Post-Execution Knowledge Cannot Create a Mayor’s Apparent Authority to Bind an Oklahoma Statutory Town

Case: Gresham v. Town of Depew, Oklahoma (No. 24-5021)
Court: United States Court of Appeals for the Tenth Circuit
Date: March 10, 2025
Disposition: Summary judgment for the Town affirmed (Order and Judgment; nonprecedential except for law of the case, res judicata, and collateral estoppel)

I. Introduction

Kevin Gresham was hired by the Town of Depew, Oklahoma (a statutory town governed by a five-member Board of Trustees) as Chief of Police. The Board approved certain terms at a July 1, 2019 meeting: compensation of $42,000/year and sending him to “chief’s school.” Mr. Gresham later drafted a more detailed two-year written “Employment Contract” containing additional benefits and, critically, a buy-out clause requiring the Town to pay half of the remaining contract salary if it terminated him for reasons other than gross misconduct. The mayor signed the written contract with Mr. Gresham on July 23, 2019, but the Board never voted to approve it.

After health-related work restrictions arose and the Board became aware of the contract, the Board terminated Mr. Gresham on October 21, 2019 and did not pay the buy-out. Mr. Gresham sued for (1) breach of contract and (2) procedural due process under the Fourteenth Amendment, alleging the contract created a property interest in continued employment and he was denied a meaningful opportunity to be heard.

The key issues on appeal were straightforward but consequential for municipal contracting:

• Whether the mayor had apparent authority to bind the Town to the written Employment Contract without Board approval.
• Whether the Board ratified the Employment Contract through conduct or silence after learning of it.
• Whether an invalid contract can supply the “property interest” needed for a procedural due process claim.

II. Summary of the Opinion

The Tenth Circuit affirmed summary judgment for the Town. The court held:

• The mayor lacked actual authority under 11 Okla. Stat. § 12-105 to execute the Employment Contract on behalf of the statutory town without authorization; Mr. Gresham conceded this.
• Mr. Gresham failed as a matter of law to show the mayor had apparent authority because the evidence he relied on concerned events after the July 23 signing, and Oklahoma apparent authority requires a principal’s manifestation supporting a reasonable belief of authority at the time of the transaction.
• The Board did not ratify the Employment Contract: the Town’s payment of salary and acceptance of services were equally consistent with the Board-approved July 1 terms, and the record did not show acceptance of benefits with full knowledge of the material contract facts; nor did the Board’s silence for only two to three months constitute “unreasonable time” sufficient to presume ratification.
• The due process claim failed because the asserted property interest depended on an invalid contract, and a procedural due process claim requires interference with a cognizable liberty or property interest.

III. Analysis

A. Precedents Cited

1. Summary judgment framework and record consequences

• Universal Underwriters Ins. Co. v. Winton (de novo review; Rule 56 standard) and Zahourek Sys., Inc. v. Balanced Body Univ., LLC (view evidence favorably to nonmovant) set the federal appellate lens.
• Adamson v. Multi Cmty. Diversified Servs., Inc. and Adler v. Wal-Mart Stores, Inc. supply the principle that a movant without trial burden can prevail by identifying a lack of evidence on an essential element.
• Butler v. Daimler Trucks N. Am., LLC and Rule 56(e)(2) are applied to deem many of the Town’s proposed facts admitted because Mr. Gresham largely did not controvert them.
• Deherrera v. Decker Truck Line, Inc. (quoting Weigel v. Broad) reiterates the standard of viewing facts in the nonmovant’s favor.

2. Oklahoma contract formation and municipal authority

• Digital Design Grp., Inc. v. Info. Builders, Inc. provides Oklahoma’s elements of breach of contract; the dispute centered on “formation.”
• 15 Okla. Stat. § 2(1) (“capable of contracting”) is used to frame capacity/authority as part of formation.
• The court emphasized statutory limits on a mayor’s powers under 11 Okla. Stat. § 12-105, reinforced by an Oklahoma Attorney General opinion (quoted in the district court order) that a mayor in a statutory-town board structure has only the powers listed in § 12-105 absent an ordinance expanding them.

3. Apparent authority: principal’s manifestation, timing, and reasonableness

• Stephens v. Yamaha Motor Co., Ltd., Japan supplies core apparent-authority doctrine: it arises from a principal’s manifestation to a third party, and authority exists only to the extent the belief is reasonable (quoting Restatement (Second) of Agency § 8 cmt. c).
• Traders Ins. Co. v. Johnson is cited for the rule that apparent power is determined by acts of the principal, not acts of the agent.
• Franco v. State ex rel. Bd. of Regents of the Univ. of Okla. is used both to narrow the inquiry (apparent authority or ratification where actual authority is absent) and to treat agency scope as a legal question when facts are undisputed and no conflicting inferences can be drawn (quoting Keel v. Titan Constr. Corp.).
• Keel v. Titan Constr. Corp. and Thornton v. Ford Motor Co. are cited for the burden on the party alleging agency/apparent authority.
• The opinion acknowledges a doctrinal “tension” in Oklahoma cases over whether detrimental reliance is an element of apparent authority, contrasting Sparks Bros. Drilling Co. v. Tex. Moran Expl. Co. and Traders Ins. Co. v. Johnson with Sanders v. Cole, but treats the tension as immaterial because the dispositive defect was the absence of a timely principal manifestation. It also cites Diamond Sevens, L.L.C. v. Intelligent Home Automation, Inc. for the proposition that apparent authority cannot be established by the putative agent’s statements alone.

4. Public-law overlay: contractors must know officials’ limited authority

• Nichols v. Jackson supplies the blunt rule: persons dealing with public officers are bound to know the extent of their authority.
• Nottingham v. City of Yukon (quoting Indep. Sch. Dist. No. 1, McIntosh Cnty. v. Howard) reinforces that anyone contracting with a municipality has notice of limitations on municipal or agent powers and proceeds at their peril.

5. Ratification: benefits + knowledge + competence; silence over “unreasonable time”

• Kincaid v. Black Angus Motel, Inc. supplies the three-part ratification test: acceptance of benefits, full knowledge of facts, and competence/capacity at the time.
• G.E. Cap. Info. Tech. Sols., Inc. v. Okla. City Pub. Schs. applies that test in the municipal context, supporting the framework used against Mr. Gresham.
• Riddle v. Ellis is cited for the burden on the party relying on ratification and for the idea that acceptance of payments consistent with a contract, without more, may not establish ratification.
• Williams v. TAMKO Bldg. Prods., Inc. supports rejecting ratification where principals are not shown to have been aware of the particular disputed term (there, an arbitration clause; here, the additional employment terms and buy-out).
• Sundance Energy Okla., LLC v. Dan D Drilling Corp. supports the point that conduct consistent with both the existence and absence of an express contract does not prove ratification.
• To address the “silence equals ratification” theory, the court relied on Alexander v. Phillips Petroleum Co. for the rule that silence/acquiescence for an unreasonable time with knowledge can support a presumption of ratification.
• Mr. Gresham’s cited authority, Minneapolis Threshing Mach. Co. v. Humphrey, was distinguished because it involved two years of silence plus conduct consistent only with ratification; by contrast, two to three months was not “unreasonable” as a matter of law on this record.
• The opinion noted but did not need to resolve the district court’s additional rationale about payment of salary; it cited Stewart v. Bd. of Educ., Sch. Dist. No. 2, Stephens Cnty. as a potentially complicating comparator but deemed it unnecessary given the broader failure of proof.

6. Forfeiture and judicial estoppel

• Richison v. Ernest Grp., Inc. is applied to reject an unpreserved argument (and the absence of plain-error framing).
• First W. Cap. Mgmt. Co. v. Malamed and Leathers v. Leathers are invoked for waiver through inadequate briefing/lack of authority.
• On the merits of judicial estoppel, the court used Stender v. Archstone-Smith Operating Tr. (quoting New Hampshire v. Maine) and the familiar factors as articulated in Malamed (quoting Eastman v. Union Pac. R.R. Co.).
• United States v. Sup. Ct. of N.M. supports the “high bar” for “clearly inconsistent” positions.
• Clinton v. Sec. Benefit Life Ins. Co. explains why a motion-to-dismiss posture does not amount to conceding contract validity: defendants may assume pleaded facts are true for Rule 12(b)(6) purposes.
• Lehman Bros. Holdings, Inc. v. Hirota is cited as a similar “not clearly inconsistent” scenario.

7. Procedural due process: the property-interest gate

• Steffey v. Orman supplies the requirement that procedural due process claims need a constitutionally cognizable liberty or property interest. With the Employment Contract invalid, the asserted property interest collapsed.

B. Legal Reasoning

1. The controlling insight on apparent authority: timing plus principal manifestation

The court’s analytical center of gravity is temporal: apparent authority must be assessed at the moment the third party enters the transaction. Mr. Gresham’s proof largely consisted of evidence that the Board learned of the contract weeks or months later (September 11 and September 17 discussions; Board awareness before the October 21 termination). Even crediting those facts, they did not show that—on July 23—there was a principal-to-third-party manifestation making it reasonable for Mr. Gresham to believe the mayor had authority.

The court reinforced that this is not a technicality: apparent authority is not about the agent’s representations (e.g., the mayor allegedly saying “the Town” approved it), but about what the principal (here, the Board) did to “cloak” the agent with authority. And because this involved a municipality, Oklahoma law charges those dealing with public officers with knowledge of statutory limitations, making “reasonableness” harder to show.

2. Ratification: the board’s conduct was equivocal, and silence was not long enough

Ratification required proof that the Board accepted the benefits of the specific Employment Contract with full knowledge of its material terms. The Town paid Mr. Gresham and accepted his work, but that conduct was fully consistent with the Board’s July 1 oral agreement (salary and job start) irrespective of the later-added two-year term and buy-out clause. Where the evidence is equally consistent with “no ratification,” the party bearing the burden (Mr. Gresham) cannot reach a jury.

Mr. Gresham also tried a “silence” pathway to ratification, relying on Minneapolis Threshing Mach. Co. v. Humphrey. The Tenth Circuit treated the required “unreasonable time” as the critical missing ingredient: at most, two to three months elapsed, far from the two years in Humphrey. Without stronger confirming conduct, the Board’s limited delay did not create a presumption of ratification.

3. The due process claim rose and fell with contract validity

Mr. Gresham’s asserted property interest was the Employment Contract’s limits on termination. Once the court held the contract invalid (no authority; no ratification), the due process claim failed at the threshold because there was no cognizable property interest to trigger procedural protections. The panel emphasized that Mr. Gresham did not contest this dependency.

C. Impact

• Municipal contracting discipline (especially employment): The decision underscores that a statutory-town board’s approval is central. Employees negotiating for fixed terms, severance/buy-outs, or termination protections must ensure the governing body—not merely the mayor—authorizes the agreement through the legally required action (often a vote, resolution, or ordinance).
• Apparent authority narrowed by timing: The opinion supplies a practical evidentiary rule: post-signing awareness, discussions, or even disputes about a contract do not create apparent authority retroactively. Plaintiffs must marshal evidence of principal manifestations pre- or contemporaneous with signing.
• Ratification requires “contract-specific” proof: Payment of salary and acceptance of work may not show ratification when those benefits match an undisputed baseline arrangement. Future plaintiffs will need evidence showing knowledge and adoption of the disputed terms (here, the two-year term and buy-out clause), not merely the employment relationship.
• Procedural due process in public employment: The decision reiterates that due process claims premised on contractual job security depend on a valid enforceable source of entitlement. Where the contract fails on municipal-authority grounds, the constitutional claim may fail at the gate.
• Persuasive, not binding: Because this is a nonprecedential “Order and Judgment,” its formal reach is limited; nonetheless, its reasoning will likely be cited in Oklahoma municipal contracting disputes within the Tenth Circuit for its tight synthesis of Oklahoma agency/ratification doctrines and its timing-based analysis.

IV. Complex Concepts Simplified

• Actual authority: The agent (mayor) is legally empowered by statute, ordinance, or the principal’s express grant to make the contract. Here, the mayor lacked it under 11 Okla. Stat. § 12-105.
• Apparent authority: Even without actual authority, a contract can bind a principal if the principal’s own conduct/communications reasonably lead the third party to believe the agent has authority. Crucially, this must exist when the contract is signed; later events cannot retroactively create it.
• Ratification: A principal can adopt an unauthorized contract later, but only if it accepts the contract’s benefits with full knowledge of the material facts (and with capacity to contract). Silence can sometimes imply ratification, but usually only after an “unreasonable time” and with confirmatory conduct.
• Summary judgment: The court can decide as a matter of law when there is no genuine dispute of material fact. Here, even accepting Mr. Gresham’s version of key events, the evidence did not meet the legal requirements for apparent authority or ratification.
• Procedural due process property interest: A public employee must show a legitimate entitlement (often from statute, ordinance, or valid contract) to continued employment. Without a valid source of entitlement, the Constitution does not require pretermination procedures for that claimed interest.

V. Conclusion

Gresham v. Town of Depew, Oklahoma is a cautionary municipal contracting decision: in an Oklahoma statutory town, a mayor’s signature on an employment contract is not enough absent legally effective Board authorization, and neither later Board awareness nor short-term silence will retroactively supply apparent authority or constitute ratification. Because the Employment Contract was invalid, Mr. Gresham’s breach-of-contract claim failed at formation, and his Fourteenth Amendment procedural due process claim failed for lack of a cognizable property interest. The opinion’s most enduring takeaway is its timing rule for apparent authority: the principal’s manifestation must make the third party’s belief reasonable at the moment of contracting—post-execution developments are too late.