Verizon Virginia LLC et al v. XO Communications, LLC, et al, No. 3:2015cv00171 - Document 83 (E.D. Va. 2015)
Court Description: MEMORANDUM OPINION. Signed by District Judge Robert E. Payne on 11/4/2015. (jsmi, )
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Verizon Virginia LLC et al v. XO Communications, LLC, et al Doc. 83 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Richmond Division VERIZON VIRGINIA, LLC, et al., Plaintiffs, v. Civil Action No. 3:15-cv-171 XO COMMUNICATIONS, LLC et al., Defendants. MEMORANDUM OPINION This matter is before the Court on PLAINTIFFS' PARTIAL JUDGMENT ON THE PLEADINGS (Docket No. MOTION FOR 4 0) , which the Court subsequently converted into a MOTION FOR PARTIAL SUMMARY JUDGMENT at the joint request of the parties 67). For Plaintiffs the reasons with stated regard to the below, the (Order, Court Docket No. finds "Calculation Dispute" for and the finds for the Defendants with regard to the "3-Month Dispute. 11 Relying on the parties' stipulation on damages (Stipulation, Docket No. 69), the Court awards Verizon $2,711,989. Dockets.Justia.com BACKGROUND A. Procedural Posture Plaintiffs are fourteen state or regional Verizon corporate entities (collectively, Communications, Plaintiffs LLC and XO Virginia, filed in this Court LLC on are Defendants "Verizon"). (collectively, March 19, 2015, XO "XO"). alleging several counts stemming from XO's failure to pay fees to Verizon owed under schedules, 1, 50, federal tariff and federally-governed private contracts. Docket No. 1; Am. Cornpl. <JI<JI 1, 50, tariff intrastate schedules, (Cornpl. Docket No. 70). <JI<JI The Complaint additionally alleges that XO failed to pay late fees on those non-payments. (Compl. 3; Am. Compl. <JI 3). <JI The pending motion involves the largest dollar-value claim in the Complaint, the so-called Commitment Discount Plan ("CDP") claim. CDPs offer discounts to customers in exchange for a precommi tment to buy high volumes of Verizon's pre-identified services. However, the CDPs also contain a "shortfall provision" that penalizes the customer's failure to meet those commitments. (Compl. <JI<JI 51-69; Am. Compl. 51-69). Verizon alleged that XO <JI<JI failed to meet its pre-commitments, shortfall fees shortfall fees. and late (Compl. <JI<JI payment and then failed to pay the fees associated 54-69; Am. Compl. 2 <JI<JI with 54-69). these On May 13, 2015, XO filed three motions, including a Motion to Refer Claims for Agency Resolution. to Refer"). On the same date, (Docket No. XO also Affirmative Defenses, and Counterclaims. Answer and Affirmative Defenses, XO 22) its filed ("Motion Answer, (Docket No. 25). In its claimed that incorrectly interpreted the CDP shortfall fee, Verizon had that Verizon had incorrectly calculated the CDP shortfall fee under Verizon's own interpretation, and that the CDP shortfall fee as interpreted by Verizon was unjust and Telecommunications Act. unreasonable (Answer in 7, 2015, Verizon of the 60-65; Affirmative Defenses 3). Verizon opposed all of XO's motions. On August contravention filed (Docket No. 33). this Motion for Partial Judgment on the Pleadings requesting partial judgment on the CDP issue, along with a memorandum in support. for Partial J. on the Pleadings, (Pl.' s Mem. Docket No. 41) in Supp. ("Pl.' s Partial J. Mem."). XO filed its Memorandum in Opposition (Docket No. ("Def.' s main Partial issues interpreted reasonable of the under J. Reply") law ( ( 1) tariff; the ( 2) on August whether whether 21, 2015, Verizon the Telecommunications raising three had tariff Act; 44) and correctly was (3) just and whether Verizon could bring a claim for a certain three-month period in addition to the usual six-month periods) and one issue of fact (whether Verizon had correctly applied its own formula). 3 On August 25, (Order, Court Docket that it 2015, No. 46). the Court denied the Motion to Refer. On August intended to present 31, 2015, several XO informed the CDP-related issues, including the "just and reasonable" nature of the CDP shortfall provision, (Letter, for to the Federal Docket No. Temporary 50) . Communications On August 31, Restraining Order Pursuant to the All Writs Act and Commission ("FCC") . Verizon filed a Motion Preliminary (Docket No. 51) Injunction and a Memorandum in Support of that motion (Docket No. 52), requesting that XO be enjoined from bringing any CDP-related matter to the FCC. The Court ordered accelerated briefing 53) , and (Order, Docket No. held a hearing on the matter on September 8, 2015. At the September 8, motion for an injunction, 2015 hearing, before any ruling on the the parties agreed that, continuing a battle over the appropriate forum, rather than they would agree to an expedited ruling from the Court on the CDP claim by way of summary judgment. (Tr. Sep. 8, 2015 Hr' g, Docket No. 68, 52: 9- 55: 2). To enable this expedited ruling, the parties advised that they would withdraw some of the live issues that had been raised in the briefing on Verizon' s partial summary judgment motion: whether the CDP shortfall provision was just and reasonable, and whether Verizon correctly calculated the shortfall under its own interpretation of the tariff. (Tr. Sep. 8, 2015 Hr' g 52: 9-55: 2) . 4 Subsequently, the parties requested, motion converting Verizon' s and the Rule 12 (c) Court granted, a motion to a Motion for Partial Summary Judgment under Rule 5 6. (Joint Proposed Order, Docket No. 66; Order, Docket No. 67). On September 16, 2015, the parties filed their stipulation on CDP issues, narrowing the dispute to two issues: 1. "[H]ow to calculate the shortfall due under the tariffs in the event a commitment. customer does not ('Calculation Dispute.')" meet its minimum 2). 2. "[W]hether XO owes a shortfall payment for the three-month period from July-September (Stipulation The parties entered stipulated as depending (Stipulation the merits 4). of ( '3-Month Dispute.')" 3). also 2014. on the to the damages resolution should be each of that dispute. In essence, the parties voluntarily submitted the CDP monetary claim to the Court for final resolution. B. Claims at Issue Under the infrastructure Telecommunications available to other Act, 4 7 U.S. C. tariffs (Compl. for CDPs. § 251. 51; Verizon Telephone Companies Tariff FCC No. 5 must telecommunications pursuant to tariffed rates. provide Verizon its companies Two of Verizon' s Compl. 52); ("FCC l") § 25.1; Am. 1 make Verizon Telephone Companies Tariff 25. 1) ) . Under the CDP terms, a FCC No. 11 ("FCC 11") § customer cornrni ts to purchase a certain minimum number of "channel terminations" on a specified service, in discount exchange on all service. which aspects that multiplexers) for (Compl. <JI<JI of are Verizon service required that (transport, to 51-57; Am. Compl. gives provide customer a termination, the specified 51-57; Pl.' s Partial J. <.!I<.!I Mem. 1-5; FCC 1 § 25.1; FCC 11 § 25.1). A customer that does not purchase enough commitment is channel subject terminations to a to shortfall meet the penalty. minimum {FCC 1 § 25.1.7{B); FCC 11 § 25.1.7(B); Pl.'s Partial J. Mero. 3-5). Verizon alleges, and XO agrees, to Verizon' s CDPs in 2004. 57; Answer <JI<JI 57-65) . missed several present, of (Compl. <JI<JI that XO began subscribing 54, Verizon alleges, its pre-commitments 57; Am. Compl. and XO agrees, between 65; Answer <JI<JI enforceable 57-65). (Compl. SI<JI 59-65; Am. and the bills <JI<JI 59- In its Answer, XO denied that the CDP was (on grounds that it was unjust and unreasonable in contravention of the Telecommunications Act) Verizon had correctly calculated the shortfall. The Compl. 54, that XO and that XO received but did not pay Verizon' s for the shortfall amounts. 65) . 2012 c:II<JI parties' subsequent Joint Submission and denied (Answer <Jlc:II reiterated that 57that the parties "dispute ... how that shortfall adjustment should be 6 calculated." of the (Joint Submission, Stipulation, the Docket No. parties' CDP 32, 1). After entry disagreement has two components . 1 The first dispute is interpretation the (Stipulation ! provision, the "Calculation Dispute." argues that of its tariff is unambiguous, shortfall 2). Verizon and that the shortfall must be calculated according to the five-step formula set forth in the tariff. Pleadings, (Pl.' s Docket Reply 45, No. to 3-5) (relying on FCC 1 § 25.1.7(B); that Verizon' s step formula actually Resp. to Mtn. ("Pl.'s FCC 11 § spent, for the calculation preamble to based that Partial 25.1.7(B)). tariff is ambiguous because, calls for J. J. on the Reply") XO asserts although the fiveon what formula a customer describes the penalty as the difference between what a customer spent over the last six months and what a customer "would have" spent over the last six months (Def.'s Partial "had J. the Reply minimum 9). cormnitment According to been XO's satisfied." theory, a rational business actor "would have" bought channel terminations (and only channel terminations) necessary to meet the minimum cormnitment, such that calculating the penalty using the preamble 1 By agreement of the parties, the question whether the shortfall penalties are just and reasonable has been withdrawn by XO and will be presented to the FCC. (Order, Docket No. 67). 7 to the five-step formula creates a lower penalty than using the five-step formula itself. Thereupon, XO asserts five-step formula shortfall, there enforce the (Def.'s Partial J. Reply 10). are is both a tariff that, alternative, believe that sufficient rational channel shortfall ambiguity that purchasing spent, judgment. The shortfall the actor term entitles history and that that, terminations penalty, and this to (Def.' s argues XO even if "would calculate the the Court must Court haven does purchased to have" most Reply 11-12). the necessary needs and the interpretation Partial J. present business to and the "would to factual ways ambiguity, according XO a plausible patent favorable to the customer. the because the preamble stave creates only on show "would issue precludes the latent evidence it not off a what granting In its haven summary (Def.'s Partial J. Reply 14-16). second dispute provision concerns to a the three-month application period, the of the "3-Month Dispute.n XO takes the veiw that Verizon cannot charge under the shortfall provision September of 2014. for the three-month (Def.' s Partial J. period from June to Reply 8-9) . XO apparently first raised this issue in an August 14, 2015 letter to Verizon that was sent in anticipation of XO' s proposed FCC filing. Partial J. Reply, Ex. 2). Verizon initially responded to 8 (XO' s that letter in an August Reply, Ex. 21, 2015 letter to XO. (Pl.' s 1). The argument first appeared in the court record as part of XO' s reply to the pending motion. Reply 8-9}. reply Partial J. Verizon first responded in the court record in its brief Solutions (Def. 's Partial J. on the pending Agreement unreasonable to ("CSA"} read the motion, arguing extended the CSA as giving CDP, XO that Custom and that the whether or not XO met the minimum commitments. the CDP it is discount (Pl.'s Partial J. Reply 7-8). LEGAL STANDARDS FOR A SUMMARY JUDGMENT MOTION Verizon titled its pleading "Motion for Partial Judgment on the Pleadings Pursuant to FRCP 12(c) ." Following the hearing of September 14, 2015, however, the parties requested entry of an order converting the motion into a Motion for Summary Judgment. (Joint Thus, Proposed Order, upon agreement Docket of the No. 66; parties, Order, Docket Verizon's No. motion 67). seeks summary judgment, and the Court is to decide these two issues on summary judgment. Under rendered Fed. R. forthwith interrogatories, affidavits, Civ. if and if any, P. the 56 (c), summary pleadings, admissions on judgment depositions, file, together "shall be answers to with the show that there is no genuine issue as to 9 any material fact and that the moving party is entitled to judgment as a matter of law." "Generally, stipulations on motions for summary judgment, of fact conclusive without In re Durability Papandon v. U.S. 2009) as admissions further Inc., ("stipulation the parties evidentiary support 212 ex rel. of F.3d Perler, between the 551, 555 courts regard in the (10th was are record." Cir. 350 F. App'x 491, parties that 493 2000); (2d Cir. controlling" such that there was "no material issue of disputed fact with respect to the amount of" liability) . Inc . , 4 4 6 F . App ' x 5 6 5 , court will moving uphold party an shows 566 award by See also Streeter v. ( 4th Cir . 2011 ) of citing summary to ( un pub 1 is h ed) judgment parts SSOE Sys., of only the ( "The if the record stipulations ... or other materials that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as Block E. Enters., (noting that a matter Inc. parties Synergistic Int'l, 2006) (noting of v. Raskin, cannot LLC v. that law.") (emphasis 591 F.3d 718 stipulate Korman, parties added); 470 cannot to but (4th Cir. questions F.3d 162, cf. of 168 stipulate H&R 2010) law); (4th Cir. to legal conclusions) . Issues of contract and tariff interpretation are matters of law germane to resolution at the summary judgment stage. 10 If a court properly determines that the contract is unambiguous on the dispositive issue, it may then properly interpret the contract as a matter of law and grant summary judgment because no interpretive facts are in genuine issue. Even where a court, however, determines as a matter of law that the contract is ambiguous, it may yet examine evidence extrinsic to the contract that is included in the summary judgment materials, and, if the evidence is, as a matter of law, dispositive of the interpretative issue, grant summary judgment on that basis. Goodman v. 1993); Resolution Trust Corp., see also United States v. 65-66 (1956) W. Pac. R. 1126 Co., (4th Cir. 352 U.S. 59, ("where the question is simply one of construction [of a tariff] law.'") 7 F.3d 1123, the courts may pass on it as an issue 'solely of (internal citation omitted) . PRINCIPLES OF TARIFF CONSTRUCTION A. Ambiguity and Reformation in Tariff Interpretation Contracts governed by federal law are interpreted according to "federal common law rules of contract interpretation" that, in turn, are guided by "principles of state common law." Johnson v. Am. United Life Ins. Co., Tariffs, too, See, e.g., 1340 (8th 716 F.3d 813, 819 (4th Cir. 2013). are interpreted according to federal common law. Penn Cent. Cir. 1971) Co. v. Gen. Mills, (cataloguing Inc., "certain 439 F.2d 1338, well-established rules of construction generally adhered to by the courts"); 11 Ivy Broad. Co. 1968) ("Where tariffs question, v. filed the common law.") . of contract Arn. Tel. & neither the pursuant courts Tel. 391 F.2d 486, Communications to are Co., the to Act apply deals a Act a rule Great Elevator Co., 259 U.S. 285, 291 N. (1922) Ry. Co. v. nor the particular of Tariff interpretation largely follows construction. (2d Cir. itself with uniform 491 federal the rules Merchants' ("what construction shall be given to a railroad tariff presents ordinarily a question of law which does not differ in character from those presented when the construction of any other document is in dispute.") 2 As in the case of contract interpretation, e.g., Cent. Tel. Co. of Virginia v. Sprint Commc'ns Co. of Virginia, 759 F. Supp. 2d 789, 804 (E.D. Va. 2011), aff'd, 2 715 F.3d 501 (4th Cir. This general rule providing that tariffs should be interpreted in the same way as other documents is limited by the filed rate doctrine and the doctrine of primary jurisdiction, which create restrictions on a court's ability to reform tariff terms. E.g., Milne Truck Lines, Inc., 970 F.2d 564, 567 (9th Cir. 1992); Western Transp. Co. v. Wilson & Co., 682 F. 2d 1227, 1231 (7th Cir.1982); Coca-Cola Co. v. Atchison, T. & S. F. Ry. Co., 608 F.2d 213, 219 (5th Cir. 1979). The relevant particulars of these limitations are discussed later in the opinion. However, these doctrines do not "preclude courts from interpreting the provisions of a tariff and enforcing that tariff." Brown v. MCI WorldCom Network Servs., Inc., 277 F.3d 1166, 1171-72 (9th Cir. 2002) (emphasis added); see also W. Pac. R. Co., 352 U.S. at 6566. 12 tariff ambiguity is construed against the drafter, 2013), which is always the carrier. As the Seventh Circuit has put it: [t]he tariff should be construed strictly against the carrier since the carrier drafted the tariff; and consequently, any ambiguity or doubt should be decided in favor of the [non-carrier] . Such ambiguity or doubt must be a reasonable one and should not be the result of a straining of the language .... [T] ariffs should be interpreted in such a way as to avoid unfair, unusual, absurd or improbable results strict construction of a tariff against a carrier is not justified where such a construction ignores a permissible and reasonable construction which conforms to the intentions of the framers of the tariff, avoids possible violations of the law, and accords with the practical application given by shippers and carriers alike. Norfolk & W. Ry. Co. v. B. I. Helser & Co., 629 F.2d 486, 488-89 (7th Cir. 1980) Lines, Inc., (internal citations omitted). Accord Milne Truck 970 F.2d 564, 567 (9th Cir. 1992) {"Because a tariff is considered to be a contract ... general principles of contract law apply .... phrase used in a once a court determines that a term or tariff is ambiguous, the court may in most instances proceed to issue a definitive interpretation of that term or phrase.") ; 107, 111 n. 3 In re Carolina Motor (4th Cir. Reiter v. Cooper, 1991) 507 U.S. 258 Inc., 94 9 F. 2d rev' d on other grounds sub nom. ( 1993) Exp., ("An unambiguous and duly published tariff is 'binding on the parties and has the force of 13 law regardless equities existing between Gas v. Co. Dixie (unpublished). of the intentions carrier Pipeline Co., of and 911 the parties shipper.'"); F.2d 721 or the D.S. Cir. (4th Swain 1990) Thus, unambiguous tariffs are enforced according to their plain terms, and ambiguous terms are strictly construed against the drafter using traditional principles of contract interpretation. There tariffs is are construction. equitably a pertinent interpreted a Appeals for according contract drafting. 3 at to the to general rule of rules As a matter of contract construction, reform parties exception the to However, effectuate as Seventh Circuit the has the United held, contract courts may intent States courts that do of the Court not of have power to equitably reform a tariff upon a finding of ambiguity or mistake. W. Transp. Co. v. Wilson & Co., (7th Cir. 1982). Although the Fourth Circuit has not stated the anti-reformation follows 682 F.2d 1227, 1231 rule logically outright, from two the Seventh major Circuit's elements of rule tariff jurisprudence previously recognized by the Fourth Circuit. First, doctrine, 3 it follows which from the filed rate "mandates that Black's Law Dictionary 471 the general rule. 'the (10th ed. 14 rate (or "filed tariff") of 2014) the carrier duly accurately recites filed is the only the relevant administrative agency has the authority to set rates. Bryan v. BellSouth only lawful Commc'ns, (quoting AT & T v. ( 1998) ) . Thus, charge,'" Inc., 377 Cent. F.3d because 424, Office Tel., 429 Inc., (4th Cir. 524 U.S. 2004) 214, 222 the filed rate doctrine "bars all claims ... that attempt to challenge the terms of a tariff that a federal agency has reviewed and filed." Brown v. Inc., 277 omitted). F.3d 1166, 1170 MCI WorldCom Network Servs., (9th Cir. 2002) (internal citations A court cannot reform the terms of a tariff, because that power is reserved to the FCC. Second, of tariffs, While the ban on reformation follows as contracts opposed are to private the private instruments from public nature nature that of only contracts. govern the relationship between a closed set of parties, tariffs are public documents upon which a potentially infinite set of non-parties rely. Thus, the purpose of contract interpretation is to carry out the will of the parties as of the time the contract was made. An equally important purpose of tariff interpretation is to prevent special deals. That is why interpretation is permitted only when the tariff is ambiguous, so that a literal reading is impossible. W. Transp. Co., 682 F.2d at 1231; accord Bryan 377 F.3d at 429 (noting that "prevent[ing] purpose of the filed discrimination among consumers" is a rate doctrine) . 15 Equitable reformation exists to effectuate what the parties intended at the time of drafting, but the parties' intent is less important than the public's reliance on the language of the tariff as filed. doctrine's purpose is twofold: "The to prevent discrimination among consumers and to preserve the rate-making authority of federal agencies," purposes, Bryan, the 377 Court F.3d adopts at 429. the To Seventh effectuate both Circuit's rule these that courts may not engage in equitable reformation of tariffs. B. Ambiguity at Federal Common Law "An ambiguity exists where the language of a contract is fairly and reasonably susceptible to either of the constructions asserted by the parties." Johnson, 716 F.3d at 820 (interpreting a Cent. of Virginia, federally-governed ERISA plan); Tel. Co. 759 F. Supp. 2d at 804. Such ambiguity may be patent or latent .... Patent ambiguity exists when the language of the contract itself reveals that it can be interpreted in more than one way .... Latent ambiguity, al though less common than patent ambiguity, arises where language '[although] appearing perfectly clear at the time the contract [is] formed, because of subsequently discovered or developed facts, may reasonably be interpreted in either of two ways.'" Lion Assocs., LLC v. 496, 501 (4th Cir. Swiftships Shipbuilders, 2012) (unpublished) 16 LLC, (internal 475 F. App'x citations to Virginia law omitted); Ward v. App'x 620, 626-27 (4th Cir. Dixie Nat. Life Ins. Co., 2007) (unpublished) 257 F. (stating South Carolina law on patent and latent ambiguity); SunTrust Mortgage, Inc. v. (E.D. AIG Va. 2011) ambiguity). 48 4 United Guar. Corp., (stating 784 Virginia F. law Supp. See also Cherry v. Auburn Gear, (7th Cir. 200 6) 585, 592-95 patent on 2d and latent Inc., 441 F.3d 476, (discussing patent and latent ambiguity in interpretation of a federally-governed ERISA contract) . 1. Patent Ambiguity at Federal Common Law Federal courts do not seem to off er detailed findings when they do (or do not) find a tariff patently making it difficult to discern a tariff-specific rule for when tariffs are ambiguous. are However, ambiguous feasible States, at least two courts have found that tariffs when they "are interpretations." 355 F.2d 326, 330 Nat'l (7th United States v. U.S. Steel Corp., subject to Van Lines, Cir. 1966) two possible and v. United (emphasis added); Inc. 645 F.2d 1285, 1288 (8th Cir. 1981). The Fourth Circuit also states that a tariff should not be found ambiguous when one of the plausible interpretations would lead to "unjust, Co., 911 F.2d absurd, at 721 or improbable results." D.S. (unpublished) (citing Nat'l Inc., 355 F.2d at 333). Applying Virginia state law, 17 Swain Gas Van Lines, this Court has also noted that "the mere fact that parties disagree over a contract's terms does not equate to ambiguity .... In order for contract language to be ambiguous, it must be reasonable interpretations." Cent. Tel. Co. capable of two of Virginia, 759 F. Supp. 2d at 803; see also Norfolk & W. Ry. Co., 629 F.2d at 48889 (stating that any "ambiguity or doubt must be a one and should not be the a tariff result of a reasonable straining of the when its language."). Accordingly, text is subject interpretations, alternative to two and a is ambiguous possible, tariff is interpretations on its feasible, and unambiguous creates face reasonable when one unjust, of absurd, the or improbable results. 2. Latent Ambiguity at Federal Common Law "Latent appearing farmed, may ambiguity perfectly clear at language where the the time '[although] contract [] [is] because of subsequently discovered or developed facts, reasonably Assocs., arises LLC, be interpreted 475 F. App'x in at either 501 of two (internal ways.'" citations Lion to Virginia state law omitted); see also Suntrust Mortgage, Inc. v. United Guar. 243, 441 257 Residential Ins. (4th Cir. F.3d at 484 2013) Co. of N. Carolina, 508 F. App'x (reciting Virginia state law); Cherry, ("A latent ambiguity is 18 '[a]n ambiguity that does not instead terms readily appear arises are from applied a in the language collateral matter the when (quoting executed.'") or of document, the but document's Law Black's Dictionary 88 (8th ed. 2004). A classic example of latent ambiguity is the tale of the Peerless. A contract to buy cotton scheduled to arrive from Bombay, India, on the ship Peerless appeared plain on its face. Objective evidence revealed, however, that there were actually two ships by the same name. Thus, it became unclear which ship the goods would be on and extrinsic evidence was appropriate to aid in the resolution of the ambiguity If a contract lacks latent ambiguity, however, "[e] xtrinsic evidence should not be used to add terms to a contract that is plausibly complete without them." Cherry, 441 omitted. F.3d The at Fourth 484 (7th Cir. Circuit 2006) similarly (internal recognizes citations the state common law principles permitting receipt of extrinsic evidence to resolve latent App' x at 257 Inc., 784 F. ambiguity. Suntrust Mortgage, (applying Virginia state law); Supp. on patent versus 2d at 592-95 Inc., 508 F. SunTrust Mortgage, (surveying Virginia state cases latent ambiguity, and the permissible use of extrinsic evidence only. upon a finding of latent ambiguity); see also Kuhn v. Cir. 1941) 3. Chesapeake & 0. Ry. Co., 118 F.2d 400, 404 (4th (stating West Virginia state law). Anti-Surplusage Canons Must be Ambigui ty Canons 19 Subordinated to Anti- Because XO' s "would have" formula, to argument here turns in the preamble to on the the role of the term five-step calculation the parties devoted a substantial amount of page space discussing surplusage the merits versus the of interpreting merits of a contract interpreting a to avoid contract in context. XO argues that the term "would have" creates a latent ambiguity that can only be resolved by extrinsic evidence about what a reasonable actor in XO' s certain business situation. position would have done in a (Def.'s Partial J. Reply 14-16). Verizon replies that "[c]laimed ambiguities or doubts as to the II).eaning of a rate tariff must have a substantial basis in the light of the ordinary meaning of the words used and not a mere arguable context basis," rather and than Partial J. Reply 3) Texas Co., R.R. 194 that ambiguity reading a must phrase be in 77, 778-79 (5th in (Pl. I s isolation. (quoting United States v. F.2d determined Missouri-Kansas- Cir. 1952)). Thus, Verizon argues that "would have," in context, is an unambiguous term customer's that is calculated by reference purchases over the six-month period. to (Pl.' s Partial J. 5) (relying on Missouri-Kansas-Texas R.R. 79 ("lifting [a] phrase ... a completely Co., out of reading it in isolation ... may not be done") ) . 20 actual Reply 3- 194 F. 2d at 778its context In response, and XO argues that "would redundancy canons. Ry Co. v. must be (Def.'s Partial J. United States, ("It is a all have" 156 F. given effect Reply 15) Supp. 740, 742 under non- (relying on S. (Ct. Cl. 1957) familiar rule in the interpretation of tariffs that parts of the instrument should be given effect, if rules of possible"). The Fourth Circuit affirmed both these construction in a single case, indicating that canons of context and non-surplusage need not be at loggerheads in every contract interpretation. "ERISA plans, like contracts, are to be construed as a whole." ... Courts must look at the ERISA plan as a whole and determine the provision's meaning in the context of the entire agreement. See generally Restatement (Second) of Contracts § 202 (2). And, because contracts are construed as a whole, courts should seek to give effect to every provision in an ERISA plan, avoiding any interpretation that renders a particular provision superfluous or meaningless see generally Restatement (Second) of Contracts § 203 (a) ("[A] n interpretation which gives a reasonable, lawful, and effective meaning to all the terms is preferred to an interpretation which leaves a part unreasonable, unlawful, or of no effect .... "). Johnson, rule, 716 then, all terms F.3d at 820 (some citations omitted). The best is somewhere in between Verizon and XO's positions: should be given effective meaning so that they make sense in context. See also Island Navigation Co. 21 v. M/V VIKING SERENADE, 35 F. App' x 524, 527 (9th Cir. 2002) (unpublished) ("Like contracts, tariffs are to be construed to give meaning to each term .... Island Navigation's proposed interpretation would render portions of the Tariff unreasonable and absurd."). However, when "read in context" and "non-surplusage" canons do go head ambigui ty to over head, a court should non-surplusage. In favor the context context of and non- statutory interpretation, the Supreme Court prefers an interpretation that follows the plain meaning and makes some words surplusage to an interpretation that creates an ambiguity but makes every phrase non-superfluous. ("our Lamie preference for v. U.S. Tr., avoiding 540 U.S. surplusage 526, 536 constructions (2004) is not absolute"). Lamie's rule for statutory interpretation applies to tariffs for two reasons. Lamie to private contracts. Co., 619 F. 3d 574, ways to read the 578 text' First, - 540 U.S. between contracts and one Inc. have v. applied Fed. Ins. ("'Where there are two that avoids surplus age 'applying the rule against surplusage absent other indications, Second, 2010) and the is, 536). circuits TMW Enterprises, (6th Cir. makes the text ambiguous - at other inappropriate.'") tariffs statutes, enjoy such that a (quoting Lamie, position Lamie is somewhere even more applicable to tariffs than it is to contracts. Cincinnati, N. 0. & T. P. Ry. Co. v. Chesapeake & 0. 22 Ry. Co., 441 F.2d 483, 488 (4th Cir. 1971) ("the tariff, so long as it is in effect, must be treated as though it has the force of law"); State of Israel v. Metro. tariff Dade Cnty., required by the 431 F. 2d 925, appropriate more than a consensual contract. 928 (5th Cir. regulatory 1970) statute ("A is It has the force of law with the analogous dignity of a statute."). In sum, the Fourth Circuit is not of the view that canons of context and anti-surplusage need be at loggerheads. However, when there are two ways to read a text, where the first reading avoids surplusage but makes the text ambiguous and the second reading creates surplusage but does not make the text ambiguous, the rule against surplusage is subordinated to the rule favoring non-ambiguity. APPLICATION OF GOVERNING LAW TO THE "CALCULATION DISPUTE" As explained below, XO's attempt to gin up ambiguity in the shortfall provision is phrase out of context. an unreasonable reading For similar reasons, of a single that provision also does not create a latent ambiguity requiring additional evidence that would render surrunary judgment inappropriate. A. The Shortfall Provision is not Patently Ambiguous 1. Examination of Plain Text Shows That the Tariff is not Ambiguous 23 The shortfall provision is slightly unwieldy, but it is not ambiguous. It clearly states that the shortfall is calculated by a multi-step process, of which channel terminations are one of several inputs. § The (FCC 1 25.1.7(B); FCC 11 portion the begins provision of with a tariff § 25.1.7(B)). describing preamble stating the the shortfall goal of the formula: the CDP Customer shall be assessed an amount equal to the difference between (1) the total dollar amount associated with that service type or combined service type over the preceding six ( 6) months and ( 2) the total dollar amount associated with that service type or combined service type which would have been applied over the preceding six ( 6) months had the Minimum commitment been satisfied. The Telephone Company will calculate the difference as follows (FCC 1 § However, 25.l.7(B); FCC 11 § 25.l.7(B)) (emphasis added). the phrase "[t]he Telephone Company will calculate the difference as followsn makes it clear that the subsequent fivestep process, not calculating the first paragraph provision, clearly and states the preceding shortfall penalty. clearly the first that the states preamble, There the is goals paragraph's final five-step formula calculate the penalty. 24 is the no ambiguity: of method the sentence is the of the penalty just as way to After. the preamble paragraph, step formula for calculating the tariff describes a five- the formula, and the five-step formula is also not ambiguous. 1. Add up bought the number under the of channel service terminations over the last the customer 6 months. Divide that number by 6. 2. Add up the amount the customer spent on all elements under that service over the last 6 months {not just terminations, but also any elements used at the beginning or end of.the service). Divide by 6. Divide by the result of Step 1. 3. Look at how many channel terminations the CDP required for the given 6 month period. Divide by 6. 4. Subtract the result of Step 1 from the result of Step 3. (This is the difference between the number of channel terminations a customer was supposed to buy, and the number of channel terminations a customer bought.) 5. Multiply Step 2 by Step 4. (This estimates "if the customer had bought the minimum number of channel commitments, it would elements as formula is have also bought all these associated part of the service package"). Multiply by 6. (FCC No. 1, § 25.1.7; FCC No. 11, § 25.1.7). The slightly awkward to parse, but "awkward" is not "ambiguous," and 25 does not give XO leave to ignore the phrase "[t] he Telephone Company will calculate the difference as follows." Following the formula also does not lead to unjust, or improbable fulfill results. In practice, a familiar function expectancy damages. If the of the contract customer required by the contract, have bought necessarily) all associated the with other the law bought terminations also formula formula uses channel by to calculating all the channel service as a as a (or typically elements terminations operates then the customer would customer would have paid Verizon the amount The absurd, whole, and the stated in Step 5. bellwether for the decrease in orders for the services typically purchased in the same transaction as channel terminations. Failure to meet the minimum commitment is measured in terms of channel terminations; the amount Verizon recoups is measured by channel terminations and associated elements. The method is not intuitive, but it makes sense as a way of approximating expectancy damages, without necessitating revision of rates penalties every time tariff change or purchasing patterns of non-termination elements a customer's change. Given that "strict construction of a tariff against a carrier is not justified where such a construction ignores a permissible and reasonable construction which conforms to the intentions of the 26 framers of the and tariff accords with the practical application given by shippers and carriers alike," Norfolk & W. Ry. 629 Co., reasonable. F.2d Nor does at 488-89, the the provision shortfall appear, "squeeze the maximum possible revenue as provision XO to from its competitors out (Def.'s Partial J. of a declining line of business." claims, is Reply 16). Instead, the shortfall formula provides a valuable tool to let Verizon calculate, expectancy damages and allows in the event XO to of a know the shortfall, a reach of, permissible and reasonable goal for any service provider. 2. XO's Contrary Reading is Unreasonable XO posits that the "would have" language in the preamble to the five-step formula is a reasonable reading of the shortfall provision. That is so, says XO, because using the preamble as an alternative method of calculating the shortfall results in much lower penalties for a customer than using the five-step formula. XO hangs its hat on the notion that the preamble's "would have" language 'would have' Reply 10). "asks what XO, as a rational spent to meet its commitment." business actor, (Def.'s Partial J. XO argues that a rational actor "would have" bought (and only bought) sufficient stand-alone channel terminations to avoid imposition of the shortfall provision, minimize the amount owed to Verizon. 27 (Def.'s because that would Partial J. Reply 10). Plugging this "rational activity" into the short "formula" of the preamble, the shortfall XO therefore argues that it is plausible for to be calculated as "the difference between what XO spent over the last six months and (2) buying enough corruni tment, channel terminations to ( 1) the cost of also meet the minimum because buying only channel terminations is what a business actor would have done." XO's reading ignores context in two ways. First, it ignores that the first paragraph of§ 25.1.7 clearly functions merely as a preamble stating the goals of the subsequent five-step test, and it ignores the text that "[t]he Telephone Company will calculate the difference as follows" appears after the preamble. The plain meaning of this language clearly tells a customer that the five-step formula after the preamble, itself, and not the preamble is the way to calculate the shortfall. XO's reading of the preamble as an alternative calculation tool is irrational, absurd, and improbable, and does not rise to the level of creating ambiguity. Second, XO's reading ignores the function that "would have" serves in the context of the preamble, as illustrated by Step 2. "Would have" does not ask a hypothetical. It is retrospective, and looks at the customer's actual behavior over the last six months, specifically as to related elements 28 that the customer bought in that period when it bought channel terminations. This is apparent when read in conj unction with Step 2 of the fivest ep process , monthly which states that Ver i z on wi 11 "sum [ ] charges associated with all channel the tot a 1 terminations, channel mileage, multiplexing arrangements, and IEF terminations or IEF interface rate elements for that service type ... over the preceding six 25.1.7). (6) In months." this (FCC No. context, 1, "would § 25.1.7; have" FCC No. does not 11, call § for speculation about what a rational business actor hypothetically would have pieces of required done. Instead, information by the it (the minimum plugs number cornmi tment in two of non-hypothetical channel and the terminations services purchased by a customer over the past six months) actually to calculate the shortfall penalty. Because the preamble does not ask what a hypothetical actor would have done, the shortfall cannot be calculated according to the preamble as "the difference between (1) only what XO spent over the last six months and channel because terminations, (2) buying the cost of only channel terminations is what a business actor would have done." Because feasible, the tariff is not susceptible and reasonable interpretations, Because the tariff is not ambiguous, strictly against Verizon, and the 29 it to two possible, is not ambiguous. it need not be construed plain meaning of the text controls. The plain meaning of "[t] he Telephone Company will calculate the difference as follows" is that the subsequent test is the one and only test used to calculate the shortfall penalty. 3. The Plain Meaning Reading Does Not Create Surplusage, and, Even if it Did, Surplusage is Not the Controlling Canon of Interpretation Reading create makes the tariff surplusage. Reading it clear that preamble, which describes (expectancy) as Verizon the "would term have" what argues does "would is have" shorthand Verizon is not in in trying actually the to As in Johnson, brief calculate before laying out the longer-form formula that expectancy is calculated. context for how 716 F.3d at 813, canons of context and anti-surplusage are not actually at odds. The introductory paragraph is quite clearly just an introductory paragraph, and is clear that the actual computation is decided according to the five-step formula calculate the FCC 25 .1. 7 (B)). 11 rendered § difference "would have" as follows ... "). However, mere ("The Telephone Company will even if (FCC the surplusasge, 1 § plain that preferable to creating ambiguity under Lamie, 25.1.7(B); text result 540 U.S. reading would be at 536, and TMW Enterprises, Inc., 619 F.3d at 578. Given the text that "[t]he Telephone Company will calculate the difference as follows" at the end of the first paragraph of 30 § 25.1.7(B), reasonable way to illustrative formula. there is read the preamble, XO' s only and one tariff: the the first five-step paragraph test is attempt to pull an alternate formula introductory paragraph requires and feasible, possible, an unreasonable is the an actual out of the reading of the structure of§ 25.1.7(8) and of the role that "would have" plays in the context of the preamble, particularly in conjunction with Step 2. Because there only is one possible, and feasible, reasonable way to read§ 25.1.7(B), the tariff is not ambiguous. The Court must follow the text of the tariff. B. "Would Have" Does not Create a Latent Ambiguity XO claims that, "would have" bought clearly what a "would have" even if the Court does not accept that XO only channel cost-averse nonetheless terminations because rational business creates a that is actor would do, latent ambiguity that requires the introduction of evidence on the issue of what XO's purchasing patterns show XO actually would do. J. (Def.' s Partial Reply 14). Again, this is irrelevant because the tariff's use of "would have" does not refer to hypotheticals. XO is not entitled present evidence on what world, because the it would have done tariff clearly 31 does not in a hypothetical call hypothetical worlds into play. Its only inputs are the minimum commitment and what XO actually ordered over the previous six months. That data was included Judgment. along with Verizon' s Motion for Partial Summary (Pl.'s Partial J. Mtn., Exs. 1-12). Because introduce judgment. there is extrinsic no ambiguity, evidence Suntrust Mortgage, and Inc., XO is not entitled summary partial prevent to 508 F. App'x at 257; Cherry, 441 F.3d at 484. For the foregoing reasons, the Court finds in favor of Verizon on the Calculation Dispute and on that issue will grant partial summary judgment in favor of Verizon. APPLICATION OF GOVERNING LAW TO THE "3 MONTH DISPUTE" The interaction of the Custom Solutions Agreement ("CSA") and the shortfall provision would not be ambiguous if XO's CSA created a did create six-month terminal period. a three-month terminal apply the shortfall provision to the formula three-month terminal of the shortfall ambiguity. However, However, period, it because XO' s is impossible CSA to as written in six month terms - period. The agreement as noted above, CSA and the together create five-step a latent the characterization of this dispute as a tariff or contract dispute alters the interpretive tools and the remedies available to this Court. 32 A. Text of Ambiguity the Two Governing Documents Creates Latent This dispute is governed by the CDP section of the tariffs and by a single paragraph that appears in the CSA and in fails to Verizon's tariffs. The tariff states that, "[i] f the maintain its minimum commitment for a preceding six (6) months, CDP Customer service type ... over the the CDP customer shall be assessed" a shortfall calculated based on the customer's purchases over the previous six months. tariff repeatedly intervals: (FCC 1 § 25.1.7(B); FCC 1 § 25.1.7(B)). The casts everything the minimum commitment is in terms of six-month calculated based on six- month intervals and the shortfall provision is calculated based on six-month intervals. (FCC No. 1. § 25.1.7; FCC No. 11 § 25.1.7). The five-step formula divides and multiplies amounts by six. It is impossible to follow the five-step formula as written using three-month data. On the other hand, the CSA states that: [i]f the Customer is signed up for Verizon's Commitment Discount Plan as of the Effective Date, the Commitment Discount Plan shall be subject to the following provisions ... : ( i) Subject to any early termination of the Agreement or the Customer's subscription to the Contract Tariffs, the Commitment Discount Plan is deemed extended as necessary to be coterminous with the end of Plan Year 5 .... All other terms and conditions applicable to 33 the Corruni tment Discount Plan (including discounts and the minimum period and review/true-up requirements) remain unchanged by this Section 12 .... Upon expiration of Plan Year 5, the Corrunitment Discount Plan will be subject to the existing regulations that apply upon expiration of the Commitment Discount Plan, including establishment of new commitments. (Docket No. 41, Ex. 4, Ex. B 12). § Identical language discussing the interaction of CDPs and tariffs appears tariffs. (FCC 1 § 21. 60 (L); FCC 11, 32. 58 (L)) . The "true-up" § requirements referenced in the CSA at § 21. 60 (L) are the shortfall provisions of FCC 1 § 25.l.7(B) 25.l.7(B). (Tr. Sep. 29, 2015 Hr'g 54:21-25, the plain text of both documents, the creation of a in the and §32. 58 (L) and FCC 11 77:6-24). § Reading the CSA clearly contemplates non-six-month terminal period at the conclusion of the five-year duration of the CSA. However, provision, it is plainly impossible as drafted, to apply the shortfall to any period that is not six months in duration. When the terminal period is not six months long, as is the case with XO's CSA, the CSA and the five-step formula become impossible to reconcile, creating a latent ambiguity. B. The 3-Month Dispute is a Tariff Dispute, and Strict Construction Against Verizon Necessitates Judgment for XO As noted interpreted previously, using identical tariffs rules. and contracts However, this general rule are applicable here. 34 First, two are largely exceptions to ambiguous tariffs are strictly construed against their drafters, Co., 629 F. 2d at 488-89, while contracts Norfolk & W. Ry. are merely construed against their drafters. Cent. Tel. Co. of Virginia, 759 F. Supp. 2d at 804. 4 Second, courts reformation of a tariff. 682 F.2d at 1231. may W. In this case, not engage Co. Transp. in Wilson & Co., v. equitable if this were a contract dispute and the parties intended that the shortfall provision apply to the terminal three-month period, then the Court could "reform" the by three five-step formula to divide rather than six. If this is a tariff dispute, then the Court does not have the power to reform the contract, decided in favor of the and "any ambiguity or doubt [non-drafter] . " Norfolk & W. should be Ry. Co., 629 F.2d at 488-89. Accordingly, Month Dispute" is it a is necessary to determine whether the "3tariff dispute or a contract dispute. XO describes the dispute as arising out of the CDP portion (§ 25.1) 4 A certain subset of contracts are "strictly construed" against the drafter in the same way that ambiguous tariffs are, including security agreements, some types of insurance agreements, and {under Virginia law) restraint on trade agreements. Cornerstone Title & Escrow, Inc. v. Evanston Ins. Co., 555 F. App'x 230, 235 (4th Cir. 2014) (unpublished). Aside from these special cases, however, the general rule of contra proferentem requires that ambiguity be merely "construed against" the contract drafter, rather than "strictly construed against" the contract drafter. Cent. Tel. Co. of Virginia, 759 F. Supp. 2d at 804. 35 of the relevant tariffs. (Def.'s Partial J. Reply 8-9). Verizon, however, CSA describes the as a "contract tariff." (Pl.'s Partial J. Reply 7 n.5). On this record, tariffs the "contract tariffs" must be treated as for the purpose construction and of relief. determining The relevant appears word-for-word in the tariffs. § applicable language rules of the CSA of (FCC 1 § 21. 60 (L); FCC 11 32. 58 (L)) • Verizon acknowledged at the hearing that contract tariffs, including the contract tariff at issue, the FCC. is (Tr. required by that contract tariff is Sep. 29, 2015 Hr'g 56:3-6). federal tariffs subject to regulation. must the be 47 filed filed rate are filed with Additionally, C.F.R. with § the doctrine. doctrine prohibits courts from changing tariffs. at 1170 filing 61.22 FCC) . The (noting A filed ("In addition to barring suits challenging filed rates the services, tariff.") of tariff, filed-rate billing, successful, act rate Brown, 277 F.3d and suits seeking to enforce rates that differ from the rates, filed would doctrine have the at which point undergirds bars suits challenging or other practices when such challenges, (relying on Am. Tel. filing, also filed the rule effect of changing the if filed Tel. Co., 524 U.S. at 223). The & the public might against modify tariffs. 36 not rely upon the allowing courts to [T] he purpose of contract interpretation is to carry out the will of the parties as of the time the contract was made[, J [a]n equally important purpose of tariff interpretation is to prevent special deals. That is why interpretation is permitted only when the tariff is ambiguous, so that a literal reading is impossible. W. Transp. Co., agency 682 F.2d at 1231. Because the act of filing and approval trigger the filed "contract tariffs" are filed, restraints on rate doctrine, and because they must be subjected to the same interpretation and relief applicable to standard tariffs. The Court finds that the 3-Month Dispute is a tariff dispute and that the plain meaning of the CSA cannot be read as creating a the terminal dispute, down special scaled shortfall provision into the CSA for the three-month the Court five-step cannot period. Because reform the Court must strictly construe the is a tariff CSA or the CDP to scale shortfall provision: and enforce the plain meaning of the this it can tariff. tariff only interpret Furthermore, against its the drafter. Hence, the Court will not read a three-month shortfall provision into the tariff where no such provision exists. On this basis, Month Dispute and the Court on that finds issue judgment in favor of XO. 37 in favor of XO on the will grant partial 3- summary C. In the Alternative, Contract Principles also Necessitate Judgment In Favor of XO Even if the 3-Month Dispute were a contract dispute (which it is not), then intent of the parties and construction against a drafter would still necessitate that the 3-Month Dispute be resolved in favor of XO. Though intent of the parties is irrelevant when examining an unambiguous tariff, it is relevant when examining contracts and ambiguous tariffs. F.2d 728, law, 731 (4th Cir. intent ambiguity) ; 721 (4th Schneider v. of the D.S. Cir. 1993) (recognizing that, parties Swain Gas Co. 1990) (noting is relevant v. of contract Supp. 2d at that intent under Virginia in of tariffs); 98 9 the face the W. of 911 F. 2d parties Transp. is Co., (recognizing party intent as a general precept interpretation); 593 Co., Dixie Pipeline Co., relevant when interpreting ambiguous 682 F.2d at 1231 Cont' 1 Cas. (noting SunTrust that, Mortgage, under Inc., Virginia law, 784 F. latent ambiguity may be resolved by resort to evidence of the parties' intent). against In the the case drafter SunTrust Mortgage, of contracts, under Inc., ambiguity the rule of F. Supp. 2d at 784 is contra 598, construed proferentem. 594 n. 14; Cent. Tel. Co. of Virginia, 759 F. Supp. 2d at 804. As XO points out, language authorizing neither the tariff nor the CSA contains prorated shortfall 38 penalties, and other portions of the tariff "show that Verizon knows full well how to write language that imposes penalties scaled to time periods of different lengths." FCC No. 1. (Def.'s Partial J. (creating 25.l.9(c) (1) (b) § Reply 9); see also, e.g., provision) . If Verizon did not include a reasons, is because XO did not it a scaled penalty scaling provision, intend to include a XO scaling provision. Verizon' s response is an appeal to common business sense. In Verizon's view, the CSA cannot reasonably be read as an agreement by Verizon to give XO the CDP discounts for that final, three-month period irrespective of whether XO satisfied its commitments. Instead, the only reasonable reading is that, just as XO was entitled to (and did) receive the CDP discounts over those three months, it remained subject to the shortfall payment obligation if it missed its commitments. (Pl.'s Partial J. appealing. actor It does improbable Verizon, shortfall written postulates, not give that expecting an the Reply 7). brief, that something intended for to parties the The must have result product of mutual 39 is rational nothing. a apply. intended then a offer enforcement mechanism to formula. are in away Verizon Verizon's position is superficially to that mistake business Thus, discount it without Accordingly, impose the a says scaled documents and is should as be interpreted to best reflect the will of the parties at the time of drafting. (Pl.' s Partial J. Reply 7) . However, Verizon's position is less appealing when taken in context. The CSA is several hundred pages long, and although the $4.9 million litigation CDP dispute (Stipulation is Tr. 4; c:II the largest Aug. 26. dispute Hr'g, in this Docket No. it does not dominate the business done between XO and 66: 1-4), Verizon. (Answer c:II 45) ("XO' s charges roughly ... $132, 000, 000 per year"). from Verizon In context, ... average Verizon was not only receiving a minimum commitment and a shortfall penalty: was CDP 64, receiving XO' s was only (describing a a commitment to the entire CSA, portion. See, e.g., FCC customer's obligation under a No. it of which the 1 § 21.2(E) contract tariff to meet minimum revenue requirements in exchange for incentives). Additionally, Verizon's intent argument is severely undermined by the fact that the plain text of XO's CSA and of § 25 .1. 7 (B) clearly do not contemplate a scaled shortfall provision, and that the five-step formula as written cannot be applied to any period but a six-month period. Verizon's tariffs do contain scaled penalty provisions No. 1 § 25.1.9{C){l)(b)), found elsewhere indicating that adding (e.g. such provision would have been feasible at the time of drafting. 40 FCC a Given that none of the scaled shortfall provision, evidence to the contrary, not that the contemplates record contains a no the Court finds that the parties did Therefore, even if the 3-Month Dispute were a contract dispute, the intent the create a and documents scaled shortfall provision. of intend to relevant parties and the rule of contra prof erentem would necessitate finding in favor of XO on the 3-Month Dispute. the foregoing judgment on reasons, this the Court would in favor of issue grant XO even For partial summary if 3-Month the Dispute is assessed as a contract issue. CONCLUSION For the reasons set PARTIAL SUMMARY JUDGMENT DENIED in part. The forth above, (Docket No. Court finds in Plaintiff's 40) MOTION FOR is GRANTED in part and favor of Verizon on the "Calculation Dispute." The Court finds in favor of XO on the "3Month Dispute." Applying the Stipulation, the Court will enter judgment for Verizon in the amount of $2,711,989. It is so ORDERED. /2£f> Isl Robert E. Payne Senior United States District Judge Richmond, Virginia Date: November -¥---' 2015 41
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