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NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

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No. 12-1332

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PARAGON TAX GROUP, LLC

v.

BROADVIEW NETWORKS HOLDINGS, INC.; 

INFOHIGHWAYS COMMUNICATION CORP; 

ATX COMMUNICATIONS, INC.; 

CORECOMM ATX, INC.,

 

Appellants

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On Appeal from the United States District Court

for the Eastern District of Pennsylvania

(D.C. No. 2-11-cv-01699)

District Judge: Honorable Robert F. Kelly

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Submitted Pursuant to Third Circuit LAR 34.1(a)

October 31, 2012

Before: SLOVITER, AMBRO and BARRY Circuit Judges

(Filed: November 1, 2012)

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OPINION

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SLOVITER, Circuit Judge
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Broadview Networks Holdings, Inc. (“Broadview”), on behalf of itself and its 

subsidiaries, appeals from the District Court’s grant of summary judgment in favor of 

Paragon Tax Group, LLC (“Paragon”). We will affirm.1

Paragon and Broadview entered into a contract (“Contract”) in which Paragon 

agreed to provide tax-related services to Broadview and some of its subsidiaries on a 

contingency basis. In September 2009, Paragon filed an initial gross receipts tax appeal 

which obtained a refund for Broadview of $22,395.00. Paragon billed Broadview 

according to the 30% contingency fee in its Contract, and Broadview paid this invoice. 

While inquiring on the status of the refund with the Pennsylvania Department of 

Revenue, Paragon discovered that Broadview owed $1,198,018.00 in gross receipts tax 

obligations from 2006. After receiving permission from Broadview, Paragon filed an 

appeal of the assessment with the Revenue Department. During the appeal, Paragon 

discovered a math error committed by the Revenue Department. Although the 

Department initially wanted more documentation to make a determination, Paragon 

appealed to the auditors of the Board of Finance and Revenue. The Board agreed with 

Paragon that the assessments were incorrect and that the Department could not demand 

more documentation. The Board therefore reduced the assessment to zero. The 

reduction secured, Paragon billed Broadview for $359,405.40, which was 30% of the 

 1 The District Court had diversity jurisdiction under 28 U.S.C. § 1332, and we have 

jurisdiction pursuant to 28 U.S.C. § 1291. We exercise plenary review of the District 

Court's grant of summary judgment and apply the same standard applicable in the District 

Court found in Fed.R.Civ.P. 56. See Doe v. C.A.R.S. Prot. Plus, Inc., 527 F.3d 358, 362 

(3d Cir. 2008).
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$1,198,018.00 reduction. Broadview objected to the contingency fee, instead offering to 

pay $40,000.00 as compensation for Paragon’s services. 

Paragon brought suit for breach of contract, quantum meruit, unjust enrichment, 

and for declaratory judgment for a related matter. The District Court granted summary 

judgment for Paragon for breach of contract, declared the quantum meruit and unjust 

enrichment claims moot, and found the declaratory judgment claim unripe. Broadview 

appeals from the grant of summary judgment and moves for summary judgment against 

Paragon on the breach of contract claim. 

The parties agree that Pennsylvania law governs the interpretation and 

construction of the Contract. Under Pennsylvania law, we look to the terms of the 

Contract to determine the intent of the parties, 401 Fourth St., Inc. v. Investors Ins. Grp, 

879 A.2d 166, 171 (Pa. 2005), and we construe these terms together so that “each will be 

given effect.” LJL Transp., Inc. v. Pilot Air Freight Corp., 962 A.2d 639, 647 (Pa. 2009).

The Contract defines the term “Refund” to include “refund(s) and/or reductions of 

. . . gross receipts tax . . . which have been either paid and/or been given notice of liability 

by a taxing authority as a result of an audit. . . .” App. at 46. Broadview argues that only 

the capitalized version of “Refund” should be given the defined meaning, and that the 

lower case version of “refund” should be given its ordinary meaning as “the actual 

recovery of monies.” Appellant’s Br. at 22. If the Contract were interpreted in this way, 

Paragon would not receive a contingency fee for its work on Broadview’s gross receipts 

tax appeal because Paragon’s appeal convinced the Pennsylvania Board of Finance and 

Revenue to reduce an assessment, rather than to return money directly to Broadview. See
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App. at 47 (showing 30% contingency fee for “Gross Receipts Tax Refund Review / 

Audit Defense” of “[a]ll refunds recovered”). This interpretation, however, fails to give 

effect to all of the provisions of the Contract.

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The Contract’s “Scope of Services” section clearly shows that Paragon’s appeal of 

Broadview’s gross receipts tax assessment falls within the scope of the Contract. This 

Section calls for Paragon to “examine Client records relating to . . . gross receipts . . . 

and, where applicable, apply for Refund(s) for the Client.” App. at 46. It also says that, 

“[i]n connection with these services,” Paragon will “[re]view the pertinent Client records 

for overpayment” and “[p]repare, file and process the petition for Refund or Reductions 

of Assessment.” App. at 46. 

 

The “Fee” section is equally clear. It calls for Paragon to “receive a Contingent 

Fee based solely on recovered amounts or reductions of assessments.” App. at 46. 

The Contract’s “Fee Schedule” provides for a 30% contingency fee for all services 

rendered. App. at 47. Although the fee schedule is inconsistent in that it only lists “All 

refunds recovered” for “Gross Receipts Tax Refund Review / Audit Defense” whereas it 

lists “All refunds and/or reductions of assessment” for “Sales & Use Tax Audit Defense,” 

this inconsistency only creates confusion if the fee schedule is interpreted in isolation. 

 2 Broadview argues that its interpretation is demanded by the “basic tenet of contract 

interpretation that when a term is defined in a contract, it is to be afforded its contractual 

definition when capitalized and given its plain, ordinary and popular meaning when 

presented in its lower-case form.” Appellant’s Br. at 21. Pennsylvania law, however, 

requires us to rely not on strict rules of interpretation, but on the contextual reading of 

contractual terms. See Murphy v. Duquesne Univ. of the Holy Ghost, 777 A.2d 418, 429 

(Pa. 2001) (“The whole instrument must be taken together in arriving at contractual 

intent.”). 
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When read in the context of the Contract, it is clear that Paragon’s 30% fee applies to all 

contractual services. Paragon’s fee for reducing Broadview’s gross receipts assessment is 

therefore appropriate.3

Broadview claims that this reading of the Contract creates a dispute of material 

fact and therefore summary judgment is inappropriate. When read in the context of the 

Contract, however, the supposedly ambiguous terms “refund claim process” and “audit” 

clearly describe the work Paragon undertook for Broadview. See Mellon Bank, N.A. v. 

Aetna Bus. Credit, Inc., 619 F.2d 1001, 1011 n. 10 (3d Cir. 1980) (“Under Pennsylvania 

law . . . unambiguous writings are interpreted by the court as a question of law.”). 

 

For the reasons set forth, we will affirm the judgment of the District Court. 

 3 Because the Contract is clear we need not construe it against Paragon, as Broadview 

claims. See Pines Plaza Bowling, Inc. v. Rossview, Inc., 145 A.2d 672, 676 (Pa. 1958) 

(only ambiguous contracts are interpreted against drafter). 

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