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Clark Resources, Inc v. Verizon Business Network Services

April 18, 2012


The opinion of the court was delivered by: Chief Judge Kane


Currently pending before the Court is Defendant Verizon Business Network's motion for summary judgment as to the sole remaining claim in Plaintiff Clark Resources's amended complaint. (Doc. No. 65.) The Court held oral argument on the motion on March 26, 2012. The matter has been fully briefed and is now ripe for disposition. For the reasons stated herein, the Court will grant Defendant's motion for summary judgment.


On November 12, 2008, the Pennsylvania Department of General Services issued a Request for Proposal related to a telecommunications project. (Doc. No. 67 ¶ 8.) Defendant elected to bid on the project. (Id. ¶ 9.) In December 2008 and January 2009, Defendant solicited bids from Plaintiff related to the prime contract. (Id. ¶¶ 14-15.) In response to Defendant's request, Plaintiff produced a subcontract proposal on February 9, 2009. (Id. ¶ 18.) On February 25, 2009, Frank Clark, Plaintiff's President and CEO, met with Bette DeRogatis, Defendant's Area Sales Vice President for Government and Education in Pennsylvania and Delaware, to discuss Plaintiff's proposal. (Id. ¶ 27.) Following the discussion, Ms. DeRogatis informed Mr. Clark that "this is the document that we are going to use as the basis of our contract of our agreement, you have a deal." (Doc. No. 71 ¶ 21.) Plaintiff contends that this statement constitutes an acceptance of a subcontract agreement between Defendant and Plaintiff on the Department's Request for Proposals. (Id. ¶ 32.) Ms. DeRogatis did not have the actual authority to bind Defendant. (Doc. No. 67 ¶ 101.) Mr. Clark believed she had the authority to bind Defendant because Ms. DeRogatis held herself out as being in charge of the project, was the highest ranking employee of Defendant who was introduced to him, had the title of "Area Sales Vice President, Government and Education," her territory covers Pensylvania and Delaware, and everyone he dealt with at Verizon reported to her. (Doc. No. 71 ¶¶ 101-02.)

In September 2009, Plaintiff agreed to a restructuring of the subcontract such that Plaintiff would perform certain tasks as a subcontractor of Adept, one of Defendant's other subcontractors on the project. (Doc. No. 67 ¶ 124.) On September 25, 2009, and September 28, 2009, Defendant and Plaintiff discussed limiting the scope of Plaintiff's work on the contract to two project management positions. (Doc. No. 71 ¶ 135.) Plaintiff refused to agree to the limited scope of work. (Id. ¶¶ 137, 139.) On October 8, 2009, Defendant advised the Department that it was unable to "successfully conclude negotiations with Clark." (Doc. No. 67 ¶ 141.) On October 13, 2009, Defendant informed Plaintiff that it would not enter into a subcontract with Plaintiff. (Id. ¶ 142.) The Office of Procurement approved Defendant's decision to substitute Adept for Plaintiff on the contract. (Id. ¶ 143.) On October 9, 2009, Defendant was awarded the prime contract from the Department. (Id. ¶ 144.)


Rule 56(a) of the Federal Rules of Civil Procedure provides that summary judgment is warranted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A factual dispute is material if it might affect the outcome of the suit under the applicable law, and it is genuine only if there is a sufficient evidentiary basis that would allow a reasonable fact finder to return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986). At summary judgment, the inquiry is whether the evidence presents a sufficient disagreement to require submission to the jury or whether it is so one-sided that one party must prevail as a matter of law. Id. at 251-52. In making this determination, the Court must "consider all evidence in the light most favorable to the party opposing the motion." A.W. v. Jersey City Pub. Schs., 486 F.3d 791, 794 (3d Cir. 2007).

The moving party has the initial burden of identifying evidence that it believes shows an absence of a genuine issue of material fact. Conoshenti v. Pub. Serv. Elec. & Gas Co., 364 F.3d 135, 145-46 (3d Cir. 2004). Once the moving party has shown that there is an absence of evidence to support the non-moving party's claims, "the non-moving party must rebut the motion with facts in the record and cannot rest solely on assertions made in the pleadings, legal memoranda, or oral argument." Berckeley Inv. Grp.. Ltd. v. Colkitt, 455 F.3d 195, 201 (3d Cir. 2006); accord Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). If the non-moving party "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden at trial," summary judgment is warranted. Celotex, 477 U.S. at 322. With respect to the sufficiency of the evidence that the non-moving party must provide, a court should grant summary judgment where the non-movant's evidence is merely colorable, conclusory, or speculative. Anderson, 477 U.S. at 249-50. There must be more than a scintilla of evidence supporting the non-moving party and more than some metaphysical doubt as to the material facts. Id. at 252; see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Further, a party may not defeat a motion for summary judgment with evidence that would not be admissible at trial. Pamintuan v. Nanticoke Mem'l Hosp., 192 F.3d 378, 387 (3d Cir. 1999).


Defendant raises four independent grounds which it contends warrant entering summary judgment in favor of Defendant. First, Defendant contends that the alleged oral agreement is unenforceable because the agreement lacks material and necessary terms and, if the Court were to supply the absent necessary terms, those terms would require summary judgment be entered in favor of Defendant. Second, relying on a flow-down agreement between the parties, Defendant argues that the Request for Proposal bars Plaintiff's claims. Third, Defendant claims that Ms. DeRogatis had neither the authority nor apparent authority to bind Defendant to a contract with Plaintiff. Finally, Defendant argues that if the Court declines to grant summary judgment on these grounds, that the Court should grant partial summary judgment. The Court will address the first three arguments in turn. Because the Court finds that the motion for summary judgment should be granted as to all of Plaintiff's claims, the Court will not consider Defendant's motion for partial summary judgment.

A. Presence of Essential Terms

A contract is formed where: (1) the parties manifest a mutual intention to be bound by the agreement; (2) the terms of the agreement are sufficiently definite to be enforced; and (3) there is consideration. Century Indem. Co. v. Certain Underwriters at Lloyd's, 584 F.3d 513, 533 (3d Cir. 2009); Co. Image Knitware, Ltd. v. Mothers Work, Inc., 909 A.2d 324, 330 (Pa. Super. Ct. 2006) (quoting Weavertown Transp. Leasing, Inc v. Moran, 834 A.2d 1169, 1172 (Pa. Super. Ct. 2003)). Defendant's first argument in support of summary judgment is that the alleged oral agreement is unenforceable because the agreement lacks clarity as to certain essential terms of the agreement. Defendant's argument raises two closely related issues. First, Defendant argues that some essential terms are unclear. Second, Defendant contends that some essential terms are lacking entirely. Specifically, Defendant contends that the agreement is unclear as to the price term, the scope of work, the number of employees, and service level agreements.

It is elementary that an agreement is only enforceable if the material and necessary details of the bargain are set forth with sufficient clarity. Peck v. Del. Cnty. Bd. of Prison Inspectors, 814 A.2d 185, 191 (Pa. 2002) (quoting Lombardo v. Gasparini Excavating Co., 123 A.2d 663, 666 (Pa. 1956)); Lackner v. Glosser, 892 A.2d 21, 30-31 (Pa. Super. Ct. 2006). This rule requires that a "a reasonably certain basis exists upon which a court could grant an appropriate remedy." Geisinger Clinic v. DiCuccio, 606 A.2d 509, 512 (Pa. Super. Ct. 1992). However, "[t]he construction of an oral contract is for the jury when there is any doubt about its terms." Koch v. Matter, 161 A. 309, 309 (Pa. 1932) (quoting Elliott v. Wanamaker, 25 A. 826 (Pa. 1893)); Krebs v. United Ref. Co., 893 A.2d 776, 783 (Pa. Super. Ct. 2006) ("When oral contracts are disputed, the issues of what was said, done and agreed upon by the parties are ones of fact to be determined by the fact finder."). Further, issues regarding what the parties intended are questions of fact reserved for the fact finder. Mazzella v. Koken, 739 A.2d 531, 536 (Pa. 1999); McDonnell v. Ford Motor Co., 643 A.2d 1102, 1105-06 (Pa. Super. Ct. 1994).

In the present matter, Plaintiff has identified evidence from which a juror could conclude that the parties reached an agreement on the essential terms of the contract, including the price terms, service level agreements, scope of work, and time for performance. (Doc. No. 71 ΒΆΒΆ 8-38.) Defendant's primary arguments in opposition to Plaintiff's position is that Plaintiff's theory of contract formation is not credible. Specifically, Defendant contends that contradictory statements by Mr. Clark suggest that the parties did not in fact agree to any specific terms. Questions of credibility, however, are questions of fact for a jury. Determining whether to believe Plaintiff regarding what terms the parties reached an oral agreement on is beyond the authority of the Court at this stage ...

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