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MCI TELCOMS. CORP. v. AMERI-TEL

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION


March 29, 1995

MCI TELECOMMUNICATIONS CORPORATION, Plaintiff,
v.
AMERI-TEL, INC., Defendant. and AMERI-TEL, INC., Third-party Plaintiff, v. ILLINOIS BELL TELEPHONE COMPANY, Third-party Defendant.

The opinion of the court was delivered by: RUBEN CASTILLO

MEMORANDUM OPINION AND ORDER

 On May 9, 1994, the Court entered summary judgment in favor of plaintiff MCI Telecommunication Corporation ("MCI") and against defendant/third-party plaintiff Ameri-Tel, Inc. ("Ameri-Tel") in MCI's collection action against Ameri-Tel. See MCI Telecommunications Corp. v. Ameri-Tel, Inc., 852 F. Supp. 659, Mem. Op. & Order (N.D. Ill. 1994). *fn1" The Court's May 9, 1994, Order awarded MCI $ 124,064.84 plus attorneys' fees and costs allowable under MCI's tariff. *fn2" The $ 124,064.84 award represented charges incurred by Ameri-Tel for allegedly fraudulently placed operator assisted international long-distance calls originating from pay telephones owned by Ameri-Tel.

 Ameri-Tel filed a timely third-party complaint against Illinois Bell Telephone Company ("Illinois Bell") *fn3" alleging that the calls for which MCI sought payment should have been blocked or screened pursuant to an agreement Ameri-Tel had with Illinois Bell. *fn4" Ameri-Tel's and Illinois Bell's cross-motions for summary judgment are presently before the Court.

 FACTS

 The following undisputed facts are gleaned from the parties' respective Local Rule 12 statements of material facts and accompanying exhibits. *fn5"

 Ameri-Tel is an Illinois corporation in the business of owning and operating coin-operated pay telephones ("payphones"). At all relevant times, Ameri-Tel owned and operated over 1,000 payphones within Chicago and the surrounding metropolitan areas. Ameri-Tel subscribed to MCI long-distance service from December, 1989 to January 26, 1991. Illinois Bell is a telecommunications carrier providing customer owned pay telephone service ("COPTS") to Ameri-Tel pursuant to Illinois Bell's Customer Owned Pay Telephone Service Tariff ("COPTS Tariff") on file with the Illinois Commerce Commission, Tariff Ill. C.C. No. 5. Illinois Bell was also MCI's billing agent for the Ameri-Tel account during all times relevant to this lawsuit.

 MCI terminated its long-distance service to Ameri-Tel on January 26, 1991, because of Ameri-Tel's nonpayment of certain long-distance charges incurred on its payphones. Thereafter, MCI brought the underlying action against Ameri-Tel to collect $ 128,923.84 in charges for long-distance calls placed on Ameri-Tel payphones. *fn6" The majority of long-distance calls for which MCI sought recovery in the underlying debt collection action were operator assisted international long-distance calls. See MCI Telecommunications Corp. v. Ameri-Tel, Inc., 852 F. Supp. 659, May 9, 1994 Mem. Op. & Order at 17; see also Illinois Bell's Local Rule 12(M) Facts P 13.

 Ameri-Tel has conceded that it is solely responsible for payment of all international calls made through MCI from its payphones prior to June 1, 1990. Thus, the only time period relevant to the third party action is June 1, 1990 to January 26, 1991, the date on which MCI terminated its long distance service to Ameri-Tel. Illinois Bell's Local Rule 12(M) Facts P 11.

 Beginning in June of 1990, pursuant to its revised COPTS Tariff, Illinois Bell offered an optional blocking service entitled International Direct Distance Dialed ("IDDD") Blocking which blocked direct dialed international calls; operated assisted international calls were not blocked by the IDDD blocking service. As of June 1, 1990, Ameri-Tel ordered IDDD blocking service for all new lines ordered by Ameri-Tel. *fn7"

 In addition to IDDD blocking, Ameri-Tel also subscribed to and paid for outgoing screening for some of its phones. *fn8" Relying, inter alia, on Illinois Bell's Customer/Vendor Information Handbook, Ameri-Tel contends that under Illinois Bell's outgoing screening service, "calls placed through an operator are restricted to those charged to the number called, a third number or a calling card." *fn9" Ameri-Tel's 12(M) Facts P 17. Illinois Bell, in contrast, maintains that "Ameritech's outgoing screening only blocked operator assisted, international calls placed through an Ameritech operator. Calls that were placed through an alternate operator service or through an MCI operator were not blocked by outgoing screening." Illinois Bell's 12(N) Facts P 17.

 Mervyn Dukatt, Ameri-Tel's president, and Gina Lubrano, Ameri-Tel's "main contact" for Illinois Bell's billing representative from April 1990 to April 1991, both attested that no one from Illinois Bell ever informed them that either the IDDD blocking service or the outgoing call screening were less than 100% effective. See Dukatt Aff. P 4; Lubrano Aff. P 5. However, Wendy Schutts, Illinois Bell's billing representative responsible for the Ameri-Tel account, attested that she advised "Ms. Lubrano on a vast number of occasions of the fact that Ameritech's blocking and screening services did not block the type of operator assisted long-distance calls that were being made from Ameri-Tel's payphones." Schutts Aff P 8. *fn10" In particular, Schutts attested that she:

 

informed Ms. Lubrano that the outgoing screening service and the IDDD service were not 100% effective in that payphone customers could get around the blocking and screening mechanisms in a variety of ways including . . . 1) bypassing [the] Ameritech system by dialing the long distance carrier operator; 2) by using an alternate operator service; 3) by dialing an access code that went directly to the long distance carrier . . . .

 Id. P 9.

 Ms. Lubrano also testified as to the procedures followed by Ameri-Tel in ascertaining whether the revenues collected by each Ameri-Tel payphone covered the amount of the Illinois Bell invoice, and in resolving billing discrepancies. Ms. Lubrano testified that if a discrepancy involved an international call, Ameri-Tel would not pay that portion of the bill. She further testified that Ms. Schutts informed her that Ameri-Tel did not have to pay international call--that "all of that should be stopped with the blocking." Lubrano Dep. at 29. Ms. Lubrano testified that when she discovered billing discrepancies involving international calls, she would compile sheets consisting of information concerning the disputed charge (e.g., date, amount, and payphone line) and then transmit the information to Illinois Bell. In turn, Illinois Bell removed the contested charges from Ameri-Tel's bill and sent Ameri-Tel a confirmation that an adjustment to its long distance bill had been made. Id. at 25-32. Illinois Bell's actions in removing the contested charge were taken pursuant to an agreement between MCI and Illinois Bell under which Illinois Bell acted as MCI's billing agent. Schutts Aff. P 10. On each occasion that an adjustment was made to an Ameri-Tel bill, Ameri-Tel was informed that the adjustment was made by Illinois Bell solely in its capacity as billing agent for MCI and that MCI retained the right to seek collection of the disputed charges through its own procedures. Illinois Bell's Local Rule 12(N)(3)(b) Facts, PP 19, 20.

 Ameri-Tel has admitted for purposes of its motion for summary judgment that its review of the relevant MCI invoices establishes that only $ 69,140 was due and owing MCI for the international calls made during the relevant time period--not the $ 124.064.84 amount for which judgment was entered in favor of MCI against Ameri-Tel. Id. P 21; see also Ameri-Tel's Mem. Resp. Ill. Bell's Mot. Summ. J. at 2, 3. *fn11"

 Ameri-Tel moves for summary judgment in the amount of $ 69,140 contending that Illinois Bell's outgoing screening service failed to restrict the operator assisted international calls giving rise to the charges at issue in the underlying suit. In its cross-motion for summary judgment, Illinois Bell contends that the evidence does not support Ameri-Tel's contention that it had an agreement with Illinois Bell to block all operator assisted international calls; rather, Illinois Bell maintains that the agreement to provide outgoing screening service only related to calls placed through an Illinois Bell operator. Illinois Bell also contends that the limitation on liability provision contained in its COPTS Tariff prohibits Ameri-Tel from recovering on its indemnification claim. Finally, for a variety of reasons, Illinois Bell maintains that Ameri-Tel cannot recover on an indemnification theory.

 ANALYSIS

 Summary Judgment Standards

 Summary judgment is proper only if the record shows that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(c). A genuine issue for trial exists only when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). The court must view all evidence in a light most favorable to the nonmoving party, Valley Liquors, Inc. v. Renfield Importers, Ltd., 822 F.2d 656, 659 (7th Cir.), cert. denied, 484 U.S. 977, 98 L. Ed. 2d 486, 108 S. Ct. 488 (1987), and draw all inferences in the nonmovant's favor. Santiago v. Lane, 894 F.2d 218, 221 (7th Cir. 1990). However, if the evidence is merely colorable, or is not significantly probative, summary judgment may be granted. Liberty Lobby, 477 U.S. at 249-50; Flip Side Productions, Inc. v. Jam Productions, Ltd., 843 F.2d 1024, 1032 (7th Cir.), cert. denied, 488 U.S. 909, 102 L. Ed. 2d 249, 109 S. Ct. 261 (1988). In making its determination, the court's sole function is to determine whether sufficient evidence exists to support a verdict in the nonmovant's favor. Credibility determinations, weighing evidence, and drawing reasonable inferences are jury functions, not those of a judge when deciding a motion for summary judgment. Liberty Lobby, 477 U.S. at 255. Finally, we note that mere conclusory assertions, unsupported by specific facts, made in depositions or affidavits opposing a motion for summary judgment, are not sufficient to defeat a proper motion for summary judgment. See Lujan v. National Wildlife Fed'n, 497 U.S. 871, 888, 111 L. Ed. 2d 695, 110 S. Ct. 3177 (1990) ("The object of [Rule 56(e)] is not to replace conclusory allegations of the complaint or answer with conclusory allegations of an affidavit."); First Commodity Traders, Inc. v. Heinold Commodities, Inc., 766 F.2d 1007, 1011 (7th Cir. 1985) ("Conclusory statements in affidavits opposing a motion for summary judgment are not sufficient to raise a genuine issue of material fact"); see also Jones v. Merchants Nat'l Bank & Trust Co., 42 F.3d 1054, 1058 (7th Cir. 1994) ("'Self-serving assertions without factual support in the record will not defeat a motion for summary judgment.'", quoting McDonnell v. Cournia, 990 F.2d 963, 969 (7th Cir. 1993)).

 Where, as here, cross-motions for summary judgment have been submitted, the court is not required to grant judgment as a matter of law for one side or the other. Heublein, Inc. v. U.S., 996 F.2d 1455, 1461 (2d Cir. 1993). The court must evaluate each party's motion on its own merits, resolving factual uncertainties and drawing all reasonable inferences against the party whose motion is under consideration. Id.; Buttitta v. City of Chicago, 803 F. Supp. 213, 217 (N.D. Ill. 1992), aff'd, 9 F.3d 1198 (7th Cir. 1993).

 Ameri-Tel's Motion for Summary Judgment

 Ameri-Tel's central contention underlying it's motion for summary judgment is that the outgoing screening service to which it subscribed from Illinois Bell was wholly ineffective in restricting the operator assisted international calls that were the subject of MCI's underlying collection action. In response, Illinois Bell argues that its outgoing screening service blocked only those international calls made through an Illinois Bell operator and that its outgoing screening service did not have the capability to block international operator assisted calls initiated from Ameri-Tel payphones where MCI was the long distance carrier. See Illinois Bell's Mem. Opp. Mot. Summ. J. at 2-4. *fn12"

  It is uncontroverted that Ameri-Tech subscribed to Illinois Bell's outgoing screening service on at least some of its lines during the relevant time period. It is also uncontroverted that Illinois Bell provided its outgoing screening service to Ameri-Tel pursuant to its COPTS Tariff--and in this sense the terms of the Tariff are incorporated into the service agreements entered into by and between Ameri-Tel and Illinois Bell. Finally, it is also uncontroverted that the relevant language of the COPTS Tariff does not limit or otherwise qualify the outgoing screening service to calls placed through an Illinois Bell operator. *fn13" The COPTS Tariff defines the outgoing screening service as follows:

 

Calls through an operator shall be restricted to those charged to the called number, a third number or calling card (required unless the customer can demonstrate that the customer-provided pay telephone equipment can perform this function.

 Illinois Bell's Local Rule 12(N) Facts, Ex. F, COPTS Tariff, P G(3). Illinois Bell's Customer/Vendor Information Handbook defines the service in a materially identical fashion: "Calls placed through an operator are restricted . . . ." *fn14" Ameri-Tel's Mem. Supp. Mot. Summ. J., Ex. F, Illinois Bell's Customer/Vendor Information Handbook at Bates Stamped page 296.

 In both instances, the operative expression is the unqualified expression "an operator." The Court finds this language to be unambiguously clear on its face; and, Illinois Bell does not explicitly argue to the contrary, instead it proffers evidence to establish that its outgoing screening service is only applicable to calls placed through an Illinois Bell operator. See, e.g., Illinois Bell, Mem. Supp. Mot. Summ. J., Ex. H., Martin Aff., P 8. However, its efforts in this regard are unavailing. At most, Illinois Bell's efforts in this regard establish that it was providing outgoing screening services to Ameri-Tel on terms at variance from those set out in its tariff (and reinforced by its Customer/Vender Information Handbook).

 As Illinois Bell correctly notes, "once a tariff is properly filed, the tariff, rather than individual private contracts, defines and discloses the terms and conditions upon which a carrier provides services to its customers." Illinois Bell, Mem. Supp. Mot. Summ. J. at 5-6 (citing In re Illinois Bell Switching Station Litigation, 161 Ill. 2d 233, 641 N.E.2d 440, 204 Ill. Dec. 216 (1994) (Miller, J., specially concurring)). Similarly, Illinois Bell correctly notes that "the terms of a filed tariff cannot be legally varied by the parties." Id. at 6. In the context of discussing the Illinois Motor Carrier of Property Law in Maurice Transport Co. v. Amoco Oil Co., 144 Ill. App. 3d 156, 494 N.E.2d 738, 98 Ill. Dec. 616 (4th Dist. 1986), the Illinois appellate court discussed the force and effect of a tariff filed with the Illinois Commerce Commission. The court's remarks are equally applicable in the present context:

 

Courts consider a tariff on file to be the legal rate between a shipper and a carrier, and the parties cannot vary from that rate. ( Aero Trucking, Inc. v. Regal Tube Co. (7th Cir.1979), 594 F.2d 619.) Specifically, where the rate set forth in a tariff differs from that stated in the parties' contract, courts decline to enforce the contract rate, holding the tariff rate controls. . . .

 

. . . Our supreme court has held that parties may not deviate from the terms of the tariff on file. (Illinois Central Gulf R.R. Co. v. Sankey Brothers, Inc. (1979), 78 Ill. 2d 56, 34 Ill. Dec. 328, 398 N.E.2d 3.) Additionally, where an ambiguous tariff is drafted by the carrier and its construction is in doubt, the tariff should be construed in favor of the shipper, since the carrier is presumed to have used language necessary to protect its interest. Indiana Harbor Belt R.R. Co. v. Budd Co. (1982), 110 Ill. App. 3d 76, 65 Ill. Dec. 787, 441 N.E.2d 1301.

 Id., 144 Ill. App. 3d at 162, 494 N.E.2d at 742.

 As this excerpt indicates, it is the plain and unambiguous language of Illinois Bell's tariff on file with the Illinois Commerce Commission that must control the outcome of this case. *fn15" As Ameri-Tel maintains, the tariff provides that "calls through an operator shall be restricted . . ." There is no qualification on the expression "an operator" in the tariff and the Court shall decline Illinois Bell's implicit invitation to read any qualification into that language now. *fn16"

 Illinois Bell has adduced absolutely no evidence bearing directly on the meaning of the expression "an operator" as used in the tariff. Instead, Illinois Bell has offered to the effect that the outgoing screening service "allows an Ameritech operator to monitor the billing of calls from privately owned pay telephones." Illinois Bell, Mem. Supp. Mot. Summ. J., Ex. H., Martin Aff., P 8 (emphasis added). No one, not even Ameri-Tel, appears to dispute this proposition. However, the issue is not what the outgoing screening service actually does; rather, it is what the outgoing screening service purports to do under the terms of the tariff. *fn17" The answer to that question is that the service should restrict calls placed through "an operator"--not simply an Illinois Bell operator.

 Illinois Bell argues that Ameri-Tel's concession that it is solely responsible for all international long distance calls incurred on Ameri-Tel's payphones prior to June 1, 1990, in conjunction with Ameri-Tel's claim that it subscribed to outgoing screening prior to June 1, 1990, compels the conclusion that Illinois Bell's outgoing screening service did not involve an agreement to block operator assisted international long-distance calls such as those involved in this case. Indeed, Ameri-Tel's president, Mervyn Dukatt, testified in his deposition that Ameri-Tel did not "have any agreement with Illinois Bell to block any numbers." Dukatt Dep. at 9. This admission by Mr. Dukatt has given the court some pause because, plainly, no change in Illinois Bell's outgoing screening service occurred as of June 1, 1990; hence, Mr. Dukatt's admission is flatly inconsistent with Ameri-Tel's position that the screening service should have blocked calls after June 1, 1990. However, for two reasons we cannot reach the conclusion urged upon us by Illinois Bell. In the first place, as Illinois Bell has repeatedly argued in its memoranda, Ameri-Tel appears to be seriously confused about the nature of the services it subscribes to from Illinois Bell. *fn18" The Court is not inclined to allow this confusion--which Illinois Bell plainly recognizes and which may underlie Mr. Dukatt's admission--to inure to Illinois Bell's benefit. While we will hold Ameri-Tel to Mr. Dukatt's admission insofar as it limits the relevant time period at issue in this case, we do not regard the admission as particularly probative evidence as to the nature of Illinois Bell's outgoing screening service. Second, and more significantly, even if we were to conclude that Ameri-Tel and Illinois Bell agreed that the outgoing screening service only applied to calls placed through an Illinois Bell operator, this Court will not enforce an agreement that varies from the express terms of the Tariff. *fn19" In re Illinois Bell Switching Station Litigation, 161 Ill. 2d 233, 641 N.E.2d 440, 204 Ill. Dec. 216 (1994) (Miller, J., specially concurring) (noting that a company may not deviate from the terms of the tariff); Maurice Transport Co. v. Amoco Oil Co., 144 Ill. App. 3d 156, 494 N.E.2d 738, 98 Ill. Dec. 616 (4th Dist. 1986) (noting that parties may not deviate from the terms of a filed tariff); Illinois Bell Telephone Co. v. Miner, 11 Ill. App. 2d 44, 58, 136 N.E.2d 1, 8 (1956) (noting that both the subscriber and the utility are bound by the terms of the tariff and cannot deviate therefrom).

 It is the Court's conclusion that Illinois Bell failed to provide outgoing screening services pursuant to the terms of its COPTS Tariff. Accordingly, we find that Illinois Bell has breached its agreement with Ameri-Tel to provide outgoing screening services. *fn20" Under Illinois law, a party aggrieved by another's breach of contract is entitled to damages for those injuries naturally arising from the breach. Midland Hotel Corp. v. Reuben H. Donnelley Corp., 118 Ill. 2d 306, 318, 515 N.E.2d 61, 67, 113 Ill. Dec. 252 (1987). In the instant case, we have no reservation in finding that the charges at issue were the natural result of Illinois Bell's failure to provide outgoing screening in accordance with the terms of its COPTS Tariff.

 Nevertheless, what the COPTS Tariff appears to give with the one hand, it takes away with the other. The COPTS Tariff includes the following express limitation on liability:

 

The liability of the Company for damages arising out of mistakes, omissions, interruptions, delays, errors or defects in transmission occurring in the course of furnishing service or other facilities, and not caused by the negligence of the customer, shall in no event exceed an amount equivalent to the proportionate charge to the customer for the period of service during which such mistake, omission, interruption, delay, error or defect in transmission occurs. No other liability shall in any case attach to the Company.

 Illinois Bell's Mem. Supp. Mot. Summ. J., Ex. L, COPTS Tariff Part 1, Section 5, P 3.1. See MCI Telecommunications Corp. v. Premium Marketing Sys., Inc., 1992 U.S. Dist. LEXIS 304, 1992 WL 6693 (N.D. Ill. Jan. 15, 1992) ("Where telecommunications services are provided under the terms of a tariff filed with the F.C.C., the tariff controls the rights and liabilities of the parties as a matter of law. This includes any limitation upon liability imposed by the tariff."). *fn21"

  Pursuant to Fed. R. Civ. P. 56(c), the Court may, and hereby enters summary judgment in favor of Ameri-Tel and against Illinois Bell on the issue of liability as a result of Illinois Bell's failure to provide outgoing screening service in accordance with the terms of its COPTS Tariff. Because the parties have not supplied sufficient information for the Court to determine the amount that Ameri-Tel is entitled to recover under the terms of the tariff, the Court is precluded from entering an appropriate judgment on the amount of damages Ameri-Tel should recover. *fn22" Accordingly, within 14 days of the date of this order, Ameri-Tel is directed to file a memorandum supported by appropriate exhibits establishing its damages pursuant to this order, as well as a proposed final judgment order. Illinois Bell shall have 14 days thereafter to file a response or objections, if any, to Ameri-Tel's memorandum and proposed order. Of course, if the parties can agree as to Ameri-Tel's damages, they are free to submit a stipulation as to the amount rather than submitting memoranda and exhibits. *fn23"

 CONCLUSION

 Third-party plaintiff Ameri-Tel, Inc.'s motion for summary judgment [84-1] is granted. Third-party defendant Illinois Bell Telephone Company's motion for summary judgment [81-1] is denied. Ameri-Tel, Inc. is directed to submit a memorandum with supporting exhibits establishing its damages, and a proposed judgment order within 14 days. Illinois Bell shall have 14 days thereafter to file a response or objections, if any, to Ameri-Tel's memorandum and proposed order.

 This order shall constitute a final order pursuant to Fed. R. Civ. P. 58 with respect to liability. This case shall only proceed for the strict purpose of determining an appropriate amount of damages to be awarded third-party plaintiff Ameri-Tel.

 ENTER:

 Ruben Castillo

 United States District Judge

 March 29, 1995


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