Harkness v. Platten

Under the apparent authority theory of agency, when an employer gives an employee actual authority to perform certain tasks, that actual authority may create the appearance of authority to perform other related tasks, thus creating an agency relationship in which the employee acts within the scope of employment when performing the “other related tasks.”

Harkness appealed a trial court judgment directing a verdict in favor of Platten on Harkness' malpractice claim. Platten previously represented Harkness in a lawsuit claiming fraud against Kantor, a loan officer acting on behalf of Sunset Mortgage (Sunset) and Directors Mortgage, Inc. (Directors), a case which Harkness settled. Harkness settled for $600,000 on the advice of Platten, who claimed Harkness could get the remainder of the $1.15 mil damages from Sunset and Directors. Platten then declined to take the case against Sunset and Directors, and Harkness brought the malpractice claim against Platten. The trial court held that Harkness could not have prevalied against Sunset and Directors, because they would not be liable for Kantor's actions under the theory of respondeat superior. The Court of Appeals affirmed. The Supreme Court reversed, holding that under the apparent authority doctrine, Kantor had been “clothed” by Sunset and Directors with actual authority to perform certain tasks as a loan officer, and as such that actual authority created the appearance of authority to perform other, related tasks. The Court held that Harkness could have prevailed against Sunset and Directors, since a reasonable factfinder could find that the Sunset and Directors manifested their intent to be bound by Kantor. Reversed and remanded to the circuit court for further proceedings.