Filed: Jan. 15, 1993
Latest Update: Feb. 21, 2020
Summary: , Andrew Z.previously executed between the Holmes parties and Route USA.though not evidence per se, reinforced the district court's, determination that at least HTI, Ruhland, and the ICC envisioned, the private escrow fund as the sole source of funding for the ICC, refunds., 530 F.2d 1105 (2d Cir.
January 15, 1993
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
No. 90-1208
No. 92-1507
INTERSTATE COMMERCE COMMISSION,
Plaintiff, Appellee,
v.
HOLMES TRANSPORTATION, INC.,
Defendant, Appellee.
ROBERT C. HOLMES AND DOROTHY HOLMES,
TRUSTEES OF THE ALVIN R. HOLMES FUND,
ROBERT C. HOLMES, INDIVIDUALLY, AND J. ROBERT SEDER,
Intervenors, Appellants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Rya W. Zobel, U.S. District Judge]
Before
Torruella, Circuit Judge,
Bownes, Senior Circuit Judge,
and Cyr, Circuit Judge.
John Woodward, with whom Burton C. Chandler, Seder and Chandler,
Andrew Z. Schwartz, Michele A. Whitman and Foley, Hoag & Eliot were on
brief for intervenors-appellants.
Stuart B. Robbins for plaintiff, appellee.
Frank J. Weiner for defendant, appellee.
CYR, Circuit Judge. Robert C. Holmes, individually and
CYR, Circuit Judge.
as trustee of the Alvin R. Holmes Fund ("Holmes Trust"), and
Dorothy Holmes, as trustee of the Holmes Trust (hereinafter,
collectively, "Holmes parties"), appeal a district court order
directing the disbursement of an escrow fund established to
defray certain civil liabilities relating to their sale of Holmes
Transportation, Inc. ("HTI"), a corporation wholly owned by the
Holmes parties. The Holmes parties are joined on appeal by J.
Robert Seder, Esquire, a former escrow agent for the fund.
Appellate jurisdiction having been retained, and certain prelim-
inary matters having been resolved on remand, we proceed to the
merits and affirm the district court order.
I
BACKGROUND
First we describe the somewhat intricate context in
which the present litigation developed. The Holmes parties
entered into negotiations in 1988 to sell HTI to Route USA
Resources, Inc. ("Route USA"), a corporation wholly owned and
controlled by Manfred Ruhland. Throughout the negotiations,
Seder represented the Holmes parties, and Robert D. Gunderman,
Esquire, represented Ruhland and Route USA. Ruhland had assumed
control of HTI, and consummation of the sale of HTI to Route USA
appeared imminent, when the Interstate Commerce Commission
("ICC") initiated the present action against HTI on July 13,
3
1988, to recover $501,976 in refunds allegedly due HTI customers
for freight overpayments improperly withheld by HTI during the
period 1984-1988 ("ICC refunds").1
The ICC action threatened to derail the HTI sale, as
Ruhland demanded a reduction in the purchase price to offset
HTI's contingent liability on the ICC refund claims. In order
for the HTI sale to proceed, the Holmes parties agreed to escrow
$500,000 of Ruhland's purchase money deposit to defray the ICC
refund claims against HTI (the "private escrow agreement"). On
September 22, 1988, Seder executed the private escrow agreement
as "attorney in fact" for the Holmes parties; Ruhland executed it
in behalf of Route USA; Seder and Gunderman executed it as desig-
nated escrow agents under the private escrow agreement. With the
ICC refunds obstacle apparently resolved, Ruhland abandoned the
demand for a reduction in the HTI purchase price, and the Holmes
parties' sale of HTI's stock to Route USA was consummated without
further incident.
While the private escrow agreement was being negotiat-
ed, HTI proposed a settlement of the ICC refund claims. On
December 12, 1988, HTI, represented by Gunderman, consented to
the entry of a district court injunctive decree ("consent de-
cree") mandating, in pertinent part, that HTI establish an escrow
fund containing at least $502,000 with which all HTI customer
1The ICC complaint did not name the Holmes parties as defen-
dants, but alleged that HTI failed to process and refund 3,048
unidentified payments and 3,485 duplicate payments received from
shippers, in violation of 49 C.F.R. 1008.9(a) and 1008.9(b).
4
overpayments were to be refunded by December 31, 1988. For
reasons which remain unclear, neither the ICC nor the district
court had yet been apprised of the private escrow agreement
previously executed between the Holmes parties and Route USA.
Thus, the escrow account arrangements envisioned in the
December 12 consent decree varied in considerable detail from the
terms of the private escrow agreement between the Holmes parties
and Route USA.2 Their function was identical, however: to
establish and preserve a fund for defraying the ICC refunds
determined to be due HTI's overcharged customers in the present
action.
The Holmes parties were not parties to the present
action at the time the consent decree was entered. At the
instance of the ICC, however, the consent decree was executed by
Seder, who had represented the Holmes parties throughout the HTI
negotiations with Ruhland and Route USA. As Gunderman and HTI
(but not the ICC) were well aware, of course, Seder and Gunderman
2The private escrow agreement provided that (1) the refunds
were to be made by HTI in the first instance, and reimbursed by
the escrow fund in $25,000 increments upon certification by HTI;
(2) the escrowed funds were to remain the property of the Holmes
parties, and, if not disbursed by March 16, 1989, were to revert
to them; (3) the escrowed funds were to be used only to defray
obligations accruing prior to February 3, 1988 (the date Ruhland
assumed operational control of HTI); and (4) the escrow account
was to be deposited in a state-chartered financial institution.
The consent decree, on the other hand, provided that (1)
refund payments were to be made directly from the escrow account
to the overcharged shippers; (2) all refunds (whether originating
before or after February 3, 1988) were to be made from the escrow
account; (3) the escrow account was not to terminate until all
refunds were made; and only then were any undistributed funds to
revert to HTI; and (4) the escrow account was to be established
in a federally-chartered financial institution.
5
were the designated escrow agents under the private escrow fund.
No refunds were ever disbursed.
On July 14, 1989, Ruhland sold HTI to Anthony Mataraz-
zo. Matarazzo was notified of the ICC action against HTI, but
was informed by Gunderman that the ICC refund claims were "al-
ready taken care of" and that a $500,000 escrow account had been
set aside to defray the refunds. The Holmes parties had other
plans for the escrowed funds. On July 18, 1989, the Holmes
parties initiated a declaratory judgment action in Massachusetts
Superior Court, to recoup the funds deposited pursuant to the
private escrow agreement. Meanwhile, the ICC became aware that
the refunds required under the consent decree had not been
disbursed.
On September 14, 1989, the ICC convened a meeting of
persons associated with HTI and with the original lawsuit. At
the meeting, the ICC was informed of the Holmes parties' state
court lawsuit and was furnished for the first time with copies of
the private escrow agreement. Matarazzo, in behalf of HTI,
agreed to effect the overdue ICC refunds within 30 days, provided
Seder and Gunderman, as escrow agents, would release the escrowed
funds. Gunderman agreed. Seder declined, however, contending
that (1) the Holmes parties' obligations under the private escrow
agreement terminated on March 16, 1989, (2) Seder's signature had
not bound the Holmes parties to the consent decree, and (3) the
Holmes parties were therefore entitled to recover the funds in
escrow.
6
On October 13, 1989, the Holmes parties and Seder
intervened in the present action, demanding a judicial declara-
tion entitling the Holmes parties to the escrow funds. The ICC
countered with a civil contempt citation against Seder, Gunder-
man, Ruhland, Route USA, HTI, and Matarazzo. The ICC contended,
inter alia, that Seder and Gunderman, by their execution of the
consent decree, subjected the escrowed funds to the jurisdiction
of the district court for disposition in accordance with the
terms of the consent decree. The ICC further contended that
Gunderman and Seder, as escrow agents, failed to provide prudent
supervision relating to HTI's obligation to disburse the escrowed
funds in accordance with the terms of the consent decree. A
barrage of cross-claims and counterclaims ensued. On Decem-
ber 15, 1989, HTI filed a voluntary chapter 11 petition in the
District of New Jersey.
On January 26, 1990, after an evidentiary hearing, the
district court issued its findings of fact, and concluded, in
pertinent part, that (1) the consent decree and the private
escrow agreement were negotiated simultaneously as "synergistic"
documents intended to ensure funding of the ICC refunds antici-
pated under the consent decree; (2) the consent decree was
executed by Seder as attorney for the Holmes parties and as a
designated escrow agent under the private escrow agreement; and
(3) the consent decree was "the only operative document" defining
the legal obligations of Seder and Gunderman relating to dis-
bursements from the escrow fund. The district court rejected the
7
Holmes parties' claims to the escrow fund, and held HTI and Seder
in civil contempt for refusing to disburse the ICC refunds
pursuant to the consent decree.3 Seder and Gunderman were
replaced as escrow agents by Frank Weiner, an HTI attorney, who
was directed to disburse the ICC refunds by March 30, 1990. We
stayed disbursements pending appeal.
On April 1, 1992, following remand, see ICC v. Holmes
Transp., Inc., 931 F.2d 984 (1st Cir. 1991), the district court
vacated its contempt finding against Seder and Gunderman,4 but
reaffirmed its order directing disbursement of the ICC refunds
from the escrow fund in accordance with the terms of the consent
decree. Appellants now challenge the district court order
entered on remand.
II
DISCUSSION
3Gunderman's civil contempt was deemed purged by his earlier
agreement to transfer the escrow funds in accordance with the
consent decree.
4Since Seder's removal as escrow agent terminated whatever
interest he asserted as a declaratory judgment plaintiff, we
conclude that Seder lacks appellate standing. See United States
v. Little Joe Trawlers, Inc., 780 F.2d 158, 161 (1st Cir. 1986)
("[t]o have standing to appeal, an appellant ordinarily must have
been a party to the proceeding below, and have been aggrieved by
the order appealed from . . . . '[A]lthough a party may have an
appealable interest at the commencement of a suit, if that
interest has terminated before the entry of a judgment or decree
sought to be appealed from, he cannot appeal'"). Accordingly,
Seder's appeal of the original contempt finding (based, inter
alia, on the vagueness of the consent decree, see Fed. R. Civ. P.
65) has been mooted. Except as otherwise indicated, therefore,
we refer to the Holmes parties as appellants.
8
As they were not named in the consent decree or in the
underlying ICC action, appellants contend that the district court
lacked authority to subject them and the private escrow fund to
the terms of the consent decree. We disagree.
The thrust of their argument is that the private escrow
agreement and the district court consent decree contemplated
separate and unrelated funds from which the ICC refunds would be
disbursed: a "private escrow fund," established under the escrow
agreement and belonging to the Holmes parties, which lay beyond
the jurisdictional reach of the district court; and an "ICC
fund," established by the consent decree, which was within the
control of the court but imposed legal obligations only on HTI.
To the extent that the district court purportedly subjected their
privately-created fund to the consent decree, the Holmes parties
contend that it lacked jurisdiction and disregarded the express
terms of their private escrow agreement. To the extent that the
consent decree directed disbursements from the escrow fund
identified in the consent decree, the Holmes parties argue that
as nonparties to the underlying action they were not bound
by the terms of the consent decree. See Fed. R. Civ. P. 65(d)
(injunction "binding only upon the parties to the action, their
officers, agents, servants, employees, and attorneys, and upon
those persons in active concert or participation with them who
receive actual notice of the order by personal service or other-
wise"); G. & C. Merriam Co. v. Webster Dictionary Co., 639 F.2d
29, 35 (1st Cir. 1980) ("[t]o hold a nonparty bound by an injunc-
9
tion it is thus essential to prove either that the nonparty
participated in the contumacious act of a party or that the
nonparty was subject to the injunction because legally identified
with a party"). The determinative difficulty with appellants'
conclusion lies in its faulty premise that there were two
separate and unrelated funds.
After carefully reviewing the relationship of the
parties, as well as the circumstances surrounding the drafting of
the escrow agreement and the consent decree, and based on its
"intimate understanding of the history and circumstances of th[e
ICC] litigation," see United States v. Massachusetts, 890 F.2d
507, 510 (1st Cir. 1989), the district court determined that the
private escrow agreement and the consent decree were "synergistic
documents," negotiated simultaneously, which contemplated a
single escrow fund comprised of the HTI purchase monies
received by the Holmes parties from Ruhland to underwrite HTI's
contingent liability for any ICC refunds determined due in the
present action. See Chelsea Indus., Inc. v. Florence, 358 Mass.
50, 55-56,
260 N.E.2d 732 (1970) (if part of "same transaction,"
separate contracts may be read together as integrated agreement);
see also Gilmore v. Century Bank & Trust Co.,
20 Mass. App. Ct.
49, 50,
477 N.E.2d 1069, 1073 (1985) (whether two instruments
derive from "same transaction" is question of fact for court, to
be determined by "such factors as simultaneity of execution,
identity of subject matter and parties, cross referencing, and
interdependency of provisions"). The district court found that
10
the Holmes parties, through Seder's execution of the December
1988 consent decree, authorized HTI to utilize their interest in
the escrowed funds to effectuate the intended purpose. As HTI is
a party to the present action, the district court properly held
that it possessed jurisdiction over any interest HTI retained in
the escrowed funds.
Since the district court ruling was based, quite
properly, on extrinsic evidence of the parties' intent, both as
concerns the private escrow agreement and the consent decree, see
Gilmore, 20 Mass. App. Ct. at 50, 477 N.E.2d at 1073; see also,
e.g., Brennan v. Carvel Corp., 929 F.2d 801, 808 (1st Cir. 1991)
(considering extrinsic evidence to elucidate ambiguous relation-
ship between parties' prior agreements), we review its findings
only for "clear error." See Gel Systems, Inc. v. Hyundai Eng'g.
& Constr. Co., 902 F.2d 1024, 1027 (1st Cir. 1990) ("clear error"
review where court utilizes extrinsic evidence, as well as
documents, to interpret parties' ambiguous contractual relation-
ship); cf. Navarro-Ayala v. Hernandez-Colon, 951 F.2d 1325, 1340,
1343 n.21 (1st Cir. 1991) ("ordinary contract principles" and
standards of review should be used to interpret "the scope of the
parties' original bargain" in public consent decree).
1. The "Single-Fund" Premise
We discern no error in the district court ruling that a
single fund was contemplated by the parties to the private escrow
agreement and the consent decree. The "single-escrow fund"
ruling was supportably based on the following findings: (1) the
11
parties to the private escrow agreement were aware of the impend-
ing injunctive decree and even made reference to it in the
private escrow agreement; (2) the purpose of the parties to the
private escrow agreement was to fund the ICC refunds determined
due by HTI in the present action; and (3) the consent decree
referring to but one escrow fund (and there being no evidence of
another fund) was signed by Gunderman and by Seder as repre-
sentative for the Holmes parties.5
Similarly, it is relevant that the ICC, envisioning a
single escrow account from which the freight refunds would be
made, requested that the injunctive decree be forwarded to Seder,
as the legal representative of the Holmes parties, providing
clear evidence that the ICC likewise recognized the obligation of
the Holmes parties to facilitate disbursement of the ICC re-
funds.6 The understanding of the parties, as well as their
5Moreover, since subsequent conduct of the parties to a
consent decree may aid the interpretation of its intended scope,
see Navarro-Ayala, 951 F.2d at 1353 (Cyr, J., concurring in
part), we likewise consider it significant that Ruhland repre-
sented to Matarazzo, during their negotiations for the second HTI
sale, that the ICC refunds were "taken care of" by the private
escrow fund. As owner of Route USA, the initial purchaser of HTI
from the Holmes parties, and as the source of the funds deposited
under the private escrow agreement, Ruhland clearly understood,
prior to the onset of the present dispute, that the function of
the private escrow agreement was to ensure the funding required
to implement the consent decree.
6Mr. Gunderman, an escrow agent, counsel to HTI, and the
person who submitted the consent decree for signature by Seder,
made the following representations to the court:
Mr. Robbins [an attorney for the ICC] alluded to nego-
tiations that took place while the agreement was being
finalized. I was the one that contacted Mr. Robbins,
told Mr. Robbins that I am reading the order, the order
12
conduct, plainly comports with the district court's view of the
private escrow agreement and the consent decree as "synergistic
documents" whose function was to enable payment of the ICC
refunds owed by HTI. Taken together, the evidence provides ample
support for the district court findings. Nor are its findings
impeached by the discrepancies in the documents to which appel-
lants point. Rather, these discrepancies give rise at most to
another plausible view of the evidence. "Where there are two
permissible views of the evidence, the factfinder's choice
between them cannot be clearly erroneous." Cumpiano v. Banco
Santander Puerto Rico, 902 F.2d 148, 152 (1st Cir. 1990) (quoting
Anderson v. City of Bessemer City, 470 U.S. 564, 573, 574 (19-
85)).7
calls for the creation of an escrow fund. I alerted
him to the fact that there was, in fact, an escrow fund
established, and did he want us to go through the
exercise of closing one and opening a new one. Mr.
Seder was clearly away aware of that [sic]. When the
order was finalized, Mr. Robbins was aware, I was
aware, and Mr. Seder was aware, that there was an
escrow fund called for in the order, and that the
private escrow fund, if you will, was intended to
comply with the Court's order. . . .
Thus, Gunderman's representations, as an officer of the court,
though not evidence per se, reinforced the district court's
determination that at least HTI, Ruhland, and the ICC envisioned
the private escrow fund as the sole source of funding for the ICC
refunds. Moreover, the district court finding that the Holmes
parties acquiesced in the consent decree implementing this under-
standing cannot be considered clear error in light of Seder's
execution of the consent decree in behalf of the Holmes parties
and as an escrow agent under the private escrow agreement.
7Most discrepancies between the documents, see supra note 2,
are reconciled by according the consent decree its due as a
mutual modification of the escrow agreement to effect their
common purpose, viz., to fund disbursement of the ICC refunds
13
pursuant to the district court decree. Indeed, Escrow Agreement
11, on which the Holmes parties rest their claim to the escrow-
ed funds, appears explicitly to anticipate voluntary modifica-
tions to its expiration date in light of a subsequent consent
decree; it provides that the parties' escrow obligations will
expire on "March 16, 1988, or such later date as the parties may
agree in order to complete the review and repayment of all
unidentified and duplicate payments."
14
2. Seder's Capacity
As countervailing evidence to the "single-escrow fund"
theory, and as a separate basis for their claim to the escrowed
funds, appellants contend that Seder did not sign the December 12
consent decree as their attorney, but rather as counsel to HTI.
Therefore, they contend, the consent decree among Ruhland, HTI
and the ICC did not bind them; rather, their rights and obliga-
tions continued to be governed by the private escrow agreement,
which expired March 16, 1989, by its own terms.
Their argument is unavailing. Regardless whether Seder
represented HTI or the Holmes parties, the district court finding
that the escrowed funds were specifically dedicated to the
settlement of HTI's contingent liabilities, and were uncondition-
ally intended for that purpose, meant that there could be no
entitlement to recoup the funds until the ICC refunds were paid.
See 30A C.J.S. Escrows 5(a) ("to constitute an instrument an
escrow, it must be deposited with the intention that it shall
take effect on the performance of an express condition or the
happening of a certain event . . . [T]he condition or event must
be one in fact which will prevent the operation of the instrument
until it is performed or occurs"); see also Childs v. Harbor
Lounge of Lynn, Inc., 255 N.E.2d 606, 608,
357 Mass. 33, 35
(1970).
In any event, the district court rejected the factual
premise for appellants' argument, holding instead that Seder had
executed the consent decree as counsel to the Holmes parties. As
15
the determination of an attorney-client relationship is a ques-
tion of fact, or, at most, a mixed question of law and fact, see
Industrial Banker of Massachusetts v. Reid, Murdoch & Co., 297
Mass. 119,
8 N.E.2d 19, 22 (1937) (attorney's authority to demand
release of attachment, following alleged verbal authorization by
owner of property, is "question of fact"); see also Pedersen v.
Leahy, 397 Mass. 689, 690,
493 N.E.2d 486, 487 (1986) (where
signature line of purchase agreement is ambiguous as to capacity
of signing party, signatory's agency relationship ordinarily
presents a question of fact), we review for "clear error."
Industrial Bankers, 8 N.E.2d at 22; see generally LoVuolo v.
Gunning, 925 F.2d 22, 25 (1st Cir. 1991) ("clear error" review of
mixed questions).
As the district court determined, Gunderman not
Seder represented HTI at the time the consent decree was
signed. Control of HTI had been transferred to Ruhland in
February 1988; Gunderman served as Ruhland's counsel and as
counsel to the company after that date. Seder, by contrast,
represented the Holmes parties, not HTI, throughout the negotia-
tions for the sale of HTI. There is no indication that Seder
entered an appearance for HTI, participated in negotiations with
the ICC, or rendered significant professional services to HTI in
connection with the ICC refund claims. Prior to that time, Seder
had never entered an appearance for HTI in the present litiga-
tion; never billed HTI for professional services in furtherance
of its settlement with ICC; and never rendered significant
16
professional services to HTI in connection with the ICC refund
claims.8 Furthermore, as the district court found, given his
inexperience with ICC rules and regulations, there was little
apparent reason for HTI to retain Seder in the present litiga-
tion.9
3. The Agency Question
Appellants further assert that even if Seder did sign
the consent decree in their behalf, he had not been vested with
the proper authority under Massachusetts law.
Although, under Massachusetts law, the "general powers"
of an attorney to represent a client do not entail the authority
either to settle a case, see Precious v. O'Rourke, 270 Mass. 305,
8Appellants contend that the material inquiry for purposes
of determining the significance of Seder's signature on the
consent decree is not Seder's actual role, but ICC's understand-
ing of his role, since Seder signed the decree at ICC's behest.
They argue that a September 14, 1988 letter, allegedly excluded
improperly by the district court, showed that the ICC understood
that Seder was acting in behalf of HTI, not the Holmes parties.
Our review of the September 14 letter persuades us that it is
ambiguous as concerns Seder's role in negotiating the consent
decree, and that its exclusion, even if erroneous, was harmless
error.
9Once again appellants point to contrary evidence, including
the letter adverted to above, see supra note 8, and the fact that
the consent decree contained no signature line for the Holmes
parties. Their arguments are not compelling. Above Gunderman's
signature on the consent decree appears the legend "Attorneys for
Defendant," which reasonably can be read to refer to the Gunder-
man law firm. Although Seder's signature appears below Gunder-
man's, the document does not clearly identify Seder's affiliation
with any particular party to the action. At best, the proffered
evidence is ambiguous, suggesting an alternative inference which
might reasonably be drawn, but not warranting reversal on "clear
error" review. See Cumpiano, 902 F.2d at 152 (quoting
Anderson,
470 U.S. at 573-74).
17
170 N.E. 110 (1930), or to make substantial modifications to an
existing contract, cf. Torrao v. Cox,
26 Mass. App. Ct. 247,
525
N.E.2d 1349 (1988), the principal's consent to be bound may be
implied by showing the agent's actual or apparent authority to
act in the principal's behalf. An agent's actual authority to
bind his principal may be implied under Restatement (Second) of
Agency 43 in circumstances where the principal has acquiesced
in or adopted conduct by the agent which is reasonably considered
to encompass the authority to undertake the subject conduct on
the principal's behalf. See LaBonte v. White Constr. Co.,
363
Mass. 41,
292 N.E.2d 352, 355 (1973) (superintendent of schools
held to be 'agent' of school district for purposes of receiving
plaintiff's statement of claim, where superintendent was familiar
with contract involved in litigation, and school district had
acquiesced in superintendent's acceptance of other plaintiffs'
claims on several prior occasions); Hurley v. Ornsteen,
311 Mass.
477,
42 N.E.2d 273 (1942) (existence of agency relationship may
be implied from "course of conduct showing that a principal has
repeatedly acquiesced therein and adopted acts of the same
kind"); Restatement (Second) Agency 43. In light of its
finding that the private escrow agreement and the consent decree
were "symbiotic" documents designed to serve the identical
function, viz., providing an indemnity fund for settling the ICC
refund claims against HTI, the court supportably ruled that
Seder's authority to negotiate and execute the escrow agreement
in behalf of the Holmes parties implied the authority to modify
18
the escrow agreement as necessary to implement settlement of the
ICC refund claims in litigation.10 After carefully reviewing
the entire record, we find the force of the countervailing
evidence proffered by appellants insufficient to produce a
"definite and firm conviction that a mistake has been committed,"
Anderson, 470 U.S. at 573 (stating "clear error" standard of
review).11
10Implied authority might also be found under Restatement
(Second) of Agency 35 (1958), which provides that "unless
otherwise agreed, authority to conduct a transaction includes
authority to do acts which are incidental to it, usually accompa-
ny it, or are reasonably necessary to accomplish it." (Emphasis
added.) See also, e.g., Transurface Carriers, Inc. v. Ford Motor
Co., 738 F.2d 42, 45 (1st Cir. 1984) ("the law of principal and
agent is clear that conferring authority to conduct a transaction
gives authority to undertake acts incidental to the transaction")
(citing Massachusetts cases).
Gordon v. O'Brien, 320 Mass. 739,
71 N.E.2d 221 (1947),
cited by appellants, is not to the contrary. In Gordon, the
Supreme Judicial Court held that general authority to sell a
property on a client's behalf could not be presumed from the fact
that the parties' longtime attorney had sold another, unrelated
property to a different party in a prior transaction. 320 Mass.
at 741. Here, the district court reasonably inferred that Seder
was authorized to sign the consent decree, based on the fact that
Seder had signed a closely related document, the private escrow
agreement, essentially involving the same parties and the same
fund. The present case is closer to United States v. Bosurgi,
343 F. Supp. 815, 817 (S.D.N.Y. 1972), aff'd in pertinent part,
530 F.2d 1105 (2d Cir. 1976), cited by neither party, in which an
attorney, expressly retained to defend a lawsuit involving an
escrow fund, was held to possess implied authority to receive
process on the same client's behalf in separate litigation
involving the same fund.
11Since we affirm on the strength of the district court's
ruling that Seder possessed implied authority to bind the Holmes
parties, we need not reach its alternative holding, based on
"apparent authority."
19
III
CONCLUSION
The district court did not exceed its authority by
directing disbursements to the ICC refund claimants from the
escrow fund established under the private escrow agreement. As
the escrow fund was comprised of the monies Ruhland deposited
with the Holmes parties for the purchase of HTI, and their
private escrow agreement was specifically intended as an indemni-
ty fund for settling HTI's contingent liabilities to the ICC
refund claimants in the present litigation, the district court
possessed jurisdiction over the escrow fund incident to its
jurisdiction over HTI in the underlying ICC action.
The district court order is affirmed, with costs to
appellees. The order previously entered by this court, staying
further disbursements from the escrow account, is vacated. The
case is remanded to the district court for further proceedings
consistent herewith.12
12Since neither party has demonstrated the likelihood of a
residue in the escrow account following disbursements to the ICC
refund claimants, any dispute over a residue is unripe for
decision. See Massachusetts Ass'n of Afro-American Police, Inc.
v. Boston Police Dept., 973 F.2d 18, 20 (1st Cir. 1992) (issue is
unfit for review if "claim involves uncertain and contingent
events that may not occur as anticipated, or indeed may not occur
at all"); W.R. Grace & Co. v. EPA, 959 F.2d 360, 364-65 (1st Cir.
1991).
20
