Mci Commc'n Servs., Inc. v. Ertel Constr., Inc., Civil Action No.: 1:17-cv-01460-JMC

Citation414 F.Supp.3d 831
Decision Date30 October 2019
Docket NumberCivil Action No.: 1:17-cv-01460-JMC
CourtUnited States District Courts. 4th Circuit. United States District Court of South Carolina

Christopher A. Cosper, Hull Barrett PC, Augusta, GA, Matthew R. Gile, Pro Hac Vice, Anthony Jorgenson, Pro Hac Vice, Katie N. Wagner, Pro Hac Vice, Tami J. Hines, Pro Hac Vice, Hall Estill Hardwick Gable Golden and Nelson PC, Oklahoma City, OK, for Plaintiff.

Brandon Paul Jones, Daniel R. Settana, Jr., Janet Brooks Holmes, McKay, Cauthen, Settana and Stubley, Columbia, SC, for Defendant.


J. Michelle Childs, United States District Judge

Plaintiff MCI Communication Services, Inc. filed this action against Defendant Ertel Construction, Inc. seeking to recover damages resulting from Defendant's alleged negligent conduct that resulted in the severance of Plaintiff's underground fiber-optic cable in or near Fairfax, South Carolina. (ECF No. 1 at 2 ¶¶ 6–10.)

This matter is before the court on Defendant's Motion for Partial Summary Judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. (ECF No. 58.) Specifically, Defendant asserts it is entitled to summary judgment as to Plaintiff's claim for loss of use damages. (Id. at 1.) Plaintiff opposes Defendant's Motion in its entirety. (ECF No. 60 at 27.) For the reasons set forth below, the court DENIES Defendant's Motion for Partial Summary Judgment as to Plaintiff's loss of use damages.


Plaintiff "is a telecommunications company which provides interstate telecommunications services to individual and commercial users." (ECF No. 1 at 2 ¶ 5.) Plaintiff alleges that it provides telecommunications services through "a nationwide network of fiber-optic cable which is buried underground."1 (Id. ) Plaintiff further alleges that it "installed, maintains, and operates a fiber-optic cable in or near Fairfax, Allendale County, South Carolina (the "Cable")." (Id. ¶ 6.) More specifically, Plaintiff asserts that the Cable serviced its customers between Columbia, South Carolina and Savannah, Georgia and actively carries data amounting to 4,416 DS-3s.2 (ECF No. 60-1 at 6 ¶¶ 24, 28.)

Defendant is a utility construction company that specializes in "installation of electric, natural gas and broadband fiber-optic services." About Ertel , (last visited Oct. 24, 2019). In June of 2014, Defendant was performing utility work in Fairfax, South Carolina on behalf of South Carolina Electric and Gas. (ECF No. 58-1 at 1.)

On June 5, 2014, Plaintiff alleges that while performing excavation work with a mechanical auger for the purpose of installing utility poles, "Defendant severed an MCI underground fiber-optic telecommunications cable" at a location "approximately 2,600 feet north of the intersection of CSX railroad tracks and Walker Road in or near Fairfax...." (ECF No. 60 at 1.) When the Cable was severed, Plaintiff was able to reroute some, but not all of the relevant telecommunications traffic to spare restoration capacity—which Plaintiff maintains for emergencies. (ECF No. 60-1 at 7 ¶¶ 33–34, 8 ¶ 41.) As a result of the aforementioned Cable severance, Plaintiff asserts that it suffered damages to include the costs of repairing the Cable and the loss of its use for 8.15 hours. (ECF No. 60 at 2–3.) For its loss of use damages, Plaintiff seeks to recover $887,013.40. (See ECF No. 60-1 at 14 ¶ 65.)

Thereafter, Plaintiff filed an action in this court on June 5, 2017, alleging a claim against Defendant for negligence. (ECF No. 1 at 2 ¶ 10–5 ¶ 14.) In the Complaint, Plaintiff specifically pleaded that "[a]s a result of [Defendant] Ertel's actions and/or omissions, [Plaintiff] MCI has sustained damage to and loss of use of its Cable, ...." (Id. at 4 ¶ 11.) Defendant answered the Complaint on July 18, 2017, denying its allegations. (ECF No. 10.) On September 15, 2019, Defendant filed the instant Motion for Partial Summary Judgment. (ECF No. 58.) Plaintiff filed opposition to the Motion for Partial Summary Judgment on September 30, 2019, to which Defendant filed a Reply in Support of Defendant's Motion for Partial Summary Judgment on October 14, 2019. (ECF Nos. 60, 65.)

On October 28, 2019, the court heard arguments from the parties in support of their respective positions. (ECF No. 68.) The court considers the merits of Defendant's Motion and Plaintiff's opposition to said Motion below.


The court has subject matter jurisdiction over this action pursuant to 28 U.S.C. § 1332, because the parties are citizens of different states and the amount in controversy exceeds $75,000.00, exclusive of interest and costs. For jurisdictional purposes, Plaintiff alleges that it is a Delaware corporation with its principal place of business in Basking Ridge, New Jersey. (ECF No. 1 at 1 ¶ 1.) Defendant is admittedly a corporation organized under the laws of the State of North Carolina. (ECF No. 10 at 1 ¶ 3.) The court is satisfied that the amount in controversy exceeds $75,000.00, exclusive of interest and costs. (ECF No. 1 at 5.)


Summary judgment should be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A fact is "material" if proof of its existence or non-existence would affect the disposition of the case under the applicable law. Anderson v. Liberty Lobby Inc. , 477 U.S. 242, 248–49, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A genuine question of material fact exists where, after reviewing the record as a whole, the court finds that a reasonable jury could return a verdict for the nonmoving party. Newport News Holdings Corp. v. Virtual City Vision , 650 F.3d 423, 434 (4th Cir. 2011). In ruling on a motion for summary judgment, a court must view the evidence in the light most favorable to the non-moving party. Perini Corp. v. Perini Constr., Inc. , 915 F.2d 121, 123-24 (4th Cir. 1990). The non-moving party may not oppose a motion for summary judgment with mere allegations or denial of the movant's pleading, but instead must "set forth specific facts" demonstrating a genuine issue for trial. Fed. R. Civ. P. 56(e) ; see Celotex Corp. v. Catrett , 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ; Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ; Shealy v. Winston , 929 F.2d 1009, 1012 (4th Cir. 1991). All that is required is that "sufficient evidence supporting the claimed factual dispute be shown to require a jury or judge to resolve the parties' differing versions of the truth at trial." Anderson , 477 U.S. at 249, 106 S.Ct. 2505.

A. The Parties' Arguments

In its Motion, Defendant argues that (1) "under prevailing South Carolina law, Plaintiff cannot recover for any alleged loss of use of its damaged cable"3 and (2) even [i]f loss of use damages are appropriate at all,...they should be calculated based on [ ] Plaintiff's lost profits due to the absence of the redundant capacity, or the diminution in value of its property." (ECF No. 58-1 at 6, 7.) In support of this argument, Defendant asserts that South Carolina courts "in analyzing loss of use damages and rental value, have only applied the assessment to automobiles or other modes of vehicular transportation." (Id. at 5.) Defendant further asserts that "[r]ental value [ ] is not a proper measure of damages where the property is not capable of [being] rented and/or does not have rental value." (Id. at 6 (citing Hyler v. Wheeler , 240 S.C. 386, 126 S.E.2d 173, 175 (1962) ). As a result of the foregoing, Defendant argues that it is entitled to summary judgment as to Plaintiff's claim for loss of use damages because: (1) it did not lease "additional capacity from another telecommunications carrier for the 8.15 hours that it took to repair the cable at issue in this case"; (2) "Plaintiff did not need to do so as most of the Plaintiff's services had built-in redundant capacity"; (3) the rental market for leasing "substitute capacity does not actually exist, at least for the 8.15 hours of time needed to repair the cable at issue in this case"; and (4) Plaintiff did not "actually incur any of the alleged $887,013.40 it is claiming in loss of use damages." (Id. at 6, 7.) However, as a fallback position, Defendant contends that "[i]f loss of use damages are appropriate at all," the court should not use Plaintiff's proposed calculation for damages, but should calculate loss of use damages "based on the Plaintiff's lost profits due to the absence of the redundant capacity, or the diminution in value of its property." (Id. at 7 (citing Peoples Fed. Sav. & Loan Ass'n of S.C. v. Res. Planning Corp. , 358 S.C. 460, 596 S.E.2d 51 (2004) ).)

Plaintiff opposes summary judgment on its claim for loss of use damages. Plaintiff argues that under South Carolina law an owner of property "may recover damages for the loss of use of that property" in instances "[w]here personal property is injured but not destroyed by the negligent act of another." (ECF No. 60 at 13 (citing generally Laney Tank Lines, Inc. v. United States , 237 F. Supp. 205 (E.D.S.C. 1965) ; Newman v. Brown , 228 S.C. 472, 90 S.E.2d 649 (1955) ; Scott v. Southern Ry. Co. , 231 S.C. 28, 97 S.E.2d 73 (1957) ; Hutson v. Cummins Carolinas, Inc. , 280 S.C. 552, 314 S.E.2d 19 (S.C. Ct. App. 1984) ).) Therefore, because it owned the Cable that Defendant severed on June 5, 2014, Plaintiff argues that it "may recover the reasonable costs of restoring the Cable to its condition immediately prior to the incident, together with loss of use during the period of the repairs." (Id. at 15 (citing Newman , 90 S.E.2d at 653 ; Coleman v. Levkoff , 128 S.C. 487, 122 S.E. 875, 875 (1924) ).) Plaintiff further argues that it "is entitled to recover for loss of use of the Cable regardless of whether it actually procures a...

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