Court Opinion

ID: 9624093
Source: CourtListenerOpinion
Date Created: 2023-08-22 06:50:33.297686+00
Date Added: 2024-06-11T10:04:39.816333
License: Public Domain

THOMAS, Judge,
dissenting.
Because Mrs. Milon did not have apparent authority to enter into an arbitration agreement on behalf of her husband, and because defendants could not have reasonably and prudently relied on the arbitration form as signed by her, I respectfully dissent.
Apparent authority is that authority which the principal has held the agent out as possessing or which he has permitted the agent to represent that he possesses. Zimmerman v. Hogg & Allen, 286 N.C. 24, 209 S.E.2d 795 (1974). Apparent authority does not arise simply by virtue of marriage. Beaver v. Ledbetter, 269 N.C. 142, 146, 152 S.E.2d 165, 169 (1967). Thus, Mrs. Milon, as Mr. Milon’s wife alone, did not have apparent authority to contract on his behalf.
The majority holds Mrs. Milon had the apparent authority to bind her husband to an arbitration agreement because there was evidence *618she earlier signed some documents for him. When deciding whether past conduct gives rise to apparent authority, however, it is the purported principal’s conduct, not that of the agent, which must be considered. McGarity v. Craighill, Rendleman, Ingle & Blythe, P.A., 83 N.C. App. 106, 349 S.E.2d 311 (1986), disc. rev. denied, 319 N.C. 105, 353 S.E.2d 112 (1987). Thus, Mrs. Milon’s past conduct alone is not determinative of whether she had apparent authority to bind her husband to an arbitration contract.
Under McGarity, the primary focus should be the conduct of Mr. Milon in determining whether Mrs. Milon had apparent authority to bind him to the arbitration contract. Id. There is no evidence that Mr. Milon ever permitted Mrs. Milon to sign his name to any documents. Mr. Milon has neither held Mrs. Milon out as possessing the authority to act as his agent in signing contracts for him, nor has he permitted Mrs. Milon to represent that she possesses such authority. On the occasion in question, in fact, Mr. Milon denied having seen the form or seen his wife sign the form and denied allowing her in any way to sign it for him.
The trial court’s findings in this regard are unequivocal. The trial court found
there has been no credible evidence presented that James Dewey Milon signed the Agreement to Alternative Dispute Resolution, agreed to submit the claims which are the subject of this action to arbitration, authorized any person to bind him to such arbitration or authorized any person to act as his agent in writing his name on the Agreement to Alternative Dispute Resolution.
(Emphasis added). Further, the court found “there is no credible evidence that James Dewey Milon knew of, authorized, consented to or ratified Rosa R Milon so doing or that James Dewey Milon authorized Rosa P. Milon or any other person to act as his agent or authorized the writing of his name on the Agreement to Alternative Dispute Resolution.” (Emphasis added). When the trial court is the fact-finder, its findings of fact are conclusive on appeal if they are supported by any competent evidence, even though there is evidence which might support a contrary finding. See Williams v. Insurance Co., 288 N.C. 338, 218 S.E.2d 368 (1975). Here, there is competent evidence to support the above findings.
Even simply considering Mrs. Milon’s past conduct alone in determining whether she had apparent authority, however, there is no evi*619dence Mrs. Milon had previously signed her husband’s name in his presence. In fact, there is evidence that the only instances she ever signed for him were in situations where he was unable to do so himself — when he was receiving medical treatment in an emergency room on one occasion, and when she went to a pharmacy without him to fill his prescriptions.
It is not insignificant that Mrs. Milon merely signed Mr. Milon’s name, not her own name, on the arbitration form. The clear language of the form requires the signer to sign his or her own name and states that if the signer is not the patient, or the parent or guardian of the patient, then the signer is to indicate his/her relationship to the patient, as well as the reason the patient is unable to sign the form. Mrs. Milon, as the signer, did not indicate her relationship to Mr. Milon and the reason he was unable to sign the form himself. The arbitration contract, therefore, would appear unenforceable under its own terms.
While the trial court correctly concluded Mrs. Milon did not have apparent authority to bind her husband to the terms of an arbitration agreement, even if she had such authority under the circumstances to enter into an arbitration agreement, defendants did not reasonably and prudently rely on it.
A third party, in order to avail itself of the privileges of a contract between itself and a principal’s apparent agent, must have relied on the agent’s authority “in good faith, and in the exercise of reasonable prudence[.]” Norfolk Southern Ry. Co. v. Smitherman, 178 N.C. 595, 599, 101 S.E. 208, 210 (1919). See also Lucas v. Li’l General Stores, 289 N.C. 212, 221 S.E.2d 257 (1976); Zimmerman, 286 N.C. 24, 209 S.E.2d 795 (1974); Edgecombe Bonded Warehouse Co. v. Security Nat'l Bank, 216 N.C. 246, 4 S.E.2d 863 (1939). Further, the third party must have “actually relied upon the assertions of the principal regarding the purported agent’s power at the time of the transaction.” Knight Publishing Co., Inc. v. Chase Manhattan Bank, 125 N.C. App. 1, 15, 479 S.E.2d 478, 487 (1997), disc. rev. denied, 346 N.C. 280, 487 S.E.2d 548 (1997) (emphasis in original).
Defendants were entirely unaware of the signed form until the parties were well into the discovery phase of the litigation. However, they were aware that Mr. Milon had retained counsel, mediation had failed and suit was imminent. Furthermore, defendants may not claim that they relied on the arbitration agreement when they finally did move to compel arbitration, because they did not do so at the time of *620the transaction, as Knight requires. Id. Mr. Milon’s surgery was on 22 December 1998. The mediation took place on 8 November 1999. The form was signed at Dr. Blackburn’s office on 8 December 1999. Plaintiffs filed their complaint on 23 December 1999 and amended it on 6 March 2000. Defendants did not file their motion to compel arbitration until 24 March 2000. Defendants thus may not rely on apparent authority to assert that Mrs. Milon effectively contracted with defendants on his behalf.
In this case, there can be no reasonable and prudent reliance, essential for apparent authority to develop into a binding contract, where: (1) the form was given to plaintiffs after all of the parties had obtained legal representation, mediation failed and suit was imminent; (2) the IQ of Mr. Milon was sixty-nine and that of his wife, sixty-five; (3) the record supports a finding that the signing was a mistake; and (4) both Mr. and Mrs. Milon were on medication, including anti-depressants to help them deal with the stress of their worsening situation.
The majority correctly points out that “[a] party seeking to compel arbitration must show that the parties mutually agreed to arbitrate their disputes.” They go on to hold, however, that the trial court failed to address certain issues in making that determination. I believe those issues were addressed in the trial court’s finding that there was no authority (apparent or otherwise) to bind Mr. Milon to a contract. While ordinarily the IQs of the Milons, their medical condition and the fact they were on anti-depressants would not defeat a contract under apparent authority, here defendants were in the unique position of having dealt with plaintiffs for years. Their medical records were in the possession of some of defendants with the antidepressants having been prescribed by Dr. Blackburn, an affiliate of PDC. The lack of a meeting of the minds here is inherent in the trial court’s finding of there being no credible evidence presented by defendants to show otherwise. Thus, there is no enforceable agreement.
Because of the lack of apparent authority and no reliance on the part of defendants as to the arbitration agreement, I respectfully dissent and vote to affirm the trial court.