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A-J Marine, Inc. v. Corfu Contractors

October 9, 2009

A-J MARINE, INC., PLAINTIFF,
v.
CORFU CONTRACTORS, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Rosemary M. Collyer United States District Judge

MEMORANDUM OPINION

A-J Marine, Inc. ("A-J Marine") sued Corfu Contractors, Inc. ("Corfu") and Corfu's surety The Ohio Casualty Insurance Company ("Ohio Casualty") for breach of contract and breach of payment bond, respectively.*fn1 Corfu filed a counterclaim against A-J Marine for breach of contract and impleaded Mr. Peter Kalos as Third Party Defendant. The parties have completed fact discovery and all have filed motions for summary judgment.

The source of the dispute is a subcontract that A-J Marine and Mr. Kalos executed, the latter purportedly on behalf of Corfu. Corfu argues, inter alia, that the subcontract cannot be enforced against it because Mr. Kalos had no authority to contract on its behalf. Because the legal rights of all parties are contingent upon the enforceability of the subcontract,*fn2 the Court will endeavor to resolve that issue first. For the reasons explained herein, the Court finds that expert testimony is needed for it to determine whether the subcontract is enforceable against Corfu. Accordingly, the Court will deny all pending motions without prejudice to refiling after the parties have completed the supplemental expert discovery contemplated by this Memorandum Opinion.

I. FACTS

On January 10, 2006 the Washington Metropolitan Area Transit Authority ("WMATA") awarded to Corfu a contract to perform work described as "Scour Countermeasure Installation for Potomac River Memorial Bridge." The project involved the dredging and placement of stone in certain bridge piers for the Potomac River Memorial Bridge. On January 24, 2006, Ohio Casualty issued performance and payment bonds on behalf of Corfu for the project.

Prior to being awarded the WMATA contract, Corfu had subcontracted with Brickwood Contractors, Inc. ("Brickwood") to perform the work. See Corfu's Opp'n to Pl.'s Mot. for Partial Summ. J. ("Corfu's Opp'n") [Dkt. # 88], Ex. M (March 8, 2005 contract between Corfu and Brickwood). The subcontract provided that "[n]o assignment of this subcontract agreement is permitted without prior written permission from the Contractor." Id. at Art. 4.

Mr. Kalos is president of Brickwood. His wife, Veron Lee Kalos, is Brickwood's secretary and treasurer. According to Mr. Christos Kollas, Corfu's president and Rule 30(b)(6) representative,*fn3 Corfu's agreement with Brickwood "was that if we get the job [with WMATA]... he [Mr. Kalos] will perform everything on the job, paperwork, and all of the actual work on it, because he was familiar with this kind of work." Pl.'s Mem. in Supp. of Mot. for Partial Summ. J. ("Pl.'s Mem.") [Dkt. # 80], Ex. D (Dep. of Christos Kollas ("Kollas Dep.")) at 21. Mr. Kollas testified that Mr. Kalos and his wife were the only persons managing the project on behalf of Corfu:

Q: What, if any, role did Corfu - any of your - any of the individuals who participated in managing Corfu, have in the scour countermeasure project? Did you supervise the work or keep track of it or attend meetings with WMATA or have any other role in that project -

A: No.

Q: - as a practical matter?

A: No.

Q: Okay. You personally did not. Your brother did not. Your nephew did not. Is that correct?

A: Right. Nobody.

Id. at 30.*fn4

On October 16, 2006, Mr. Kollas executed a document on behalf of Corfu, apparently requested by WMATA, entitled "power of execution." See id., Ex. E. Pursuant to the power of execution, Corfu: nominates, constitutes, and appoints Peter Kalos, Project Supervisor with full power to act alone on behalf of Corfu Contractors, Inc. to make, execute, seal and deliver on its behalf as contractor and as its act and deed, any and all contracts, change orders, monthly and final payment certificates and other like instruments.

Id. The power of execution was delivered to WMATA by cover letter dated July 24, 2007. Id. The July 24, 2007 cover letter appears to be from Mr. Kollas.*fn5 Corfu also submitted to WMATA a list of its personnel, on which Mrs. Kalos was listed as "project manager" who can be contacted at "CorfuContractors@aol.com" and Mr. Kalos was listed as "superintendent." Id., Ex. F Mrs. Kalos testified on behalf of Brickwood that she maintained a supply of Corfu letterhead at her office. Id., Ex. G (Dep. of Veron Lee Kalos ("L. Kalos Dep.")) at 30. She testified that she sent letters to third parties on Corfu letterhead because "Corfu and Brickwood were working together, and we were working under Corfu's name." Id. at 29. She also testified that she issued checks on behalf of Corfu to pay Corfu's vendors:

A: Somebody would give me a signed check. I didn't take it somewhere to get it signed. I ...


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