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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 employment. An agent's authority may be actual or apparent. Actual authority exists when an agent's action is expressly authorized or, although not authorized, is subsequently ratified by the principal. In contrast, apparent authority is that semblance of authority which a principal, through his own acts or inadvertences, causes or allows third persons to believe his agent possesses. Consequently, apparent authority is to be determined, not by the agent's own acts, but by the acts of the agent's principal.
The Plaintiffs claim that the trial court's enforcement of a settlement agreement between the parties, based on a finding of apparent authority on the part of the Plaintiffs' attorney to bind the Plaintiffs to the agreement, was clearly erroneous in the absence of conduct by the Plaintiffs (1) manifesting that their attorney had authority to settle the pending litigation, and (2) leading the opposing defense attorneys reasonably to believe that the Plaintiffs' attorney had full and final authority to settle the litigation, as distinguished from authority only to negotiate. The Plaintiffs also claim that they were denied their right to a jury trial on issues of fact under article first, § 19, of the Connecticut constitution, as amended by article four of the amendments, when the trial court, in the midst of voir dire, made findings of fact and determined that the litigants had reached a settlement of the pending litigation. The Defendants respond that the trial court's finding that the Plaintiffs' counsel had apparent authority to settle the litigation was not clearly erroneous and that the Plaintiffs had no right to a jury trial on their equitable motions seeking to enforce the agreement.
Did the Plaintiffs' attorney have apparent authority to make settlement proposals, engage in settlement discussions and bind the Plaintiffs to a global settlement agreement with the Defendants?
The court held that the trial court's finding that Plaintiffs clothed their attorney with apparent authority to settle the litigation was supported by evidence of a course of dealing involving Plaintiffs, their attorney, Defendants, and the parties' attorneys that was well-established before Defendants accepted the global settlement offer. Plaintiffs did not indicate by their conduct before the bank's acceptance of the offer that their attorney lacked continued authority to settle the suit. The trial court properly found that Defendants reasonably could have believed the attorney had apparent authority to settle the suit. That the agreement was oral did not make it any less enforceable. Plaintiffs' unpreserved claim that they were deprived of their right to a jury trial under Conn. Const. art. I, § 19 on the question of whether there was a settlement failed because the motion to enforce was equitable in nature and, consequently, the trial court was entitled to use its equitable powers to resolve the dispute without a jury.