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RIDGEWELLS CATERER, INC. v. NELSON

June 28, 1988

Ridgewells Caterer, Inc., Plaintiff
v.
Lana Nelson, Defendant



The opinion of the court was delivered by: PENN

 JOHN GARRETT PENN, UNITED STATES DISTRICT JUDGE

 This matter comes before the Court on the plaintiff's motion for summary judgment *fn1" and defendant's motion for partial summary judgment. After careful consideration of the motions, the oppositions, and the record in the case, the Court concludes that both motions must be granted.

 The dispositive elements of the case are discussed briefly. Defendant Lana Nelson was president, treasurer, director and sole shareholder of Sunshine International, Ltd., ("Sunshine"), a District of Columbia corporation which was engaged in special events and meeting coordination planning. In December 1983, Sunshine entered into a contract with Joseph E. Seagram, U.S.A., ("Seagrams") to plan a reception and dinner which was held at the Corcoran Gallery of Art in Washington, D.C. on June 11, 1984. Seagrams' paid Sunshine $ 46,234.99 for expenses connected with the dinner. In the course of staging the event, Sunshine employees contracted with plaintiff Ridgewells Caterers Inc., ("Ridgewells"), a Maryland corporation, to provide food, equipment and services amounting to $ 25,360.34 for the dinner and reception. Ridgewells presented Sunshine with several bills for its services, however the amount remains unpaid. It is undisputed that Sunshine owes $ 25,360.34 to plaintiff.

 Defendant Nelson met with several Ridgewells employees on November 28, 1984 in order to discuss the outstanding bill. At the meeting, Nelson related that two Sunshine employees, Rita Landis and Mary Newell, had been discharged for stealing from Sunshine and that Sunshine was no longer financially capable of meeting its obligation to Ridgewells. Nelson offered to settle the debt for approximately $ 12,000, however Ridgewells did not respond to the offer and the meeting was thereafter terminated. Ridgewells subsequently initiated this action against the defendant in her individual capacity, claiming breach of contract, fraud, and conversion. Defendant Nelson counterclaimed, alleging that Ridgewells both slandered her by disseminating derogatory information about her financial status among the Washington catering community and that it subjected her to the intentional infliction of emotional distress at the November meeting. Ridgewells has moved for partial summary judgment on the defamation and intentional infliction of emotional distress counterclaims. Nelson has moved for partial summary judgment on the contract claim asserted against her as an individual. For the reasons set forth below, both motions will be granted.

 I.

 The Court's jurisdiction has been invoked under 28 U.S.C. § 1332. The governing substantive law is that of the District of Columbia. Klaxon v. Stentor Electric Manufacturing Co., 313 U.S. 487, 496, 61 S. Ct. 1020, 1021, 85 L. Ed. 1477 (1941); Anchorage-Hynning & Co. v. Moringiello, 225 U.S. App. D.C. 114, 697 F.2d 356, 360 (D.C. Cir. 1983).

 It is a general principle of corporation law that the officers and employees of a corporate entity are its agents. 2 Fletcher Cyc. Corp. § 434 (1982). Under the law of the District of Columbia, an agent is not personally liable on a contract it executes on behalf of a principal so long as it identifies the principal and discloses the agency relationship. Rittenberg v. Donohoe Construction Co. Inc., 426 A.2d 338, 341 (D.C. 1981); Resnick v. Abner B. Cohen Advertising, Inc. 104 A.2d 254, 255 (D.C. 1954). The requirement of disclosure is satisfied if, at the time of the transaction, the other party had notice that the agent is acting for a principal and of the principal's identity. Penick v. Frank E. Basil, Inc. of Delaware, 579 F. Supp. 160, 164-65 (D.D.C.) aff'd 240 U.S. App. D.C. 254, 744 F.2d 878 (D.C. Cir. 1984); Henderson v. Phillips, 195 A.2d 400, 402 (D.C. 1963).

 In this regard, the record demonstrates that the invoices and work sheets containing the material terms of the contract between Ridgewells and Sunshine indicate that on the occasion at issue, Ridgewells dealt exclusively with two Sunshine employees, Rita Landis and Holly Van Fleet, while planning the Seagram event. The billing information section on the invoices lists "Sunshine International" and its office address. See, Invoices, attached to Complaint, filed November 30, 1984. The invoices were acknowledged by Rita Landis and the resulting bill was mailed to the Sunshine office marked to the attention of Landis. There is no indication that Ridgewells was dealing with Landis as an individual. On these facts, it is apparent that Landis disclosed her agency status as well as the identity of Sunshine. There are no references to defendant Nelson in these documents.

 Ridgewells argues, however, that it dealt with Landis as an agent for Nelson in her individual capacity and was unaware of Sunshine's corporate status. In response, defendant has established through copies of records filed with the District of Columbia Department of Consumer and Regulatory Affairs that Sunshine International, Ltd. was originally incorporated in 1968 and has operated under its present identity from 1973 until late 1984. See, Nelson v. United States, 142 A.2d 604 (D.C. 1958) (existence of corporation may be proven by certificate of incorporation). Moreover, Ridgewells has had several previous dealings with Sunshine as substantiated by invoices from past functions. These invoices were alternately addressed to "Sunshine International", "Sunshine International, ATTN: Rita Landis" or "Sunshine International, ATTN: Lana Nelson". The invoices from these previous functions were paid by checks drawn on Sunshine's corporate account and which bore the legend "Sunshine International, Ltd.". Exhibit E, attached to Defendant's Motion for Partial Summary Judgment, filed February 24, 1987.

 These prior dealings between the parties were certainly sufficient to impute notice of the agency relationships involved to Ridgewells. The checks drawn in payment for services previously supplied to Sunshine by Ridgewells reveal the corporate identity of the defendant. See, Henderson, 195 A.2d at 402. In addition, Sunshine's use of the term "Ltd." in its correspondence and on its checks is further evidence of its corporate status. D.C. Code Ann. § 29-308(1) (1981). *fn2" Finally, none of Sunshine's contracts with Ridgewells contain any indication that the defendant intended to be held personally liable for Sunshine's obligations to Ridgewells. Inasmuch as Landis disclosed both the agency relationship and the identity of Sunshine as principal at the time of the transaction, and previous dealings between Ridgewells and Sunshine put Ridgewells on notice it was dealing with a corporate entity, personal liability may not be imposed upon the corporation's agents under the circumstances presented herein.

 Furthermore, Fed. R. Civ. P. 56(e) provides that a party opposing a properly supported motion for summary judgment may not rest upon the mere allegations and denials of his pleadings, but must set forth specific facts showing there is a genuine issue for trial. See also, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S. Ct. 2505, 2511, 91 L. Ed. 2d 202 (1986). The Supreme Court has held that in the face of a motion under Rule 56, this burden requires the nonmoving party to introduce "significant, probative evidence tending to support the complaint". First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 290, 88 S. Ct. 1575, 1598, 20 L. Ed. 2d 569 (1968).

 The plaintiff now before the Court has been afforded an adequate opportunity for discovery and has failed to produce any such evidence supporting its allegation that Nelson held herself out as contracting in her individual capacity. Because plaintiff has failed to make a sufficient showing of an essential element of its case with respect to which it bears the burden of proof, Celotex Corp. v. Catrett, 477 U.S. 317, 106 S. Ct. 2548, 2553, 91 L. Ed. 2d 265 (1986), defendant is entitled to judgment. The record indicates that plaintiff has not joined the corporate entity as a party defendant, nor does it address in its supplemental pleadings whether there is a sufficient justification in this instance to disregard the corporate entity so as to impose personal liability upon the defendant for corporate obligations. See, Labadie Coal Co. v. Black, 217 U.S. App. D.C. 239, 672 F.2d 92, 96 (D.C. Cir. 1982); McAuliffe v. C and K Builders, 142 A.2d 605, ...


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