Play Time, Inc. v. LDDS Metromedia Communications, Inc.
| Decision Date | 07 May 1997 |
| Docket Number | No. 96-2066,96-2066 |
| Citation | 123 F.3d 23 |
| Parties | PLAY TIME, INC., Appellee, v. LDDS METROMEDIA COMMUNICATIONS, INC., a/k/a WorldCom, Inc. or WorldCom, Appellant. . Heard |
| Court | U.S. Court of Appeals — First Circuit |
Joan A. Lukey, Boston, MA, with whom Anthony A. Scibelli and Hale and Dorr, LLP were on brief, for appellant.
Kenneth L. Kimmell, Boston, MA, with whom Erin M. O'Toole and Bernstein, Cushner & Kimmell, P.C. were on brief, for appellee.
Before TORRUELLA, Chief Judge, CYR, Senior Circuit Judge, and STAHL, Circuit Judge.
Defendant-appellant WorldCom challenges a district court judgment awarding damages
for breach of its agreement to assign plaintiff-appellee Play Time, Inc. ("Play Time") a toll-free "800" vanity number. We affirm the district court judgment in all respects.
WorldCom, a corporation with its principal place of business in Jackson, Mississippi, and an office in Revere, Massachusetts, provides subscribers with specialized long-distance services, including toll-free "800" numbers. 2 Pursuant to industry standards, toll-free "800" numbers are stored in a central database known as the 800 Service Management System ("SMS/800"). All "800" numbers are reserved and assigned to subscribers by so-called Responsible Organizations ("RESP ORGs") through SMS/800.
In March 1994, Play Time, a Massachusetts-based, family-owned corporation engaged in selling art supplies, was endeavoring to expand into nationwide telephonic networking aimed at the commercial real estate leasing market. Michael Levosky, a Play Time shareholder and co-manager, envisioned a nationwide referral service through which potential customers could call a toll-free "800" number and enter information into an automated call router which would link the caller to a real estate office near the place the caller wanted to lease commercial real estate. Play Time would generate income from the fees charged real estate brokers for their advertising and usage of the toll-free "800" number.
To that end, Play Time set out to obtain a suitable vanity number, one whose alphabetical counterpart conveyed a business message readily identified and remembered by targeted customers. Levosky decided to obtain 1-800-"367-5327" ("the Number"), which would transpose as "FOR-LEAS[E]." WorldCom advised Levosky that the Number, though not then in use, was expected to become available a few weeks later, on or about April 20, 1994. 3
Levosky called the WorldCom office in Revere, Massachusetts, which handled other telephone business for Play Time, and spoke with the "800" coordinator, Martha Burton, who confirmed that the Number would become available in mid-April. Burton assured Levosky that she would obtain the Number through SMS/800 and assign it to Play Time once it attained "spare" status.
On April 20, 1994, one week after WorldCom became the RESP ORG for the Number, and the day the Number was to revert to "spare" status, Levosky reminded WorldCom to assign the Number to Play Time. 4 Notwithstanding that WorldCom had been designated the RESP ORG for the Number, however, it did not do so. Levosky called WorldCom frequently between April 20 and May 10, 1994, to ascertain why the Number had not yet been assigned to Play Time, only to be told essentially that WorldCom was checking into it.
On May 11, 1994, Levosky called Joseph Shannon, a senior account executive in WorldCom's Revere office, who assured Levosky that the Number could be assigned to Play Time once the appropriate paperwork Although the WorldCom fax machine in the Revere office printed a receipt reflecting that the fax had been received in San Antonio on May 12, when Shannon called the San Antonio office on May 13 he was informed that the documents had never been received. Once again Shannon faxed the documents. Although the second set of documents was received in San Antonio on May 13, as confirmed by telephone, still the Number was not assigned to Play Time. Shannon was told the delay was due to difficulty in getting the Number released from SMS/800, notwithstanding the fact that WorldCom was already the RESP ORG for the Number. But see supra note 3.
had been completed. Levosky promptly executed the required documents and returned them to Shannon the same day; Shannon faxed them to the WorldCom RESP ORG office in San Antonio on May 12.
Meanwhile, one Michael Eisemann had asked a WorldCom office in Indiana to obtain the Number for his real estate business. Eisemann intended to use the Number in a nationwide referral system similar to that envisioned by Levosky. On May 20, 1994, approximately two months after Levosky first made a verbal request for the Number and nine days after Levosky's first written request, Eisemann submitted the order to the WorldCom office in Indiana, with the required paperwork. Levosky's earlier requests notwithstanding, WorldCom assigned the Number to Eisemann, because its Revere office had never entered Play Time's request into SMS/800.
Unaware that Eisemann had obtained the Number, Levosky continued to inquire into its status. Although Levosky was told there had been some delay due to paperwork problems, Shannon advised him that the problems had been resolved and the Number would soon be assigned to Play Time. On May 26, Levosky dialed the Number to determine whether it would ring at Play Time's office. The call was answered instead by an employee in a Detroit, Michigan, maintenance office. Whereupon Levosky contacted WorldCom, only to be informed that there had been a computer "glitch."
Although WorldCom switched the Number to Play Time on May 27, by May 31 it was once again ringing at the Detroit maintenance office. The Number changed hands between Levosky and Eisemann four more times between May 31 and June 2, ultimately remaining with Eisemann. On June 2, Shannon tracked down the Indiana sales representative responsible for assigning the Number to Eisemann, and learned for the first time that Eisemann too had requested the Number. After Shannon informed Levosky of the problem, Levosky complained that WorldCom originally had retrieved the Number from SMS/800 at his request, more than two months earlier. Levosky then asked WorldCom to disconnect the Number pending an investigation.
Shannon and his supervisor, Charles Hurd, approached senior WorldCom management in the Revere office, urging that the Number be returned to Play Time. Hurd informed Brady Buckley, Vice President of sales for the eastern region, that the Number had been taken from Play Time. Buckley asked Hurd how much money the Number could be expected to produce. Hurd was unable to answer the question. Buckley finally told Hurd: "F--- it[;]" "leave it alone."
Upon learning that the Revere office was unable or unwilling to assist him further, Levosky contacted Deborah Surrette, WorldCom Vice President for the Northeast region. When Levosky explained why the Number was so important to Play Time, Surrette promised to investigate the matter and get back to him. Surrette asked Kelle Reeves, director of customer provisioning and RESP ORG, to determine whether WorldCom policy had been followed in regard to the Number. After speaking with several people, but without attempting either to contact the Revere office or to ascertain which customer had first requested the Number, Reeves simply concluded that WorldCom had complied with industry guidelines requiring "800" numbers to be allocated on a "first-come, first-served" basis, as Eisemann's request had been the first to be entered into SMS/800. 5
Levosky continued to urge WorldCom to return the Number to Play Time, but was told that industry guidelines prohibited its reassignment. See supra note 5. Levosky nevertheless maintained that Play Time had been the first to request the Number. WorldCom then altered course, explaining that its relationship with Levosky was not controlled by industry guidelines, which govern only the relationship between a RESP ORG and SMS/800.
At that point, WorldCom wrongly represented to Levosky that the problem had been caused by AT & T. According to WorldCom, AT & T had been the RESP ORG for the Number on the date Play Time requested it, but had released the Number to "spare" status rather than assigning it to WorldCom. To the contrary, however, AT & T was never the RESP ORG for the Number after 1993. Rather, as we have noted, WorldCom itself had been the designated RESP ORG since April 13, 1994.
Finally, WorldCom informed Levosky that the documents he had submitted through Shannon, see supra pp. 25-26, had not been received by its San Antonio office until after the May 20th request from Eisemann, even though a WorldCom employee in San Antonio had confirmed receipt of the Levosky paperwork on May 13. Play Time brought suit against WorldCom on November 9, 1994, demanding damages and specific performance. Shortly after Eisemann was named an indispensable party in relation to the specific performance claim--because he still controlled the Number--he changed long-distance carriers to prevent WorldCom from returning the Number to Play Time.
Play Time then offered Eisemann an immediate $5,000 non-refundable deposit and an additional $45,000 following trial, in return for the Number. At the same time, it offered to dismiss its action against Eisemann if he would testify to the value of the Number. Eisemann countered with a demand for a $10,000 non-refundable deposit and $40,000 after trial. Their negotiations ultimately fell through because Play Time could not come up with the additional $5,000 non-refundable deposit.
Eisemann nevertheless testified at trial that the Number did have inherent value, explaining that "people would buy the [vanity] number for [its] potential value." He produced a pamphlet he had developed for marketing the Number, touting the importance of vanity numbers in reaching potential customers. Although...
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