WSMP, Inc. v. BellSouth Telecom

UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

AT&T COMMUNICATIONS,
INCORPORATED,
Plaintiff,

v.

WSMP, INCORPORATED,
Defendant & Third Party Plaintiff- No. 96-1304
Appellant,

v.

BELLSOUTH TELECOMMUNICATIONS,
INCORPORATED,
Third Party Defendant-Appellee.

Appeal from the United States District Court
for the Western District of North Carolina, at Statesville.
Graham C. Mullen, District Judge.
(CA-94-70-5-MU)

Argued: April 9, 1997

Decided: June 30, 1997

Before NIEMEYER, LUTTIG, and MICHAEL, Circuit Judges.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.

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COUNSEL

ARGUED: Louis Ernest Vinay, SIMPSON AYCOCK, P.A., Mor-
ganton, North Carolina, for Appellant. Leon Harvey Lee, Jr., BELL-
SOUTH TELECOMMUNICATIONS, INC., Charlotte, North
Carolina, for Appellee. ON BRIEF: Robert E. Thomas, Jr., BELL-
SOUTH TELECOMMUNICATIONS, INC., Charlotte, North Caro-
lina, for Appellee.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

In August 1991 third-party plaintiff WSMP, Inc. (WSMP) entered
into an arrangement with third-party defendant BellSouth Telecom-
munications, Inc. (BellSouth) for the use of certain telephone equip-
ment and services known as the ESSX system. The arrangement
included (1) a subscription to certain advanced communication fea-
tures, such as an incoming (toll free) wide area telephone service
(WATS) number, and (2) a "Master Lease Agreement" for the neces-
sary equipment. One piece of the equipment was an"auto attendant,"
which allowed WSMP franchises to call in sales results on the WATS
number after hours.

During June 1992 hackers were able to access the auto attendant
from an outside line and make international long distance calls on
WSMP's line without WSMP's knowledge or permission. AT&T,
WSMP's long distance carrier, noticed an unusual pattern of calls and
notified WSMP. Recognizing that the calls had not been made by its
agents, WSMP asked BellSouth to modify the ESSX system to pre-
vent such unauthorized access. BellSouth made certain changes to the
system, but hackers once again were able to enter the system and
place another series of calls. After BellSouth made further adjust-
ments, the fraudulent calls stopped.

The toll charges run up by the hackers were included in AT&T's
bills to WSMP, and WSMP refused to pay for the unauthorized calls.

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AT&T brought an action against WSMP to recover these toll charges,
which amounted to approximately $125,000. WSMP then filed a
third-party complaint against BellSouth, alleging that the charges
were caused by defects in the auto attendant. Specifically, WSMP
asserted third-party claims against BellSouth for breach of warranty,
implied indemnity, and unfair trade practices. Later, AT&T and
WSMP reached a settlement that disposed of AT&T's claim against
WSMP. This left WSMP's third-party claims against BellSouth, and,
as to those claims, the district court awarded summary judgment in
favor of BellSouth. WSMP now appeals the summary judgment deter-
mination. After considering the appendix, the briefs, and the argu-
ments of counsel, we affirm on the reasoning of the district court. See
AT&T Corp. v. WSMP, Inc., No. 5:94CV70-MU (W.D. N.C. Jan. 31,
1996).

AFFIRMED

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