Opinion
CIVIL ACTION NO. 02-5366
November 6, 2003
MEMORANDUM AND ORDER
Presently before the Court is Plaintiff Gennaro Anthony Spignesi's Motion For Summary Judgment (Doc. No. 14). For the following reasons, Plaintiff's Motion will be denied.
Background
Plaintiff Gennaro Anthony Spignesi ("Plaintiff"), resigned from his job and filed a complaint against his former employer, Defendant Warner-Jenkinson d/b/a Sensient Technichal Colors ("STC"), alleging breach of contract, violation of the Wage Payment and Collection Law, 43 PA. CONS. STAT. § 260.1, et seq. (the "WPCL"), and seeking specific performance. STC removed the action to this Court based upon diversity. STC also brought a third-party complaint against its former president, Third-Party Defendant Barry D. Dobinsky, for indemnification. STC contends that Dobinsky is liable to it for negotiating and signing an employment contract (the "Agreement") with Plaintiff on behalf of STC that included unauthorized provisions.
The third-party complaint includes claims for breach of contract, breach of fiduciary duty, breach of duty of loyalty, negligence, and fraud.
All of Plaintiff's claims against STC depend on the enforceability of the Agreement. Plaintiff contends that the Agreement is binding on STC because Dobinsky had actual and/or apparent authority to enter into the Agreement. Plaintiff also argues that STC should be estopped from denying Dobinksy's authority to enter into the Agreement because STC received and retained benefits from the Agreement.
Legal Standard
We apply the familiar standard applicable to the consideration of a motion for summary judgement. Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. Civ. P. 56(c). In considering a motion for summary judgment, "a court does not resolve factual disputes or make credibility determinations, and must view facts and inferences in the light most favorable to the party opposing the motion." Siegel Transfer, Inc. v. Carrier Express, Inc., 54 F.3d 1125, 1127 (3d Cir. 1995). The moving party bears the burden of proving that no genuine issue of material fact is in dispute. Adickes v. S. H. Kress Co., 398 U.S. 144, 157 (1970). Once the moving party has carried its initial burden, the non-moving party "may not rest upon the mere allegations or denials of his pleading, but his response . . . must set forth specific facts showing that there is a genuine issue for trial." FED. R. Civ. P. 56(e).
Discussion
I. Actual and/or Apparent Authority
Plaintiff contends that Dobinsky had actual and/or apparent authority to enter into the Agreement on behalf of STC. We find that there are genuine issues of material fact that preclude us from granting Plaintiff's Motion. For instance, Plaintiff testified at his deposition that Dobinsky needed the approval of John Mudd, STC's president, in order to enter into the Agreement. (Spignesi Dep., Def.'s Opp. Ex. F at 81.) Mudd swore that he did not recall giving Dobinsky authority to enter into the Agreement, and that he would have recalled giving such authority given the unusual provisions in the Agreement. (Mudd Aff., Def. Opp. Ex. K ¶¶ 5-6.) Thus, there is a genuine issue of material fact as to whether Dobinsky had actual authority to enter into the Agreement.
There is also a genuine issue of material fact as to whether Dobinsky had apparent authority to enter into the Agreement. Plaintiff understood that Dobinsky needed the approval of Mudd to enter into the Agreement. Even if Dobinsky told Plaintiff that Mudd had approved the Agreement as Plaintiff claims (Spignesi Dep. at 83), "[a]n agent cannot, simply by his own words, invest himself with apparent authority." Jennings v. Pittsburgh Mercantile Co., 202 A.2d 51, 54 (Pa. 1964); D G Equip. Co. v. First Nat'l Bank of Greencastle, Pa., 764 F.2d 950, 954 (3d Cir. 1985). See also RESTATEMENT (SECOND) OF AGENCY § 168 (1958) ("A disclosed or partially disclosed principal is not thereby subject to liability because of untrue representations by an agent as to the existence or extent of his authority or the facts upon which it depends."). Rather, only the actions of the principal can give rise to apparent authority. D G Equip., 764 F.2d at 954.
"The test for determining whether an agent possesses apparent authority is whether `a man of ordinary prudence, diligence and discretion would have a right to believe and would actually believe that the agent possessed the authority he purported to exercise.'" Fetterolf v. Harcourt Gen., Inc., No. 01-1112, 2001 WL 1622196, at *4 (E.D. Pa. Dec. 18, 2001) (citing Browne v. Maxfield, 663 F. Supp. 1193, 1199-1200 (E.D. Pa. 1987); Apex Fin. Corp. v. Decker, 369 A.2d 483, 485-86 (Pa.Super. 1976)). "Apparent authority can exist only to the extent that it is reasonable for the third party dealing with the agent to believe the agent is authorized." D G Equip., 764 F.2d at 954. STC argues that the provisions Dobinksy ultimately agreed to were so unusual that Plaintiff should have had a reason to doubt that Mudd had approved them. The Agreement did contain provisions that were quite different from Plaintiff's previous employment contracts with STC. Whether or not the new provisions were so extraordinary that it was unreasonable for Plaintiff to believe that Mudd had authorized them is an issue for the jury. Accordingly, we find that STC has raised a genuine issue of material fact as to whether Dobinsky had apparent authority.
II. Estoppel
Plaintiff also argues that STC is estopped from denying Dobinksy's authority to enter into the Agreement because STC received substantial benefits under the Agreement. Viewing the facts and inferences in the light most favorable to STC, as we must, we find that Plaintiff is not entitled to summary judgment on this issue.
STC has pointed to evidence in the record that the first time it learned of the disputed provisions in the Agreement was in late February or early March of 2002. (Solter Dep., Pl.'s Mot. Ex. I at 60.) STC then obtained a copy of the Agreement. (Id. at 63-64.) On March 13, 2002, Plaintiff gave STC official notice of his intent to terminate his employment in ninety days. (Pl.'s Mot. Ex. J.) However, on April 18, STC notified Plaintiff that it wanted to terminate his employment immediately. (Spignesi Dep. at 61.) Plaintiff's last day of employment with STC was April 25. (Id. at 62.) On April 30, after an reviewing the Agreement, outside counsel for STC notified Plaintiff that STC believed the Agreement was not properly authorized and therefore invalid. (Pl.'s Mot. Ex. K.) Thus, approximately two months passed between the time STC learned of the disputed provisions and when it repudiated the Agreement.
It is true that when a corporation has received and enjoyed the benefits of a contract, it will be estopped from denying the agency that secured those benefits. Lokay v. Lehigh Valley Coop. Farmers, Inc., 492 A.2d 405, 409 (Pa.Super. 1985) (citing Emperee v. Meyers, 269 A.2d 731 (Pa. 1970)). However, in order to ratify the unauthorized act of an agent, the corporation must have knowledge of all of the agent's acts. See Scott v. Purcell, 399 A.2d 1088, 1094 n. 4 (Pa.Super. 1979) (citing RESTATEMENT (SECOND) OF AGENCY § 98 (1958)). Viewing the evidence in a light most favorable to STC, we conclude that STC did not have knowledge of the disputed provisions of the Agreement until late February or early March, 2002. Shortly thereafter, STC began investigating who authorized the Agreement. Approximately two months later, STC concluded that the Agreement was unauthorized and repudiated it. Plaintiff has cited us no cases, and we have found none, binding a principal to an unauthorized contract when so little time has passed between knowledge and repudiation of the contract. Cf. Gum, Inc. v. Felton, 17 A.2d 386, 389 (Pa. 1941) (refusing to decide whether approximately two months was "an unreasonable time for [the corporate] defendant to accept or reject the [unauthorized] lease"). Under the circumstances, we will allow a jury to decide whether STC acted reasonably.
III. Plaintiff's Remaining Claims
Plaintiff's claims for violation of the WPCL and for specific performance depend on the enforceability of the Agreement. Because there are genuine issues of material fact as to whether the Agreement is enforceable, we will deny Plaintiff's Motion with respect to his remaining claims.
An appropriate Order follows.
ORDER
AND NOW, this day of November, 2003, upon consideration of the Plaintiff Gennaro Anthony Spignesi's Motion For Summary Judgment (Doc. No. 14), and all papers filed in support thereof and in opposition thereto, it is ORDERED that Plaintiff's Motion is DENIED.
IT IS SO ORDERED.