Van Dussen-Storto Motor Inn, Inc. v. Rochester Tel. Corp.

• Decision Date: 26 October 1973
• Docket Number: DUSSEN-STORTO
• Citation: 348 N.Y.S.2d 404,42 A.D.2d 400
• Parties: , 1974-1 Trade Cases P 75,099, 2 P.U.R.4th 525 VANMOTOR INN, INC., Appellant, v. ROCHESTER TELEPHONE CORPORATION, Respondent. VANMOTOR INN, INC., Appellant-Respondent, v. ROCHESTER TELEPHONE CORPORATION, Respondent-Appellant.
• Court: New York Supreme Court — Appellate Division

Page 404

348 N.Y.S.2d 404

42 A.D.2d 400, 1974-1 Trade Cases P

75,099, 2 P.U.R.4th 525

VAN DUSSEN-STORTO MOTOR INN, INC., Appellant, v.ROCHESTER TELEPHONE CORPORATION, Respondent.

VAN DUSSEN-STORTO MOTOR INN, INC., Appellant-Respondent, v.ROCHESTER TELEPHONE CORPORATION, Respondent-Appellant.

Supreme Court, Appellate Division, Fourth Department.

Oct. 26, 1973.

Robinson, Williams, Robinson & Angeloff, Rochester, for appellant(John T. Sullivan, Jr., Rochester, of counsel).

Nixon, Hargrave, Devans & Doyle, Rochester, for respondent(Edward J. Burns and David N. Kunkel, Rochester, of counsel).

Before GOLDMAN, P.J., and MARSH, MOULE, CARDAMONE and HENRY, JJ.

OPINION

MOULE, Justice:

This case comes before us on appeal from a dismissal of certain portions of plaintiff's complaint on a question concerning the proper primary administrative jurisdiction of the Public Service Commission.

During the course of the construction of a motel in Henrietta, New York, plaintiff, in 1968, informed defendantRochester Telephone Corporation(RTC) that it intended to install a private telephone system supplied by Universal Communications Systems, Inc.(Universal), a private supplier of such equipment, in its motel.Plaintiff further informed RTC that it wished to connect the Universal system with the RTC exchange and access lines but the latter refused to permit such interconnection, giving as its reason that tariffs which RTC had on file with the Public Service Commission prohibited the use and interconnection of non-RTC owned and supplied equipment to RTC's exchange and access lines.

Plaintiff, believing that its phone service might be terminated, agreed in writing on November 4, 1968 to the installation of an RTC-supplied system rather than the one it had planned to purchase from Universal.The RTC system was installed and it remained in operation in the motel until April, 1971 when plaintiff disconnected it and installed the Universal system in its place.RTC's service to the motel was not terminated at this time because of the plaintiff's action on the same date in agreeing to deposit in escrow with RTC's attorneys an amount equal to RTC's regular termination charges to be held pending the outcome of this litigation.

Plaintiff set forth six separate causes of action in its complaint.The first sought rescission because of duress of the November 4, 1968 agreement; the second alleged that RTC's rates were unreasonable; the third, that RTC tortiously interfered with its contract with Universal; the fourth, that RTC acted in violation of state antitrust laws; the fifth, that RTC acted in violation of federal antitrust laws; and the sixth sought consequential damages flowing from the first five causes of action.All but the first of these was dismissed by Special Term pursuant to a motion under CPLR 3211.Both plaintiff and defendant appealed from Special Term's order.

The first cause of action which plaintiff sets forth in its complaint asks for a rescission of its November 4, 1968 contract with RTC and a restitution of its funds on deposit with RTC's attorneys.It alleges that this contract was entered into under duress in that RTC refused to provide service to other than RTC supplied private telephone systems and that, as a result, plaintiff was faced with the choice of either agreeing to RTC's terms or losing phone service to its motel.

However, an RTC tariff, on file with the Public Service Commission, expressly prohibited the phone company from interconnection with privately supplied telephone systems, and RTC's position, while concededly at odds with plaintiff's desires, was mandated by its duly filed tariff.Thus, it is the reasonableness of this tariff, not the phone company's action in accordance with it, that is at the heart of plaintiff's first cause of action.Tariffs on file with the Public Service Commission are presumed to be reasonable and must be attacked in the first instance before the Public Service Commission(People ex rel. Public Service Commission of State of New York v. New York Telephone Co. et al., 262 App.Div. 440, 444, 29 N.Y.S.2d 513, 517, affd.287 N.Y. 803, 40 N.E.2d 1020).Where the reasonableness of a public utility's practices is challenged, the doctrine of primary administrative jurisdiction is applicable, and the Public Service Commission is the proper body to pass on the question of reasonableness (Leitner v. New York Telephone Co., 277 N.Y. 180, 189, 13 N.E.2d 763, 766, mot. for rearg. den. 278 N.Y. 598, 16 N.E.2d 118;Freedom Finance Co., Inc. v. New York Telephone Co., 29 A.D.2d 545, 285 N.Y.S.2d 163;Murray v. New York Telephone Co., 170 App.Div. 17, 156 N.Y.S. 151, affd.226 N.Y. 590, 123 N.E. 879).Therefore, the first cause of action should be dismissed.

The plaintiff's second...