Court Opinion

ID: 9727194
Source: CourtListenerOpinion
Date Created: 2023-08-26 13:24:48.54853+00
Date Added: 2024-06-11T18:25:34.691950
License: Public Domain

Chief Justice CAPPY,
concurring.
I join the majority opinion. I write separately, however, to note that I would take this opportunity to adopt, prospectively, the doctrine of apparent authority as set forth in Section 27 of the Restatement (Third) of the Law Governing Lawyers. I favor embracing this approach due to its recognition of the practical difficulties inherent in negotiating and enforcing settlements, and its proper balancing of the competing policies of the client’s right to control settlement, protection of third parties, and our strong public policy in favor of settlement.
As set forth by the majority, the law in our Commonwealth has been clear that an attorney must have express authority in order to bind a client to a settlement agreement. Starling v. West Erie Avenue Buildings & Loan, 333 Pa. 124, 3 A.2d 387, 388 (1939). While it has been suggested that whether our Court would adopt the doctrine of apparent authority is an open question,1 our prior ease law has expressly rejected the apparent authority doctrine. Starling, 3 A.2d at 388 (determining that the “necessity of special [express] authority ... not only denies the existence of implied authority, but also of apparent authority of an attorney to bind his client” to a settlement agreement). .
*161I, however, would adopt, prospectively, the doctrine of apparent authority, as stated in Section 27 of the Restatement (Third) of the Law Governing Lawyers as the law of our Commonwealth. Embracing Section 27 would slightly alter the current requirement of express authority by permitting enforcement of a settlement agreement where a third party reasonably assumes that the lawyer is authorized to settle a matter, based upon the client’s manifestations of such authorization:
A lawyer’s act is considered to be that of the client in proceedings before a tribunal or in dealings with a third person if the tribunal or third person reasonably assumes that the lawyer is authorized to do the act on the basis of the client’s (and not the lawyer’s) manifestations of such authorization.
Restatement (Third) of the Law Governing Lawyers § 27 (2000).
I believe that such an approach is more desirable than the doctrine of express authority, first, because it takes into account the complex and difficult nature of negotiating a settlement agreement as well as a blameless third party’s burden in enforcing a settlement agreement. Settlement disputes can arise if a recalcitrant attorney agrees to settle an action contrary to the express instructions of his or her client. Likewise, an attorney mistakenly may believe his or her client has authorized a settlement. Finally, a client may renege on a commitment to settle after authorizing his attorney to reach an agreement. Under the doctrine of express authority, the impact of such contests regarding the validity of a settlement falls disproportionately on a third party who relies upon an opposing party’s attorney’s acts and representations. This is due to the fact that a third party engaged in the settlement of a dispute seldom knows whether the opposing party’s attorney is acting with the express authority of his or her client. Furthermore, in enforcing a settlement agreement, a third party may find proving express authority difficult, as the proof necessarily will involve dealings between the client and his or her attorney to which the third party was not privy and which *162may be protected by the attorney-client privilege. See generally, Grace M. Giesel, Enforcement of Settlement Contracts: The Problem of the Attorney Agent, 12 Geo. J. Legal Ethics 543, 543-44 (Spring 1999).
The doctrine of apparent authority as set forth in the Restatement (Third) of the Law Governing Lawyers alleviates, at least to some degree, these practical difficulties that are manifest in the settlement of disputes and the shortcomings of the express authority doctrine. Under the doctrine of apparent authority a third party bases enforcement of a settlement agreement upon the statements and conduct of the opposing attorney’s client. Therefore, if the third party is reasonably misled by the client’s communications or manifestations that the client’s attorney is authorized to bind the client to a settlement agreement, then it is the client who must bear the burden for misleading. By adopting the apparent authority doctrine, a balance of interest between the parties is maintained where clients retain ultimate control over settlement issues yet, at the same time, reasonable third parties are protected.
Second, I believe that the apparent authority doctrine is more in line with our Court’s strong and historic public policy of encouraging the settlement of disputes. Muhammad v. Strassburger, et al, 526 Pa. 541, 587 A.2d 1346, 1350-51 (1991). Under the doctrine of apparent authority, if a client’s communications or manifestations are reasonably interpreted to mean that the client’s attorney has the authority to settle the dispute, any settlement agreement entered into by the client’s attorney will be enforceable against that client. This approach also will reduce the ability of a client to renege on settlement after an agreement is reached.2
Thus, for the reasons stated above, I join the majority opinion, but additionally would prospectively adopt as the law *163of our Commonwealth the Restatement (Third) of the Law Governing Lawyers § 27.
Justice NEWMAN joins this concurring opinion.

. See, Farris v. JC Penney Company, Inc., 176 F.3d 706, 709 (3rd Cir.l999)(noting that the Pennsylvania Supreme Court has never invoked the doctrine of apparent authority to enforce a settlement agreement, but at best, “has left the applicability of the doctrine open citing Rothman v. Fillette, 503 Pa. 259, 469 A.2d 543 (1983)).

. Scholarship has endorsed this approach to the enforcement of settlement agreements. See e.g. Giesel, 12 Geo. J. Legal Ethics at 590; Parness and Bartlett, The Authority of Illinois Lawyers to Settle Their Client’s Civil Claims: On Principles Not Quite Settled, 31 Loy. U. Chi. L.J. 199, 220-21 (Winter 2000).