DWECK V.NASSER
WL 2602169 (DeLCh. 2008)


PROCEDURAL BASIS Chancery court consideration of the plaintiff's motion to enforce a settlement agreement.

FACTS: Dweck (P) was as an officer, board member, and shareholder of Kids International, Inc. Nasser (D) was a 52.5% shareholder in Kids and the chairman of the board. In 2005, Nasser (D) discovered that Dweck (P) was operating competing businesses out of Kids' offices, so he removed her as president and replaced her with his nephew. Dweck (P) filed a lawsuit challenging her employment termination, and
Nasser (D) filed a motion to dismiss, which was granted in part, upholding Dweck's (P) termination. The parties continued to attempt to settle the dispute between them for a period of two years. Ultimately, Nasser (D) suggested to attorney Shiboleth, a longtime friend to whom Nasser's (D) attorney of record had turned for support, that he just wanted to get the thing done and over with. Shiboleth understood Nasser's (D) request to indicate that he was authorized to settle the dispute on Nasser's (D) behalf, as
he had often done in the past. When a settlement agreement was finally reached, Nasser (D) disagreed with its terms and refused to be bound by it Dweck (P) moved the court to enforce the agreement.

ISSUE:Did Shiboleth have the legal authority to enter into the settlement agreement on the defendant's behalf, even though he was not the attorney of record?

RULE: Implied authority is authority that the agent reasonably believes he has as a result of the principal's actions, and can be shown by evidence of acquiescence of the principal with knowledge of the agent's acts, and such knowledge and acquiescence may be shown by evidence of the agent's course of dealing for so long a period of time that acquiescence may be assumed.

HOLDINGA settlement agreement between a minority stockholder of a closely held corporation and a majority stockholder resolving a minority stockholder's claims for breach of fiduciary and breach of contract was binding, although it was entered into by the majority stockholder's primary attorney, rather than the attorney of record in the action. The majority stockholder had instructed his attorney of record in the action that his primary attorney had authority to settle the action.