810 F. Supp. 2d 168
D.D.C.2011Background
- A-J Marine sued Corfu Contractors and Ohio Casualty for breach of contract and payment bond respectively in D.D.C.; Corfu counterclaimed for breach and impleaded Peter Kalos (Brickwood’s owner) as third-party defendant.
- Court previously held Kalos lacked actual authority to bind Corfu to the A-J Marine subcontract and ordered expert discovery on apparent authority and estoppel; the current round resolves summary judgment on these theories.
- A-J Marine subcontracted Brickwood’s scope to Kalos (signed by Kalos on Corfu’s behalf) for WMATA scour countermeasure project; Brickwood subcontract prohibited assignment without written permission from Corfu.
- Corfu’s power-of-execution document and on-site management by Kalos raised questions about apparent authority and ratification; the record shows Kalos acted in Corfu’s name without explicit authorization for Brickwood’s work.
- Court finds A-J Marine breached the subcontract by failing to obtain required Virginia workers’ compensation insurance; grants Ohio Casualty’s limited liability and dismisses Kalos from the Third-Party Complaint; declines to decide on apparent authority and ratification due to disputed facts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Kalos have actual authority to contract for Corfu? | A-J Marine asserts Kalos acted with actual authority. | Corfu contends Kalos lacked actual authority; no express grant. | No, Kalos lacked actual authority. |
| Did Corfu have apparent authority to bind Corfu via Kalos? | A-J Marine relied on apparent authority evidenced by Corfu’s conduct. | Corfu argues absence of manifestations to create apparent authority. | Court declines to resolve on summary judgment; findings insufficient. |
| Is Corfu estopped from denying liability or did ratification occur? | Estoppel and ratification could bind Corfu to Kalos’s subcontract. | Needes credibility facts about Kollas’s involvement; ratification uncertain. | Summary judgment denied on ratification/estoppel; questions still fact-bound. |
| Did A-J Marine breach the subcontract by insurance noncompliance? | A-J Marine argues required insurance could be passed through or paid by Corfu. | Subcontract required A-J Marine to obtain and pay for insurance; pass-through not paid. | A-J Marine breached by not obtaining Virginia workers’ compensation insurance. |
| What is Ohio Casualty’s potential liability under the payment bond? | A-J Marine seeks full contract damages under the bond. | Bond covers labor/material per contract; damages limited to $10,000 mobilization/demobilization; lost profits not recoverable. | Ohio Casualty liable only for $10,000; full damages denied. |
Key Cases Cited
- Makins v. Dist. of Columbia, 861 A.2d 590 (D.C. 2004) (apparent authority is a question of fact; third party belief must be traceable to principal’s manifestations)
- Sigal Constr. Corp. v. Stanbury, 586 A.2d 1204 (D.C. 1991) (implied/actual authority concepts and agency principles)
- Livingston v. Fuhrman, 37 A.2d 747 (Mun. Ct. App. D.C. 1944) (example of apparent authority in commercial setting (limited applicability here))
- Tel-Ads, Inc. v. Trans-Lux Playhouse, Inc., 232 F. Supp. 198 (D.D.C. 1964) (apparent authority based on principal’s conduct to third party)
- St. James Mut. Homes v. Andrade, 951 A.2d 766 (D.C. 2008) (nominally discusses agency-related issues in a related context)
- Kuwait Airways Corp. v. Am. Sec. Bank, N.A., 890 F.2d 456 (D.C. Cir. 1989) (ratification and agency standards in corporate context)
- Columbia Hosp. for Women Found. v. Bank of Tokyo-Mitsubishi, 15 F. Supp. 2d 1 (D.D.C. 1998) (ratification/agency-related considerations in contract disputes)