Yes, There is Such a Thing Called Apparent Authority
“But he did NOT have the authority….” This is the beginning of a sentence that does not start well.
Agents have the authority to bind their principal. “Even where there is no express agent/principal relationship, a principal may be bound by the acts of an agent acting with apparent authority.” Clayton v. Poggendorf, 43 Fla.L.Weekly D436a (Fla. 4th DCA 2018).
Apparent authority sometimes gets lost in the shuffle and the reason why the sentence, “But he did not have the authority…,” does not start well. If the person is deemed to have apparent authority then he did have the authority to bind you or make decisions on your behalf.
“Apparent authority arises from the authority a principal knowingly tolerates or allows an agent to assume, or which the principal by this actions or words holds the agent out as possessing.” Clayton, supra. If the principal creates the appearance of the agent’s authority, then the agent will have apparent authority. Id quoting Regions Bank v. Maroone Chevrolet, L.L.C., 118 So.3d 251, 255 (Fla. 3d DCA 2013).
In Clayton, a settlement agreement with installment payments was entered into. The settlement agreement provided that if payments were not timely made, the payee would provide the payor a notice to cure. If there was no cure, the payee could move for a judgment against the payor. These are common settlement terms when dealing with installment payments.
In this case, notices to cure were sent to the payor’s counsel when the payor failed to timely pay. The payee’s counsel even inquired whether the payor’s counsel was still representing the payor and no response was ever provided. In prior instances, the payor cured the nonpayment after his counsel received the notice to cure. However, when the payor ultimately did not cure, the payee moved for a judgment against the payor per the terms of the settlement agreement. The payor argued that the notices to cure should not have been sent to his counsel because his counsel did not have the authority. This was not a successful argument:
Apparent authority rests on the doctrine of estoppel. Estoppel requires: 1) representation of a material fact by the party estopped (Clayton) [payor] to the party claiming the estoppel (Poggendorf and Thomas) [payee] that is contrary to the fact later asserted by the estopped party; 2) reliance on that representation by the party claiming the estoppel; and 3) the party claiming estoppel detrimentally changed their position due to such reliance. Clayton [payor], by his conduct in allowing Tittle [payor’s attorney] to accept the notices of default, represented that the notices of default complied with the Settlement Agreement. Poggendorf and Thomas [payee] clearly relied on that representation by continuing to send the email notices to Tittle. Finally, Poggendorf and Thomas changed their position by not sending the notices directly to Clayton.
So, yes, apparent authority does exist!
Please contact David Adelstein at firstname.lastname@example.org or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.