VERIZON NORTHWEST, INC. v. MAIN STREET DEVELOPMENT

• Decision Date: 25 February 2010
• Docket Number: No. 09-CV-72-BR.,09-CV-72-BR.
• Citation: 693 F. Supp.2d 1265
• Parties: VERIZON NORTHWEST, INC., Plaintiff, v. MAIN STREET DEVELOPMENT, INC., an Oregon corporation; Hans J. Vatheuer; and the Main Street/Vatheuer Partnership, an Oregon partnership, Defendants.
• Court: U.S. District Court — District of Oregon

693 F. Supp.2d 1265

VERIZON NORTHWEST, INC., Plaintiff, v. MAIN STREET DEVELOPMENT, INC., an Oregon corporation; Hans J. Vatheuer; and the Main Street/Vatheuer Partnership, an Oregon partnership, Defendants.

No. 09-CV-72-BR.

United States District Court, D. Oregon, Portland Division.

February 25, 2010.

Jay T. Waldron, Carson Bowler, William J. Ohle, Schwabe Williamson & Wyatt, PC, Portland, OR, for Plaintiff.

Thomas H. Cutler Harris Berne Christensen, LLP, Lake Oswego, OR, for Defendant, Main Street Development, Inc.

Michael T. Wise, Marcus H. Reed, Michael Wise and Associates, P.C., Portland, OR, for Defendants, Hans J. Vatheuer and Main Street/Vatheuer Partnership.

OPINION AND ORDER

BROWN, District Judge.

This matter comes before the Court on Plaintiff Verizon Northwest, Inc.'s Motion (# 27) for Partial Summary Judgment; the Cross-Motion (# 36) for Summary Judgment of Defendants Main Street/Vatheuer Partnership and Hans J. Vatheuer; and Defendant Main Street Development, Inc.'s Cross-Motion (#54) for Summary Judgment.

For the reasons that follow, the Court GRANTS in part and DENIES in part Plaintiff Verizon's Motion for Partial Summary Judgment, GRANTS in part and DENIES in part the Cross-Motion for Summary Judgment of Defendants Main Street/Vatheuer Partnership and Hans J. Vatheuer, and GRANTS in part and DENIES in part Defendant Main Street Development's Cross-Motion for Summary Judgment.

BACKGROUND

The following facts are taken from the parties' Stipulated Agreed Facts and Exhibits unless otherwise noted:

Verizon is an "Incumbent Local Exchange Carrier" under the Telecommunications Act of 1996, Pub.L. No. 104-104, 110 Stat. 56 (codified as amended in various sections of U.S.C. Titles 15, 18, and 47). Verizon provides telecommunications services throughout Oregon. It is a regulated "rate-of-return" public utility, and, therefore, its tariffs are reviewed and approved by the Oregon Public Utility Commission (PUC).

Main Street Development is in the business of developing real-estate projects, including residential housing.

In 2005 Vatheuer entered into an oral development agreement with Main Street Development. The agreement provided:

1. Vatheuer would purchase property at 19755 Alexander Street, Beaverton, Oregon;

2. Main Street Development would develop townhomes on the Alexander Street Property;

3. Main Street Development would seek and obtain all necessary government approvals for the development of townhomes on the Alexander Street Property;

4. Main Street Development would proceed with horizontal preparation of lots, infrastructure construction, and vertical construction of the townhomes; and

5. Vatheuer would loan funds to Main Street Development for development and construction costs of the project.

On April 27, 2006, Main Street Development obtained a Washington County Land Use Decision that "approved with conditions" the development of townhomes on the Alexander Street Property. One of the conditions of approval was that Main Street Development would widen Alexander Street to meet Washington County's Uniform Road Improvement Design standards.

On August 22, 2007, in connection with the Land Use Decision, Vatheuer entered into a "Public Improvement Contract" with Washington County in which Vatheuer agreed to "provide public improvements as noted in conformance with the Community Development Code and agreed to maintain an assurance in the amount of $70,020.00." Decl. of William Ohle, Ex. 21 at 1. Vatheuer also agreed "if work on the subject improvements of this contract is abandoned, incomplete or deficient . . . after March 30, 2008, County may collect the assurance described." Ohle Decl., Ex. 21 at 2.

To satisfy the condition requiring Alexander Street to be widened, Main Street Development retained W.B. Wells Engineering to prepare site plans for the development. It was determined that an underground telecommunications facility and cross-box belonging to Verizon located within the right-of-way along the Alexander Street property needed to be relocated in order to widen Alexander Street as required by Washington County.

On September 5, 2007, Washington County Engineer Gregory Miller sent Verizon a letter noting the conditions Washington County imposed on the development of the Alexander Street property and advised Verizon: "Per ORS 758.010. . . Washington County directs your utility to relocate your facilities at your expense so that they do not interfere with the construction of the County road. Please do so in the next 60 days so the developer can complete his road work prior to winter." Verizon then advised Main Street Development that it would have to pay to have Verizon's facilities relocated pursuant to Verizon's tariff. On October 15, 2007, Main Street Development informed Verizon that it would not pay to relocate Verizon's facilities because (1) Main Street Development was not a "customer" or "applicant" as defined under Verizon's tariff, (2) Washington County rather than Main Street Development requested Verizon to move its facilities, and (3) Verizon's tariff "cannot and does not trump a state statute Oregon Revised Statute § 758.010 giving the county direct and unqualified authority to order Verizon. . . to move their facilities."

Verizon brought the matter of payment before the Washington County Board of Commissioners. On February 5, 2008, the Commissioners held a board meeting, discussed the matter, noted Oregon Revised Statute § 758.010(2) provides only that a utility must move its facilities when ordered to do so by a county and does not address the question of who must pay for the move, ordered Verizon to relocate its facilities, and declined to decide the question of liability for payment.

On February 7, 2008, Washington County Counsel informed Verizon and Main Street Development that

the Oregon PUC and Attorney General concurred with the County's authority to order the facility relocation under ORS 758.010, but took no position as to whether the utility or the developer would be obligated to pay relocation costs under the facts of this case. Board members understood that the relocation was necessary in order for a public road improvement to be completed. The County's action did not decide which entity ultimately would pay the cost. As between the County and Verizon, the statute does not condition the utility's compliance with a relocation order upon prior payment or any other prior act.

Parties' Stipulated Agreed Facts, Ex. 8.

Ultimately Verizon relocated its facilities onto the Alexander Street property within an area designated on the site plan as a public-utility easement. In September and December 2008 Verizon billed Main Street Development $108,811.28 for the relocation.

On November 3, 2008, Main Street Development informed Verizon that it had been billed "in error" because it was the County that ordered the relocation work, and, therefore, Verizon did not have a basis for billing Main Street Development.

According to Defendants, Verizon's delay in moving its facilities "together with the general market collapse . . . halted" progress on the Main Street Development project. Although some improvements were made, the project has never been completed.

On January 16, 2009, Verizon filed a Complaint in this Court against Main Street Development and Vatheuer for collection of tariff, breach of contract, and quantum meruit.

On June 16, 2009, Verizon filed an Amended Complaint and added Main Street/Vatheuer Partnership as a Defendant.

On June 30, 2009, Vatheuer filed an Answer, Affirmative Defenses, and Counterclaim in which he brings a Counterclaim for trespass.

On August 21, 2009, Verizon filed a Motion for Partial Summary Judgment against all Defendants in which it seeks summary judgment as to its claims for collection of tariff and breach of contract and as to Vatheuer's Counterclaim for trespass. On September 23, 2009, Main Street/Vatheuer Partnership and Vatheuer filed a Cross-Motion for Summary Judgment as to all of Verizon's claims. On September 28, 2009, Main Street Development filed a Cross-Motion for Summary Judgment as to all of Verizon's claims.

On November 23, 2009, the Court heard oral argument on the parties' Motions. For the reasons stated on the record, the Court granted Defendants' Motions for Summary Judgment as to Verizon's breach-of-contract claim and denied Verizon's Motion for Summary Judgment as to that claim. The Court directed the parties to file supplemental briefing by November 30, 2009, on the issue of the method for interpreting tariffs. The Court took the remaining issues under advisement as of November 30, 2009.

STANDARDS

Federal Rule of Civil Procedure 56(c) authorizes summary judgment if no genuine issue exists regarding any material fact and the moving party is entitled to judgment as a matter of law. The moving party must show the absence of an issue of material fact. Rivera v. Philip Morris, Inc., 395 F.3d 1142, 1146 (9th Cir.2005). In response to a properly supported motion for summary judgment, the nonmoving party must go beyond the pleadings and show there is a genuine issue of material fact for trial. Id.

An issue of fact is genuine "`if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" Villiarimo v. Aloha Island Air, Inc., 281 F.3d 1054, 1061 (9th Cir.2002) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). The court must draw all reasonable inferences in favor of the nonmoving party. Id. "Summary judgment cannot be granted where contrary inferences may be drawn from the evidence as to material issues." Easter v. Am. W. Fin., 381 F.3d 948, 957 (9th Cir.2004) (citing Sherman Oaks Med. Arts Ctr., Ltd. v. Carpenters Local Union No.1936, 680 F.2d 594, 598 (9th Cir.1982)).

A mere disagreement about a material issue of fact, however, does not preclude summary judgment. Jackson v. Bank of Haw., 902 F.2d 1385, 1389 (...