FOR PUBLICATION
ATTORNEY FOR APPELLANT: ATTORNEYS FOR APPELLEES:
SCOTT D. HIMSEL IRWIN B. LEVIN
Baker & Daniels RICHARD E. SHEVITZ
Indianapolis, Indiana SCOTT D. GILCHRIST
Cohen & Malad, P.C.
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
TIME WARNER ENTERTAINMENT )
COMPANY, L.P., )
)
Appellant-Defendant, )
)
vs. ) No. 49A02-9910-CV-719
)
KELLY J. WHITEMAN and )
JEAN WILSON, )
)
Appellees-Plaintiffs. )
APPEAL FROM THE MARION SUPERIOR COURT
The Honorable John L. Price, Judge
Cause Nos. 49D11-9803-CP-420 and 49D06-9803-CP-423
January 16, 2001
OPINION – FOR PUBLICATION
DARDEN, Judge
STATEMENT OF THE CASE
Time Warner Entertainment Company, L.P., (“Time Warner”), appeals the
trial court’s grant of a motion to correct error filed by Kelly Whiteman
and Jean Wilson (collectively “the Plaintiffs”) in their consolidated
action against Time Warner.
We affirm in part and reverse in part.
ISSUE
Whether the trial court erred in granting the Plaintiffs’ motion to correct
error.
FACTS
The facts are undisputed. Time Warner provides cable services to
subscribers in Indianapolis. Subscribers are billed monthly, in advance.
Time Warner charges a $4.65 late fee if its subscribers do not timely pay
their monthly cable bills.
The Plaintiffs are Time Warner subscribers. When they subscribed to
Time Warner’s programming service, the Plaintiffs signed contracts that
expressly permit Time Warner to charge a late fee if the Plaintiffs fail to
pay their cable bills by the due date listed on their bills. The Time
Warner contracts refer to the late fee as a “handling charge” and as an
“administrative charge.” (R. 360, 363). Monthly cable bills also remind
customers to pay their bills by a certain date to avoid paying the $4.65
late fee. The Plaintiffs have paid late fees in the past.
The Plaintiffs filed actions against Time Warner in January 1998 and
February 1998, respectively, on behalf of themselves and a putative class
of others similarly situated. The complaints allege[1] that Time Warner’s
late fee is unlawful and unenforceable because it is excessive,
unreasonable, and a penalty. The two actions were consolidated in April
1998. The claims raised in the Plaintiffs’ complaints fall into two
categories: 1) claims for money damages which seek to recover the allegedly
excessive late fees that Time Warner has collected in the past, and 2)
claims for declaratory and injunctive relief which seek to prohibit Time
Warner from charging an allegedly excessive late fee in the future.
In July 1998, Time Warner filed a motion to dismiss the Plaintiffs’
claims for money damages pursuant to Ind. Trial Rule 12(b)(6) on the
grounds that (a) none of the Plaintiffs’ claims for money damages state a
cognizable claim under Indiana law, and (b) such claims, even if
actionable, are barred by the voluntary payment doctrine. Time Warner’s
motion also requested summary judgment as to the Plaintiffs’ claims seeking
to both declare the late fee invalid and enjoin Time Warner from collecting
the fee in the future. In its summary judgment motion, Time Warner
contended that its late fee is a valid liquidated damages assessment. In
support of its contention, Time Warner designated, among other things, a
1997 Time Warner cost study and the affidavit of Rick Langhals, Vice
President of Finance for Time Warner in Indianapolis.
According to Langhals, Time Warner charges a late fee to recover some
of the costs that the company incurs when customers fail to timely pay
their cable bills. Langhals explained that Time Warner conducted a study
of the costs that it incurred from January through November 1997 due to the
failure of its customers to timely pay their bills. On average, 24% of
Time Warner’s 84,000 Indianapolis cable subscribers failed to timely pay
their cable bills each month. That leads to a total of 202,558 customers
who failed to timely pay their cable bills within the ten-month study
period. Time Warner’s cost study identified the cost of the extra work
that Time Warner employees had to do because the subscribers failed to pay
their bills on time.
For example, Time Warner has a collection manager and 11 collection
employees who spend 96% of their time communicating with the late payers.
In addition, general customer service representatives spend 18% of their
days dealing with late payers, and lobby personnel spend 39% of their days
serving late payers. In addition, Time Warner employs field collectors who
visit subscribers at their homes.
Time Warner used these percentages to determine what portion of its
building, utilities and salaries to include as costs attributable to late
payments. Time Warner also included in its study data processing, postage
and other expenses incurred as a result of late payments. In addition,
Time Warner included in the study its costs resulting from the loss of use
of money because customers paid late. As a result of the ten-month study,
Time Warner determined that the 202,558 delinquent customers caused the
company to incur costs of $1,035,139 – a $5.11 monthly net cost per
delinquency. Therefore, according to Time Warner, its $4.65 monthly late
fee does not even cover the costs that it incurs as a result of late
payments.
The Plaintiffs filed a response to Time Warner’s summary judgment
motion and designated, among other things, an affidavit of Andrea Crane and
a declaration of John Lehman. Crane is a regulatory rate-setting
consultant who has testified in more than 80 administrative proceedings on
issues relating to cable television and other utilities. Most of the
proceedings involved issues regarding the appropriate costs to recover from
ratepayers through regulated rates. At the time she prepared her
affidavit, Crane had been the sole consultant to the state of New Jersey,
Division of Rate Payer Advocate, on all cable television matters for the
previous five years. In this capacity, Crane has reviewed and analyzed
approximately 200 cable television rate filings, including Federal
Communications Commission forms, which govern the rates charged by cable
providers such as Time Warner.
In preparing her affidavit, Crane reviewed Langhals’ affidavit, Time
Warner’s cost study, and FCC forms filed by Time Warner. According to
Crane, Time Warner uses the FCC’s benchmark method to set its rates for
cable services. The benchmark form of regulation is designed to cover all
costs and provide a profit. According to Crane, Time Warner’s late fee
cannot be justified as a fee necessary to recover costs associated with
delinquent payers because those costs are already recovered in the
benchmark rate. Further, Time Warner’s use of late fees to recover costs
included in the FCC’s basic rate structure results in a double recovery of
these costs – once through Time Warner’s FCC- approved rates and again
through the collection of a separate late payment fee.
Crane further explained that the methodology employed in Time
Warner’s cost study is flawed because it includes “many costs in excess of
those incremental costs directly related to the collection of late
payments.” (R. 1262). Specifically, Crane explained as follows:
Many of the costs included in the study relate to costs for non-
collection. These costs result from customers who do not pay their
bills at all, and are not directly attributable to customers who
simply pay late.
Time Warner Indianapolis has included costs for various salary and
wage categories in its late fee study. However, Company has not
demonstrated that these costs are incremental to the late payment
function. In some cases, these costs relate to overhead positions
such as the Director of Human Resources. In my opinion, Time Warner
Indianapolis would not experience lower costs for these positions if
all customers made timely payments.
Time Warner has included costs such as general insurance, utilities,
property taxes, and depreciation in its late fee costs. In my
opinion, none of these costs should be included in a late fee since
the level of general insurance, utilities, property taxed, and
depreciation does not change as a result of late payments.
Time Warner also included 30% of its data system billing costs in its
late payment costs. No documentation was provided for this estimate.
Moreover, it is likely that at least some of these costs relate to
nonpaying customers, rather than late paying customers, and therefore
these costs should not be included in late payment fees.
(R. 1262).
Crane concluded her affidavit as follows:
(i) Time Warner Indianapolis is already recovering through its FCC-
approved cable service rates, which were established using the
benchmark methodology, the costs represented to be recovered through
its late fee; (ii) Time Warner may also be recovering some of these
costs in the equipment and installation rates charged to customers;
(iii) the Time Warner cost study contains many costs that are not
incremental to late payments and are therefore inappropriate for
inclusion in a cable late fee.
(R. 1262).
John Lehman is a certified public accountant who has provided
analysis and testimony on behalf of cable television customers and
regulators in cases concerning the reasonableness of late payment fees
charged subscribers for late payments by at least fifteen cable television
providers. Like Crane, Lehman reviewed Time Warner’s cost study and
Langhals’ affidavit. According to Lehman, based upon his training and
experience, Time Warner’s $4.65 late fee is “not reasonable” and “bears no
relation to the actual costs incurred by Time Warner when a customer fails
to pay a bill on time.” (R. 709). Lehman averred that the premise for
Time Warner’s cost study was flawed. Specifically, Lehman explained as
follows:
8. Time Warner’s cost study does not reflect the costs caused by a
subscriber who fails to pay a cable bill on time. Instead, the cost
study is a study of the average of aggregate costs, including costs of
overhead and infrastructure, which Time Warner claims are associated
with those who pay late and those who never pay at all. Costs of
overhead and infrastructure are not causally related to a subscriber’s
failure to pay on time. Rather, these costs, (including building,
insurance, utilities and the like) would exist whether or not a
subscriber pays a bill late. These overhead or infrastructure costs
are costs of doing business and should not be included as costs
incurred because a cable television subscriber fails to pay a bill on
time. . . .
12. Similarly, the majority of costs Time Warner’s cost study claims
are associated with customer service and the lobby payment center are
inappropriately allocated as costs associated with late-fee payments.
Customer service representatives, telephones, cashiers and other
infrastructure are also necessary elements of running a cable business
whether an individual subscriber pays late or not. Moreover, the time
allegedly spent by customer service representatives in dealing with
delinquent accounts, as shown in the cost study, is suspect.
According to industry experience, most customers who pay late,
actually end up paying their bill within two weeks of being assessed
the late fee. Time Warner’s own cost study shows that over half of
its “delinquent” customers, those who are assessed a late fee, pay
before Time Warner engages in any activity to collect on the
delinquent accounts. As a result, customer service representatives do
not typically spend a great deal of time in collection activities.
(R. 709-711). Lehman concluded that the maximum charge caused by a
subscriber who pays late is “no more than $.36 . . . .” (R. 711).
After a hearing, on July 9, 1999, the trial court issued a 20-page
order granting Time Warner’s motions. Therein, the trial court dismissed
the Plaintiffs’ claims for money damages. Specifically, the court 1)
entered a T.R. 12(B)(6) dismissal of the Plaintiffs claims for money
damages, and 2) entered summary judgment in favor of Time Warner on the
Plaintiffs’ remaining claims for declaratory and injunctive relief.
The Plaintiffs filed a motion to correct error in August 1999. After
a hearing, the trial court issued an order 1) granting the motion to
correct errors, 2) vacating the previously granted motions to dismiss and
for summary judgment, and 3) denying Time Warner’s motions to dismiss and
for summary judgment. It is from this order that Time Warner appeals.
DECISION
As a preliminary matter, the parties disagree on the standard of
review. Time Warner argues that the standard of review is de novo. The
Plaintiffs argue that because we are reviewing the grant of a motion to
correct error, the standard of review is abuse of discretion. Although the
judgment from which the motion to correct error was granted included a T.R.
12(B)(6) dismissal and summary judgment, the judgment from which Time
Warner appeals is the order granting the motion to correct error. See
Heredia v. Sandler, 605 N.E.2d 1212, 1215 (Ind. Ct. App. 1993). A decision
to grant a motion to correct error is reviewed for an abuse of discretion.
See Malacina v. Malacina, 616 N.E.2d 1061, 1062-63 (Ind. Ct. App. 1993).
However, because we must determine whether the trial court abused its
discretion by altering its decision as to the T.R. 12(B)(6) dismissal and
the summary judgment, those standards are implicated as well. See Heredia,
605 N.E.2d at 1215.
We turn to the parties’ contentions. As noted in the facts, the
claims raised in the Plaintiffs’ pleadings fall into two categories: 1)
claims for money damages which seek to recover the allegedly excessive late
fees that Time Warner has collected in the past, and 2) claims for
declaratory and injunctive relief which seek to prohibit Time Warner from
charging an allegedly excessive late fee in the future.
I. Money Damages
Time Warner argues that the trial court erred in granting the
Plaintiffs’ motion to correct error, thereby vacating its order of
dismissal of the Plaintiffs’ claims for money damages, because none of the
Plaintiffs’ claims for money damages state a cognizable claim under Indiana
law. “In reviewing a ruling on a motion to dismiss, we stand in the shoes
of the trial court and must determine if the trial court erred in its
application of the law.” American Dry Cleaning & Laundry v. State, 725
N.E.2d 96, 98 (Ind. Ct. App. 2000). We will view the pleadings in a light
most favorable to the plaintiffs and draw every reasonable inference in
their favor. See Ratliff v. Cohn, 693 N.E.2d 530, 534 (Ind. 1998). A
motion to dismiss is proper if it is apparent that the complaint states a
set of facts and circumstances, which, even if true, would not support the
relief requested. See Minks v. Pina, City of Hammond et al., 709 N.E.2d
379, 381 (Ind. Ct. App. 1999), trans. denied.
Time Warner contends that the voluntary payment doctrine bars relief
in favor of the Plaintiffs on their claims for money damages. Because the
voluntary payment doctrine is dispositive as to the claims for money
damages, we will address the claims in that context.
The general rule is that “a voluntary payment made under a mistake or
in ignorance of law, but with a full knowledge of all the facts, and not
induced by any fraud or improper conduct on the part of the payee, cannot
be recovered back.” City of Evansville v. Walker, 162 Ind. App. 121, 318
N.E.2d 388, 389 (1974) (quoting 23 I.LE., Payment § 43, p. 136). In City
of Evansville, the plaintiffs sought to recover parking fines they paid for
violations issued on federal property that was not within the city’s
authority. The plaintiffs discovered the lack of authority after they had
paid the fines. The court determined that recovery was barred because the
plaintiffs had sufficient knowledge of the facts to render the payments
voluntary. Id. The court stated:
The appellees had the opportunity to plead not guilty and
challenge their [parking] citations. Instead they chose to plead
guilty and voluntarily pay their fines under the mistaken belief that
valid city ordinances covered the lots in question. Under the above
rule of law the fines, therefore, are not recoverable.
Id. at 390; see also Hollingsworth v. Stone, 90 Ind. 244, 246-47 (1883)
(money paid even under compulsion of legal process is voluntary when no
mistake of fact or fraud induced the payment); Brune v. Marshall, 169 Ind.
App. 637, 350 N.E.2d 661, 663 (1976) (voluntary payment doctrine barred
recovery of fee paid for unauthorized program even though parties
mistakenly believed the program was authorized at the time of payment). We
conclude that knowledge by the payor and fraud or imposition by the payee
are the two key factors in application of the voluntary payment doctrine.
Time Warner directs us to cases from other jurisdictions which have
held that the doctrine bars cable subscribers from recovering a late fee
that they have already paid to their cable provider. In Hassen v. Mediaone
of Greater Florida, 751 So.2d 1289, 1290 (Fla. Dist. Ct. App. 2000), the
court recognized that the cable subscribers did not have knowledge of
whether the actual costs incurred by the cable company due to late payments
were related to the late payment fee imposed by the company. The court
stated:
It does not matter that the payment may have been made upon a mistaken
belief as to the enforceability of the demand, or liability under the
law, as long as payment is made with knowledge of the factual
circumstances. . . . [P]ayment should ordinarily be deemed voluntary
unless the circumstances present some constraint or compulsion of such
a degree as to impose a necessity of payment sufficient to overcome
the mind and will of a person of ordinary firmness. The appellants’
desire for cable television services, and their assertion of a right
to make late payment for such services without incurring late charges
in the amounts here imposed, are not such circumstances as to destroy
the voluntary character of the appellants’ payment. Even if the
appellants were unaware of the actual costs which the appellee
incurred in connection with the late payment, the appellants were
informed of the payment deadlines and the possibility that the late
charges could be imposed upon late payment.
Id.; see also Telescripps Cable Co. v. Welsh, No. A00A1179, 2000 WL 1727853
(Ga. Ct. App. Nov. 22, 2000) (citing Hassen, and determining the voluntary
payment doctrine precluded recovery of money paid in late fees entitling
cable company to dismissal of plaintiffs’ claims); McWethy v. Telecomm.,
Inc., 988 P.2d 356, 357-58 (Ok. Ct. App. 1999) (affirming dismissal on
basis of voluntary payment doctrine where customer had knowledge of the
late payment fee by its inclusion in service contract).
Here, the Plaintiffs contend that they paid the fees without
knowledge that the late fees did not accurately reflect the costs
associated with late payments by the subscribers. The Plaintiffs argue
that the voluntary payment doctrine does not apply in this case because
“they paid Time Warner’s late fees without full knowledge of the facts.”
Plaintiffs’ Brief at 15. Specifically, they contend that they did not have
knowledge that Time Warner’s late fees were unreasonable and amounted to a
penalty. In support of their contention, in a submission of additional
authority,[2] they direct us to TCI Cablevision of Dallas v. Owens, 8
S.W.3d 837 (Texas Ct. App. 2000), wherein TCI appealed the trial court’s
certification of a class. TCI argued that the voluntary payment doctrine
barred the claim. The Texas Court of Appeals noted that “other
jurisdictions . . . are divided in applying the voluntary payment rule to
claims regarding the payment of late fees for cable television service.
Considering the split of authority and [the plaintiff’s] statement that he
did not have full knowledge of the material facts, it is far from clear
that the voluntary payment doctrine applies here.” Id. at 845. The Texas
court affirmed certification of the class.
The authority from other jurisdictions is instructive with regard to
the type of knowledge that bars recovery of “payment[s] made under a
mistake or in ignorance of law . . . .” See City of Evansville, 318 N.E.2d
at 389 (reciting Indiana’s voluntary payment doctrine). The weight of the
authority from other jurisdictions leads to a conclusion that even where
the claim for money damages is based upon an assertion that the late fee
payments, as established within the contract, were made without full
knowledge of the costs incurred by the entity demanding the late payment
fee, the voluntary payment doctrine is applicable. The onus is upon the
party making the payment to inquire about the reasonableness of the charge
before making the payment, or perhaps before signing the contract that
specifies the late charge.
In addition to knowledge of the circumstances, the other principle
factor in determining whether recovery is barred by a voluntary payment is
the compulsion to pay. In Smith v. Prime Cable of Chicago, 658 N.E.2d 1325
(Ill. Ct. App. 1995), the court determined that the voluntary payment
doctrine barred recovery of the payment for a pay-per-view program where
the customers paid to prevent interruption of cable service or damage to
their credit. The customers paid the charge after lodging a protest by
filing suit. The court stated:
Ordinarily, payment made pursuant to threat of litigation or to
prevent the bringing of a legal action is regarded as voluntary for
the reason that an ample remedy by way of defense to the suit would
exist and because no loss could occur until the lawsuit was instituted
and proceeded to judgment. Thus, Plaintiffs’ allegations that they
made payment to avoid the threat of lawsuit or actual institution of a
lawsuit against them for failure to make payment would not support a
finding of payment under compulsion.
A similar result is warranted with respect to Plaintiffs’ allegations
of threat of or actual loss of cable service based upon their prior
experience with Prime Cable. As stated above, in order to render
payment compulsory, there must have been some necessity and “such
pressure must be brought to bear upon the person paying as to
interfere with free enjoyment of his rights of person or property.”
That pressure is established by allegation of some actual or
threatened power wielded over the payor from which he has no immediate
relief and from which no adequate opportunity is afforded to
effectively resist the demand for payment. Here we question whether
cable service is a necessity such that the loss or threatened loss
thereof could ever furnish the motive for payment under compulsion or
economic duress.
Id. at 1332-33 (citations omitted); cf. Beachlawn Building Corporation v.
City of St. Clair Shores, 121 N.W.2d 427 (Mich. 1963) (determining that
builder did not pay municipalities’ building fees voluntarily because fees
were unlawful exactions paid under compulsion or duress of discontinuing
builder’s business).
We agree with the jurisdictions that have held that the potential loss
of cable service, or the threat of litigation will not support the type of
compulsion necessary to render the late fee payments involuntary. Review
of the Plaintiffs’ complaints does not reveal the possibility of any other
compulsion.
Because the pleadings do not reveal any circumstances under which the
Plaintiffs could recover money damages and avoid the voluntary payment
doctrine, the trial court abused its discretion by granting the Plaintiffs’
motion to correct error as to the money damages portion of their claim.
II. Declaratory and Injunctive Relief
Time Warner also argues that the trial court erred in granting the
Plaintiffs’ motion to correct error that reversed the grant of summary
judgment for Time Warner with regard to the Plaintiffs’ requests for
declaratory and injunctive relief to prohibit excessive late fee charges in
the future.
Summary judgment is appropriate only if the designated evidentiary
matter shows that there is no genuine issue as to any material fact and the
moving party is entitled to judgment as a matter of law. Warner Trucking,
Inc. v. Carolina Casualty Ins. Co., 686 N.E.2d 102, 104 (Ind. 1997) (citing
Ind. Trial Rule 56(C)). In reviewing the trial court’s entry on a summary
judgment motion, we apply the same standard used in the trial court, i.e.,
whether there is no genuine issue of material fact and the moving party is
entitled to judgment as a matter of law. Shell Oil Co. v. Lovold Co., 705
N.E.2d 981, 983-84 (Ind. 1998).
Time Warner directs us to Gershin v. Demming, 685 N.E.2d 1125, 1128
(Ind. Ct. App. 1997), as authority for the proposition that its late fee is
a permissible, valid liquidated damages charge, not an impermissible
penalty. “Where the sum stipulated in the agreement is not greatly
disproportionate to the loss likely to occur, the provision will be
accepted as a liquidated damages clause and not as a penalty . . . .” Id.
However, where the amount set as liquidated damages is grossly
disproportionate to the loss which may result from the breach, the courts
will treat the sum as a penalty rather than as liquidated damages. Id.
Time Warner argues that, as in Gershin, its late payment fee is not
greatly disproportionate to its loss. Specifically, Time Warner contends
that pursuant to Gershin, Time Warner is entitled to recover costs incurred
when its subscribers fail to timely pay their monthly cable bills.
According to Time Warner, its 1997 cost study showed that the company
incurs a $5.11 monthly net cost per delinquency. Therefore, its $4.65
monthly late fee does not even cover the costs that it incurs as a result
of late payments.
The Plaintiffs respond that the Crane affidavit and the Lehman
declaration show that the expenses covered in Time Warner’s cost study are
1) subsumed in Time Warner’s benchmark rates, and 2) included expenses that
are not causally related to a customer’s late payment of a bill.
Therefore, according to the Plaintiffs, the Crane affidavit and Lehman
declaration raise
genuine issues of material fact concerning whether costs included in
Time Warner’s cost study duplicate costs recovered under the
‘benchmark rate’ charged to all subscribers. The evidence also raises
genuine issues of material fact concerning whether the costs included
in Time Warner’s cost study may be attributed to late payments at all,
or whether they are instead ‘fixed costs’ that Time Warner would incur
regardless of whether a customer pays late. Any one of these issues
precludes summary judgment, and the trial court properly denied Time
Warner’s Motion.
Plaintiffs’ Brief at 25.
Time Warner responds by attacking Crane’s affidavit and Lehman’s
sworn declaration. Time Warner first contends that Crane and Lehman did
not raise any genuine issues of material fact because they did not base
their statements on admissible facts about Time Warner’s Indianapolis cable
system. Time Warner directs us to Doe v. Shults-Lewis Child and Family
Services, Inc., 718 N.E.2d 738 (Ind. 1999), for the proposition that the
trial court must look behind the expert’s ultimate conclusion and analyze
the adequacy of its foundation. Time Warner further argues that Crane and
Lehman have not stated any accounting principles to support their opinions.
Time Warner again cites Doe for the proposition that an expert opinion
must state the reasoning or methodologies upon which it is based.
In Doe, the court examined Ind. Evidence Rule 702 regarding admission
of expert testimony in light of decisions concerning the requirements for
experts who give scientific testimony, and in the context of a summary
judgment. Id. at 748-51. At issue was an affidavit by a psychiatrist
giving his opinion that a plaintiff suffered repressed memory. In order to
discern "'junk science' from reliable scientific evidence," and to assess
technical information, the court announced the following standard:
Therefore, we believe that an expert opinion affidavit submitted
in a summary judgment proceeding, in addition to asserting admissible
facts upon which the opinion is based, must also state the reasoning
or methodologies upon which it is based. The reliability of the
scientific principles need not be established, but the trial court
must be provided with enough information to proceed with a reasonable
amount of confidence that the principles used to form the opinion are
reliable. The trial court is in the best position to make such
determinations, as it is in the trial court that the issue may be
fully explored. This approach both allows the trial court to perform
its gatekeeping function at the summary judgment stage of the
proceedings and avoids placing an onerous burden upon the nonmoving
party.
Id. at 750-51. The court explained that to raise a genuine issue of
material fact an expert’s opinion must do more than assert bald conclusions
or supply a “bottom line.” Id. at 751.
The affidavits submitted by the Plaintiffs are not mere “bottom line”
assertions of opinions, or bald conclusions as rejected in Doe. Crane’s
affidavit, including her curriculum vitae, exhaustively set out her years
of experience with regulated industries, and the cable industry in
particular. She asserted her knowledge of FCC filings, forms, and cases.
She detailed the materials upon which she relied when she prepared her
affidavit. Further, she averred:
The opinions summarized in this Affidavit are based upon: (i) my
education, training and experience, summarized above and in my
attached Curriculum Vitae; (ii) my familiarity with the FCC’s rules,
regulations, and forms for establishing service rates; (iii) my
experience as a participant in regulatory proceedings concerning the
setting of cable television rates; (iv) my review of the FCC rate-
setting forms filed by Time Warner and its predecessor in
Indianapolis; (v) my review of Mr. Langhals’ Affidavits; (vi) my
review of the Time Warner Cost Study; and (vii) my prior experience
with the establishment of regulated rates and related matters,
including rate-related services for Bell Atlantic Corporation and GTE
Service Corporation.
(R. 1258). Crane’s affidavit connected her experience, the data, and her
conclusions.
The declaration by Lehman recited his accounting experience analyzing
“revenue and costs . . . .” and his previous experience in assessing “the
reasonableness of fees charged subscribers for late payments by at least
fifteen cable television systems . . . .” (R. 707). Lehman summarized the
materials upon which he relied when he prepared his affidavit. He noted
that he relied upon
information regularly and reasonably relied upon by accountants and
other financial experts to conduct the type of analysis and review
that has been requested of me. My conclusions are also based upon my
personal knowledge of the collection and accounting practices of the
cable industry and other industries resulting from extensive
experience analyzing the costs incurred and included in such
practices.
(R. 708). Lehman included a spread sheet he prepared based upon the
materials. Lehman’s affidavit contains information regarding the materials
and methodologies upon which he relied.
In making its determination to grant the motion to correct error with
regard to the summary judgment, the trial court was provided with
sufficient information to proceed with a reasonable amount of confidence
that the principles used to form the experts’ opinions within the
designated affidavits are technically reliable. Cf. Doe v. Shults-Lewis
Child and Family Services, Inc., 718 N.E.2d at 751.
Time Warner also argues that Crane’s opinion that Time Warner already
recovers its late payment in its benchmark rate has no basis in the facts.
Time Warner is incorrect. The Plaintiffs provided documentation to support
the experts’ opinions and the affidavits reveal the facts from which the
opinions were formed.
Time Warner argues that no genuine issue of material fact can be left
for resolution because the issue is one of pure law for the trial court to
determine. See Gershin, 685 N.E.2d at 1128. Time Warner misses the mark.
In Gershin, we reviewed a final determination by the trial court after a
bench trial. Here, the preliminary facts upon which the legal question
rests have not been determined, and are at the heart of the dispute at this
stage in the proceedings. The preliminary facts to be resolved include,
inter alia, whether Time Warner charges at the benchmark rate, and whether
the benchmark rate includes the costs of collecting late payments. No
legal conclusion can be made without the material, foundational issues. As
the matter stands now, the trial court’s ruling granting the motion to
correct error had the effect of undoing the summary judgment. Accordingly,
as yet, the trial court has not been given an opportunity to rule on the
legal question.
We conclude that the affidavits and designated evidence by the
Plaintiffs raise genuine issues of material fact as to the foundational
questions. The evidence demonstrates that the trial court did not abuse
its discretion in granting the motion to correct error with regard to the
summary judgment on the Plaintiffs’ claims for declaratory and injunctive
relief. Therefore, we remand for further proceedings not inconsistent with
this opinion.
Affirmed in part and reversed in part.
MATTINGLY, J., and BROOK, J., concur.
-----------------------
[1] Wilson’s request to dismiss voluntarily a Uniform Commercial Code
claim contained within her complaint was granted by the trial court within
its July 9, 1999 order.
[2] We find inapposite the parties’ submissions of additional authority
that do not address the voluntary payment doctrine or that address the
doctrine in the context of a specific statutory limitation on the amounts
an entity may charge.
