United States v. Kansas Gas and Electric Company, 6420.

• Decision Date: 03 February 1961
• Docket Number: No. 6420.,6420.
• Citation: 287 F.2d 601
• Parties: UNITED STATES of America, Appellant, v. KANSAS GAS AND ELECTRIC COMPANY, a corporation, Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

287 F.2d 601 (1961)

UNITED STATES of America, Appellant, v. KANSAS GAS AND ELECTRIC COMPANY, a corporation, Appellee.

No. 6420.

United States Court of Appeals Tenth Circuit.

February 3, 1961.

Ronald A. Jacks, Atty., Dept. of Justice, Washington, D. C. (George Cochran Doub, Asst. Atty. Gen., Wilbur G. Leonard, U. S. Atty., Topeka, Kan., and Alan S. Rosenthal, Atty., Dept. of Justice, Washington, D. C., were with him on the brief), for appellant.

Stanley Garrity, Wichita, Kan., for appellee.

Before MURRAH, Chief Judge, and BRATTON and BREITENSTEIN, Circuit Judges.

BREITENSTEIN, Circuit Judge.

The United States, plaintiff below, appeals from a summary judgment in favor of appellee-defendant, Kansas Gas & Electric Company (herein referred to as the Utility), to recover alleged overpayments made under a contract for the sale by the Utility of electrical energy for use on the Planeview federal housing project located near Wichita, Kansas. The claim of overcharge involves the years 1947-1952 and depends on the applicability of a rate schedule adopted by the Utility in 1947. The parties agree that if such rate schedule is applicable the amount of the overcharge is $62,468.75.

The contract required the Utility to deliver electricity to a designated point where it was metered for billing purposes. Beyond that point the Housing Authority distributed the electricity to the users and included the charge therefor in the rent as an incident of tenancy. The dispute arises over the interpretation and application of the following provision of the contract:

"If during the period of this contract, the Utility makes general reductions in rates or if lower rates are made applicable to this general class of service, then such reductions shall be applicable to the rates for the service covered by this contract."

There was no general reduction in rates. The query is whether there was a rate reduction applicable to the "general class of service." The record shows that at the time of the execution of the contract the Utility had in effect a schedule, designated as PW-337, applicable to "electric service for redistribution and resale by municipalities owning and operating a local distribution system." In the fall of 1942 the Utility adopted a schedule, designated as PW-942, which cancelled PW-337 and applied to "all electric service supplied for resale to municipalities whose entire requirements are supplied under this Schedule at one metering point." The Utility offered to apply PW-942 to the Planeview project but the offer was rejected as a study disclosed that it would not result in a reduced rate. In 1947 the Utility adopted schedule PWM-247 which cancelled PW-942 and applied to "all electric service supplied under Company's standard `Agreement for Electric Service' to Public Utilities for Resale." The Government contends that this last schedule reduced the rates and the failure of the Utility to apply it resulted in the claimed overcharges. The Utility says that the PWM-247 schedule does not apply as it does not relate to the same "general class of service" as that provided for in the contract under consideration.

The sole question is whether there is a factual dispute which precludes summary judgment. In their reply brief Government counsel, with commendable candor, say that they do not now ask for judgment on the merits "for the record at this point does not contain all the facts necessary for such a determination."

No good purpose would be served by reviewing the numerous decisions of this court dealing with summary judgment.¹ The Utility recognizes that summary judgment is not proper when there is a genuine issue of material fact and, in saying that there is no such issue here, relies heavily on the fact that the trial court had before it the contract in issue and a typical contract with a municipality which was governed by schedule PWM-247 and that its affidavits submitted in support of its summary judgment motion were not controverted by counter affidavits. The Government contends that its pleadings, answers to requests for admissions, and answers to interrogatories, when considered together with the pleadings and affidavits of the Utility, establish a factual situation which precludes summary judgment.

The failure of the Government to file counter affidavits is not controlling.² A summary judgment proceeding is not a trial by affidavit.³ The parties must always be afforded a trial when there is a good faith dispute over the facts.⁴ Rule 56, F.R.Civ.P., 28 U.S.C.A., requires, in the determination of the existence of such a dispute, consideration of the pleadings, depositions, admissions on file and affidavits, if any. Answers to interrogatories may also be properly considered.⁵ While the pleadings are to be construed liberally in favor of the party against whom the motion is granted,⁶ "flimsy or transparent" allegations in pleadings are insufficient to raise a factual issue.⁷

The complaint alleged that:

"At the time of execution of said contract, the general class of electrical service that defendant agreed to furnish to plaintiff thereunder was also being furnished by the defendant to public utilities and municipalities owning and operating local distribution systems in territory served by the defendant, according to the provisions of a certain rate schedule designated as PW-337."

In answering interrogatories propounded by the Utility, the Government asserted several acts of the Utility which allegedly indicated that the Utility considered the service furnished the Planeview housing project as within the same "general class of service" as that supplied by the Utility to municipalities. These acts included: offer of service at PW-337 rates; service at PW-337 rates; use of PW-337 rate tables; the stamping of bills to the Government with the notation "PW-337"; the offer to the Government of the PW-942 rate which superseded the PW-337 rate; and the reports by the Utility to the Federal Power Commission that the sales of electricity to the Planeview project were made under "Rate Schedule PW-337, Mun. Resale Service." These are substantial statements of material facts going to the intent of the parties in the use of the phrase "general class of service" in the contract. They may not be brushed aside as frivolous.

The Utility relies on three affidavits. These contain the following pertinent statements. The Government requested a "wholesale rate on a master meter basis" and the Utility had no applicable general rate schedule. The rate set out in the contract was "a special rate, based on special and unusual circumstances." The contract was filed with and approved by the State Corporation Commission of Kansas as a special contract rather than a "general rate schedule." The rate schedules applicable to municipalities do not apply to federal housing projects because the municipal schedules are for metered resale and the housing contracts expressly prohibit resale.⁸ The Utility is required to comply with the accounting procedures of the Federal Power Commission and reported the contract sales in question under the account entitled "Other Sales to Public Authorities" whereas the municipal sales under schedules PW-337, PW-942, and PWM-247 were reported under the account "Sales to Other Electric Utilities." Schedule PW-337 was used in the billing of sales to the Government only because the block rate in the Planeview contract was the same as that in PW-337.

The trial court accepted the Utility's affidavits as stating the "true and undisputed facts of the case," held that the contract in question was "a special contract for a special purpose," observed that the general rate schedules were not applicable because the electricity "furnished the housing projects was not for resale," and found support in the classification of the contract...