Curtis G. Testerman Co. v. Buck
Decision Date | 01 September 1995 |
Docket Number | No. 45,45 |
Citation | 667 A.2d 649,340 Md. 569 |
Parties | CURTIS G. TESTERMAN COMPANY et al. v. Walter E. BUCK, III et al. , |
Court | Maryland Court of Appeals |
Timothy A. Hodge, Jr. (Edward J. Lopata, Tydings & Rosenberg, on brief), Baltimore, David E. Carey (Brown, Brown & Brown, on brief), Bel Air, for Appellants.
Kenneth F. Spence, III (Daniel Nuzzi, Miles & Stockbridge, on brief), Towson, for Appellees.
Argued before MURPHY, C.J., and ELDRIDGE, RODOWSKY, CHASANOW, KARWACKI, BELL and RAKER, JJ.
Appellants Curtis G. Testerman and Curtis G. Testerman Company appealed to the Court of Special Appeals from a judgment entered by the Circuit Court for Cecil County confirming an arbitration award against both Appellants in favor of Appellees Walter and Gabrielle Buck. We granted certiorari on our own motion prior to review by the intermediate appellate court. Several questions are raised in this appeal. First, whether the trial court erred by compelling Testerman, a non-signatory to the contract at issue, to arbitrate. Second, whether the trial court erred by confirming the arbitrator's award of attorney fees when the arbitration clause in the parties' contract did not contain a provision authorizing an award of attorney fees. 1
This action arises out of a suit instituted by Walter and Gabrielle Buck (the Bucks) in the Circuit Court for Cecil County against Curtis G. Testerman Company (the Company) and Curtis G. Testerman (Testerman) individually, seeking damages for, inter alia, breach of contract, negligence and violation of the Consumer Protection Act (CPA), Maryland Code, (1975, 1990 Repl.Vol., 1995 Supp.), Commercial Law Article, §§ 13-301 through 13-501. The underlying dispute involved construction work performed by the Company pursuant to a construction contract (the contract) signed by the Bucks as Owner and the Company as Contractor. 2 The contract called for the construction of an addition to the Bucks' house and various other home improvements. The Bucks filed suit after the Company allegedly failed to complete the work within the time called for by the contract.
The Company moved to compel arbitration pursuant to the arbitration agreement in the contract between the parties. Section 10.8 of the contract provides in pertinent part:
The circuit court granted the Company's motion and ordered the Bucks and the Company to arbitrate their dispute. Testerman then filed a motion to dismiss the complaint against him individually claiming that he was not a party to the contract and was not personally liable for the acts of the corporation. The court denied Testerman's motion to dismiss and, pursuant to the Buck's motion to compel Testerman into arbitration, ruled that Testerman was bound by the arbitration clause in the contract.
The Company, Testerman and the Bucks entered into arbitration. As a result, the arbitrator awarded the Bucks $65,607.00 in damages and $20,753.75 in attorney fees and held the Company and Testerman jointly and severally liable. The trial judge confirmed the arbitrator's award and entered final judgment in favor of the Bucks. Both Testerman and the Company noted their appeal to the Court of Special Appeals. We granted certiorari prior to review by that court.
We are asked by Appellants Testerman and the Company to determine the following issues:
I. Whether one who is neither a party to the arbitration agreement nor a signatory of the underlying contract can be bound by an arbitration award.
II. Whether an arbitrator has the authority to award attorney fees when the contract between the parties did not provide for the recovery of attorney fees in the event of a dispute but the CPA, under which claimants also sought recovery, authorizes attorney fees to be awarded by a "court."
For the reasons set forth below, we answer "no" to both questions. Accordingly, we reverse and hold that the trial court erred as a matter of law.
Testerman first challenges the trial judge's order compelling him to join the Company and the Bucks in arbitration. Testerman does not dispute that he might be held personally liable for any negligence in which he participated, but contends that he cannot be forced to arbitrate his liability since he never agreed to resolve disputes through arbitration. Testerman argues that the contract and its accompanying arbitration clause were entered into by the Company only, not by him individually. He claims he signed the contract on behalf of the Company as its president, not in his individual capacity. Thus, Testerman argues that he cannot be bound by a provision to which he did not agree.
The contract names the contractor as "Curtis G. Testerman, Inc." and was signed in the following manner:
OWNER CONTRACTOR /s/ /s/ /s/ ------------------------ ------------------------------ (Signature) (Signature) Walter Buck Curtis G. Testerman, Inc Gabrielle Buck Curtis G. Testerman, President ------------------------ ------------------------------ (Printed name and title) (Printed name and title) ---------- A
The Bucks argue that since the contract was executed in the name of "Curtis G. Testerman, Inc." instead of "Curtis G. Testerman Company," the actual corporate name, Testerman entered into the contract on behalf of "an unincorporated entity and apparently unregistered trade name" and is therefore personally liable. We find no merit in this contention.
The circuit court found that the use of "Inc." instead of "Company" was a misnomer and therefore, "the company [wa]s the valid party to the contract." Further, the record discloses no allegations that the Bucks thought they were contracting with Testerman in his individual capacity. The use of the term "Inc." indicates corporate status. See Md.Code (1975, 1993 Repl.Vol., 1995 Supp.) Corporations and Associations Art., § 2-106(a) ( ). Thus, we conclude the Bucks knew that they were dealing with a specific corporation.
We cannot allow the Bucks to use a simple misnomer in the corporate name to hold Testerman personally liable. We believe that "[a] mistake in setting out the name of a corporation in an instrument is not fatal where the identity of the corporation is apparent." 7 WILLIAM M. FLETCHER, FLETCHER CYCLOPEDIA OF THE LAW OF PRIVATE CORPORATIONS § 3014, at 149 ( ). See In re Goldville Mfg. Co., 118 F. 892, 896 (1902) (), aff'd, William Firth Co. v. South Carolina Loan & Trust Co., 122 F. 569 (4th Cir.1903); Seaboard Commercial Corp. v. Leventhal, 120 Conn. 52, 178 A. 922 (1935) (). Cf. Dart Drug Corp. v. Hechinger Co., 272 Md. 15, 28, 320 A.2d 266, 274 (1974) ( ). Clearly, the identity of the corporation, Curtis G. Testerman Company, could be ascertained from the face of the contract and was apparent to the Bucks.
We hold that the trial judge in the instant case correctly ruled that the use of "Inc." was a misnomer and that "the [Curtis G. Testerman] [C]ompany [wa]s the valid party to the contract." Thus, the misnomer that appeared on the face of the contract is not sufficient to release the corporation from liability leaving Testerman, the Company's agent, personally liable on the contract.
B.
In the alternative, the Bucks argue that Testerman, either as agent or corporate officer of the Company, is personally liable for and subject to the provisions of the contract, i.e., the arbitration clause. We disagree.
First, if Testerman signed the contract on behalf of the Company, a disclosed principal, he cannot be held personally liable as an agent. The rule in Maryland is clear that A.S. Abell Co. v. Skeen, 265 Md. 53, 56, 288 A.2d 596, 597-98 (1972) (citations omitted). Further, when, "upon the face of an agreement, a party contracting plainly appears to be acting as the agent of another, the stipulations of the contract are to be considered as solely to bind the principal " unless otherwise intended. Burkhouse v. Duke, 190 Md. 44, 46-47, 57 A.2d 333, 334 (1948) (emphasis added) (citation omitted). See also Ace Development Co. v. Harrison, 196 Md. 357, 366, 76 A.2d 566, 570 (1950) ( ...
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