The Court has diver sity jurisdiction under 28 U.S.C. § 1332. 1 Pursuant to the Complaint and Counterclaim, the liability of Ohio Casualty

and Mr. Ka los 2 i s d e r i v a t i v e o f

C o r f u ’ s l i a b i l i t y. UNITED STAT ES DIS TRICT COURT F OR THE D ISTRIC T OF CO LU M BIA

) A-J M ARINE, INC. , ) ) P laintif f, )

) v. ) Civil Action No. 07-1642 (RM C) ) CORF U CONTRACTORS, INC., e t al . , ) ) Defendan ts. ) )

M EM OR

AN DU M OP IN ION A-J Marine, I nc. (“A -J Marine ”) sued Corfu Contractors, I nc. (“Corf u”) and Corfu’ s surety The Ohio Casua lty I nsuranc e Company (“O hio Ca sualty ”) for brea ch of contra ct and br eac h of pay ment bond, respe ctively

. Corfu filed a counter claim ag ainst A-J Marine for br eac h of contra ct 1 and impleade d Mr. Peter K alos as Third Par ty Def endant. The parties have complete d fac t discovery

and a ll h a ve fi le d mo tio ns fo r s umm ary jud g me nt. The sourc e of the dispute is a subcontrac t that A-J M arine and Mr. Ka los ex ecute d, the latter pur

portedly on behalf

of Corfu. Corf

u argues, int e r a lia , t h at t h e subcontrac t cannot be enfor ced a g ainst it be cause Mr. Kalos had no authority to contrac t on its behalf. B eca use the leg al ri g hts of a ll p art ie s are c on tin g e nt u po n th e e nf

or c e a bil ity of the su bco nt ract , the Cou

rt wi ll 2 endea vor to resolve that issue first. For the re asons explained here in, the Co u rt fi n d s t h at expertFe d. R. Civ. P . 30(b)( 6). 3 -2- testimony is ne eded for it to deter mine whether the subcontrac t is enfor cea ble ag ainst C orfu. Acc ording ly , the Court will deny all pending motions wit hout prejudice to refiling afte r the pa rties have c ompleted the supplementa l expert discovery contemplated by

this Memorandum Opinion. I. F AC TS On J anu ary

10 , 2 00 6 th e Was hin g ton Me tr op oli tan A re a

Tr ans it Auth or ity (“WMATA” ) aw arde d t o C orfu a contra ct to perf

orm work de scribed a s “Scour Counterme asure I nstallation for Potomac River Memor ial Br idge .” The projec t involved the dredg ing a nd place ment of sto ne in ce rt a in br idg e pie rs fo r the Pot oma c Riv e r M e mor ia l B ri dg e . O n Jan ua ry 24 , 2 00 6, Oh io Ca su a lty iss ue d p e rf

or manc e and

pa y me nt b on ds on

be ha lf of Cor fu fo r t he pr oje c t. Pr ior to b e ing award ed the WMA TAc on tr a c t, C or fu ha d s ub c on tr a c te d w ith Br ickwood Contrac tors, I nc. (“ Br ickwood”) to pe rfor m the work. See Cor fu ’s Op p’ n to Pl. ’s Mo t. for Par tial Summ . J . (“Corf

u’s Opp’n” ) [Dkt. # 88], Ex. M (Mar ch 8, 2005 contra ct betwee n Corfu

and B ri c kw oo d) . T he su

bc on tr a c t pro vid e d tha t “[n]o as sig nme nt of thi s su bc on tr a c t a g re e me nt i s permitted without prior written pe rmission from the Contractor.” Id. at Art. 4.

Mr. Kalos is pre siden t o f Br ickwood. His wife , Ver on L ee K alos, is Bric kwood’s

secr e ta r y an d tr e a s u r e r . A c c o r d in g to M r . Ch r is to s K o ll a s , Co r f u ’ s p r e s id e n t a

n d Ru le 3 0(b)( 6) repr esentative, Corfu’s ag ree ment with Br ickwood “w as that if we g et the job [with W MATA] . . 3 . h e [Mr . K a los ] wil l pe rf or m e ve ry thi ngon the job , p a

pe rw or k, and a ll of th e act ual wo rk

on it, b e c a u s e h e w a s f

a m i l i ar w i t h t h i s k i n d o f w o r k

. ” P l

. ’ s M e m . i n S u

p p . o f M o t

. f

o r P art i a l S u m m . J. (“Pl.’s Mem.”) [Dkt. # 80] , Ex . D (De p. of Christ o s Ko l l as (“Kollas Dep.”) ) at 21. Mr. K ollas testified that Mr. Kalos and his w ife wer e the only persons mana g ing the projec t on behalf of Corfu:On e of the re a so ns that Mr

. Ko lla s pla y e d no ro le in the pr oje c t wa s that he wa s p hy sic a lly 4 absent for much of the relevant t ime. He testified that he travels to Corfu, Gre ece for a fewmonths eac h winter a

nd summer. See Kollas Dep. at 28, 35. Mr. Kollas testified that he did not sig n the J uly 24, 2007 letter. See Corfu’s Opp’ n at 5. 5 That would m ak e sense g iven his summer trips to Gree ce. T he re cord is inconc lusive as to who signe d Mr. Kollas’s name on the letter

. -3-

Q. What, if an y , r o le d id Co r f u

— an y o f y o u r

— an y o f the individuals who participated in mana g ing Corf u, have in the sc o ur counter measure projec t? Did y ou supervise the work or ke ep tra ck of it or attend mee tings with WMATA or have any o t h er role in that projec t — A. No. Q. — as a

prac tical matter? A. No. Q. Okay . You per sonally did not. Your brother

did not. Your ne ph e w d id n ot. I s th a t c or re c t? A

. R i g h t

. N o b o dy. Id. at 30. 4 On Oc tob e r 16 , 20 06 , Mr

. Ko lla s e xec ute d a do c ume nt on be ha lf of Cor fu , a pp a re ntl y reque sted by

WMATA, entitled “power of execution.” See id. , Ex . E. Pursuant to the power of execution, Corfu:

nominates, constitutes, and appoints Peter K alos, Project Supervisor wi thf u l l p o w e r t o a c ta l o n e o nb e h a l f

o f C o r f uC o n t r a c t o r s , I n c . to make , e xec ute , s e a l and

de liv e r o n it s b e ha lf

a s c on tr a c tor

and a s it s act a nd deed, a

ny and all contra cts, cha

ng e orde rs, monthly

and fina l pa y me nt c e rt if

ic a te s and oth e r l ike ins tr

ume nts

. Id. The powe r of e x ecution wa s delivere d to WMATA by cover letter dated J uly 24, 2007. Id. The July 24 , 2 00 7 c ov e r l e tte r a

pp e ars to be fr om M r. Ko lla s. Cor fu a lso su bmi tte d to WMA TAa

lis t 5Whil e Mr. Kalos was qualified to perf orm the work himself, he contra cted with A- J Marine 6 beca use he anticipated that WMATA w ould issue a cha ng e orde r enla

rg ing the scope of

the projec t fr om f our p ie rs to s e ven, whi c h w a s to o mu c h f or Mr . K a los to d o a lon e g ive n h is o the r p ro je c ts. -4- of its personnel, on whic h Mrs. Kalos wa s listed as “projec t manag er” who ca n b e co n t ac ted at “CorfuContra ctors@a ol.com” and Mr . Kalos wa s listed as “super intendent.” Id. , E x . F

Mrs. Kalos testified on be half of B rickwood that she maintained a supply of Corfu letterhe ad at her of

fice

. Id. , Ex

. G (De p. of Ver on L ee Kalos (“L . Kalos De p.”)) at 30. She testified that she sent letter s to third parties on Corfu letterhe ad bec ause “ Corfu and B rickwood w ere working toge ther, a

nd we we re w ork i n g u n der Corf u’s name.” Id. at 29. She also testified that she issued

c he c ks on be ha lf of Cor fu to p ay Cor fu ’s ve nd or s: A. Somebo dy wou ld g ive me a sig ne d c he c k. Idid

n’ t take it somewher e to g et it signe d. Iwas g iven a sig ned che ck. Q. B e fo re it w a s f

ill e d o ut? A. Ye s. Q. An d th e n y ou

wo uld fi ll i t out? A. Ye s. Q. When Mr. Koll as l eft for Gre ece , did he leave y ou with a st ack of sig ne d c he c ks fo r you

to f ill ou t? A. Yes. I

alway s had a c heck. Q. So the signatures pre cede d the information about pa y ee? A. Rig ht. On Octobe r 24, 2 0 0 6 , M r . K a lo s , p u r p o r te d ly a c tingon behalf

of Corfu, subc ontrac ted with Mr. J ames D. Nicholas, president of A-J Marine, in appar ent di sreg ard of Br ickwood’s c ontrac t with Corfu that disallowed subcontra cts without Corfu’s prior c onsent. The subcontr act wa s for A- J 6See Pl.’s Mem, E x . C (D ep . o f Peter Ka los) at 32-33. This larg er volume of work ne ver materia liz ed. Withres pect to ins ur anc e , th e su bc on tr a c t pr ov ide s th a t “ [t]he Sub c on tr a c tor a g re e s to 7 o b t a i nan d p ay f

o r t h e f o l l o w i n g i n s u r an c e c o v e r a g e s : W o r km e n ’ s C o mp e n s a t i o n , P u b l i c L i a b i l i t y, Property Damag e, and a

ny other insura

nce c overa g e which ma

y be nec essar

y as re quired by

the Owner , Contractor, or

State L aw, Per

Contract Specif

ications and County

Requirements.” Pl.’s Mem., Ex. B. An adde ndum to the subcontrac t prov i d es t h at “[a]ny additional insurance require ments above w hat is in place w ill be passed thru to the g ener al contra ctor.” Id. -5- M ar i n e t o p e r f

o r m m e c h an i c a l dr e d g i n g an d s t o n e p l a c e m e n tf

o r $ 8 5 , 3 7 1 p e r

m o nth , plus a

m o b i l i z at i o n fee of $5,000 and a demobiliz ation fee of $5,000. See id. , E x. B

. T h e r e a f te r, A-J Marine immediate ly

mobiliz ed its cre w and e quipment, as t h e s u b contra ct re quired it to do. Ho we ve r, C or fu

did no t de liv e r t

he dr e dg e ma te ri a l ba

rg e s and sto ne ma te ri a l ba

rg e s lo a de d w ith stone, as it had promised.

On Dec ember 8 , 2 0 0 6 , Mr. Kalos sent Mr. N icholas a le tter on Corfu letter head

s t at i n g: We do not acc ept y our equipment until we rec eive c onfirmation y our

e qu i p m e n ti s w i t h o u td e f e c t s an d y o u r v e s s e l s ar e s e aw o rt h y . In a dd iti on , A -J Ma

ri ne , I nc . and y ou

r e mpl oy e e s are no t a llo we d o n- sit e un til y ou have a ll r e qu ir e d in sura nc e c ov e ra g e , a

nd an a c c e pta

ble insurance cer

tificate is re quired. Your reque st f

or pay ment for mobilization and rental is disapproved. Corfu does not ac ce p t m o b i liz ation by A-J Marine, I nc., until the above de ficienc ies are fully and complete ly

cure d. Corfu’s Mem. in Supp. of Mot. for Summ. J . (“Corf u’s Mem.”) [Dkt. # 81] , Ex . E. 7 On Dec ember

22, 2006, A-J Marine obtained a quote from its insuranc e ag ent for the additional cover ag e that Corfu ha d reque sted. By l et t er dated January 10, 2007, A-J Marine demande d that Corfu pay the cost of the a dditional insurance, ha ving be en advise d by

its attorney that the subcontra ct re quir es C o rf u t o pay for suc h additional insurance

. See id. , Ex . G. Corfu-6-

ref used. B y letter dated Fe bruar y 6, 2007, Corfu advised A-J Marine that “y our failure upon re ceipt of a c ur e no tic e is a su

bs tanti a l and ma te ri a l br e a c h of y our c on tr a c t. We h a ve ma de arr ang e me nts to complete y our work with othe r companies.” Pl.’s Mem., Ex . Q. A-J Marine did no work on the projec t. This lawsuit ensued. II. LEGAL STANDARD

Under Rule 56 of the Fe dera l Rules of Civil P roce dure, summar y judgme nt must be g rante d when “ the pleading s, depositions, answers to interr o g a to r ie s , a n d a d mi s s io n s o n

file, tog ether with the aff

idavit s , if any , show that there is no ge nuine issue as to any materia l fac t and that the

mov ingpa

rt y is e nti tle d to a jud g me nt a s a ma tte r o f l aw. ” F e d. R. C iv. P. 5 6( c ); An de rso n v . Li be rty Lobby, Inc. , 4 77 U. S. 242 , 247 (1 98 6)

. Mo re ov e r, su mma ry jud g me nt i s p ro pe rl y

g ra nte d a g a ins t a par ty who “a fter a dequate time for discove ry and upon motion . .

. fa i ls to make a showing sufficie nt to establish the exi stence of an e lement es s en t i al t o that party ’s ca se, and on w hich that party will bear the burden of

proof at trial.” Ce lot e

xCor p. v . Ca tre tt , 477 U.S. 317, 322 (1986). I n r uli ngon a motio n f or su mma ry jud g me nt, the c ourt

mus t dr aw a ll j us tif

ia ble infer e n c e s in

th e n o n mo v in g p arty ’ s f a v o r an d a c c e p t t h e n o n mo v in g p arty ’ s e v id e n c e a s tr u e. Anderson , 477 U.S. at 255. A nonmoving pa rty , howeve r, must estab l i s h m o re t han “the mere exis tence of a scintilla of evidenc e” in support of its posit ion. Id. at 252. I n addition, the nonmoving party may not rely solely on alleg ations or conc lusory statements. Gree ne v. D alton , 164 F.3d 671, 675 (D.C. Cir. 1999). Rather , the nonmoving party must pre sent specific fac ts that would enable a

r e a s o n a b le ju r y to f in d in it s f

a v o r . Id. at 6 7 5

. I f the e vidence “is mere ly colora ble, or is not signific antly

probative, summary j u d gment may be g rante d.” Anderson , 477 U.S. at 249-50 (citations omitted).All parties ag ree that District of Columbia law applies to t h i s dispute. I n Makins , the 8 District of Columbi a Court of Appea ls applied the Restateme nt (Second) of Ag ency . See M

akins , 861 A.2d at 593-94. A fter that decision is s u ed in 2004, the Amer ican L aw Institut e adopte d and promulg ated the Re statement (Third) of Ag ency in 2005

. There fore , the Court will apply the Restatement (Thir d) of Ag ency to this case. -7- III . A NA LY SIS A-J Marine a

rg ues that Corfu wr ong fully abandone d the subcontra ct. Corfu a rg ues that the subcontra ct is not enforc eable ag ainst it be cause Mr. Kalos had no authority to c ontrac t on its behalf, and to the e x tent that the Court finds otherwise, A -J M arine ’s fa ilure to obtain additional insurance cover ag e wa s a m ater ial brea ch that excused Corfu from perf ormanc e. Corfu also ar g ues that even if

it breac hed the subc ontrac t, A-J M arine is not entitl ed to its claimed expectation dama g e s. First thing s first. A-J Marine d o es n o t dispute, and there fore conce des, Corfu’ s contention that Mr. Kalos lacke d actua l a uthority to bind Corfu to the subcontrac t with A-J Marine. I nstead, A- J Marine a

rg u es only

that Mr. Kalos ha d appar ent authority to contrac t for Corfu. See Pl. ’s Me m. a

t 5- 6 ( “ Cor fu ha s ra ise d an iss ue of a g e nc y . . . . Whate ve r m a y have be e n th e pr ivate understandingbetwee n Mr. Kalos a nd Corfu of Mr. Kalos’s authority to act as Corfu’s ag ent, Mr. Kalos had a

ppare nt authority

to do so, and his appar ent authority was unmistakable.” ). District of Columbia courts apply the Restatement of Ag ency in r esolving issues of appar ent authority

. Se e Ma k ins v . Dis tri c t of

Col um bia , 861 A.2d 590, 593 (D.C. 2004) ( en banc ). 8 Appar ent authority

“is cre ated by a person’ s manifestation that another has authority to a ct with leg al conseque nces for the per son who makes the ma nifestation, when a

third party

rea sonably

believes the ac tor to be authorized and the belief is trac eable to the manifestation.” Re statement (Third) of Ag ency § 3.03. “A pe rson manife sts assent or intention throug h written or spoke n words or othe rI ndeed, had A-J Mar ine been awa re of the power of execution on October 24, 2006, there 9 would have been no rea son for A- J Marine to r equest proof of Mr. Ka los’s authority

by letter dated November

15, 2006, discussed below. -8- conduct.” Id. § 1.0 3. “ Th e re le va nt state of min d is tha t of the pe rs on

wh o o bs e rv e s o r o the rw ise lear ns of the manife station.” Id. , comment b. “Appa rent a uthority is present only

when a third party ’s belief is trace able to manife stations of the principal.” Id. § 3 .0 3, c omm e nt b ; see M akins , 861 A.2d at 594 (“ appar ent authority depends upon the principal’s ma n if e s ta tions to t he third par

ty ”). “Whether a

n ag ent had a

ppare nt authority

is a question of fact and the party asser ting the e x istence of appa rent a uthority must prove it.” Makins , 861 A.2d at 594. A- J Mar ine argue s th a t “ Cor fu a llo we d M r. Ka los to o pe ra te the job sit e and

a ll aspec ts of the ‘sc our counte rmea sure’ projec t, including a ll dealing s with W MATA and subcontrac tors, in a manner that cause d all to believe that [Mr.] Kalos and Corfu we re one and the

same .” Pl. ’s Re ply

[Dk t. # 91 ] at

6. Th a t ma

y be tr ue wi th res pec t to WMA TAand to subcontrac tors who had knowledg e of the power of execution in which Corfu authorized Mr. Ka los to act on its behalf. There is no evidenc e in the rec ord that A-J Marine wa s awa re of the power

of execution when it signe d the subcontra ct on Octobe r 24, 2006. Nor ha s A-J Marine pointed to any 9 other manife station by Corfu that cause d A-J Marine to believe that Mr. Kalos wa s an ag ent of Corfu at the time it signe d the subcontra ct.

To th e c o n tr ar

y , th e e v id e n c e A

- J Ma

r in e ma r s h a le d in d is c o v e r y s h o w s th a t A -J Mari ne re lie d on noth ing mor e tha n Mr. Ka los ’s ow n re pr e se ntatio ns that he wa s a c tin g on be ha lf of Corfu. Mr. N icholas t estified on beha lf of A- J Marine that “[a]s far as I knew, [Mr. Kalos] was actingas Corfu

. I d o n ’t k now in what ca pacity . That’s how he identified himself, as just Corfu Contractors.” Corfu’s Opp’ n, Ex . 5 (De p. of J am es D. Nic holas (“N icholas De p.”)) at 43. WhenMr. Nicholas’ s deposition testim ony does not make c lear

whether the letterhe ad wa s that 10 of Cor fu ’s or

Mr . K a los ’s ow n c omp any , B ri c kw oo d. No r d oe s h is d e po sit ion te sti mony

e la bo rate as to the nature of the c ontrac t that Mr. Kalos showed him. B ut even a ssuming the doc ument was on Corfu’s letter

head a nd wa s a co ntrac t with Brickw ood to act on its behalf, Mr . Nicholas’s subsequent letter

establishes that he did not per ceive Mr. Kalos to have had author ity to contrac t on C o r f u ’ s b e h a l f

. B e c a u s e A

- J M ar i n e b e ar s t h e b u r d e no f p r o v i n g t h e e x i s t e n c e o f

a p p ar e n ta u t h o r i t y, the Court will construe any ambig uities ag ainst it.

-9- asked if Mr

. Kalos had “any business car ds or emblems or any thing that would tell someone what

c omp any he wa s w or

kin g fo r, ” Mr . N ic ho la s r e sp on de d o nly that “[ h] e pr od

uc e d le tte rh e a d w ith ‘Contrac t’ on it.” Id. Mr. Nicholas te stified that he neve r met or spoke with Mr. Kollas. Id. at 74. 10 Whil e A- J Marine uncover ed in disc overy evidenc e that, had it bee n known to it earlier , could have fo rm e d th e ba sis fo r a

be lie f t hat Co rf u h a d a uth or ize d M r. Ka los to a c t a s Cor fu ’s a g e nt, no ne of it was known to A- J Marine a t the time it contracte d with Mr. Kalos. Mo st i nju ri ou s to A- J Ma

ri ne ’s c a se is that Mr . N ic ho la s e xpre sse d h is o wn do ub ts about M r. Kalos’s authority to contra ct for Corf u in a letter to Mr. K alos dated N ovember 15, 2006: Yo u s ta te d to me that y ou we re no t th e ow ne r o f C or fu Con tr a c tor s, I nc. and pr omised me a statement of authority /affidavit ( notarized) of y our authority

to execute contractua l ag ree ments on behalf of Corfu Contractors, Inc. You have neg lected to pr ovide proof of this after re p e a t e d r e qu e s t s w h i c h w i t h o u t t h e c o n t r a c tu a l a g r e e m e nt i s considere d to be i n t h e least misreprese nted. You said y ou wer e a man o f your w or d s o p le a se pr ov ide thi s A SAP

. Id. , Ex

. L

. As Mrs. Kalos t estified on behalf of Brickwood, Mr. Nicholas “wanted Christos Kollas [Cor fu ’s ow ne r a

nd pr e sid e nt] t o n ota

ri ze a le tte r c on fi rm ing that Pe te r Ka los ha d th e a uth or ity to execute a c ontrac t with A-J Marine” on beha l f o f C o rf u. L . Kalos De p. at 62. Mr. Nichola s’s

se nti me nts e xpre sse d in

his le tte r t o Mr. Ka los sh owno t on ly that hi s b e lie f i n M r. Ka los ’s a uth or ity

wa s ba se d o n n oth ingmor e tha n M r. Ka los ’s ow n r e pr e se ntatio ns ; i.e. Mr . K a los ’s “ wo rd ,” bu t a lso that he had doubts a

bout Mr. Kalos’s a

uthority . “Appa

rent a uthority depends upon ‘ the third-par ty ’sTo the extent that any one of the se ca ses i s not fac tually distinguishable, it has be en 11 implicitl y overr uled by t h e subseque nt en banc decision of the D .C. Court of Appeals in Makins , which cla rified that “ appa re n t au thority depends upon the principal’s ma nifestations to the third party .” Makins , 861 A.2d at 594. The que stion in t hat ca se wa s “[u] nder D istrict of Columbia law, is a client bound by a settlement ag ree ment neg otiated by her attorney when the client has not g iven the attorney actua l authority to settle the ca se on those ter ms but has authorized the attorney to attend a settlement c onfer ence befor e a ma g istrate judg e and to ne g otiate on her behal f and when the attorney leads the opposingparty to believe that the c lient has ag ree d to those t erms.” Id. at 592. I n answe ring the question in the neg ative, the c ourt explained: -10- perc eption of the a g ent’s author ity .’” Makins , 8 6 1 A. 2 d at 5 9 4 (q u o t i n g Sigal Const r. Corp. v. Sta nb ur y , 586 A.2d 1204, 1219 (D.C. 1991)) . His letter to Mr. Ka los clear ly indicated that Mr. Nicholas did not perc eive Mr. K alos to h av e t h e au t h o rity to contrac t for Corfu. Mr . Nicholas’s doubts a bout Mr

. Kalos’s contra cting authority wer e only reinfor ced by the undisputed fac t that Mr. Nicholas never r ece ived a state ment of authority or notarized af

fidavit from Mr. K alos, as he ha d reque sted in his November15, 2006 le tter. See L . Kalos De p. at 62, 133.

A-J Marine re lies on case s in which the principal placed the actor in a position that le d a thi rd pa rt y to b e lie ve that the a c tor wa s the pr inc ipa l’ s a g e nt. Th os e c a se s are dis tin g uis ha ble beca use none involved a

third party who had no knowledg e of the principal’s manifestation. I n other words, ea ch involved something more than the age nt’s own represe ntation of authority to contrac t for the pr incipal. See , e.g. , Livingston v. Fuhrman , 3 7 A .2 d 7 47 , 7 48 (D .C. 19 44 ) ( thi rd pa rt y

c on ta c te d a g e nt a

t pr inc ipa l’ s p ho ne numbe r a nd bo ug ht f ro m a g e nt at pr inc ipa l’ s st or e ); Jack Pry, In c . v . D razin , 173 A.2d 222, 222 (D.C. 1961) ( third party had neg otiations with both principal and

a g e nt) ; Feltman v. Sarbov , 366 A.2d 137, 137, 140 (D.C. 1976) (third party neg otiated with ag ent sp e c if ic a lly re ta ine d b y

pr inc ipa l f

or purp os e s o f c on su mmatin g the tr ans a c tio n) ; Tel-Ads, Inc. v. Trans-Lux Playhouse, Inc

. , 232 F. Supp. 198, 199 (D.D.C. 1964) ( third party enter ed into contra ct wi th pr inc ipa l’ s distri c t ma na g e r)

. B y

c on tr a st, oth e r t

ha n th e re pr e se ntatio ns ma de by Mr . K a los , 11We take as a g iven that a third party

in the shoes of the D istrict of Columbi a would re asonably assume that Makins [ t h e client] had authorized attorney Har

rison (1) to attend the settlement confe renc e, and (2) to neg otiate on her behalf . . . . We hold, howeve r, that abse nt further manifestations b y M ak ins — not Harrison — . . . ther e wa s insufficient c onduct by the client to suppor t a re asonable belief by

the District that Har

riso n had full and f

inal authority

to the settlement te rm s. Id. at 594. “Ha

rrison’s c onduct and r epre sentations about his own authority , in short, are not dispositi v e t o wh et h er Ma kins herself f

urnished the ba sis for a r easona ble belief that he wa s authorized to conclude the settlement.” Id. at 596. -11- A-J Marine had no r eason to be lieve that Mr. Kalos was acting on behalf of C orfu. Mr. Nicholas’s No ve mbe r 15, 20 06 le tte r co nf ir ms that he wa s una

wa re of any manif

e statio n by Cor fu

that c ou ld have le d him to believe that Corfu had authorized Mr. Kalos to repr esent it

. There fore , beca use Mr. Kalos’s own r epre sentations wer e the sole basis for A -J M arine ’s belief that Mr. Kalos wa s an ag ent of Corfu, A- J Marine c annot trac e its belief to any manifestation by

Corfu. The a naly sis does not end there , howeve r, for the Restatement pr ovides that “[a] principal may

also cre ate a

ppare nt authority

by actua lly or appa rently authorizing a

n ag ent to make repr esentations to t hird parties c oncer ning the ag ent’s own a

uthority or position, even thoug h the ag ent ’s re p re s en t at i o n s b y th em s el v es wo u l d

b e i n s u ff i ci en t

. ” R es t at em en t(T h i rd ) of Age ncy § 3.03, comment b. “The deter

minative question is whether a third party can establish a linkag e betwe en statements of a

uthority by the age nt and a manifestation of assent by the principal to the m aking of such statements.” Id. “ I f n o s uc h li nk a g e c an b e e sta bli sh e d, the thi rd

pa rt y may be a ble no ne the le ss to estop the principal f

rom denying the ag ent’s author ity under the doctrine state d in § 2.05 if the pr inc ipa l is re sp on sib le fo r t he a g e nt’ s r e pr e se ntatio n, t y p i c a lly be c a us e the pr inc ipa l di d n ot e xer c ise

rea sonable c are to preve nt the ag ent from making the r epre sentation or to inform the third pa rty ofCorfu ar g ues that the powe r of execution “ deals with Mr

. Kalos’ ability to deal with the 12 WMATA, and g rants no author ity to Peter Ka los to enter into subcontrac ts with vendors or su bc on tr a c tor s o n th e pr oje c t.” Cor fu ’s Op p’ n at 5. A- J Mar ine c ou nte rs that “ [s]inc e the pr ime contra ct betwe en WMATA and Corf u had already been signe d, to what contracts could this ‘Power of Execution ’ h ave been intende d to infer? The a nswer is: subcontra cts.” Pl.’s Reply at 6. The Court need not re solve the issue bec ause the Court finds that even if the power of execution did not actua lly authorize Mr. Ka los to enter into subcontrac ts with vendors, it appare ntly did so. -12- its falsity .” Id. Whil e the po we r o f e xec uti on a pp are ntl y , if

no t a c tua lly , a

uth or ize d M r. Kal os to make r epre sentations to A-J M arine concer n i n g his authority to enter into contra cts on beha lf of Corfu, there is no evidenc e in the record linking the two. I n other wor ds, there is no e vidence that

12 Mr. Kalos m ade his statements of authority to A-J M arine based on his belief that, beca

use of the power of execution or some other manifestation of a ssent, Corfu had g iven him the authority to make such stateme n t s . Be cause the Court has not bee n made pr ivy to the entirety

of Mr. Ka los’s deposition, it cannot say

for sure why Mr. Kalos thought he could represe nt to A-J Marine that he had author ity

t o co n t ra ct o n behalf

of Corfu. B ut the portion of his deposition testim ony that the parties have provide d with their brief s does not sug g est th at M r. Ka los made the re prese ntations beca use of a manifestation of a ssent to do so by Corfu. I ndeed, it is doubtful that Mr. Kalos thoug ht Cor fu ha d g ive n him a

uth or ity to make the re pr e se ntatio ns he ma de to A- J Ma ri ne. Mr. Ko lla s, Corfu’s owne r and pr esident, testified that he had not he ard of A-J Mar ine until it s ued Corfu a nd that “ Iwo uld

no t hav e a llo we d for [Mr . Ka los ] to have a su bc on tr a c tor ; be c a

us e the a g re e me nt m e and him, he had — w e had, it wa s for him to do the work.” Kollas Dep. at 50, 51-52.

Stil l r e ma in in g is w h e th e r Co r f u s h o u ld b e e s toppe d from deny ing Mr. Kalos’s appar ent authority

beca use i t failed to exercise reasona ble ca re to pre vent Mr. Ka los from making the represe ntations or to inform A-J Marine of the ir falsity

. Se e DB I A rc hit e c ts, P. C. v . A m. Ex pr ess-13-

Travel-Re lated Servs. Co. , 388 F.3d 886, 890 (D.C. Cir. 2004) (“ a princ ipal may be estoppe d from denying a ppare nt authority

if the principa l intentionally or neg lige ntly

creat ed an appe ara

nce of authority in the ag ent, on which a third party relied in c hang ing its position”). Section 2.05 of the Re state me nt p ro vid e s:

A per son w h o h a s n o t ma d e a ma n if e s tati o n th a t an a c to r

has authority as an a g ent and who is not otherw ise liable as a party to a tr ans a c tio n p ur

po rt e dly do ne by the a c tor

on that pe rs on ’s a c c ount i s subject to liability to a third party who justifiably is induc ed to make a detr imental chang e in position because the tra n s action is believed to be on the per son’s ac count, if (1) the per son i n t en t i o nally or car elessly cause d such belief

, or (2) having notice of suc h belief a nd that it mi ght in du c e oth e rs to c ha ng e the ir po sit ion s, the pe rs on

did no t ta ke re a so na

ble ste ps to n oti fy

the m of the fa c ts. Restatement (Thir d) of Ag ency § 2.05. “The doctrine is applicable when the person a g ainst whom

e sto pp e l is a sse rt e d h a s ma de no man if e statio n th a t an a c tor

ha s a uth or ity a s an a g e nt b ut i s responsible for

the third party ’s belief that an actor is an ag ent and the third pa rty has justifiably

been induced by

that belief to unde rg o a detr imental chang e in position.” Id. , comment c. “Most often the per son estopped will be re sponsible for the third party ’s erroneous belief as the consequenc e of a fa ilure to use re asonable car e, either to preve nt circumstanc es that for esee ably led to the belief

, or to corr ect the belief once on notice of it.” Id. Un lik e a pp are nt a uth or ity wh ic h “ is n ot p re se nt u

nle ss the third party ’s belief

is trace able to the pr incipal’s own manif estatio n s , . . . [e] stoppel does not require as close a

fit betwee n aff

irmative ac ts of the p ri n cipal and the third party ’s belief .” Id. , comment d. “Instead, it pr otects third parties who r easona bly believe a n actor to be authorized as an age nt when the be lief ca nnot be shown to follow direc tly or indirec tly

from the pr incipal’s own manifestations.” Id.

I llustration 2 of § 2.05 comes nea rest to the fa cts here :Ne ith e r t he Com pla int no r t he Counte rc la im d e mand a jur y tr ia l. 13 -14- P owns a larg e re tail furniture store , known as “ P’s Furniture Emporium.” P, who is often ab s en t fr om the premises, doe s not otherwise ma intain surveillance over the store’s sa les forc e. T, a pr os pe c tiv e c us tom e r, e nte rs the sto re and is ap pr oa c he d by A, wh os e demea nor and attire lend A the a ppear ance of a sa lesperson

. After examin i ng floor samples, T pur chase s sever al items of furniture for cash, g iving the c ash to A. A g ives T a r ece ipt written on a standar dlooking f orm, with “P’s Fur

niture Emporium ” printed at t he top. A explains t o T that the items purcha sed ar e not pre sently in inventory but will be de livered to T ’s home within two wee ks. A is a n imposter who is not an employ ee or other a g ent of P. A does not re mit any of the ca sh paid by

T to P. No furniture is deliver ed to T. T’s cha ng e of position i s justified b y

T’s belief

that A is what A purpor

ts to be, a salesper son with authority to sell from P ’s i nventory . Whether P may de ny A’ s a uth or ity is a qu e sti on fo r t he tr ie r o f f

a c t. Id. , I llustration 2.

L ike the pr inc ipa l in the ill us tr a tio n, the re is a qu e sti on wh e the r C or fu fa ile d to us e

rea sonable c are to preve nt the circ umstances that c aused A -J M arine to be lieve that Mr. Kalos wa s an ag ent of Corfu. The Court note s that Mr. Kollas eff ectively entrusted Mr. a

nd Mrs. Kalos to ac t in Corfu’s stead w ith respec t to the WM ATA p ro j ec t wh ile he traveled to Gr eec e, and it does not appea r that he or any other employ ee of Corfu supervised their ac tiviti es. While the Court is aware that it , an d no t a ju ry , is the tr ie r o f f a c t in thi s c a se , thi s q

ue sti on c ann ot b e ans we re d o n th is 13

re c or d. B e fo re the Court c an d e ter mi ne whe ther

Cor fu fa ile d to us e re a so na

ble c are , it

mus t f ir st

rec eive e vidence in the form of expert testimony about what the r eleva

nt standard of

car e is in the construction industry

. See St. Paul Me rcury I ns. Co. v. Cap i t o l S

p r i n kl er Inspection, Inc. , 6 27 F. Sup p. 2d 1, 7 ( D. D. C. 2 00 9) (“ I t is we ll es ta bli sh e d in the Di str ic t of Columbi a that ‘a pla int if f m us t pu t on e xpe rt te sti mony

to e sta bli shwh a t th e sta

nd ard of c are is i f t

he su bje c t in qu e sti on is s o d i s t i n ct l y re l at edt o s o m e s ci en ce , p ro fe s s i o no r o cc u p at i o nas t o b e b ey o n d t h e k en o f t h e a v er ageThe Court will decide whether th e s u bcontra ct is enfor cea ble ag ainst Corfu bef

ore 14 de c idi ngwh e the r i t w a s A -J Ma ri ne or Cor fu wh o b re a c he d th e su

bc on tr a c t. -15- l ay p er s o n . ’” ) ( qu o t i n g D is tr ic t o f C o lu m b ia v . A rn o ld

& P o r ter , 756 A.2d 427, 433 (D.C. 2000)) ; see also id. (“A s the United States Court o f Ap p ea l s for the D istrict of Columbia Ci rcuit has observe d, ‘the D.C. Court of Appe als has re q u i re d ex p ert testimony in a number of

case s that, on first blush, appea

r to be within the rea lm of common knowledg e,’ such as the maintenanc e of lea ning t re es , ap p l i ca t i o no f h ai r r el ax er , o r t h e t i g h t n e s s o f h an d cu ff s . ”) (q u o t i n g Briggs v. W

ash. Metro. Area Trans. Auth. , 481 F.3d 839, 845 ( D.C. Cir. 2007)).

There also is a question whethe r A-J Marine was justified in believingthat Mr. Kalos

wa s an a g e nt of Cor fu

. “ I f t he thi rd pa rt y is unr e a so na

ble in b e lie vin g that an a g e nc y re la tio ns hip exis ts and that the ac tor has author ity , the th i rd party should not recove r, just as a plaintiff’ s contributory

neg lige nce in r elying on a neglig ent m isrepre sentation bars recove ry or reduces it under a rule of compa

rative ne g lige nce.” Restatement (Third) of Ag ency § 2.05, comment d. The Court notes that in forming h i s belief, Mr . Nicholas re lied on nothing more than Mr. Ka los’s own

re pr e se ntatio ns . B e fo re the Court c an de te rm ine wh e the r A- J Ma ri ne ’s be lie f w a s ju sti fi e d, it mus t fi rs t r e c e ive e vid e nc e in t

he fo rm of e xpe rt te sti mon y a bo ut w hat the re le va

nt s tand ard

of c are is i n the construc tion indust ry . See St. Paul M er cury I ns. Co. , 627 F. Supp. 2d at 7. Ac cording ly , the Court will order the pa

rties to complete s u p p l emental ex pert discove ry limit ed to the re levant

s t an d ar d s o f

c ar e i nt h e c o n s t r

u c t i o ni n d

u s t r y. 14 O n e f i n a l p o i n tn e e d s t o b e a d dr e s s e d

. A

- J M ar i n e s e e k s $ 6 2 4 , 1 5 8 i nd a m a g e s . It contends that that is the amount of the loss of the be nefit of its barg ain with Corfu. Corfu a rg ues that even if it is i n brea ch of the subcontrac t, A-J M arine cannot r ecove r that amount as a matter of la

wWhil e the Court does not now r ule on d am age s , t h e parties should be awa re that the 15 damag es ava ilable under an es t o p p el t heory

of liability

may be more limit ed than the da mag es available in an ordinar

y brea ch of c ontrac t case

. See R es t atement ( Third) of A g ency § 2.05, comment d; Restatement (Sec ond) of Tor ts § 552B.

-16- beca use “ M r. Nicholas was totally unprepa red to testify

at the deposition [as to the calculation of damag es] and had none of the supporting documents or infor mation to support A-J Marine’ s

c la ims [,]” Cor fu ’s Me m. at 10 , a nd in a ny e ve nt “ the ma ximum a mou nt of tim e fo r wh ic h it

c ou ld

reco v er i s . . . a p eriod of four and a half months.” Id. at 15. A-J Marine re sponds that “Corfu’s motion ignore s the documentation p e r ta in in g to A

- J Ma r ine ’s damag es that A-J Marine ha d produce d in discovery

long pr ior to J une 4, 2009, and which had bee n the subject of e x amination during A-J Marine’ s prior deposition.” P l.’s Opp’n to Corfu’s Mot. for Sum m. J

. [Dkt. # 85] at 5. A-J Marine ins ist s th a t “ [t]he a mou

nt of dama g e s w hic h A -J Ma ri ne is e nti tle d to re c ov e r r e qu ir e s th e Court to

re so lve iss ue s o f f

a c t, a mon g oth e rs , a s to the pe ri od of ti me fo r w hic h A -J Ma ri ne is e nti tle d to compensation and the amount due f or ea ch per iod.” Id. at 7. The Court will abstain from ruling on damag es until liabili ty

is determined. 15

IV . C ON CL USI ON For the fore g oing rea sons, the C ourt will deny all pending motions wit hout prejudice to r e fi lin g a ft e r t

he pa rt ie s h a ve c omp le te d th e su pp le me nta l e xpe rt

dis c ov e ry

c on te mpl a te d b y

thi s Memorandum Opinion. The Court will ord er t h e p ar t i es t o file a joint proposed e x pert discove ry schedule no later tha

n October 23, 2009. A m emorializing Order acc ompanies this Memorandum Opinion. Date : O c tob e r 9 , 2 00 9 /s/ ROSEMARY M. COL L YER United States District J udg e