Opinion ID: 2554806
Heading Depth: 3
Heading Rank: 3

Heading: Implied Warranty of Authority

Text: [¶ 48] Muther and Woods contend that a genuine issue of material fact remains regarding whether, at the settlement conference, the Association purported to have authority to represent its 243 household-members, including the J-Lot owners. They argue that from the provision in the settlement agreement that waived the $150 annual beach access fee for J-Lot owners it was reasonable to infer that the Association represented the J-Lot owners as deeded easement holders. They also argue that, having established this element of an implied warranty of authority claim, the burden shifted to the Association to present facts that would preclude its liability. [¶ 49] The Restatement (Third) of Agency prescribes liability for breach of implied warranty of authority: A person who purports to make a contract ... with a third party on behalf of another person, lacking power to bind that person, gives an implied warranty of authority to the third party and is subject to liability to the third party for damages for loss caused by breach of that warranty ..., unless (1) the principal or purported principal ratifies the act as stated in § 4.01; or (2) the person who purports to make the contract ... gives notice to the third party that no warranty of authority is given; or (3) the third party knows that the person who purports to make the contract... acts without actual authority. Restatement (Third) of Agency § 6.10 (2006); [11] see also Noyes v. Loring, 55 Me. 408, 412, 413 (1867) (suggesting liability for contracts made by unauthorized agents purporting to have authority, but not specifying the form of action). [¶ 50] As discussed above with regard to the fraud claim, Muther and Woods did not establish on the summary judgment record that Hess, Connolly, or the Association's attorney purported to have authority to bind the J-Lot owners in any way other than as members of the Association. Without an express representation of authority, no implied warranty of authority was given upon which Muther and Woods may make a claim. See Restatement (Third) of Agency § 6.10. [¶ 51] However, whether the Association made an implied representation to Muther and Woods that it had authority to bind the J-Lot owners other than as members of the Association is a question of fact to be determined by inferences to be drawn from the [Association's] conduct. See Restatement (Third) of Agency § 6.10, cmt. c. Although summary judgment is typically inappropriate for resolving questions of fact such as this, a plaintiff must still establish in the summary judgment record evidence sufficient to create a question of fact, Stanley v. Hancock Cnty. Comm'rs, 2004 ME 157, ¶ 25, 864 A.2d 169, 178, and summary judgment is appropriate if the non-moving party rests merely upon conclusory allegations, improbable inferences, and unsupported speculation, Dyer v. Dep't of Transp., 2008 ME 106, ¶ 14, 951 A.2d 821, 825 (quotation marks omitted); but see Curtis, 2001 ME 158, ¶ 9, 784 A.2d at 22 (When facts or reasonable inferences are in dispute on a material point, summary judgment may not be entered.). [¶ 52] Here, the issue is whether it is an improbable inference that the Association was authorized to represent the J-Lot owners in a capacity other than as Association members based on the fact that, pursuant to the settlement agreement, the $150 annual beach access fees that Association members would pay would be waived for the J-Lot owners. Viewing all of the evidence in the light most favorable to Muther and Woods, it is an improbable inference that the J-Lot owners would authorize the Association to represent them in exchange for waiving a fee for a privilege that they already hold by deed. A more reasonable inference is that the Association understood that it could not charge some of its members for something that they already owned. Because the summary judgment record is insufficient to create a genuine issue of fact that the Association made an implied representation of authority to make a binding agreement related to the J-Lot owners' deeded easement interests, the court did not err in granting summary judgment in favor of the Association on Muther and Woods's claim of implied warranty of authority.