Salsgiver Commc'ns, Inc. v. Consol. Commc'ns Holdings, Inc., 946 WDA 2015

• Decision Date: 10 November 2016
• Docket Number: No. 946 WDA 2015,946 WDA 2015
• Citation: 150 A.3d 957
• Parties: SALSGIVER COMMUNICATIONS, INC., Salsgiver Telecom, Inc., and Salsgiver, Inc., Appellants v. CONSOLIDATED COMMUNICATIONS HOLDINGS, INC., North Pittsburgh Systems, Inc., and North Pittsburgh Telephone Company, Inc., Appellees
• Court: Pennsylvania Superior Court

150 A.3d 957

SALSGIVER COMMUNICATIONS, INC., Salsgiver Telecom, Inc., and Salsgiver, Inc., Appellants

v.CONSOLIDATED COMMUNICATIONS HOLDINGS, INC., North Pittsburgh Systems, Inc., and North Pittsburgh Telephone Company, Inc., Appellees

No. 946 WDA 2015

Superior Court of Pennsylvania.

Argued May 17, 2016

FILED NOVEMBER 10, 2016

Louis C. Long, Pittsburgh, for appellants.

Stanley Yorsz and Jordan M. Webster, Pittsburgh, for appellees.

BEFORE: OLSON, STABILE AND MUSMANNO, JJ.:

OPINION BY OLSON, J.:

Appellants, Salsgiver Communications, Inc., Salsgiver Telecom, Inc., and Salsgiver, Inc., appeal from the June 2, 2015 judgment entered in favor of defendants, Consolidated Communications Holdings, Inc., North Pittsburgh Systems, Inc., and North Pittsburgh Telephone Company, Inc. (collectively "Defendants"). We affirm.

On April 14, 2008, Appellants instituted the current action against Defendants. Appellants' amended complaint sounded in trespass and alleged that Defendants tortiously interfered with their existing and prospective contractual relations.

Within Appellants' amended complaint, Appellants averred that Salsgiver Communications, Inc. ("Salsgiver Communications") and Salsgiver Telecom, Inc. ("Salsgiver Telecom") are wholly-owned subsidiaries of Salsgiver, Inc. Appellants claimed that, under the Federal Telecommunications Act of 1996, 47 U.S.C. §§ 151 et seq. ("the Act"), Salsgiver Communications is a "cable television system operator" and Salsgiver Telecom is a "telecommunications carrier." Appellants' Amended Complaint, 8/4/08, at ¶¶ 1–4. Defendants own and maintain utility poles in Western Pennsylvania. Id. at ¶ 6.

According to Appellants, they "can provide [their cable television and telecommunication] services to customers only by way of fiber optic cable [,] which must be attached to utility poles en route to their destination." Id. at ¶ 9. In addition, under "[t]he Pole Attachment Section of the [Act] (47 U.S.C. § 224 )[,] cable television system operators, like Salsgiver Communications, and telecommunications carriers, like Salsgiver Telecom, must be granted access to those [utility] poles by utilities in their service areas, such as [Defendants], which own the poles."¹ Id.

Appellants averred that, in September 2004, "Salsgiver Communications entered into its first cable franchise agreement with a municipality, the Borough of Freeport, Armstrong County." Id. at ¶ 17A. Under the agreement with Freeport, Salsgiver Communications is obliged to provide "cable television programming and other cable services" to Freeport, for a period of at least 50 years. Id. at ¶ 22D.

As Appellants alleged, the cable franchise agreement with Freeport "entitled Salsgiver Communications to pole access as a ‘cable television system’ under § 224 of the Act."² Id. at ¶ 17A. Therefore, in October 2004, Salsgiver Communications "formally requested, in writing, access to the telephone poles owned by Defendants," so that Salsgiver Communications could provide cable television services to its existing and prospective customers. Id. at ¶ 11. Nevertheless, Appellants claimed:

knowing that such conduct would harm Salsgiver Communications' existing and prospective contractual relations with its customers, ... [Defendants] repeatedly refused to allow Salsgiver Communications to attach to its poles, despite the fact that Salsgiver Communications also entered into cable franchise agreements with Buffalo Township on December 31, 2004[ ] and with Harrison Township on April 26, 2006.

Id. at ¶ 17C.

Appellants alleged that Defendants' actions were intentional and harmed Salsgiver Communications' reputation, as well as "Salsgiver Communications' existing and prospective contractual relations with its customers." Id. at ¶¶ 17C and 23.

Appellants also claimed that, in 2005, "the Pennsylvania Public Utilities Commission [ ] provisionally approved Salsgiver Telecom's application to provide telecommunications services" in Pennsylvania. Id. at ¶ 28A. The approval "entitle[d] Salsgiver Telecom to pole access as a [‘Competitive Access Provider’] under § 224 of the Act."³ Id. at ¶ 28A. Therefore, in October 2005, Salsgiver Telecom requested, in writing, access to the telephone poles owned by Defendants, so that Salsgiver Telecom could provide telephone services to its existing and prospective customers. Id. at ¶ 12. However, Defendants "repeatedly refused to allow Salsgiver Telecom to attach to their poles." Id. at ¶ 28C. Appellants alleged that Defendants' "willful, intentional [,] and negligent behavior" tortiously caused harm to Salsgiver Telecom's reputation and caused Salsgiver Telecom to lose potential profits. Id. at ¶ 31.

Prior to trial, Defendants filed a motion for summary judgment and claimed, amongst other things, that the two-year statute of limitations barred Appellants' claims. Defendants' Motion for Summary Judgment, 6/18/12, at ¶ 15. On February 12, 2013, the trial court entered an order partially granting Defendants' summary judgment motion and declaring that "the two-year statute of limitations bars [Appellants'] claims [ ] for alleged tortious conduct occurring prior to April 14, 2006." Trial Court Opinion, 2/12/13, at 3; Trial Court Order, 2/12/13, at 1.

The case proceeded to a jury trial and, during trial, Defendants introduced evidence that they did not allow Appellants utility pole access because Defendants' attorneys concluded that Appellants were neither a "cable television system operator" nor a "telecommunications carrier," as defined under the Act. N.T. Deposition of Kevin Albaugh, 5/1/15, at 6 and 16 (introduced into evidence on May 8, 2015). Therefore, according to the Defendants, they believed that Appellants were ineligible to receive utility pole attachments. Id. at 11.

The evidentiary portion of the trial concluded on May 13, 2015. The next morning, the trial court heard argument on the parties' proposed jury instructions.⁴ As is relevant to the current appeal, during argument, Appellants objected to two proposed jury instructions that were proffered by Defendants. First, Appellants objected to Defendants' proposed instruction that Defendants "cannot be liable to [Appellants] for interference with a prospective contract if [the jury finds] that the Defendants, in good faith, were asserting a legally protected interest of their own." See Defendants' Proposed Jury Instructions, 5/13/15, at 9; N.T. Trial, 5/14/15, at 687–689. According to Appellants, this instruction was improper because Pennsylvania case law "does not ... encompass any explicit good faith test in the context of intentional interference with contractual relations" and because "the term ‘legally protected interest’ is kind of confusing to the jury." N.T. Trial, 5/14/15, at 688–689. The trial court agreed that the term "legally protected interest" was confusing and thus "knock[ed] out" that part of the instruction. Id. at 690. However, the trial court declared that it would instruct the jury on "good faith." Id.

Second, Appellants objected to Defendants' proposed jury instruction regarding "mitigation of damages." Id. at 691. According to Appellants, "there was not much testimony at all" about how Appellants could have mitigated their damages in this case and "the jury [would] really [have] no context within which to view [the mitigation] instruction." Id. at 692. The trial court disagreed with Appellants, holding that it was "up to the determination of the jury [ ] to determine whether or not there was mitigation and whether or not [Appellants] did it and whether or not it was reasonable." Id. at 699.

The trial court then instructed the jury on the tort of intentional interference with prospective contractual relations⁵ in the following manner:

One who intentionally induces or otherwise intentionally prevents another from entering into a prospective business relationship with a third person or makes the entry into that business relationship more expensive is responsible for the loss that person or company suffered as a result of the prevention or interference with such prospective business relationship.

In order to succeed on this claim for tortious interference with prospective business relations, the Plaintiff must prove by a preponderance of the evidence, [number one,] the existence of a prospective contractual or business relation between the Plaintiffs and a third party; [number two], purposeful action on the part of the Defendants intended to interfere with or prevent the prospective relation from occurring; [number three], the absence of privilege or justification on the part of the Defendants; and [number four], the occasioning of actual legal damage as a result of the Defendants' conduct.

These items are called the elements of Plaintiffs' claim. The term "prospective business relationship" includes any prospective relationship leading to potentially profitable contracts. A prospective relationship is less than a contractual right, but more than a mere hope.

Plaintiffs must have had a realistic expectation that they would have entered into a contractual relationship with residential and business customers purchasing Plaintiffs' services.

The tort of intentional interference with prospective business relations requires Plaintiffs to prove by a fair preponderance of the evidence that the interference was intentional and improper.

The term "intent" or "intentional" is not limited to consequences which are desired. If the actor knows that the consequences are certain or substantially certain to result from his act and still goes ahead, he is treated by the law as if he had, in fact, desired to produce the result.

If the Defendants did not have that intent, that conduct does not subject them to liability to the Plaintiffs. If the Defendants' conduct was for a purpose other than interference with the Plaintiffs' prospective contractual relations, you may take that into consideration in your determination of whether the Defendants intended any interference.

Intent to interfere does

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