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Steelstone Ind. v. North Ridge L.P.
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MAINE SUPREME JUDICIAL COURT					Reporter of Decisions
Decision:	1999 ME 132
Docket:	Aro-98-547
Submitted
on Briefs:	April 27, 1999
Decided:	August 18, 1999

Panel:WATHEN, C.J., and CLIFFORD, RUDMAN, DANA, SAUFLEY, ALEXANDER, and
CALKINS, JJ.




STEELSTONE INDUSTRIES, INC. v. NORTH RIDGE LIMITED PARTNERSHIP


DANA, J.

	[¶1]	North Ridge Limited Partnership appeals from a judgment
entered in the Superior Court (Aroostook County, Marsano, J.) in favor of
Steelstone Industries, Inc., in Steelstone's breach of contract claim.  North
Ridge Limited argues that the court erred when it concluded that the
president of Quality Glass, its general contractor, had apparent authority to
bind North Ridge Limited to a contract for paving services.  We disagree and
affirm the judgment.
I.
	[¶2]  North Ridge Limited owns North Ridge Apartments, a
government-assisted housing project in Caribou.  North Ridge Limited hired
Diana Cassidy as the regional property manager for apartment complexes in
Presque Isle, Fort Fairfield, Fort Kent, and Caribou.  Cassidy described her
job as dealing with "all day to day operations to deal with apartments and
filling apartments and taking care of them."  Cassidy explained that "I would
hire subcontractors to take care of day to day business, plumbing, heating
and just general type of work that needed to be done."  Lawrence Van
Peursem, the president of Maine Development Associates, Inc.,{1} 
acknowledged that Cassidy had authority to have small repairs done and
purchase certain supplies, however, he testified that Cassidy had no
authority to contract for rehabilitation work or construction work.
	[¶3]  In late September or early October 1995, Cassidy telephoned
Brian Longstaff, president of Steelstone, a supplier of concrete, gravel, and
asphalt, and introduced herself as manager of Northern Heights
Apartments.{2}  Cassidy told Longstaff that she wanted to discuss a potential
paving contract and requested to meet with him.  At their first meeting in
October 1995, Cassidy showed Longstaff the site, explained the type of
paving required, and asked for a ballpark figure as to cost.  Cassidy
instructed Longstaff to mail the cost estimate to her attention at Northern
Heights Apartments.
	[¶4]  In November 1995, North Ridge Limited hired Quality Glass,
Inc., as the general contractor for the renovation of the North Ridge
Apartments.  Lee Richard, the president of Quality Glass, signed the
contract, which provided for a fixed price of $723,000 and included all site
work including the asphalt paving project.
	[¶5]  North Ridge Limited allowed Richard to establish a temporary
office in an apartment at North Ridge Apartments.  Because Richard needed
administrative and secretarial support, Van Peursem authorized Cassidy to
assist Richard when she was not performing her responsibilities for North
Ridge Limited.  Cassidy divided her time equally between Quality Glass and
North Ridge Limited.  North Ridge Limited continued to pay Cassidy directly
and billed Quality Glass for the time Cassidy worked with Quality Glass.
	[¶6]   Longstaff mailed his first proposal to Cassidy in December 1995. 
The proposal states "[p]roposal submitted to Northern Heights Apartment
Complex" and is addressed to the attention of Cassidy.  In March 1996,
Longstaff drafted a revised proposal.  Again, the proposal was sent to
Cassidy's attention at Northern Heights Apartments and states "[p]roposal
submitted to Northern Heights Apartments."
	[¶7]  On March 27, 1996, Cassidy called Longstaff to arrange a
meeting between Longstaff and Richard.  Longstaff testified that Cassidy did
not explain in what capacity Richard worked, and Cassidy did not mention
Quality Glass during this phone conversation.  About a week later, Longstaff
met with Cassidy and they walked to Richard's temporary office.  Cassidy
introduced Longstaff to Richard as "Lee Richard, construction manager or
project manager."  Longstaff testified that "[t]here was no conversation
whatsoever about [a] subcontractor/contractor relationship at that point." 
With respect to Richard's position as general contractor or president of
Quality Glass, Longstaff testified that "I saw no signs, no letterheads, no
business cards.  There was nothing to indicate . . . any entity such as a
general contractor, or another business involved for that matter."  Cassidy
admitted that she never told Longstaff or anyone else connected with
Steelstone about Quality Glass's role as general contractor in the renovation
project.
	[¶8]  On May 9, 1996, Longstaff met with Richard again.  Longstaff
submitted a third proposal.  The proposal was made to North Ridge
Apartments{3} and sent to Cassidy's attention at North Ridge Apartments.
	[¶9]  On May 13, 1996, Longstaff met with Cassidy and Richard in
Cassidy's office, where Longstaff and Richard signed the contract for paving
services.  The contract called for Steelstone to pave the apartment parking
lot and various walkways and entrances around the apartment buildings for
$20,460.  At the top of the page, the contract states "Proposal submitted to
North Ridge Apartments" and notes "Attn:  Diana [Cassidy]" just like the
three previous proposals.  The contract is signed only by Longstaff and
Richard.  Longstaff signed without reference to Steelstone, and Richard
signed without reference to Quality Glass.  The contract does not state that
either North Ridge Limited or Quality Glass is a party.  Cassidy did not sign
the contract.
	[¶10]  Steelstone performed the contract in May and June 1996. 
Additional work was added without written change orders, and the final
contract price was $24,603.63.  In July 1996, Steelstone sent invoices to
North Ridge Apartments to the attention of Cassidy.  It was not until after
August 30 that Longstaff learned that Richard was president of Quality Glass,
and it was not until he spoke with Van Peursem, sometime before October
15, that he learned that Quality Glass was the general contractor for the job. 
Steelstone failed to perfect its rights under the mechanic's lien laws, and
Quality Glass and Richard later sought protection under the bankruptcy laws. 
The invoices were never paid.
	[¶11]  In July 1997, Steelstone filed suit against North Ridge Limited
alleging counts for breach of contract, quantum meruit, and unjust
enrichment.  The court concluded that North Ridge Limited created
apparent authority in Richard to act as its agent and bind North Ridge
Limited to a contract for paving services and that North Ridge Limited
breached that contract.  North Ridge Limited appealed.
II.
	[¶12]  Whether an agency relationship exists is generally a question of
fact that we review for clear error.  See Williams v. Inverness Corp., 664
A.2d 1244, 1246-47 (Me. 1995); Clapperton v. United States Fidelity &
Guar. Co., 148 Me. 257, 266, 92 A.2d 336, 341 (1952).  Because North
Ridge Limited failed to move for further findings of fact pursuant to
M.R. Civ. P. 52, we assume that the trial court found for Steelstone on all
factual issues necessarily involved in its decision and review the record to
determine whether those assumed findings are supported by the evidence
in the record.  See Estate of Saliba, 682 A.2d 224, 226 (Me. 1996); A.F.A.B.,
Inc., v. Town of Old Orchard Beach, 657 A.2d 323, 325 (Me. 1995). 
	[13]  Apparent authority is authority "which, though not actually
granted, the principal knowingly permits the agent to exercise or which he
holds him out as possessing.  Apparent authority exists only when the
conduct of the principal leads a third party to believe that a given party is
his agent."  Williams, 664 A.2d at 1246 (quoting Libby v. Concord Gen. Mut.
Ins. Co., 452 A.2d 979, 982 (Me. 1982)) (emphasis in original); see
Restatement (Second) of Agency  8 (1958).  Apparent authority can arise if
the principal knowingly or negligently holds someone out as possessing
authority to act for him or her or it.  See Williams, 664 A.2d at 1246-47;
Twin Island Dev. Corp. v. Winchester, 512 A.2d 319, 324 (Me. 1986).  A
principal, therefore, creates apparent authority "by written or spoken words
or any other conduct of the principal which, reasonably interpreted, causes
the third person to believe that the principal consents to have the act done
on his behalf by the person purporting to act for him." Restatement (Second)
of Agency  27 (1958). 
	[14]  The record supports the court's conclusion that North Ridge
Limited negligently held Richard out as its agent.  The court could infer that
North Ridge Limited authorized Cassidy to contact potential subcontractors,
including Steelstone.  Consequently, Cassidy, in her capacity as the regional
property manager of North Ridge Limited, contacted Steelstone, explained
the project, and received Steelstone's written proposal to North Ridge
Apartments.  North Ridge Limited then hired Quality Glass, allowed Richard
to operate an office from an apartment on the premises, and arranged for
Cassidy to work for Richard, without ever disclosing the separate existence
of Quality Glass as a general contractor.  Steelstone then continued to submit
proposals to North Ridge Apartments to Cassidy's attention, and when these
proposals were, in turn, forwarded to Richard, it created in Steelstone the
reasonable belief that Richard was an agent of North Ridge Limited.  North
Ridge Limited's negligent conduct led Steelstone to reasonably believe that
Richard was North Ridge Limited's agent.  See Williams, 664 A.2d at 1246-
47.  Taking the evidence and the inferences that reasonably could be drawn
from the evidence most favorably to the result reached by the court, there is
sufficient evidence to support the court's conclusion that North Ridge
Limited created apparent authority in Richard.
	The entry is:
Judgment affirmed.

Attorney for plaintiff: Richard D. Solman, Esq. Solman & Hunter, P.A. P O Box 665 Caribou, ME 04736 Attorney for defendant: Richard D. Abbondanza, Esq. Hopkinson & Abbondanza, P.A. 511 Congress Street, Suite 801 Portland, ME 04101
FOOTNOTES******************************** {1} . Maine Development Associates, Inc., (MDA) develops, rehabilitates, and manages government-assisted housing projects and manages North Ridge Apartments. MDA is also the general partner of North Ridge Limited and, for the purposes of this case, the parties stipulated that North Ridge Limited and MDA were legally indistinguishable. {2} . The name of the apartments later changed to North Ridge Apartments. {3} . The name had changed to North Ridge Apartments by May 1996.