Court Opinion

ID: 2655797
Source: CourtListenerOpinion
Date Created: 2014-03-06 20:13:33.298179+00
Date Added: 2024-06-11T12:59:37.003129
License: Public Domain

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.
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.

                                 2
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

                                          3
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).

                                        4
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.

                                          5
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).

                                                 6
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 seven-

count 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.

                                            7
(“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

                                               8
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.

                                             9
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.

                                              10
        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.

                                           11
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.
(Continued)
                                           12
     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

     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).

                                        13
the following issues:           whether the Exculpatory Clause had been

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]

       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.

                                        14
earlier since it was only after the Fourth Circuit’s remand that

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

      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

      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.

                                              15
the existing multiplexer and Loop Ring were already assigned.

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

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.

      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.

                                            16
      That jury trial, of course, never occurred.                        Core asked the

district court to reconsider its rulings on the tort claims,

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

                                          17
on   its    breach       of        contract     claim.          When      it    entered       the

Reconsideration Order, the court issued a separate memorandum to

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.

                                                18
                                        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

                                           19
court erred in ruling that Core was entitled to only nominal

damages on its breach of contract claim.

                                       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,

                                       20
S.A. v. Marine Transp. Inc., 900 F.2d 714, 725 n.7 (4th Cir.

1990).       Although      not     relying      specifically        on   Caterpillar

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

                                         21
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).

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

                                         22
In re Cavalier Tel., LLC, 18 FCC Rcd. 25887, 25985-87 (Wireline

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

     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

     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.

                                            23
Virginia. 15    Those parties had already agreed to an ICA provision

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

      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
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.”).

                                         24
Cavalier Order 25986.           The CLEC’s concerns about undermining the

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

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

                                           25
an exculpatory provision in an ICA does not offend any aspect of

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

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 commission-

sanctioned 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.,
(Continued)
                                              26
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.

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
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.

                                      27
       Under   Maryland    law,   the    tort   of   concealment    has    five

elements:

       (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

                                        28
defraud or deceive, nor sufficient evidence of Core’s reasonable

reliance on Verizon’s alleged deception.

     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,

                                                29
Mingo, as Core’s president, could merely assert that the failure

to disclose occurred, and then theorize that Verizon must have

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)).

                                       30
Accordingly, the district court did not err in awarding Verizon

summary judgment on Core’s tort claims.

                                         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

      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.

                                         31
in tort, because an intent to defraud or deceive is ordinarily

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

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

      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).

                                         32
use the term “Telecommunications Service,” but instead use the

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

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

                                              33
on   only     one   arguable       instance     of    non-compliance,       which    is

insufficient to trigger the performance penalties provision of

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

                                          34