Court Opinion

ID: 5157197
Source: CourtListenerOpinion
Date Created: 2022-01-02 02:24:59.358213+00
Date Added: 2024-06-11T08:25:25.378935
License: Public Domain

STOWERS, Justice,
concurring in part and dissenting in part.
I agree that there is a genuine issue of material fact as to whether Airline Support's accounting manager, Katie Land, had apparent authority to execute ASM Capital's assignment agreement. The court concludes that a genuine issue of material fact arises from the third factor in our apparent authority analysis, namely, that on the state of the evidence it cannot be said as a matter of law that ASM acted reasonably in relying on the principal's (Airline Support's) manifestations to the third party (ASM) of the agent's (Katie Land's) authority to bind Airline Support to the assignment agreement. I agree with this determination and to this extent concur with the court's opinion.
I disagree with the court's conclusion that there are no genuine issues of material fact with respect to the first factor in our apparent authority analysis. The first factor looks to "the manifestations of the principal to the third party" to determine whether the principal has signaled, by word or deed, that the agent has authority to act on the principal's behalf.1 The court concludes that because Airline Support gave Land the title "accounts manager," because it provided Land with company stationery, because it sent ASM's offer and assignment agreement to Land in Georgia, and because it sent Land the relevant billings from Airline Support to Northwest Airlines, these facts are "manifestations" of Land's authority to execute the assignment agreement as a matter of law.
The court is mistaken. These facts might be accepted by a fauctfinder as sufficient to establish a manifestation by the principal of authority in the agent, but these facts, in the context of all of the relevant facts, do not establish a manifestation of apparent authority as a matter of low.
This appeal comes to the court from summary judgment granted by the superior court. The question is whether there are any genuine issues of material fact proffered by the opponent of summary judgment.2 If there is a single genuine issue of material fact, summary judgment is precluded. I believe that the court overlooks several critical genuine issues of material fact.
Airline Support's president, director, and sole shareholder, Donald Tulin, provided the superior court with an affidavit in which he swore:
I emphasize that the corporation was unaware of the transfer of the corporate claim by bookkeeper, Katie Land, until after the fact. I emphasize that Airline Support, Inc.'s Board of Directors did not authorize the transfer of its claim, and when the transfer was discovered, the corporation took action by contacting ASM and attempting to resolve this matter, and also took action to set the transfer aside.
Tulin also attested:
Katie Land is, in fact, a bookkeeper. She does not sit on the Board of Directors; she is not a signatory on the corporation's bank accounts; she does not buy or sell corporate assets in the normal course of our business; and ... her transfer of [Airline Support's] claims to ASM was a mistake.
These affidavit statements are sufficient to raise a genuine issue of material fact as to the factual question whether Land had apparent authority to bind Airline Support to the terms of ASM's assignment agreement, including the question whether Airline Support did or said anything to create an appearance of authority in its agent, Land.3
The factual context is critical to the proper analysis. ASM sent a letter and an Assignment of Claim Agreement to Airline Support seeking to purchase, at "deep discount," amounts owed to Airline Support by North*612west Airlines, which was in bankruptcy. The assignment form contains the following language:
Assignor represents and warrants that it ... has the full authority to enter into this Agreement and 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.
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This Agreement shall be governed by and construed in accordance with the laws of the State of New York.... Any action under or relating to this Agreement may only be brought in any State or Federal court located in Nassau County, in the State of New York.... In any action hereunder the Assignor waives the right to demand a tﬁal by jury.
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Assignor will indemnify Assignee ... and save [it] harmless from and against all claims, actions, lMabilities and Assignee shall not be liable for any damages, or any lost profits whatsoever, relating to the performance of- its obligations hereunder.
What is important to understand is that the assignment agreement did not merely seek Airline Support's assent to sell its Northwest Airlines accounts receivable. The agreement also sought Airline Support's promises to bestow huge litigation benefits on ASM in the event that litigation ensued. Putting aside the question whether Land, Airline Support's account manager and bookkeeper, had authority to sell the accounts receivable, there was no evidence proffered by ASM (other than the fact that Land signed the agreement and used company stationery in her correspondence with ASM) that Land had authority to: waive Airline Support's right to jury trial; bind Airline Support to an indemnification and hold harmless agreement; and give up Airline Support's right to seek damages or lost profits from ASM. What bookkeeper or accounts manager (whose authority did not even include being a signatory on Airline Support's checks, according to Tulin's affidavit) has the authority to bind its employer to such one-sided and potentially devastating promises, even where she received her employer's billing statements, company stationery, and an unopened letter soliciting a purchase at deep discount of the company's accounts receivable? And based on what?-the agent's signature to a form contract prepared by the third party that states that she "represents and warrants that [she] ... has the full authority to enter into this Agreement and that [she] ... expressly represent[s] that [she] halls] the authority to bind the party for which [she] sign[s] this Agreement."
But it never is the case that a third party can bind the principal based on the agent's representation of authority.4 Yet that appears to be exactly what has happened in this case. Because I believe there are genuine issues of material fact as to both the first factor (manifestation by the principal) and third factor (reasonable reliance by the third party) of this court's apparent authority analysis, I dissent in part from the court's opinion.5

. Anderson v. PPCT Mgmt. Sys., Inc., 145 P.3d 503, 509 (Alaska 2006) (citing Restatement (Second) or §§ 8 cmt. b, 27 (1958)).

. Alaska R. Civ. P. 56(c).

. It is undisputed that neither Airline Support's president, director, and sole shareholder, Donald Tulin, nor anyone at Airline Support's office in Anchorage, ever communicated directly with ASM prior to ASM's receipt of the assignment agreement signed by Land.

. A. Lorp, 12 Wirumton on Conrracts § 35:12 (4th ed. 1990) ("Agents often attempt to create an appearance of authority by their own acts or statements, but such an appearance does not create apparent authority; the principal is only liable for the appearance of authority caused by the principal's own conduct.").

. There is an important issue unaddressed by the parties and the superior court, and not at issue on appeal. Because there are genuine issues of material fact, at least as to the reasonableness of ASM's reliance on Airline Support's purported manifestations giving rise to Land's apparent authority to bind Airline Support, the case is being remanded for trial. But tried by who? Airline Support filed a demand for jury trial ASM's form contract provides that Airline Support has waived its right to jury trial. The superior court granted ASM's motion for an order providing that Airline Support is not entitled to a jury trial. But whether Airline Support's waiver of trial by jury is valid depends on whether Land had apparent authority to bind Airline Support to all terms of the assignment agreement, and that will be the subject of the trial. To the extent that ASM relied on Airline Support's purported waiv*613er of jury trial in its motion, the superior court's reliance on that waiver may have been premature.