Maharishi School of Vedic Sciences, Inc. v. connecticut Consitution Associates Limited Partnership

The dispositive issue in this appeal is
whether the trial court properly determined that an
agent of the plaintiff, Maharishi School of Vedic Sci-ences,
Inc. (Connecticut), had the authority to bind the
plaintiff to a settlement agreement with the defendant,
Connecticut Constitution Associates Limited Partner-ship,
and a third party, General Electric Capital Corpo-ration
(General Electric). The plaintiff appeals 1 from the
judgment of the trial court rendered after the granting
of the defendant’s motion to summarily enforce the
agreement. We affirm the trial court’s judgment.

The record discloses the following undisputed facts.
The plaintiff is the owner of a hotel, formerly known
as the Summit Hotel, located on Constitution Plaza in
downtown Hartford. The defendant owns Constitution
Plaza. The plaintiff filed an amended complaint, dated
November 9, 1998, against the defendant alleging a vio-lation
of an existing declaration of reciprocal easements
that the defendant had executed on December 13, 1988.
The complaint specifically alleged that the defendant
impermissibly had interfered with the plaintiff’s access
to and use of 220 designated parking spaces in the
defendant’s garage, which is adjacent to the plaintiff’s
hotel. Thereafter, General Electric, the holder of a mort-gage
and security interest on the defendant’s property,
was cited in as an additional party defendant.2

Trial on the matter commenced on August 4, 1999,
and, after two days, was suspended for evidentiary pur-poses.
The action thereafter extended into February,
2001, after several continuances and various other legal
proceedings. Contemporaneous with those proceed-ings,
between April and December, 2000, the parties
engaged in settlement negotiations. Throughout those
negotiations, the plaintiff communicated through Paul
Potter, its corporate secretary, and Daniel A. Wasielew-ski,
its directing manager. On May 15, 2000, the parties
informed the court that they had reached an agreement
in principle. The court continued the action for thirty
days to facilitate the finalization of the agreement and
the filing of a withdrawal of the case. The court sched-uled
a deadline for filing the withdrawal for June 16,
2000.

On or about June 13, 2000, the defendant sent the
plaintiff an initial draft of the agreement consisting of
a document that set forth terms for a new easement
on the defendant’s property and another document that
contained a settlement and a release, which required
the parties to record the new easement in the Hartford
land records and required the plaintiff concurrently to
withdraw the case. The easement expressly designated Potter, per the plaintiff’s request, as the individual to
receive all notices, requests and other communications
on the plaintiff’s behalf. On June 28, 2000, following a
failure by the parties to file a timely withdrawal of
the case, the court rendered a judgment of dismissal.
Thereafter, negotiations between the parties continued.
On August 2, 2000, following a series of telephone con-versations
regarding the terms of the agreement, the
defendant forwarded to the plaintiff a revised draft
agreement. On August 21, 2000, the parties held a meet-ing
for the purpose of finalizing language in the
agreement, but continued discussions throughout Sep-tember.

On October 19, 2000, pursuant to Practice Book § 17-
4 (a),3 the plaintiff moved to open the judgment of
dismissal, claiming that opening the judgment was pru-dent
in order to maintain the option of a trial in the event
that the ongoing efforts toward settlement ultimately
failed. The plaintiff acknowledged that, although the
case previously had been reported to the court as having
been settled, additional time was still necessary to con-summate
the agreement and to reduce it to writing. The
plaintiff further stated that the terms of the agreement
with respect to the defendant had been finalized, but
that there remained an unresolved issue between the
defendant and General Electric,4 which did not impli-cate
the plaintiff. Finally, the plaintiff advised the court
that it was operating under the impression that the case
was settled and that it anticipated no further court
intervention once the paperwork was signed. On Octo-ber
30, 2000, the trial court granted the plaintiff’s motion
to open the judgment of dismissal and set a new trial
date.

During the negotiations, General Electric had sug-gested
that it might be beneficial for the plaintiff to
execute a corporate resolution expressly approving the
terms of the agreement and granting Potter the author-ity
to execute it on the plaintiff’s behalf. James J.
Nugent, the plaintiff’s attorney, agreed to draft the reso-lution,
to obtain its execution and to distribute it to the
defendant, which, in turn, would forward the resolution
to General Electric. On November 29, 2000, the defen-dant
sent to Nugent a finalized draft of the settlement
agreement for the plaintiff to sign. Nugent then gave
the documents to Potter. Potter signed the settlement
agreement and release and the easement in the presence
of two witnesses and a notary, as well as an attestation
that he had the authority to sign those documents on
the plaintiff’s behalf in his capacity as the plaintiff’s
secretary. Thereafter, Potter returned the signed papers
to Nugent. Potter did not execute a corporate reso-lution.

Following his receipt of the documents from Potter,
Nugent informed Chad A. Landmon, the defendant’s
attorney, that the plaintiff had signed the agreement. Nugent and Landmon arranged to meet at Nugent’s
office on December 20, 2000, for the purpose of
exchanging the documents. Landmon arranged with
General Electric for it to send its executed signature
papers to Landmon’s office in time for the scheduled
exchange. The plaintiff and the defendant also planned
that, following the exchange, a paralegal from Land-mon’s
office would record the new easement at the
Hartford land records and the plaintiff would file a
withdrawal of the action with the court that day.

On or about December 18, 2000, shortly after Potter
had signed the agreement, Randall S. Koladis, the plain-tiff’s
real estate agent, informed Potter that the eco-nomic
development commission of the city of Hartford
(city) was considering exercising its powers of eminent
domain to take the plaintiff’s property. He advised Pot-ter
to reconsider the agreement, in particular the ease-ment,
noting that it would be worthless if the city were
to take the property.

Thereafter, on December 20, Nugent drove to Land-mon’s
office for the sole purpose of exchanging the
documents and consummating the settlement. Nugent
brought with him the plaintiff’s signed and notarized
settlement and release agreement and easement, as well
as the court papers required to withdraw the case. After
Nugent arrived at Landmon’s office, he received a voice-mail
from Potter instructing him not to deliver the
signed papers to the defendant. The meeting subse-quently
was concluded without an exchange of the
signed documents.

On January 22, 2001, alleging that the parties had
executed a final agreement but that the plaintiff ‘‘ha[d]
refused to withdraw [the] action or to provide to the
other parties the original documents containing [its]
signature,’’ the defendant moved the trial court sum-marily
to enforce the agreement. On February 22, 2001,
at the hearing on the defendant’s motion, the plaintiff
claimed that the agreement was unenforceable because,
inter alia,5 the parties had contemplated that Nugent
would obtain a corporate resolution from the plaintiff’s
board of directors approving the agreement as negoti-ated
and granting Potter the authority to sign the
agreement on the plaintiff’s behalf, which Nugent had
failed to obtain. In the absence of that resolution, the
plaintiff contended that its agents, in particular, Potter,
did not have the authority to bind it to the agreement.

On the basis of the evidence and testimony presented,
the trial court determined that the parties had, in fact,
arrived at an agreement that was ‘‘satisfactorily clear
and unambiguous.’’ 6 The court noted that a corporate
resolution had been discussed by the parties, but was
never executed. Nevertheless, the trial court deter-mined
that ‘‘[n]o evidence was produced to demonstrate
that, prior to December 20, 2000, Nugent or Potter acted
beyond the authority granted to them by the [plaintiff].’’ The court reasoned that ‘‘[a] settlement agreement may
be summarily enforced within the framework of the
original lawsuit as a matter of law when the parties do
not dispute the terms of the agreement. . . . No dis-pute
existed between the parties at the time their coun-sel
reached a settlement as evidenced by the executed
documents.’’ (Citation omitted.) Accordingly, the trial
court granted the defendant’s motion to enforce the
agreement and rendered judgment thereon.

On appeal, the plaintiff reiterates the claim that it
articulated before the trial court. Specifically, the plain-tiff
contends that the parties contemplated a corporate
resolution approving the agreement and authorizing
Potter to sign it, and that, in the absence of that resolu-tion,
the record cannot support the trial court’s determi-nation
that Potter, as the plaintiff’s agent, had the
authority to bind the plaintiff to the agreement. There-fore,
in the plaintiff’s view, the trial court improperly
enforced the agreement. The defendant counters that
the record demonstrates that Potter had either actual or
apparent authority to bind the plaintiff to the agreement
and, accordingly, the trial court properly concluded that
the agreement was enforceable. We conclude that the
record demonstrates that Potter had implied actual
authority to bind the plaintiff to the agreement, and,
therefore, that the trial court properly concluded that
the agreement was enforceable.

Before we turn to the merits of the plaintiff’s claim,
we briefly address the applicable standard of review.
‘‘The scope of our appellate review depends upon the
proper characterization of the rulings made by the trial
court. To the extent that the trial court has made find-ings
of fact, our review is limited to deciding whether
such findings were clearly erroneous.’’ (Internal quota-tion
marks omitted.) Wagner v. Clark Equipment Co.,
259 Conn. 114, 122, 788 A.2d 83 (2002). ‘‘A finding of
fact is clearly erroneous when there is no evidence in
the record to support it . . . or when although there
is evidence to support it, the reviewing court on the
entire evidence is left with the definite and firm convic-tion
that a mistake has been committed. . . . In making
this determination, every reasonable presumption must
be given in favor of the trial court’s ruling.’’ (Internal
quotation marks omitted.) State v. Hill, 256 Conn. 412,
425–26, 773 A.2d 931 (2001).

It is well settled that ‘‘[t]he nature and extent of an
agent’s authority is a question of fact for the trier where
the evidence is conflicting or where there are several
reasonable inferences which can be drawn.’’ (Internal
quotation marks omitted.) Il Giardino, LLC v. Belle
Haven Land Co., 254 Conn. 502, 531, 757 A.2d 1103
(2000); see also Czarnecki v. Plastics Liquidating Co.,
179 Conn. 261, 268, 425 A.2d 1289 (1979). In the present
case, the parties disputed whether Potter had the
authority to bind the plaintiff to the agreement, and the trial court’s determination that Potter did, in fact, have
the requisite authority was central to the court’s conclu-sion
that the agreement was enforceable. Our resolution
of the plaintiff’s claim, therefore, depends on whether
there was sufficient evidence to support the trial court’s
finding that Potter had the authority to settle the case
on behalf of the plaintiff.

Having set forth the applicable standard of review,
we turn to the merits of the plaintiff’s claim. It is well
settled that a corporation can act only through its
agents. See, e.g., Lieberman v. Reliable Refuse Co., 212
Conn. 661, 673, 563 A.2d 1013 (1989). Furthermore, it
is a general rule of agency law that the principal in an
agency relationship is bound by, and liable for, the acts
in which his agent engages with authority from the
principal, and within the scope of the agent’s employ-ment.
See Connecticut National Bank v. Giacomi, 242
Conn. 17, 70, 699 A.2d 101 (1997); Hartford Accident &
Indemnity Co. v. South Windsor Bank & Trust Co.,
171 Conn. 63, 70, 368 A.2d 76 (1976). An agent’s authority
may be actual or apparent. Hallas v. Boehmke &Dobosz,
Inc., 239 Conn. 658, 674, 686 A.2d 491 (1997). Actual
authority exists when ‘‘[an agent’s] action [is] expressly
authorized by resolution of the board of directors . . .
[is] impliedly authorized by the board of directors . . .
or . . . although not authorized, [is] subsequently rati-fied
by the board of directors.’’ Czarnecki v. Plastics
Liquidating Co., supra, 179 Conn. 268. Apparent
authority is that semblance of authority that a principal,
through its own acts or inadvertences, causes or allows
third persons to believe the principal’s agent possesses.
See Hallas v. Boehmke & Dobosz, Inc., supra, 674.

In the present case, in finding that Potter had acted
with authority from the plaintiff, the trial court did not
specify whether that authority was actual or apparent.7
Accordingly, we first review the findings of the trial
court for sufficient evidence to support a finding of
actual authority for Potter to bind the plaintiff to the
agreement.

Actual authority may be express or implied. See Czar-necki
v. Plastics Liquidating Co., supra, 179 Conn. 268;
see also Connecticut National Bank v. Giacomi, supra,
242 Conn. 69–70; Hartford Accident & Indemnity Co.
v. South Windsor Bank & Trust Co., supra, 171 Conn.
69. The defendant does not contend, however, that Pot-ter
had express actual authority. Our review is limited,
therefore, to whether Potter had actual authority that
was implied. ‘‘Implied authority is actual authority cir-cumstantially
proved. It is the authority which the prin-cipal
intended his agent to possess.’’ (Internal quotation
marks omitted.) Czarnecki v. Plastics Liquidating Co.,
supra, 268. ‘‘Implied authority is a fact to be proven by
deductions or inferences from the manifestations of
consent of the principal and from the acts of the princi-pal
and [the] agent. Fireman’s Fund Indemnity Co. v. Longshore Beach & Country Club, Inc., 127 Conn. 493,
498, 18 A.2d 347 [1941] . . . .’’ (Internal quotation
marks omitted.) Connecticut National Bank v. Gia-comi,
supra, 70.

Applying these principles to the present case, the
following evidence supports the trial court’s determina-tion,
based on the totality of the facts and circum-stances,
that, in the absence of the signed corporate
resolution, Potter had implied actual authority from
the plaintiff to bind it to the agreement.8 The parties
negotiated the agreement for nine months. During this
process, it was General Electric, not the plaintiff, that
suggested that it would be prudent for the plaintiff to
execute a corporate resolution expressly approving the
agreement and granting Potter the authority to execute
the agreement. Although that resolution was never exe-cuted,
at no point during the negotiations did the plain-tiff
behave as if that resolution were dispositive of
Potter’s authority to negotiate and execute the
agreement. To the contrary, throughout the process,
Potter was involved directly in negotiating the language
of the documents. The plaintiff was aware of Potter’s
actions on its behalf because, in his capacity as the
plaintiff’s secretary, Potter communicated directly with
the plaintiff’s board of directors about developments
in the negotiations. In addition, in the easement, which
addresses the heart of the dispute between the parties
underlying this appeal, Potter was designated explicitly
by the plaintiff as the individual to receive all notices,
requests and other communications. Moreover, Potter
not only executed the agreement on the plaintiff’s
behalf, but he expressly averred before a notary public
and two witnesses that he had the authority to do so.
Thereafter, despite having neither received nor signed
the corporate resolution that Potter testified was pivotal
to his authority to bind the plaintiff, Potter nevertheless
returned the executed agreement to Nugent with full
knowledge that Nugent was meeting with Landmon
shortly thereafter to exchange the signed papers and
to consummate the agreement.

Moreover, at no time during the nine month negotia-tion
period, during which Potter reported his activities
and the progress of the negotiations to the plaintiff’s
board, did the plaintiff notify either Nugent or Landmon
that Potter did not have the requisite authority to close
the deal. Nor was it Nugent’s understanding, in his com-munications
with the plaintiff, through both Wasielew-ski
and Potter, that, in the absence of the corporate
resolution, Potter did not have the requisite authority
to bind the plaintiff. To the contrary, Nugent left his
office on December 20, 2000, with the intention of meet-ing
Landmon, exchanging what he believed to be the
relevant documents, closing the deal, and filing a with-drawal
with the court, without ever having received
from Potter the signed corporate resolution. Indeed,
the plaintiff was aware of Nugent’s actions on its behalf that day, and when the plaintiff contacted Nugent after
his arrival at Landmon’s office to close the deal, the
plaintiff took issue, not with the lack of a signed corpo-rate
resolution, but, rather, with the potential effect
that a possible condemnation of its property by the city
might have on the value of that agreement. Moreover,
the plaintiff’s last minute instruction to Nugent, through
Potter, to refrain from exchanging the signed papers,
evinced the plaintiff’s belief that Potter’s execution of
those documents was binding and that the exchange
of those documents would consummate the deal.

In light of this evidence, we cannot conclude that the
trial court’s finding that Potter had acted within his
authority in executing the agreement was clearly erro-neous.
Because the trial court has the inherent power
summarily to enforce a settlement agreement as a mat-ter
of law when, as here, the terms of the settlement
are clear and unambiguous and not in dispute; Audubon
Parking Associates Ltd. Partnership v. Barclay &
Stubbs, Inc., 225 Conn. 804, 811, 626 A.2d 729 (1993);
we conclude that, under the facts and circumstances
of this case, the trial court properly enforced the settle-ment
agreement.

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The judgment is affirmed.

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