                                                                                                                           Opinions of the United
2005 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


4-28-2005

Phillips v. Andrews
Precedential or Non-Precedential: Non-Precedential

Docket No. 04-3784




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Recommended Citation
"Phillips v. Andrews" (2005). 2005 Decisions. Paper 1301.
http://digitalcommons.law.villanova.edu/thirdcircuit_2005/1301


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                                                         NOT PRECEDENTIAL

               UNITED STATES COURT OF APPEALS
                    FOR THE THIRD CIRCUIT

                              ___________

                              No. 04-3784
                              ___________

                         VERONICA PHILLIPS

                                    v.

                       RUPERTHA ANDREWS,
                                    Appellant.
                           ___________


On Appeal from the District Court of the Virgin Islands-Appellate Division
                      (D.C. Civil No. 00-cv-00096)
    District Judge: The Honorable Raymond L. Finch, Chief Judge
           District Judge: The Honorable Thomas K. Moore
          Territorial Judge: The Honorable Rhys S. Hodge

                              ___________

               Submitted Under Third Circuit LAR 34.1(a)
                            April 19, 2005

      Before: NYGAARD, RENDELL, and SMITH, Circuit Judges.


                         (Filed: April 28, 2005)
                                       ___________

                               OPINION OF THE COURT
                                    ___________


NYGAARD, Circuit Judge.

       Appellee Veronica Phillips filed this action with the Territorial Court of the Virgin

Islands, alleging entitlement to damages incurred from Appellant Rupertha Andrews’

improper disbursement of insurance proceeds. The Territorial Court held that Andrews’

actions were proper based on the verbal grant of authority given by Phillips. The District

Court of the Virgin Islands reversed. Andrews argues on appeal that the District Court of

the Virgin Islands erred in its finding that she lacked authority and or agency to contract

and pay for the repairs to Phillips’ house. We will affirm.

                                             I.

       This appeal stems from an action for damages instituted by Appellee Veronica

Phillips against Appellant, a local real estate agent. Andrews assisted Phillips in finding

property on the island of St. Croix. Phillips executed a Special Power of Attorney which

was effective until closing. Before the closing, the property was damaged by a hurricane.

The seller, however, had insured the house and agreed to assign the insurance proceeds to

Phillips to compensate her for the damage to the property. Before she received the

insurance proceeds, Phillips executed a second Special Power of Attorney on December

29, 1995, authorizing Andrews to “receive any and all insurance proceeds/interests of



                                              2
    mine.” On January 22, 1996, the insurance company issued its settlement check in the

    amount of $14,081.75 and Andrews, as agent for Phillips, collected the proceeds.

           Wrigby Archibald 1 testified that Phillips asked him to repair her house and told

    him he would be paid by Andrews. He conceded that he never prepared an estimate,

    never agreed on a price for the repairs, and never entered into a written agreement with

    Phillips because he did not intend to do a “contract job” for her at a “fixed price.”

    Archibald, a contractor for the last 25 to 30 years, conceded that this was not his regular

    practice. He never billed Phillips for any of the work and he does not know what the

    repairs actually cost nor could he produce any receipts. Phillips asserts that, although she

    talked to Archibald about repairing her home, they did not reach an agreement.

    Furthermore, Phillips asserts that when she returned to St. Croix the house was in the

    same condition in which she had left it.

           The record contains a letter from Andrews to Phillips which provides: “I followed

    your instructions as requested of me by Janet2 to “DEPOSIT YOUR INSURANCE

    CHECK, FOR REPAIRS TO YOUR PROPERTY IN MY ACCOUNT AND THEN

    GIVE ALL OF THE MONEY TO MR. ARCHIBALD IN ORDER FOR HIM TO DO

    THE REPAIRS.” However, Janet testified that she gave Andrews no such authority. In




1   1.      Mr. Archibald is Andrews’ brother.

1   2.      Janet Davis was Phillips’ friend who also worked in Andrews’ office.

                                                  3
her April 4, 1996 letter to Phillips, Andrews outlined the disbursements to Archibald

totaling $14,081.75 as follows:

      Feb. 29, 1996 - $2,500
      March 6, 1996 - $3,000
      March 12, 1996 - $2,500
      March 15, 1996 - $ 600
      March 22, 1996 - $2,500
      March 22, 1996 - $ 500
      March 25, 1996 - $2,481.75
The summary did not indicate the specific purpose of those payments. Furthermore, some

of those checks were written to Archibald and others were written to “Cash.”

                                              II.

        Phillips disputes that she ever orally extended authority to Andrews and she

asserts that Andrews only had authority to receive the insurance proceeds from the

insurance company. Andrews contends, however, that around the same time as the

written power of attorney was executed, Phillips gave her an additional oral grant of

authority to expend the insurance proceeds for the purpose of securing repairs to Phillips’

home.

        The Territorial Court of the Virgin Islands denied Phillips’ requested relief,

finding that while the written power of attorney did not address Andrews’ authority to

apply the insurance proceeds to repair the home, there was an oral grant of authority. The

District Court of the Virgin Islands reversed the Territorial Court’s decision and held that

an oral authority granted contemporaneously with the written power of attorney could not

modify the written authority. We agree and will affirm.

                                              4
                                             III.

       An agency relationship is formed by the “manifestation of consent by one person

to another that the other shall act on his behalf and subject to his control, and consent by

the other to so act.” R ESTATEMENT S ECOND OF A GENCY § 15 (1981). An agent’s

authority may be created “by written or spoken words or other conduct of the principal

which, reasonably interpreted, causes the agent to believe that the principal desires him so

to act on the principal’s account.” Id. at § 26 and cmt. 6. Where the agent’s authority is

conferred through a writing, the court must look to the form and content of that writing in

light of the circumstances, to ascertain whether the parties intended to constitute a

complete and final expression of their agreement. Id. § 48.

       The parol evidence rule precludes using extrinsic evidence of prior or

contemporaneous agreements to extend or alter the authority granted in a writing. Id. at

cmt. b. We said that:

       If [both an oral and written agreement] relate to the same subject matter,
       and are so interrelated that both would be executed at the same time and in
       the same contract, the scope of the . . . agreement must be taken to be
       covered by the writing.

Mellon Bank Corp. v. First Union Real Estate Equity and Mortgage Inv., 951 F.2d 1399,

1405 n.6 (3d Cir. 1991).

       In this instance, Phillips executed a two-page power of attorney, which provided in

pertinent part:




                                              5
       My agent shall have full power and authority to act on my behalf but only to
       the extent permitted by this Special Power of Attorney. My agent’s powers
       shall include the power to:
             1. Receive any and all insurance proceeds/interest of mine in real (sic)
       located at: plot No. 230 of Estate La Grange, West End Quarter, Frederiksted, St.
       Croix, V.I.

The written agreement clearly addressed the precise subject matter contested here—the

scope of the agent’s authority with regard to handling Phillips’ insurance settlement—and

limited Andrews’ authority to that defined in the writing. The written power of attorney

was executed on December 29, 1995 and Andrews asserts that the purported oral grant of

authority was given during that same time period—sometime toward the end of

December. The subjects of both agreements are so closely related, and the relationship in

time is so close, that the scope of the written agreement must prevail. Moreover,

according to the parol evidence rule, we are precluded from considering the oral

evidence, since it alters the authority granted in the writing.

                                              IV.

       Therefore, the District Court correctly held that the trial court erred as a matter of

law by giving legal effect to a contemporaneous oral agreement significantly expanding

the scope of the agent’s authority which was otherwise expressly defined in a writing.

For the foregoing reasons, we will affirm.
