I'm a florida lawyer but not a litigator so you obviously have more expertise here, but assuming FSU''s claim about the bylaw violation is persuasive (which I agree it is), how does that abrogate the contract between ESPN and the ACC? It's not ESPN's job to verify Phillips is following the ACC's bylaws. As far as ESPN is concerned, Phillips had apparent authority as the agent of the ACC, he signed the deal, now the ACC is bound by the contract. I can't imagine the court would establish a principle that one party in a contract is legally obligated to make sure that the other party is following its own internal procedures in a business deal.
FSU can sue Phillips and the ACC for violating the bylaws, but even if they win, the GOR is still in effect (since the GOR is part of the tv deal). I don't see how that gets them out of the ESPN deal. The ACC would have to sue ESPN, and I presume they would claim that the tv deal is invalid because they did not receive adequate consideration. The problem with that is that I don't think ACC will sue ESPN (too many small market teams like the tv deal, even though for us it's terrible), and I also think the consideration argument is going to be hard to prove. Am I missing something?
I disagree that it was not ESPN's job to verify the ACC's bylaws. First, I'm willing to bet that the bylaws were incoporated by reference into the contract. Second, a contracting party with an agent of the principal has to act reasonably and that includes the duty to inquire from the principal about the extent of the agent's authority. See,
All Seasons Condo. ***'n, Inc. v. Patrician Hotel, LLC, 274 So. 3d 438, 449ā50 (Fla. 3d DCA 2019). āAn agent's authority need not be conferred in express terms, but may be implied or apparent under justifying circumstances.ā
Am. Ladder & Scaffold Co. v. Miami Ventilated Awning Mfg. Co., 161 So.2d 699, 700 (Fla. 3d DCA 1964) (citing
Thomkin Corp. v. Miller, 156 Fla. 388, 24 So.2d 48, 49 (Fla. 1945) ). An agency relationship based on apparent authority only exists if the following three elements are present: ā1) a representation by the purported principal; 2) reliance on that representation by a third party; and 3) a change in position by the third party in reliance on the representation.ā
Ocana v. Ford Motor Co., 992 So.2d 319, 326 (Fla. 3d DCA 2008) (citing
Mobil Oil Corp. v. Bransford, 648 So.2d 119, 121 (Fla. 1995) ). āApparent authority does not arise from the subjective understanding of the person dealing with the purported agent, nor from appearances created by the purported agent himself.ā
Izquierdo v. Hialeah Hosp., Inc., 709 So.2d 187, 188 (Fla. 3d DCA 1998) (quoting
Spence, Payne, Masington & Grossman, P.A. v. Philip M. Gerson, P.A., 483 So.2d 775, 777 (Fla. 3d DCA 1986) ). Instead, the words and actions of the principal must be the focus because apparent authority exists only where the principal creates the appearance of an agency relationship.
SeeGuadagno v. Lifemark Hosps. of Fla., Inc., 972 So.2d 214, 218 (Fla. 3d DCA 2007);
see alsoJackson Hewitt, Inc. v. Kaman, 100 So.3d 19, 31 (Fla. 2d DCA 2011) (āIn considering a claim based on apparent authority, the inquiry properly focuses on the actions of or appearances created by the principal, not by the agent.ā). However, any reliance by a third party on a purported agent's apparent authority must be reasonable.
Regions Bank v. Maroone Chevrolet, L.L.C., 118 So.3d 251, 255 (Fla. 3d DCA 2013) (citing
Izquierdo, 709 So.2d at 188);
see alsoSterling Crest, Ltd. v. Blue Rock Partners Realty Group, LLC, 164 So.3d 1273, 1279 (Fla. 5th DCA 2015) (āReliance *450 of a third party on the apparent authority of a principal's agent must be reasonable and rest in the actions of or appearances created by the principal, and not by agents who often ingeniously create an appearance of authority by their own acts.ā (internal quotations and citations omitted) ).