Ophthalmic Surgeons, LTD., et al v. Paychex, Inc., et al

Filing 920110131

Opinion

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var WPFootnote1 = 'Of the Seventh Circuit, sitting by designation.\
'

var WPFootnote2 = 'Paychex is a New York corporation, based in New York, with\
branch offices in several states, including Rhode Island.\
'

var WPFootnote3 = 'Dr. Andreoni alleges that at the time of the formation of this\
original contract, he met with a Paychex representative who assured\
him that he would not have to worry about payroll. Dr. Andreoni\
understood from this representation that Paychex would inform him\
if anything warranted his attention. This is extrinsic evidence\
that OSL alleges goes to the parties\' intent.\
'

var WPFootnote4 = 'During some years, OSL asked Paychex to run payroll using a bi-weekly pay period.\
'

var WPFootnote5 = 'On April 28, 2010, the Supreme Court of the United States\
approved amendments to Federal Rule of Civil Procedure 56,\
effective December 1, 2010.\
\
              The standard for granting summary judgment remains\
unchanged. The language of subdivision (a) continues to\
require that there be no genuine dispute as to any\
material fact and that the movant be entitled to judgment\
as a matter of law. The amendments will not affect\
continuing development of the decisional law construing\
and applying these phrases.\
\
Fed. R. Civ. P. 56 advisory committee\'s note to 2010 amendment. \
Because the amendment does not constitute a substantive change, we\
find that referring to the amended rule is just and practicable. \
Godin v. Schencks, No. 09-2324, 2010 WL 5175180, at *9 n.19 (1st\
Cir. Dec. 22, 2010).\
'

var WPFootnote6 = 'Although the existence of apparent authority is normally a\
question of fact that courts do not resolve on a motion for summary\
judgment, here we find that even viewing the facts in the light\
most favorable to OSL, it is clear that OSL acted in a manner that\
created apparent authority in Connor. See Moreau v. Local Union\
No. 247, Int\'l Bhd. of Firemen and Oilers, AFL-CIO, 851 F.2d 516,\
520 (1st Cir. 1988) (affirming district court\'s grant of summary\
judgment based on its conclusion that the local unions had apparent\
authority to enter into binding side agreements); Minskoff v. Am.\
Express Travel Related Servs. Co., Inc., 98 F.3d 703, 708-09 (2d\
Cir. 1996) (recognizing that determining apparent authority\
involves a question of fact not usually resolved on a motion for\
summary judgment, yet finding sufficient evidence to determine that\
the agent had apparent authority as to use of a credit card).\
'

var WPFootnote7 = 'Under principles of agency, "[a]pparent authority may exist in\
the absence of authority in fact . . . ." Greene v. Hellman, 412\
N.E.2d 1301, 1306 (N.Y. 1980). Actual authority refers to the\
manifestation that the principal makes to the agent. Id.;\
Restatement (Third) of Agency § 2.01 cmt. c ("Actual authority is\
a consequence of a principal\'s expressive conduct toward an agent,\
through which the principal manifests assent to be affected by the\
agent\'s action, and the agent\'s reasonable understanding of the\
principal\'s manifestation."). Apparent authority arises when the\
agent deals with third parties and refers to the manifestation that\
the principal makes to the third party. Greene, 412 N.E.2d at\
1306; Restatement (Third) of Agency § 2.03 cmt. c ("Apparent\
authority holds a principal accountable for the results of\
third-party beliefs about an actor\'s authority to act as an agent\
when the belief is reasonable and is traceable to a manifestation\
of the principal.").\
'

var WPFootnote8 = 'We find it appropriate to cite the Restatement (Third) of Agency\
because the New York Court of Appeals recently relied on it when\
discussing traditional agency principles. See Kirschner, 15 N.Y.\
3d at 468-69. We also note that New York courts have consistently\
relied on the Restatement (Second) of Agency. See, e.g., Standard\
Funding Corp. v. Lewitt, 678 N.E.2d 874, 877 (N.Y. 1997); Hallock\
v. State, 474 N.E.2d 1178, 1181 (N.Y. 1984); Greene, 412 N.E.2d at\
1305-06.\
'

var WPFootnote9 = 'We briefly consider OSL\'s parol evidence, not to alter the terms\
of the contract, but with respect to Paychex\'s obligations under\
principles of agency. See Wooster v. Sherwood, 25 N.Y. 278 (1862)\
(parol evidence admissible where it did not tend to vary or change\
the written contract); McCormack Motor Sales v. Hayes, 346 N.Y.S.2d\
460, 460 (App. Div. 1973) (finding, in an action to recover\
balances due on contracts, that the parol evidence rule did not\
preclude proof of defendant\'s claims with respect to whether the\
agent had apparent authority). We refer to New York law regarding\
the admissibility of parol evidence because it is a rule of\
substantive contract law. See Wheeler v. Blumling, 521 F.3d 1, 4\
(1st Cir. 2008) (noting that the parol evidence rule is a rule of\
substantive law); Petereit v. S.B. Thomas, Inc., 63 F.3d 1169, 1177\
(2d Cir. 1995) (concluding that the parol evidence rule is "a rule\
of substantive contract law, not a rule of evidence").\
'

var WPFootnote10 = 'OSL argues that these instructions limit Connor\'s authority such\
that she could only order 52 paychecks a year for each employee. \
As such, Paychex should have questioned Connor when she ordered\
more than 52 paychecks for herself.\
'

var WPFootnote11 = 'We find it reasonable to infer that the New York Court of\
Appeals would adopt the Restatement (Third) of Agency with respect\
to this issue because apparent authority based on a principal\'s\
inaction is similar to the principle of estoppel to deny apparent\
authority that the Second Circuit applied in Minskoff v. American\
Express Travel Related Services Co., Inc. 98 F.3d 703, 708 (2d\
Cir. 1996) (citing Restatement (Second) of Agency § 8b) (applying\
New York Law regarding apparent authority); see also Restatement\
(Third) of Agency Introduction (noting that this Restatement deals\
with situations where an agent is claimed to have acted without the\
principal\'s consent and acknowledging that the legal consequences\
of such appearances of agency are governed principally by apparent\
authority and to a lesser degree estoppel).\
'

var WPFootnote12 = 'Although Minskoff involved the application of the Truth in\
Lending Act, 15 U.S.C. § 1601 et seq., which explicitly defines\
"unauthorized use" of a credit card, the court determined that\
Congress contemplated "primary reliance on background principles of\
agency law in determining the liability of cardholders for charges\
incurred by third-party card bearers." 98 F.3d at 708 (internal\
quotation marks and citation omitted).\
'

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