Civic Center Drive Apts. Ltd. v. Sw Bell Video, C-02-2955 JCS.
| Decision Date | 19 November 2003 |
| Docket Number | No. C-02-2955 JCS.,C-02-2955 JCS. |
| Parties | CIVIC CENTER DRIVE APARTMENTS LTD. PARTNERSHIP, et al., Plaintiffs, v. SOUTHWESTERN BELL VIDEO SERVICES, Defendant. |
| Court | U.S. District Court — Northern District of California |
Michael G. Long, Watt, Tieder, Hoffar & Fitzgerald LLP, Irvine, CA, Julian F. Hoffar, Watt, Tieder, Hoffar & Fitzgerald, LLP, McLean, VA, for Plaintiffs.
James G. Gilliland, Mehrnaz Boroumand, Townsend and Townsend and Crew LLP, San Francisco, CA, John C. Nabors, Matthew J. Schroeder, Gardere Wynne Sewell LLP, Dallas, TX, for Defendant.
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT [Docket No. 90]
On Friday, October 17, 2003 at 9:30 a.m., a hearing was held on Defendant's Motion For Partial Summary Judgment ("the Motion"). At the request of the Court, Defendant filed a supplemental brief on November 3, 2003. For the reasons stated below, the Motion is GRANTED IN PART and DENIED IN PART.
Plaintiff Civic Center Drive Limited Partnership ("Civic Center") owns Civic Center Apartments, located in Fremont, California. Declaration of Dan Rigney ("Rigney Decl.") at ¶ 4. Plaintiff North Ninth Street Limited Partnership ("North Ninth") owns an apartment complex called The Esplanade, in San Jose, California. Id. Defendant, Southwestern Bell Video Services, Inc. ("SBVS"), contracts with owners of apartment complexes and other multi-dwelling units to provide multi-channel video and audio services to residents by way of satellite transmission. Declaration of Allen Foster in Support of Defendant's Motion for Partial Summary Judgment ("Foster Decl.") at ¶ 4. To do this, SBVS installs and maintains various equipment including twin cable,1 which typically is installed between the interior walls of the units during construction of the building. Id. at 5.
Plaintiffs in this action entered into contracts with SBVS for the provision of multi-channel video and audio programming services for the tenants of Civic Center Apartments and The Esplanade. See Pacific Bell SmartMoves Contract For Marketing Of Video Services, dated August 8, 2000 (hereinafter, "North Ninth Agreement"), Exh. 2 to Declaration of Peggy Stodola in Support of Defendant's Motion For Partial Summary Judgment ("Stodola Decl."); Multichannel Video Programming Service Agreement, dated June 12, 2001 (hereinafter, "Civic Center Agreement"), Exh. 1 to Stodola Decl.2
The Civic Center Agreement contains the following provisions relevant to Defendant's Motion:
1. ACCESS
1.1 Grant. [Civic Center] hereby grants to [SBVS] and [SBVS] accepts from [Civic Center] a license for the Term of this Agreement to access and use areas of the Property which ... shall be used solely to install, operate and maintain the System ... and provide the Service.
3. INSTALLATION AND OWNERSHIP OF THE SYSTEM
3.1 Installation. Operator shall install, operate, maintain, repair, replace and remove ("the Work") all facilities and equipment, passive and active, necessary for the delivery of the Service to residents of the Property ("the System") in an orderly and workmanlike fashion ... All work done in connection with the System may be done only as specified in and only in the locations shown on the plans and specifications ("Plans") submitted by Operator and approved by Owner in owner's sole discretion.... After the initial installation of the System has been completed in accordance with the Plans, Operator may not make any material modifications to the System without the prior approval of Owner which shall not be unreasonably withheld .... Operator agrees that it shall perform all Work in a manner that preserves the aesthetics of the Property as much as possible and minimizes the effect on the appearance of the Property, including, to the extent possible, the placement of all cables and wiring underground .... All work shall be performed by Operator at times mutually agreed to by the parties. Operator shall be responsible for all maintenance and repair of the System at its sole cost through the term of the Agreement ... Owner may not modify, connect to, disconnect or remove the system or any property belonging to Operator ... Owner will not allow a third party to use the system or any property belonging to Operator....
3.2 Title to the System. [SBVS] shall own and have title to the System throughout the term of this Agreement.
4. TERMINATION RIGHTS
4.1 Termination (a) [Civic Center], in addition to whatever other remedies it may have at law or otherwise, may elect to terminate this Agreement and is relieved of any liabilities or obligations hereunder ... in the event of any default on the part of [SBVS]. [SBVS] shall be deemed in default hereunder upon the ... (ii) breach or default in its performance of any obligation hereunder ... including a breach of any covenant, representation or warranty, and failure to remedy same within a period of thirty (30) days after receipt of written notice from Owner of same; provided however, that if such default cannot reasonably be remedied within such thirty (30) day period (but is susceptible of being remedied), [SBVS] shall not be in default if it commences to remedy the default within such thirty (30) day period and thereafter diligently pursues such remedy to completion but in no event shall such completion take longer than an additional thirty (30) day period .... Neither party shall be liable to the other for any consequential, indirect or punitive damages.
5.1 Operator Indemnity. [SBVS] shall defend, indemnify and hold harmless Civic Center ... from and against all claims, demands, liabilities, causes of action, suits, judgments, fines, damages, and expenses ... arising from (1) the negligent installation. maintenance, upgrade, removal, use or operation of the System or the provision of the service ... or the negligent exercise of [SBVS's] other rights under this Agreement ..., (2) [SBVS's] negligence in failing to perform its obligations under this Agreement, (3) any negligent act or omission of [SBVS] ..., and (4) any breach by [SBVS] of its covenants, representations and warranties....
7. MISCELLANEOUS
7.8 Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the jurisdiction where the Property is located without reference to the principles governing the conflict or choice of laws applicable in that or any other jurisdiction.
Civic Center Agreement, Exh. 1 to Stodola Decl.
The North Ninth Agreement contains the following provisions relevant to the Motion:
III. [SBVS] SERVICES
1. During the term of this agreement, [SBVS] will own the System and ... [SBVS] will have the exclusive right to use and allow others to use the System. [North Ninth] is not authorized to permit third parties to use or connect with property owned by [SBVS], nor may [North Ninth] modify, rearrange, connect equipment to, disconnect or remover property owned by SBVS, except with prior written permission from [SBVS].
IV. GENERAL TERMS AND CONDITIONS
[North Ninth] grants to [SBVS] an irrevocable right of entry to the land during the term of the contract appurtenant to the land on which [SBVS]'s facilities lie ... and the right to use all facilities installed by [SBVS] in the Location during the term of this Contract hereunder....
1. If a Party defaults on its obligations under this Agreement and fails to cure the default within fifteen (15) days after receiving written notice, in addition to all rights and remedies available at Law or in equity, the non-defaulting party may terminate the contract. If the default is not reasonably curable in the fifteen(15) day period, the Parties will negotiate a reasonable time interval for the defaulting party to cure the default.
* * * * * *
3. If the Contract expires or is terminated for any reason, [SBVS] will, within forty-five (45) days after the termination date, remove all [SBVS]-owned System equipment except for all internal building and external, underground wire, cable, conduit, connectors and jacks ("Cable") .... [North Ninth] will receive ownership of the cable on the termination date....
.... This Contract will be interpreted and governed by Laws in the state of the applicable Location.
F. Indemnification
Each Party agrees to indemnify, defend, and hold harmless the other party ... from and against any and all liability, loss, damage, claim or expense ... incurred by the other(s) in connection with any claim, demand or suit for damages, injunction or other relief caused by or resulting from the negligence, gross negligence or intentional misconduct of the indemnifying party....
I. Disclaimer of Warranties and Limitation of Liability
... The Parties are not liable for each other's incidental, specific, direct, punitive or consequential damages including lost revenues or profits, or loss or damage of any kind arising out of performance or non-performance under this Contract or a System defect or failure.
North Ninth Agreement, Exh. 2 to Stodola Decl.
Pursuant to these Agreements, between November 2000 and March 2002, SBVS installed twin cable at Civic Center Apartments and The Esplanade. Answer to Amended Complaint of Plaintiffs and Counterclaim, Exh. B to Mitrakos Decl. at ¶ 14. On August 29, 2001, when most of the cable system had been installed, SBVS learned that the twin cable it had used on the two projects did not conform to Underwriters Laboratories standards. Id. at ¶ 15; SBVS Response to Interrogatory No. 9, Exh. A to Declaration of Kevin J. McKeon in Opposition to Defendant's Motion for Summary Judgment ("McKeon Decl.").
Seven months later, in early April 2002, SBVS informed Plaintiffs that non-conforming cable had...
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