Hello Paul,
I've posted, below, the case information I wrote about. I'm glad we
were able to work together on this (and I agree, Google Answers can be
a bit confusing the first-time out...thanks for sticking with the
process).
If anything is at all unclear, or if you need additional information
on anything I wrote about, just let me know by posting a Request for
Clarification and I'll be happy to assist you further.
Best of luck, and happy holidays.
pafalafa-ga
==========
The case in question, Bennett v. Juzelenos, can be found on the
website of the Pennsylvania Superior Court at:
http://www.superior.court.state.pa.us/opin.htm
By clicking on the "List Opinions" button, and then clicking again on
the link to cases for January 2002, you will come to the Bennett v.
Juzelenos case (about four cases into the January 2002 list):
----------
Gerald R. And Eleanor W. Bennett, Husband And Wife V. Charles R. And
Yolanda Juzelenos, Husband And Wife
No. 00549MDA01 2002 PA Super 19 Filed: 1/30/2002
Appeal From The Order Entered February 28, 2001,
In The Court Of Common Pleas Of Adams County,
Civil Division At No. 98S420.
Before: DEL SOLE, P.J., JOHNSON, J. and CERCONE, P.J.E.
Opinion by: DEL SOLE, P.J.
This appeal is from the order of the Court of Common Pleas of Adams
County entered on February 28, 2001, which granted Appellees Gerald
and Eleanor Bennett?s petition to enforce a settlement agreement. The
Bennetts initiated this equity action seeking reformation of the
parties? deeds. Prior to trial, the Bennetts asked the court to
enforce the parties? settlement agreement regarding the boundary line
between their respective lands and reformation of their deeds. Upon
review, we reverse the decision of the Chancellor.
----------
You can click on this summary to pull up the case in its entirety.
I have excerpted some of the key segments of the decision that revolve
around the issue of ?apparent authority? and that pertain to the
obligations of the attorney, the client, and the client's son. I want
to particularly call your attention to Paragraph 22, which says, in
part, ?The sum of the evidence is inadequate to support a conclusion
that Charles Juzelenos, Jr. had the apparent authority to settle this
matter on his parents? behalf. ?
This language seems to bear on the question of how much
evidence/information is needed to make a case regarding apparent
authority, and who has the key onus for making the case. I am not a
lawyer (and please do not take anything here as professional legal
advice!), but the language in Paragraph 22 seems to imply that the
court?s ?default assumption? is that apparent authority of a client?s
son does not exist, and that evidence must show, convincingly, that it
does for the court to find otherwise.
Again...let me know if you have any questions on this case.
==========
P. 11 To the contrary, Attorney Peterson testified that Appellants had
reluctantly authorized him to engage in settlement negotiations. Id., at 8,
22-23, 61. However, he acknowledged that neither Appellant expressly
authorized him to settle the case for $6,000.00. Id., at 63. Rather,
Attorney Peterson believed he had authority to settle because Charles
Juzelenos, Jr., Appellants? son, told him during a telephone conversation to
settle the case as proposed. Id., at 27-28, 63. Attorney Peterson believed
the son was authorized by Appellants to instruct him to settle. Id., at 28,
63. Attorney Peterson based this assumption on the fact that the son had
regularly attended meetings regarding this matter with his mother. Id., at
61, 63. However, Appellant Yolanda Juzelenos testified she had never
authorized her son to settle this case on his parents? behalf. Id., at 47, 54.
Notably, Attorney Peterson never testified that Appellants had told
him that their son had been authorized to act on their behalf in this
matter nor had he previously done so. Also, Attorney Peterson never
testified that the son expressly told him that his parents authorized
the settlement. Charles
Juzelenos, Jr. never testified in this case. [fn3]
----
fn3 We note that the record indicates that Charles Juzelenos, Jr., may have
had an interest in quick settlement of this matter unrelated to the interests
of his parents. Mrs. Juzelenos testified: ?My son was anxious to build a
house there. My son has 15 acres of land there and he was anxious to build
a house and they have held that up. He can?t build until this has been
settled.? N.T., at 47.
---
P. 12 Based upon the son?s representations, Attorney Peterson entered into
a settlement agreement with the Bennetts? counsel the precise terms of
which would be subsequently reduced to writing. The Bennetts? counsel then
prepared a written settlement agreement. However, Appellants refused to
execute the agreement. Attorney Peterson was eventually dismissed by
Appellants prior to the filing of an the answer and counterclaim.
P. 13 Following the hearing, the Chancellor determined that Appellants? son
had apparent authority to settle this matter on their behalf. N.T., at 65. In
other words, the Chancellor concluded that ?[Attorney] Peterson could act
upon the strength of the son?s representation?. Id., at 66. [fn4] The Chancellor
then advised counsel to brief the Statute of Frauds issue concerning whether
the settlement agreement entered into by Attorney Peterson was
enforceable despite his lack of written authority to do so. Subsequently, the
---
4 The Chancellor based this finding of fact in part upon Appellants? failure to
produce Charles Juzelenos, Jr. at the hearing to dispute Attorney Peterson?s
testimony.
---
Chancellor concluded that the Statute of Frauds did not bar the settlement of
this case, and he ordered enforcement of the agreement. This appeal
followed.
P. 14 We turn now to Appellants? assertion that Attorney Peterson lacked
authority to settle this case. Appellants argue that ?[t]he record is absent of
any evidence which would show that [their] son had any authority in this
action to bind [them] to the agreement nor is there any evidence that [their]
former counsel ? had any reason to believe that such authority existed.?
Appellant?s Brief, at 5. Regarding the validity of a settlement agreement, we
recently stated in Pulcinello v. Consolidated Rail Corp., 784 A.2d 122,
___ (Pa. Super. 2001) (citations omitted):
The enforceability of settlement agreements is ordinarily
determined by general principles of contract law. An oral
settlement agreement may be enforceable and legally binding
without a writing. This Court has stated that ?Where parties
have reached an oral agreement, the fact that they intend to
reduce the agreement to writing does not prevent enforcement
of the oral agreement.?
Settlement agreements which have not been reduced to writing are
ordinarily enforceable. However, before an attorney may agree to a
settlement, he must have actual authority to settle from his clients.
Rothman v. Fillette, 469 A.2d 543, 545 (Pa. 1983). The ordinary
employment of an attorney to represent a client with respect to litigation
does not confer upon the attorney the implied or apparent authority to bind
the client to a settlement or compromise, and the attorney cannot do
so in the absence of express authority. Starling v. West Erie Avenue
Building
& Loan, 3 A.2d 387 (Pa. 1939); Lodowski v. O?Malley, 307 A.2d 439, 440
(Pa. Super. 1973); Garnet v. D?Alonzo, 422 A.2d 1241, 1242 (Pa. Cmwlth.
1980).
P. 15 Presently, there is no dispute that Attorney Peterson did not have
express authority to settle this case simply because his services had been
retained relative to this litigation. Rather, the question that we must
address is whether Charles Juzelenos, Jr. had the authority to advise
Attorney Peterson to settle this matter on behalf of his parents. If he did,
then Attorney Peterson had authority to enter into the settlement agreement
on behalf of Appellants.
P. 16 Accordingly, the first issue turns on the application of the doctrine of
apparent authority. In Tiernan v. Devoe, 923 F.2d 1024, 1034 (3d Cir.
1991), the Third Circuit set forth the doctrine of apparent authority as
follows:
Apparent authority ? has as its source the client?s conduct
toward another party in the litigation. It arises from a principal?s
manifestations to a third party that an agent has authority to act
on the principal?s behalf. See Restatement (Second) of Agency
§ 8 (1958).
P. 17 As noted by the Court of Appeals for the Third Circuit, our Supreme
Court has yet to adopt the doctrine of apparent authority in the context of
an attorney?s settlement of a suit. Farris v. J.C. Penney Company,
Inc., 176 F.3d 706, 711 (3d Cir. 1999); Tiernan, 923 F.2d 1024. [fn5]
In Farris, 176 F.3d at 709, the Third Circuit noted: ?At best, [the
Pennsylvania Supreme Court] has left the applicability of the doctrine
open, seeming to
suggest in Rothman v. Fillette, 503 Pa. 259, 469 A.2d 543 (Pa. 1983),
that apparent authority might be used to enforce a settlement given the
right set of facts.?
---
5 Our Supreme Court has employed the doctrine of apparent authority in
other contexts. See, e.g., Revere Press, Inc. v. Blumberg, 246 A.2d 407
---
P. 18 This Court has previously applied the doctrine of apparent authority to
a settlement situation. Sustrik v. Jones & Laughlin Steel Corp., 149
A.2d 498 (Pa. Super. 1959) (plaintiffs? conduct in connection with settlement
and discontinuance clearly clothed their counsel with authority to settle the
case upon principles of apparent authority). We similarly will apply it here.
P. 19 However, despite the application of the doctrine, we nevertheless
conclude that under the particular facts of this case, its application does not
warrant enforcement of the settlement agreement. The application of
apparent authority is fact-dependent. Farris, 176 F.3d at 706, 711, (citing
Edwards v. Born Inc., 792 F.2d 387 (3d Cir. 1986)); Sustrik 149 A.2d at
501 (given the circumstances surrounding settlement, application of the
principles of apparent authority was proper).
P. 20 We are convinced the record does not support the conclusion that
Attorney Peterson reasonably believed that Charles Juzelenos, Jr. had
apparent authority to settle this matter on his parent?s behalf. As our
Supreme Court stated in Revere Press, Inc. v. Blumberg, 246 A.2d 407,
410 (Pa. 1968) (citation omitted):
Apparent authority is power to bind a principal which the
principal has not actually granted but which he leads persons
with whom his agent deals to believe that he has granted.
Persons with whom the agent deals can reasonably believe that
the agent has power to bind his principal if, for instance, the
principal knowingly permits the agent to exercise such power or
if the principal holds the agent out as possessing such power.
See also, Stallo v. Insurance Placement Facility of Pennsylvania, 518
A.2d 827, 830 (Pa. Super. 1986) (collecting cases).
P. 21 Herein, the record reveals that Appellants were at best reluctant to
settle, and Attorney Peterson was well aware of this fact. Mrs. Juzelenos
testified that she never authorized her son to settle this matter, that she
never told Attorney Peterson her son had authority to act on her and her
husband?s behalf and that she never agreed to the settlement of the case for
$6,000.00. Attorney Peterson acknowledged that neither of his clients
actually accepted the settlement as proposed. Attorney Peterson assumed
that Mrs. Juzelenos had authorized her son to settle the matter because of
his involvement with the case, i.e., attending meetings with his mother.
Further, there was no testimony from Charles Juzelenos, Jr. to show that
Attorney Peterson?s belief in the son?s apparent authority was reasonable.
P. 22 The sum of the evidence is inadequate to support a conclusion that
Charles Juzelenos, Jr. had the apparent authority to settle this matter on his
parents? behalf. There is no evidence of record to suggest that Appellants,
by either their words or deeds, granted their son (or Attorney Peterson) the
authority to settle their case. Nor is there any evidence to suggest that
Appellants led Attorney Peterson to believe that their son had such
authority. In light of Mrs. Juzelenos? clear aversion to settlement and the
absence of any facts that would permit the conlcusion that Charles
Juzelenos, Jr. had authority to sanction a settlement, the Chancellor erred in
concluding Attorney Peterson had authority to enter into a settlement
agreement. Under these circumstances, without Appellants? express grant of
authority to settle, there could be no settlement. |
