Ackerman v. Sobol Family Partnership, Llp

298 Conn. 495 (2010)

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Nature of the Case

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Facts

In the underlying cases, Ps alleged a breach of contract, breach of fiduciary duty, unjust enrichment, civil conspiracy, and violation of the Connecticut Unfair Trade Practices Act, General Statutes § 42-110a et. seq. The cases were scheduled for trial. Ds then filed a motion to enforce a settlement agreement purportedly reached with Ps a few days before. The trial court conducted a hearing to determine whether the settlement was enforceable. Ps argued that there was no agreement. The court made the following findings. The parties met for mediation. Ps' attorney, Glenn Coe, represented Ps. A mediation was not concluded, but the mediator, Judge Sheldon did remain active in further negotiations between the parties. Coe made a detailed offer of settlement . . by way of letter that was addressed to Attorneys Wyld, Fisher, and Ecker representing Ds in this action other than the defendant Bank of America. Wyld rejected the proposal. Negotiations continued and Coe made an offer to settle the litigation in a series of conversations with Wyld and Bank of America's attorney Schneider. Coe had been speaking on behalf of all Ps regarding settlement with the knowledge and authority of his clients, as well as Attorney Horan, who had represented the other two plaintiffs Rakoszynski and Mann. Coe expressly assured Ds' attorneys on separate occasions in response to direct questioning on the issue that the settlement offer proposed by him at that time was fully authorized by his clients as well as Horan; and if accepted it would resolve the litigation in all respects. Wyld who was negotiating the settlement on behalf of the Sobol defendants notified Coe on Monday, June 30, 2008, that the offer of settlement made by Coe was accepted by the Sobol defendants. Both those attorneys awaited word from Bank of America. Ps demanded from Bank of America the sum of $ 1.1 million. Schneider was out trying to get approval from Bank of America. Schneider requested to extend . . . the deadline for . . . acceptance to 5 p.m. on July 1, which request was granted. Bank of America accepted the $ 1.1 million settlement proposal in the early afternoon of July 1, 2008, prior to the 5 p.m. deadline. All Ds had accepted the offer. At no time prior to the acceptance of the settlement proposal on July 1, 2008, were Ds or their attorneys notified that the offer had been withdrawn, unauthorized, or otherwise ineffective. Ackerman (P) never manifested to Ds or their attorneys that the settlement authority of her attorney was limited or had been terminated. Ackerman (P) was very involved in every aspect of the case, including settlement. She was vigilant in pursuing and protecting her interests in these lawsuits. Coe expressly and unambiguously assured both Wyld and Schneider in separate conversations that he had authorization from Ackerman (P) to offer the specific settlement terms at issue. On July 1, 2008, while Ackerman (P) was physically present Coe continued to await word from Schneider. The court found that the contractual terms with respect to both Bank of America and with respect to the settlement of the Sobol defendants were clear, certain, and unambiguous. The court then addressed the apparent authority of Coe to make the settlement proposals and to accept the settlement on behalf of all Ps. An agent who has apparent authority, but not express authority, can bind his principal especially as to parties who act in good faith. Apparent authority exists, where the principal held the agent out as possessing sufficient authority to embrace the act in question and knowingly permitted him to act as having such authority; and, in consequence thereof, the person dealing with the agent acting in good faith reasonably believed under all the circumstances that the agent had the necessary authority. The court found that Coe had apparent authority. Ds' counsel reasonably believed that Coe was authorized by Ps to make the settlement offer at issue, and further, that ds' counsel at all . . . relevant times were acting in good faith in their respective efforts to settle the case on the terms proposed by Coe. Ps' attorney indicated that there was a misunderstanding and that he did not appreciate the clients' wishes with regard to the proposal. That testimony, while unfortunate, does not change the fact that he had apparent authority to enter into these discussions and bind his clients. Whether that misunderstanding came before or after the proposal was made and was the result of a change of heart on the part of the clients is irrelevant. The court found Ackerman's (P) testimony regarding the settlement discussions and her authority to Coe indicating that he had no authority to enter into this settlement was not credible. The court granted Ds’ motions to enforce the settlement. Ps appealed.