Walson v. Walson

• Decision Date: 18 December 2001
• Docket Number: Record No. 1701-00-4.
• Citation: 37 Va. App. 208,556 S.E.2d 53
• Court: Virginia Court of Appeals
• Parties: Faye E. WALSON v. Robert C. WALSON.

556 S.E.2d 53

37 Va. App. 208

Faye E. WALSON v. Robert C. WALSON.

Record No. 1701-00-4.

Court of Appeals of Virginia, Alexandria.

December 18, 2001.

Betty A. Thompson, (Paul Varriale, on brief), Alexandria, for appellant.

Eric F. Schell, McLean, for appellee.

Present: ANNUNZIATA, BUMGARDNER and CLEMENTS, JJ.

CLEMENTS, Judge.

Faye E. Walson (wife) appeals a decision of the trial court finding her bound by an agreement signed by her attorney and subsequently incorporated by reference into her final decree of divorce from Robert C. Walson (husband). She contends the trial court erred in determining that her attorney had apparent authority to sign the agreement on her behalf and, thus, compromise her claim.¹ We hold that the trial court's factual finding that wife's attorney had apparent authority is unsupported by the evidence in the record and, accordingly, reverse the trial court's judgment and remand this case for further proceedings. Because we conclude that the trial court erred in finding, as a matter of fact, that, under the circumstances of this case, wife's attorney had apparent authority to execute the agreement on wife's behalf, we do not address the issue of whether an attorney may, as a matter of law, bind his or her client to a written property settlement agreement by apparent authority.

I. BACKGROUND

We view the evidence and all reasonable inferences fairly deducible therefrom in the light most favorable to husband, the party prevailing below. See Stockdale v. Stockdale, 33 Va.App. 179, 181, 532 S.E.2d 332, 333 (2000)

. So viewed, the evidence established that husband initiated divorce proceedings on September 3, 1998. On October 13, 1998, the trial court entered a consent pendente lite order reflecting the terms of an agreement executed by the parties when they separated. The trial court set a trial date for July 7, 1999. On May 27, 1999 wife and her attorney, Richard Byrd, met in Byrd's conference room with husband and his attorney, Eric Schell, to negotiate a settlement of the issues arising from the dissolution of the parties' marriage. Based on the discussions at that conference, Byrd submitted a letter on behalf of wife to Schell on June 23, 1999 setting forth wife's proposals for a settlement. Thereafter, Byrd drafted and submitted to Schell a formal eighteen-page property settlement agreement reviewed and approved, but not executed, by wife. That draft agreement included designated spaces at the end of the document for the parties' respective signatures and attestation clauses for notarization of those signatures. The paragraph immediately preceding the spaces for the parties' signatures read:

IN WITNESS WHEREOF, the parties hereto, after free and full discussion of the terms contained herein and with an understanding of the meaning and intent of those terms and provisions, have this day first mentioned placed their signatures and seals upon this Agreement and by so signing they hereby agree with all the terms and provisions thereof.

Husband rejected the proposed property settlement agreement.

Following a continuance of the trial date to November 1, 1999, Byrd drafted and submitted to Schell a second formal eighteen-page property settlement agreement reviewed and approved, but not executed, by wife. The second draft, like the first proposed agreement, provided spaces for the parties' signatures and for notarization of those signatures. It also included a paragraph, immediately preceding the signature lines, that was identical to the paragraph quoted above from the first proposed agreement. Husband did not accept the second proposed property settlement agreement.

No final agreement having been reached, a second negotiation meeting was held on October 27, 1999. Husband, Schell, and Byrd attended the meeting in the conference room at the offices of Byrd's firm. Wife chose not to attend the meeting, "because she didn't want to be in the same room with her husband." She instead made herself available to Byrd by telephone. Byrd left the meeting and telephoned wife from his private office periodically throughout the meeting.

Byrd testified that, during the meeting, he, Schell, and husband went item-by-item through the issues and that he discussed with wife on the telephone everything he discussed with Schell and husband. By Byrd's count, he spoke with wife "every ten minutes" during the meeting, at least ten times. "[T]here were," according to Byrd, "various offers back and forth to settle the issues."

After approximately four hours of negotiations, Byrd returned to the conference room after speaking with wife and told Schell and husband that wife had agreed to sell the house and divide the net proceeds evenly. After conferring with husband, Schell replied that wife would have to be responsible for one-half of the mortgage payment, pending sale of the house. Byrd responded, "I didn't talk to her about that. I don't have agreement on it. I'm going to have to get back to her, and see if she will." Byrd then left the conference room to call the wife regarding that issue, which, in Byrd's opinion, "was the only unsettled part of the negotiations, at that moment." While speaking on the phone with wife, Byrd became upset because he thought wife was changing her mind about issues that were already settled and raising other matters that were beyond the focus of the current negotiation. He put the phone down, threw a cup through the wall of his office, and left the building without returning to the meeting.

The next day, having received an e-mail from wife that he believed expressly authorized and directed him to settle the case, Byrd drafted, signed, and transmitted to Schell the subject two-page final settlement agreement entitled "Agreement: Walson v. Walson." Wife did not see the agreement before Byrd signed it and sent it to Schell. Prior to signing and sending the agreement, Byrd had attempted to call wife three times to review the document he had prepared, but she did not return his calls. Following transmission of the document to Schell, counsel notified the court that the case was settled and could be removed from the trial docket.

The following day, wife went to Byrd's office expecting to review a draft of the "fully typed out property settlement agreement." Instead, she was given a copy of the agreement signed on her behalf by Byrd. That agreement, according to wife, did not represent what she had agreed to, did not contain many of the items in the earlier proposed property settlement agreements that she expected to be included in the final agreement, and was signed by Byrd without her authority or consent. Wife testified that, had she, as expected, been given the opportunity to review the agreement signed by Byrd, she would not have approved or signed it.

On November 11, 1999 wife filed an objection to entry of a final decree of divorce, wherein she challenged the agreement signed by Byrd as not being a full and final agreement of all property distribution issues arising out of the marriage. An ore tenus hearing on wife's objection was held on April 19, 2000. The trial court held that, although wife had not expressly or impliedly authorized Byrd to execute the agreement, wife was bound by the terms of the agreement because Byrd had apparent authority to execute the agreement on her behalf. In finding that Byrd had apparent authority to sign the document, the court relied on the Supreme Court's decision in Singer Sewing Machine Co. v. Ferrell, 144 Va. 395, 132 S.E. 312 (1926). The trial court entered an order memorializing its ruling on May 23, 2000.

A final decree of divorce, affirming and incorporating the agreement, was entered by Judge M. Langhorne Keith on June 22, 2000. Wife now appeals from the trial court's order of May 23, 2000, entered by Judge Arthur B. Vieregg, Jr., finding her bound by the settlement agreement signed by her attorney.

II. ANALYSIS

The sole issue on appeal is whether the trial court erred in finding Byrd had apparent authority to execute the subject agreement on wife's behalf.² We will affirm the trial court's decision unless it was plainly wrong or without evidence to support it. See Lapidus v. Lapidus, 226 Va. 575, 580, 311 S.E.2d 786, 789 (1984)

(noting that a court's finding based on evidence heard ore tows will not be disturbed unless plainly wrong or unsupported by the evidence).

Husband argues that Singer controls the outcome of this case. The Virginia Supreme Court stated in Singer that

"it is well settled that while a compromise made by an attorney without authority or in violation of his client's commands will not be enforced to the client's injury, yet if the authority of the attorney be apparent, then his client will be bound, unless the compromise possessed such elements of intrinsic unfairness as to provoke inquiry or imply fraud."

144 Va. at 403-04, 132 S.E. at 315 (quoting Black v. Rogers, 75 Mo. 441 (1882)). The Court went on to describe apparent authority as follows:

"[A]s between the principal and agent and third persons, the mutual rights and liabilities are governed by the apparent scope of the agent's authority, which is that authority which the principal has held the agent out as possessing, or which he has permitted the agent to represent that he possesses, and which the principal is estopped to deny. The apparent authority, so far as third persons are concerned, is the real authority, and when a third person has ascertained the apparent authority with which the principal has clothed the agent, he is under no obligation to inquire into the agent's actual authority."

Id. at 404, 132 S.E. at 315 (quoting J.C. Lysle Milling Co. v. S.W. Holt & Co., 122 Va. 565, 571-72, 95 S.E. 414, 415 (1918)). The Court further explained:

"Where one, without objection, suffers another to do acts which proceed upon the ground of authority from him, or by his conduct adopts and sanctions such acts after they are done, he will be bound,

...