Urim Corporation v. Steven L. Krongold

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
_____________________________U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
JUNE 9, 2008
No. 07-13415
_____________________________ THOMAS K. KAHN
CLERK
D. C. Docket No. 05-00633 CV-GET-1
URIM CORPORATION,
Plaintiff-Appellant,
versus
STEVEN L. KRONGOLD,
MARK T. PALIN,
Defendants-Appellees,
JAY T. THOMPSON,
Defendant,
KENNETH E. FLICK, et al.,
Respondents.
_________________________________________
Appeal from the United States District Court
for the Northern District of Georgia
_________________________________________
(June 9, 2008)
Before EDMONDSON, Chief Judge, PRYOR and KRAVITCH, Circuit Judges.
PER CURIAM:
Broadly speaking, this case is a legal malpractice action in which it is
claimed that the Defendant lawyers agreed to an unauthorized settlement of
Plaintiff’s claim against a third-party in an earlier civil action. Summary judgment
was granted to Defendants in this case. Briefly stated, the district court
determined that the doctrine of collateral estoppel barred litigation of Plaintiff’s
contention that Defendants lacked the “special authority” Georgia law requires
that lawyers must have to settle their clients’ claims. We conclude that collateral
estoppel does not apply. We vacate the judgment and remand for further
proceedings.
The relationship between lawyer and client is regulated by particular rules
and laws; see, for example O.C.G.A. § 15-19-6 (“Without special authority,
attorneys cannot receive anything in discharge of a client’s claim but the full
amount in cash.”). As we understand Georgia law, it is strict when it comes to
limiting lawyers’ authority to settle clients’ claims. See Lewis v. Uselton, 416
S.E.2d 94, 96-98 (Ga. App. 1992). Therefore, circumstances that might establish
actual authority for an agent, such as a lawyer, to act for his principal can still be
inadequate to establish the “special authority” for one kind of transaction: a
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lawyer’s compromise and settlement of a client’s claim. In Georgia, actual
authority and the “special authority” to compromise and settle a client’s claim are
not necessarily the same thing: we believe that special authority is actual authority
plus meeting some technical formalities that must be observed before settling.
In the earlier case, Judge Thrash’s orders, addressing a motion to enforce
the settlement agreement, decide apparent authority and actual authority. But
Judge Thrash’s orders do not mention or actually decide the question of the
lawyers’ “special authority” as that idea is construed in Georgia’s law: the power,
given by the client, to settle on the basis of the specific terms – including the
amount of money – that the lawyers accepted. Looking at this record, we cannot
say that Georgia’s “special authority” rule was litigated before Judge Thrash and
in Judge Thrash’s mind and, thus, actually decided in the earlier case. We have
assumed, for argument, that Plaintiff, in the earlier action before Judge Thrash,
had a full and fair opportunity to litigate the issue of his lawyers’ power to settle
even though he was represented then by the very lawyers against whom he now
claims malpractice: we decide nothing today about conflict of interest in the earlier
litigation and its impact, if any, on collateral estoppel being asserted by the lawyer.
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We agree that Defendants’ continued representation of Plaintiff in the
earlier civil action constitutes adequate consideration for the revised fee
agreement.
VACATED AND REMANDED.
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