Airline Support, Inc. v. Asm Capital Ii, L.P.

Facts

P is an Anchorage-based Alaska corporation that provides support services for airlines at the International Airport in Anchorage. On September 15, 2005, Northwest Airlines filed for Chapter 11 bankruptcy. At the time of the bankruptcy filing, Northwest owed P $62,071. After the filing, P continued to provide services to Northwest and bill for those services. D invests in the claims of unsecured creditors in domestic bankruptcy cases. D monitors bankruptcy filings and offers to purchase claims from bankruptcy creditors at a percentage of their face value. D sent P a letter proposing to purchase P's bankruptcy claim for $19,862.72, which was 32% of the claim's face value. D sent the letter to P's corporate office in Anchorage, to the attention of 'A/R - Credit Manager.' If P was interested in selling D asked it to mail or fax an executed Assignment of Claim Agreement, a copy of which was attached. If D accepted the purchase, payments were typically sent by regular mail within 7 to 10 business days. D received a letter on P's letterhead signed by Katie Land, who identified herself as P's 'Accounting Manager.' Land lived in Georgia, and remotely acted as P's 'accounts manager' and 'bookkeeper.' Enclosed with the letter from Land was the executed assignment agreement, dated June 14, 2006. Land's letter also included over 50 pages of invoices relating to P's claim in the Northwest bankruptcy. Land had handwritten '$71,404.00' as the amount of Airline Support's claim in the bankruptcy proceedings. Preprinted on the assignment agreement was the purchase price for the assignment of the claim, $19,862.72. On the signature block, Land had written 'Katie Land/Acct. Mng.' The executed assignment agreement contained a clause stating that 'the individuals whose signatures appear below hereby expressly represent that they have the authority to bind the party for which they sign this agreement.' The assignment agreement also included an attorney's fee provision requiring D to reimburse ASM for all of its expenses in connection with enforcing the agreement, 'including without limitation, reasonable attorneys' fees at the trial and appellate levels.' D filed a proof of claim in bankruptcy court against debtor Northwest on June 26, 2006, indicating that P had assigned its claim to D. D sent a check to P for $19,862.72. P received a notice of transfer of its $62,071 bankruptcy claim and that it had until August 22, 2006, to object to the transfer. On September 29, P brought a challenge to the transfer. The Bankruptcy Court denied P’s application. D incurred and paid $21,247.94 in attorney's fees responding to P's challenge in bankruptcy court. On February 15, 2007, P sued D in superior court in Anchorage. Both parties moved for summary judgment as to whether Katie Land had the authority to execute the assignment agreement. Eventually, a judge granted summary judgment in favor of D, holding that Land had apparent authority as a matter of law. D incurred and paid $21,247.94 in attorney's fees responding to P's challenge in bankruptcy court. Eventually, a judge granted summary judgment in favor of D, holding that Land had apparent authority as a matter of law. It held that all three elements of apparent authority were satisfied as a matter of law: (1) P made manifestations that Land was its agent to D, (2) D relied on those manifestations, and (3) D reasonably interpreted Land's communication as an expression of authority on behalf of P. P appealed. 

Issues

Rule of Law

Holding and Decision

Legal Analysis

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