Bellsouth Telecommunications, Inc. v. Kerrigan
| Decision Date | 28 May 1999 |
| Docket Number | No. 3:97CV554.,3:97CV554. |
| Citation | 55 F.Supp.2d 1314 |
| Parties | BELLSOUTH TELECOMMUNICATIONS, INC., d/b/a Southern Bell Telephone and Telephone Company/South Central Bell, Plaintiff, v. Robert KERRIGAN, George W. Estess, and 811, Inc., Defendants. |
| Court | U.S. District Court — Northern District of Florida |
Scott A Markowitz, Heinrich Gordon Hargove Etc., FT Lauderdale, Cathy J Goodwin, Heinrich Gordon Hargrove Etc, Orlando, for plaintiff.
Dennis K. Larry, Clark Partington Hart Etc., Pensacola, David Lafuria, Lukas Nace Gutierrez Etc., Washington, DC, Damian Christopher Taylor, Clark Partington Etc., Pensacola, for defendants.
Pending is the plaintiff's motion for summary judgment. (doc. 48) Also pending is the defendants' motion for partial summary judgment. (doc. 79)
I. BACKGROUND
In 1992, plaintiff BellSouth Telecommunications, Inc. ("BellSouth") introduced a new "N11" service in the state of Florida. The N11 service is a three-digit local dialing arrangement available in specified areas for the delivery of general information over the telephone. BellSouth made available for assignment in specified areas the N11 telephone numbers 211, 311, 511, 711, and 811. N11 Subscribers who contracted with BellSouth and were assigned an N11 number could provide information services and charge end users for calls, while BellSouth would record and rate the calls on behalf of the subscribers. Only one N11 number could be assigned to an N11 subscriber per local calling area. The intended target market for the service consisted of subscribers making available on a pay-per-call basis such information as sports scores, weather, time, stock quotes, and classified services. Service in Florida was to be offered in specified local calling areas, with area designations ranging from Tier 1 (highly-populated areas) to Tier 4 (the least-populated areas).
The various telephone services provided by BellSouth in Florida are governed by the Florida General Subscriber Service Tariff ("Tariff"), as approved by the Florida Public Service Commission ("PSC"). BellSouth filed a modification to the Tariff consisting of Section A.39, a section that set forth the service requirements and conditions of N11 abbreviated dialing. The Florida Public Service Commission approved the A.39 tariff on November 4, 1992.
In 1994, defendant Robert Kerrigan and his partner, defendant George Estess, decided to apply to BellSouth for the ability to provide N11 service in multiple regions in the state of Florida. The defendants requested "811" as their three digit dialing code. The defendants signed letters of agreement with BellSouth for seven N11 lines in Florida, and received copies of the BellSouth General Service Subscriber Tariff, which was incorporated into the agreements by reference. The defendants incorporated 811, Inc. for the purpose of operating the N11 business. To provide information to callers, the defendants ordered a satellite-based information system, and hardware was installed in several locations in Florida.
Under the Tariff, a "minimum usage charge" is incurred by an N11 provider if six months after the N11 line is installed, the line usage has not risen to a specified level. The parties dispute whether the charge is a one-time charge or a monthly charge. In 1995, the plaintiff billed the defendants monthly for minimum usage charges on all the N11 sites operated by the defendants. The defendants paid the charge for one month for each site. (Miller dep., at 40-41) The plaintiff billed the defendants for minimum usage charges for subsequent months on the sites, and the defendants refused to pay the charges on the basis that the minium usage charge was a one-time charge, rather than a monthly charge.
BellSouth continued to apply minimum usage charges to 811, Inc., and after five months of non-payment BellSouth informed 811, Inc. that service would be disconnected if the balance owed was not immediately paid. On May 30, 1996, an attorney for BellSouth sent 811, Inc. a letter stating that according to BellSouth's interpretation of the tariff, 811, Inc. was required to pay minimum usage charges for every period in which 811, Inc. fell below the minimum usage charges, and that 811, Inc. had an outstanding balance of $85,474. The telephone lines were eventually disconnected on the basis that 811, Inc. had made no arrangements to pay the outstanding balance.
The plaintiff filed the present action on December 29, 1997, and filed an amended complaint on May 21, 1998. (doc. 27) Count I alleges breach of contract. Count II, entitled "Statement of Account," alleges that the defendants owe the plaintiff $107,730.28 and $14,608.39 on two accounts. In their counterclaim, the defendants alleged that plaintiff breached the N11 agreements by improperly cutting off the defendant's N11 service without prior notice.
II. ANALYSIS
A motion for summary judgment should be granted when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Rule 56(c), Fed.R.Civ.P. "[T]he plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265, 273 (1986); see also Everett v. Napper, 833 F.2d 1507, 1510 (11th Cir.1987).
However, summary judgment is improper "[i]f a reasonable fact finder could draw more than one inference from the facts, and that inference creates a genuine issue of material fact." Cornelius v. Highland Lake, 880 F.2d 348, 351 (11th Cir.1989), cert. denied, 494 U.S. 1066, 110 S.Ct. 1784, 108 L.Ed.2d 785 (1990). An issue of fact is "material" if it might affect the outcome of the case under the governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202, 211 (1986). It is "genuine" if the record taken as a whole could lead a rational trier of fact to find for the nonmoving party. Id.: see also Matsushita Electric Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538, 552 (1986).
Conclusory allegations based on speculation, subjective beliefs, or bald assertions based upon unsubstantiated hearsay are insufficient to create a "genuine issue of material fact." Carter v. Miami, 870 F.2d 578, 585 (11th Cir.1989); Ramsey v. Leath, 706 F.2d 1166, 1170 (11th Cir.1983). On a summary judgment motion, the record and all reasonable inferences that can be drawn from it must be viewed in the light most favorable to the non-moving party. McCabe v. Sharrett, 12 F.3d 1558, 1560 (11th Cir.1994). If the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, then summary judgment is appropriate. Matsushita Elec. Industrial Co. Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538, 552 (1986).
(1) Plaintiff's Motion for Summary Judgment on Defendant's Counterclaim
In their counterclaim, the defendants allege that the plaintiff breached the Florida General Subscriber Service Tariff and the agreements with the defendants when the plaintiff improperly cut off the defendants' N11 service access without right or justification and without proper notice. The Tariff provides that:
Unless otherwise specifically provided in this Tariff, the Company shall be authorized to disconnect any tariffed service provided to the N11 subscriber utilized, directly or indirectly, with the N11 Service which fails to comply with regulation and conditions set forth herein, upon five (5) days notice to the subscriber. Disconnection may be suspended at the discretion of the Company if it receives written certification that the N11 subscriber is in compliance with regulations and conditions of the tariffs. Continual noncompliance shall be cause for disconnection without notice at the discretion of the Company.
According to the plaintiff, it is entitled to summary judgment on the defendants' counterclaim because the counterclaim is barred by the limitation of liability clause in the Tariff.
The plaintiff entered into seven separate agreements for N11 service with the defendants, with each agreement addressing a separate service location. Each agreement contains a paragraph which states that 811, Inc.:
[A]grees to the rules and regulations for the provision of N11 service as set out in Section A.39 of the Florida General Subscriber Service Tariff.
The agreements also provide that:
811, Inc. further agrees to abide by any subsequent rules adopted by the FCC regarding the use and return of N11 service codes.
The General Subscriber Service Tariff in effect at the time the agreements were signed provides:
In no event shall the Company be liable for any losses or damages of any kind resulting from the unavailability of its equipment or facilities or for any act, omission or failure of performance by the company, or its employees, or agents, in connection with this tariff. The Company shall not be responsible for calls that cannot be completed as a result of repair or maintenance difficulties on company facilities and equipment. Nor on equipment owned or leased by the subscriber.
Section A.39.1.2(J). According to the plaintiff, under the filed rate doctrine, the limitation of liability clause must be interpreted as barring the defendants' claim for damages resulting from termination of service.
The filed rate doctrine "recognizes that where a legislature has established a scheme for...
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