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Highland Supply Corp. v. Tecnologia De Communicaciones Avanzadas

February 11, 2008

HIGHLAND SUPPLY CORPORATION, PLAINTIFF,
v.
TECNOLOGIA DE COMMUNICACIONES AVANZADAS, S.A. DE C.V., D/B/A BORDERCOMM, AND BORDERCOMM PARTNERS, L.P., DEFENDANTS.



The opinion of the court was delivered by: G. Patrick Murphy United States District Judge

MEMORANDUM AND ORDER

MURPHY, District Judge

This matter came before the Court on cross motions for summary judgment (Docs. 35, 41), and the Court heard arguments from counsel on December 19, 2007. For the reasons set forth below, Plaintiff's motion for summary judgment is granted, and Defendant's motion for summary judgment is denied.

BACKGROUND

Plaintiff Highland Supply Corporation ("Highland") is a supplier of various products in the floral industry. Defendant Tecnologia de Communicaciones Avanzadas, S.A. de C.V. ("TCA") owns the concessions to certain wireless spectrum in Mexico and provides wireless communications to companies transacting business across the Mexican border.*fn1

The facts, as the Court set forth in its Memorandum and Order on September 7, 2006 (see Doc. 24), are as follows:

On or about January 5, 2004, HSC [Highland] and TCA entered into a Digital Wireless Service Agreement (the "First Agreement") wherein TCA agreed to provide cross border digital wireless communications between a data center located in Brownsville, Texas, and facilities operated by HSC in Matamoroes, Mexico. On or about August 20, 2004, HSC and TCA entered into a second Digital Wireless Service Agreement (the "Second Agreement") wherein TCA agreed to provide digital wireless communications between two HSC facilities in Los Indios, Texas, and Estacion, Mexico. The First Agreement was attached to HSC's Purchase Order No. 108087 as an exhibit and sent back to TCA. The Second Agreement was attached to HSC's Purchase Order No. 110134 and sent back to TCA. Purchase Order Nos. 108087 and 110134 contained a condition, which stated,

In the event [HSC] is not satisfied for any reason with the wireless services and any other services ordered with this Purchase Order and Digital Wireless Service Agreement then [HSC] may in its sole discretion in writing only cancel the Purchase Order and Digital Wireless Service Agreement and owe to [TCA] only the monthly charge prorated to the date of the written notice of cancellation. This additional term and condition supercedes any other provision on the reverse side or any other place that may conflict.

On or about December 1, 2005, HSC sent a notice of cancellation to TCA, canceling Purchase Order Nos. 108087 and 110134 . A dispute arose concerning the terms of the contract, and TCA informed HSC that it would consider the December 1st cancellation to be a breach of the contract, and it would seek damages against HSC.

As a result of TCA's threats, HSC filed a complaint against TCA and Bordercomm with this Court on December 16, 2005, seeking declaratory judgment as a remedy to the current controversy. (See Doc. 1).

ANALYSIS

Because Highland's action is for declaratory judgment under 28 U.S.C. § 2201(a), Highland bears the burden of showing the existence of an actual controversy to establish subject matter jurisdiction. Cardinal Chem. Co. v. Morton Int'l, Inc., 508 U.S. 83, 95 (1993). See Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 239-41 (1937) (an actual controversy must be present before a declaratory judgment action is ripe for adjudication). The actual controversy must be "definite and concrete," touching the legal relations of parties which have adverse legal interests. Id. at 242. If a declaratory judgment would settle an actual controversy and afford relief from uncertainty, insecurity, or delay regarding a party's legal rights, the action is not subject to dismissal. Genentech v. Eli Lilly & Co., 998 F.2d 931, 937 (Fed. Cir. 1993); Goodyear Tire & Rubber Co. v. Releasomers, Inc., 824 F.2d 953, 956 (Fed. Cir. 1987).

Here, the Court finds that there is an actual and substantial controversy between the parties concerning Highland's right to cancel the contracts pursuant to the terms of the purchase orders. The Court notes that TCA has admitted that it considers the cancellations to be a breach of the contracts which entitles it to damages. (See, e.g., Doc. 26, paras. 10-11). For this reason, the Court has jurisdiction to settle this dispute and provide relief.

Summary judgment may be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). In considering a summary judgment motion, a court must review the entire record and draw all reasonable inferences in the light most favorable to the non-moving party. See NLFC, Inc. v. ...


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