National Linen Service v. City of Monroe
Docket: No. 40,241-CA
Court: Louisiana Court of Appeal; September 21, 2005; Louisiana; State Appellate Court
The City of Monroe appealed a trial court ruling that determined Roger Cloman, the director of operations for the Monroe Civic Center, had both apparent and implied authority to contract with National Linen Service. National Linen sought increased attorney fees for the appeal. The City had a history of service agreements with National Linen dating back to 1989, including a contract signed by Cloman in July 2002 for a five-year term. This contract stipulated a 30-day remedy period for service issues, after which the contract could be considered abrogated if unresolved. National Linen provided linens for about a year before the City ceased doing business with them in September 2003, citing a switch to a cheaper supplier. Following National Linen's demand for damages due to breach of contract, the City argued that Cloman lacked the authority to sign the contract, asserting that only the mayor could do so after administrative review. National Linen countered this claim by referencing prior correspondence from 1994, where the City acknowledged Cloman’s prior agreements and indicated that future contracts would require the authorized personnel's signature. The trial court ultimately found that Cloman had apparent authority to sign contracts based on his title and operational role at the Civic Center, as well as the City’s previous acceptance of contracts he executed. The appellate court vacated the trial court's judgment and remanded for further proceedings. The court determined that the validity of the contract and Mr. Cloman’s authority to sign it were only challenged when a party sought a better deal, indicating a misuse of the contract's advantages. The court awarded National Linen $22,277.64 in damages and $10,611.00 in attorney fees. The City appealed, claiming the trial court wrongly found Mr. Cloman had apparent authority to sign the contract, emphasizing that agency must be explicitly appointed, and that National Linen should have verified Mr. Cloman's authority. The City noted it had previously informed National Linen of an unauthorized signing and mandated that future contracts be signed by an authorized individual. National Linen contended that Mr. Cloman had either implied or express authority and that the City had ratified previous agreements. The appellate court agreed that a contract's enforceability requires the signatory to have express authority, as dictated by state statute or charter. The court noted that National Linen bore the burden of proving the contract's validity and that damages could still be recoverable if the contract was found unenforceable. Citing legal precedents, the appellate court vacated the trial court's decision and remanded the case for further proceedings, assessing costs against National Linen. Additionally, it reiterated that proper authority to sign contracts is defined by specific laws and that a Home Rule Charter must be properly filed to be valid.