*1 however, only applies, made. This rule pleadings
issues “raised
or
the CAPITAL
AND
DREDGE
DOCK COR-
PORATION,
49(a).
guid-
evidence.”
corporation,
Fed.R.Civ.P.
For
an Ohio
Plaintiff-Appellant,
rule,
application
ance
of this
we turn
City Independent
Solis v. Rio Grande
School,
Cir.1984). There,
plaintiffs would have been hired had those 19, 1986. Decided March factors not be considered. The first issue Rehearing 4,1986. on Opinion Sept. defendants; was decided presented second jury. Rehearing Rehearing was never En Ban 20, 1986. We held that “Rule 49 Denied Nov. is not satisfied” deeming finding on the second issue con- liability.
sistent with the defendants’ Sol-
is, supra Rather, at 250. there were two answered, questions
distinct to be and the
trial court sepa- should have submitted two questions jury.
rate
Here, jury found that ALCOA’s
warnings to the ultimate consumer were
inadequate. Supreme The Texas Court’s
Alm decision, however, requires that the
jury must be instructed on another issue liability
before imposed ALCOA, can be
viz., warnings ALCOA’s to and train
ing Temple Pepper Dr. Bottling were
inadequate. proper application of Rule
49(a) does not allow this finding second
be deemed.
In view of the new Alm rule and the fact jury was not instructed with re it,
spect to our earlier decision must be
vacated, and the case must be reversed and
remanded for a trial. new There remains
an issue applicability agree of the Temple
ment under which Pepper Dr.
Inc. indemnified ALCOA
“arising in connection Temple with” Dr.
Pepper’s capping use of the machine it
bought from ALCOA. Resolution of this
issue, however, jury must await a new ver alleged negligence
dict as to the of ALCOA
under Court’s Alm Supreme the Texas
rule. AND REMANDED.
REVERSED *2 Morris,
E. Michael William C. Garratt & Associates, Hills, (C. Bloomfield Mich. Wil- Garratt, argued), liam for plaintiff-appel- lant. Clay, Strong (City
Eric L. Helen Francine Det.), Lewis, White, Strong, Clay, Detroit, (Harold Pope, argued), Mich. D. defendant-appellee. WELLFORD, MERRITT Before Cir- EDWARDS, Judges, cuit Senior Circuit Judge.
MERRITT, Judge. Circuit Plaintiff-appellant Capital Dredge & Corp. Dredge appeals Dock a District partial summary order granting Court against judgment Capital Dredge in its suit against Detroit, defendant-appellee City of subsequent and a order dismiss- ing, 12(b)(6) of under rule the Federal Procedure, Rules of Civil a related suit against the city. The District Court ruled of Capital some city an express were barred by Capital Dredge release executed the statute limitations. We affirm the District on the release, assigned on the contract Capi- reach with but we question. tal so that of limitations became statute project. contractor I. FACTS In June the defendants 1960s, of Detroit In the late explo- whom claims from the tunnel the Lake Huron Station Raw undertook (including sion asserted Cap- had been both *3 bring Project to fresh water Water Intake Dredge city) agreed ital and the to settle all city. project The from the lake to the against claims each other for indemnifica- a intake construction of water involved wrongful tion and contribution death and than six in 100 feet of water more “crib” personal injury arising cases out of the miles off shore and a tunnel beneath the explosion. They negotiated and drafted a through which water was to flow lake-bed settlement document entitled “Minutes of shoreline, point to the from from the intake Alteri, represented Capi- Settlement.” who piped to Detroit. On where it was be Dredge process, tal in the settlement 7, 1971, Detroit and the Indian River June 30, signed this document June into con- Company entered Construction para- The of Detroit has asserted that was to tract under which Indian River be graph two of document constitutes a (ex- project for general contractor the release of some of claims to be built cept that the tunnel was Detroit, against Capital Dredge which date, contractor). On that same different provision advanced the case bar. This part subcontracted of the Indian River quoted of the Minutes of Settlement (who Dredge in turn en- work below. subcon- agreements
tered into with other 27, 1980, February Capital Dredge On tractors). (the diversity against filed a action Detroit 11, 1971, action”). complaint On December there was an “1980 The had four explosion inju- period I in the tunnel. It caused the counts. Count covered the from workers, (the 11, ry signifi- explo death of several December date of the and 15, 1974 sion) (the property damage, lengthy May cant and a shut- date the contract project. parties assigned Capital Dredge). down of work on the All It sought project damages delay in the blamed each other for and costs involved attrib explosion. for the Certain actions utable to extra work not included in the contract, explosion against Cap- general filed all of which resulted from out were Dredge, attorney, explosion. hired an one the tunnel Count II covered the ital which Alteri, 15, through period May to defend it these claims. from end sought damages of 1974. It for the ex 22, 1973, January On Detroit and Indian penses required by extra work Detroit By River amended their contract. general but not included contract. amendment, they the amount of increased period III Count covered River, compensation due Indian extended through completion project of the in 1976. project the time in which the was to be sought damages delay expenses It for and completed, preserved and certain claims for required by of extra work Detroit but not performed. extra work On December general included in the contract. Count IV filed an action unpaid sought recovery of the balance on seeking damages impairment Detroit remaining contract after com bonding capacity its and diminishment of pletion project. of the reputation resulting city’s from the al- summary judgment, leged responsibility explosion. city for the On moved for 15, 1974, the District Court May Detroit and Indian River and on October again Again they granted city’s motion as to all of count amended their contract. compensation, parts I second and third counts. increased the amount of ex- time, District preserved extra Joiner of the United States tended the work day, for the Eastern District claims. On this same Indian River’s Court had released all held that revolves paragraph around two of count I the claims in and some Settlement, the Minutes provides: by executing II and III claims in counts agreed It signa- between the Minutes of Settlement. District Court tories hereto stated in count further held that claims Corporation Dock will dismiss with preju- contract claims but were either were not a certain pending against dice suit governed Michigan’s tort three- City Detroit in United States Dis- limitations, year Mich.Comp. statute trict Court entitled 27A.5805,or Laws Ann. claims “other § Corporation, Dock et al. v. City De- actions,” personal governed six-year by a troit, al, et 472-944, No. pre- Case limitations, statute of Reason- 600.5813. § serving Capital against ing either that under section the cause of City Detroit for extra work and delays action have accrued on date of previously compensated for and aris- explosion, December the Dis- *4 ing solely Change out a certain Order trict Court held the count to Amendment #2 to Contract LH-6D eight years which more than were filed May 13, dated 1975.1 explosion, after the were barred limitations. statute of Case No. 472-944 provision to this Capital is Dredge’s bonding refers capacity 12, 1981, Capital Dredge On November reputation and suit filed December moved the District Court to reconsider its 1974. opinion or to allow it to its com- amend plaint. slightly The District Court mod- The District provi- Court held that this ified its on the issue as release support sion only interpretation, one below, discussed but court otherwise Capital Dredge released all opinion refused to its reconsider to work extra claims that were not for work Capital allow to amend its com- pursuant change done order referred plaint. paragraph to in Change two. The Order On in June effort stated: to question, avoid the statute limitations remaining piling Remove temp- sheet Capital Dredge diversity filed another ac- spouds during late the 1975 construction (the action”). tion Detroit “1982 In season means of additional excavation this Capital Dredge unspec- action asserted frozen material on the lake bottom ified extra work claims but this time clari- use of barge mounted 700 ton fied that brought claims were under hydraulic trip jar A-frame and or other Capital Dredge’s contract and were tort means. In suitable areas over excava- August claims. On the District place tion stone proper fill to restore to granted city’s motion under rule grade. Modify temporary intakes. All 12(b)(6)and dismissed this “for rea- action to be as in work described letter of sons stated the Court on the record.” July 1975. dismissal, Despite its this action was con- REASON FOR CHANGE: lake bob solidated with the 1980 action. In October did rapidly tom not thaw as as anticipa- 1983, just before surviv- requiring thus extraordinary ted ing means the 1980 action were sched- piling go trial, complete uled to removal order to Capital Dredge during Detroit work remaining settled all the claims. the 1975 construction sea- changes son. These to result in an in- II. RELEASE crease plus contract sum a cost dispute concerning Dredge’s $225,- Capital limited amount basis not exceed alleged release certain claims reconsider, May
1. The Judge changed 13 date in the ruling Minutes of Settlement Joiner change an error. The correct date of the to account correction of error. 13, 1975. August order Capital was After moved ground, the District Court held that the attorney represented On who had Capital Capital Dredge had all of negotiating Minutes, released stated complaint claims in I of its 1980 Count on the record that he would affirm what claims in counts some both II and Mr. Russell had said.
III.
short,
argues
that it would be
argues
provision
useless to
remand
order for the District
and,
ambiguous
therefore,
that under Court to consider extrinsic evidence on the
Michigan’s parol evidence rule the District meaning of the Minutes of Settlement be-
Court should have considered extrinsic evi-
Capital Dredge
cause
already
tried and
parties’
dence to ascertain the
intended failed to find some
signa-
evidence that the
meaning
executing
provision
ques-
paragraph
tories intended
any-
two to mean
Capitel Dredge
tion.
also asserts that Al-
thing
other than
Joiner’s interpreta-
teri,
negotiated
who
the Minutes of Settle-
argument,
tion. At oral
counsel for
Capital Dredge,
ment on
had no Dredge
behalf
point.
conceded this
He admitted
any
to release
only
supporting
evidence
a con-
Dredge’s
point,
trary interpretation
extra work claims. On this
found in
affidavits
Capital by parties representing
the District Court
ruled that
Dredge had ratified its
in the Min- who stated that Alteri had
release
by failing
utes of Settlement
release
extra
disavow
work claims.
This evidence
challenge
directly
Alteri’s
or otherwise
does not bear
on the
people
negotiated
of what the
years
the Minutes of
for four
who
Settlement
*5
the Minutes of Settlement
after their execution.
intended that
paragraph two should mean. This evidence
A. Extrinsic Evidence
deals with the
authority,
issue of Alteri’s
above, Capital Dredge argues
As noted
signatories
not with what the
intended that
the
that
Minutes of Settlement should be
the Minutes would mean.
interpreted
light
of
of
extrinsic evidence
Normally we would not look to ex
parties’
city
the
asserts
intent.
that
dispute
trinsic evidence to resolve a
over
the District Court allowed
the
whether
court should consider extrinsic
extrinsic evidence on this issue
discover
However,
light
evidence.
in the
of this
and that all the extrinsic evidence discover-
by Capital Dredge,
concession
we decline to
supports
interpreta-
ed
the District Court’s
rule on the District Court’s
tion of the Minutes of Settlement. The
ambiguous
Minutes of Settlement are
transcripts
record
this case contains
of
Capital
argu
their face and on
Booth,
depositions of William
Robert Rus-
the Minutes
interpret
ment that
should be
sell,
McClear,
and Richard
three of
six
the
light
ed in
of extrinsic evidence. See
signatories to the Minutes of Settlement.
Hooks,
(6th
Hooks v.
771 F.2d
deponents represented
All three of these
Cir.1985) (the
may
examine the
(McClear
parties
repre-
the
settlement
points
whole record and base its decision on
city)
nego-
sented
and were involved
Court).
not addressed
the District
We
tiating
drafting the Minutes. All three
directly
question
turn
of Alteri’s
understanding
state that it was their
authority
Capital Dredge’s
to release
that,
intent
in accord with the District
delay.
claims for extra work and
interpretation, Capital Dredge was
Court’s
releasing
out of the
all claims
Authority
B.
of Alteri
change
order referred to
the Minutes of
Court,
city
points
also
out that in
Before
the District
Settlement.
a related action Mr. Russell stated to the
submitted affidavits to the effect
representatives
specifically
court on the record that he
that
in-
believed
compromise any
had released the claims involved
structed Alteri not to
of
by signing
Capital Dredge’s
claims for extra
the case at bar
Minutes of
work and
case,
Alteri, delay. Capital Dredge argues
same
Mr.
that even if
Settlement.
(Second)
the Minutes of
an
Agency
Settlement constitute
Restatement
8.§
unambiguous release
accept
courts
this definition of
claims, Capital Dredge should not be bound apparent authority. See Grosberg v. Mich
because,
by this release
extent
Bank-Oakland,
igan National
420 Mich.
release, they
Minutes constitute a
ex-
were
(1984).
N.W.2d
If a third
by Alteri
authority
ecuted
without
party,
principal’s
based on a
manifesta
Capital Dredge.
if
Even
Alteri had no tions, reasonably believes
sup
express authority to release the
posed agent is authorized to enter into a
prevail
if it could be
shown
agreement,
transaction or
principal
will
the release or that
ratified
deny
not be
liability
allowed to
under the
apparent authority
Alteri
had
release
agent
even if the
actual
claims.2
principal.
to act for the
Appar
ent
is created
principal’s
1. Ratification
manifestations to
third party;
prin
held
Joiner
cipal’s
supposed
with
communications
Dredge’s acceptance
benefits
agent are not relevant to
failing
challenge
Minutes while
the Min apparent authority. Michigan National
period
years”
utes for a
of “at least four
Kellam,
Bank Detroit v.
receiving
after
them amounted to
rat
2. Apparent Authority
is generally
claim
entitled to enforcement
if
According to
settlement
even
Agency,
the Restatement of
attorney was acting contrary to the client’s
[ajpparent authority
power
is the
to af-
situation,
instructions.
In such a
legal
fect of another person
relations
the client’s
is to
by
remedy
persons, pro-
transactions
third
sue
with
fessedly
agent
other,
professional malpractice.
as
arising
for the
The third
party may
and in
rely
attorney’s
accordance with the other’s
on
persons.
manifestations to such third
he has reason to
unless
believe
8A,
(Second)
id.,
possible analyses
We
not
Agency
will
discuss other
estoppel,
§
agency power,
such as inherent
Restatement
§ 8B.
nego-
delay
claims
from the explosion.
a settlement.
Alteri therefore
apparent authority
tiate
release these claims. Consequently, we af-
law, prudent litigants
But for this rule of
ruling that,
firm the District
Court’s
rely
opposing
repre-
not
on
could
counsel’s
Settlement,
Minutes of
Capital Dredge re-
sentation of authorization to settle. Fear
action,
leased certain claims from the 1980
of a later claim that counsel lacked authori-
although we do
on slightly
so
different
ty
require litigants
go
to settle would
grounds than
by Judge
were used
Joiner.
opposing party
counsel to
behind
verify
every
order to
authorization for
set-
III. CONCLUSION
Michigan
tlement offer. The courts of
holding
question sup-
Our
on the release
evidently
specifically
have
addressed
ports the District Court’s dismissal of all
apparent authority question
in the at-
I Capital Dredge’s
count of
torney-client
Michigan
context.
In
Na-
complaint plus other claims in counts II
Kellam, supra,
Bank v.
tional
the Michi-
III,
specified
as
Judge
opin-
Joiner’s
gan
Appeals
Court of
held that an
ion. Because the District
holding
Court’s
apparent authority
part-
had no
bind
on the statute of limitation issue affects
(whose
nership
partnership agreement the
only the claims in count I of the 1980
written)
dealings
attorney had
with third
complaint,
subject
which are
holding
to our
However,
parties.
the court noted that the
question,
on the release
opinion
we state no
partners
worked for one
analysis
on the statute of limitations
em-
individually
part-
not hired
ployed by Judge Joiner. We are unable to
nership to handle the matter that the third
ascertain the basis for
Joiner’s deci-
parties presented.
v.Wells United Sav-
dismiss
complaint,
sion to
the 1982
and we
Bank,
ings
286 Mich.
fact professional malpractice. Opinion ney for liable, although he has autho- Dredge sought at 10. In this only rized conduct actuated lawful remedy Michigan state court. however, servant, If, motives. al- Dredge sued its insurer and Mr. Alteri him, though purporting to act for among things, claiming, other that Alteri purpose serving the interests had executed the Minutes of Settlement acting the master or on account Capital Dredge’s without authorization. business, the master is not liable. jury After a returned a verdict added). (Emphasis Capital Dredge, Circuit Court Thus, generally respon the client is judgment Michael entered a Connor though attorney’s actions even sible for the of no cause of action on June not authorized the the client has ap- judgment apparently This never acts. It should be to commit the tortious pealed. argued of Detroit has only possible agency theory noted that the judgment renders liability apparent authority; such light Dredge’s arguments moot. In of our expressly implicitly autho client has not or disposition we engage rized the tortious opinion to whether the collat- state no as However, “has no conduct. if estoppel judgment eral effect bars interests,” purpose serving the [client’s] argument Al- present apparent responsible client is not under executed the Minutes of Settlement teri principles attorney’s acts. for the (Second) authority. Agency without also Restatement See agent." person place interpretation third of that 1. “The rules of au- (Second) Agency thority [express] 8 comment § as those for Restatement are ... the same substituting authority, a. the manifestation *9 534
WELLFORD,
Judge, dissenting.
question
light
Circuit
The
Coates wheth
Michigan
recognize
attorney’s
er
would
an
issue of
Upon reconsideration
apparent
authority to settle his client’s
to
attorney’s apparent authority
settle his
recognize
claim
it does not
an
when
attor
case,
was the
for our
basis
client’s
authority
ney’s implied
to settle without
petitioner
original disposition,
directs
special
Michigan
authorization.
National
Drake, 131
to
v.
Mich.
attention
Coates
Kellam,
Bank
App.
Detroit v.
107 Mich.
(1984).
687,
App.