## Facts

- Airline Support, Inc., an Alaska corporation providing airport support services, held an unsecured bankruptcy claim against Northwest Airlines arising from pre-petition invoices.
- ASM Capital II, L.P., a claim-purchasing firm, sent a form offer letter to Airline Support’s Anchorage office addressed to “A/R – Credit Manager,” proposing to buy the claim at a discount.
- Airline Support forwarded the unopened offer to Katie Land, a remote accounting manager/bookkeeper working from Georgia.
- Land executed ASM’s “Assignment of Claim Agreement” on Airline Support letterhead, signed with her name and “Acct. Mng.,” and returned it to ASM with extensive invoice documentation; the agreement included a representation that the signatory had authority to bind the principal.
- ASM paid Airline Support the agreed discounted purchase price and filed a proof of claim in the bankruptcy case as assignee.
- The bankruptcy court issued notice of the claim transfer and a deadline to object; Airline Support did not object by the deadline and later sought to challenge the transfer, unsuccessfully.
- Airline Support then sued ASM in Alaska superior court to invalidate the assignment, asserting Land lacked authority; the superior court granted summary judgment to ASM based on apparent authority.
- Airline Support appealed; ASM cross-appealed on related issues including fees.

## Issues

1. Whether summary judgment was proper on the ground that Land had apparent authority, as a matter of law, to bind Airline Support to the assignment of its bankruptcy claim.
2. Whether genuine issues of material fact existed regarding Airline Support’s manifestations to ASM and the reasonableness of ASM’s reliance.

## Decision

- The Alaska Supreme Court reversed the superior court’s summary judgment for ASM and remanded for further proceedings.
- The court held the record permitted competing reasonable inferences on apparent authority, creating genuine issues of material fact.
- The court accepted that ASM relied on the transaction, but concluded reasonableness of that reliance could not be resolved as a matter of law on this record.

## Legal Principles

- Apparent authority requires: (1) manifestations by the principal to the third party, (2) actual reliance by the third party, and (3) reasonable reliance under the circumstances.
- Apparent authority turns on the principal’s conduct, not the purported agent’s self-description or representations alone.
- When evidence supports competing inferences about the principal’s manifestations or the reasonableness of reliance, apparent authority is generally a fact question unsuitable for summary judgment.
- In assessing reasonable reliance, the nature of the transaction and the third party’s sophistication may affect what verification steps are expected.

## Conclusion

The court held that whether Airline Support’s conduct reasonably conveyed authority to its accounting employee to assign a substantial bankruptcy claim—and whether ASM reasonably relied on that appearance—presented factual disputes requiring a fact-finder, so summary judgment was improper.


Airline Support, Inc. v. ASM Capital II, L.P., 279 P.3d 599 (Alaska 2012)