Mild, Inc. v. Rhode Island Department of Environmental Management, No. 02-6281 (RI 11/10/2004)
| Decision Date | 10 November 2004 |
| Docket Number | No. 02-6281,02-6281 |
| Parties | MILD, INC. v. RHODE ISLAND DEPARTMENT OF ENVIRONMENTAL MANAGEMENT |
| Court | Rhode Island Supreme Court |
Appellant Mild Inc. ("Appellant" or "Mild") seeks review of a final Decision and Order ("Decision and Order") of the Department of Environmental Management ("DEM") pursuant to the Rhode Island Administrative Procedures Act (the "APA"), G.L. 1956 § 42-35-15, in a matter entitled In re: Mild, Inc., AAD No. 94-024/SRE (October 11, 2002). The Decision and Order, which was entered, found that the Appellant Mild had violated § 13 of DEM's Oil Pollution Control Rules and Regulations, and §§ 14.08 and 14.09 of DEM's Regulations for Underground Storage Facilities Used for Petroleum Products and Hazardous Materials, when the Appellant failed to remediate known gasoline contamination on its Exeter property. The Decision and Order requires Appellant Mild to clean up the contamination of the property and to pay DEM an administrative penalty of $24,800.
On or about September 14, 1994, DEM ("Respondent") issued a Notice of Violation ("NOV") which ordered Appellant to investigate and remedy known contamination on its Exeter property and to pay an administrative penalty. The NOV was served upon Appellant's registered agent, Attorney James D. Levitt. Levitt then wrote to the DEM to inform the agency that he was acting as Appellant's attorney, and to request a meeting with DEM in order to preserve Mild's right to an administrative hearing. Levitt also filed a memorandum of law in response to a motion/memorandum filed by DEM. He continued to represent the Appellant in further correspondence, at meetings with DEM, and at the October 1, 1996 hearing. At no time during these proceedings did Attorney Levitt either file a withdrawal of appearance or inform DEM that he no longer represented Appellant in this matter.
At the hearing, Attorney Levitt appeared for the Appellant and Attorney Wagner for the Respondent. The Hearing Officer noted that the parties had reached an agreement, and in lieu of convening a full administrative hearing, the Hearing Officer had counsel for DEM read the agreement into the record on that day. (See Tr. at 3.) According to the terms read aloud before Hearing Officer Kathleen Lanphear, "the Division [assumed] the responsibility for drafting the written agreement, encompassing what ha[d] been read into the record . . . ." (See Tr. at 7) The Hearing Officer then asked if the parties were satisfied that the consent agreement "constitutes a final administrative adjudication of [the] matter from which no appeal lies." (Id.) Both Attorney Levitt and Attorney Wagner replied in the affirmative. (Id.) The Hearing Officer proceeded to ask Levitt if he had been advised of the terms read into the record by DEM's counsel, and furthermore, if he had discussed the terms with Mild and whether they were in agreement with the terms that had been read into the record. (See Tr. at 7-8.) To this question, Levitt responded: "Yes, they are." (See Tr. at 8.) Finally, the Hearing Officer asked both sides if they were in agreement that the consent agreement was to take effect immediately and not approximately two weeks later, when the agreement was reduced to writing and sent to Mild's counsel, to which Levitt replied, "Correct." (Id. at 8.)
After the hearing, DEM made several attempts to meet with the Appellant to no avail. DEM then decided to file a motion asking the Administrative Adjudication Division ("ADD") to issue a written Decision and Order for the purpose of clarifying and implementing the Record Agreement. A hearing was held on October 7, 2002, over 6 years after the initial hearing, and on October 11, 2002, the Hearing Officer issued the Decision and Order. The Hearing Officer granted the request for a Decision and Order over an objection of Ronald Mann, an officer, director, or shareholder of Mild, Inc. The Appellant is now requesting that this Court review the decision of the commission, pursuant to the Rhode Island Administrative Procedures Act, R.I. Gen Laws § 42-35-15, because it believes that the Hearing Officer erred in determining that Attorney Levitt had authority to enter a consent agreement on its behalf and in issuing a Decision and Order nunc pro tunc.
When reviewing a final agency order, Section 42-35-15(g) of the General Laws governs this Court's review of a decision of the agency. This section provides for review of a contested agency decision:
"The Court shall not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact. The court may affirm the decision of the agency or remand the case for further proceedings, or it may reverse or modify the decision if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:
(1) In violation of constitutional or statutory provisions;
(2) In excess of the statutory authority of the agency;
(3) Made upon lawful procedure;
(4) Affected by other error [or] law; sic
(5) Clearly erroneous in view of the reliable, probative, and substantial evidence on the whole records; or
(6) Arbitrary or capricious or characterized by abuse of direction or clearly unwarranted exercise of discretion."
Sitting as an appellate court with a limited scope of review, the Superior Court justice may not substitute his or her judgment for that of the agency with respect to the credibility of the witnesses or the weight of the evidence as to the questions of fact. Center for Behavioral Health v. Barros, 710 A.2d 680, 684 (R.I. 1998); Mine Safety Appliances Co. v. Berry, 620 A.2d 1255, 1259 (R.I. 1998).
When reviewing a final agency order, the Superior Court sits as an appellant court in accordance with the statutory jurisdiction conferred upon it by the Rhode Island Administrative Procedures Act, G.L. § 42-35-15(g). The review by the Superior Court is a continuation of the administrative process and is extremely limited in respect to findings of fact. National Velour Corp. v. Durfee, 637 A.2d 375, 391 (R.I. 1994). "The Superior Court is precluded from substituting its judgment for that of the agency and must affirm the agency's decision unless the agency's findings in support of its decision are completely bereft of any competent evidentiary support." Rocha v. State of Rhode Island Public Utilities Commission, 694 A.2d 722, 726 (R.I. 1997).
Appellant first argues that Attorney Levitt had neither actual nor apparent authority to enter the October 1, 1996 consent agreement, on Mild, Inc.'s behalf. Respondent counters that Attorney Levitt had actual authority, but even assuming arguendo that he lacked it, at the very least, the Court should find that he possessed apparent authority to enter into a consent agreement for the Appellant, Mild Inc.
The Restatement (Second) defines an attorney's or agent's actual authority as an agent's power to affect the legal relationships of the principal "by acts done in accordance with the principal's manifestations of consent to him." Restatement (Second) Agency § 7 (1958). Apparent authority is defined as "the power to affect the legal relations of another person by transactions with third persons, professedly as agent for the other, arising from and in accordance with the other's manifestations to such third persons." Restatement (Second) Agency § 8 (1958). Further, "if an attorney has apparent authority to settle a case and the opposing counsel has no reason to doubt that authority, the settlement will be upheld." Parillo v. Chalk, 681 A.2d 916, 919 (R.I. 1996) (citing Fennell v. TLB Kent Co. Co., 865 F.2d 498, 502 (2nd Cir. 1989)).
The Rhode Island Supreme Court has held, in Cohen v. Goldman, 85 R.I. 434, 439, 132 A.2d 414, 417 (R.I. 1957), that "[i]t is the conduct of the client and not that of the attorney which must be considered in determining whether apparent authority exists, and if it does, the client is bound by what the attorney does." In Cohen, the appellants' attorney forged his client's signature on a release in return for $1,500 in full settlement of the claim, and then failed to distribute any part of said monies to his client. (Id. at 415.) Thereafter, the client hired new counsel and filed an action alleging that the matter was compromised without his consent. (Id.) Rejecting appellants' argument, our Supreme Court held that although "the mere engagement of an attorney does not ipso facto imply authority to compromise his client's case," the "petitioner's conduct, innocent though it may have been, placed his attorney in such a situation that a person of ordinary prudence and discretion would have been justified in assuming . . . that the attorney was authorized to . . . compromise . . . that case." (Id. at 417.)
More recently, in Parillo v. Chalk, 681 A.2d 916, 919 (R.I. 1996), the Rhode Island Supreme Court reaffirmed its position that a determination as to whether apparent authority exists is contingent upon the client's conduct. Parillo concerned an attorney who forged clients signatures on a dismissal stipulation, despite the fact that he "was not the lawyer who brought the lawsuit on behalf of plaintiffs; he did not sign file, or case the summons and complaint to be served upon the defendants; nor was he otherwise an attorney of record for plaintiffs." (Id. at 918, 920.) Taking all of these factors into account, the Court held that the attorney who agreed to this stipulation did not possess apparent authority to consent to such an agreement. (Id.) In reaching its decision, the Court pointed out that, in contrast to the opposing attorneys in Cohen, the opposing parties and their counsel "were not so innocent [in Parillo], at least in the sense that they knew that before the dismissal stipulation was signed by [one attorney], [two other attorneys] had filed pleadings or other co...
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