FENNELL V. TLB KENT COMPANY 865 F.2d 498 (1989) CASE BRIEF

FENNELL V. TLB KENT COMPANY

865 F.2d 498 (1989)

NATURE OF THE CASE: Fennell (P) appealed an order which dismissed P's action holding that P's counsel had apparent authority to enter into a settlement agreement.

FACTS: P sued TLB (D) alleging wrongful discharge because of his race and age in violation of 42 U.S.C. 1981 (1982). P was represented by C. Vernon Mason and several of his associates, including Fred K. Brewington. The case was on the ready calendar on January 6, 1987. On January 16, 1987, Brewington and Eugene Frink agreed to settle the case for $10,000 during a telephone conversation. The settlement was reported to the court by both attorneys in a telephone conference call on January 20, 1987. The district court dismissed the case on the same day which provided that either party could apply to the court by letter to restore the case to the court's calendar within sixty days of the order. The settlement was conditioned upon P signing a general release and a stipulation of discontinuance being filed with the court, which never occurred. P claimed that he was willing to settle but $10,000 was not enough. When P found out about the settlement he disapproved. Eventually he wrote Mason expressing his dissatisfaction with the settlement agreement and indicating that he had 'no further use of [Mason's] services.' A copy of this letter was sent to the district court and received there on March 3, 1987. On March 20, 1987, Brewington wrote to the district court requesting that the 'matter be restored to the calendar as the settlement which was authorized and accepted by our client is no longer acceptable to him,' and that Mason and his associates be released by the court as counsel to P. The district court concluded that P's counsel 'had every appearance of being authorized to make a binding agreement with [defendants' counsel].' The district court then applied the common law principle that an agent clothed with apparent authority binds the principal as to actions taken within the scope of that authority, together with the principle favoring settlement agreements, to conclude that P was bound by the settlement agreement. P appealed.

ISSUE:

RULE OF LAW:

HOLDING AND DECISION:

LEGAL ANALYSIS:

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