Trustees of the American Federation of Musicians and Employers’ Pension Fund v. Steven Scott Enterprises, Inc.

William Moriarity was the president of Local 802 (the union) and a trustee of the American Federation of Musicians and Employers Pension Fund (the pension fund) (plaintiff). Steven Scott Enterprises, Inc. (Steven Scott) (defendant) was a company that hired musicians to perform at events such as weddings and bar mitzvahs. Steven Scott made 15 settlement agreements with the union, the pension fund, and Moriarity regarding certain covered employees. The settlement agreements explained that Steven Scott would make contributions to the pension fund for its covered employees in full settlement of all claims against Steven Scott. The agreements further stated that if the pension fund accepted Steven Scott’s contribution payments, it would thereby ratify the agreements. The settlement agreements were signed by an agent of Steven Scott and by Moriarity. The pension fund cashed all 15 checks written by Steven Scott for the pension-fund contributions. Although Moriarity was authorized to collect pension-fund contributions from employers, he was not authorized to enter into settlement agreements for the pension fund. Only the pension fund’s board of trustees could enter into settlement agreements. At the time the settlement agreements were made, Steven Scott did not know that Moriarity was not authorized to enter into the settlement agreements on behalf of the pension fund. The pension fund sought an audit of Steven Scott’s records. Steven Scott argued that the settlement agreements precluded the pension fund from auditing it. The pension fund argued that the settlement agreements were not binding, because Moriarity did not have authority to enter into the agreements. Steven Scott filed a motion for summary judgment, claiming that the principles of equitable estoppel and apparent authority bound the pension fund to the settlement agreements.