Court Opinion

ID: 9791233
Source: CourtListenerOpinion
Date Created: 2023-08-31 02:07:53.922045+00
Date Added: 2024-06-11T07:37:34.997574
License: Public Domain

RANSOM, Justice (specially concurring). I concur in the result reached by the majority, but I write specially to state a belief that it would serve well the law of agency if we were to more distinctly assign meaning to the various words of art defining actual and apparent authority, and more precisely construct the foundation necessary for the establishment of either. Actual authority is given to the agent by the principal in terms that are express, or in terms that are implied from words or conduct of the principal to the agent or from the circumstances of the relationship. Restatement (Second) of Agency § 7 comment c (1958). Absent a limitation to the contrary, I agree with the majority that it lies within the implied authority of an attorney to bind the client to pay the reasonable expenses incurred in the preparation and trial of a case, including the fees of an expert witness. Here, however, the trier of fact specifically found that the attorney acted outside the scope of his authority. As the majority recognizes, testimony that the principal neither discussed nor authorized payment of expert fees over and above $2,500 supports a finding that actual authority was limited to $2,500. Therefore, I would affirm the lower court on the issue of actual authority. There was neither express nor implied authority in this case. It is not clear, however, that the trial court made specific findings of ultimate fact regarding apparent authority. See SCRA 1986, 1-052(B)(1)(a), (b) (the court shall find ultimate facts necessary to determine the issues). The trial court did find that the expert witness failed to prove the attorney acted within the scope of “apparent or ostensible authority,” but this finding seemingly is based on the expert’s failure to make any inquiry into the extent of the attorney’s authority to bind his client. The unanswered determinative question of fact, however, is whether the failure was unreasonable, i.e., whether the principal proved the third party had constructive knowledge of the limitation. I would reverse with instructions to the court to make certain findings material to the issue of apparent authority, e.g., whether the client had placed her attorney in a position that would lead a reasonably prudent third party to believe the attorney had authority to bind the principal to pay witness fees incurred, and whether the expert reasonably relied on such belief notwithstanding his failure to ascertain any limitation on the authority (an authority normally implied as between attorney and client to include litigation expenses, as discussed above). See Restatement (Second) of Agency § 27 (“Creation of Apparent Authority: General Rule”) (1952); see also Id. § 49; Romero v. Mervyn’s, 109 N.M. 249, 784 P.2d 992 (1989); Vicker’s v. North Am. Land Dev., 94 N.M. 65, 607 P.2d 603 (1980); Douglas v. Mutual Ben. Health & Accident Ass’n, 42 N.M. 190, 76 P.2d 453 (1938). I wish to emphasize that apparent authority must emanate from the conduct of the person to be charged as principal. Restatement (Second) of Agency § 8 comment e, § 27 comment a (1958); see also Romero, 109 N.M. at 253, 784 P.2d at 996 (“While actual authority is determined in light of the principal’s ‘manifestations of consent’ to the agent, apparent authority arises from the principal’s manifestations to third parties * * *.”). For this reason, the unauthorized statements of an agent to the third party concerning the existence or extent of his authority cannot be relied upon to establish apparent authority. See Restatement (Second) of Agency § 27 comment a (“The information received by the third person may come directly from the principal by letter or word of mouth, from authorized statements of the agent, from documents or other indicia of authority given by the principal to the agent * * *.”) (emphasis added), comment c (“A statement by an agent to a third person with whom he deals, as to the extent of his authority, is admissible in evidence as an operative fact creating apparent authority upon proof that the agent was authorized to make the statement.”) (emphasis added); see also 1 F. Mechem, The Law of Agency § 285 p. 205 (1914) (“Agent’s authority cannot be established by his own statements and admissions.”). The agent’s authority, either actual or apparent, must be traced back to some act or statement by the principal. Consequently, I consider irrelevant the representations of the attorney to which the majority has referred. Such representations could have relevance only if authorized by the principal or if they put the third party on notice of a limitation on authority. Likewise, I question the propriety of the statement in the majority opinion: “Nor has [the client] shown that the [expert witness] acted imprudently or without diligence in relying on [the attorney’s] representation that [the attorney] would pay [the expert witness] ‘as billed’.” (Emphasis added.)