Appeal by plaintiff from order entered 12 April 2005 by Judge
Leon Stanback in Alamance County Superior Court. Heard in the
Court of Appeals 12 April 2006.
Egerton & Associates, P.A., by Kurt B. Aktug, for plaintiff-
appellant Curtis Thaxton.
Frazier & Frazier, L.L.P., by Torin L. Fury, for defendant-
Plaintiff Curtis Thaxton appeals from an order granting
summary judgment to defendant on the grounds that Mr. Thaxton had
agreed to settle his claims. Defendant contends that Mr. Thaxton's
attorney entered into a settlement in a telephone conversation with
an insurance adjuster, while Mr. Thaxton argues that no settlement
was reached and, in any event, his attorney had no authority to
settle his claims without his consent. This dispute presents a
novel scenario in that the two key witnesses _ the attorney and the
adjuster _ have no recollection of the conversations and instead
are relying upon their regular business practices and theirconstruction of computer logs entered two years earlier. While
defendant's evidence suggests that a settlement was reached, Mr.
Thaxton's evidence would permit a jury to find otherwise. Further,
even if a settlement was reached, Mr. Thaxton has offered evidence
that is sufficient, if believed, to rebut the presumption that his
attorney was authorized to settle his claims without his consent.
Under these circumstances, summary judgment is inappropriate and,
accordingly, we reverse.
On 11 May 2004, plaintiffs Curtis and Jewel Thaxton sued
defendant, alleging he had negligently caused a 31 December 2001
automobile collision. GMAC was defendant's insurance carrier.
Defendant's answer included an affirmative defense asserting that
"[o]n or about October 24, 2002, the plaintiffs by and through
their attorney, settled their claims against the defendant, with
the plaintiff Curtis Thaxton settling his claim for the amount of
$8,500.00, and the plaintiff Jewel Thaxton settling her claim for
$9,000.00. Said settlements are hereby pled in bar of plaintiffs'
On 21 January 2005, Jewel Thaxton agreed to accept $9,000.00
from GMAC in settlement of her claims. As part of that settlement,
Ms. Thaxton filed a voluntary dismissal of her claims with
prejudice on 15 February 2005.
On 7 February 2005, Curtis Thaxton filed a motion for partial
summary judgment as to defendant's affirmative defense of
settlement. Defendant subsequently filed a motion for summaryjudgment as well, seeking dismissal of Mr. Thaxton's claims. On 12
April 2005, the trial court denied Mr. Thaxton's motion for partial
summary judgment and granted defendant's motion for summary
judgment. Mr. Thaxton has filed a timely appeal.
This Court reviews orders granting summary judgment de novo
Falk Integrated Techs., Inc. v. Stack
, 132 N.C. App. 807, 809, 513
S.E.2d 572, 574 (1999). Summary judgment is appropriate if "the
pleadings, depositions, answers to interrogatories, and admissions
on file, together with the affidavits, if any, show that there is
no genuine issue as to any material fact and that any party is
entitled to a judgment as a matter of law." N.C.R. Civ. P. 56(c).
In ruling on a motion for summary judgment, a trial court may
not resolve issues of fact and must deny the motion if there is a
genuine issue as to any material fact. Singleton v. Stewart
N.C. 460, 464, 186 S.E.2d 400, 403 (1972). Moreover, in deciding
the motion, "'all inferences of fact . . . must be drawn against
the movant and in favor of the party opposing the motion.'"
Caldwell v. Deese
, 288 N.C. 375, 378, 218 S.E.2d 379, 381 (1975)
(quoting 6 Moore's Federal Practice
§ 56.15, at 2337 (2d ed.
"A defendant who moves for summary judgment assumes the burden
of positively and clearly showing that there is no genuine issue as
to any material fact and that he or she is entitled to judgment as
a matter of law. 'A defendant may meet this burden by: (1) proving
that an essential element of the plaintiff's case is nonexistent,or (2) showing through discovery that the plaintiff cannot produce
evidence to support an essential element of his or her claim, or
(3) showing that the plaintiff cannot surmount an affirmative
defense which would bar the claim
.'" James v. Clark
, 118 N.C. App.
178, 180-81, 454 S.E.2d 826, 828 (emphasis added) (quoting Watts v.
Cumberland County Hosp. Sys.
, 75 N.C. App. 1, 6, 330 S.E.2d 242,
247, disc. review denied in part
, 314 N.C. 548, 335 S.E.2d 27
(1985), rev'd in part on other grounds
, 317 N.C. 321, 345 S.E.2d
201 (1986)), disc. review denied
, 340 N.C. 359, 458 S.E.2d 187
(1995). Since settlement is an affirmative defense, defendant bore
the burden of establishing that Mr. Thaxton could not defeat
defendant's evidence that a settlement occurred. See State
Distrib. Corp. v. G.E. Bobbitt & Assocs., Inc.
, 62 N.C. App. 530,
532-33, 303 S.E.2d 349, 350-51 (1983) (noting defendant had burden
of proving affirmative defense that settlement had been reached).
Mr. Thaxton claimed in his affidavit in support of his partial
motion for summary judgment that he never accepted any settlement
offer from GMAC. GMAC does not suggest otherwise, but rather
contends that Lawrence Egerton, Jr., Mr. Thaxton's attorney,
accepted an $8,500.00 settlement on behalf of Mr. Thaxton. It is
undisputed that all the settlement negotiations were conducted
through telephone conversations between Charles Hardin, an employee
of GMAC, and Mr. Egerton. It is also undisputed that neither Mr.
Hardin nor Mr. Egerton has any independent recollection of those
conversations. Both men rely solely on computer logs and their
regular business practices. Mr. Hardin stated in his deposition that no one ever
specifically told him that Mr. Thaxton had agreed to the settlement
and that he based his belief that the parties had a settlement on
his understanding that an attorney has authority to act for his
clients. Mr. Hardin stated in both his affidavit and deposition
that, on 22 October 2002, he had a conversation with Mr. Egerton in
which he made an initial offer to settle Ms. Thaxton's claim for
$7,900.00, which was increased to $9,000.00 during the telephone
conversation. With respect to Mr. Thaxton's claims, Mr. Hardin
initially offered $6,400.00, but increased that figure to
$7,500.00. Mr. Hardin's affidavit states: "At that time, Mr.
Egerton stated to me that he would present those offers to his
clients and call me back." His computer log for that date added
only that Mr. Egerton indicated that he would recommend those
offers to his clients.
According to Mr. Hardin, he next spoke with Mr. Egerton on 24
October 2002, and they "agreed to settle Jewel Thaxton's claim for
$9,000.00 and Curtis Thaxton's claim for $8,500.00." He testified
that he told Mr. Egerton he would send the checks and fax the
releases. Mr. Hardin's log for that date stated: "Spoke With Clmt
Atty And Reached Agreed Settlement At $9k On Jewell And $8500 On
Curtis. Raised Offer On Curtis To $8250 Based On New Info. Atty
Countered At $8750 And We Split Diff At $8500."
On the other hand, Mr. Egerton testified in his deposition
that although he does not recall his conversations with Mr. Hardin,
he does not believe he has authority to accept a settlement offerwithout first advising his client of the offer. He stated: "[N]o
case in our office is resolved until the client comes in and
accepts it and signs a release." According to his regular
practice, he tells the adjuster that although he has no authority
to settle the case, he will recommend the specified figure to his
client and use his best efforts to persuade his client to accept
the offer. Mr. Egerton claimed that he never tells an adjuster he
has complete authority to settle for a particular amount. With
respect to GMAC's forwarding of the checks and releases in this
case, Mr. Egerton explained that it is his practice, when he
receives an offer that he would recommend, to ask the adjuster to
send the check and the release, and he will present them to his
client because "99 times out of 100," his client will then, with
the check sitting in front of him or her, accept the settlement.
Mr. Hardin acknowledged that "every couple of months" he is
asked to proceed in that manner and send out a check and release
even though the client had not agreed to the amount. He claimed,
however, that it was his business practice to never agree to do so.
According to Mr. Hardin, he asks the attorney whether they have
reached a settlement; if the attorney says that they have not, then
he tells the attorney to follow up with his or her client and call
back to confirm. Although Mr. Hardin testified that this is the
way he always "does business," he could not remember specifically
proceeding that way with Mr. Egerton.
The Egerton & Associates, P.A. computer logs dated 22 October
2002 stated as to Ms. Thaxton: "mr. egerton spoke to greg & heinitially offered 7900.00, mr. egerton got him to increase his
offer to 9k. mr. egerton said he would speak w/ the client & call
him back." As for Mr. Thaxton, the 22 October 2002 log stated:
"mr. egerton spoke to greg & he initially offered 6400.00, mr.
egerton got him to increase his offer to 7500.00. mr. egerton said
he would call the client & get back w/ him." For 24 October 2002,
the logs state with respect to Ms. Thaxton: "mr. egerton spoke to
greg & settled this case for $9k. the check & release is on the
way. (client does not know at this time)[.]" With respect to Mr.
Thaxton, a 24 October 2002 log stated: "greg called mr. egerton
back after considering the additional meds & increased his offer to
$8500.00. mr. egerton told him to go ahead & send the check &
release. (client does not know at this time)[.]" The 24 October
2002 log for Mr. Thaxton _ in contrast to that of Ms. Thaxton _
thus contains no express mention of a settlement.
Subsequently, Mr. Thaxton did not sign the release or accept
the check. On 19 November 2003, Mr. Hardin spoke again with Mr.
Egerton. According to Mr. Hardin's deposition, "We were talking
about the checks and releases either being accepted or sent back,
and he advised me he was going to send the checks back, as no other
claimant accepted the settlement, and he was going to forward
additional info on Curtis as well for possible review." When GMAC
received the checks back, it "reopened reserves," a phrase that,
according to Mr. Hardin, referred to "a certain amount of money set
aside potentially for that claim settlement." In sum, Mr. Hardin's logs and business practices suggested
that he reached a settlement agreement with Mr. Egerton over the
telephone on 24 October 2002. Mr. Egerton's logs _ stating that a
settlement had been reached as to Ms. Thaxton, but omitting similar
language as to Mr. Thaxton _ and his business practices could be
viewed by a reasonable jury as indicating that Mr. Egerton did not
agree to a settlement as to Mr. Thaxton on 24 October 2002. The
subsequent communications between the two men are ambiguous, but
could reasonably be construed as supporting Mr. Thaxton's position
that Mr. Hardin did not consider any settlement to have been
reached unless the release was signed _ the position taken by Mr.
We are confronted with a record in which the key witnesses
have no independent recollection of the critical conversations and
are basing their positions on after-the-fact interpretations of
computer log notations regarding conversations occurring two years
earlier. While a jury may well reach the conclusion urged by GMAC
and Mr. Hardin, this presentation of evidence is not sufficient to
justify a conclusion as a matter of law that Mr. Egerton in fact
accepted, on behalf of Mr. Thaxton, a settlement of $8,500.00.
Consequently, the evidence before the trial court failed to
satisfy defendant's burden of establishing a lack of any triable
issues of fact as to the affirmative defense of settlement. See
Am. Ripener Co. v. Offerman
, 147 N.C. App. 142, 145, 554 S.E.2d
407, 408 (2001) ("'The moving party must still succeed on the
strength of its evidence, and when that evidence contains materialcontradictions or leaves questions of credibility unanswered, the
movant has failed to satisfy its burden.'" (quoting Perry v.
, 68 N.C. App. 705, 707, 315 S.E.2d 791, 793-94 (1984))),
disc. review denied sub nom. Am. Ripener Co. v. Tolson
, 355 N.C.
210, 559 S.E.2d 796 (2002). See also Winkler v. Appalachian
, 238 N.C. 589, 598, 79 S.E.2d 185, 192 (1953)
("[E]stoppel, even if pleaded, settlement, accord and satisfaction
are affirmative defenses, and ordinarily a nonsuit will not be
allowed in favor of the party on whom rests the burden of proof
Even if we were to conclude that defendant had conclusively
established that Mr. Egerton accepted Mr. Hardin's offer, the
evidence gives rise to genuine issues of material fact regarding
whether Mr. Egerton had authority to accept that offer without
first obtaining Mr. Thaxton's consent. We recognize that the law
presumes that attorneys, as agents of their clients, have authority
to act for the clients they profess to represent. See People's
Bank of Burnsville v. Penland
, 206 N.C. 323, 324, 173 S.E. 345, 345
(1934) (per curiam) ("There is a presumption in favor of an
attorney's authority to act for any client whom he professes to
represent."); Gillikin v. Pierce
, 98 N.C. App. 484, 488, 391 S.E.2d
198, 200 ("[T]here is a presumption that an attorney has authority
to act for his client and one challenging the attorney's actions as
being unauthorized has the burden of rebutting the presumption."),
disc. review denied
, 327 N.C. 427, 395 S.E.2d 677 (1990). Our courts have held that "[s]pecial authorization from the
client is required before an attorney may enter into an agreement
discharging or terminating a cause of action on the client's
behalf." Harris v. Ray Johnson Constr. Co.
, 139 N.C. App. 827,
829, 534 S.E.2d 653, 655 (2000). Nevertheless, even "'[w]here
special authorization is necessary . . . it [is also] presumed . .
. that the attorney acted under and pursuant to such
(second alteration original) (quoting
Greenhill v. Crabtree
, 45 N.C. App. 49, 52, 262 S.E.2d 315, 317,
aff'd per curiam without precedential value
, 301 N.C. 520, 271
S.E.2d 908 (1980)). "One who challenges the actions of an attorney
as being unauthorized has the burden of rebutting this presumption
and proving lack of authority to the satisfaction of the court."
A trial court's conclusion as to the extent of an attorney's
authority must be supported by some evidence in the record. See
Caudle v. Ray
, 50 N.C. App. 641, 645, 274 S.E.2d 880, 883 (1981)
(vacating consent judgment signed by attorney because "[t]he
presumption of authority [of an attorney to act for his client],
standing alone, was not sufficient to sustain the order when
countered by plenary evidence in rebuttal").
Here, the Thaxtons submitted two affidavits to the trial
court, one by Mr. Thaxton and the other by Ms. Thaxton, each
stating that they never explicitly authorized Mr. Egerton's firm to
settle their claims without their permission. In his deposition,
Mr. Egerton stated:
I never tell an adjuster I have spoken to my
client and I have authority to accept X numberof dollars and the deal is hereby done. I
never tell them that because I never have that
(Emphasis added.) Later, the following exchange occurred during
Mr. Egerton's deposition:
Q. [Defendant's Attorney] . . . [I]n
general terms, do you ever think that you have
authority to settle any case without your
client's actual consent to do so?
A. [Mr. Egerton] I do not.
Mr. Hardin acknowledged in his deposition that, during the 22
October 2002 telephone conversation, Mr. Egerton said that he would
recommend the offers to his clients, and "[h]e didn't say anything
about having authority."
This evidence tends to rebut the presumption that Mr. Egerton
had the "special authorization" necessary to settle Mr. Thaxton's
claims without his permission. Harris
, 139 N.C. App. at 829, 534
S.E.2d at 655. Both the client and the attorney have denied the
existence of the special authorization, and defendant has presented
no evidence that Mr. Egerton represented otherwise to the adjuster.
Indeed, the 22 October 2002 telephone conversation, in which Mr.
Egerton told Mr. Hardin that he needed to call his clients about
the settlement offers, also suggests a lack of special authority.
Mr. Thaxton has, therefore, made a sufficient forecast of evidence
that he will, at trial, be able to rebut the presumption that Mr.
Egerton had the special authority required to act for Mr. Thaxton
in settling the case. Compare Caudle
, 50 N.C. App. at 645, 274
S.E.2d at 883 (concluding plaintiffs rebutted presumption when
their affidavits stated attorney lacked authority to settle, andrecord was "devoid of evidence" indicating attorney had requisite
authority), with Royal v. Hartle
, 145 N.C. App. 181, 183-84, 551
S.E.2d 168, 170-71 (applying presumption to conclude attorney had
authority to settle defendants' case when attorney represented he
had such authority and no admissible evidence was submitted to the
contrary), disc. review denied
, 354 N.C. 365, 555 S.E.2d 922
Mr. Thaxton has presented evidence both that (1) no settlement
was reached between Mr. Hardin and Mr. Egerton, and (2) if a
settlement was reached, Mr. Egerton lacked the special
authorization to enter into the settlement without Mr. Thaxton's
consent. A jury must resolve the dispute in the evidence on both
issues. The trial court, therefore, erred in granting defendant's
motion for summary judgment.
Judges TYSON and JACKSON concur.
Report per Rule 30(e).
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