Court Opinion

ID: 194489
Source: CourtListenerOpinion
Date Created: 2011-02-07 02:18:21+00
Date Added: 2024-06-11T08:47:04.280082
License: Public Domain

January 15, 1993
                  UNITED STATES COURT OF APPEALS
                      FOR THE FIRST CIRCUIT

                                           

No. 90-1208
No. 92-1507

                 INTERSTATE COMMERCE COMMISSION,

                       Plaintiff, Appellee,

                                v.

                   HOLMES TRANSPORTATION, INC.,

                       Defendant, Appellee.

                                           

               ROBERT C. HOLMES AND DOROTHY HOLMES,

              TRUSTEES OF THE ALVIN R. HOLMES FUND,

       ROBERT C. HOLMES, INDIVIDUALLY, AND J. ROBERT SEDER,

                     Intervenors, Appellants.

                                           

           APPEAL FROM THE UNITED STATES DISTRICT COURT

                FOR THE DISTRICT OF MASSACHUSETTS

             [Hon. Rya W. Zobel, U.S. District Judge]
                                                    

                                           

                              Before

                     Torruella, Circuit Judge,
                                             

                  Bownes, Senior Circuit Judge,
                                              

                     and Cyr, Circuit Judge.
                                           

                                           

   John Woodward, with whom Burton C.  Chandler, Seder and Chandler,
                                                                   
Andrew Z. Schwartz, Michele A. Whitman and Foley, Hoag & Eliot were on
                                                            
brief for intervenors-appellants.
   Stuart B. Robbins for plaintiff, appellee.
                    
   Frank J. Weiner for defendant, appellee.
                  

                                           

                                           

          CYR, Circuit Judge.  Robert C. Holmes, individually and
          CYR, Circuit Judge.
                            

as  trustee of  the Alvin  R. Holmes  Fund ("Holmes  Trust"), and

Dorothy  Holmes, as  trustee  of the  Holmes Trust  (hereinafter,

collectively, "Holmes  parties"), appeal  a district  court order

directing  the  disbursement of  an  escrow  fund established  to

defray certain civil liabilities relating to their sale of Holmes

Transportation, Inc.  ("HTI"), a corporation wholly  owned by the

Holmes  parties.  The  Holmes parties are joined  on appeal by J.

Robert  Seder,  Esquire,  a  former escrow  agent  for  the fund.

Appellate jurisdiction  having been retained, and certain prelim-

inary matters having been  resolved on remand, we proceed  to the

merits and affirm the district court order.

                                I

                            BACKGROUND
                                      

          First  we  describe the  somewhat intricate  context in

which  the  present litigation  developed.    The Holmes  parties

entered  into negotiations  in  1988 to  sell  HTI to  Route  USA

Resources,  Inc. ("Route  USA"), a  corporation wholly  owned and

controlled  by  Manfred  Ruhland.   Throughout  the negotiations,

Seder represented  the Holmes  parties, and Robert  D. Gunderman,

Esquire, represented Ruhland and Route USA.   Ruhland had assumed

control of HTI, and consummation of  the sale of HTI to Route USA

appeared   imminent,  when  the  Interstate  Commerce  Commission

("ICC")  initiated the  present  action against  HTI on  July 13,

                                3

1988, to recover $501,976 in refunds allegedly due HTI  customers

for freight  overpayments improperly  withheld by HTI  during the

period 1984-1988 ("ICC refunds").1

          The ICC action  threatened to derail  the HTI sale,  as

Ruhland demanded  a  reduction in  the purchase  price to  offset

HTI's  contingent liability on the  ICC refund claims.   In order

for the  HTI sale to proceed, the Holmes parties agreed to escrow

$500,000  of Ruhland's purchase  money deposit to  defray the ICC

refund claims against  HTI (the "private escrow  agreement").  On

September 22,  1988, Seder executed the  private escrow agreement

as "attorney in fact" for the Holmes parties; Ruhland executed it

in behalf of Route USA; Seder and Gunderman executed it as desig-

nated escrow agents under the private escrow agreement.  With the

ICC refunds obstacle apparently  resolved, Ruhland abandoned  the

demand  for a reduction in the HTI purchase price, and the Holmes

parties' sale of HTI's stock to Route USA was consummated without

further incident.

          While the private escrow agreement was  being negotiat-

ed,  HTI proposed  a settlement  of the  ICC refund  claims.   On

December 12,  1988, HTI,  represented by Gunderman,  consented to

the entry  of a district  court injunctive  decree ("consent  de-

cree") mandating, in pertinent part, that HTI establish an escrow

fund  containing at least  $502,000 with  which all  HTI customer

                    

     1The ICC complaint did not name the Holmes parties as defen-
dants,  but alleged that HTI  failed to process  and refund 3,048
unidentified payments and 3,485 duplicate payments received  from
shippers, in violation of 49 C.F.R.    1008.9(a) and 1008.9(b).

                                4

overpayments  were  to be  refunded  by December 31,  1988.   For

reasons which  remain unclear, neither  the ICC nor  the district

court  had yet  been  apprised of  the  private escrow  agreement

previously  executed between  the Holmes  parties and  Route USA.

Thus,  the   escrow  account  arrangements   envisioned  in   the

December 12 consent decree varied in considerable detail from the

terms of the private escrow agreement  between the Holmes parties

and  Route  USA.2   Their function  was  identical, however:   to

establish  and preserve  a  fund for  defraying  the ICC  refunds

determined to  be due HTI's overcharged customers  in the present

action.

          The  Holmes parties  were  not parties  to the  present

action  at  the time  the consent  decree  was entered.    At the

instance  of the ICC, however, the consent decree was executed by

Seder, who  had represented the Holmes parties throughout the HTI

negotiations  with Ruhland and Route  USA.  As  Gunderman and HTI

(but not the ICC) were well aware, of course, Seder and Gunderman

                    

     2The private escrow agreement  provided that (1) the refunds
were  to be made by HTI in  the first instance, and reimbursed by
the escrow  fund in $25,000 increments upon certification by HTI;
(2) the escrowed funds were to remain the property of  the Holmes
parties,  and, if not disbursed by March 16, 1989, were to revert
to them;  (3) the escrowed funds  were to be used  only to defray
obligations accruing prior to  February 3, 1988 (the date Ruhland
assumed  operational control of HTI);  and (4) the escrow account
was to be deposited in a state-chartered financial institution.
     The  consent decree, on  the other  hand, provided  that (1)
refund  payments were to be made directly from the escrow account
to the overcharged shippers; (2) all refunds (whether originating
before or after February 3, 1988) were to be made from the escrow
account;  (3) the escrow account  was not to  terminate until all
refunds  were made; and only then were any undistributed funds to
revert to HTI; and  (4) the escrow account was  to be established
in a federally-chartered financial institution.

                                5

were the designated escrow agents under the private escrow  fund.

No refunds were ever disbursed.

          On July 14, 1989, Ruhland  sold HTI to Anthony Mataraz-

zo.   Matarazzo was notified  of the ICC  action against HTI, but

was  informed by Gunderman that  the ICC refund  claims were "al-

ready taken care of" and that a $500,000 escrow  account had been

set aside  to defray the refunds.   The Holmes  parties had other

plans  for the  escrowed funds.   On  July 18,  1989, the  Holmes

parties initiated a declaratory  judgment action in Massachusetts

Superior  Court, to  recoup the funds  deposited pursuant  to the

private escrow agreement.   Meanwhile, the ICC  became aware that

the refunds  required  under  the  consent decree  had  not  been

disbursed.

          On September 14,  1989, the  ICC convened a  meeting of

persons  associated with HTI and  with the original  lawsuit.  At

the  meeting, the ICC was  informed of the  Holmes parties' state

court lawsuit and was furnished for the first time with copies of

the  private escrow  agreement.   Matarazzo,  in  behalf of  HTI,

agreed to effect the overdue ICC refunds within 30 days, provided

Seder and Gunderman, as escrow agents, would release the escrowed

funds.   Gunderman agreed.   Seder declined,  however, contending

that (1) the Holmes parties' obligations under the private escrow

agreement terminated on March 16, 1989, (2) Seder's signature had

not  bound the Holmes parties to the  consent decree, and (3) the

Holmes parties were  therefore entitled to  recover the funds  in

escrow.

                                6

          On  October 13,  1989,  the Holmes  parties  and  Seder

intervened in  the present action, demanding  a judicial declara-

tion entitling the Holmes parties  to the escrow funds.  The  ICC

countered with  a civil contempt citation  against Seder, Gunder-

man,  Ruhland, Route USA, HTI, and Matarazzo.  The ICC contended,

inter alia, that Seder  and Gunderman, by their execution  of the
          

consent decree, subjected the  escrowed funds to the jurisdiction

of  the district  court for  disposition  in accordance  with the

terms  of the  consent decree.   The  ICC further  contended that

Gunderman and Seder, as escrow agents, failed to provide  prudent

supervision relating to HTI's obligation to disburse the escrowed

funds in  accordance with  the terms of  the consent  decree.   A

barrage  of cross-claims  and  counterclaims ensued.   On  Decem-

ber 15,  1989, HTI filed a  voluntary chapter 11  petition in the

District of New Jersey.

          On January 26, 1990, after  an evidentiary hearing, the

district court  issued its  findings of fact,  and concluded,  in

pertinent  part, that  (1)  the consent  decree  and the  private

escrow  agreement were negotiated simultaneously as "synergistic"

documents intended to  ensure funding of the  ICC refunds antici-

pated under  the  consent  decree;  (2) the  consent  decree  was

executed by Seder  as attorney for  the Holmes  parties and as  a

designated escrow  agent under the private  escrow agreement; and

(3) the consent decree was "the only operative document" defining

the legal obligations  of Seder  and Gunderman  relating to  dis-

bursements from the escrow fund.  The district court rejected the

                                7

Holmes parties' claims to the escrow fund, and held HTI and Seder

in  civil  contempt for  refusing  to  disburse the  ICC  refunds

pursuant to  the  consent  decree.3   Seder  and  Gunderman  were

replaced as escrow agents  by Frank Weiner, an HTI  attorney, who

was directed to  disburse the ICC refunds by March 30,  1990.  We

stayed disbursements pending appeal.

          On April 1,  1992, following remand, see  ICC v. Holmes
                                                                 

Transp., Inc., 931 F.2d  984 (1st Cir. 1991), the  district court
             

vacated its  contempt finding  against Seder and  Gunderman,4 but

reaffirmed its  order directing  disbursement of the  ICC refunds

from the escrow fund in accordance with  the terms of the consent

decree.    Appellants  now  challenge the  district  court  order

entered on remand.

                                II

                            DISCUSSION
                                      

                    

     3Gunderman's civil contempt was deemed purged by his earlier
agreement  to transfer the  escrow funds  in accordance  with the
consent decree.

     4Since Seder's removal  as escrow agent  terminated whatever
interest  he asserted  as  a declaratory  judgment plaintiff,  we
conclude that Seder lacks appellate standing.  See  United States
                                                                 
v. Little Joe  Trawlers, Inc., 780 F.2d 158, 161  (1st Cir. 1986)
                             
("[t]o have standing to appeal, an appellant ordinarily must have
been a party to the proceeding below, and have  been aggrieved by
the order appealed from . . .  .  '[A]lthough a party may have an
appealable  interest at  the  commencement  of  a suit,  if  that
interest  has terminated before the entry of a judgment or decree
sought to  be appealed from,  he cannot appeal'").   Accordingly,
Seder's  appeal of  the original  contempt finding  (based, inter
                                                                 
alia, on the vagueness of the consent decree, see Fed. R. Civ. P.
                                                 
65) has been  mooted.  Except as otherwise  indicated, therefore,
we refer to the Holmes parties as appellants.

                                8

          As they were not named in the consent decree or in  the

underlying ICC action, appellants contend that the district court

lacked authority to subject  them and the private escrow  fund to

the terms of the consent decree.  We disagree.

          The thrust of their argument is that the private escrow

agreement  and  the district  court  consent decree  contemplated

separate  and unrelated funds from which the ICC refunds would be
                       

disbursed:  a "private escrow fund," established under the escrow

agreement and belonging  to the Holmes parties,  which lay beyond

the  jurisdictional  reach of  the  district court;  and  an "ICC

fund," established  by the consent  decree, which was  within the

control of the court  but imposed legal obligations only  on HTI.
                                                                

To the extent that the district court purportedly subjected their

privately-created fund to the  consent decree, the Holmes parties

contend that  it lacked jurisdiction and  disregarded the express

terms of their private escrow agreement.   To the extent that the

consent  decree  directed  disbursements  from  the  escrow  fund

identified in the  consent decree, the Holmes  parties argue that

   as nonparties to the underlying  action    they were not bound

by the terms  of the consent decree.   See Fed. R. Civ.  P. 65(d)
                                          

(injunction  "binding only upon the parties  to the action, their

officers, agents,  servants, employees,  and attorneys,  and upon

those  persons in active  concert or participation  with them who

receive  actual notice of the order by personal service or other-

wise"); G. & C. Merriam  Co. v. Webster Dictionary Co., 639  F.2d
                                                      

29, 35 (1st Cir. 1980) ("[t]o hold a nonparty bound by an injunc-

                                9

tion  it  is thus  essential to  prove  either that  the nonparty

participated  in  the contumacious  act of  a  party or  that the

nonparty was subject to the injunction because legally identified

with a  party").   The determinative difficulty  with appellants'

conclusion  lies in  its faulty  premise     that there  were two

separate and unrelated funds.

          After  carefully  reviewing  the  relationship  of  the

parties, as well as the circumstances surrounding the drafting of

the escrow agreement  and the  consent decree, and  based on  its

"intimate understanding of the  history and circumstances of th[e

ICC] litigation,"  see United  States v. Massachusetts,  890 F.2d
                                                      

507,  510 (1st Cir. 1989), the district court determined that the

private escrow agreement and the consent decree were "synergistic

documents,"  negotiated  simultaneously,  which   contemplated  a

single  escrow  fund     comprised  of  the  HTI  purchase monies
      

received by the Holmes  parties from Ruhland to  underwrite HTI's

contingent  liability for any  ICC refunds determined  due in the

present  action.  See Chelsea Indus., Inc. v. Florence, 358 Mass.
                                                      

50,  55-56, 260 N.E.2d 732 (1970) (if part of "same transaction,"

separate contracts may be read together as integrated agreement);

see also Gilmore  v. Century Bank & Trust Co.,  20 Mass. App. Ct.
                                             

49, 50,  477 N.E.2d  1069, 1073  (1985) (whether two  instruments

derive  from "same transaction" is question of fact for court, to

be  determined by  "such  factors as  simultaneity of  execution,

identity of  subject matter  and parties, cross  referencing, and

interdependency of  provisions").  The district  court found that

                                10

the  Holmes parties,  through Seder's  execution of  the December

1988 consent decree, authorized HTI  to utilize their interest in

the escrowed funds to effectuate the intended purpose.  As HTI is

a party to the  present action, the district court  properly held

that it possessed jurisdiction over any interest  HTI retained in

the escrowed funds.

          Since  the  district  court  ruling  was  based,  quite

properly, on extrinsic  evidence of the parties' intent,  both as

concerns the private escrow agreement and the consent decree, see
                                                                 

Gilmore,  20 Mass. App. Ct. at 50,  477 N.E.2d at 1073; see also,
                                                                

e.g., Brennan v. Carvel Corp., 929 F.2d  801, 808 (1st Cir. 1991)
                             

(considering extrinsic evidence  to elucidate ambiguous relation-

ship between  parties' prior agreements), we  review its findings

only for "clear error."  See Gel Systems,  Inc. v. Hyundai Eng'g.
                                                                 

& Constr. Co., 902 F.2d 1024, 1027 (1st Cir. 1990) ("clear error"
             

review  where  court  utilizes  extrinsic evidence,  as  well  as

documents, to interpret parties' ambiguous  contractual relation-

ship); cf. Navarro-Ayala v. Hernandez-Colon, 951 F.2d 1325, 1340,
                                           

1343  n.21 (1st  Cir. 1991)  ("ordinary contract  principles" and

standards of review should be used to interpret "the scope of the

parties' original bargain" in public consent decree).

     1.   The "Single-Fund" Premise
                                   

          We discern no error in the district court ruling that a

single fund was contemplated by the parties to the private escrow

agreement  and  the consent  decree.    The "single-escrow  fund"

ruling  was supportably based on the following findings:  (1) the

                                11

parties to the private escrow agreement were aware of the impend-

ing  injunctive decree  and  even made  reference  to it  in  the

private escrow agreement; (2)  the purpose of the parties  to the

private  escrow agreement was to  fund the ICC refunds determined

due by HTI in the  present action; and (3) the consent  decree   

referring to but one escrow fund (and there being  no evidence of

another fund)    was signed  by Gunderman and by Seder  as repre-
                                                                 

sentative for the Holmes parties.5
                                

          Similarly, it  is relevant that the  ICC, envisioning a

single  escrow account  from which the  freight refunds  would be

made, requested that the injunctive decree be forwarded to Seder,
                                                       

as  the legal  representative  of the  Holmes parties,  providing

clear evidence that the ICC likewise recognized the obligation of

the Holmes  parties  to facilitate  disbursement of  the ICC  re-

funds.6    The understanding  of the  parties,  as well  as their

                    

     5Moreover,  since subsequent  conduct  of the  parties to  a
consent  decree may aid the interpretation of its intended scope,
see  Navarro-Ayala,  951 F.2d  at  1353 (Cyr,  J.,  concurring in
                  
part), we  likewise consider  it significant that  Ruhland repre-
sented to Matarazzo, during their negotiations for the second HTI
sale, that  the ICC refunds were  "taken care of" by  the private
escrow fund.  As owner of Route USA, the initial purchaser of HTI
from the Holmes parties, and as the source of the funds deposited
under the private  escrow agreement, Ruhland clearly  understood,
prior to the onset of the  present dispute, that the function  of
the private escrow  agreement was to ensure the  funding required
to implement the consent decree.

     6Mr.  Gunderman, an escrow  agent, counsel  to HTI,  and the
person who  submitted the consent decree for  signature by Seder,
made the following representations to the court:

     Mr. Robbins [an attorney for the  ICC] alluded to nego-
     tiations that took place  while the agreement was being
     finalized.  I  was the one that contacted  Mr. Robbins,
     told Mr. Robbins that I am reading the order, the order

                                12

conduct, plainly  comports with the district court's  view of the

private escrow  agreement and the consent  decree as "synergistic

documents" whose  function  was  to  enable payment  of  the  ICC

refunds owed by HTI.  Taken together, the evidence provides ample

support  for the district court  findings.  Nor  are its findings

impeached by the discrepancies  in the documents to which  appel-

lants  point.  Rather, these  discrepancies give rise  at most to

another plausible view  of the  evidence.  "Where  there are  two

permissible  views  of  the  evidence,  the  factfinder's  choice

between  them cannot  be clearly erroneous."   Cumpiano  v. Banco
                                                                 

Santander Puerto Rico, 902 F.2d 148, 152 (1st Cir. 1990) (quoting
                     

Anderson v. City of  Bessemer City, 470  U.S. 564, 573, 574  (19-
                                  

85)).7

                    

     calls  for the creation of  an escrow fund.   I alerted
     him to the fact that there was, in fact, an escrow fund
     established,  and did  he  want us  to  go through  the
     exercise of closing  one and  opening a new  one.   Mr.
     Seder was clearly away  aware of that [sic].   When the
     order  was  finalized, Mr.  Robbins  was  aware, I  was
     aware,  and  Mr. Seder  was  aware, that  there  was an
     escrow  fund called  for  in the  order,  and that  the
     private  escrow  fund, if  you  will,  was intended  to
     comply with the Court's order. . . .

Thus, Gunderman's  representations, as  an officer of  the court,
though  not  evidence per  se,  reinforced  the district  court's
                             
determination that at least HTI, Ruhland, and the  ICC envisioned
the private escrow fund as the sole source of funding for the ICC
refunds.  Moreover,  the district court  finding that the  Holmes
parties acquiesced in the consent decree implementing this under-
standing  cannot be considered  clear error  in light  of Seder's
execution of the consent  decree in behalf of the  Holmes parties
and as an escrow agent under the private escrow agreement.

     7Most discrepancies between the documents, see supra note 2,
                                                         
are  reconciled  by according  the consent  decree  its due  as a
mutual  modification  of the  escrow  agreement  to effect  their
common purpose,  viz., to  fund disbursement  of the ICC  refunds
                     

                                13

                    

pursuant to the district court decree.   Indeed, Escrow Agreement
  11, on which the Holmes parties rest their claim to the escrow-
ed funds, appears  explicitly to  anticipate voluntary  modifica-
                                            
tions to its  expiration date  in light of  a subsequent  consent
decree;  it provides  that the  parties' escrow  obligations will
expire on "March 16, 1988, or such later date as the  parties may
                                                                 
agree  in order  to  complete the  review  and repayment  of  all
     
unidentified and duplicate payments."

                                14

     2.   Seder's Capacity
                          

          As countervailing evidence to the  "single-escrow fund"

theory, and as a separate  basis for their claim to the  escrowed

funds, appellants contend that Seder did not sign the December 12

consent decree as their  attorney, but rather as counsel  to HTI.

Therefore, they  contend, the  consent decree among  Ruhland, HTI

and the ICC did not  bind them; rather, their rights  and obliga-

tions continued to  be governed by the private  escrow agreement,

which expired March 16, 1989, by its own terms.

          Their argument is unavailing.  Regardless whether Seder

represented HTI or the Holmes parties, the district court finding

that  the  escrowed  funds  were specifically  dedicated  to  the

settlement of HTI's contingent liabilities, and were uncondition-

ally  intended for  that purpose,  meant that  there could  be no

entitlement  to recoup the funds until the ICC refunds were paid.

See  30A C.J.S. Escrows    5(a) ("to constitute  an instrument an
   

escrow, it must  be deposited  with the intention  that it  shall

take effect on  the performance  of an express  condition or  the

happening of a certain event . . . [T]he condition  or event must

be one in fact which will prevent the operation of the instrument

until  it is  performed or  occurs"); see  also Childs  v. Harbor
                                                                 

Lounge  of  Lynn, Inc.,  255 N.E.2d  606, 608,  357 Mass.  33, 35
                      

(1970).

          In any  event, the district court  rejected the factual

premise for appellants' argument,  holding instead that Seder had

executed the consent decree as counsel to the Holmes parties.  As

                                15

the determination  of an attorney-client relationship  is a ques-

tion  of fact, or, at most, a mixed question of law and fact, see
                                                                 

Industrial Banker  of Massachusetts v.  Reid, Murdoch &  Co., 297
                                                            

Mass. 119, 8 N.E.2d 19, 22 (1937) (attorney's authority to demand

release of attachment, following alleged verbal authorization  by

owner of property, is  "question of fact"); see also  Pedersen v.
                                                              

Leahy,  397 Mass.  689, 690,  493 N.E.2d  486, 487  (1986) (where
     

signature  line of purchase agreement is ambiguous as to capacity

of  signing  party,  signatory's agency  relationship  ordinarily

presents  a question  of  fact),  we  review for  "clear  error."

Industrial  Bankers, 8  N.E.2d at  22; see  generally LoVuolo  v.
                                                             

Gunning, 925 F.2d 22, 25 (1st Cir. 1991) ("clear error" review of
       

mixed questions).

          As  the  district  court determined,  Gunderman     not
                                                         

Seder      represented HTI  at the  time  the consent  decree was

signed.   Control  of  HTI had  been  transferred to  Ruhland  in

February  1988;  Gunderman served  as  Ruhland's  counsel and  as

counsel  to the  company after  that date.   Seder,  by contrast,

represented the Holmes parties,  not HTI, throughout the negotia-
                              

tions  for the sale  of HTI.   There is no  indication that Seder

entered an appearance for  HTI, participated in negotiations with

the ICC, or  rendered significant professional services to HTI in

connection with the ICC refund claims.  Prior to that time, Seder

had  never entered an appearance  for HTI in  the present litiga-

tion; never  billed HTI for professional  services in furtherance

of  its  settlement  with  ICC; and  never  rendered  significant

                                16

professional services to  HTI in connection  with the ICC  refund

claims.8   Furthermore, as  the district  court found,  given his

inexperience  with ICC  rules and  regulations, there  was little

apparent  reason for HTI to  retain Seder in  the present litiga-

tion.9

     3.   The Agency Question
                             

          Appellants further  assert that even if  Seder did sign

the consent decree in their  behalf, he had not been vested  with

the proper authority under Massachusetts law.  

          Although, under Massachusetts law, the "general powers"

of an attorney to represent a client do not  entail the authority

either to settle a case, see Precious v. O'Rourke, 270 Mass. 305,
                                                 

                    

      8Appellants contend that the material inquiry  for purposes
of  determining  the significance  of  Seder's  signature on  the
consent decree is not Seder's  actual role, but ICC's understand-
ing of his  role, since Seder signed the decree  at ICC's behest.
They argue  that a September 14, 1988  letter, allegedly excluded
improperly  by the district court, showed that the ICC understood
that Seder was  acting in behalf of HTI,  not the Holmes parties.
Our review of  the September 14  letter persuades us  that it  is
ambiguous  as concerns  Seder's role  in negotiating  the consent
decree, and  that its exclusion, even if  erroneous, was harmless
error.

     9Once again appellants point to contrary evidence, including
the letter adverted to above, see supra note 8, and the fact that
                                       
the consent  decree contained  no signature line  for the  Holmes
parties.  Their  arguments are not compelling.  Above Gunderman's
signature on the consent decree appears the legend "Attorneys for
Defendant,"  which reasonably can be read to refer to the Gunder-
man law  firm.  Although Seder's signature  appears below Gunder-
man's, the document does not clearly identify Seder's affiliation
with any particular party to the  action.  At best, the proffered
        
evidence is ambiguous, suggesting an alternative  inference which
might reasonably be drawn, but not warranting reversal  on "clear
error"  review.  See Cumpiano, 902 F.2d at 152 (quoting Anderson,
                                                                
470 U.S. at 573-74).

                                17

170 N.E. 110 (1930),  or to make substantial modifications  to an

existing contract, cf. Torrao  v. Cox, 26 Mass. App. Ct. 247, 525
                                     

N.E.2d  1349 (1988), the principal's  consent to be  bound may be

implied by showing  the agent's actual  or apparent authority  to

act  in the principal's behalf.   An agent's  actual authority to

bind his principal may  be implied under Restatement (Second)  of

Agency   43 in  circumstances where the principal  has acquiesced

in or adopted conduct by the agent which is reasonably considered

to encompass  the authority to  undertake the subject  conduct on

the  principal's behalf.  See  LaBonte v. White  Constr. Co., 363
                                                            

Mass. 41, 292  N.E.2d 352, 355 (1973)  (superintendent of schools

held to be 'agent'  of school district for purposes  of receiving

plaintiff's statement of claim, where superintendent was familiar

with  contract involved  in litigation,  and school  district had

acquiesced  in superintendent's  acceptance of  other plaintiffs'

claims on several prior occasions); Hurley v. Ornsteen, 311 Mass.
                                                      

477, 42 N.E.2d  273 (1942) (existence of agency  relationship may

be implied from "course  of conduct showing that a  principal has

repeatedly  acquiesced  therein  and  adopted acts  of  the  same

kind");  Restatement  (Second) Agency    43.    In light  of  its

finding that the private escrow agreement and the  consent decree

were  "symbiotic"  documents  designed  to  serve  the  identical

function, viz., providing an indemnity fund for  settling the ICC
              

refund  claims  against HTI,  the  court  supportably ruled  that

Seder's authority  to negotiate and execute  the escrow agreement

in behalf of the  Holmes parties implied the authority  to modify

                                18

the escrow agreement as necessary to implement settlement of  the

ICC  refund claims  in litigation.10   After  carefully reviewing

the entire  record,  we  find  the force  of  the  countervailing

evidence  proffered  by  appellants  insufficient  to  produce  a

"definite and firm conviction that a mistake has been committed,"

Anderson, 470  U.S. at  573 (stating  "clear  error" standard  of
        

review).11

                    

     10Implied  authority might also  be found  under Restatement
(Second)  of  Agency   35  (1958),  which  provides that  "unless
otherwise  agreed, authority  to  conduct a  transaction includes
authority to do acts which are incidental to it, usually accompa-
ny  it, or are reasonably necessary to accomplish it."  (Emphasis
                                                    
added.)  See also, e.g., Transurface Carriers, Inc. v. Ford Motor
                                                                 
Co., 738 F.2d 42, 45  (1st Cir. 1984) ("the law of  principal and
   
agent is clear that conferring authority to conduct a transaction
gives authority to undertake acts incidental to the transaction")
(citing Massachusetts cases).
     Gordon  v.  O'Brien, 320  Mass. 739,  71 N.E.2d  221 (1947),
                        
cited by appellants,  is not  to the  contrary.   In Gordon,  the
                                                           
Supreme  Judicial Court  held that  general  authority to  sell a
property on a client's behalf could not be presumed from the fact
that the  parties' longtime attorney had  sold another, unrelated
                                                                 
property to a different  party in a prior transaction.  320 Mass.
at  741.  Here, the district court reasonably inferred that Seder
was authorized to sign the consent decree, based on the fact that
Seder had signed  a closely related document,  the private escrow
                                   
agreement, essentially  involving the  same parties and  the same
fund.  The  present case is closer  to United States  v. Bosurgi,
                                                                
343 F. Supp. 815,  817 (S.D.N.Y. 1972), aff'd in  pertinent part,
                                                                
530 F.2d 1105 (2d Cir. 1976), cited by neither party, in which an
attorney,  expressly retained  to defend  a lawsuit  involving an
escrow  fund, was held  to possess  implied authority  to receive
process  on  the  same  client's behalf  in  separate  litigation
involving the same fund.

     11Since we affirm  on the strength  of the district  court's
ruling that Seder possessed implied authority to bind  the Holmes
parties,  we need  not reach  its  alternative holding,  based on
"apparent authority."

                                19

                               III

                            CONCLUSION
                                      

          The  district court  did  not exceed  its authority  by

directing  disbursements to  the  ICC refund  claimants from  the

escrow fund  established under the private escrow  agreement.  As

the escrow  fund was  comprised of  the monies  Ruhland deposited

with  the Holmes  parties  for the  purchase  of HTI,  and  their

private escrow agreement was specifically intended as an indemni-

ty fund  for  settling HTI's  contingent liabilities  to the  ICC

refund claimants  in the  present litigation, the  district court

possessed  jurisdiction  over the  escrow  fund  incident to  its

jurisdiction over HTI in the underlying ICC action.

          The  district court  order is  affirmed, with  costs to
                                                                 

appellees.   The order previously entered by  this court, staying
                                                                 

further disbursements from  the escrow account, is  vacated.  The
                                                                 

case is  remanded to the  district court for  further proceedings
                                                                 

consistent herewith.12
                   

                    

     12Since neither  party has demonstrated the  likelihood of a
residue in the escrow account following disbursements  to the ICC
refund  claimants, any  dispute  over  a  residue is  unripe  for
decision.  See Massachusetts  Ass'n of Afro-American Police, Inc.
                                                                 
v. Boston Police Dept., 973 F.2d 18, 20 (1st Cir. 1992) (issue is
                      
unfit  for review  if  "claim involves  uncertain and  contingent
events that may not occur as anticipated, or indeed may not occur
at all"); W.R. Grace & Co. v. EPA, 959 F.2d 360, 364-65 (1st Cir.
                                 
1991).

                                20