Makins v. District of Columbia
861 A. 2d 590, 2004 WL 2471504, 2004 D.C. App. LEXIS 577 (2004)
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Rule of Law:
An attorney's authority to attend a settlement conference and negotiate on a client's behalf does not, without more, create apparent authority to bind the client to a final settlement agreement. A third party's belief that an attorney has final settlement authority is only reasonable if it is based on a manifestation from the client, not from the attorney's own words or actions.
Facts:
- Brenda Makins was employed by the District of Columbia's Department of Corrections from 1995 until her discharge in 1997.
- Represented by attorney John Harrison, Makins sued the District of Columbia, seeking reinstatement, compensatory damages, and attorney's fees for alleged sex discrimination and retaliatory firing.
- A court ordered the parties to a settlement conference, requiring the District to have an individual with 'full settlement authority' present, and for Makins to either attend or be available by telephone.
- Makins did not personally attend the conference but authorized Harrison to attend and negotiate on her behalf.
- During the two-and-a-half-hour conference, Harrison and the District's attorneys reached an oral agreement for Makins to receive $99,000 and have her personnel records amended in exchange for dismissing her claims.
- During the negotiations, Harrison left the room with a cell phone, apparently to speak with Makins, and returned to accept the proposed terms.
- Several days after the conference, Harrison presented the written settlement agreement to Makins, but she refused to sign it because it did not include her reinstatement.
Procedural Posture:
- Brenda Makins sued the District of Columbia in the United States District Court for the District of Columbia, a federal trial court.
- The District Court referred the case to a magistrate judge for a settlement conference.
- Following Makins' refusal to sign the agreement, the District of Columbia filed a Motion to Enforce Settlement in the District Court.
- The District Court granted the motion, ruling that Makins' attorney possessed apparent authority to settle the case.
- Makins (appellant) appealed the District Court's decision to the United States Court of Appeals for the District of Columbia Circuit, a federal intermediate appellate court.
- The U.S. Court of Appeals for the D.C. Circuit certified a question of law to the District of Columbia Court of Appeals, the highest court for D.C. law, to determine how D.C. law resolves the issue.
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Issue:
Under District of Columbia law, does an attorney have apparent authority to bind a client to a settlement agreement when the client has not given the attorney actual authority, but has authorized the attorney to attend a settlement conference and negotiate on her behalf, and the attorney leads the opposing party to believe the client has consented to the terms?
Opinions:
Majority - Nebeker, Senior Judge
No. A client is not bound by a settlement agreement negotiated by her attorney under these circumstances. The doctrine of apparent authority requires that the principal (the client) make a manifestation to the third party that causes the third party to reasonably believe the agent (the attorney) has authority. Merely retaining an attorney and authorizing them to attend a settlement conference and negotiate are insufficient manifestations to create a reasonable belief that the attorney has the final authority to conclude a settlement. The decision to settle belongs exclusively to the client, a core ethical principle which opposing counsel is presumed to know, making it unreasonable for them to rely solely on the attorney's representations without some direct manifestation from the client herself. An attorney cannot create their own apparent authority through their own actions or statements, such as making phone calls and claiming the client has agreed.
Concurring - Ruiz, Associate Judge
No. The conclusion that the attorney lacked apparent authority is correct, but only on the narrow interpretation that the client did nothing more than retain counsel. This case presents a much closer factual question than the majority suggests, because the client authorized the attorney to attend a court-ordered settlement conference and was available by phone during active negotiations. A third party's reliance on opposing counsel's representation that a deal has been reached is not unreasonable, as ethical rules require lawyers to be candid and generally prohibit direct contact with a represented party. However, because established law requires a manifestation from the principal, and the facts here, when narrowly construed, lack a sufficient manifestation from Makins herself to the District, the settlement cannot be enforced on a theory of apparent authority.
Analysis:
This decision reinforces a strong protection for client autonomy in settlement decisions within the District of Columbia. It clearly distinguishes the authority to negotiate from the authority to finalize a settlement, placing a high burden on opposing parties to confirm an attorney's authority to bind their client. By requiring a direct manifestation from the client, the court prioritizes the client's absolute right to accept or reject a settlement over the policy of promoting finality in settlement negotiations. This ruling may lead parties to insist on the client's physical presence at settlement conferences or to require direct, on-the-record confirmation from the client before an agreement is considered binding.
