Court Opinion

ID: 154146
Source: CourtListenerOpinion
Date Created: 2010-08-14 03:51:58+00
Date Added: 2024-06-11T09:30:40.996302
License: Public Domain

UNITED STATES COURT OF APPEALS
Filed 11/6/96
                                     TENTH CIRCUIT

 475342 ALBERTA LTD., an Alberta
 corporation,

                Plaintiff - Appellant,
                Cross-Appellee,                  Nos. 95-5213 and 96-5000
       v.                                             N.D. Oklahoma
 DATAPHON CELLULAR                                (D.C. No. 95-C-174-BU)
 PARTNERSHIP and JOHN F. KANE,

                Defendants - Appellees,
                Cross-Appellants.

                          _________________________________

 475342 ALBERTA LTD., an Alberta
 corporation,

                Plaintiff - Appellant,
                Cross-Appellee,                  Nos. 95-5214 and 96-5001
       v.                                             N.D. Oklahoma
 CONSTITUTION CELLULAR and                        (D.C. No. 95-C-175-BU)
 JOHN B. KANE,

                Defendants - Appellees,
                Cross-Appellants.
                              ORDER AND JUDGMENT*

Before ANDERSON, HENRY, and MURPHY, Circuit Judges.

       These are diversity contract actions which we have combined for convenience on

appeal. The central question is whether the defendants in each case are liable for

$100,000 in liquidated damages under the following provision contained in two identical

contracts:

       The system[s] to be constructed using the proceeds of the loan we have
       committed to providing herein must utilize cellular system equipment and
       ancillary equipment and services supplied by NovAtel. Should you refer to
       this commitment in any filing or application presented to the FCC in
       connection with one of the proposed systems listed on Schedule A, and fail
       to purchase NovAtel equipment in connection with the construction of a
       system listed on Schedule A, there shall become immediately due and
       payable from Applicant to NovAtel a fee of U.S. $100,000 in liquidated
       damages.

The district court found no liability and granted the defendants’ motions for summary

judgment, from which the plaintiffs appeal. The court determined that liquidated

damages under the clause quoted above were subject to two conditions precedent: (1) a

       *
        This order and judgment is not binding precedent, except under the doctrines of
law of the case, res judicata, and collateral estoppel. The court generally disfavors the
citation of orders and judgments; nevertheless, an order and judgment may be cited under
the terms and conditions of 10th Cir. R. 36.3.

                                            -2-
loan--which never eventuated in either case, and (2) the construction and operation of a

cellular telephone system by the defendants--which did not occur in one case--for an

amount not exceeding the loan commitment contained in the agreements--which did not

occur in the other case. The court found in the alternative that the documents containing

the liquidated damage clause were agreements to agree, hence unenforceable.

Subsequently, the district court denied the defendants’ claims for attorneys’ fees under

Okla. Stat. tit. 12, § 936 (1991). The defendants appeal from that judgment.

                                    I. BACKGROUND

                                             A.

       The plaintiff in these actions, 475342 Alberta Ltd., is a successor in interest to the

rights of NovAtel Communications, Ltd., under circumstances not disclosed in the record.

Because NovAtel is a party to the agreements being construed, we refer primarily to it in

this opinion.

       The defendants in Appeal No. 95-5213 are Dataphon Cellular Partnership and

John F. Kane (collectively “Dataphon”). The defendants in Appeal No. 95-5214 are

Constitution Cellular and John B. Kane 1 (collectively “Constitution”).2 In 1988, the year

       The record does not show whether John F. Kane and John B. Kane are the same
       1

person and, if so, the reason for a different middle initial.

      Dataphon’s and Constitution’s appeals relating to the denial of attorneys’ fees are
       2

Appeals No. 96-5000 and No. 96-5001, respectively.
                                                                                 (continued...)

                                             -3-
in which the letter agreements in question were signed, Dataphon and Constitution had

the same address--50 California Street, Suite 470A, San Francisco, California--and each

had a partner named John Kane.

       Both Dataphon and Constitution were apparently formed for the purpose of

playing the FCC lottery for cellular telephone licenses. The context has been described as

follows:

       In order to streamline the licensing process and to provide cellular service
       to the public in a more timely manner, the Commission has since 1984
       selected the tentative licensee from among competing applicants through a
       lottery, as authorized by section 309(i) of the Communications Act, 47
       U.S.C. § 309(i) (1988), rather than through competitive hearings. Each
       facially complete application is qualified to be included in a lottery for a
       particular Service Area license . . . .

               When the lottery produces a tentative selectee, the Commission
       reviews only the selected application to determine whether it is “acceptable
       for filing,” i.e., whether it complies with the FCC procedural and
       substantive rules and regulations. . . . If it is determined that the application
       is acceptable, the Commission provides public notice as to the identity of
       the tentative licensee. Competing applicants are then entitled to challenge
       the application of the tentative licensee by filing petitions to deny the
       application.

Florida Cellular Mobil Communications Corp. v. FCC, 28 F.3d 191, 193 (D.C. Cir. 1994)
(citations omitted) (describing the FCC’s general procedures for selecting licensees for
Services Areas other than the nation’s thirty largest), cert. denied, 115 S. Ct. 1357 (1995).

       The relevant lotteries pursued by Dataphon and Constitution were for 422 Rural

Service Areas (RSAs) scattered across the United States. Both apparently filed

       (...continued)
       2

                                              -4-
applications for each RSA. These 800-plus applications yielded a lottery win of at least

one license to each entity: Dataphon received the South Carolina - 4 RSA on October 4,

1989, and Constitution received the California - 3 RSA.3 Dataphon held its license for

more than two years without constructing or operating a cellular telephone system, then

sold it--apparently for millions--to an unrelated entity, United States Cellular Corporation

(“U.S. Cellular”). Constitution assigned its license to California Alpine - 3 (“Alpine”), a

limited partnership in which all the original Constitution partners owned a pro rata

interest. Alpine constructed and operated the system for the California-3 RSA.

       In order for their applications to be considered by the FCC, Dataphon and

Constitution were required to comply with various rules and regulations, including those

pertaining to financial fitness. See 47 C.F.R. § 22.917(c) (1988). Section 22.917(c)

provides, in part, as follows:

       A non-wireline applicant for a new station shall demonstrate, at the time it
       files its application, that it has either a firm financial commitment or
       available financial resources necessary to construct and operate for one year
       its proposed cellular system. The firm financial commitment may be
       contingent on the applicant obtaining a construction permit . . . (emphasis
       added).

       Dataphon and Constitution employed a dual approach to satisfy this provision:

reliance on their own balance sheets and written financial commitments from NovAtel.

       3
           The record does not reveal the precise date upon which Constitution received its
license.

                                               -5-
The NovAtel commitments, in the form of letter agreements, are the basis of this

controversy.

       In order to facilitate its business of manufacturing and selling cellular telephone

system equipment, NovAtel entered into agreements with license applicants in which it

committed to loan the applicant an amount sufficient to cover the estimated cost of

constructing and operating a cellular system for one year. The applicant, such as

Dataphon and Constitution, would then submit the loan commitment to the FCC as part of

the license application, to satisfy the “firm financial commitment” proviso of 47 C.F.R.

§ 22.917(c).

       Under the agreement, NovAtel would provide the equipment and the “loan” would

be structured as a line of credit against the expenses of purchasing the equipment and

constructing and operating the system for one year. Essentially, these were agreements

for a potential sale of equipment on credit up to a specified amount, plus advances for a

year’s operating expenses, all cast in the form and language necessary to comply with

FCC regulations regarding firm financial commitments.

       NovAtel’s agreements with Dataphon and Constitution are identical and appear to

be form contracts cast as letters, with a space in which to insert the applicant’s name, and

signature blocks for both the “applicant” and NovAtel. Each agreement is dated July 8,

1988, and shows Mr. Kane’s signature, on behalf of each applicant, on July 11, 1988.

                                             -6-
The agreements consist of twenty single-spaced paragraphs (exclusive of lettered

subparagraphs), twelve of which are numbered terms and conditions.

       For the stated consideration of $1.00, NovAtel commits in the agreements to lend

the “applicant” up to a million dollars for the construction and operation of a cellular

system in one or more of the RSAs “listed in Schedule A.” That schedule is identical for

both the Dataphon and Constitution agreements, and, as indicated above, lists

approximately 420 RSAs.

       The twelve numbered terms and conditions, which include paragraph 5, the

liquidated damages provision quoted above, read as follows:

       Our performance under this commitment is subject to the following terms
       and preconditions:

       1)     You must receive the U.S. Federal Communications Commission’s
              (“FCC’s”) authorization to construct one or more of the cellular
              systems identified on the attached Schedule A, and that award must
              not be subject to further review or reversal under the FCC’s Rules;

       2)     The loan committed to herein will be structured as a line of credit,
              which may be drawn upon as needed and as provided for in our Loan
              Documents (defined below) to pay the verified expenses incurred in
              constructing and operating one or more of the cellular systems
              authorized by the FCC and listed in Schedule A;

       3)     This loan commitment is effective and enforceable for one year after
              the date first noted above, but may be renewed at its expiration by
              the payment of a further Commitment Fee and upon NovAtel’s
              approval of Applicant’s financial condition at that time;

       4)     As presently envisioned, the loan will:

                                             -7-
     (a)    incur interest at a floating rate two percentage points greater
            than that specified as the “Prime” rate for major banks by the
            Wall Street Journal, interest shall accrue from drawdown;

     (b)    be repayable over 7 years monthly in arrears interest only in
            the first 2 years, monthly payments of principal (equal
            payments) and interest thereafter; and

     (c)    be secured by first, perfected and primary security interests in
            all of the assets of the system[s] constructed using the funds
            loaned pursuant to this commitment, and, except where
            Applicant is an individual, all of the equity in Applicant;

5)   The system[s] to be constructed using the proceeds of the loan we
     have committed to providing herein must utilize cellular system
     equipment and ancillary equipment and services supplied by
     NovAtel. Should you refer to this commitment in any filing or
     application presented to the FCC in connection with one of the
     proposed systems listed on Schedule A, and fail to purchase NovAtel
     equipment in connection with the construction of a system listed on
     Schedule A, there shall become immediately due and payable from
     Applicant to NovAtel a fee of U.S. $100,000 in liquidated damages;

6)   NovAtel, Applicant and Applicant’s principals must enter into all
     necessary agreements reasonably required by NovAtel and typically
     required by NovAtel in connection with similar transactions,
     including but not limited to, where applicable, System Sale, Loan
     and Security, and Pledge and Escrow Agreements, Notes, Leasehold
     and/or Freehold Mortgages and Uniform Commercial Code Filing
     Statements (the “Loan Documents”). All such Loan Documents
     shall conform in all respects with relevant FCC rules and policies,
     especially 47 C.F.R. Section 22.917(d) (1987);

7)   Applicant will pay all costs incurred by NovAtel in making the loan
     committed to herein, including, but not limited to, all attorneys’ fees,
     filing costs, etc., incurred in connection with drafting the Loan
     Documents and consummating the agreements set forth in the Loan
     Documents;

                                    -8-
       8)     All of the representations you have made to us, or which have been
              made to us on your behalf by your agents, including all financial
              information presented to us for our consideration, must be true,
              correct and accurate in all material respects at the present time and at
              the time the Loan Documents are executed;

       9)     There shall not be any material adverse change in Applicant’s
              financial condition or business plans, including the relevant financial
              commitments of Applicant’s partners reflected in the financial
              information you have provided to us, and no change in Applicant’s
              ownership, prior to NovAtel’s making the loan committed to herein,
              and there shall be no change in the facts underlying your business
              plans, or in the assumptions supporting your business plans such that
              these business plans or the underlying assumptions would be
              materially and adversely changed;

       10)    Neither this commitment nor any of the benefits hereunder may be
              assigned by Applicant to any party or entity without NovAtel’s prior
              written authorization and any such assignment without NovAtel’s
              authorization shall not be binding in any manner upon NovAtel;

       11)    You agree to indemnify and hold NovAtel harmless, and to
              reimburse NovAtel fully, for any liability, forfeiture, penalty,
              expense, cost or similar obligation incurred by NovAtel arising out
              of any inquiry, dispute, litigation or claim in connection with, or in
              any way related to, directly or indirectly, whether instituted by you or
              another, this Commitment or the terms or obligations of NovAtel
              hereunder, including reasonable attorneys’ fees and legal costs
              related thereto;

       12)    This commitment letter shall be executed on behalf of Applicant and
              an executed copy delivered to NovAtel.

       Both Dataphon and Constitution attached their respective financial commitment

agreements with NovAtel to their multiple applications to the FCC for cellular licenses,

referring to them as follows:

                                             -9-
       The Applicant has significant financial resources at the Applicant’s disposal
       to both construct and operate the cellular radio system, as demonstrated by
       the independently audited balance sheet and Applicant certification attached
       as Exhibit 2.1 and Exhibit 2.2 hereto. See Exhibit 2.3 [NovAtel’s
       commitment] regarding the external financing to be used, if any.

Appellant’s App. (No. 95-5213) at 18; Appellee’s App. (No. 95-5214) at 58 (emphasis

added).

       According to the language just quoted, and its referenced Exhibits 2.1 and 2.2

(financial statements and certifications of Dataphon and Constitution, respectively),

Dataphon and Constitution relied primarily on their own balance sheets to satisfy the

financial qualification requirement of 47 C.F.R. § 22.917(c). But in other parts of their

applications, both entities referred in somewhat ambiguous terms to the NovAtel

commitments as satisfying the “firm financial commitment” requirement of the

regulations:

       Pursuant to these requirements the Applicant has secured, in writing,
       binding firm quotations from a major equipment manufacturer for
       equipment acquisition and installation costs, and associated construction
       items.

       The Applicant is proposing to finance the system’s construction and first
       year’s operating costs by several methods, including internal funding. Full
       compliance with Section 22.917(c) of the Rules is evidenced in Exhibit 2 of
       this Application including all documents required by Section 22.917(c)(6).
       (See Exhibits 2.1, 2.2 and 2.3.)

       The preliminary projected costs for system construction and first year
       operation, are presented in Table 5-1.

       The Applicant’s ability to finance the system’s construction and first-year
       operating costs is demonstrated in Exhibit 2 to this Application. Exhibits

                                           -10-
       2.1 and 2.2 demonstrate the Applicant’s ability to finance these costs
       internally. External financing to be used, if any, is shown in Exhibit 2.3.

Appellant’s App. (No. 95-5213) at 28; Appellant’s App. (No. 95-5214) at 31.

       The agreements, which by their terms expired in one year, were subsequently

renewed through separate, identical agreements in the form of letters from NovAtel to

Constitution and Dataphon, dated July 7, 1989. These renewals referenced as their

subject matter: “Renewal of Financial Commitment--Pending RSA Applications.”

       On October 5, 1989, counsel for Dataphon requested a second financial

commitment from NovAtel to cover Dataphon’s “second lottery win in the South Carolina

4 - Chesterfield RSA held on October 4, 1989.” Appellant’s App. (No. 95-5213) at 94.

The letter stated, among other things, that Dataphon needed to file a financial

commitment with the FCC on November 6, 1989. NovAtel then issued its substitute

commitment letter, dated October 12, 1989, along with a further letter-agreement adding

material financial benchmark provisions. The substitute commitment, including the

accompanying agreement, directly addressed a commitment for the South Carolina - 4

Chesterfield RSA, while leaving the original commitment in force for other RSAs.

Specifically, the substitute commitment provided that:

       [T]his letter sets forth a commitment in addition to the commitment set
       forth in the June 23, 1988 letter insofar as that letter was and is being relied
       upon by you and was incorporated into your applications for FCC permits to
       construct cellular radiotelephone systems in other rural service areas,
       specifically including but not limited to the Colorado - 7 RSA.

                                             -11-
Id. at 97.4

       On November 15, 1989, counsel for Dataphon again wrote NovAtel, this time

pointing out that a material provision had been omitted from the October 12 commitment

agreement, and requesting a replacement commitment letter containing the provision.

The replacement, dated December 7, 1989, was provided by NovAtel on that date.

                                             B.

       As indicated above, Dataphon did refer to the financial commitment by NovAtel in

filings with the FCC. It did obtain a permit from the FCC. And, it did not purchase

NovAtel equipment or obtain any loan from NovAtel. Rather, it sold and assigned the

license for the South Carolina - 4 Chesterfield RSA to U.S. Cellular.

       Also, as indicated above, Constitution did refer to the financial commitment by

NovAtel in filings with the FCC. It did obtain a license from the FCC. And, it did not

purchase NovAtel equipment or obtain any loan from NovAtel.

       Alberta filed these actions for liquidated damages in 1995, several years after the

events in question. Its argument is straightforward: paragraph 5 of the agreements

specifies $100,000 in liquidated damages if Dataphon and Constitution, respectively,

       4
         The reference to June 23, 1988, is apparently in error, with the reference properly
being to the original commitment agreement dated July 8, 1988, which Alberta attached
to its complaint. The complaint filed by Alberta against Dataphon also is less than clear
regarding the differently dated agreements. The complaint refers in paragraph 11 to the
October 12, 1989, agreement, but attaches only the July 8, 1988, agreement.

                                            -12-
refer to the financial commitment in any filing or application with the FCC and

subsequently fail to purchase NovAtel equipment. Alternatively, it argues unjust

enrichment, and that the district court erred in failing to address this alternative theory.

       Dataphon and Constitution advance the same arguments on appeal that they made

in the district court. They contend that sub-paragraph 5 created two conditions precedent

to any duty to actually purchase NovAtel equipment. First, they had to actually construct

a cellular system in the RSA. Second, they had to actually draw on the NovAtel funds for

the construction. Since it is undisputed that Dataphon did neither, Dataphon argues it has

no liability for damages. Constitution admits that its assignee, Alpine, did construct a

system, but argues that NovAtel did not loan it any money and, in any event, the system it

built cost more than $1,000,000, and its agreement with NovAtel applied only to

construction and operation of a system for $1,000,000 or less.

       In the alternative, Dataphon and Constitution argue that the liquidated damage

provision in paragraph 5 is unenforceable because the entire Agreement is merely an

“agreement to agree.” In support, they point to the prefatory language of numbered

paragraph 4 of the Agreement, which refers to the financing arrangement “[a]s presently

envisioned.” And, numbered paragraph 6 predicates the lending of money on the parties

entering into “all necessary agreements reasonably required by NovAtel . . . .” All this,

Dataphon and Constitution urge, demonstrates that the agreement was fatally incomplete.

                                             -13-
       Finally, Dataphon and Constitution argue that any duties and liabilities they may

have had expired along with the Agreements themselves: no later than December 1990,

in the case of Dataphon, and July 1990, in the case of Constitution. Dataphon notes that

the transfer of its FCC permit to U.S. Cellular occurred over a year after the Agreement’s

expiration.

       In response, Alberta contends that sub-paragraph 5 does not predicate Dataphon’s

liability on the actual lending of money or the actual construction of a cellular system in

the RSA. Yet, even if such conditions precedent existed, Alberta argues, Dataphon could

not rely on them because Dataphon prevented their occurrence by selling the permit to

U.S. Cellular. Furthermore, Alberta asserts that Dataphon and Constitution should be

estopped from claiming that the Agreements are nonbinding because they benefited from

the Agreements by relying on them in their FCC applications. Alberta also contends that

the district court erred in refusing discovery into the cost, and related matters, of the

system constructed by Alpine.

       As to all these arguments, we review the grant of summary judgment de novo,

Universal Money Ctrs., Inc. v. American Tel. & Tel. Co., 22 F.3d 1527, 1529 (10th Cir.),

cert. denied, 115 S. Ct. 655 (1994), and we may affirm upon any ground supported by the

record. Sat-Tech Int’l Corp. v. Delutes (In re Sat-Tech Int’l Corp.), 47 F.3d 1054, 1057

(10th Cir. 1995).

                                             -14-
                                      II. DISCUSSION

       The parties insist that the agreements are unambiguous. On the points argued by

the parties, we conclude that is so with respect with Dataphon, but not as to Constitution.

Because the Dataphon Agreement contains no relevant ambiguities, we ascertain the

intentions of Dataphon and NovAtel from the agreement as a whole. See Public Serv. Co.

of Oklahoma v. Burlington N. R.R. Co., 53 F.3d 1090, 1097 (10th Cir. 1995); Dillard &

Sons Constr., Inc. v. Burnap & Sims Comtec, Inc., 51 F.3d 910, 914 (10th Cir. 1995);

Heskett v. Heskett, 896 P.2d 1200, 1202 (Okla. Ct. App. 1995).

       At the outset we reject three arguments advanced by both Dataphon and

Constitution. First, these are not agreements to agree. It is untenable for Dataphon and

Constitution to so argue when they represented to the FCC that the agreements were

binding. All the material terms are contained in the agreements, and it is significant in

this regard that Dataphon’s counsel insisted on a reissued commitment because a material

term had been omitted. Collateral documents necessary to effectuate the terms of the

agreements had ascertainable standards by reference to common commercial practice,

FCC rules and policies, and other NovAtel transactions. It is a settled principle that the

law does not favor invalidation of agreements on the grounds of uncertainty, and a

contract is not void for uncertainty because it fails to set out all details with respect to the

subject matter if it can be ascertained with a reasonable degree of certainty what the

parties intended. Brown v. Bivings, 277 P.2d 671, 673 (Okla. 1954). That is the case

                                              -15-
here. See First Nat’l Bank of Chicago v. Atlantic Tele-Network Co., 946 F.2d 516 (7th

Cir. 1991); Teachers Ins. and Annuity Ass’n of Am. v. Tribune Co., 670 F. Supp. 491,

498 (S.D.N.Y. 1987) (finding in a loan commitment context that the obligation of good-

faith performance “bar[s] a party from renouncing the deal, abandoning the negotiations,

or insisting on conditions that do not conform to the preliminary agreement”).

       Second, the fact that Dataphon and Constitution filed financial statements with the

FCC showing an ability to finance the systems in question from internal sources does not

demonstrate that NovAtel’s financial commitments were essentially meaningless. The

applications show on their face that Dataphon and Constitution considered NovAtel’s

commitments to be material and necessary. And, subsequent renewal requests (some with

considerable urgency) confirm that fact. We have no difficulty concluding that NovAtel’s

commitments were valuable to Dataphon and Constitution, and that they relied on them in

their filings and applications with the FCC.

       Third, Dataphon and Constitution were not excused from the damage provision of

paragraph 5 after expiration of the term of the contracts. By availing themselves of the

benefit of NovAtel’s financial commitment in filings with the FCC, Dataphon and

Constitution obligated themselves under paragraph 5 for the term of the agreements and

at least a reasonable time thereafter. Whatever period that may be, we conclude that it did

not expire here.

       From this point the two cases diverge, so we address them separately.

                                           -16-
                                        A. Dataphon

       Once again, paragraph 5--the damages provision of the agreements--provides as

follows:

       The system[s] to be constructed using the proceeds of the loan we have
       committed to providing herein must utilize cellular system equipment and
       ancillary equipment and services supplied by NovAtel. Should you refer to
       this commitment in any filing or application presented to the FCC in
       connection with one of the proposed systems listed on Schedule A, and fail
       to purchase NovAtel equipment in connection with the construction of a
       system listed on Schedule A, there shall become immediately due and
       payable from Applicant to NovAtel a fee of U.S. $100,000 in liquidated
       damages[.]

       Dataphon did not purchase any equipment from NovAtel because it sold its rights

to U.S. Cellular. In its brief, Alberta relies heavily on the “fail to purchase” clause in

isolation, arguing that since Dataphon “failed to purchase,” it owes NovAtel $100,000. In

the process, Alberta essentially converts the “liquidated damages” to a fee for NovAtel’s

financial commitment. That interpretation of the second sentence of paragraph 5 is

unsupportable for three reasons.

       First, the contract does not have any force-majeure clause, does not address the

possibility of a sale by Dataphon of all of its rights, and in other respects does not address

the multitude of possibilities that might result in a “failure to purchase” NovAtel

equipment. It would be an extraordinarily expansive reading of the “fail to purchase”

                                             -17-
clause to conclude that the parties intended Dataphon to pay $100,000 to NovAtel under

any conceivable circumstance which could result in nonpurchase.5

       Second, Alberta’s theory that the $100,000 damage figure converts to a fee for the

financial commitment is not borne out by the text of paragraph 5. If the parties intended

something of that nature, they would have expressed it in fuller terms--possibly in a

separate paragraph reserved for that purpose--especially in view of the fact that the

opening paragraph of the agreement recites $1.00 as sufficient consideration for the

financial commitment.

       Third, Alberta’s repeated emphasis on the “fail to purchase” clause completely

neglects the clause’s relationship to the rest of the sentence:

       Should you refer to this commitment in any filing or application presented
       to the FCC in connection with one of the proposed systems listed on
       Schedule A, and fail to purchase NovAtel equipment in connection with the
       construction of a system listed on Schedule A, there shall become

       5
        In the context of the FCC applications here, it is understandable why NovAtel
may not have had assignment of Dataphon’s rights in mind in connection with these
agreements. FCC regulations required applicants to warrant that they actually intended to
construct and operate the cellular station. See, e.g., 47 C.F.R. § 22. 923(b)(7) (1988). In
their applications, both Dataphon and Constitution stated:

       The Applicant warrants that the Applicant’s motivation for filing this
       application is the Applicant’s intention to provide cellular service to the
       public. The Applicant is specifically not interested in obtaining this license
       for sale or other disposition at any time, and is applying to construct and
       operate the system as a business venture.

Appellant’s App. (No. 95-5213) at 18; Appellant’s App. (No. 95-5214) at 20.

                                             -18-
       immediately due and payable from Applicant to NovAtel a fee of U.S.
       $100,000 in liquidated damages[.] (emphasis added).

The sentence refers directly to Dataphon (“should you . . .”), and the clause, on its face,

does not address a situation where there is no construction. Taken in conjunction with the

first sentence in paragraph 5, the second sentence essentially stands for the unremarkable

proposition that if Dataphon takes advantage of the financial commitment in its filings

with the FCC, it may not use a competitor’s equipment when it constructs a system,

unless it pays damages to NovAtel.

       This agreement simply reflects NovAtel’s marketing strategy of extending the

inducement of financial commitments to secure the subsequent sale of its products when

a successful applicant actually constructs a cellular telephone system, and imposing a

penalty if a competitor’s equipment is used. Thus, we do not read the second sentence in

paragraph 5 as expansively as Alberta. To the extent there is any doubt on the point, we

resolve it against the drafter, NovAtel, especially since we are dealing with a damages

provision.

       On this view of the contract, Alberta’s unjust enrichment argument fails as well,

since Dataphon was doing no more than the agreement permitted.

                                      B. Constitution

       Constitution presents a different situation because it did (through Alpine) construct

a system and failed to purchase NovAtel equipment. Yet, Constitution argues among

                                             -19-
other things, that it was excused from the obligation to purchase NovAtel equipment

because its agreement with NovAtel was limited to a $1,000,000 commitment and the

system built by Constitution cost substantially more. We find the contract ambiguous on

this point.

       As previously noted, the first sentence of paragraph 5 stands for the unremarkable

proposition that any money advanced by NovAtel must be used to purchase NovAtel

equipment. It does not, as Constitution contends, require an actual extension of the loan

as a pre-condition to the damages provision in the next sentence. But the two sentences

of paragraph 5 are plainly related to each other, as well as to the terms of the rest of the

agreement. All these terms relate to a specific loan maximum, and to the construction of

a specified system costing less than that maximum. Whether the parties intended the

second sentence of paragraph 5 to have a more expansive meaning than construction of a

system costing less than $1,000,000 is not clear.

       Furthermore, there are troubling ancillary questions. Constitution represented both

in the initial agreement and in its request for a renewal one year later that the system it

was going to construct would cost less than $1,000,000, leading NovAtel to proceed on

that basis. It is wholly unexplained on this record how the cost suddenly increased to as

much as $3,000,000 without (a) implicating whether there was a misleading

representation on the part of Constitution to begin with, or (b) questions about the cost

and nature of the system actually built compared to the one originally envisioned by

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NovAtel and Constitution. And, finally, depending upon the evidence, it is conceivable

that the doctrine of unjust enrichment may apply as asserted by Alberta.

       In any event, we cannot decide within the four corners of the agreement or on the

face of this record that there is no genuine issue as to any material fact and that one party

should prevail as a matter of law. Accordingly, this case must be developed further in the

district court. Beyond views expressed herein, we express no opinion on the availability

or merit of any defense or issue which may be raised on remand.

                                III. ATTORNEYS’ FEES

       With respect to Dataphon, we affirm the district court’s denial of attorneys’ fees.

We have recently explained that the Oklahoma courts strictly construe the fee-shifting

provisions of Okla. Stat. tit. 12, § 936 (1991). Octagon Resources, Inc. v. Bonnett

Resources Corp. (In re Meridian Reserve, Inc.), 87 F.3d 406, 411-12 (10th Cir. 1996).

Here, the district court determined that the agreement was a financial commitment, not a

contract for the purchase or sale of goods. While the agreement created the possibility of

a future contract for the sale of goods, such a contract never actually arose. Dataphon

itself has never contended otherwise. We find no error in the district court’s application

of the statute.

       Consistent with our disposition of the case involving Constitution, we vacate the

district court’s judgment denying attorneys’ fees and remand that question as well.

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                                 IV. CONCLUSION

      The summary judgment in No. 95-5213 is AFFIRMED. The judgment denying

attorney’s fees in No. 96-5000 is also AFFIRMED.

      The judgment in No. 95-5214 is REVERSED, and the case is REMANDED for

further proceedings consistent with this opinion. The judgment in No. 96-5001 is

VACATED.

                                                 ENTERED FOR THE COURT

                                                 Stephen H. Anderson
                                                 Circuit Judge

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