Wednesday, December 19, 2012
There are only a few courts that have discussed whether an attorney-in-fact may act based upon “the authority granted in the power of attorney.” In one of the more recent cases, the Georgia Court of Appeals decided a case that dealt with “whether an attorney-in-fact can perform an act that the principal refused to perform.”
In this case, Dennison Williams and Darius Peterson jointly owned real property. Williams executed a power of attorney appointing Peterson’s wife Anita. In the power of attorney, “Williams authorized Anita to sell real property.” The issue arose when Williams tried to sell his interest in the jointly owned property to man named Eugene Harris. In an effort to prevent him from selling, Anita presented Williams with a quitclaim deed that would transfer his interest to Peterson. He refused to sign the quitclaim so Anita signed the deed for him, claiming that she could as his attorney-in-fact. She filed the signed deed in the superior court. Williams would later do the same, except he transferred his interest to Harris. Peterson brought suit against Harris, claiming trespass and damage to property. According to Bryan Cave Fiduciary Litigation, “Harris filed a third-party complaint against Anita and Williams claiming fraud.” Anita moved for summary judgment on the grounds that she acted within her authority as the power of attorney.
While the trial court agreed with Anita, the Georgia Court of Appeals disagreed. In Harris v. Peterson, the court ruled that Anita had exceeded the scope of her authority as his power of attorney. The court relied on two different theories. First, the court stated that a factual issue still exists in this case because of the legal theory of agency. While it is understood that an agent may act on behalf of a principal, the grantor of the power of attorney still has the authority to act. The question remains whether Williams granted Anita the authority to act in this instant. This determination should be based on Williams’ intent in light of the circumstances. The second theory is based upon ethics. The court stated that under agency law, an agent cannot self-deal. This is what Anita did when she transferred the property to her husband. The court transferred the case to the trial court.
See Luke Lantta, How Far Does The Scope of An Attorney-In-Fact’s Authority Extend?, BryanCaveFiduciaryLitigation.com, Dec. 18, 2012.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.