Court Opinion

ID: 9476156
Source: CourtListenerOpinion
Date Created: 2023-08-05 05:48:21.548409+00
Date Added: 2024-06-11T17:45:08.980886
License: Public Domain

GARWOOD, Circuit Judge,
dissenting:
I respectfully dissent.
The majority holds that Nicholls can bind Schlumberger to Breaux under the doctrine of detrimental reliance for exactly the same recovery as would be available if Nicholls had had apparent authority to obligate Schlumberger to lease the property, despite the fact that Nicholls had no such authority.1 For his recovery under “detri*1234mental reliance,” in other words, Breaux is not required to prove anything he is not required to prove to recover under “apparent authority”; the elements of the two causes of action are exactly the same, except only that Schlumberger must have clothed its employee Nicholls with indicia of authority for an “apparent authority” recovery, but not for a “detrimental reliance” recovery. Significantly, there is no difference in the measure of recovery: in each case it is promissory, being based on what Breaux would have received had Schlumberger executed and fulfilled the lease. Who then, when seeking recovery from a principal on a promise made in his name by his unauthorized employee, will ever seek to recover under “apparent authority,” when “detrimental reliance” will always get as much money but with less proof. Why climb the higher hill or carry the superfluous baggage? In essence, in all employee cases, the Louisiana doctrine of apparent authority has been vastly changed so that it is now no longer necessary to prove that something the principal did made it reasonable to believe that the employee had authority; provided only that the pleader and the district judge use the magic words “detrimental reliance.” This, I submit, is an elevation of form over substance — of labels over content — in which the Louisiana courts would not indulge.
I do not believe Louisiana would invoke the doctrine of detrimental reliance to make such a vast change in its law respecting when a principal can be bound to a promise made in his name by his unauthorized employee.2 The common law analogues of detrimental reliance are apparently promissory estoppel, see Restatement (Second) Contracts § 90, tortious misrepresentation, see Restatement (Second) Torts §§ 525, 526, 530, 544, 552, 552C, restitution of benefits conferred on or property transferred to another, see Restatement of Restitution §§ 15, 56, and apparent authority. Restatement (Second) Agency § 27. Only the latter is applicable here, yet we have already held that its requirements have not been proved. Promissory estoppel speaks not to want of authority, but to want of consideration. Restitution is inapplicable, for here recovery is not sought of any benefit conferred on or thing transferred to the defendant. See Restatement of Restitution § 15, comment / (transfer to an unauthorized agent does not allow recovery from the principal if not ratified or received by the principal); § 56 (items transferred in anticipation of a contract with the transferee may be recovered from the transferee if the contract is not formed or carried out). That leaves tortious misrepresentation. Recovery for misrepresentation of future intention — as opposed to misrepresentation of existing facts (or opinion respecting existing facts) —is limited to fraudulent misrepresentation. Restatement (Second) Torts §§ 525, 526, 530, 544, 552, 552C. There is no evidence here that any existing fact — or opinion concerning an existing fact — was misrepresented. There is no finding of fraud or even of negligence.
Accordingly, I respectfully dissent.

. The majority quotes the final paragraph of our opinion on the prior appeal. Also relevant is the immediately preceding portion of that earlier opinion, viz.:
"Here, we find no evidence of action on the part of the principal, Schlumberger, that would lead Breaux to believe that Schlumber*1234ger had consented to a lease or authorized Nicholls to finalize an agreement on its behalf. Breaux’s strongest evidence is the language in Nicholls’ July 16 letter stating that Vice President Pohoriles had ‘selected’ Breaux’s building. Yet even assuming that Pohoriles was completely satisfied with the building and fully intended to go forward with the transaction, the 'selection' of the building was only a preliminary step in the consummation of a lease agreement. The details of the agreement remained to be worked out. No subsequent actions of either Nicholls or Schlumberger indicated that an agreement had been finalized."

. The majority candidly concedes that the cases it looks to for guidance, Stewart v. Schmauss, 191 So.2d 882 (La.App. 1st Cir.1966), and Dousson v. South Central Bell, 429 So.2d 466 (La.App. 4th Cir.), writ denied, 437 So.2d 1135 (La.1983) (writ applied for by plaintiff), do not compel the result reached here. Neither involved a question of want of authority, and each seems to have treated the situation as involving a misrepresentation of existing fact — in Stewart as to the terms agreed on, in Dousson as to the telephone company’s existing procedures. Stewart can also be seen as using promissory estoppel to prevent a party from backing out of a contract he had actually made but which was unenforceable for lack of formality, much like Restatement (Second) Contracts § 90. See Preload Technology v. A.B. & J. Construction Co., Inc., 696 F.2d 1080 (5th Cir.1983).