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Attorneys – Agency – Settlement & Absconding – Accord & Satisfaction – Auto Accident

After plaintiff was seriously injured in an auto accident, she may not have specifically authorized her attorney to settle for the liability limits of the other driver’s auto insurance, but the attorney had the apparent authority to enter into the settlement. Although plaintiff’s attorney absconded with the settlement funds, the other driver is entitled to the defense of accord and satisfaction.

We affirm the trial court’s grant of summary judgment for defendant Cruz.

Interlocutory Appeal

Plaintiff’s appeal is interlocutory because her claim against her UIM carrier is still pending. Plaintiff has demonstrated that the trial court’s order affects a substantial right: her remaining claim would be resolved by arbitration if the order were affirmed and by jury trial if it were reversed. Therefore, we have jurisdiction to consider plaintiff’s appeal.


There is no dispute that plaintiff hired the attorney to represent her in her personal injury claim against defendant Cruz and her liability carrier, Nationwide Insurance.

The attorney-client relationship is based upon principles of agency. A principal is liable on a contract duly made when the agent acts within the scope of his actual authority. Furthermore, the principal may be bound in an agreement with a third party by the apparent authority of her agent which includes authority to do all those things usual and necessary in accomplishing the main act authorized.

The settlement of a personal injury case for liability limits of an insurance policy is well within the realm of the usual business of a personal injury lawyer in his work on an automobile accident case. Plaintiff appears to argue there is no proof that a settlement was reached and that the parties never came to an agreement, but the record shows that the settlement check was sent by Nationwide and cashed by plaintiff’s attorney.

Much of plaintiff’s argument seems to rely on the evidence, or lack thereof, of details regarding the negotiations between her attorney and Nationwide. But the details of their discussions as framed by plaintiff would not change the fact that Nationwide agreed to pay its policy limits to plaintiff in settlement of her claim.

Even if plaintiff did not grant her attorney the actual authority to settle her personal injury case for Nationwide’s policy limit of $50,000, all of the evidence shows that the attorney – as plaintiff’s agent – had sufficient apparent authority to bind plaintiff in her dealings with defendant Cruz and Nationwide.

Plaintiff seeks to transfer the loss from her attorney’s malfeasance to Nationwide. We sympathize with her predicament, but unfortunately for plaintiff, the client bears the risk of her lawyer’s malfeasance when it involves an innocent third party.

Accord & Satisfaction

This case is a clear example of an accord and satisfaction. Plaintiff, through her agent, agreed to release all claims against Nationwide for the agreed-upon sum of $50,000. Plaintiff suffered a greater amount of damages than $50,000, which is why she also brought a claim against her UIM carrier for the remainder of her damages. There is no genuine issue of material fact; the trial court properly granted summary judgment for defendant Cruz based on accord and satisfaction.


Hogue v. Cruz (Lawyers Weekly No. 012-061-18, 11 pp.) (Donna Stroud, J.) Appealed from Caswell County Superior Court (Osmond Smith, J.) Drew Brown for plaintiff; Joshua Rotenstreich, Kenneth Rotenstreich and Torin Fury for defendants. N.C. App. Unpub.


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