The Power to Bind the Client
July 30, 2013 § 5 Comments
When you accept the responsibility to represent a client and enter an appearance or otherwise hold yourself out as representing a party, the court will presume that you have the authority to speak for and bind that party.
That principle came into play in the COA case of Williams v. Homecomings Financial Network, Inc., handed down July 23, 2013.
In that case, Samuel and Carolyn Williams retained a law firm to sue their mortgage company for fraud. They were two of a group of 16 plaintiffs with similar claims. Their attorney, Martin, signed the complaint initiating the suit, holding herself out as counsel for the Williamses. Another attorney in the firm, Nelson, participated.
Terms of settlement were reached, and the attorney signed an agreed judgment of dismissal without prejudice. All of the plaintiff signed the settlement documents except Samuel and Carolyn Williams, who refused to sign. Their attorney withdrew from representation.
Homecomings filed suit to enforce the settlement agreement, and the chancellor ruled in favor of the mortgage company, whereupon the Williamses appealed.
The main point raised by Samuel and Carolyn on appeal was the admission into evidence of the deposition of their former attorney, which they argued contained inadmissible hearsay. For our purposes, though, it’s the authority of counsel and the power to bind the client that concerns us. Here are some points from Judge Carlton’s COA opinion, which affirmed the chancellor:
- ¶13. [From the chancellor’s opinion] “There is a long-standing principle in [the] law that settlements are contracts which are enforceable according to their terms. An attorney is presumed to have the authority to speak for and bind his client. Parmley v. 84 Lumber [Co.], 911 So. 2d 569 (Miss. Ct. App. 2005). Whether or not an attorney has agreed to a settlement on behalf of his client is a question of fact. Id.
- ¶17. In this case, as previously noted, Martin expressed on the record through deposition testimony that he had the authority to bind the Williamses to the terms of the settlement upon learning from Nelson of the Williamses’ alleged acceptance of the proposed settlement. As also previously noted, the record reflects that Martin signed the complaint against Homecomings on behalf of the Williamses. We thus find that the record provides substantial evidence supporting Martin’s authority as counsel of record to bind the Williamses to the agreement. We also find substantial evidence exists to support the chancellor’s order enforcing the settlement agreement. See Parmley, 911 So. 2d at 573 (¶19). Furthermore, Martin’s testimony that he possessed authority as the Williamses’ attorney to accept the settlement terms, coupled with Martin signing the complaint on behalf of the Williamses, demonstrates that Martin indeed possessed the authority to enter into a settlement and bind the Williamses to the terms of any such agreement with Homecomings. Fairchild, 254 Miss. at 265, 179 So. at 187.
In other words, when you sign the pleadings and act like a lawyer with authority to act in a case, the court is going to presume that you have that authority.
And what are the evidentiary implications of that presumption when the court is called upon to make that finding of fact? Here is what the COA said as to the issues in this particular case:
- ¶16. Mississippi Rule of Evidence 801(d)(2)(C) provides that a statement is not hearsay if “[t]he statement is offered against a party and is . . . a statement by a person authorized by him to make a statement concerning the subject[.]” Our supreme court has held that “[a]n attorney is presumed to have the authority to speak for and bind his client.” Parmley, 911 So. 2d at 573 (¶19); see also Pace v. Fin. Sec. Life of Miss., 608 So. 2d 1135, 1138 (Miss. 1992); Fairchild v. Gen. Motors Acceptance Corp., 254 Miss. 261, 265, 179 So. 2d 185, 187 (1965). Additionally, we recognize the determination of “[w]hether or not the attorney has agreed to a settlement on behalf of the client is a question of fact.” Parmley, 911 So. 2d at 573 (¶19).
So, when you speak on behalf of the client under color of the client’s authority, your statements will be admissible as non-hearsay. Attorney-client privilege obviously restrains the scope of admissibility, but does not proscribe it.
You can help avoid factual disputes over the scope of your authority by using representation agreements that clearly define it. As the case progresses, document key discussions with your client via followup letters. Get your client to sign off on orders and agreements that will affect the outcome of the case.