LARRY v. NATIONWIDE MUTUAL INSURANCE COMPANY
United States District Court, W.D. North Carolina, Statesville Division.
September 19, 2011.
A. Breach of Contract
Moose contends that he entered into a valid and enforceable contract with Nationwide. According to Moose, in exchange for his early retirement, Rollins, on behalf of Nationwide, promised to help identify a replacement agent willing to enter into a side deal with Moose covering the desired $160,000.00 retirement incentive. The gist of Moose's breach of contract claim is that Nationwide breached this contract by failing to approve Bowman as a replacement agent while enforcing Moose's letter of retirement.
Moose contends that he and Rollins first discussed his financial goals and retirement plans in late 2005 or early 2006, at which time Moose made clear that he would not be able to retire until his house was paid for and his daughter's college education was taken care of. (Moose Dep. 63-72) According to Moose, absent an additional financial incentive to do so (i.e., a "side deal"), there was no reason for him to retire since he could stay on and continue to collect his renewals and new sales commissions. (Moose Dep. 82) According to Moose, he only responded positively to the inquiry about retirement when prompted by Rollins, "Well, I have candidates that I can send to you. And if we can make that happen for you, get those things taken care of, would you retire?" (Moose Dep. 63) (Moose Dep. 63)
Rollins denies ever representing to Moose that he'd find a replacement agent who would pay Moose "some lump sum" of money to cover the financial obligations Moose identified as obstacles to early retirement. (Rollins Dep. 110) Instead, Rollins claims he had in his mind that the replacement agent would permit Moose "to work through a transition," possibly on a part-time basis, and enable him to continue to earn some money. (Rollins Dep. 109) (Rollins Dep. 109-11, 117-18) Nationwide argues that Moose's breach of contract claim fails because 1) no such contract could exist since Rollins lacked the actual and apparent authority to contract on behalf of Nationwide; and 2) that even if Rollins possessed the requisite authority and a contract found to exist, the contract would be unenforceable as a matter of law due to either impossibility of performance or because its terms violate public policy. Taking the facts and inferences in the light most favorable to Moose, genuine issues of material fact exist as to whether Nationwide, through Rollins, entered into a valid and enforceable contract with Moose.
A valid contract may be formed by the agent of the principal where " the agent acts within the scope of his  authority;  when an unauthorized contract has been ratified; or  when the agent acts within the scope of his  apparent authority, unless the third person has notice that the agent is exceeding actual authority." Branch v. High Rock Realty Inc., 565 S.E.2d 248, 252 (N.C. App. 2002). "Actual authority is that authority which the agent reasonably thinks he possesses, conferred either intentionally or by want of ordinary care by the principal." Harris v. Ray Johnson Constr. Co., 534 S.E.2d 653, 655 (N.C. App. 2000). Actual authority may be implied by conduct of the principal amounting to consent or acquiescence. Lucas v. Little General Stores, 221 S.E.2d 257, 262 (1976).
Under the doctrine of apparent authority, "the principal's liability is to be determined by what authority a person in the exercise of reasonable care was justified in believing the principal conferred upon his agent." Branch, 565 S.E.2d at 252. "[A]ny apparent authority that might otherwise exist vanishes in the presence of the third person's knowledge, actual or constructive, of what the agent is, and what he is not, empowered to do for his principal." Id.