UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 05-1218
XO COMMUNICATIONS, INCORPORATED,
Plaintiff - Appellant,
versus
METROPCS, INCORPORATED,
Defendant - Appellee.
Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. T. S. Ellis, III, District
Judge. (CA-04-845)
Argued: May 22, 2006 Decided: June 20, 2006
Before NIEMEYER, SHEDD, and DUNCAN, Circuit Judges.
Affirmed by unpublished per curiam opinion. Judge Duncan wrote a
separate concurring opinion.
John Alexander Fraser, III, Clifton, Virginia, for Appellant.
Charles Lee Perry, ANDREWS & KURTH, L.L.P., Dallas, Texas, for
Appellee.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
XO Communications, Inc. appeals the summary judgment entered
in favor of MetroPCS, Inc. We affirm.1
The material facts are not in dispute, and we need only
briefly recite them in this opinion. XO is a telecommunications
carrier. MetroPCS provides wireless telephone service in the
Miami, Florida, area. After negotiations, XO and MetroPCS entered
into two separate (but identical) one-year contracts for “Dedicated
IntraLATA DS-3 Voice Service for Calls Originating and Terminating
Within LATA 460 (Miami, Florida).” J.A. 1286. Generally, under
these contracts, MetroPCS’ customers used MetroPCS equipment to
make telephone calls which MetroPCS then routed to XO’s network for
completion. XO provided this service to MetroPCS and billed
MetroPCS periodically.
The parties’ dispute involves approximately $350,000 that XO
contends MetroPCS owes as a result of XO’s delivery of MetroPCS
calls to BellSouth for completion. BellSouth assessed XO for this
amount. MetroPCS refused to pay XO, contending that it is not
liable because the contracts unambiguously provide that it was only
obligated to pay XO a flat monthly rate of $11,200 (per contract).
MetroPCS specifically relies on the addendum to the contracts,
which sets the “rates” for the specified service as being a monthly
1
We review de novo an award of summary judgment. Chawla v.
Transamerica Occidental Life Ins. Co., 440 F.3d 639, 644 (4th Cir.
2006).
2
recurring charge of $11,200 with no non-recurring charge. J.A.
1286.
On cross-motions for summary judgment, the district court
analyzed the various provisions of the contracts, found XO’s
proposed reading of the contracts to be untenable, and concluded
that MetroPCS is not liable for the BellSouth charges under the
unambiguous terms of the contracts. See J.A. 1273 (“It is the
Court’s view, . . . without reference to anything other than the
contract documents, . . . that it is unambiguous, and that the
addendum makes clear that the only charge is [$]11,200. . . . It’s
not conceivable to the Court that this contract is unambiguous the
other way.”). Alternatively, the district court held that if XO’s
proposed reading of the contracts is plausible, then the contracts
are, at best, ambiguous. Continuing this line of reasoning, the
district court stated that in the event of such an ambiguity, the
parol evidence establishes as a matter of law that the parties
intended for MetroPCS to pay only a monthly flat rate of $11,200
per contract. See J.A. 1276 (“[E]ven assuming that there was some
plausibility to the plaintiff’s argument on the construction of the
addendum, . . . that would render the contract ambiguous and,
therefore, resort to parol evidence would be appropriate. . . .
3
There is no evidence contradicting what Mr. Ibanez told Mr. Madsen
in their negotiation of the contract.”).2
On appeal, XO reiterates its contention that the contracts
unambiguously require MetroPCS to pay the BellSouth charges. At
oral argument, XO’s counsel readily conceded that unless we
conclude that the contracts are unambiguous in XO’s favor on this
point, then MetroPCS must prevail in this litigation. In making
this concession, XO’s counsel specifically agreed that if resort to
parol evidence is necessary because of an ambiguity in the
contracts, then MetroPCS must prevail.
Having carefully considered the parties’ arguments, we agree
with the district court that the contracts do not unambiguously
support XO’s position. Instead, we believe that the contracts are,
at best, ambiguous concerning MetroPCS’ payment obligation. Given
this ambiguity, and in light of XO’s concession and our review of
the record, we conclude that the undisputed parol evidence
establishes as a matter of law that MetroPCS was only obligated to
pay a monthly flat rate of $11,200 per contract and, therefore, is
not liable for the BellSouth charges. Accordingly, we affirm the
summary judgment.
AFFIRMED
2
Ibanez, the XO Vice-President who negotiated the contracts
with MetroPCS, admitted during discovery that he had represented
that MetroPCS would not incur any usage charges under the
contracts.
4
DUNCAN, Circuit Judge, concurring:
I write separately to explain the basis of my agreement with
the majority.
I believe that the term “rate” in the Addendum is a term of
art used within the telecommunications industry to denote charges
imposed by a particular carrier. As such, a “rate” would not
include taxes, fees, or the BellSouth transit charges at issue.
Interpreting “rate” as specific to a carrier would also harmonize
the agreement before us. So interpreted, the term as used in the
Addendum could be read consistently with the provisions allowing
for the pass through of third party fees such as taxes and other
carrier’s charges instead of overruling them.
Although my interpretation is a plausible, and, I think, more
compelling one, unfortunately for XO it is not the only one that
can be drawn from this agreement. The agreement appears to use the
terms “rates” and “fees” interchangeably; in fact, the multiple
references to components of a customer’s costs make it difficult to
tell what one’s rate comprises.
As the drafter of the agreement, XO was in a position to
define the term “rate,” or otherwise make its meaning clear. Its
failure to do so creates an ambiguity that renders resort to parol
evidence appropriate.
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