OPEN AND OBVIOUS DOCTRINE CANNOT SHIELD A LAND POSSESSOR WHEN THE POSSESSOR SHOULD HAVE ANTICIPATED INVITEE WOULD STILL ENCOUNTER THE DANGER
Court of Appeals of Utah: In October 2015, Utah company, MX, “began internal discussions about hosting a major corporate conference” with plans to invite both current and prospective clients. The next month, MX’s Events Manager (a twenty-four year old who had only been hired a few months prior) and the Event Coordinator “were tasked with the assignment of negotiating a prospective contract with Stein” and “participated in a site visit” to tour Stein’s facilities as a potential site for the event. After more correspondence with Stein, the Events Coordinator expressed interest in the venue but informed Stein she needed to get approval from MX’s new CMO “before moving forward.” Stein then informed the Events Coordinator other groups had also indicated interest for the venue on the same days, and they would need “commitment from MX in order to hold the rooms open.” On New Year’s Eve, Stein contacted the Events Manager “alerting her that another group had submitted a proposal that conflicted with MX’s proposed dates and asking to ‘confirm everything and finalize the contract.’” In an effort not to lose the dates, the Events Manager signed the contracts that same day, without alerting upper management. The contract required two $2,500 deposits and an additional $75,000 deposit due at a later time. The Events Manager paid the $2,500 deposit on January 5, 2016 using a company credit card. None of upper management knew the Events Manager had entered in the contract and believed the $2,500 deposit was to hold the dates. Eventually the CFO and CMO learned of the contract and “attempted to negotiate a resolution with Stein, explaining in an email that, in his view the contracts had not been approved per corporate policy” and that the Events Manager was “not authorized to sign on behalf of or legally bind MX.” Stein refused to negotiate and filed suit against MX for “breach of contract, seeking $350,660 in liquidated damages.” Both parties then filed motions for summary judgment, with Stein asserting the Events Manager “either had authority to sign the contracts or, alternatively, that MX ratified the contracts after execution.” The district court granted Stein’s motion after determining the Events Manager “had authority to sign the contracts and that, even if she did not, her actions were ratified by MX upper management.” The appeals court found that because MX’s company policy required “any payment over $20,000 had to be run through company software and approved by CFO” and “CFO unequivocally testified that Events Manager did not have authority to sign,” it is disputed whether the Events Manager did have express authority to bind MX to the contract. The appeals court further determined, that despite the fact the Events Manager had entered into a similar contract for MX previously, it was “not enough to establish the reasonableness of Events Manager’s belief as a matter of law” that she had implied actual authority, noting they did not know enough about the previous contract and that “she was aware of the prevailing company policy” that she needed approval to enter into the contract. The case was remanded back to the district court for further proceedings.
Stein Eriksen Lodge Owners Ass’n v. Mx Techs., 2022 UT App 30 (March 10, 2022)