Court Opinion

ID: 220458
Source: CourtListenerOpinion
Date Created: 2011-07-07 00:01:48+00
Date Added: 2024-06-11T17:28:45.043081
License: Public Domain

FILED
                           NOT FOR PUBLICATION                              JUL 06 2011

                                                                        MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U .S. C O U R T OF APPE ALS

                            FOR THE NINTH CIRCUIT

In the Matter of: AUBURN ACE                     No. 10-35364
HOLDINGS LLC,
                                                 D.C. No. 2:09-cv-00909-RSL
              Debtor,

                                                 MEMORANDUM *
AUBURN ACE HOLDINGS LLC,

              Appellant,

  v.

CENTRUM FINANCIAL SVCS INC,
WELLS FARGO BANK NA,

              Appellees.

                   Appeal from the United States District Court
                      for the Western District of Washington
                  Robert S. Lasnik, Chief District Judge, Presiding

                        Argued and Submitted June 9, 2011
                               Seattle, Washington

Before: REINHARDT, W. FLETCHER, and RAWLINSON, Circuit Judges.

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
      Appellant Auburn Ace Holdings L.L.C. (Auburn Ace) challenges the

bankruptcy court’s grant of summary judgment and dismissal of Auburn Ace’s

quiet title action against Appellee Centrum Financial Services Inc. (Centrum).

Auburn Ace maintains that its president, Ben Errez (Errez), lacked the requisite

authority to enter into a loan agreement with Centrum. The bankruptcy court held

that it was reasonable for Centrum to rely on a written consent providing Errez

with authority to negotiate the terms of any loan without the approval of Auburn

Ace’s board of directors.

      The bankruptcy court properly granted summary judgment because there

was no material factual dispute that the written consent and an opinion letter from

Auburn Ace’s corporate attorney bestowed upon Errez, at a minimum, apparent

authority to enter into the loan. See Hoglund v. Meeks, 170 P.3d 37, 44 (Wash.

App. 2007) (“The principal is bound by the act of his agent when he has placed the

agent in such position that persons of ordinary prudence, reasonably conversant

with business usages and customs, are thereby led to believe and assume that the

agent is possessed of certain authority and to deal with him in reliance upon such

assumption.”) (citation and alteration omitted). Because the title insurance

company confirmed Errez’s apparent authority on Centrum’s behalf, Centrum

“actually believe[d] such authority existed.” BP Land & Cattle LLC v. Balcom &

                                          2
Moe, Inc., 86 P.3d 788, 790 (Wash. App. 2004), as amended (citation omitted); see

also W.L. Feely Lumber Co. v. Bookstaver-Burns Lumber Co., 43 P.2d 953, 955

(Wash. 1935) (“The apparent authority, so far as third persons are concerned is the

real authority, and when a third person has ascertained the apparent authority with

which the principal has clothed the agent, he is under no further obligation to

inquire into the agent’s actual authority.”) (citation omitted).1

      AFFIRMED.

      1
         Because the bankruptcy court properly granted summary judgment
premised on Errez’s apparent authority to enter into the loan, we do not address the
parties’ alternative arguments regarding actual authority, the Washington Deed of
Trust Act, election of remedies, ratification of the loan, or equitable subrogation.

                                            3