A & M Farm Center, Inc. v. Agco Finance LLC

921 N.E.2d 54 (2010)

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Nature of the Case

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Facts

A&M (D) provided AGCO (P) with a corporate resolution that Leek, Abbett, and Janice Sampson were authorized to execute on behalf of A&M any and all agreements, assignments, endorsements, security documents, negotiable instruments and any other documents necessary to conduct the affairs of A&M. The powers were to continue in effect until revoked or modified in writing. D also agreed to hold P harmless for P’s reliance on the resolution after revocation or termination by operation of law in the absence of written notice. In reliance, Leek signed over 100 or so documents for D in doing business with P. Leek began another business and that business Cable Tech, entered into three leases with D for equipment and financed those leases through P. The leases were signed by Leek on behalf of D and Phil Norman, president of Cable Tech. Each lease had a full recourse letter. Each of the leases were signed by Leek on behalf of D. P got credit reports that Leek was a former employee of D. They were incorrect as Leek was still employed by D. Cable Tech converted the leases into variable rate loan contracts. The agreements were signed by Leek and Norman as borrowers. Leek also signed for D giving full recourse. Abbett was unaware of the Cable Tech agreements until 2002. Cable Tech defaulted and P declared the amounts due immediately ($276,123). P demanded that D accept reassignment of the Cable Tech Agreements under the full recourse agreements. On January 31, 2003, Leek resigned from D. P sued D, Abbett and Cable Tech. P filed for summary judgment in that D was liable to P under the recourse agreements and that Leek had both actual and apparent authority to enter into the contracts. D claims that Leek was acting adversely and there were genuine issues of material fact on whether P’s belief in Leek’s authority was reasonable. Abbett argued that his signature had been forged on the personal guarantee. The trial court granted the motion for summary judgment and D appealed.