Opinion ID: 1537412
Heading Depth: 3
Heading Rank: 2

Heading: Davis's Apparent Authority

Text: [¶ 17] Rodney contends that he entered into an agreement with Peoples, through Davis, that Peoples has not honored. According to Rodney, the complaint was not served until August 15, 2000, after the parties had already reached an agreement regarding two of the loans. [¶ 18] Peoples contends that Davis lacked the authority to enter into negotiations with the Peases. According to Peoples, Davis lacked express or apparent authority because Peoples had already informed the Peases in writing that they were not to make any further payments and provided a list of their options. Peoples contends that it refused to accept the Peases' checks, returning them within ten days in compliance with 14 M.R.S.A. § 6204 (Supp.2001), and making clear that Davis lacked the authority to bind the bank to an agreement with them. [¶ 19] Section 6204 provides, in pertinent part: The acceptance, before the expiration of the right of redemption and after the commencement of foreclosure proceedings of any mortgage of real property, of anything of value to be applied on or to the mortgage indebtedness by the mortgagee ... constitutes a waiver of the foreclosure, unless an agreement to the contrary in writing is signed by the person from whom the payment is accepted or, with regard to foreclosures commenced by civil action ... unless the bank returns the payment to the mortgagor within 10 days of receipt.... The mortgagee and the mortgagor may enter into an agreement to allow the mortgagor to bring the mortgage payments up to date with the foreclosure process being stayed as long as the mortgagor makes payments according to the agreement. If the mortgagor does not make payments according to the agreement, the mortgagee may, after notice to the mortgagor, resume the foreclosure process at the point at which it was stayed. [¶ 20] Whether an agency relationship exists is a question of fact. Steelstone Indus., Inc. v. N. Ridge Ltd. P'ship, 1999 ME 132, ¶ 12, 735 A.2d 980, 983. A person has apparent authority to act for a principal if the principal knowingly permits the agent to exercise authority or holds the agent out as possessing authority. Id. at ¶ 13. Thus, the principal's conduct must cause a party reasonably to believe a person acts as an agent of the principal. Id. [A]pparent authority can be created by appointing a person to a position, such as that of manager or treasurer, which carries with it generally recognized duties; to those who know of the appointment there is apparent authority to do the things ordinarily entrusted to one occupying such a position, regardless of unknown limitations which are imposed upon the particular agent. RESTATEMENT (SECOND) OF AGENCY § 27 cmt. a (1958). An agent has apparent authority to do what an employee in his position would customarily do, if the third party knows of his position with the principal, but not of what the employer actually authorized him to do in that position. Id. cmt. d. For instance, a teller for a savings and loan association has apparent authority to bind the association by accepting tender of a late payment. Sav. & Loan Ass'n of Bangor v. Tear, 435 A.2d 1083, 1085 (Me.1981). [¶ 21] The letters from Davis suggest that, notwithstanding Peoples' earlier letter listing the Peases' options, Davis agreed to a new payment schedule for two of the five loans at issue in the present case. This evidence gives rise to genuine issues of material fact regarding whether Davis acted for Peoples in forming a new contract and whether Peoples breached the agreement if it was made. [9] The court erred in granting the summary judgments on these two notes, especially because the evidence did not establish that the checks tendered on the two renegotiated loans were refused or the proceeds returned. As to the two notes negotiated by Davis, we vacate the court's summary judgments on the complaint and on the counterclaim for breach of contract.