                              In the
 United States Court of Appeals
                For the Seventh Circuit
                          ____________

Nos. 03-2994 & 03-3098
SARKES TARZIAN, INC.,
                            Plaintiff-Appellee-Cross-Appellant,

                                 v.

U.S. TRUST COMPANY OF FLORIDA
SAVINGS BANK,
                   Defendant-Appellant-Cross-Appellee.
                          ____________
            Appeals from the United States District Court
     for the Southern District of Indiana, Indianapolis Division.
              No. 99 C 165—Richard L. Young, Judge.
                          ____________
    ARGUED APRIL 8, 2004—DECIDED FEBRUARY 14, 2005
                      ____________


  Before KANNE, EVANS, and WILLIAMS, Circuit Judges.
  WILLIAMS, Circuit Judge. Sarkes Tarzian, Incorporated
(“STI”) brought this suit for breach of an oral contract for
the sale of non-publicly traded shares of STI stock against
U.S. Trust Company of Florida Savings Bank (“U.S. Trust”).
A jury found that U.S. Trust breached its contract entered
into by James Pressly, who was acting on U.S. Trust’s
behalf, and awarded STI $4 million in damages. U.S. Trust
appeals the district court’s denial of its motion for judgment
as a matter of law, or in the alternative a new trial, and STI
appeals a number of the district court’s rulings. For the
2                                   Nos. 03-2994 & 03-3098

reasons discussed, we find that STI presented no evidence
at trial showing that Mr. Pressly had actual authority to
bind U.S. Trust in a contract. We reverse the district court’s
denial of U.S. Trust’s motion for judgment as a matter of
law and remand for entry of judgment for U.S. Trust. We
also find that the jury instructions that the district court
gave to the jury were sufficient to apprise the jury correctly
of the applicable law of agency under New York law. As
such, the district court did not err by refusing to instruct
the jury on apparent authority. Because we find that there
was no contract between STI and U.S. Trust, we will not
address STI’s arguments.


                      I. Background
  STI is a closely-held Indiana corporation. STI, which owns
and operates four radio and two television stations, was
founded by Sarkes Tarzian and his wife, Mary Tarzian.
Mary Tarzian’s will stated that upon her death, her shares
in STI were to be transferred by her estate (the “Estate”) to
the Tarzian Family Trust (“the Family Trust”). Mary
Tarzian hired James Pressly, a Florida trust and estates
lawyer, to revise her will and trust documents, instructing
him to modify these documents so that within nine months
after her death, the Family Trust’s trustees could dis-
claim, or legally detach themselves from, the 301,119
shares of $4 par value STI stock that Ms. Tarzian owned.
One way for the trustees to disclaim themselves of the stock
was to sell it. After the trustees disclaimed this stock, the
shares would pass to the Mary Tarzian Charitable Founda-
tion. This action would enable the Estate to avoid paying
death taxes. U.S. Trust, the personal representative of the
Estate, and Patricia Tarzian (Mary Tarzian’s daughter)
were appointed trustees of the Family Trust. After Mary
Tarzian died on June 7, 1998, U.S. Trust retained Mr.
Pressly as counsel for the Estate. Through Mr. Pressly, U.S.
Nos. 03-2994 & 03-3098                                         3

Trust retained a broker to find a purchaser for the shares.1
  U.S. Trust had some difficulty finding a buyer for the
shares because Tom Tarzian, a beneficiary of the trust, was
unwilling to sell his controlling interest in STI.2 With the
nine-month deadline fast approaching and no willing buyer
for the shares identified, Mr. Pressly, on behalf of U.S.
Trust, held a meeting with representatives of STI on
January 25, 1999 in New York City. The purpose of the
meeting was to negotiate a sale of the shares. Present at
the meeting were Tom Tarzian and two STI attorneys,
Herbert Camp, and Valerie Carney; Mr. Pressly, as the
Estate’s legal counsel; and periodically by telephone,
lawyers who represented Patricia Tarzian, co-trustee of the
Family Trust and beneficiary of the Estate and Trust.
However, no principal of U.S. Trust attended this meeting.
   There is little dispute about what the parties said at the
meeting. Mr. Pressly started the meeting by telling the STI
representatives not to be concerned about the fact that no
one from U.S. Trust was present. Reading from his pre-
pared notes, Mr. Pressly stated, “U.S. Trust is standing by,
is fully briefed, and is prepared to sign a definitive purchase
and sale contract today if we can negotiate one.” STI
Attorney Carney’s notes also reflect that Mr. Pressly made
this statement. Mr. Pressly also stated during the meeting
that, “If there is a way to cut the Gordian knot, we’re here
at your invitation to decisively make a deal today.”
  U.S. Trust’s Chairman and CEO, Townbridge Callaway
III, and U.S. Trust Senior Vice President, Ann Cavanaugh,
testified that Mr. Pressly had authority to negotiate a
sale of the shares but did not have authority to enter into a



1
    The shares are not publicly traded and pay no dividends.
2
  Tom Tarzian has voting control of and elects STI’s Board of
Directors.
4                                    Nos. 03-2994 & 03-3098

contract on behalf of the Estate. After almost a day of
negotiation, Mr. Pressly proposed a sale price of $4 mil-
lion in cash and $3 million in the form of a promissory note.
Mr. Pressly stated, “I am authorized to make this offer.”
   Following some further negotiations, STI offered to
purchase the shares for $4 million cash and a $2 million
promissory note. The promissory note had a six-year term
at a 7% interest rate. Mr. Pressly conferred with Patricia
Tarzian’s counsel and then stated, “This is not what we had
hoped for and I can’t say we’re happy with it, but we’ll take
it.” Tom Tarzian asked Mr. Pressly if they had a deal. Mr.
Pressly replied, “[y]es, we have a deal.” After Mr. Pressly
made that statement, the parties shook hands.
  Mr. Pressly was then told that STI’s general counsel,
Valerie Carney, was marking up a sale agreement. Suppos-
edly, Ms. Carney was using as a template the contract for
an earlier sale of Patricia Tarzian’s STI shares to STI. Ms.
Carney faxed the document to Mr. Pressly that night. After
leaving the meeting and on his way to the airport, Mr.
Pressly received a message from Gray Communications,
Inc. offering to pay U.S. Trust $10 million in cash for the
shares. On January 28, 1999, U.S. Trust sold the shares to
Gray’s affiliate, Bull Run, for that price. That same day, Mr.
Pressly informed STI of the Bull Run transaction. On
February 2, 1999, STI wrote to U.S. Trust asserting that it
had a binding contract and demanded return of the shares.
  Ten days later, STI sued Bull Run and the Estate,
naming U.S. Trust as the Estate’s personal representative.3
STI claimed that the Estate breached an oral contract to
sell its shares to STI for $4 million in cash and a $2 million
promissory note. STI had two theories about how the oral


3
  Bull Run moved to dismiss for lack of personal jurisdiction.
Ultimately, STI filed a notice of dismissal without prejudice as
to Bull Run.
Nos. 03-2994 & 03-3098                                       5

contract was made: (1) that the parties had agreed to all
material terms and had agreed to negotiate a written
document in good faith (referred to under New York law as
a “Type I” agreement); or (2) that the parties had agreed to
certain important terms and had agreed to negotiate the
remaining terms in good faith (referred to under New York
law as a “Type II” agreement). STI sought specific perfor-
mance of the oral contract or damages resulting from the
breach.
  With motions for summary judgment on both Type I and
Type II agreements denied, the case went to trial. The jury
found that the Estate had entered into a binding Type I
agreement, and awarded STI $4 million in damages. This
amount represented the difference between the STI contract
price (total of $6 million) and that of Bull Run ($10 million).
Per the district court’s jury instructions, the jury made no
finding on the alleged Type II agreement.
  U.S. Trust renewed its motion for judgment as a matter
of law and, in the alternative, a new trial. The district judge
denied both motions and STI filed a motion to amend the
judgment, seeking specific performance and prejudgment
interest from the date U.S. Trust allegedly breached the
contract. The district court denied the request for specific
performance but granted STI prejudgment interest from
August 29, 2002—the date the district court found STI to
have been damaged by the breach—through February 3,
2003, the date of the jury’s verdict.4 U.S. Trust appeals the
judgment and related rulings. STI cross-appeals the district
court’s refusal to permit STI to recover benefit-of-the-
bargain damages and the district court’s order denying
specific performance. It also cross-appeals the district
court’s refusal to award prejudgment damages from the
date of the breach.


4
  August 29, 2002 is the date STI established an employee stock
plan.
6                                  Nos. 03-2994 & 03-3098

                       II. Analysis
  While the parties’ briefs present us with many issues,
we must decide as a threshold matter whether the dis-
trict court properly denied U.S. Trust’s motion for judgment
as a matter of law. U.S. Trust’s central argument in support
of its motion is that no binding contract of any type was
created between U.S. Trust and STI. U.S. Trust asserts that
Mr. Pressly, the attorney representing the U.S. Trust, did
not have the authority necessary to bind U.S. Trust in a
stock purchase and sale agreement. As a result, U.S. Trust
contends the matter should not have gone to the jury, and
the district court’s judgment should have been for the
Estate as a matter of law. Consequently, U.S. Trust argues
that STI can claim no damages for U.S. Trust’s sale of the
STI shares to Bull Run.
  We review de novo the district court’s denial of a mo-
tion for judgment as a matter of law pursuant to Rule 50 of
the Federal Rules of Civil Procedure. Harvey v. Office of
Banks and Real Estate, 377 F.3d 698, 707 (7th Cir. 2004);
Deimer v. Cincinnati Sub-Zero Prods., Inc., 58 F.3d 341,
343-44 (7th Cir. 1995). We examine all of the evidence in
the record to determine whether a reasonable juror could
have found in favor of the non-moving party, drawing
all reasonable inferences in the non-moving party’s favor,
and refraining from weighing the evidence or making
credibility determinations. Harvey, 377 F.3d at 707 (citing
Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133,
150 (2000)). We note that “the question is not whether
the jury believed the right people, but only whether it
was presented with a legally sufficient amount of evi-
dence from which it could reasonably derive its verdict.”
Zelinski v. Columbia 300, Inc., 335 F.3d 633, 638 (7th Cir.
2003) (internal citations omitted).
 Oral contracts for the sale of stock are enforceable
under New York law, N.Y. U.C.C. § 8-113(a) (providing, in
Nos. 03-2994 & 03-3098                                           7

pertinent part, “a contract or modification of a contract
for the sale or purchase of a security is enforceable whether
or not there is a writing signed or record authenticated by
a party against whom enforcement is sought, even if the
contract or modification is not capable of performance
within one year of its making.”) We therefore direct our
attention to the question of whether there was sufficient
evidence presented at trial to demonstrate that Mr. Pressly
had the authority to bind U.S. Trust in the oral contract
with STI.5 The party asserting that an attorney had
authority to enter into a contract on behalf of the attorney’s
client (in this case, STI) bears the burden of proving it.
Nash v. Y and T Distribs., 616 N.Y.S.2d 402, 403 (N.Y. App.
Div. 1994); Slavin v. Polyak, 470 N.Y.S.2d 38, 39-40 (N.Y.
App. Div. 1984). Without the authority for the agent to bind
its principal in a contract with a third party, or without the
principal’s subsequent ratification, the contract must be set
aside under New York law. Nash, 616 N.Y.S.2d at 403.
  A party’s mere retention of an attorney, and its assign-
ment to that attorney the responsibility to negotiate on
behalf of the client does not create authority in the attorney
to bind the principal in a contract. Id.; see also Ford
v. Unity Hosp., 299 N.E.2d 659, 664 (N.Y. 1973) (“An
agent’s power to bind his principal is coextensive with the
principal’s grant of authority.”) With this rule in mind, the
question before this court is what kind of authority is
sufficient under New York law? Is actual authority suffi-
cient, or does a party need actual and apparent authority?



5
  The parties do not dispute that we are to apply New York law
to their substantive claims. The district court did not decide
whether Florida or New York law should apply to the question of
Mr. Pressly’s authority. However, the district court noted that
the law of the two states on this subject is the same. We agree. We
therefore apply New York law.
8                                       Nos. 03-2994 & 03-3098

  The highest court of the state of New York, the New York
Court of Appeals, has explicitly recognized that “without a
grant of authority from the client, an attorney cannot
compromise or settle a claim.” Hallock v. State, 474 N.E.2d
1178, 1181 (N.Y. 1984). See also Nash, 616 N.Y.S.2d at 403
(“It is settled [New York] law that an attorney must be
specifically authorized to settle and compromise a claim.”).
While this language suggests that only actual authority will
do, as U.S. Trust contends,6 closer study reveals that
apparent authority can also suffice. See Hallock, 474 N.E.2d
at 1181-82 (finding that principal had cloaked attorney in
apparent authority and therefore was bound by a settle-
ment agreement into which attorney had entered client in
open court). See also Clark v. Bristol-Meyers Squibb and
Co., 761 N.Y.S.2d 640, 643 (N.Y. App. Div. 2003) (“A
settlement is considered binding, however, even where a
client is not present at the time it is entered, and where the
attorney does not have actual authority, if the court
concludes that counsel’s actions indicate ‘apparent author-
ity’ to act on his or her client’s behalf.”).
  A principal confers actual authority on his agent when he
objectively manifests to the agent consent to the agency.
Ojeni v. Lieber, 759 N.Y.S.2d 453, 454 (N.Y. App. Div.


6
  U.S. Trust cites Restatement (Third) of Law Governing Lawyers
§ 22(1) and comment (e) to that section to support its contention
that an attorney must have actual authority from the client to
bind the client in a significant contract. However, the parties have
not pointed us to, nor has our own research yielded any cases
demonstrating the New York Court of Appeals’s adoption of these
particular provisions. In addition, we have found no cases decided
by New York’s intermediate courts which would indicate that
these provisions would most likely be adopted by the New York
Court of Appeals. Therefore, we rely on the actual pronounce-
ments of the New York Court of Appeals on the law of its state on
this issue. These holdings are in such cases as Hallock, and other
New York cases which are consistent with Hallock.
Nos. 03-2994 & 03-3098                                     9

2003). As for apparent authority, it is created by “words
or conduct of the principal, communicated to a third
party, that give rise to the appearance and belief that the
agent possesses authority to enter into a transaction.”
Hallock, 474 N.E.2d at 1181. New York explicitly rejects the
idea that an agent can confer apparent authority on him or
herself. See id. “Rather, the existence of ‘apparent author-
ity’ depends upon a factual showing that the third party
relied upon the misrepresentation of the agent because of
some misleading conduct on the part of the principal—not
the agent.” Id. (quoting Ford, 299 N.E.2d at 664 and
Restatement (Second) of Agency § 27 (1958)). Furthermore,
we note that a third party may rely on an appearance of
authority in such circumstances “only to the extent that
such reliance is reasonable.” Id. Finally, the New York
Court of Appeals has held that “[o]ne who deals with an
agent does so at his peril, and must make the necessary
effort to discover the actual scope of authority.” Ford, 299
N.E.2d at 664. With these principles in mind, we turn to the
facts of this case to discern whether there was sufficient
evidence presented to support a finding that Mr. Pressly
had actual or apparent authority to bind U.S. Trust in a
contract with STI.


  A. Actual Authority
  Because there was no writing between U.S. Trust and Mr.
Pressly outlining the scope of Mr. Pressly’s authority, only
testimonial evidence was available to determine whether
Mr. Pressly had actual authority. In its appellate brief, STI
highlights the testimony of U.S. Trust Chief Executive
Officer Callaway as the strongest affirmative evidence from
which the jury could infer actual authority. When asked,
“was Mr. Pressly authorized to go to New York to negotiate
the deal?”, Callaway responded, “He was authorized to go
to New York to negotiate a deal, yes.”
10                                  Nos. 03-2994 & 03-3098

  Mr. Pressly told STI at the beginning of the January 25,
1999 meeting, “U.S. Trust is standing by, is fully briefed,
and is prepared to sign a definitive purchase and sale
contract today if we can negotiate one.” At the end of the
meeting, Mr. Pressly said, “This is not what we had hoped
for and I can’t say we’re happy with it, but we’ll take it.”
STI also notes that Mr. Pressly stated at one point dur-
ing the negotiations, “I am authorized to make this offer.”
In addition, Mr. Pressly admitted on cross-examination that
at the New York meeting, he did not state that he was not
authorized to bind U.S. Trust.
  U.S. Trust directs our attention to the following evi-
dence in the record as supporting its contention that Mr.
Pressly did not have actual authority. First, it is undisputed
that no one from STI had any communication with U.S.
Trust concerning that scope of Mr. Pressly’s authority other
than with Mr. Pressly himself. Second, U.S. Trust Senior
Vice President Cavanaugh testified that Mr. Pressly was
authorized “to negotiate a possible deal,” but his authority
was limited. Specifically, Mr. Pressly “was not authorized
to actually execute a contract.” U.S. Trust CEO Callaway
testified to the specific instructions he gave Mr. Pressly: he
was
     to go out and try to find a buyer for the Sarkes
     Tarzian stock and he was given the authority to
     negotiate terms, price, and that sort of thing, with
     the people that he actually found, if any, and was
     specifically instructed, and there was no argument
     at all, that he would come back to us with those
     terms, and present them to us for review, analysis,
     and a final decision as to whether they were some-
     thing that we should move forward with.
  Further, Mr. Callaway testified that Mr. Pressly “had
a fairly wide authority to go out and basically negotiate
on terms, and anything else that needed to be considered,
Nos. 03-2994 & 03-3098                                     11

but with the definite caveat that whatever he had negoti-
ated came back to us for final determination.” It is also
undisputed that Mr. Pressly only communicated with U.S.
Trust on one occasion about the negotiations. Mr. Pressly
communicated with U.S. Trust after the negotiation session
concluded. In particular, Mr. Pressly called U.S. Trust CEO
Callaway, who was standing by all day long, and stated that
there would not be an agreement signed that day. Further-
more, Mr. Pressly told Mr. Callaway that he was released
from standing by.
  In addition, U.S. Trust argues that the signature blocks
on the unsigned written agreements STI prepared after the
negotiation meeting were for U.S. Trust’s signature, not
that of Mr. Pressly. This assertion is consistent with the
other record evidence indicating that only U.S. Trust signed
agreements on behalf of the Mary Tarzian estate.
  U.S. Trust wanted Mr. Pressly to testify concerning the
scope of his authority to corroborate Mr. Callaway’s testi-
mony. However, the district court prohibited Mr. Pressly
from testifying on this issue and U.S. Trust challenges this
evidentiary decision on appeal. We review a district court’s
decision to exclude evidence for abuse of discretion. Mason
v. S. Ill. Univ. at Carbondale, 233 F.3d 1036, 1042 (7th Cir.
2000); Old Republic Ins. Co. v. Employers Reinsurance
Corp., 144 F.3d 1077, 1082 (7th Cir. 1998).
  Apparently concerned about gamesmanship, the dis-
trict court did not permit Mr. Pressly to testify as to
whether he had actual authority to bind his principal in a
contract with STI. The district court made this ruling
because Mr. Pressly refused to answer STI’s question on
this point in his deposition. Mr. Pressly claimed attorney-
client privilege. The day after Mr. Pressly’s deposition, U.S.
Trust implicitly waived its attorney-client privilege when
Ms. Cavanaugh responded fully to the same questions STI
asked Mr. Pressly the day before. The court regarded Mr.
12                                     Nos. 03-2994 & 03-3098

Pressly’s desire to change his position taken at his deposi-
tion as “not playing right.”
  Even if the district court did abuse its discretion by
excluding the testimony, we are not convinced that this
alleged error warranted a new trial. See Old Republic, 144
F.3d at 1082 (interpreting Federal Rule of Civil Pro-
cedure 61 as permitting a new trial only “when a significant
chance exists that [evidentiary errors] affected the outcome
of the trial.”). Mr. Pressly’s putative testimony was already
in evidence through the testimony of Mr. Callaway and Ms.
Cavanaugh. U.S. Trust has not demonstrated how the
admission of Mr. Pressly’s cumulative testimony would
have changed the outcome of the trial. See Mason, 233 F.3d
at 1047-48 (“It is unlikely that excluding such cumulative
evidence would have caused the jury to find differently,”
citing Palmquist v. Selvik, 111 F.3d 1332, 1341 (7th Cir.
1997)).7
   In any case, whether it was reversible error for the
district court to deny Mr. Pressly’s testimony on the scope of
his authority does not matter here. This is because our
review of the record demonstrates that there was no
evidence presented at trial showing that Mr. Pressly had
actual authority to bind U.S. Trust in a contract. Mr.
Callaway and Ms. Cavanaugh’s testimony—that they
allowed Mr. Pressly to negotiate a deal but not to enter into
it without first consulting with U.S. Trust and getting its
approval—stood unrebutted. In other words, STI did not


7
   As for STI’s statement during its closing argument that there
was no corroboration for Mr. Callaway’s testimony, U.S. Trust
quotes a footnote in United States v. Swanquist, 161 F.3d 1064,
1074 n.2 (7th Cir. 1998) to argue that it was improper. However,
in Swanquist we ultimately held it was not reversible error for the
trial court to allow admittedly improper statements about the
significance of absent rebuttal testimony. Therefore, Swanquist
does not help U.S. Trust on this matter.
Nos. 03-2994 & 03-3098                                     13

discharge its burden of showing that Mr. Pressly had actual
authority. See Gucciardo v. Norman, 527 N.Y.S.2d 62, 64
(N.Y. App. Div. 1988); Slavin, 470 N.Y.S.2d at 39-40 (“A
party who relies on the authority of an attorney to compro-
mise an action in his client’s absence deals with such an
attorney at his own peril, and if the settlement is thereafter
challenged, he has the burden of establishing that the
attorney’s actions were, in fact, authorized.”). Nor did STI
discharge its duty under New York law to ascertain the
scope of Mr. Pressly’s authority. See Ford, 299 N.E.2d at
664 (“One who deals with an agent . . . must make the
necessary effort to discover the actual scope of authority.”).
As U.S. Trust argues, Mr. Pressly told the STI representa-
tives at the negotiation meeting that U.S. Trust was
“standing by” all day “to sign” an agreement, if the parties
could reach one. STI did not reach out to or call U.S. Trust’s
principals. Doing nothing cannot be construed as making
“the necessary effort to discover the actual scope of [the
agent’s] authority.” Id.
  STI cites Carter v. Chicago Police Officers, 165 F.3d 1071
(7th Cir. 1998) for support. In that case, we maintained that
“Given the inconsistencies among the evidence and testi-
mony presented to the jury, it was certainly within
the province of the jury ‘to parse the facts, to weigh the
credibility of each witness and to disregard the testimony’
of witnesses it found to be less credible or not worthy of
credence.” Id. at 1081 (internal citations omitted). In other
words, STI suggests that the jury could have disbelieved
Mr. Callaway and Ms. Cavanaugh and set aside their
testimony. However, Carter, as the text quoted above
indicates, involved a situation in which the parties had
two distinct and inconsistent stories about the events that
triggered the lawsuit. Here, even viewed in the light
most favorable to STI, the evidence STI points to is not
inconsistent with Mr. Callaway and Ms. Cavanaugh’s
testimony about the scope of Mr. Pressly’s authority,
14                                   Nos. 03-2994 & 03-3098

namely that Mr. Pressly was authorized to negotiate a
deal but not to sign a contract or otherwise bind U.S.
Trust without consulting it first.
  On these facts, Carter is not helpful to STI. However,
United States v. 2.4 Acres of Land, More or Less, in Lake
County, Ill., 138 F.2d 295, 297 (7th Cir. 1943) is instructive.
2.4 Acres holds that, “neither has the jury the right arbi-
trarily to ignore or discredit the testimony of unimpeached
witnesses so far as they testify to facts.” Id.
  With no showing of actual authority, we turn to the
question of whether there was evidence demonstrating
Mr. Pressly had apparent authority to bind U.S. Trust
under New York law.


  B. Apparent Authority
   The district court refused to instruct the jury on apparent
authority, because it concluded that there were insufficient
facts to support the claim under New York law. STI appeals
this ruling. Our review of a district court’s rejection of a
proposed jury instruction is limited. We first ascertain
whether the instructions as a whole were sufficient to
apprise the jury correctly of the applicable law and, if not,
whether the instructions so misguided the jury that a
litigant is prejudiced, warranting reversal. Maltby v.
Winston, 36 F.3d 548, 560 (7th Cir. 1994).
  We agree with the district court’s decision not to sub-
mit an apparent authority instruction to the jury. We recall
that under New York law, apparent authority is created by
“words or conduct of the principal, communicated to a third
party, that give rise to the appearance and belief that the
agent possesses authority to enter into a transaction.”
Hallock, 474 N.E.2d at 1181. As we stated above, New York
explicitly rejects the idea that an agent can confer apparent
authority on him or herself. Id. “Rather, the existence of
‘apparent authority’ depends upon a factual showing that
Nos. 03-2994 & 03-3098                                      15

the third party relied upon the misrepresentation of the
agent because of some misleading conduct on the part of the
principal—not the agent.” Id. (quoting Ford, 299 N.E.2d at
664 and Restatement (Second) of Agency § 27 (1958)). See
also Nash, 616 N.Y.S.2d at 403; Melstein v. Schmid Labs.,
Inc., 497 N.Y.S.2d 482, 483 (N.Y. App. Div. 1986). The
district court was correct in concluding that STI did not
produce any evidence demonstrating that STI had any
direct interaction with U.S. Trust principals before or
during the negotiations for the sale of the shares. Nor did
STI observe any actions by U.S. Trust that would indicate
that U.S. Trust had cloaked Mr. Pressly in apparent
authority. We conclude, therefore, the district court commit-
ted no error by refusing to instruct the jury on apparent
authority.
  STI seeks to shore up support for its apparent authority
claim by citing the Restatement (Second) of Agency and a
number of cases. However, these citations provide no
traction for STI. STI points to two sections of the Restate-
ment (Second) of Agency. First, STI contends that section 8,
comment (b) aids its case. That comment provides that “The
manifestation of the principal may be made directly to a
third person, or may be made to the community, by signs,
by advertising, by authorizing the agent to state that he is
authorized, or by continuously employing the agent.”
  In addition, STI cites section 27, comment (a) of the
Restatement (Second) of Agency. This provision states
that apparent authority may arise “from authorized
statements of the agent” that come to the third party if
the principal is responsible for the information. Specifically,
STI notes Mr. Pressly’s statements “I am authorized to
make this offer” and “we’ll take it” as sufficient to cloak Mr.
Pressly with apparent authority. STI also cites National
Labor Relations Board v. G & T Terminal Packaging Co.,
Inc., 246 F.3d 103, 115 (2d Cir. 2001) to support its conten-
tion that apparent authority arose from Mr. Pressly’s
16                                 Nos. 03-2994 & 03-3098

statements. However, we find that G & T Terminal does not
apply in this situation. In G & T Terminal, the court found
there was substantial evidence to support the Administra-
tive Law Judge’s conclusion that the attorney had apparent
authority to bind the client. In G & T Terminal, the client
company’s president had attended an earlier negotiating
session at which time he agreed to all of the contract terms
except an arbitration clause. The attorney stated at the
meeting, “she was there to enter into an agreement.” Id. By
contrast, in this case, U.S. Trust’s CEO Callaway did not
speak to Mr. Pressly the entire day. Nor was he was ever
present at the negotiation meeting. In essence, there were
no actions or words of CEO Callaway which STI could con-
strue as cloaking Mr. Pressly with authority to bind U.S.
Trust. Further, unlike the president in G & T Terminal, Mr.
Callaway was unaware of any of the terms Mr. Pressly had
discussed with STI. Finally, unlike the attorney in G & T
Terminal who said she (as opposed to her client) was there
to “enter into an agreement,” Mr. Pressly made no such
statement. Rather, Mr. Pressly stated only that he was
there to negotiate an agreement which U.S. Trust, the
principal, was standing by to sign.
  In sum, we find STI’s arguments on apparent authority
unconvincing. The district court did not err by refusing
to instruct the jury on this issue.


                    III. Conclusion
  We find that Mr. Pressly lacked authority to enter U.S.
Trust in a binding stock sale and purchase agreement
with STI as a matter of New York law and consequently
conclude that no contract was ever created. The case should
not have gone to the jury. As the existence of the contract
is a threshold matter in this case, we need not analyze the
parties’ remaining arguments. The case is REVERSED and
REMANDED with instructions to enter judgment for U.S.
Trust.
Nos. 03-2994 & 03-3098                                17

A true Copy:
      Teste:

                      ________________________________
                      Clerk of the United States Court of
                        Appeals for the Seventh Circuit




                 USCA-02-C-0072—2-14-05
