Delaware Business Litigation Report

Superior Court Rejects Breach of Contract and Apparent Authority Claims, Grants Summary Judgment

Pisano v. Delaware Solid Waste Auth., C.A. No. 05-C-03-132-FSS (Del. Super. Nov. 30, 2006).

 

In this opinion granting Defendant’s motion for summary judgment, the Superior Court rejected Plaintiff’s argument that Defendant had breached an alleged contract with Plaintiff to sell used waste-processing equipment, and found that Plaintiff’s argument that Defendant granted apparent authority to a third party to sell the equipment unconditionally lacked merit. Plaintiff alleged that he had entered into an unconditional contract with a third party serving as Defendant’s agent to acquire the equipment for $150,000, and that Defendant breached that contract when it later sold some of the equipment to another party. Defendant argued that it did not have a contractual relationship with Plaintiff, and that Plaintiff’s argument that the third party had authority to act on Defendant’s behalf was clearly unfounded. The Superior Court concluded that even viewing the facts in a light most favorable to Plaintiff, there was no basis for a jury to determine that Defendant had breached any contract with Plaintiff or had given the third party authority to act on Defendant’s behalf.

 

The Court found that giving the contract its plain meaning, Defendant had entered into a contract with the third party, not Plaintiff, to dismantle and sell the equipment to a firm acceptable to Defendant, and Plaintiff was therefore without standing to sue for outright breach. The Court further found that Defendant properly terminated the contract after the third party’s nonperformance. Rejected was Plaintiff’s argument that a contract with Defendant was formed because Defendant held the third party out as its agent by allowing the third party to sell the equipment on Defendant’s behalf. The Court found that neither Defendant’s contract with the third party nor Defendant’s representations and statements to Plaintiff created a reasonable belief or reliance that the third party had actual or apparent authority to sell the equipment on Defendant’s behalf. Furthermore, Plaintiff breached his duty to act with “ordinary prudence and reasonable diligence” in determining what the scope of the third party’s authority might have been. The Court also held, without lengthy discussion, that Plaintiff’s breach of contract claim was time barred, and that Plaintiff’s claim for unjust enrichment against Defendant for not returning the $150,000 Plaintiff paid to the third party was a claim to be made against the third party, not Defendant. Finally, the Court held that Plaintiff had not presented sufficient evidence to allow a jury to find that Defendant had broken any promise to Plaintiff, and therefore could not support his claim of promissory estoppel.

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