BellSouth Mobility, Inc. v. Cellulink, Inc.
| Decision Date | 25 May 2001 |
| Citation | 814 So.2d 203 |
| Parties | BellSOUTH MOBILITY, INC. v. CELLULINK, INC. Cellulink, Inc., and Eugene Ogletree v. BellSouth Mobility, Inc., and BellSouth Cellular National Marketing, Inc. |
| Court | Alabama Supreme Court |
D. Owen Blake, Jr., general counsel, BellSouth Telecommunications, Inc., Birmingham; and John D. Clements, F.A. Flowers III, James E. Fleenor, Jr., and Rebecca W. Block of Burr & Forman, L.L.P., Birmingham, for appellants/cross appellees BellSouth Mobility, Inc., and BellSouth Cellular National Marketing, Inc.
Jere F. White, Jr., Madeline H. Haikala, Ivan B. Cooper, and Kevin E. Clark of Lightfoot, Franklin & White, L.L.C., Birmingham; and Richard A. Freese and Leslie E. McFall of Langston, Frazer, Sweet & Freese, P.A., Birmingham, for appellees/cross appellants Cellulink, Inc., and Eugene Ogletree.
BellSouth Mobility, Inc. ("BellSouth"), appeals from a judgment entered on a jury verdict in favor of Cellulink, Inc. (appeal no. 1990082). Cellulink and Eugene Ogletree cross appeal from a judgment entered on that jury verdict and from a summary judgment entered in favor of BellSouth Mobility, Inc. (appeal no. 1990224). As to case 1990224, we affirm, but as to case 1990082, we reverse and remand.1
Most of the pertinent facts are undisputed. BellSouth provides cellular telephone service to customers in the southeastern United States. On January 2, 1994, Eugene Ogletree, the owner of Cellulink, executed a document entitled "Authorized Agency Agreement Between BellSouth Mobility, Inc. and Cellulink" (the "Agency Agreement"). Under this agreement, which was to terminate on December 31, 1998, BellSouth appointed Cellulink a "nonexclusive agent of BellSouth to solicit and contract on behalf of BellSouth with Subscribers for [cellular telephone service] in the Area [serviced by BellSouth]."
Pursuant to the Agency Agreement, Ogletree purchased telephone equipment from BellSouth for resale to potential subscribers of BellSouth's cellular telephone service. However, the income that Ogletree received from BellSouth principally consisted of "activation" commissions and "residual compensation." Specifically, BellSouth paid Cellulink a commission for every customer Cellulink persuaded to subscribe to BellSouth's telephone service. Furthermore, for every such subscription that remained active for 150 days, BellSouth paid Cellulink "residual compensation," defined as a percentage "of the amount [BellSouth] bill[ed] that Subscriber for monthly access, airtime usage and service options, excluding insurance, roamer and Equipment charges, taxes and tolls." (Emphasis omitted.)
The Agency Agreement also contained the following pertinent provisions:
The Agency Agreement also specifically referenced an appended document, described as Appendix B. Appendix B provided in pertinent part: "If [Cellulink] receives Equipment under any [BellSouth] program and invoices are not timely paid, or if [Cellulink] owes [BellSouth] amounts for any other reason, ... [BellSouth] reserves the right to deduct such unpaid amounts from [Cellulink's] compensation."2
Additionally, the Agency Agreement provided:
Under the Agency Agreement, Ogletree operated Cellulink stores in the Birmingham area. In doing so, he confined his equipment sales to telephones and related equipment that he purchased from BellSouth.
In 1994, Ogletree began discussing with BellSouth officials a proposal that involved the operation of booths, or "kiosks," in Wal-Mart stores within BellSouth's servicing area for the sale of BellSouth equipment and the solicitation of BellSouth's air-time subscriptions. Those discussions led to the execution of a "Letter Agreement" between Cellulink and BellSouth, dated October 12, 1994. The Letter Agreement evidenced the intent of the parties "with respect to the activation by Cellulink of subscribers to the radio-telephone service of BellSouth Mobility," but, specifically, with respect to "activations of subscribers in the Inverness Wal-Mart,... and up to three other Wal-Mart ... stores to be mutually agreed upon by Cellulink and BellSouth Mobility." (Emphasis added.)
The Letter Agreement expressly authorized Ogletree to sign leases with Wal-Mart. Under the Letter Agreement, BellSouth agreed to supply the "furniture and fixtures" of the kiosk at the Wal-Mart store in Inverness (the "Inverness Wal-Mart"). In an addendum to the Letter Agreement, the furniture and fixtures were valued at $9,750.00. BellSouth was to retain ownership of the furniture and fixtures, which it agreed to lease to Cellulink for $1.00 per year. Additionally, BellSouth agreed to "be responsible for the monthly lease space rental charges owed to the respective Wal-Mart ... in the amount of $1,000.00 per month." Cellulink agreed to execute the lease with Wal-Mart and to "assign the lease to [BellSouth] in the event that Cellulink cease[d] operation at a particular location." BellSouth also agreed to pay Cellulink $28,945.00 for "market development," which included (1) $2,250.00 for "signage," that is, outdoor and indoor banners; (2) a telephone deposit of $600.00; and (3) $3,470.00 in "miscellaneous start-up" expenses, including advertising and stationery. Finally, BellSouth agreed to pay Wal-Mart "10% of the monthly cellular telephone sales...
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