-moving party will not be given a reasonable opportunity to present material that may be pertinent to the court’s decision, as required by Md. Rule 2-601. In the instant case, however, the trial court’s ruling on each of Green’s counts appears to have turned on its legal conclusion that the facts failed to establish a fiduciary or agency relationship between H & R Block and its customers, a conclusion that has been fully briefed by the parties to this appeal. It is not apparent, therefore, that Green has suffered any prejudice as a result of the trial court’s reference to matters outside the pleading-, and we shall treat the trial court’s aetion as the grant of a motion for summary judgment. 3

H & R Block is entitled to summary judgment only if “there is no genuine dispute as to any material fact and that the party is entitled to judgment as a matter of law.” Md. Rule 2-501(a). In determining whether summary judgment was properly granted in favor of H & R Block, we examine whether the trial court was legally correct, taking the facts in the light most favorable to the losing party. See Heat & Power v. Air Products, 320 Md. 584, 590-92, 578 A.2d 1202, 1205-06 (1990). Our review is de novo since we have “the same information from the record and decide[] the same issues of law as the trial court.” Heat & Power, 320 Md. at 591-92, 578 A.2d at 1206. Where multiple inferences may be drawn from the facts, they must be resolved in favor of the nonmoving party.

*503 III. Principal-Agent Relationship

A.

The predominate issue in this appeal involves whether an agency relationship exists between H & R Block and its taxpayer customers, in particular those customers who choose to participate in H & R Block’s RAL program. According to the Restatement (Second) of Agency, “Agency is the fiduciary relation which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act.” Restatement (Second) of Agency § 1 (1958). The creation of an agency relationship ultimately turns on the parties’ intentions as manifested by their agreements or actions. See Ramsburg v. Sykes, 221 Md. 438, 442, 158 A.2d 106, 108 (1960); American Casualty Co. v. Ricas, 179 Md. 627, 631, 22 A.2d 484, 487 (1941).

While the agent and principal must both consent to the relationship, an agency relationship can be created by express agreement or by inference from the acts of the agent and principal. Patten v. Board of Liquor, 107 Md.App. 224, 238, 667 A.2d 940, 947 (1995). “The relation of principal and agent does not necessarily depend upon an express appointment and acceptance thereof, but it may be implied from the words and conduct of the parties and the circumstances.” Medical Mut. Liab. v. Mutual Fire, 37 Md.App. 706, 712, 379 A.2d 739, 742-43 (1977). See also Heslop v. Dieudonne, 209 Md. 201, 206, 120 A.2d 669, 672 (1956)(same),

In recent cases, courts applying Maryland agency law have considered three characteristics as having particular relevance to the determination of the existence of a principal-agent relationship: (1) the agent’s power to alter the legal relations of the principal; (2) the agent’s duty to act primarily for the benefit of the principal; and (3) the principal’s right to control the agent. See, e.g., United Capitol Ins. v. Kapiloff, 155 F.3d 488, 498 (4th Cir.1998); Proctor v. Holden, 75 Md.App. 1, 20, 540 A.2d 133, 142, cert. denied sub nom., 313 Md. 506, 545 A.2d 1343 (1888); Schear v. Motel Management Corp., 61 *504 Md.App. 670, 687, 487 A.2d 1240, 1248 (1985). These factors derive from the Restatement (Second) of Agency §§ 12-14 (1958). See Restatement (Second) of Agency § 12 (1958)(“An agent or apparent agent holds a power to alter the legal relations between the principal and third persons and between the principal and himself.”); Restatement (Second) of Agency § 13 (1958)(“An agent is a fiduciary with respect to matters within the scope of his agency.”); Restatement (Second) of Agency § 14 (1958)(“A principal has the right to control the conduct of the agent with respect to matters entrusted to him”).

When a party asserts a claim that is dependent upon an agency relationship created by inference, that party has the burden of proving the existence of the principal-agent relationship, including its nature and its extent. Hofherr v. Dart Industries, Inc., 853 F.2d 259, 262 (4th Cir.1988); Schear, 61 Md.App. at 687, 487 A.2d at 1248. In order to defeat a motion for summary judgment, the party’s burden is to produce legally sufficient evidence of a principal-agent relationship.

When legally sufficient evidence is produced of an agency relationship, the question of the existence of the agency relationship is a factual matter and must be submitted to the jury. Faya v. Almaraz, 329 Md. 435, 460, 620 A.2d 327, 339 (1993)(“The existence of an agency relationship is a question of fact which must be submitted to the factfinder if any legally sufficient evidence tending to prove the agency is offered.”); P. Flanigan & Sons v. Childs, 251 Md. 646, 653, 248 A.2d 473, 476 (1968)(declaring that the existence of an agency relationship is ordinarily a question of fact). “[I]t is not for the court to determine the question of agency vel non, but if the testimony as to the fact of the agency tends to prove the existence of that relation, it should be submitted to the jury, who are the exclusive judges of its weight.” Levine v. Chambers, 141 Md. 336, 343, 118 A. 798, 800 (1922).

If the party alleging the existence of a principal-agent relationship fails to produce sufficient evidence to allow a *505 reasonable fact finder to conclude that such a relationship exists, then summary judgment would be proper on the agency issue. See, e.g,, Proctor, 75 Md.App. at 21, 540 A.2d at 142 (“We conclude from our review of the record that the Holdens failed to produce any evidence from which a reasonable inference could be drawn that an agency relationship had been created.”). Finally, where only one inference may be drawn from the evidence, it is proper for the court to find the existence of an agency relationship as a matter of law. Globe Indemnity Co. v. Victill Corp., 208 Md. 573, 585, 119 A.2d 423, 429 (1956).

B.

The trial court determined that no agency relationship had been created between H & R Block and its customers as a matter of law. Citing Schear, supra, the trial court’s written order stated that “three essential elements must be satisfied” in order to determine the existence of an agency relationship, including (1) the principal’s right of control over the agent, (2) the agent’s duty to act primarily for the benefit of the principal, and (3) the agent’s power to alter the legal relations of the principal. Applying this three-part test and retying largely on decisions of trial courts in other states, the trial court held that Green failed to demonstrate the first and third elements. That holding provided the primary basis for the trial court’s dismissal of each of the claims appealed to this Court.

We disagree, at least in part, with the trial court’s agency analysis. Initially, as noted above, the primary determination of whether a principal-agent relationship exists involves ascertaining the parties’ intent, as evidenced by their agreements and actions:

“There are two fundamental elements for the creation of the agency relationship: (1) some manifestation or indication by the principal to the agent that he consents to the agent’s acting for his benefit; and (2) consent by the agent to act for the principal. In sum, the agency relationship can arise *506 only when there is mutual consent between the two parties that it should arise. However, consent may be inferred from words or conduct, including acquiescence. Whereas, however, some manifestation of the principal’s consent must actually come to the attention of the agent, the agent need not necessarily communicate his consent to the principal if, under the circumstances, embarking on the purpose of the agency is, itself, a sufficient indication of consent.” (Footnotes omitted).

W. Edward Sell, Sell on Agency § 7, at 7-8 (1975).

The three factors adopted in Schear and used by the trial court in this case provide guidance to determining whether an agency relationship exists. The trial court, however, overstated the significance of the three factors when it labeled them “essential elements” of an agency relationship. The factors are proper considerations for determining agency, but rather than being determinative, the three factors should be viewed within the context of the entire circumstances of the transaction or relations. They are neither exclusive nor conclusive considerations in determining the existence of an agency relationship.

Nevertheless, contrary to the trial court’s conclusions, as discussed next, we conclude that the evidence alleged concerning the “control” and “legal relations” factors supports a finding of agency. After considering those two factors, we examine some of the additional circumstances that would support a factual finding in favor of the existence of an agency relationship in this case.

1.

The trial court concluded that Green’s allegations regarding H & R Block’s efforts in “preparing their returns, checking the accuracy of their tax returns, electronically filing their tax returns and if necessary, accompanying] them to IRS audits” were insufficient to demonstrate that Green had the right to control H & R Block’s conduct. The quoted text indicates that the trial court’s emphasis was on H & R Block’s activities *507 as a tax preparer and tax filer, rather than its activities in procuring a loan for its customers secured by the anticipated tax refund. Although related to H & R Block’s tax activities, the more pertinent question involves whether H & R Block was acting as Green’s agent with respect to the RAL transaction. Indeed, at oral argument H & R Block conceded that it acts as an agent for its customers for the purposes of preparing the tax return and filing it with the IRS. The question we must address, however, is whether sufficient facts are alleged to support a reasonable inference that either H & R Block was Green’s agent with respect to the RAL transaction, or that the scope of H & R Block’s status as its customer’s agent for preparing and filing the tax return is broad enough to encompass its role in the RAL process.

Green contends that the loan agreement provides the control element for a finding of an agency relationship between H & R Block and its customers with respect to the RAL. The loan application authorizes II & R Block to disclose to the bank the customer’s federal income tax return “for the purpose of enabling BNB to determine whether or not to make a Refund Anticipation Loan (“RAL”) to me in response to my application for such loan which is a part of this form.” The authorization goes on to limit H & R Block’s use of the information: “H & R Block may not use or disclose such tax return information or such other information for any purpose ... other than as stated herein.” II & R Block apparently concedes that the authorization clause may create an agency relationship between H & R Block and its customers for transmitting the RAL application but argues that “once [H & R] Block successfully transmitted the required information to the RAL lender, any agency relationship—and any corresponding liability for breach of fiduciary duty—was terminated.”

H & R Block misconstrues the level of control necessary for establishing a principal-agent relationship. The control a principal must exercise over an agent in order to evidence an agency relationship is not so comprehensive. A *508 principal need not exercise physical control over the actions of its agent in order for an agency relationship to exist; rather, the agent must be subject to the principal’s control over the result or ultimate objectives of the agency relationship.

Often an agent is left free from direct supervisory control as he or she furthers the interest of the principal. As explained by Restatement (Second) of Agency § 14 cmt. a (1958), “The control of the principal does not ... include control at every moment; its exercise may be very attenuated and ... may be ineffective.” See also Philip Mechem, Me-chem Outlines Agency § 12, at 5 (4th ed. 1952)(“[T]he agent does not work for [the principal] physically, nor is he subject to the control of [the principal] in his physical actions.”). Indeed, there are circumstances under which very little control is exercised by the principal.

“If it is otherwise clear that there is an agency relation ... the principal, although he has contracted with the agent not to exercise control and to permit the agent the free exercise of his discretion, nevertheless has the power to give lawful directions which the agent is under a duty to obey if he continues to act as such.”

Restatement (Second) of Agency § 14 cmt. b (1958).

The level of control a principal must exercise over the agent becomes more clear when it is contrasted with the control exercised by the master in a master-servant relationship. In Globe Indemnity Co., supra, a hotel employee sought to hold vicariously liable the employer of a business guest who had assaulted him. We discussed the difference between the control a master has over a servant and the control a principal has over an agent:

“It is important to distinguish between a servant and an agent who is not a servant, because ordinarily a principal is not liable for the incidental acts of negligence in the performance of duties committed by an agent who is not a servant. An agent is a person who represents another in contractual negotiations or transactions akin thereto. A servant is a person who is employed to perform personal services for *509 another in his affairs, and who, in respect to his physical movements in the performance of the service, is subject to the other’s control or right of control. Persons who render service but retain control over the manner of doing it are not servants.

We reaffirm the rule that a principal is not liable for any physical injury caused by the negligent conduct of his agent, who is not a servant, during the performance of the principal’s business, unless the act was done in the manner authorized or directed by the principal, or the result was one authorized or intended by the principal. A principal employing an agent to accomplish a result, but not having the right to control the details of his movements, is not responsible for incidental negligence while such agent is conducting the authorized transaction. 1 Restatement, Agency, sec. 250.” (Emphasis added).

Globe Indemnity Co., 208 Md. at 581-82, 119 A.2d at 427. As the emphasized text demonstrates, a principal who is not an employer need not “control the details” nor the “physical movements” of the agent.

More recently, in Chevron, U.S.A., Inc. v. Lesch, 319 Md. 25, 570 A.2d 840 (1990), we again discussed the control necessary to establish a master-servant relationship in the context of determining an alleged principal’s liability to a third party for the purported agent’s tort. The plaintiff, Lesch, alleged that Chevron, a national gasoline distributor, should be liable as a master for the actions of its alleged servant, a local service station. We explained:

“One may be an agent of another, owing to his principal the fiduciary obligations of loyalty and general obedience, but at the same time not be sufficiently under the control of the principal to be considered a, servant. The relationship of master and servant exists only when the employer has the right to control and direct the servant in the performance of his work and in the manner in which the work is to be done.

*510 ‘The decisive test in determining whether the relation of master and servant exists is whether the employer has the right to control and direct the servant in the performance of his work and in the manner in which the work is to be done.' ” (Citations omitted)(emphasis added and supplied).

Chevron, U.S.A., Inc., 319 Md. at 32-33, 570 A.2d at 844 (quoting Keitz v. National Paving & Contracting Co., 214 Md. 479, 491, 134 A.2d 296, 301 (1957)).

These cases make clear that the level of control a principal exercises over an agent is less than the level of control a master has over a servant. Indeed, the level of control a master exercises over a servant is a key factor distinguishing the master-servant subset of the set of principal-agent relationships. In other words, all masters are principals and all servants are agents, but only when the level of control is sufficiently high does a principal become a master and an agent a servant. See Restatement (Second) of Agency § 2 cmt. a (1958)(“A master is a species of principal, and a servant is a species of agent.”). See also E. Coast Freight Lines v. M. & C.C. of Balto., 190 Md. 256, 58 A.2d 290 (1948)(contrasting the master-servant relationship with the principal-agent relationship). Thus, principals who are not masters exercise a much lesser degree of control over their agents than masters do over their servants.

In sum, the control a principal exercises over its agent is not defined rigidly to mean control over the minutia of the agent’s actions, such as the agent’s physical conduct, as is required for a master-servant relationship. The level of control may be very attenuated with respect to the details. However, the principal must have ultimate responsibility to control the end result of his or her agent’s actions; such control may be exercised by prescribing the agents’ obligations or duties before or after the agent acts, or both. See Smalich v. Westfall, 440 Pa. 409, 269 A.2d 476, 481 (1970)(quoting Commonwealth v. Minds Coal Mining Corporation, 360 Pa. 7, 60 A.2d 14, 20 (1948))(“Those rendering service but retaining control over the manner of doing it are *511 not servants. They may be agents, agreeing only to use care and skill to accomplish a result. ...”).

Applying this analysis to the instant case, we conclude that it would be reasonable to infer that H & R Block’s customers retain control over H & R Block’s ultimate actions and representations with respect to filing the tax return and applying for the RAL. Viewed most favorably to Green, H & R Block’s relationship with its customers is analogous to other principal-agent relationships, such as between an attorney and his or her client. See Md. Rule 1-331 (“Attorney may act for party.”); Salisbury Beauty Schools v. St. Bd., 268 Md. 32, 300 A.2d 367 (1973)(holding that attorney’s actions within scope of retainer are binding on the client under ordinary agency principles). An attorney who, for example, serves as his or her client’s representative in negotiations to settle a lawsuit is generally not subject to the client’s control over the best strategy to use in order to arrive at a good settlement, but the client controls the final decision as to whether to settle or not. The clienVprincipal may have little knowledge of the law or negotiating strategies and so trusts the attorney/agent to further his or her interests in the settlement negotiations.

Similar to the client who is represented by an attorney in settlement negotiations, the H & R Block customer may be unknowledgeable in tax and financial matters, trusting H & R Block to further his or her interests. Like the attorney representing a client in settlement negotiations, H & R Block undertakes to file customer tax returns with the IRS and the loan application with the bank, but only at the direction of the customer, who ultimately controls whether H & R Block takes either action with respect to the third party. It is not dispositive, as the trial court implied, that H & R Block’s customers do not generally exercise control over the manner in which H & R Block prepares the tax filings. Indeed, H & R Block conceded at oral argument that it serves as its customers’ agent for the purpose of filing the tax return and transmitting the loan application to the lender. Thus, H & R Block’s customers retain enough control over H & R Block to support a finding of an agency relationship. Our conclusion is *512 in accord with the only other appellate opinion, of which we are aware, that has addressed the identical issue. See Basile v. H & R Block, Inc., 729 A.2d 574 (Pa.Super.Ct.l999)(holding in a similar lawsuit that H & R Block’s customers exercise enough control to evidence an agency relationship).

2.

We also disagree with the trial court’s analysis regarding H & R Block’s ability to alter the legal relations of its customers. The trial court concluded that the complaint “fails to allege that Defendants had been granted or accepted or had the power to alter the legal relations of Plaintiff.” Because H & R Block’s customers actually sign the loan application, and not H & R Block, the trial court concluded that Green “fail[ed] to demonstrate that [H & R Block] had the authority to represent Plaintiff in her transactions with RAL lenders.... ”

When the facts otherwise demonstrate an agency relationship, that relationship cannot be negated simply because the principal’s and not the agent’s signature appears on a document otherwise prepared and negotiated by the agent. Such a result would create a legal fiction contrary to the substantive reality. For example, as noted above, an attorney may re