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Didonato v. U.S. Legal Support, Inc.

United States District Court, E.D. Pennsylvania

August 17, 2017



          John R. Padova, J.

         Plaintiff, Gregory DiDonato, d/b/a Syndicated Reporters, Inc., has brought this action against U.S. Legal Support, Inc. (“U.S. Legal”) and Joseph Saraco, asserting claims arising out of a failed business arrangement between DiDonato and U.S. Legal. Before the Court is U.S. Legal's Motion for Summary Judgment. For the reasons that follow, we grant the Motion in part and deny it in part.

         I. BACKGROUND

         In May 2012, DiDonato and U.S. Legal began to discuss entering into a business arrangement pursuant to which DiDonato, a court reporter, would shutter his small court reporting agency, Syndicated Reporters, Inc., and transfer his client list to U.S. Legal in exchange for “commissions, first-call status on certain assignments, and an expense allowance.” (Concise Statement of Stipulated Material Facts (“SMF”) ¶¶ 1, 3-4.) In June 2013, DiDonato did not receive the minimum number of weekly depositions from U.S. Legal that DiDonato claims he was promised according to the parties' business arrangement. (Id. ¶ 5.) Shortly thereafter, on July 10, 2013, U.S. Legal terminated its business relationship with DiDonato. (Id. ¶ 6.)

         In July 2013, DiDonato retained Joseph Saraco as his counsel to resolve a fee dispute that DiDonato had with U.S. Legal. (DiDonato Aff. ¶ 3.) On July 18, 2013, Saraco sent an e-mail to U.S. Legal that included the following:

I have been retained by Greg DiDonato to represent him in an issue with fees due him for services provided to your company . . . in particular with regard to World Trade Center Litigation. . . . [T]here seems to be a valid claim that my client is owed for fees he first credited to your company under the belief and promise that he would be assigned more work in the litigation. . . . Greg has authorized me to undertake appropriate legal action to protect his interests . . . .

(Pl.'s Concise Statement of Additional Facts Ex. B at 2-3; see also SMF ¶¶ 7-8; Hankey Decl. ¶¶ 5-6, Ex. A.) That e-mail was forwarded to David Hankey, counsel for U.S. Legal, who subsequently spoke with Saraco on several occasions in August and September 2013, regarding resolution of DiDonato's claims. (Hankey Decl. ¶¶ 4, 7; SMF ¶ 9.)

         DiDonato did not give Saraco the authority to “negotiate, settle or act on [DiDonato's] behalf regarding” any issue other than the limited fee dispute between DiDonato and U.S. Legal at any time prior to November 13, 2014. (DiDonato Aff. ¶ 9.) Nonetheless, on September 25, 2013, Saraco represented to Hankey “that he had authority from DiDonato to agree to a settlement whereby DiDonato would accept, in full satisfaction of all of his claims against U.S. Legal, the amount of $4, 000.00; in exchange for this payment, DiDonato would grant U.S. Legal Support a general release.” (Hankey Decl. ¶ 8.) Hankey drafted an agreement reflecting these settlement terms (the “Settlement Agreement”), and e-mailed it to Saraco on September 26, 2013. (Id. ¶ 9, Ex. B; SMF ¶ 10, Ex. A.) On September 30, 2013, Saraco responded to U.S. Legal via e-mail, stating, “[t]his looks fine. . . . I will have it executed and sent to you asap.” (SMF ¶ 11 (quotation marks omitted).) However, when Saraco sent this e-mail to U.S. Legal, he knew that DiDonato had not authorized him to execute a general release in favor of U.S. Legal in exchange for a $4, 000.00 payment. (Id. ¶ 12.)

         On October 18, 2013, Saraco sent a “Hold Harmless Agreement” to DiDonato, advising him that it contained all of the material terms of the Settlement Agreement that he had negotiated between DiDonato and U.S. Legal. (Id. ¶ 13, Ex. B.) That same day, intending to be bound by the terms set forth in the Hold Harmless Agreement, DiDonato executed the Hold Harmless Agreement and returned it to Saraco. (Id. ¶ 14; DiDonato Aff. ¶ 5.) The Hold Harmless Agreement states that U.S. Legal will make a $4, 000.00 payment to DiDonato to “settle the dispute between the parties concerning monies due from U.S. Legal Support to DiDonato for services rendered by DiDonato on behalf of U.S. Legal Support.” (SMF Ex. B ¶ 111 a.-b.) It then states that in exchange for this payment, DiDonato “agree[d] to cease and withdraw any legal action filed against U.S. Legal Support on these issues and not [] partake in any further legal action or claims against U.S. Legal Support concerning these and only these issues.” (Id. Ex. B. ¶ III.c.) However, the Settlement Agreement does not contain these terms. (Compare Id. Ex. A with id. Ex. B.)

         On October 21, 2013, Saraco faxed to U.S. Legal a copy of the Settlement Agreement that appeared to bear DiDonato's signature. (Id. ¶ 15; see also id. ¶ 16; Hankey Decl. ¶ 11.) DiDonato's signature on the Settlement Agreement was “forged by Saraco without DiDonato's knowledge or approval.” (SMF ¶ 25.) In fact, DiDonato neither saw nor received a copy of the Settlement Agreement before Saraco submitted it to U.S. Legal and he had not signed it. (Id. ¶ 16.) On October 23, 2013, Hankey informed Saraco that he had forwarded the Settlement Agreement to U.S. Legal's headquarters. (Id. ¶ 17; Hankey Decl. ¶ 12.) He also told Saraco that because U.S. Legal had a W-9 for Syndicated Reporters, Inc., but did not have a W-9 for DiDonato, U.S. Legal “would either have to issue the check to Syndicated Reporters or obtain a new W-9 for DiDonato.” (SMF ¶ 17; Hankey Decl. ¶ 12.) When Saraco responded, he asked Hankey if U.S. Legal could issue the payment to both himself and DiDonato. (SMF ¶ 18.) Hankey “then informed Saraco that, in order to process such a payment, U.S. Legal Support would require a W-9 for [Saraco] as well.” (Hankey Decl. ¶ 13, Ex. E.) On October 24, 2013, Saraco provided a completed W-9 to U.S. Legal and again requested that U.S. Legal issue payment to DiDonato and himself. (SMF ¶ 19.) Later that day, Hankey informed Saraco that U.S. Legal would also need a signed authorization from DiDonato in order to issue the settlement payment jointly, to which Saraco responded “I will secure the note you requested and send [it] to you.” (Id. ¶¶ 20-21; Hankey Decl. ¶¶ 15-16, Ex. H.)

         On October 28, 2013, Saraco faxed a note to Hankey that Saraco represented had been signed by DiDonato. (SMF ¶ 22.) The note stated, “[p]lease allow this to confirm that I authorize the $4000.00 settlement in this matter, Gregory DiDonato and Syndicated Reports vs. U.S. Legal Support, may be issued to myself and my attorney Joseph J. Saraco, Esquire.” (Id. ¶ 22; Hankey Decl. ¶ 17, Ex. I.) On October 29, 2013, U.S. Legal mailed a letter directly to DiDonato, which stated:

Enclosed is a fully executed Settlement Agreement by and between U.S. Legal . . . and Gregory DiDonato . . . . In addition, [enclosed] is a check made payable to both Syndicated Reporters, Inc. and Joseph J. Saraco (as per your request) in the amount of $4, 000 in accordance with said Settlement Agreement.

         (SMF ¶ 24, Ex. C (third alteration in original) (quotation marks omitted).) DiDonato received this letter on November 4, 2013, along with a copy of the Settlement Agreement purporting to incorporate DiDonato's signature, and a check in the amount of $4, 000.00. (Id. ¶¶ 25-26.) Immediately thereafter, DiDonato emailed the letter and its enclosures to Saraco, stating, “Joe, got this today. The agreement is not what I signed that you sent. Advise.” (Id. ¶ 27, Ex. D.) The next day, Saraco responded as follows:

This is not our agreement. Not sure what they are trying to pull except that they are worried about you with the next battle. I have a good relationship with the attorney, and this was clearly not sent by him, so I will reach out to him today and give you a call. Meanwhile, you have the check so let's get that deposited. That should have been payable to you only.

(Id. ¶ 28, Ex. D.) DiDonato then asked Saraco if depositing the $4, 000.00 check would constitute consent to the Settlement Agreement. (Id. ¶ 29, Ex. D.) Saraco responded that it “‘will not be seen as consent to anything other than this particular case.'” (Id. ΒΆ 30 (quoting Ex. D).) After receiving ...

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