Arbitration & Mediation

Lawyers Have No Implied Authority to Settle ("Emergency" Exception Has Never Been Applied)

By Christopher B. Hopkins, Esq.

Can an attorney settle a case based upon implied or apparent authority? The general rule is "no" and the exception to that rule exists as a matter of law but has never been exercised. So "no" means no.

In Calvin A. Johnson v. Velma Virginia Skarvan, the plaintiff was represented by counsel and was scheduled to attend an independent medical examination (IME) set by the defendant. Apparently the Plaintiff told his counsel he could not attend and counsel reported that his absence might lead to sanctions. Authority was given to settle the case for $7,500.

Counsel apparently could not get the deal done for that amount so he settled the case for $6,500, filed a motion to withdraw and motion to enforce settlement, wherein counsel wrote that there was an emergency and he had to settle. Although we do not have a detailed set of facts, it appears that the Plaintiff was unable.

The Fifth District (Pleus, Orfinger, and Torpy) held that the general rule was "the mere employment of an attorney does not give the attorney implied or apparent authority to compromise the client's cause of action or settle the client's claim." The court on to set forth an exception: "an exception to this general rule is said to exist when an attorney is confronted with an emergency which requires immediate action to protect the client's interest and consultation with the client is impossible."

But how good is an exception if it's never been used? Not very good at all: "Although several courts, including our own, have acknowledged this exception... no Florida court has ever found the exception to be applicable. We conclude that it is not applicable here, even assuming that the exception is legally sound."

Bottom line: lawyers do not have implied or apparent settlement authority and the circumstances of an "emergency" must be (exceptionally) compelling to even suggest that authority. Recall, in prior cases, we've seen the Fourth District invalidate a verbal hallway agreement and we have seen that same court say that a lawyer's good faith belief of his settlement authority is likewise not good enough.

Full post as published by Florida Arbitration Law on October 20, 2008 (boomark / email).