LLC v. Global Computer Corp., Doing Business as Global Computer Systems, Appellant. (2024)

ORDERED that the judgment is affirmed, without costs.

In this action, plaintiff, a marketing services provider, seeks to recover the principal sum of $24,000, based on defendant's alleged anticipatory repudiation of a contract. At a nonjury trial, it was established that, in October 2018, one of defendant's employees contacted plaintiff about providing marketing services for defendant. After meeting with three of defendant's employees, including Thomas Halpin, on several occasions, plaintiff provided defendant with a proposed agreement in December 2018. In February 2019, at Halpin's request, plaintiff attended an additional meeting concerning defendant's possible retention of plaintiff to provide marketing services. Defendant's owner and president, Alan Paulus, who knew the purpose of the meeting, attended the meeting, was introduced to plaintiff, and did not communicate to plaintiff any restrictions on Halpin's authority to enter into a marketing services contract on defendant's behalf. Halpin held himself out to plaintiff as defendant's "managing director."

Following the February 2019 meeting, Halpin told plaintiff that defendant had hired a different marketing services agency. However, in June 2019, Halpin informed plaintiff that he had cancelled the other agency and requested another meeting with plaintiff. Following that meeting, which Halpin and plaintiff attended together with another of defendant's employees, as well as further meetings and negotiations, plaintiff drafted a letter agreement (the contract) upon which plaintiff bases this action.

Under this "non-cancellable" contract, plaintiff was appointed the "Marketing Communications Agency for Global Computer Systems" for a six-month term, commencing on August 1, 2019. The services plaintiff was to provide included the development of "a communication plan and budget estimates based on [defendant's] marketing objectives and strategies." Defendant, as client, was required to approve and authorize all contracts for outside services. The contract did not include a marketing budget. It provided that plaintiff would be paid a $4,000 monthly retainer fee and commissions on the purchase of outside services. On July 26, 2019, plaintiff and Halpin signed the contract. Halpin's signature appeared below the word "officer" and over the descriptor "Global Computer Systems, Inc."

Paulus testified that Halpin had not been authorized to enter into contracts, and that he had only been given the title of "managing director" around the middle of 2020. He stated that, upon learning of the contract, he instructed Halpin to cancel it. It was undisputed that Halpin canceled the contract before plaintiff's time for performance had begun.

The Suffolk County Court found that, under the totality of the circumstances, Halpin had had the apparent authority to enter into the contract with plaintiff and that plaintiff's reliance on Halpin's authority had been reasonable. The court commented that defendant had failed to call Halpin as a witness or to explain why Halpin was unavailable to testify. It rejected defendant's claims that the contract was unenforceable because of its failure to specify a budget for a marketing plan and because of its use of the name "Global Computer Systems, Inc.," and awarded plaintiff the principal sum of $24,000 based on defendant's anticipatory breach of the contract. This appeal ensued.

"One who deals with an agent does so at his peril, and must make the necessary effort to discover the actual scope of authority" (Ford v Unity Hosp., 32 NY2d 464, 472 [1973]; accord e.g. ER Holdings, LLC v 122 W.P.R. Corp., 65 AD3d 1275, 1277 [2009]). Thus, although plaintiff asserts and defendant does not dispute that Halpin's title of "managing director" appeared on Halpin's business card and his emails, without establishing that defendant was aware of, and explicitly or implicitly endorsed, Halpin's use of that title during the time in question, Halpin's use of the title "managing director" in his dealings with plaintiff was, standing alone, inadequate to imbue Halpin with apparent authority to enter into the contract on behalf of defendant.

Nevertheless, in dealing with an agent, one may rely on conduct of the agent's principal which gives "rise to the appearance and belief that the agent possesses the authority to act on behalf of the principal" (Malefakis v Jazrawi, 209 AD3d 727, 728 [2022]), although "only to the extent that such reliance is reasonable" (Hallock v State of New York, 64 NY2d 224, 231 [1984]). In our opinion, the Suffolk County Court properly concluded that, in the circumstances presented here, Halpin was cloaked with apparent authority to enter into a contract for marketing services on behalf of defendant, and that no extraordinary factors triggered a duty for plaintiff to inquire respecting Halpin's authority to do so (cf. Collision Plan Unlimited v Bankers Trust Co., 63 NY2d 827 [1984] [where the individual who had signed a corporate resolution to gratuitously guaranty a mortgage loan was the prime beneficiary of the mortgage loan, the arrangement was so extraordinary that it should have triggered a duty of reasonable inquiry by the bank as to the authority of the persons involved to make the mortgage arrangement]; Weiss v Hager, 151 AD3d 906 [2017] [where the defendant bank's employee introduced the plaintiff to outside individuals located in other countries who promised returns which were so extraordinary as to be unbelievable, the circumstances triggered a duty for the plaintiff to make reasonable inquiry about the employee's authority]).

We further find that the County Court correctly concluded that the omission from the contract of a marketing budget did not render the contract unenforceable. The contract stated, among other things, that plaintiff would develop a communication plan and budget estimates based on defendant's marketing objectives, but that defendant would have to authorize each plan and campaign that plaintiff proposed, as well as all outside contracts. The marketing budget thus was an item that was to be determined during the term of plaintiff's employment, and could not be a fixed number. Since the contract was definite as to plaintiff's retainer fee, we find that the County Court properly found it to be enforceable despite the lack of a marketing budget.

The contract, by its terms, constituted an agreement for plaintiff "to be appointed Marketing Communications Agency for Global Computer Systems"; the name "Global Computer Systems, Inc." only appeared below the signature line for defendant's "Officer." It is undisputed that defendant did business as Global Computer Systems, and that both parties understood that the contract was intended to be an agreement between plaintiff and defendant. We thus find that the County Court correctly determined that the inadvertent misnomer by the addition of the descriptor "Inc." below the signature line for defendant did not affect the enforceability of the contract (see Lipson v Herman, 189 AD3d 440 [2020]; J.N.K. Mach. Corp. v TBW, LTD., 155 AD3d 1611, 1613 [2017]; Assos Constr. Corp. v 1141 Realty LLC, 120 AD3d 1151 [2014]).

Accordingly, the judgment is affirmed.

GARGUILO, P.J., DRISCOLL and WALSH, JJ., concur.

ENTER:

Paul Kenny

Chief Clerk

Decision Date: November 14, 2024