Speed v. Muhanna
619 S.E.2d 324, 2005 Fulton County D. Rep. 2427, 274 Ga. App. 899 (2005)
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Rule of Law:
An attorney of record has apparent authority to enter into a binding agreement, such as a release of future claims, on behalf of a client. Such an agreement is enforceable by a third party who relies on it, unless the client's express limitations on the attorney's authority were communicated to that third party.
Facts:
- On February 14, 1999, Henry Speed injured his foot at a Sports Authority store.
- In November 1999, Speed retained attorney Scott Zahler to pursue claims against Sports Authority and 'any other Defendants later named or identified' resulting from the incident.
- In January 2002, Speed was hospitalized and treated by Dr. Shajih Muhanna for deep venous thrombosis.
- In June 2002, Zahler contacted Muhanna to depose him as Speed's treating physician for the Sports Authority case.
- Muhanna expressed reluctance to be deposed and requested written assurance that he would not be subject to a medical malpractice claim.
- On August 27, 2002, Zahler sent Muhanna a letter stating, 'This is not a medical malpractice case and neither now or in the future will you be subject to any type of malpractice claim.'
- Relying on this letter, Muhanna met with Zahler and gave his deposition testimony on September 10, 2002, for use in Speed's case against Sports Authority.
Procedural Posture:
- Henry Speed, represented by attorney Scott Zahler, filed a premises liability action against Sports Authority in the trial court.
- On January 8, 2004, Speed, through new counsel, filed a separate medical malpractice suit against Dr. Shajih Muhanna in the trial court.
- Dr. Muhanna filed an answer asserting that Speed had released any malpractice claims against him.
- Dr. Muhanna filed a motion for summary judgment based on the defense of release.
- The trial court granted summary judgment in favor of Dr. Muhanna, ruling that the attorney's letter was an enforceable release.
- Henry Speed (appellant) appealed the trial court's grant of summary judgment to the Georgia Court of Appeals, where Dr. Muhanna is the appellee.
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Issue:
Does a written letter from a client's attorney of record to a third-party doctor, stating that no future malpractice claim will be filed against him, constitute an enforceable release that binds the client, even if the client later claims the attorney lacked specific authority to issue it?
Opinions:
Majority - Blackburn, Presiding Judge.
Yes, the written letter constitutes an enforceable release that binds the client. Under Georgia law, an attorney of record has apparent authority to enter into agreements on behalf of their client, which opposing parties may rely upon unless notified of express limitations. Here, Zahler, as Speed's attorney of record, possessed apparent authority to negotiate with Muhanna. From Muhanna's perspective, Zahler's authority was plenary, and he was entitled to rely on the assurance that no claim would be brought. The letter was a clear and unambiguous release of future claims, supported by valid consideration—Muhanna's voluntary testimony, which was a benefit to Speed's case against Sports Authority. Speed's remedy for any unauthorized action by his attorney is a claim against the attorney, not against the innocent third party who relied on the attorney's apparent authority.
Analysis:
This decision strongly affirms the doctrine of apparent authority for attorneys in Georgia, placing the risk of an attorney exceeding their actual authority squarely on the client. It establishes that a third party can confidently rely on an attorney's written promises, such as a release of claims, even outside the context of formal litigation. The ruling serves as a crucial reminder that a client's limitations on their attorney's power to settle or release claims must be explicitly communicated to opposing parties to be effective. Consequently, clients are bound by their counsel's agreements, and their only recourse for an unauthorized action is a malpractice suit against their own attorney, not the unwinding of the agreement with the third party.
