Opinion ID: 1370217
Heading Depth: 1
Heading Rank: 6

Heading: area plus losses

Text: BellSouth argues the circuit court erred in reversing PSC's decision to include Area Plus losses in test-year calculations because that decision was supported by substantial evidence. We disagree. In February 1993, BellSouth asked PSC to approve its rate plan for a new service called Area Plus. [9] PSC approved the plan. Several long-distance carriers appealed the decision in circuit court. In April 1994, PSC, BellSouth, the long-distance carriers, and Consumer Advocate entered into an agreement resolving the dispute. The parties made several stipulations, including the following: BellSouth will not come before [PSC] requesting rate relief for any possible losses resulting from the introduction of Area Plus service, the execution of Area Calling Plan Principles Agreement, or this Stipulation. The parties further stipulated that PSC must review the agreement three years after its approval to determine whether any modifications are appropriate. In the present case, PSC's staff and BellSouth recommended that Area Plus revenue from the first half of 1995 be included in test-year calculations. Consequently, PSC allowed BellSouth to recognize nearly $4.5 million in losses attributable to Area Plus service. Consumer Advocate protested that BellSouth was barred from recognizing those losses under the April 1994 agreement. Recognizing the losses would increase BellSouth's need for revenue from other ratepayers, which was what the stipulation was intended to prevent, Consumer Advocate argued. PSC rejected those contentions, saying BellSouth had not requested rate relief because PSCnot BellSouthhad initiated the review of the company's earnings. Therefore, neither PSC nor BellSouth had violated the stipulation. The circuit court reversed PSC's decision. The court concluded PSC had abused its discretion because the parties reasonably expected to rely on the April 1994 agreement, and PSC had offered no reason for nullifying the stipulation. BellSouth now argues the circuit court erred because substantial evidence supported PSC's decision to include known and measurable Area Plus losses in test-year calculations. Including them did not violate the stipulation because BellSouth had not asked for rate relief, but merely submitted the information during an earnings review initiated by PSC. BellSouth also argues the parties intended for stipulations in the April 1994 agreement to be considered only if BellSouth asked to withdraw its Area Plus service or if PSC considered another specific type of long-distance service in South Carolina. A stipulation is an agreement, admission or concession made in judicial proceedings by the parties thereto or their attorneys. Stipulations, of course, are binding upon those who make them. Kirkland v. Allcraft Steel Co., 329 S.C. 389, 392, 496 S.E.2d 624, 626 (1998) (citations omitted). A stipulation is an agreement, an understanding. The court must construe it like a contract, i.e., interpret it in a manner consistent with the parties' intentions. Webster v. Holly Hill Lumber Co., 268 S.C. 416, 421, 234 S.E.2d 232, 234 (1977). Because the court construes it like a contract, a stipulation that is unambiguous and explicit must be construed according to the terms the parties have used, as those terms are understood in their plain, ordinary, and popular sense. See C.A.N. Enterprises, Inc. v. South Carolina Health and Human Services Fin. Comm'n, 296 S.C. 373, 377, 373 S.E.2d 584, 586 (1988) (court must construe unambiguous contracts according to plain meaning of terms used by parties); Chapman v. Metropolitan Life Ins. Co., 172 S.C. 250, 256, 173 S.E. 801, 804 (1934) (it plainly is the duty of the court to construe a written contract if there be no ambiguous language which is susceptible of more than one meaning); accord 83 C.J.S. Stipulations § 11 (1953); 73 Am.Jur.2d Stipulations § 7 (1974). A party who has entered into a stipulation may seek the written consent of other parties to abrogate the stipulation. A party also may ask the court to abrogate a stipulation for good cause or because the interests of justice require it. Whether to abrogate the stipulation is addressed to the sound discretion of the trial judge, and an appellate court will not interfere with that decision except when there is a manifest abuse of discretion. Strange v. South Carolina Dep't of Highways and Pub. Transp., 314 S.C. 427, 430, 445 S.E.2d 439, 441 (1994); Edens v. Cole, 261 S.C. 556, 561, 201 S.E.2d 382, 384 (1973); Brown v. Pechman, 55 S.C. 555, 563, 33 S.E. 732, 737 (1899); accord 83 C.J.S. Stipulations §§ 30-37; 73 Am.Jur.2d Stipulations §§ 12-14. When a party has not asked the court to relieve it from the terms of a stipulation, that party remains bound by the stipulation. American Surety Co. v. Hamrick Mills, 194 S.C. 221, 232, 9 S.E.2d 433, 438 (1940). We conclude the circuit court properly enforced the plain meaning of the stipulation at issue in this case. Regardless of which entity initiated the earnings review, BellSouth asked PSC to recognize losses attributable to Area Plus. It is true that, in the end, PSC reduced BellSouth's rates by $42.3 million annually. But BellSouth plainly requested rate relief because it wanted to use Area Plus losses to avoid a further reduction in its rates, and that was precisely what BellSouth promised not to do in the April 1994 agreement. BellSouth never asked the other parties, PSC, or the court to relieve it from the stipulation. The record contains no evidence supporting PSC's decision to ignore the stipulation. In fact, a PSC engineer conceded under questioning by Consumer Advocate that BellSouth would receive rate relief if PSC allowed the company to recognize the losses. See Porter v. South Carolina Pub. Serv. Comm'n, 332 S.C. 93, 504 S.E.2d 320 (1998) (reversing circuit court order that upheld PSC's approval of certain expenses, where utility had not complied with stipulation that plainly required it to perform a cost/benefit analysis when seeking recovery of those costs). This result does not mean, of course, that BellSouth may never ask PSC to recognize Area Plus losses. The April 1994 agreement stated PSC would review the agreement after three years, and BellSouth may ask PSC to reconsider the stipulation sooner. See Strange v. South Carolina Dep't of Highways and Pub. Transp., supra ; Edens v. Cole, supra ; Brown v. Pechman, supra . Accordingly, we affirm the judgment of the circuit court on this issue.