PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 12-2572

CORE COMMUNICATIONS, INC.,

Plaintiff – Appellant,

v.

VERIZON MARYLAND LLC, as successor entity to Verizon 

Maryland, Inc.,

Defendant – Appellee,

and

MARYLAND PUBLIC SERVICE COMMISSION; STEVEN B. LARSEN, In 

his official capacity as Chairman of the Maryland Public 

Service Commission; HAROLD D. WILLIAMS, In his official 

capacity as Commissioner of the Maryland Public Service 

Commission; ALLEN M. FREIFELD, In his official capacity as 

Commissioner of the Maryland Public Service Commission; 

SUSANNE BROGAN, In her official capacity as Commissioner of 

the Maryland Public Service Commission; LAWRENCE BRENNER, 

In his official capacity as Commissioner of the Maryland 

Public Service Commission,

Defendants. 

Appeal from the United States District Court for the District of 

Maryland, at Baltimore. J. Frederick Motz, Senior District

Judge. (1:02-cv-03180-JFM)

Argued: December 12, 2013 Decided: March 6, 2014

Before WILKINSON, KING, and GREGORY, Circuit Judges.
2

Affirmed by published opinion. Judge King wrote the opinion, in 

which Judge Wilkinson and Judge Gregory joined. 

ARGUED: Ralph Lee Gleaton, II, GLEATON WYATT HEWITT, PA, 

Greenville, South Carolina, for Appellant. Scott H. Angstreich, 

KELLOGG, HUBER, HANSEN, TODD, EVANS & FIGEL, P.L.L.C., 

Washington, D.C., for Appellee. ON BRIEF: Andrew M. 

Hetherington, Jessica C. Collins, KELLOGG, HUBER, HANSEN, TODD, 

EVANS & FIGEL, P.L.L.C., Washington, D.C., for Appellee.
3

KING, Circuit Judge:

Plaintiff Core Communications, Inc. appeals the district 

court’s award of summary judgment to defendant Verizon Maryland, 

LLC, successor to Verizon Maryland, Inc. (interchangeably 

“Verizon”), with respect to a pair of tort claims pursued by 

Core under Maryland law. See Core Commc’ns, Inc. v. Verizon 

Md., Inc., No. 1:02-cv-03180 (D. Md. Aug. 10, 2012), ECF No. 66 

(the “Memorandum Opinion”). Core contends that the court 

further erred when, as a result of granting partial 

reconsideration of its Memorandum Opinion, it awarded nominal 

damages of only one dollar to Core on its related claim for 

breach of contract. See Core Commc’ns, Inc. v. Verizon Md., 

Inc., No. 1:02-cv-03180 (D. Md. Nov. 27, 2012), ECF No. 73 (the 

“Reconsideration Order”). As explained below, we affirm.

I.

A.

The Telecommunications Act of 1996, Pub. L. No. 104-104, 

110 Stat. 56 (codified as amended in scattered sections of 47 

U.S.C.) (“the Act”), was designed to increase competition in 

local telephone markets. See Verizon Commc’ns, Inc. v. FCC, 535 

U.S. 467, 489 (2002). To that end, the Act required established 

telephone companies to enter into contracts known as 

interconnection agreements (in the singular, an “ICA”) with new 
4

market entrants seeking to connect with existing networks. See

47 U.S.C. § 251. In the Baltimore area, Verizon was the 

established phone company, that is, the incumbent local exchange 

carrier (“ILEC”), and Core was one of several new market 

entrants, known as competitive local exchange carriers (in the 

singular, a “CLEC”). Pursuant to the Act, Core sought an ICA

with Verizon, and, in order to expedite negotiations, the two 

companies agreed — at Core’s suggestion — to adopt the terms of 

a previously approved ICA between Verizon’s predecessor and 

another CLEC. On July 14, 1999, the companies jointly submitted 

their proposed ICA to the Maryland Public Service Commission 

(the “PSC”) for its review and approval. On September 15, 1999, 

the PSC approved that ICA (the “Core ICA”).1

 

On July 27, 1999, while the PSC’s approval of the Core ICA 

was pending, Core wrote Verizon to request that the proposed 

interconnection — as to which Core would be a wholesale customer 

of Verizon — be accomplished by September 10, 1999. At a 

 1 As the district court explained, “[r]ather than negotiate 

a new agreement with Verizon, Core decided to adopt the terms of 

Verizon’s (then Bell Atlantic’s) agreement with American 

Communications Services of Maryland, Inc.” See Memorandum Op. 

6. That agreement had been approved by the PSC about two years 

earlier, in 1997. Pursuant to regulations promulgated by the 

Federal Communications Commission under the Act, “an [ILEC] 

shall make available . . . to any [CLEC] any [ICA] in its 

entirety to which the [ILEC] is a party that is approved by a 

state commission.” See 47 C.F.R § 51.809(a). 
5

meeting between Core and Verizon on August 11, 1999, the

companies agreed that Core’s interconnection would occur at 

Verizon’s “Wire Center” in Baltimore, which was “on-net” with 

Verizon, that is, the Wire Center was physically connected to 

Verizon’s central network and housed the needed equipment. In 

tension with Core’s proposed timeline, however, Verizon 

estimated that it would take another four to six months before 

the essential new equipment for Core’s interconnection —

including an OC-12 multiplexer (the “OC-12 Mux”) and a 

corresponding OC-12 facility ring (the “OC-12 IOF Ring”) — was

available for use. 

Desiring to avoid having its preferred date of 

interconnection delayed for several months, Core suggested that, 

instead of installing the new OC-12 Mux and OC-12 IOF Ring,

Verizon should utilize an existing multiplexer and “Loop Ring”

already in the Wire Center. Verizon acknowledged that it would 

be technically feasible to use the existing equipment for the 

Core interconnection, but, as a matter of internal policy, it

declined to do so. On August 15, 1999, Verizon advised Core

that, in any event, the existing multiplexer and Loop Ring were

already assigned to a Verizon “customer of record.”2

 Only later 

 2 On August 20, 1999, Core amended its initial notification 

to request that its interconnection with Verizon be deferred 

from September 10, 1999, until September 18, 1999. 
6

did Verizon disclose that the customer of record to which it had

referred was Core itself, already a Verizon retail customer in a 

separate context. The existing equipment was never used for the 

Core interconnection, and the new OC-12 Mux and OC-12 IOF Ring

were installed by Verizon in late November 1999. The Core

interconnection was consummated on December 23, 1999.

On October 8, 1999, Core filed a complaint with the PSC,

alleging that Verizon had breached the Core ICA by delaying the 

interconnection. In 2004, the PSC ruled against Verizon, 

concluding that Verizon was obliged, under the Core ICA, to use

its existing equipment and make the Core interconnection by

September 18, 1999, as Core had requested. In 2008, Verizon 

sought review of the PSC’s adverse order by filing a complaint

for declaratory relief in the District of Maryland, as it was 

entitled to do under the Act.3

 Verizon’s district court 

complaint (“Civil No. 08-503”) requested a declaration that 

Verizon had neither violated the Core ICA nor any duty of good 

faith and fair dealing relating thereto. In June 2009, the 

court granted Verizon’s request for summary judgment, thereby 

 3 Pursuant to 47 U.S.C. § 252(e)(6), federal judicial review 

in the appropriate district court is the exclusive means of 

contesting a State commission’s determinations relating to 

enforcement of an ICA. See Iowa Util. Bd. v. FCC, 120 F.3d 753, 

803-04 (8th Cir. 1997), aff’d in part, rev’d in part on other 

grounds, 525 U.S. 366 (1999). 
7

overturning the PSC’s 2004 decision ruling Verizon in breach of

the Core ICA. See Verizon Md., Inc. v. Core Commc’ns, Inc., 631 

F. Supp. 2d 690 (D. Md. 2009). Core appealed the court’s 

ruling, and we reversed. See Verizon Md., Inc. v. Core 

Commc’ns, Inc., 405 F. App’x 706 (4th Cir. 2010) (unpublished)

(the “first appeal”). In so doing, we concluded that “Verizon 

had a duty to provide Core with the requested interconnection

[in September 1999] and therefore breached [the Core ICA].” Id.

at 714. We then remanded the matter to the district court for 

further proceedings, “including a determination of damages” and

an assessment of “whether Verizon also breached an implied duty 

of good faith and fair dealing.” Id.4 

B.

On October 13, 2011, the district court consolidated the 

remand proceedings in Civil No. 08-503 with a separate sevencount complaint that had been filed by Core against Verizon in 

the Circuit Court for Baltimore City nine years earlier, in 

2002. Asserting federal question jurisdiction, Verizon had 

removed the state court complaint to the District of Maryland

 4 Because Core had never lodged a counterclaim in Verizon’s 

declaratory judgment action, the district court might have been 

technically unable to comply with our instruction to calculate 

and award damages for Verizon’s breach of the Core ICA. That 

latent pitfall, however, was obviated by the consolidation of 

the remand proceedings with Core’s 2002 complaint, as described 

further herein. 
8

(“Civil No. 02-3180”), where, on January 8, 2003, it was 

administratively closed without prejudice to being reopened upon 

disposition of the PSC proceedings. 

In its 2002 complaint, Core alleged a single count for 

breach of contract; three related claims for promissory 

estoppel, unjust enrichment, and breach of warranty; and three 

state law tort claims — misrepresentation (both negligent and 

intentional), concealment (both negligent and intentional), and 

unfair competition. Notably, the parties agreed in the 

consolidated proceedings — and also agree here — that our 

decision in the first appeal is entitled to preclusive effect on 

the issue of Verizon’s liability for the breach of contract 

claim alleged in Core’s 2002 complaint. The tort claims alleged 

in Civil No. 02-3180 derived from the proposition that Verizon 

had lied to Core about the reasons for delaying Core’s

interconnection in 1999, such delay constituting Verizon’s 

breach of the Core ICA. In a similar vein, Core alleged that 

Verizon had improperly failed to disclose, in or about August 

1999, Core’s status as the Verizon “customer of record” assigned 

to the existing equipment at the Wire Center in Baltimore. 

The district court’s 2011 consolidation of the proceedings 

in Civil No. 08-503 and Civil No. 02-3180 engendered an early 

round of dispositive motions. After hearing argument, the court

ruled, by order of February 2, 2012, that Core’s promissory 
9

estoppel, unjust enrichment, and breach of warranty claims had 

been rendered superfluous by the first appeal, inasmuch as Core 

could recover nothing on those claims that it was not already 

entitled to for Verizon’s breach of the Core ICA. At the same

time, Core conceded that there was no independent action under 

Maryland law for breach of a duty of good faith and fair 

dealing, effectively removing that claim from the litigation. 

Thus, as of early 2012, the following issues remained for 

resolution in the consolidated proceedings: (1) Core’s damages

for Verizon’s breach of the Core ICA; and (2) Core’s tort claims 

for misrepresentation, concealment, and unfair competition.5

On remand following the first appeal, the parties, in aid 

of the consolidated proceedings, engaged in further discovery. 

Of some importance was Verizon’s deposition of Bret Mingo, 

Core’s president. Mingo testified about, among other things, 

Core’s initial entry into the telecommunications marketplace in 

Maryland in 1997. With respect to Verizon’s refusal in August 

1999 to use the existing multiplexer and Loop Ring at the Wire 

Center for Core’s interconnection, Mingo clarified that Verizon 

 5 In its August 10, 2012 Memorandum Opinion, the district 

court recognized Core’s concession on the good faith and fair 

dealing claim. Therein, the court concluded that “dismissal of 

Verizon’s claim for declaratory relief that it did not breach an 

implied duty of good faith and fair dealing is appropriate.” 

Memorandum Op. 2 n.2. 
10

had never maintained that such an interconnection was 

impossible. Instead, Verizon had asserted that the 

interconnection would violate its internal policies. Mingo also 

acknowledged that Verizon had never advised Core that Verizon

intended to unduly delay the Core interconnection or

deliberately contravene the Core ICA. Critically, Mingo

acknowledged that he could not identify any untrue statement 

made in that regard by any Verizon employee.

Mingo also conceded that, at the time the Core 

interconnection negotiations were ongoing, he knew that Core was

a retail customer of Verizon’s at the Wire Center. Accordingly, 

upon visiting the Wire Center prior to the Core interconnection, 

Mingo became “perplexed” when Verizon advised him that the only

multiplexer located there was already in use by an unnamed

retail customer. J.A. 260.6

 Mingo did not share with Verizon, 

however, his contemporaneous belief that Core “must be [that]

customer.” Id. at 263. Finally, Mingo admitted that he knew 

that different Verizon employees were assigned to handle retail

transactions — as opposed to wholesale transactions, such as 

that relating to the Core ICA — and he could not say whether any 

of those employees ever communicated with each other. 

 6 Citations herein to “J.A. __” refer to the contents of the 

Joint Appendix filed by the parties in this appeal.
11

During the discovery proceedings, the parties exchanged

expert reports on the damages issue. Core’s expert opined that 

the interconnection delay of roughly three months had resulted 

in several million dollars of lost profits to Core from 1999 to 

2011. Verizon’s rebuttal expert, unsurprisingly, took a strong

view to the contrary. The parties thereafter agreed to defer 

any expert depositions and Daubert motions pending completion of 

the summary judgment proceedings.

In early 2012, the parties submitted cross-motions for 

summary judgment regarding contract damages and the resolution 

of Core’s surviving tort claims. Core reasoned that it was 

entitled to summary judgment on each of its tort claims for

misrepresentation, concealment, and unfair competition, 

insisting that the facts necessary to prove each claim had been

definitively established by our decision in the first appeal. 

In opposition to Core’s motion for summary judgment and in 

support of its own cross-motion, Verizon emphasized the evidence

that it had gleaned in discovery — particularly the deposition 

of Mingo — indicating that Verizon had neither intentionally 

breached the Core ICA nor deceived Core in any way. 

In its summary judgment papers, Verizon argued for the 

first time that the Core ICA contained an exculpatory provision

that served to insulate Verizon from the damages Core pursued. 
12

Verizon directed the district court to section 26.2 of the Core 

ICA, which provides that

[n]either Party shall be liable to the other in 

connection with the provision or use of services 

offered under this Agreement for indirect, incidental, 

consequential, reliance or special damages, including 

(without limitation) damages for lost profits 

(collectively, “Consequential Damages”), regardless of 

the form of action, whether in contract, warranty, 

strict liability, or tort, including, without 

limitation, negligence of any kind . . . .

Notwithstanding the foregoing limitation, a Party’s 

liability shall not be limited by this subsection in 

the event of its willful or intentional misconduct.

J.A. 531 (the “Exculpatory Clause” or the “Clause”). According 

to Verizon, the Exculpatory Clause barred the consequential, 

lost-profit damages that Core was demanding for Verizon’s breach 

of the Core ICA. From that premise, Verizon reasoned, the only

contract damages available to Core, consistent with the evidence 

it had forecast, were nominal in nature. Verizon contended, 

moreover, that the Clause barred recovery of damages for any 

tort claims, except those involving “willful or intentional 

misconduct,” which, Verizon insisted, Core was unable to prove.7

 7 As explained further herein, at least three aspects of the 

Exculpatory Clause are pertinent here:

• That consequential damages cannot be recovered by 

either party;

• that negligence claims are barred; and 

• that tort claims involving willful or intentional 

misconduct are preserved.
13

Core objected to Verizon’s reliance on the Exculpatory 

Clause, asserting that Verizon had waived any rights thereunder

by failing to timely invoke the Clause as an affirmative defense 

under Rule 8(c) of the Federal Rules of Civil Procedure, that 

is, by not properly pleading the Clause in its answer to Core’s 

2002 complaint. Core also pointed out that Verizon had not 

relied on the Clause at all in its declaratory judgment action.8

 

If the Clause was not waived, Core argued, it was nevertheless 

unenforceable under Maryland law because it contravened the 

State’s public policy. Finally, Core maintained, if the Clause

were enforced, Core was yet entitled to recover damages based on 

Core’s interpretation of the Clause, as well as the “performance 

penalties” authorized by section 27.3 of the Core ICA. 

During the pendency of the summary judgment motions, Core 

withdrew its tort claim for misrepresentation, acknowledging

that no evidence suggested that Verizon had made an affirmative 

misrepresentation of any kind. That concession left in dispute

the following issues: whether the Exculpatory Clause had been 

 8 Relatedly, Core asserted that Verizon’s invocation of the 

Exculpatory Clause was untimely because Verizon had not sought 

an interpretation of the Clause by the PSC. That contention is 

foreclosed by our recent decision in Central Telephone Co. of 

Virginia v. Sprint Communications Co. of Virginia, Inc., in 

which we ruled that the Act “does not require a State commission 

to interpret and enforce an ICA in the first instance.” See 715 

F.3d 501, 514 (4th Cir. 2013). 
14

timely invoked by Verizon; if so, its impact; Core’s damages for 

Verizon’s breach of the Core ICA; and whether Core’s remaining

tort claims — concealment and unfair competition — could be 

resolved on summary judgment, or should, on the other hand, be 

decided by a jury.9

On August 10, 2012, the district court filed its Memorandum 

Opinion resolving those issues. As a preliminary matter, the 

court rejected Core’s assertion that Verizon had waived the 

benefit of the Exculpatory Clause by failing to properly and 

timely invoke the Clause in its pleadings. The court reasoned, 

“Unlike a statute of limitations affirmative defense . . . the 

[Exculpatory Clause was] an integral part of the contract at 

issue,” and thus not subject to the pleading requirements of

Rule 8(c). Memorandum Op. 15 n.6. Furthermore, the court 

explained that “no adverse consequences resulted from Verizon’s 

failure to formally raise and discuss the [Exculpatory Clause] 

earlier since it was only after the Fourth Circuit’s remand that 

[the district court] focused specifically on damages.” Id.

 9 Although Core’s 2002 complaint alleged both “negligent” 

and “intentional” concealment, Maryland law recognizes a single 

cause of action for concealment, and intent to defraud or 

deceive is an essential element thereof. See Lloyd v. Gen. 

Motors Corp., 916 A.2d 257, 274 (Md. 2007). The Maryland courts

have sometimes referred to the concealment action as “fraudulent 

concealment.” See id. In any event, Core abandoned its claim 

for negligent concealment in the district court.
15

With respect to the enforceability and impact of the 

Exculpatory Clause on the other issues, the district court 

conducted two separate analyses. As to the tort claims, the 

court ruled, on the basis of state law public policy principles,

that the Clause could not be enforced.10 With respect to the 

contract damages issue, the court opined that its enforcement of 

the Clause would frustrate the Act’s goal of removing 

impediments to competition in local telecommunications markets. 

Thus, the Memorandum Opinion recited, the Clause could not bar 

Core’s request for consequential damages on the breach of 

contract claim.

Turning to the merits of the concealment and unfair 

competition tort claims, the district court rejected at the 

outset Core’s contention that the essential elements of those 

claims had been established by our decision’s factual recitation 

in the first appeal. The court set forth that the crux of the

concealment claim was that Verizon had obfuscated Core’s status 

as the “customer of record” at the Wire Center in 1999, to which

the existing multiplexer and Loop Ring were already assigned. 

Had Core known that it was actually that customer of record, 

 10 The district court’s public policy analysis of the 

Exculpatory Clause, as applied to Core’s intentional tort 

claims, was arguably unnecessary. Such claims, by the plain 

terms of the Clause, were outside its scope, and therefore 

preserved. See supra note 7.
16

Core’s argument went, it could have demanded an immediate 

interconnection using the existing Wire Center equipment. This 

theory, in the court’s view, was fatally flawed. Focusing on 

the concealment claim’s element of intent to defraud or deceive,

see Lloyd v. Gen. Motors Corp., 916 A.2d 257, 274 (Md. 2007),

the court could discern “no evidence supporting Core’s 

contention that Verizon’s motive in not disclosing the identity 

of the customer of record was to deceive Core, and thereby cause 

a delay in interconnection.” Memorandum Op. 10.11 The court 

then explained that Core’s unfair competition claim failed for 

the same reasons, that is, there was a lack of proof on the 

issue of intent to defraud or deceive. See id. at 14. 

Accordingly, the court awarded summary judgment to Verizon on 

each of the remaining tort claims. A jury issue nonetheless 

remained, according to the court, with respect to the proper 

measure of damages for Verizon’s breach of the Core ICA. 

That jury trial, of course, never occurred. Core asked the 

district court to reconsider its rulings on the tort claims, 

 11 As an alternative basis for awarding summary judgment to 

Verizon on the concealment claim, the district court explained 

that, even if Core could have established Verizon’s intent to 

defraud or deceive, Core “[could not] prove that it took action 

in justifiable reliance on the concealment.” Memorandum Op. 11. 

On this record, according to the court, “Core knew or should 

have realized that it was the unidentified customer of record.” 

Id. at 12.
17

highlighting evidence that it contended the court had not 

properly evaluated. Verizon filed its own reconsideration 

motion, maintaining that the court had erred by declining to 

enforce the Exculpatory Clause as a bar to consequential

damages. Verizon therein directed the court’s attention to 

decisions of the Federal Communications Commission (the “FCC”)

in which the FCC had consistently sanctioned similar exculpatory 

provisions in other ICAs. Those decisions, Verizon urged, were 

entitled to deference and application, in adherence to the 

Supreme Court’s decision in National Cable & Telecommunications 

Ass’n v. Brand X Internet Services. See 545 U.S. 967, 980-81 

(2005) (citing Chevron, U.S.A, Inc. v. Natural Res. Defense 

Council, Inc., 467 U.S. 837, 843-44 (1984) (explaining that 

agency’s reasonable implementation of statute it administers is

entitled to acceptance by federal courts)). Verizon also argued 

that the PSC’s 1999 approval of the Core ICA was a conclusive 

determination that the Exculpatory Clause was consistent with 

the public interest. 

The district court, by its Reconsideration Order of 

November 27, 2012, granted Verizon’s motion and denied Core’s. 

The Reconsideration Order therefore enforced the Exculpatory 

Clause as a bar to Core’s recovery of any consequential damages 

on its breach of contract claim. When it entered the

Reconsideration Order, the court issued a separate memorandum to 
18

the parties, requesting them to “agree upon a form of judgment” 

that would be consistent with the “limited amount that the ICA 

permits in light of the rulings [the court] made,” and which

would “enable the parties to appeal [those] rulings.” S.A. 3.12 

Verizon responded to the court’s request a week later, on

December 3, 2012, and proposed that the judgment award only

nominal damages to Core. Verizon therein represented to the 

court that Core “[did] not object” to Verizon’s proposed 

judgment. Id. at 4. Core did not independently or directly 

respond to the court’s request or to Verizon’s representation of 

Core’s position, but instead filed a notice of appeal on 

December 26, 2012, prior to judgment being entered. Thereafter, 

on January 15, 2013, the court adopted Verizon’s proposal for 

nominal damages and entered judgment accordingly, awarding Core

the sum of one dollar. We possess jurisdiction pursuant to the 

provisions of 28 U.S.C. § 1291.13

 

 12 Our citation to “S.A. __” refers to the contents of the 

Supplemental Appendix filed by the parties in this appeal.

13 In accordance with Rule 4(a)(2) of the Federal Rules of 

Appellate Procedure, Core’s premature notice of appeal was

effective upon the district court’s entry of the judgment. 

Core, nonetheless, filed an amended post-judgment notice of 

appeal on January 17, 2013. 
19

II.

We review for abuse of discretion a district court’s ruling 

that a defense was properly and timely raised. See Polsby v. 

Chase, 970 F.2d 1360, 1364 (4th Cir. 1992), vacated and remanded 

on other grounds, 507 U.S. 1048 (1993). We review de novo a 

district court’s award of summary judgment, viewing the facts 

and inferences reasonably drawn therefrom in the light most 

favorable to the nonmoving party. See Woollard v. Gallagher, 

712 F.3d 865, 873 (4th Cir. 2013). A summary judgment award is 

appropriate only when the record shows “that there is no genuine 

dispute as to any material fact and the movant is entitled to 

judgment as a matter of law.” Fed. R. Civ. P. 56(a). 

III.

On appeal, Core challenges three aspects of the district 

court’s rulings. First, it maintains that the court erred in

allowing the Exculpatory Clause to be invoked, and then by

enforcing the Clause as a bar to Core’s recovery of 

consequential damages. Second, Core contends that the court’s 

summary judgment awards to Verizon on Core’s concealment and 

unfair competition tort claims were erroneously made. Finally, 

Core argues that, notwithstanding the Exculpatory Clause, the 

court erred in ruling that Core was entitled to only nominal 

damages on its breach of contract claim. 
20

A.

We will first assess the timeliness and application of the 

Exculpatory Clause. On this front, Core advances two arguments: 

first, that Verizon failed to timely invoke the Clause; and,

second, that the Clause is void under principles of Maryland 

contract law. 

1.

Core argues that Verizon waived the benefit of the 

Exculpatory Clause by neglecting to invoke it as an affirmative 

defense under Rule 8(c) of the Federal Rules of Civil Procedure,

that is, by not properly pleading the Clause in its answer to 

Core’s 2002 complaint. Lest Verizon’s inattention be construed 

as a mere oversight, Core reminds us that Verizon continued to 

ignore the Clause in its declaratory judgment action. Thus,

according to Core, the district court abused its discretion in 

permitting Verizon to raise the Clause, post-remand, in the 

summary judgment proceedings. 

Put succinctly, we discern no abuse in the district court’s 

ruling. In analyzing a party’s failure to timely invoke an 

exculpatory provision, we have recognized an exception to Rule 

8(c) where, as here, the pertinent provision was “evident” in 

the contract “before the trial court.” Caterpillar Overseas, 

S.A. v. Marine Transp. Inc., 900 F.2d 714, 725 n.7 (4th Cir. 

1990). Although not relying specifically on Caterpillar 
21

Overseas to support its ruling on timeliness, the court

nevertheless identified the salient legal principle. 

Furthermore, the court properly observed that Core was neither

unfairly surprised nor unduly prejudiced by Verizon’s delay in 

invoking the Exculpatory Clause, in that the parties did not 

have occasion to address the issue of damages until after the 

first appeal. Thus, the Clause was timely and appropriately 

invoked. 

2.

Next, Core contends that the Exculpatory Clause cannot be 

enforced because Maryland law bars the use of “exculpatory 

agreements in transactions affecting the public interest.” See

Wolf v. Ford, 644 A.2d 522, 532 (Md. 1994). Verizon counters, 

however, that the Clause is enforceable under federal law, and 

that state law principles cannot, at this stage, void a 

provision of an ICA already approved by the appropriate State 

commission. Verizon maintains that, pursuant to the Act, the 

proper time for Core to object on the asserted basis of

Maryland’s public policy was prior to the PSC’s approval of the 

Core ICA. We agree with Verizon. 

The Telecommunications Act “t[ook] the regulation of local 

telecommunications competition away from the States,” imposing a 

federal regime to govern certain aspects of such competition. 

See AT&T Corp. v. Iowa Utils. Bd., 525 U.S. 366, 378 n.6 (1999). 
22

Approved ICAs between ILECs and CLECs are the “tools” through 

which the Act is implemented and enforced, and are thus, as we 

have explained, “creation[s] of federal law.” See Verizon Md., 

Inc. v. Global NAPS, Inc., 377 F.3d 355, 364 (4th Cir. 2004)

(internal quotation marks omitted). The contractual duty at 

issue in this case — Verizon’s duty to interconnect with Core —

is a duty imposed by the Act itself. Accordingly, the 

resolution of a claim regarding the scope of that statutory 

duty, including the remedies available for its breach, depends 

on the interpretation and application of federal law. See id. 

None of our sister courts of appeals have weighed in on the 

specific issue of whether the Act abides the existence of an 

exculpatory provision in an approved ICA. Nonetheless, we are 

satisfied with the district court’s conclusion that “exculpatory 

clauses, like section 26 of the [Core] ICA, are not void under 

the Telecommunications Act.” See Reconsideration Order 1. The 

court so concluded by deferentially applying FCC decisions that 

have approved the use of exculpatory provisions under the Act. 

See In re Implementation of the Local Competition Provisions in 

the Telecomm’s Act of 1996, 11 FCC Rcd. 15499, 15576 (1996)

(hereinafter cited as the “Local Competition Order”); see also

In re Cavalier Tel., LLC, 18 FCC Rcd. 25887, 25985-87 (Wireline 

Comp. Bur. 2003) (hereinafter cited as the “Cavalier Order”). 
23

The Local Competition Order, in 1996, constituted the FCC’s 

initial declaration implementing the local competition 

provisions of the Act.14 Therein, the FCC “reject[ed]” the 

contention that it would be impermissible for an ILEC to request 

that a CLEC “limit its legal remedies as part of a negotiated 

[ICA].” Local Competition Order 15576. The FCC also recognized 

that exculpatory provisions are a legitimate negotiating tool; 

for example, “A party may voluntarily agree to limit its legal 

rights or remedies in order to obtain a valuable concession from 

another party.” Id. The Local Competition Order identified 

only one circumstance where a request to limit a party’s legal 

rights might be improper, and that circumstance is not 

applicable here. See id. (explaining that “an [ILEC] may not 

demand that the [CLEC] attest that the [ICA] complies with all 

provisions of [the Act], federal regulations, and state law”).

In the 2003 Cavalier Order, the FCC arbitrated a dispute 

between an ILEC and a CLEC involving ICA negotiations in 

Virginia.15 Those parties had already agreed to an ICA provision

 14 Certain of the regulations adopted in the Local 

Competition Order were subsequently vacated after review in the 

federal courts. See Verizon Commc’ns, Inc. v. FCC, 535 U.S. 467 

(2002). All aspects of the Order upon which we rely today, 

however, remain undisturbed. 

15 In the proceedings leading to the Cavalier Order, the FCC 

assumed jurisdiction when the State commission declined to 

resolve the Virginia dispute. See 47 U.S.C. § 252(e)(5) (“If a 

(Continued)
24

functionally identical to the Exculpatory Clause, which limited 

the ILEC’s liability for lost profits and other consequential 

damages. The CLEC, however, sought to add a broad exclusion to 

the proposed ICA’s exculpatory provision that would entitle the 

CLEC to damages “where [the ILEC] violat[ed] any law governing 

communications.” See Cavalier Order 25985. The CLEC argued 

that its right to damages under the Act should not be curtailed 

or eliminated at the ILEC’s insistence, because such a 

limitation would greatly diminish the ILEC’s incentive to 

perform its obligations under the ICA. The ILEC countered that 

the broad exclusion effectively gutted the proposed ICA’s

exculpatory provision, and that the ICA otherwise provided the 

CLEC with sufficient protection.

The FCC agreed with the ILEC and rejected the CLEC’s 

proposed change to the exculpatory provision. Specifically, 

the FCC determined that the CLEC’s effort to “eviscerate” the 

exculpatory provision was “commercially unreasonable.” See

Cavalier Order 25986. The CLEC’s concerns about undermining the 

ILEC’s incentive to comply with the Act were mitigated,

 

State commission fails to act to carry out its responsibility 

under this section in any proceeding or other matter under this 

section, then the [FCC] . . . shall assume the responsibility of 

the State commission . . . with respect to the proceeding or 

matter and act for the State commission.”). 
25

according to the FCC, by the remedies available elsewhere in the 

ICA and under applicable law. The FCC later issued an order 

approving an ICA between the parties that included the original 

exculpatory provision. See In re Cavalier Tel., LLC, 19 FCC 

Rcd. 4070 (Wireline Comp. Bur. 2004). 

The Reconsideration Order’s deference to these FCC 

decisions was entirely appropriate. In Chevron, the Supreme 

Court “established a familiar two-step procedure for evaluating 

whether an agency's interpretation of a statute is lawful.” See

Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 

U.S. 967, 986 (2005) (citing Chevron, U.S.A, Inc. v. Natural 

Res. Defense Council, Inc., 467 U.S. 837, 843-44 (1984)). 

First, we assess “whether the statute’s plain terms directly 

address the precise question at issue.” Id. (internal quotation 

marks and alterations omitted). If the statute is deemed 

ambiguous on the question, “we defer at step two to the agency’s 

interpretation so long as the construction is a reasonable 

policy choice for the agency to make.” Id. (internal quotation 

marks omitted). Applying that framework, we observe that the 

Act itself does not address the viability of an exculpatory 

provision in an ICA. The FCC’s decisions, on the other hand,

convincingly illustrate the agency’s reasonable conclusion that 

an exculpatory provision in an ICA does not offend any aspect of 

the Act. We are therefore obliged to acknowledge that Verizon’s 
26

reliance on the Exculpatory Clause is not precluded by federal 

law. 

Though federal law does not prohibit the use of an 

exculpatory provision in an ICA, the Act authorizes a State 

commission to reject any provision of an ICA that the commission 

deems “not consistent with the public interest, convenience, and

necessity.” See 47 U.S.C. § 252(e)(2)(A)(ii). This statutory 

prescription creates a narrowly defined time and forum for 

identifying and evaluating any state-level policy that might 

invalidate part or all of an ICA. Neither the Act nor any other

provision of federal law, however, subjects a State commissionsanctioned ICA to any subsequent attack on the basis of a state 

law principle. By its approval, the PSC affixed the imprimatur 

of the State of Maryland on the Core ICA, confirming that it 

worked no injury to Maryland’s public interest.16 In that 

 16 We are constrained to note that Core, like a man who buys 

a dog yet cannot abide fleas, seeks to avoid a key provision of 

the very agreement, that is, the Core ICA, that it previously 

insisted upon. Core’s position in the district court and on 

appeal — that the Exculpatory Clause is inconsistent with 

Maryland’s public interest — is a complete U-turn from the 

position Core took in 1999 when it sponsored the Core ICA before 

the PSC. Though we reject on the merits Core’s newfound 

contentions regarding the enforceability of the Clause, we would 

not condone in any event Core’s apparent effort to manipulate 

our court system. See King v. Herbert J. Thomas Mem’l Hosp., 

159 F.3d 192, 196 (4th Cir. 1998) (recognizing application of 

judicial estoppel to party who “assert[s] a position that is 

factually incompatible with a position taken in a prior judicial 

or administrative proceeding,” where tribunal has accepted 

(Continued)
27

circumstance, no further consideration of Maryland law or policy 

is appropriate.17 As our distinguished colleague Judge Michael 

aptly observed, “[o]nce the [ICA] is approved, the [Act] 

requires the parties to abide by its terms.” See Verizon Md., 

377 F.3d at 364. Accordingly, the district court did not err in 

enforcing the Exculpatory Clause in the consolidated 

proceedings.

B.

We next assess Core’s challenge to the district court’s 

summary judgment awards with respect to Core’s state law tort 

claims for concealment and unfair competition. The Exculpatory 

Clause presents no obstacle to those intentional torts, inasmuch 

as the Clause does not limit the liability of either party for

“willful or intentional misconduct.” See J.A. 531.

Under Maryland law, the tort of concealment has five 

elements:

 

initial position and party has assumed contrary position to gain 

unfair advantage) (citations omitted).

17 It may well be that, in the absence of governing federal 

principles, a court should draw on appropriate state law 

contract principles for an interpretation of an ICA. See, e.g., 

Cent. Tel. Co. of Va. v. Sprint Commc’ns of Va., Inc., 715 F.3d 

501, 517 (4th Cir. 2013). Such a limited use of state law 

principles, however, falls far short of Core’s assertion that 

Maryland law “controls” our analysis of whether a party to an 

ICA may limit its liability thereunder.
28

(1) the defendant owed a duty to the plaintiff to 

disclose a material fact; (2) the defendant failed to 

disclose that fact; (3) the defendant intended to 

defraud or deceive the plaintiff; (4) the plaintiff 

took action in justifiable reliance on the 

concealment; and (5) the plaintiff suffered damages as 

a result of the defendant’s concealment. 

See Lloyd v. Gen. Motors Corp., 916 A.2d 257, 274 (Md. 2007). 

Each of those five elements must be proven by clear and 

convincing evidence. See Rhee v. Highland Dev. Corp., 958 A.2d 

385, 389 (Md. Ct. Spec. App. 2008). The related tort of unfair 

competition, on the other hand, is a more “flexib[le]” cause of 

action, but in all instances requires proof of “fraud, deceit, 

trickery or unfair methods of any sort.” See Delmarva Sash & 

Door Co. of Md., Inc. v. Anderson Windows, Inc., 218 F. Supp. 2d 

729, 733 (D. Md. 2002) (citing Balt. Bedding Corp. v. Moses, 34 

A.2d 338, 342 (Md. 1943)). 

Core relies upon the same conduct to support both of its

intentional tort claims: that Verizon failed to disclose that 

Core was the “customer of record” to which the then existing

multiplexer and Loop Ring in the Wire Center had been committed, 

and that, had Core known that fact, it could have demanded an 

immediate interconnection. Verizon asserts that, viewed in the 

proper light, Core failed to produce any evidence of intent to 

defraud or deceive, nor sufficient evidence of Core’s reasonable 

reliance on Verizon’s alleged deception.
29

As a preliminary matter, we reject, as did the district 

court, Core’s assertion that the facts we “found” in the first 

appeal are sufficient to establish Verizon’s liability for 

Core’s tort claims. First, “it is axiomatic . . . that 

appellate courts do not make factual findings.” See Robinson v. 

Wix Filtration Corp. LLC, 599 F.3d 403, 419 (4th Cir. 2010). 

Second, even if our factual recitation in the first appeal is

accorded some weight, Core substantially overstates the 

inferences that could be permissibly drawn therefrom. Finally, 

Core’s concealment and unfair competition claims were not 

litigated at all until the consolidated proceedings that 

occurred post-remand, and only then did the parties conduct 

discovery with an eye toward developing evidence specifically 

related to those intentional torts.

Based on our de novo review of the summary judgment record, 

we agree with the district court’s assessment that no reasonable 

jury could find that Verizon unlawfully concealed any material 

fact from Core. Our conclusion in that regard turns on the 

element of intent to defraud or deceive. Core has simply 

offered no evidence suggesting that Verizon’s failure to 

identify Core as the “customer of record” was driven by any 

intent to defraud or deceive Core. When given the chance,

Mingo, as Core’s president, could merely assert that the failure 

to disclose occurred, and then theorize that Verizon must have 
30

done so intentionally in order to improperly delay the Core 

interconnection. A claim built on such rank speculation is 

insufficient to survive summary judgment, as the court properly 

recognized. Moreover, Mingo’s concession that he knew, and did 

not share, that Core was a retail customer in the Baltimore Wire 

Center establishes that Core could not have reasonably relied on 

the intentional concealment it alleges.

Core’s unfair competition tort claim fails for the same 

reason, that is, the lack of evidence on the element of intent 

to defraud or deceive. Though we are content to affirm the 

district court’s rulings on the merits of Core’s intentional 

tort claims, we also note our concern that those claims amount 

to little more than “the assertion of a contract claim in the 

guise of a tort.” See Sibley v. Lutheran Hosp. of Md., Inc., 

871 F.2d 479, 487 (4th Cir. 1989) (Murnaghan, J., concurring). 

Under Maryland law, “where the essence of a relationship between 

the parties is contractual in nature and the basis for the claim 

of defendant’s dereliction is its failure to perform the 

contract, the cause of action . . . is not available in [tort], 

but only in an action for breach of contract.” Abt Assoc., Inc. 

v. JHPIEGO Corp., 104 F. Supp. 2d 523, 527 (D. Md. 2000) (citing 

Baird v. C & P Tel. Co. of Balt., 117 A.2d 873, 879 (Md. 1955)). 

Accordingly, the district court did not err in awarding Verizon 

summary judgment on Core’s tort claims.
31

C.

Lastly, we review the propriety of the district court’s 

judgment awarding nominal damages of one dollar to Core for 

Verizon’s breach of the Core ICA. Core contends that, the 

Exculpatory Clause notwithstanding, it is yet entitled to more 

than nominal damages for three reasons: (1) Verizon’s breach of 

the Core ICA involved “willful or intentional misconduct”; (2) 

the Core interconnection was not a “service” for purposes of the 

Clause; and (3) the Clause permits the award of “performance 

penalties,” as provided for in section 27.3 of the Core ICA.18

Core’s first theory, that it can recover consequential 

damages for Verizon’s breach of the Core ICA because the breach 

involved “willful or intentional misconduct,” is without merit. 

The “willful or intentional misconduct” exclusion to the 

Exculpatory Clause would apply exclusively to actions sounding

in tort, because an intent to defraud or deceive is ordinarily

not at issue in a breach of contract claim. In any event, Core 

 18 Verizon contends that Core waived its arguments for 

damages notwithstanding the Exculpatory Clause by failing to 

object to Verizon’s proposed form of judgment awarding nominal 

damages only. Verizon’s point is that the district court 

specifically requested the parties’ views on what damages were 

available in light of its ruling that the Clause was 

enforceable, and Core remained silent. Core, however, maintains 

that it misunderstood the court’s request and believed it had no 

other recourse than to appeal. In these circumstances, we 

decline to deem Core’s arguments waived and are content to

address their merits. 
32

is unable to show that Verizon engaged in any “willful or 

intentional misconduct.” 

Second, Core emphasizes that the Exculpatory Clause only 

limits Verizon’s liability for consequential damages “in 

connection with the provision or use of services offered under 

[the Core ICA].” J.A. 531 (emphasis added). According to Core, 

interconnection is not a “service” within the meaning of the 

Clause. For this proposition, Core relies on a district court 

decision from New Jersey, deciding that interconnection is not a 

“‘telecommunications service[]’ for purposes of [the Act].” See

Global NAPS, Inc. v. Bell Atlantic-N.J., Inc., 287 F. Supp. 2d 

532, 547 (D.N.J. 2003). Verizon correctly responds that the 

court’s ruling in Global NAPS has no bearing on the Clause. The 

phrase “Telecommunications Service” has a precise meaning under 

the Act, which the Core ICA expressly incorporates and employs 

in several instances. See J.A. 484 (“‘Telecommunications 

Service’ is as defined in the Act”); see also id. at 486, 496, 

509, 512, 515, 524.19 In the Clause, however, the parties do not 

use the term “Telecommunications Service,” but instead use the 

single word “services.” Thus, the parties intended to draw a 

 19 The Act defines a “telecommunications service” as “the 

offering of telecommunications for a fee directly to the public, 

or to such classes of users as to be effectively available 

directly to the public, regardless of the facilities used.” See

47 U.S.C. § 153(53).
33

distinction between a “Telecommunications Service” and mere 

“services.” We conclude that, accorded its broad, ordinary 

meaning, the word “services” in the Clause must include the 

provision of an interconnection at Core’s request. 

Finally, Core maintains that it is entitled to “performance 

penalties” under section 27.3 of the Core ICA, which provides 

for a limited remedy not barred by the Exculpatory Clause. 

Verizon responds that section 27.3 imposes specific evidentiary 

requirements that Core has not met. Section 27.1 defines 

certain “performance standards” Verizon must satisfy in 

connection with its obligations under the Core ICA, and section 

27.2 requires Verizon to submit quarterly reports of its 

network’s performance with respect to those standards. See J.A. 

531-32. If, “based on a statistically significant number of 

[such] reports” Core believes that Verizon is “not complying 

with the performance standards referenced in [section] 27.1,” 

then section 27.3 permits Core to seek redress in a court of 

competent jurisdiction. Id. 

Core has provided no evidence to satisfy the predicate

conditions for the performance penalties provided for in section 

27.3. Core does not point to any quarterly report, much less a 

“statistically significant number” thereof. Instead, it relies 

on only one arguable instance of non-compliance, which is 

insufficient to trigger the performance penalties provision of
34

section 27.3. Moreover, even if we were to ignore the quarterly 

report requirement, we are not swayed by Core’s unsupported 

assertion that it could prove thousands of unspecified 

performance failures by Verizon. Core had the opportunity to 

marshal such evidence in the summary judgment proceedings, and 

it failed to do so. Accordingly, Core is not entitled to

performance penalties under section 27.3.

The Exculpatory Clause therefore bars any liability for 

consequential damages arising from Verizon’s breach of the Core 

ICA, and Core has failed to establish its entitlement to any 

other remedy. As a result, the district court properly entered 

judgment on Core’s breach of contract claim in the nominal sum

of one dollar.

 

IV.

Pursuant to the foregoing, we affirm the judgment of the 

district court.

AFFIRMED