Makins v. District of Columbia

RUIZ, Associate Judge,

concurring in part:

I am fully in agreement with the essential holding of the en banc court’s opinion that the enforceability of settlement agreements is governed by principles of contract and agency law, including the doctrine that a principal (the client) will be bound by the acts of an agent (the attorney) where the facts support a finding of apparent authority. See Makins v. District of Columbia, 838 A.2d 300, 306 (D.C.2003) (Ruiz, J., *598 dissenting), vacated and reh’g en banc granted, 2004 D.C.App. Lexis 198. That doctrine, as we have long held, is grounded on a third party’s reliance on manifestations of the principal which lead the third party reasonably to expect that the acts of the agent are to be taken as authorized by the principal. Although we have previously held that the existence of apparent authority is a question of fact, see Feltman v. Sarbov, 366 A.2d 137, 140 (D.C.1976), I can join the majority’s narrow holding that the facts presented in the certified question— as interpreted by the majority to mean that Ms. Makins did nothing more than retain counsel- — do not, as a matter of law, satisfy a necessary prerequisite for apparent authority: “Since Ms. Makins, as principal, did not make any manifestation of authority to the District’s attorneys, other than retaining Harrison, under the facts as certified in the question, a finding of apparent authority is precluded under the law of this jurisdiction.” (Emphasis added.) 1 See ante at 597.

The certified question, however, presented the factual situation as one where the client, beyond merely retaining counsel, “has authorized the attorney to attend the settlement conference before a magistrate judge and to negotiate on her behalf and ... the attorney leads the opposing party to believe that the client has agreed to th[e] terms.” The majority takes the position that no inference of apparent authority should be permitted from the client’s authorization because she “had little choice, short of discharging Harrison, except to allow him to continue to represent her in the negotiations at the ordered conference.” See ante at 597. But viewed through the eyes of a third party, Ms. Makins did have a choice, for the magistrate’s order provided that the District be represented by a person with settlement authority and that Ms. Makins “either attend the settlement conference or be available by telephone for the duration of the settlement conference.” The import of the magistrate’s order was evident, that the purpose of the conference was to have a negotiation with those who could come to a final settlement. Thus, Ms. Makins had the choice of attending personally, but appeared to have chosen, instead, to be available by telephone to her lawyer, whom, according to the certified question, she authorized to attend the conference to negotiate on her behalf. 2

There are additional facts in the record of this case, moreover, that make the question of apparent authority intensely factual and a much closer issue. In particular, the attorney had been representing the client for several years throughout the adminis *599 trative and judicial proceedings of her claim against the District, and (as testified by the client) she had been asked to be on call the day of the settlement conference and in fact had several telephone conversations with her counsel during the course of the settlement conference in which specific terms were discussed. Taking the facts in the certified question on their face and these further facts of record into consideration, supports the district court’s finding that there was apparent authority because there was a reasonable inference that opposing counsel could draw from the longstanding representation, specific authorization to negotiate settlement and the client’s conversations with her lawyer during the give-and-take of negotiations, that the client was informed and in agreement as terms of settlement were being actively discussed.

In Feltman , the court held there was apparent authority binding the client when the principal held out his retained counsel as the person to negotiate a lease. 366 A.2d at 140 . Similarly in this case, the certified question posits that Ms. Makins held Mr. Harrison out as the person with whom the District should negotiate a settlement of her claims by “authorizing] the attorney to attend the settlement conference before a magistrate judge and to negotiate on her behalf.” Although not stressed in our opinion in Feltman , the attorney in that case had conducted a previous negotiation for the lease of the same premises on behalf of the client, see id. at 138, 140 , from which course of conduct the third party could reasonably draw the conclusion that the attorney spoke for his client on the occasion of the lease renewal as well. Likewise, in this case, there was longstanding representation by Mr. Harrison of Ms. Makins, beginning -with the adverse action in the agency, continuing through a complaint before the EEOC, and culminating in the initiation and prosecution of a lawsuit in federal court. And, beyond this prior course of conduct similar to that present in Feltman , in this case there were several conversations between Mr. Harrison and Ms. Makins during the negotiations — conversations a fact finder could think the client knew or should have known would come to the attention of the court and the District’s counsel. 3 Taken *600 together, these actions by the client, though “short of an overt, affirmative representation” present a course of conduct that, the fact finder could find, placed the agent “in a position which causes a third person to reasonably believe the principal had consented to the exercise of authority the agent purports to hold.” Id. at 139 (quoting Ins. Mgmt. of Washington, Inc. v. Eno & Howard Plumbing Corp., 348 A.2d 310, 312 (D.C.1975)). Feltman , in other words, cannot meaningfully be distinguished if all the facts of record are taken into account and, arguably, presented fewer facts than this case to support apparent authority. The majority opinion relies on Feltman and does not purport to overrule it. Based on the authority of Feltman , we can hold that there is no apparent authority only if the facts are limited to the majority’s interpretation of the certified question that all the client did was retain an attorney. To the extent that the majority opinion holds otherwise, I disagree. 4

I also disagree with the majority opinion’s additional and, in my view, unnecessary discussion that the third party (in this case, the District of Columbia attorneys) unreasonably relied on counsel’s representation that his client had agreed to the settlement. The majority opinion places key emphasis on the ethical principle that it is the client who decides when, and on what terms, to settle. See D.C. Rule of Prof. Conduct 1.2(a). This rule guides not only the attorney vis a, vis the client, but also the reasonable expectations of other lawyers. With respect to the latter, the majority argues that because lawyers understand that the ultimate settlement decision is for the client, opposing counsel could not reasonably expect that their counterpart would have final settlement authority without some further client manifestation to that effect. This analysis is fine as far as it goes, but it does not go far enough, because it does not take into account all of the applicable ethical rules. According to the certified question, the attorney “led the opposing party to believe that the client had agreed.” That opposing counsel relied on that representation is not unusual: when lawyers are involved, lawyers deal with lawyers. This not only is common practice, but also is mandated by the ethical prohibition on direct contact with a represented party. See Rule of Prof. Conduct 4.2(a). In this context, it is imperative that lawyers be able to rely upon the facially reasonable representations of opposing counsel. That expectation is particularly sound when a representation is made in the course of a judicial proceeding, as here, not only to opposing counsel but to the presiding judicial officer. See Rule 3.3(a)(1) (“A lawyer shall not knowingly: (1) make a false statement of material fact or law to a tribunal.”). A lawyer’s operating assumption must be to expect — and our opinions place decisive significance upon — candor from counsel in their dealings with each other and with the court consistent with the rules of professional conduct we have promulgated. See Miranda v. Contreras, 754 A.2d 277, 281 *601 (D.C.2000) (“As colleagues at bar and officers of the court, and to ensure the efficient, accurate and just operation of judicial proceedings, counsel must be able to reasonably rely on representations made by fellow counsel in the context of litigation”). I see nothing in the facts of record that should have alerted the District’s attorneys to suspend that customary assumption and instead suspect the bona fides of Mr. Harrison’s representation that settlement had been reached satisfactory to his client. To the contrary, the certified question’s formulation that counsel “led the opposing party to believe the client had agreed” carries the implication that the District’s attorneys’ (and the magistrate’s) reliance was reasonable. What we hold is that this reliance did not legally bind the client in this case because it was not based on sufficient manifestations from the client, who merely retained counsel. If the majority means to argue that the District’s continued reliance on counsel’s representations was unreasonable once it turned to enforce the settlement on an apparent authority theory which requires a manifestation by the client, I fail to see how that posture could be deemed unreasonable when the very question has been certified to us by our federal appellate colleagues, and it took our court, sitting en banc, to settle the matter.

On this limited basis, I concur in the full court’s negative answer to the certified question.

. Although not explained in the opinion, the majority’s view that all Ms. Makins did was to retain her attorney is presumably based on the fact that because the magistrate had ordered the parties to attend the settlement conference, Mr. Harrison’s attendance could not be interpreted as anything more than routine compliance in the course of litigation. See Makins, 838 A.2d at 305 ("Because Harrison was ordered to attend the conference by the magistrate, however, we find such an "authorization” of limited value in evaluating a conveyance of authority.”) Notwithstanding the majority’s premise that Ms. Makins had made no manifestation beyond retaining Harrison as her counsel, the majority ”take[s] as a given that a third party in the shoes of the District of Columbia would reasonably assume that Makins had authorized attorney Harrison (1) to attend the settlement conference, and (2) to negotiate on her behalf.” See ante at 594.

. In her testimony, Ms. Makins conceded that she knew principals were at the conference, "I asked Mr. Harrison, when he made mention to me that Mr. Henderson [the warden who was a defendant in the lawsuit] was here [at the settlement conference], I said to him, I said, Mr. Harrison, why is Mr. Henderson there and I'm not there?”

. Mr. Harrison testified that immediately before settlement was concluded, he spoke to Ms. Makins for about 30 minutes:

I was on the phone and they came out and they wanted me to go back in while I was doing that, and I said, no, that Ms. Makins wanted to go over some things and since I had no authority I couldn’t— there was no reason for me to go back until I had authority from my client.

So I would not go back in, and I believe that was the next to last thing before we settled at $99,000. We had one more discussion before we settled at $99,000.

Although she disagreed with Mr. Harrison about the content and length of their conversations, Ms. Makins testified that she had three conversations with her attorney the day of the settlement conference.

Michael Stern, the District’s attorney with settlement authority who attended the conference, testified about the impact of the telephone conversations:

[Question] Mr. Stern, did Mr. Harrison, plaintiff’s counsel, explain to Judge Kay whether or not he would be in contact with his client during the mediation session?

[Answer] Judge Kay, in fact, asked him why the plaintiff wasn’t there, and he said, oh, she is at home, and I have contact with her on the telephone, and I will call her if there are any discussions that — any offers that I have to make.

Plaintiff's counsel stepped back in. I explained to him — I said, there was no way we were going to be able to settle this for over $100,000. If he was able to speak to his client and then come back to us with an offer of under $100,000, that I thought that there was a chance of settling it. *600 And he said, do you think it would go for $100,000? And I said, it has to be under $100,000. He went out with the phone in hand, came back a little while — not very long. Maybe it was ten minutes later, five minutes later, with the phone still in hand, and said, would $99,000 do it? And I said, $99,000 is fin[e]. We can settle this case.

. The majority recognizes the importance of the prior course of conduct in Feltman , see ante at n. 4, but does not take into account the extensive prior course of conduct in this case, presumably, because, unlike Judge Kessler, the district court judge who heard all the evidence presented, the majority limits its consideration to the facts in the certified question.