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A settlement agreement is enforceable even if a plaintiff did not give his attorney the express authority to settle the case, the Superior Court of Pennsylvania has ruled. The court in Hannington v. Trustees of the University of Pennsylvania said that the doctrine of apparent authority applied in the case involving a former doctoral candidate and the University of Pennsylvania. “Since the university had a reasonable belief that appellant had authorized the settlement, the doctrine of apparent authority is applicable to enforce the settlement agreement in this case,” Judge Maureen Lally-Green wrote. “Appellant’s claim fails.” The decision affirmed a ruling by Philadelphia Court of Common Pleas Judge Allan L. Tereshko. In May 1999, plaintiff Steven A.B. Hannington filed suit against the university, alleging breach of contract and unjust enrichment. Hannington had been a Ph.D. candidate in the Energy Management and Policy Program at the university. According to Hannington, the school agreed to waive all of his tuition in exchange for his participation in organizing and planning a conference. In June 1995, however, the university terminated Hannington from the Ph.D. program, saying he had failed to pay outstanding tuition fees. Hannington sued the university, asserting that there was an agreement in place that he did not have to pay tuition. The university countersued for the outstanding tuition. The case was put in the trial pool for Aug. 7, 2000. Prior to that, however, the attorneys indicated that they were nearing a settlement and asked for a delay. The settlement provided that Hannington would pay the outstanding tuition, minus one year, and that he would be reinstated to the Ph.D. program. The parties ultimately agreed to the settlement. In January 2001, however, Hannington’s counsel informed the university that his client would not sign the final settlement and mutual release agreement. Hannington then obtained new counsel and sought to restore the case to the trial list. The trial court said, however, that the doctrine of apparent authority applied to the case and the court would not restore the case to the trial list. Hannington appealed to the superior court. “Appellant argues that the doctrine of apparent authority does not apply to the present case because a lawyer must have his client’s express approval to settle a case,” Lally-Green wrote. “In other words, appellant argues that the settlement agreement is unenforceable because appellant’s lawyer did not have express authority to settle, regardless of whether the university reasonably believed that counsel had such authority.” The doctrine of apparent authority allows a court to enforce a settlement agreement where a third party believes the principal’s lawyer had the authority to settle the case even though the lawyer fraudulently represents that he or she has that authority, Lally-Green said. After reviewing case law, the Superior Court said the trial court’s conclusions were accurate. Lally-Green said that Penn was free of fault and that the university and its lawyer believed that Hannington’s lawyer had the authority to settle the case. The court also concluded that the record reflects that Hannington had “clothed” his lawyer with the authority to negotiate with the university on Hannington’s behalf. Lally-Green said it was reasonable for the university to conclude that Hannington’s lawyer had Hannington’s express authority to settle the case. The court said the doctrine of apparent authority also applied. The court also refused to remand the case for an evidentiary hearing on whether Hannington consented to the settlement of the case. Judges Peter Paul Olszewski and Zoran Popovich joined Lally-Green in the unanimous decision. Jeffrey S. Saltz of the Law Office of Jeffrey S. Saltz represented Hannington in his appeal. Jane B. LaPorte of Hamburg & Golden represented the university.

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