Court Opinion

ID: 47588
Source: CourtListenerOpinion
Date Created: 2010-04-25 23:24:41+00
Date Added: 2024-06-11T17:18:04.546313
License: Public Domain

[DO NOT PUBLISH]

             IN THE UNITED STATES COURT OF APPEALS
                    FOR THE ELEVENTH CIRCUIT
                                                                            FILED
                       -------------------------------------------U.S. COURT OF APPEALS
                                    No. 05-13404                    ELEVENTH CIRCUIT
                                                                        APRIL 14, 2006
                              Non-Argument Calendar
                      -------------------------------------------- THOMAS K. KAHN
                                                                           CLERK

                    D.C. Docket No. 03-60537-CV-MGC

WHOLESALE TELECOM CORPORATION,

                                                       Plaintiff-Counter-
                                                       Defendant-Appellant,

                                        versus

ITC DELTACOM COMMUNICATIONS, INC.,

                                                       Defendant-Counter-
                                                       Claimant-Appellee.

            ----------------------------------------------------------------
                 Appeal from the United States District Court
                     for the Southern District of Florida
            ----------------------------------------------------------------

                                (April 14, 2006)

Before EDMONDSON, Chief Judge, TJOFLAT and CARNES, Circuit Judges.

PER CURIAM:
       Plaintiff-Appellant Wholesale Telecom Corp. (“WTC”) appeals a final

judgment denying its cross-motion for summary judgment and granting the cross-

motion for summary judgment of Defendant-Appellee ITC DeltaCom

Communications, Inc. (“ITC”). No reversible error has been shown; we affirm.

       ITC is a non-dominant provider of telecommunications services, including

local and long-distance voice transmission; WTC is a non-dominant wholesale

provider of international long-distance telecommunications services. Both ITC

and WTC purchase voice transmission services and resell these services.

       In January 2003, the parties entered into a contract pursuant to which ITC

agreed to transmit WTC’s international long-distance calls at “Horizon Level V”

retail rates.1 The contract was handled on ITC’s end by personnel in the retail

field sales office. ITC’s rates were premised on its retail end-user experience that

95% of its international traffic was landline termination. The cost to ITC of

cellular termination was considerably greater than that of landline termination but,

because such a small percentage of ITC’s retail traffic was cellular, ITC offered a

flat rate. The Horizon Level V rates quoted to WTC were the same whether the

  1
   The Horizon Level V rates were referenced -- but not set out -- in ITC’s standard form contract.
ITC faxed WTC the rate schedule then in effect after the agreement was signed. Nothing in the rate
schedule suggests a guarantee of the then applicable rates for the term of the agreement for service.

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calls terminated on land-lines or on cellular phones. WTC made clear to ITC that

ITC’s flat rate was very important in WTC’s decision to contract with ITC.

     ITC installed the lines required to transmit WTC’s international calls in late

January 2003; WTC began routing its calls through ITC’s network on 1 February

2003. Under the Horizon Level V rates, WTC incurred a charge of approximately

$37,000 through 20 February 2003; ITC’s cost for routing WTC’s traffic for this

initial period was approximately $102,000. ITC’s retail sales force also added two

other reseller customers who, together with WTC, nearly doubled ITC’s

international traffic. Under the Horizon Level V flat rates, ITC recouped only

approximately 36% of its costs of providing service. The retail sales force was

unaware of the cost differential to ITC depending on where an international call

terminated. And, according to ITC, approval of the Horizon Level V rates to these

resellers was based on a misunderstanding about the volume of international

cellular traffic to be expected.

      To address its error and to remedy the resultant cost disparity, ITC modified

its rates, effective 21 February 2003, by imposing a surcharge on international

calls terminating on cellular telephones. ITC posted these surcharges on its

website. ITC also informed WTC and the other two resellers of the new

surcharges and offered each of them the option to terminate their ITC contract or

                                          3
accept a higher rate. The other two resellers reached an agreement with ITC.

WTC refused to accept a rate change and continued to send traffic over ITC’s lines

after the effective date of the surcharge. ITC thereafter billed WTC at the

surcharged rate and required WTC to provide security equal to two months

estimated usage. WTC maintained that its agreement with ITC entitled it to the

Horizon Level V rate without surcharge; it refused the security demand and

continued to tender payment at the initial Horizon Level V rates.

      WTC sought injunctive relief, specific performance and damages based on

its assertion that ITC (i) breached their contractual agreement; (ii) engaged in

unjust and unreasonable practices and discrimination, in violation of 47 U.S.C. §§

201(b) and 202(a); and (iii) committed fraud. ITC filed a counterclaim for breach

of contract and action on an account. The district court denied WTC preliminary

injunctive relief; ITC terminated services to WTC on 8 May 2003.

      The service agreement between ITC and WTC provides:

                     Customer hereby agrees to all the terms and
             conditions of this Agreement for Service (“Agreement”)
             and the terms and conditions of the state and federal
             tariffs of ITC^DeltaCom Communications, Inc.
             (“ITC^DeltaCom”), as the same exist or may be modified
             in the future by ITC^DeltaCom, including limitations on
             ITC^DeltaCom liabilities, filed with the respective
             regulatory bodies and/or as the same may appear on
             ITC^DeltaCom’s website (www.itcdeltacom.com).

                                          4
The district court determined that the unambiguous language of the agreement

entitled ITC to raise its rates through the tariffs posted on its website. We agree.

      The meaning of the word “tariff” as used in the agreement is critical to the

parties’s conflicting construction of their respective contractual rights. Before

ITC and WTC entered into the service agreement in 2003, the regulations

applicable to the tariffing of international telecommunications experienced a

significant policy shift. In 2001, the Federal Communications Commission

determined to detariff international long distance services provided by non-

dominant carriers (such as ITC) and, after a nine-month transition period, all such

tariffs, with limited exceptions, were cancelled. Report and Order: In the Matter

of 2000 Biennial Regulatory Review Policy and Rules Concerning the

International, Interexchange Marketplace, 16 F.C.C.R. 10,647; 16 FCC Rcd.

10,647 (March 20, 2001). After January 2002, non-dominant carriers in the

provision of international and interstate domestic interexchange services were to

cease filing tariffs for such services. 47 C.F.R. § 61.19. Instead, the FCC required

non-dominant carriers to make publically available information about their current

rates; and if the carrier maintains a website, the rate information must be posted on

the website. 47 C.F.R. § 42.10. So, at the time ITC and WTC entered their

                                          5
agreement, there could be no federal regulatory tariff filing of the Horizon Level V

rates.

         WTC seems to argue that, because of detariffing, ITC could post no tariffs

on its website because no tariffs could be filed with the regulatory body. Noting

that the service agreement contains a merger clause, WTC maintains that the

unilateral posting of the rate surcharge by ITC could effect no change in the terms

of the service agreement.

         Both parties assert that the contract is unambiguous. That the parties differ

on the meaning of a contract term does not render the contract ambiguous and

thereby defeat summary judgment. See Lawyers Title Ins. Corp. v. JDC (America)

Corp., 52 F.3d 1575, 1580 (11th Cir. 1995); Wayne J. Griffin Electric, Inc. v. Dunn

Constr., Co., 622 So.2d 314, 317 (Ala. 1993).2 Instead, when, as here, we

determine that the contract is susceptible to only one reasonable interpretation,

summary judgment appropriately may be awarded. Id.

         As the district court explained, the service agreement fails to limit the term

“tariff” to tariffs filed with a regulatory body. To be sure, the word “tariff” does

include filings with an appropriate government agency; but it is not so limited. As

the district court noted correctly, “the word ‘tariff’ has a meaning independent of a

  2
      The Agreement for Service provides that Alabama law applies.

                                                6
rate schedule filed with a regulatory body.” See Blacks Law Dictionary, 8th Ed.

(2004) (listing among the definitions of tariff “[a] schedule listing the rates

charged for services provided by a public utility, the U.S. Postal Service, or a

business (esp. one that must by law file its rates with a public agency); The

American Heritage Dictionary of the English Language, 4th Ed. (2000) (defining

tariff as “[a] schedule of prices or fees.”).

      To limit the word “tariffs” to matters filed with a regulatory body would

nullify the “or” clause in the service agreement. We conclude, as did the district

court, that the plain language of the service agreement contemplates “tariffs” (i)

filed with a regulatory body or (ii) posted on ITC’s website or (iii) both. Because

the service agreement entitled unambiguously ITC to modify the terms and

conditions of its state and federal tariffs by modifying the same on its website,

summary judgment was due to be denied to WTC on its breach of contract claim.

      We have reviewed and find without merit WTC’s other claims of unjust and

unreasonable discrimination and fraud. The surcharge imposed on the Horizon

Level V rates applied to all customers under that rate. ITC offered WTC and the

other two customers the same options; WTC failed to proffer evidence that ITC

treated similarly-situated customers differently. And the record shows no material

dispute about the reasonableness of the rate surcharge or the demand for additional

                                            7
credit or both in the light of ITC’s cost structure and its contractual entitlement to

adjust charges. About the fraud claim, the service agreement contained a merger

clause that disclaimed representations made before the contract was executed.

And as we have explained, the service agreement guaranteed no rate; instead,

through its incorporation of tariffs published on ITC’s website, the service

agreement allowed the rate surcharge which WTC seeks to label as fraudulent.

      After review of all the arguments, we discern no reversible error in the order

denying partial summary judgment to ITC and granting summary judgment to

WTC on its breach of contract counterclaim.

      AFFIRMED.

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