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21st Capital Corp. v. Tiffany And Co.

February 6, 2008

21ST CAPITAL CORP., PLAINTIFF-APPELLANT,
v.
TIFFANY AND COMPANY, DEFENDANT/THIRD-PARTY PLAINTIFF-RESPONDENT, AND TROY CORP., MIZUHO SECURITIES USA, INC., UNITED WATER, INC., TECH SYSTEMS & SERVICES, INC., TECHNOLOGY SCIENCES & SERVICES, INC., AND RICHARD A. SPAIR, JR., DEFENDANTS,
v.
TECH STAFF SOLUTIONS, INC., THIRD-PARTY DEFENDANT.



On appeal from Superior Court of New Jersey, Law Division, Morris County, Docket No. L-1988-04.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued January 23, 2008

Before Judges Coburn, Fuentes and Grall.

Plaintiff, 21st Capital Corp. appeals from the order of the Law Division dismissing its collection cause of action against defendant Tiffany and Company. The matter came before the trial court on the parties' cross-motions for summary judgment. Plaintiff's case is premised on the theory of apparent authority in one of defendant's employees.

The salient facts are relatively straight forward. Plaintiff is a factoring financier. It purchased accounts receivable from an information technology consulting company that performed information technology (IT) services for defendant. Plaintiff brought this collection action against defendant claiming that it had a right to receive payment based on the face amount reflected on the invoices, regardless of whether these invoices were fraudulent, or duplicative of past work previously paid by defendant.

In support of its claim, plaintiff submitted verification forms signed by Fernando Vega, a Tiffany employee, that: (1) purport to confirm the debt Tiffany owed plaintiff regarding the IT company's factored accounts receivable; and (2) purport to waive all defenses regarding the factored accounts, including any challenge to the underlying invoices' validity.

In response, defendant argued that the employee in question was not authorized either to confirm its debt to plaintiff or waive any defenses. Defendant further argued that the underlying invoices are fraudulent, precluding plaintiff's collection on them.

After reviewing the record, and considering the arguments of counsel, Judge Wilson granted Tiffany's summary judgment motion, and, as a consequence, denied plaintiff's cross-motion. We affirm.

In reviewing a trial court's decision on a motion for summary judgment, the Appellate Division applies the same standards as those that govern the trial court below. Jolley v. Marquess, 393 N.J. Super. 255, 267 (App. Div. 2007). A trial court should grant a motion for summary judgment only when there is no "genuine issue of material fact" in dispute. Liberty Surplus Ins. Corp. v. Nowell Amorso, P.A., 189 N.J. 436, 446 (2007) (quoting Brill v. Guardian Life Ins. Co., 142 N.J. 520, 540 (1995)). In making this determination, the court must view the evidence in the light most favorable to the non-moving party. Brill, supra, 142 N.J. at 540. Here, it must be emphasized that both parties moved for summary judgment, thus conceding that there are only legal issues at stake.

We will first address the issue of apparent authority. The doctrine of apparent authority applies "where the actions of a principal have misled a third party into believing that a relationship of authority existed." Lobiondo v. O'Callaghan, 357 N.J. Super. 488, 497 (App. Div.), certif. denied, 177 N.J. 224 (2003) (quoting Rodriguez v. Hudson County Collision Co., 296 N.J. Super. 213, 221 (App. Div. 1997)). The doctrine looks to the actions of the principal, and not of the alleged agent. Busciglio v. DellaFave, 366 N.J. Super. 135, 140 (App. Div. 2004). The alleged agent cannot create apparent authority on his own accord, but must be held out as having such authority by the principal. Blaisdell Lumber Co. v. Horton, 242 N.J. Super. 98, 103 (App. Div. 1990).

The apparent authority doctrine states that:

[t]he principal is bound by the acts of his agent within the apparent authority which he knowingly permits the agent to assume, or which he holds the agent out to the public as possessing. The question in every case depending upon the apparent authority of the agent is whether the principal has by his voluntary act placed the agent in such a situation that a person of ordinary prudence, conversant with business usages and the nature of the particular business, is justified in presuming that such agent has authority to perform the particular act in question . . . .

[Lobiondo, supra, 357 N.J. Super. at 497 (quoting Legge Indus. v. Joeseph Kushner Hebrew Acad., 333 N.J. ...


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