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A West Virginia appellate court held that an attorney had apparent authority to enter into a mediated settlement agreement after he reasonably relied on a statement agreeing to the settlement given by the client through their spokesperson and the client did not offer any information rebutting the attorney's apparent authority.
In Messer v. Huntington Anesthesia Group, Inc., No. 33663, 2008 WL 2523158 (W. Va. June 26, 2008), Theresa Messer brought suit against the eight doctors comprising HAGI for failing to reasonably accommodate her physical disabilities sustained from a back injury. The suit proceeded to court-annexed mediation.
Mike Dellinger represented all eight of the doctors, three of whom separated from HAGI under the terms of an undisclosed settlement agreement between the doctors. The remaining five doctors communicated with Dellinger mainly through Dr. Ramos.
Subsequent to the mediation, Dellinger notified the doctors that Messer was willing to settle for $225,000. Dr. Ramos told Dellinger that all the doctors would agree to this settlement.
Dellinger then sent a letter confirming the settlement agreement to all of the doctors. He notified Messer of the agreement to settle for $225,000 after receiving no objection from the doctors.
None of the doctors replied until over a week later when Dr. Gabriel emailed Dellinger and told him that HAGI would not go forward with the settlement. Dellinger notified Messer of HAGI's unwillingness to go forward with the mediated agreement and removed himself as counsel.
Messer moved to confirm the settlement agreement and a trial court denied her request, agreeing with HAGI that no meeting of the minds had occurred. Messer appealed to this Court.
This Court found the issue of whether Dellinger had apparent authority to enter into a settlement agreement to be dispositive.
Ultimately, the Court held that HAGI did not meet its burden of rebutting the presumption that Dellinger, as HAGI's attorney, had apparent authority to represent its settlement interests. See Gen. Elec. Credit Corp. v. Fields, 133 S.E.2d 780, 783 (W. Va. 1963). HAGI did not mention this authority or attempt to rebut it expressly in its denial regarding the settlement agreement.
In light of all the circumstances, the Court determined that Dellinger acted reasonably in relying on Dr. Ramos's assurance that the settlement offer was agreed to by the other doctors. Dr. Ramos acted as the spokesperson for HAGI, as shown by the other doctors' communication with Dr. Ramos rather than Dellinger. Moreover, none of the doctors contacted Dellinger to object or question his authority to represent them until more than a week after the settlement notification letter was sent.
The Court also noted Dr. Ramos's contradicting testimony regarding what he told Dellinger about the settlement. Pointing to the emails between Dr. Gabriel and Dr. Ramos, which seemed to corroborate Dellinger's account of the events, and Dr. Ramos's admitted memory problems due to cardiac surgery he underwent days after his conversation with Dellinger, the Court discounted Dr. Ramos's credibility.
Weighing Dr. Ramos's credibility against Dellinger's reasonable reliance on Dr. Ramos's representation that the other HAGI doctors agreed to the settlement, the Court held that the trial court erred in refusing to confirm the settlement agreement between HAGI and Messer. The decision was therefore vacated and remanded.
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