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Posted by: Tanja Trezise on Feb 9, 2015

Court: TN Court of Appeals

Attorneys 1:

Philip E. Oliphant, Assistant City Attorney, Memphis, Tennessee, for the appellant, City of Memphis.

Attorneys 2:

Darrell James O’Neal, Memphis, Tennessee, for the appellee, Michael Savage.

Judge(s): GIBSON

In this appeal, we are asked to determine whether an Assistant City Attorney of the City of Memphis was an agent properly authorized to settle a dispute with a former employee. The former employee sued the City to enforce a settlement agreement he purportedly reached with the Assistant City Attorney for an amount in excess of $500.00. His complaint alleged that although he was never informed that the agreement was contingent on the Mayor’s approval, the Mayor subsequently rejected the agreement, and the City, based on the Mayor’s rejection, refused to honor it. The Memphis City Charter provides that the City Attorney has independent authority to settle claims against the City for amounts less than $500.00, but settlements for amounts exceeding $500.00 must be entered “by and with the approval of the Mayor.” After a period of discovery, the City filed a motion for summary judgment contending that the former employee’s evidence was insufficient to establish that the Assistant City Attorney acted with authority to bind the City to the settlement agreement. The former employee opposed the City’s motion and filed his own motion for summary judgment, in which he argued that evidence established the Mayor either actually or apparently authorized the Assistant City Attorney to enter the settlement agreement. The trial court granted the former employee’s motion for summary judgment after finding that the Assistant City Attorney acted with apparent authority to enter the settlement agreement. On appeal, we find that the record does not contain evidence sufficient to establish that the Assistant City Attorney acted with either actual or implied authority to bind the City. In light of our findings, we reverse the trial court and hold that summary judgment should be granted in favor of the City.