- 19 -
However, as the United States Supreme Court has observed as to
such a presumption:
the utter want of power of an attorney, by virtue of
his general retainer only, to compromise his client’s
claim, cannot, we think, be successfully disputed.
A judgment entered upon such a compromise is
subject to be set aside on the ground of the lack of
authority in the attorney to make the compromise upon
which the judgment rests. Prima facie, the act of the
attorney in making such compromise and entering or
permitting to be entered such judgment is valid,
because it is assumed the attorney acted with special
authority, but when it is proved he had none, the
judgment will be vacated on that ground. Such judgment
will be set aside upon application in the cause itself
if made in due time or by a resort to a court of equity
where relief may be properly granted. [United States
v. Beebe, 180 U.S. 343, 352 (1901).]
Absent a stipulation to the contrary, an appeal of this case
lies to the Court of Appeals for the Ninth Circuit. See sec.
7482(b)(1)(A). That court has held that settlement agreements
are contracts whose enforceability is governed by “familiar
principles of contract law”. Jeff D. v. Andrus, 899 F.2d 753,
759 (9th Cir. 1989); see also Harrop v. W. Airlines, Inc.,
550 F.2d 1143, 1145 (9th Cir. 1977). These “familiar principles”
are drawn from the local law that applies to the general
interpretation of contracts. Jeff D. v. Andrus, supra at 759.
The applicable local law, California contract law, invokes the
law of agency to determine whether Montgomery was authorized to
settle all or part of petitioners’ case, with the important
caveat that only express authority from petitioners suffices to
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 NextLast modified: May 25, 2011