VERIZON CONNECTED SOLUTIONS v. STARLIGHT COMMUNICATIONS HOLDING

2004 | Cited 0 times | D. Rhode Island | January 7, 2004

REPORT AND RECOMMENDATION

Before the court is the Motion for Partial Summary JudgmentDismissing the Sixth Cause of Action ("Motion for Partial SummaryJudgment") of Defendant Starlight Communications Holding, Inc. I d/b/aStarlight Communication ("Starlight"). This matter has been referred tome for preliminary review, findings, and recommended disposition pursuantto 28 U.S.C. § 636(b)(1)(B) and D.R.I. Local R. 32(a). A hearing wasconducted on June 25, 2003. After reviewing the memoranda and exhibitssubmitted and performing independent research, I recommend that theMotion for Partial Summary Judgment be denied.

Overview of Sixth Cause of Action

Verizon Connected Solutions, Inc. ("Verizon" or "Plaintiff"), andStarlight entered into a contract whereby Verizon agreed to install acable television system at the Bayside Country Club apartment complex("Bayside") in exchangePage 2for $44,000.00 (the "Bayside Contract"). The work involved burying5,300 feet of coaxial cable. Starlight paid $22,000 to Verizon at theoutset of the project, but it refused to pay the remaining balance uponcompletion. As grounds for nonpayment, Starlight claimed that Verizon hadbreached the Bayside Contract by failing to bury the coaxial cableeighteen inches deep. Verizon filed this action against Defendants torecover the unpaid balance allegedly due from Starlight.1 Defendantsthen moved for partial summary judgment, contending that Verizon's workis worthless and that the court should rule as a matter of law thatVerizon failed to substantially perform its obligations under the BaysideContract, thereby excusing Starlight from payment of the balance due.Because genuine issues of material fact exist, Starlight's Motion forPartial Summary Judgment should be denied.

Facts

In or about June of 2000, Verizon2 and Starlight, a private cableoperator that sells cable services to paying subscribers, entered into acontract pursuant to which Verizon was to install a cable televisionsystem at Bayside. See Defendant's Local Rule 12.1 Statement ofUndisputed FactsPage 3("DSUF") ¶ 4. The work included the underground installation ofapproximately 5,300 feet of coaxial cable. See DSUF ¶ 5(A).The Bayside Contract required Verizon to perform the installation "in asafe and workmanlike manner," Letter from W. James MacNaughton to JudgeMartin of 7/1/03, Exhibit ("Ex.") A (Agreement for Wire and CableInstallation and Design Services) § 5.01, and to comply with theprovisions of all permits and state and federal laws, see id.The contract also stated that any modification to its requirements mustbe made through a written change order, see id. § 4.03,agreed to, see id. § 4.07, and signed by both parties,see id.

Verizon hired a subcontractor, Plan B Communications, L.L.C. ("PlanB"), to provide the labor for the Bayside Contract. See DSUF¶ 6. Plan B performed the work in July and August of 2000. Seeid. ¶ 15; Plaintiff Verizon Connected Solutions, Inc.'sStatement of Disputed Material Facts in Opposition to Defendant's Motionto Dismiss the Sixth Cause of Action ("PSDF") ¶ 27.3 HarrisShulman, a contractor who served as Starlight's design consultant for theBayside Contract and also performed work at Bayside, saw Plan B employeesburying the coaxial cable at depths less than eighteen inches.See DSUF ¶ 23; see also PSDF ¶ 20. Whendeposed in connection with this matter, Mr. Shulman stated that herelayed this information to Mike Derderian, President of Starlight,see DSUF ¶ 23, and per Mr. Derderian's instruction toldDavid McCaul, a Plan B employee, to bury the cable deeper, seeid. ¶ 25; PSDF ¶¶ 20-21. According to Mr.Page 4Shulman, Mr. McCaul responded that Plan B could not bury the cableeighteen inches deep because it was experiencing difficulties with thesoil at Bayside. See DSUF ¶ 24. Mr. Shulman testified atthe deposition that, with Starlight's knowledge, he then told Mr. McCaulto bury the cable as deep as was possible with eighteen inches being thegoal. See DSUF ¶ 25. Mr. McCaul does not recall anyconversations with Mr. Shulman concerning a specified depth for thecoaxial cable at Bayside. See id. ¶ 26. On or about October30, 2000, Mr. Derderian signed a customer acceptance form stating thatthe work performed at Bayside had been completed in a satisfactorymanner. See id. ¶ 38.

In December of 2002, Starlight conducted a physical inspection of thecable installed at Bayside. See id. ¶ 40. Eight random testholes were dug, and the depth of the cable at each hole was measured.See id. The depth of the cable at these holes ranged from threeto twelve inches, with an average depth of 8.75 inches. See id.

The cable buried by Plan B is presently being used by Starlight toprovide cable television services to the residents of Bayside. Seeid. ¶ 42. Since its installation, the cable has been cut once bya company repairing a septic system. See id. ¶ 43. As aresult, the residents were without cable service for approximately fourhours. See id. The cost of repairing a cut cable is about$200.00. See PSDF 1 47.

Travel

Plaintiff filed its Complaint on May 2, 2002. Defendants filed theirAnswer, Counterclaims and Jury Demand on June 21, 2002. Plaintiff repliedthereto on July 3, 2002. StarlightPage 5filed the Motion for Partial Summary Judgment on April 21, 2003.Plaintiff Verizon Connected Solutions Inc.'s Objection to Defendants'[sic] Motion for Summary Judgment Dismissing the Sixth Cause of Actionwas filed on May 21, 2003.

Law

Summary judgment is appropriate where "the pleadings, depositions,answers to interrogatories, and admissions on file, together with theaffidavits, if any, show that there is no genuine issue as to anymaterial fact and that the moving party is entitled to a judgment as amatter of law." Kearney v. Town of Wareham, 316 F.3d 18, 21(1st Cir. 2002) (quoting Fed.R.Civ.P. 56(c)). "`A dispute is genuineif the evidence about the fact is such that a reasonable jury couldresolve the point in the favor of the non-moving party. A fact ismaterial if it carries with it the potential to affect the outcome of thesuit under the applicable law.'" Santiago-Ramos v. Centennial P.R.Wireless Corp., 217 F.3d 46, 52 (1st Cir. 2000)(quotingSánchez v. Alvarado, 101 F.3d 223, 227 (1st Cir. 1996)).

In ruling on a motion for summary judgment, the court must examine therecord evidence "in the light most favorable to, and drawing allreasonable inferences in favor of, the nonmoving party." Felicianode la Cruz v. El Conquistador Resort & Country Club. 218 F.3d 1,5 (1st Cir. 2000) (citing Mulero-Rodriguez v. Ponte. Inc.,98 F.3d 670, 672 (1st Cir. 1996)). "[W]hen the facts support plausible butconflicting inferences on a pivotal issue in the case, the judge may notchoose between those inferences at the summary judgment stage."Coyne v. Taber Partners I, 53 F.3d 454, 460 (1st Cir. 1995).Furthermore, "[s]ummary judgment is not appropriate merely because thefacts offered by the moving party seem morePage 6plausible, or because the opponent is unlikely to prevail at trial.If the evidence presented is subject to conflicting interpretations, orreasonable men might differ as to its significance, summary judgment isimproper." Gannon v. Narragansett Elec. Co., 777 F. Supp. 167,169 (D.R.I. 1991)(citation and internal quotation marks omitted).However, the non-moving party may not rest merely upon the allegations ordenials in its pleading, but must set forth specific facts showing that agenuine issue of material fact exists as to each issue upon which itwould bear the ultimate burden of proof at trial. SeeSantiago-Ramos, 217 F.3d at 53 (citing Anderson v. LibertyLobby. Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202(1986)).

In the present matter, this court, sitting in diversity jurisdiction,must apply the law of Rhode Island, the forum state. See Erie R.R.Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 822, 82 L.Ed. 1188(1938); see also Lexington Ins. Co. v. Gen. Accident Ins. Co. ofAm., 338 F.3d 42, 46 (1st Cir. 2003) ("It is a black-letter rulethat state substantive law supplies the rules of decision for a federalcourt sitting in diversity jurisdiction.")(citing Erie, 304U.S. at 78).

Discussion

Starlight's argument, broadly stated, is that it is excused from payingthe amount owed under the Bayside Contract because Verizon did notsubstantially perform its obligations under the Contract as would renderpayment due. Therefore, Starlight asserts, it is entitled to summaryjudgment on the sixth cause of action.

"As incorporated into Rhode Island law, the doctrine of substantialperformance shields contracting parties from the harsh effects of beingheld to the letter of their agreements.Page 7Instead, substantial fulfillment of an obligation by one partysuffices to trigger a corresponding duty on behalf of the other party."URI Cogeneration Partners, L.P. v. Bd. of Governors for HigherEduc., 915 F. Supp. 1267, 1284-85 (D.R.I. 1996). Conversely, "[a]party's material breach of contract justifies the nonbreaching party'ssubsequent nonperformance of its contractual obligations." Women'sDev. Corp. v. City of Central Falls. 764 A.2d 151, 158 (R.I. 2001).

Determining the legal threshold for "materiality" is "necessarily imprecise and flexible." Restatement (Second) Contracts § 241 cmt. a at 237 (1981). One court has described a material breach as "a failure to perform a substantial part of the contract or one or more of its essential terms or conditions, or if there is such a breach as substantially defeats its purpose;" in other words, such a breach is one that "upon a reasonable construction of the contract, it is shown that the parties considered the breach as vital to the existence of the contract." UHS-Oualicare, Inc. v. Gulf Coast Community Hospital, Inc., 525 So.2d 746, 756 (Miss. 1987).Women's Dev. Corp., 764 A.2d at 158.

Whether a party to a contract has substantially performed or materiallybreached its obligations is usually a question of fact for a jury toresolve after considering all of the relevant evidence. See id.at 158, 160; URI Cogeneration Partners, 915 F. Supp. at 1285(citing Nat'l Chain Co. v. Campbell, 487 A.2d 132, 135 (R.I.1985)). "However, if the issue of materiality admits of only onereasonable answer, then the court should intervene and resolve the matteras a question of law." Women's Dev. Corp., 764 A.2d at 158;see also Jacob & Youngs. Inc. v. Kent. 129 N.E. 889, 891(N.Y. 1921) ("The question is one of degree, to be answered, if therePage 8is doubt, by the triers of the facts and, if the inferences arecertain, by the judges of the law.") (citations omitted).

Starlight concedes that substantial performance ordinarily is a factualquestion. See Memorandum of Law in Support of Motion byDefendant Starlight Communications Holding Inc. I for Partial SummaryJudgment Dismissing the Sixth Cause of Action ("Defendant's Mem.") at 4.It claims, however, that "in a case such as this, where Verizon did notbury the coaxial cable anywhere near the required minimum depth of18 ". . . the Court can determine the lack of substantial performance asa matter of law." Id. at 4-5.

If, on the record before it, the court can determine as a matter of lawthat Verizon did not substantially perform the Bayside Contract, thenStarlight is excused from rendering payment of the balance due andsummary judgment should be granted as to the sixth cause of action.However, if the court finds that a question of fact exists as to whetherVerizon breached the contract or as to the materiality of any suchbreach, then the court cannot make such a determination at this stage ofthe proceedings and summary judgment is precluded.

I. Eighteen Inch Requirement

Starlight's claim that Plaintiff did not substantially perform underthe Bayside Contract is based on the alleged failure of Plan B'semployees to bury the coaxial cable eighteen inches deep beneath unpavedsurfaces at Bayside. See Defendant's Mem. at 4-5. Such aspecification is not explicitly stated in the Bayside Contract.4Starlight argues,Page 9however, that an eighteen inch depth requirement is implicit inVerizon's agreement to perform the work in a "workmanlike" manner,see Reply Memorandum of Law in Support of the Motion by theIndividual Defendants [sic] Dismissing the Sixth Cause of Action("Defendant's Reply Mem.") at 1-2, or, presumably, via its agreement toabide by state laws,5 see Defendant's Mem. at 5 n.6. As aninitial matter, therefore, the court must decide whether the term"workmanlike" in the Bayside Contract unambiguously imposed therequirement that the cable be buried at a depth of eighteen inches belowunpaved surfaces.

Contract interpretation presents, in the first instance, a question of law, and is therefore the court's responsibility. Fashion House, Inc. v. K mart Corp., 892 F.2d 1076, 1083 (1st Cir. 1989). Under Rhode Island law, a court's objective in construing contractual language is to determine the parties' intent. Johnson v. Western Nat. Life Ins. Co., 641 A.2d 47, 48 (R.I. 1994). As a first step, the court must determine whether the contract's terms are clear or ambiguous as a matter of law. Kelly v. Tillotson-Pearson. Inc., 840 F. Supp. 935, 944 (D.R.I. 1994).Page 10 To be sure, the actual meaning of a contractual provision which can reasonably accommodate two or more interpretations should be left to the jury. But the question whether a provision can reasonably support a proffered interpretation is a legal one, to be decided by the court. Fleet Nat'l Bank v. Anchor Media Television. Inc., 45 F.3d 546, 556 (1st Cir. 1995) (citations omitted).

URI Cogeneration Partners, L.P. v. Bd. of Governors for HigherEduc., 915 F. Supp. 1267, 1281 (D.R.I. 1996).

To perform work in a workmanlike manner "is to do the work as a skilledworkman would do it." Morris v. Fox, 135 N.E. 663, 664 (Ind.App. 1922); see also Nash v. Sears. Roebuck & Co.,174 N.W.2d 818, 821 (Mich. 1970)("[T]he standard of comparison or test ofefficiency is that degree of skill, efficiency, and knowledge which ispossessed by those of ordinary skill, competency, and standing in theparticular trade or business for which [the worker] isemployed.")(quoting 17 Am. Jur.2d Contracts § 371); NuliteIndus. Co. v. Home, 556 S.E.2d 255, 256 (Ga. App. 2001)(holding dutyto perform in workmanlike manner breached when worker "fails to exercisea reasonable degree of care, skill, and ability under similar conditionsand like surrounding circumstances as is ordinarily employed by others inthe same profession.")(quoting Hall v. Harris. 521 S.E.2d 638,643 (Ga. App. 1999)).

An agreement to perform in a workmanlike manner does not promise acertain end result but, rather, is an "`in process' concept" focusing on"the nature of the conduct [a contracting party] provides when renderingservices." 3 Bruner & O'Connor Construction Law § 9:68; seealso id. § 9:54 n.3 ("[T]he `workmanlike performance' warrantyis an in-process or `properPage 11efforts' warranty that is more in the nature of a standard of carerather than a true warranty."); Nash, 174 N.W.2d at 821(holding that in absence of express provision so requiring, contractordoes not become "guarantor of results.")(quoting 17 Am. Jur.2d Contracts§ 371).

In arguing that the court can determine as a matter of law what theparties contemplated when they agreed that Verizon would install thecable in a "workmanlike" manner, Starlight here is claiming, in essence,that a particular industry standard as to cable depth is whollydeterminative of the question. See Defendant's Reply Mem. at 1("The prevailing industry standard determines whether the work has beenperformed to the generally accepted level of skill."). It further claimsthat the evidence before the court definitively establishes what thatdepth standard is. See id. at 2. After reviewing relevant caselaw and the evidence presently in the record, the court finds thatStarlight's arguments in this regard are unpersuasive.

First, exactly what constitutes "workmanlike" performance in aparticular circumstance ordinarily is a question of fact. See17B C.J.S. Contracts § 780; M.J. Oldenstedt Plumbing Co. v. KMart Corp., 629 N.E.2d 214, 219 (Ill.App. 1994); Previews,Inc. v. Everets, 94 N.E.2d 267, 268 (Mass. 1950)("The law can supplyno standard of performance beyond the bare statement of the rule that acontract for services must be performed in a reasonably diligent,skillful, workmanlike, and adequate manner. Whether the requirement ofthe rule has been met in a particular instance is commonly a question offact, even if the evidence as to what was done is undisputed."); cf.Iowa-Illinois Gas & Elec. Co. v. Black & Veatch.497 N.W.2d 821, 825 (Iowa 1993)(finding jury questionPage 12generated where parties disputed exact substance of "higheststandards of the engineering profession").

The cases cited by Defendants demonstrate that industry standards arerelevant evidence of what constitutes workmanlike performance, seeHigh Plains Genetic Research, Inc. v. J K Mill-Iron Ranch,535 N.W.2d 839, 843 (S.D. 1995); D/S Ove Skou v. Hebert.365 F.2d 341, 347-48 (5th Cir. 1966), but they do not support the notionthat such standards are wholly dispositive of the issue. Typically, as inHigh Plains, the factfinder determines whether the work has beenperformed with the necessary level of skill by considering all theevidence, including any evidence of industry standards. See HighPlains Genetic Research, Inc., 535 N.W.2d at 843; see alsoMaguire Co., Inc. v. Herbert Const. Co., Inc., 945 F. Supp. 72, 75-77(S.D.N.Y. 1996); D/S Ove Skou. 365 F.2d at 347-50.

Second, in this case, the evidence of record regarding the industrystandard for the proper depth of coaxial cable is contradictory, and,upon reviewing it, the court finds that Starlight's characterization ofsome of that evidence is either inapt or unverifiable. For example, toestablish the purported standard, Starlight relies upon the depositiontestimony of Robert Zuba, Chief Electrical Inspector for the City ofWarwick, claiming that he "testified that the Rhode Island Building Coderequires coaxial cable to be buried at least 18" deep [and that] he`would ask them to correct the violation' if the cable was not buried 18"deep." Defendant's Mem. at 4; see also DSUF ¶¶ 30-31.However, a review of the excerpts of Mr. Zuba's testimony that have beenprovided to the court discloses that while he spoke generally about thePage 13typical requirements of the National Electrical Code ("NEC")6and how he would handle a situation of noncompliance therewith, he neveractually specified that the NEC required "coaxial" or"telecommunications" cable to be buried 18" deep or stated that he wouldconsider the failure to do so a violation needing correction.7Furthermore, as additionalPage 14evidence of a depth standard, Starlight cites to one sentence fromthe deposition testimony of a purported expert, Dennis Heron,see Defendant's Reply Mem. at 2 n.6, but has not provided thecourt with any more of the transcript of that testimony or with anyinformation regarding Mr. Heron's qualifications. Finally, whileStarlight also quotes testimony from Verizon's project manager, DennisMatthews, saying that eighteen inches is "kind of an industry standard,National Electrical Code, Bell Standard," Defendant's Reply Mem. at 2n.4, it does not acknowledge contrary testimony from Mr. Shulmanconcerning whether the NEC, or any other code, included an applicablestandard. See Discussion supra at 12-13 n.7. As such,Starlight's assertion that "[i]t is undisputed in this case that theprevailing industry standard for the depth at which coaxial cable shouldbe buried is at least 18" beneath unpaved surfaces . . . [and that]Plaintiff has offered nothing to contradict it," Defendant's Reply Mem.at 2, must be rejected.

The court concludes, therefore, based on the foregoing analysis, thatthe "workmanlike" provision in the Bayside Contract is ambiguous and itcannot be said, as a matter ofPage 15law, that it imported a standard requiring that the cable be buried at adepth of eighteen inches. Obviously, the cable needed to be buried atsome depth, but the intent of the parties as to a required depth is notclear. When a contract is ambiguous and more than one possibleinterpretation exists, the intent of the parties is a question of factnot properly resolved in a motion for summary judgment. See URICogeneration Partners, L.P. v. Bd. of Governors for Higher Educ.,915 F. Supp. 1267, 1281 (D.R.I. 1996); see also Westinghouse Broad.Co., Inc. v. Dial Media, Inc., 410 A.2d 986, 990-91 (R.I. 1980).Furthermore, even if it were established that the parties intended toimport the industry standard for the burial depth of coaxial cable, therecord contains conflicting evidence as to what that standard is.8Page 16

Insofar as a preliminary factual question exists regarding the exactdepth requirement to which the parties agreed, it is impossible for thecourt to determine, as a matter of law, whether there has beensubstantial performance of the contract. Without knowing what the partiescontemplated as full compliance, there is simply no way to assess themateriality of the alleged defects in performance. Accordingly, for thisreason alone, summary judgment ought to be denied.

II. Substantial Performance

Even if the contract were unambiguous as to the depth requirement,other material factual disputes exist within the broader question ofwhether Verizon substantially performed the Bayside Contract. The courtwill address these briefly.

A. Cable depth

First, the current evidence as to the actual depth at which the cablehas been buried is both sparse and conflicting. Starlight, through itspresident, attests that when eight random test holes were dug and thedepth of the cable measured, the depths ranged from 3 inches to 12 inchesPage 17with an average depth of 8.75 inches. See Certificationof Mike Derderian in Support of Motion by Defendant StarlightCommunications Holdings, Incj.j for Partial Summary Judgment Dismissingthe Sixth Cause of Action ("Derderian Certification") ¶¶ 10-11; id.,Ex. C (photographs of test holes with notations as to depth). However,Verizon challenges whether Starlight's sample is representative of theentire system, see Plaintiff's Mem. at 10, and Starlight hassubmitted nothing to support the proposition that eight random holesaccurately reflect, with any degree of reliability, the depth overall ofa mile's length of cable. See Speen v. Crown Clothing Corp.,102 F.3d 625, 635 (1st Cir. 1996)(finding Plaintiff's statisticalevidence insufficient to prove discrimination where he failed to explainwhy group selected was appropriate and representative sample).

Furthermore, Verizon has submitted contrary evidence of the cable'sdepth in the deposition testimony of Jack Kennedy, a Plan B employee, andalso that of Mr. Shulman. Mr. Kennedy testified that he witnessed thecable being buried 24 inches deep. See Exhibits in Oppositionto Motion for Partial Summary Judgment Dismissing the Sixth Cause ofAction ("Plaintiff's Ex."), Ex. 3 (Excerpts from Kennedy DepositionTranscript) at 2. Mr. Shulman stated that he saw the cable being buriedat depths varying from 6 to 13 or 14 inches. See Plaintiff'sEx., Ex. 1 (Excerpts from Shulman Deposition Transcript) at 2. Based onthe foregoing, the court concludes that a factual question exists as tothe actual depth at which the cable is buried at Bayside.

B. Worth of the System

Starlight further claims that, due to the cable's insufficient depth,the work done by Plan B at Bayside isPage 18worthless and, therefore, cannot constitute substantialperformance. See Defendant's Mem. at 5-6. It argues that, forboth legal and business reasons, it is necessary to cure the allegeddefect. See Tape of June 25, 2003, Hearing. As to the former,Starlight claims that the Rhode Island Building Code ("RIBC") requiresthat the cable be buried at a depth of eighteen inches, seeDefendant's Mem. at 5, and it implies that an official of the city ofWarwick will inspect the premises and force Starlight into compliance,see id. at 6 n.7. Regarding the latter, Starlight alludes tothe potential frost damage to a cable buried at less than eighteen inchesand to the danger of its being accidentally cut. See Tape ofJune 25, 2003, Hearing. According to Starlight, the cost to cure thedefect would be the cost of completely reburying the cable, which "wouldrender the work performed by Plaintiff worthless." Defendant's Reply Mem.at 3. These arguments are not persuasive.

Under Rhode Island law, when a contractor has substantially performedits obligations, it is entitled to recover the contract price less theamount needed to remedy the defect. See Nat'l Chain Co. v.Campbell, 487 A.2d 132, 135 (R.I. 1985). However, in a situationwhere the defect renders the contractor's performance worthless and thework has to be completely redone, that formula does not apply and thecontractor is liable for the full cost to remedy the work. Seeid. Thus, the court agrees that the need to completely rebury thecable would render Plaintiff's work worthless.

Starlight, in support of its argument that there is a legal need tocompletely rebury the cable, relies on the deposition testimony of Mr.Zuba regarding the requirements of the NEC, which has been incorporatedinto the RIBC. SeePage 19Defendant's Mem. at 4, 6 n.7. As earlier explained, however,Starlight's characterization of Mr. Zuba's testimony is not whollyaccurate. See Discussion supra at 12-13 n.7. AlthoughMr. Zuba indicated that if he were confronted with a violation of the NEChe would require its correction, he never explicitly stated that burialof coaxial cable at depths of less than 18 inches was in fact such aviolation necessitating repair. See id. While his otherstatements may be read to imply that an 18 inch requirement from Table300-5 of the NEC is applicable, there is other, contrary evidence in therecord such that a factual dispute remains as to whether that Tablecontrols. See id. Additionally, there is no evidence that anygovernmental authority has ordered Starlight to rebury the cable or thatsuch an order is forthcoming. However, there is evidence to the contrary.See Plaintiff's Ex., Ex. 2 (Excerpts from Derderian DepositionTranscript) at 2 (stating that Starlight has not been fined by any RhodeIsland municipality, nor have there been any discussions with anymunicipal employee regarding cable installed by Verizon).

Starlight's argument that there is a business need to have the cablereburied, based on the purported threat to cable buried at under eighteeninches from frost and from being accidentally cut, is similarlyunfounded. First, Starlight itself claims that the frost line at Baysideis located at a depth of thirty-six inches. See Defendant'sMem. at 2. Assuming that is true, it follows that a cable buried ateighteen inches would not necessarily be protected from frost damage. Atthe hearing, Starlight's counsel conceded that there was no evidence inthe record to support the contention that there is more frost damage doneto cable buried at less than eighteen inches than to cable buried atPage 20eighteen inches. See Tape of June 25, 2003, Hearing.Second, Starlight, through its president, has identified only oneinstance in approximately three years in which the cable has beenaccidentally cut, see Derderian Certification ¶ 12, and noevidence has been produced to show that the cut would not have occurredhad the cable been buried at eighteen inches. Further, the only evidencebefore the court on the matter suggests that the cost to repair a cablecut is nominal, see PSDF ¶ 47 (stating cost is $200), andthe resultant inconvenience minimal, see DSUF ¶ 43 (notingcable cut resulted in four hour interruption in service).

In fact, contrary to Starlight's assertion of worthlessness, the cable,at its present depth, apparently has been used for approximately threeyears to generate revenue by providing cable television service to theresidents at Bayside. See Derderian Certification ¶ 12.There is no evidence that the present depth of the cable has any negativeeffect on the operation of the cable system. Rather, according to Mr.Shulman, burial of cable at less than 18 inches "wouldn't affect itstechnical performance in terms of its signal carrying capability."Plaintiff's Ex., Ex. 1 (Excerpt from Shulman Deposition Transcript) at 7.Further, Starlight did not inform Verizon of any defects in the work atBayside either during or after the one year warranty period provided forin the Bayside Contract, see PSDF ¶¶ 24-25; Plaintiff's Ex.,Ex. 2 (Excerpts from Derderian Deposition Transcript) at 1, which,arguably, indicates that the system was functioning properly.

Given the foregoing, the court is unable to conclude that the cable, atits current depth, "frustrate[s] the purpose of the contract." Jacob& Youngs. Inc. v. Kent. 129 N.E. 889,Page 21891 (N.Y. 1921). Nor can it necessarily be said that it deprivesStarlight of any "reasonably expected contractual benefits." Women'sDev. Corp. v. City of Central Falls, 764 A.2d 151, 158 (R.I. 2001).Accordingly, Starlight's argument that Plaintiff did not substantiallyperform the Bayside Contract because the system is worthless must berejected.

C. Bad Faith

Starlight also argues that Verizon cannot rely on the doctrine ofsubstantial performance because the alleged defects in the work were doneintentionally and in bad faith. See Defendant's Mem. at 7-8.However, the intentional and bad faith argument is premised uponallegations that Plan B intentionally and in bad faith deviated from anagreed upon minimum depth. As earlier determined, a minimum depthrequirement is not clearly expressed in the contract, so the questionremains as to the depth to which the parties agreed. Because the court atthis stage of the proceedings is unable to determine even if the work isdefective, it necessarily cannot reach the question of whether anydefects were intentional.9

D. Summary

Contrary to Defendants' claims and based on the foregoingPage 22analysis, the question of substantial performance in this case doesnot admit of "only one reasonable answer." Women's Dev. Corp.,764 A.2d at 158. On the record evidence, a reasonable jury could verywell conclude that the work done at Bayside is not worthless and thatVerizon has substantially or even fully performed the requirements of theBayside Contract in a good faith manner. Therefore, even if therequirements of that contract were unambiguously expressed, the questionof whether or not Verizon substantially performed its obligationsthereunder could not be determined by the court as a matter of law.

Conclusion

For the reasons stated above, I recommend that Defendants' Motion forPartial Summary Judgment be denied. Any objections to this Report andRecommendation must be specific and must be filed with the Clerk of Courtwithin ten (10) days of its receipt. See Fed R. Civ. P. 72(b);D.R.I. Local R. 32. Failure to file specific objections in a timelymanner constitutes waiver of the right to review by the district courtand of the right to appeal the district court's decision. See UnitedStates v. Valencia-Copete, 792 F.2d 4, 6 (1st Cir. 1986); ParkMotor Mart. Inc. v. Ford Motor Co., 616 F.2d 603, 605 (1st Cir.1980).

1. Verizon Connected Solutions, Inc. ("Verizon" or "Plaintiff"), incounts one through five of its Complaint also seeks recovery of amountsit alleges are due pursuant to a different agreement between itself andStarlight Communications Holding, Inc. I, d/b/a Starlight Communication("Starlight"). See Complaint ¶¶ 1-53. The individualDefendants are named in connection with count five, which relates toguarantees they executed relative to that agreement. Seeid. ¶¶ 40-46.

2. Plaintiff, at the time it entered into the contract which is thesubject of this dispute, was a subsidiary of Bell Atlantic named BellAtlantic Communications and Construction Services, Inc. ("BACCS"). Withthe merger of GTE and Bell Atlantic, BACCS was renamed Verizon ConnectedSolutions, Inc. See Plaintiff Verizon Connected Solutions,Inc.'s Memorandum in Opposition to Defendant's Motion for SummaryJudgment Dismissing the Sixth Cause of Action ("Plaintiff's Mem.") at 2n.1.

3. Defendants apparently do not disagree with the facts stated inPlaintiff Verizon Connected Solutions, Inc.'s Statement of DisputedMaterial Facts in Opposition to Defendant's Motion to Dismiss the SixthCause of Action ("PSDF"). See Reply Memorandum of Law inSupport of the Motion by the Individual Defendants [sic] Dismissing theSixth Cause of Action ("Defendant's Reply Mem.") at 1 n.2.

4. The Bayside Contract states that the cable should be buried at aminimum depth of eighteen inches below paved surfaces, but doesnot expressly state a depth requirement for the cable underunpaved surfaces. See PSDF ¶ 2; Defendant's LocalRule 12.1 Statement of Undisputed Facts ("DSUF") ¶ 21: seealso Letter from W. James MacNaughton to Judge Martin of 7/1/03,Exhibit ("Ex.") A (Agreement for Wire and Cable Installation and DesignServices). In addition, no change order relating to a depth requirementwas issued, and the parties agree that this aspect of the contract wasnot subsequently modified. See Plaintiff's Mem. at 12, 18-19;Memorandum of Law in Support of Motion by Defendant StarlightCommunications Holding Inc. I for Partial Summary Judgment Dismissing theSixth Cause of Action ("Defendants' Mem.") at 9-10.

5. Starlight's argument as to this latter point is not altogetherclear. In its memorandum, Starlight notes that the Rhode Island BuildingCode ("RIBC") incorporates the National Electrical Code ("NEC").See Defendant's Mem. at 5 n.6. Seemingly, Starlight claims thatthe NEC, in Table 300-5, explicitly states a requirement that coaxialcable be buried at least 18 inches deep. See id.Additionally, Starlight notes that Section 820-6 of the NEC requirescommunications equipment to be installed in a "neat and workmanlikemanner," id., and cites case law and deposition testimony tosupport an inference that this phrase, in the present circumstances,equates with an 18 inch depth, see id.

6. The NEC has been incorporated into the RIBC. See RhodeIsland State Building Code Electrical Code Regulation SBC-5 (August 1,2002)("The Building Code Standards Committee . . . adopts the provisionsof the National Electrical Code . . . as the Rhode Island ElectricalCode. . . .").

7. The relevant testimony is as follows: Q. Is there a requirement for how deep the cable is supposed to be buried in Warwick? * * * A Table 300-5 of the NEC has specific requirements. In most cases, it's 18 inches. It could be less depending on if it's installing concrete or conduit, et cetera. Q. If cable were buried a depth of — coaxial cable were buried at a depth of less than 18 inches or in violation of this article in the NEC you described, is there any penalty for that in the City of Warwick? * * * A. We would ask them to correct the violation. Q. And the correction would consist of what? A. Complying with the State Building Code. Q. Burying it at 18 inches or whatever the requirement is? A. Or whatever the requirement is.Exhibits in Support of Motion for Partial Summary JudgmentDismissing the Sixth Cause of Action ("Defendant's Ex."), Ex. E (Excerptsof Deposition of Robert Zuba) at 10 (italics added)(objections omitted). Mr. Zuba also explained that Table 300-5 of the NEC "consists of alisting of burial depths for different types of cable and different typesof installations depending on how it's installed," id., andreplied in response to counsel's question that, to his understanding,that table applied to telecommunications cable, see id. at 11.Mr. Zuba's understanding, however, is contradicted by the depositiontestimony of Harris Shulman. Mr. Shulman testified that he was familiarwith the NEC and used it regularly in the course of his business.See Exhibits in Opposition to Motion for Partial SummaryJudgment Dismissing the Sixth Cause of Action ("Plaintiff's Ex."), Ex. 1(Excerpts from Shulman Deposition Transcript) at 4. He stated furtherthat there was no requirement in the NEC as to the burial of coaxialcable and that he was not aware of any code providing for the minimumdepth for burial thereof. See id. Additionally, Plaintiff in its memorandum argues that "chapter 820" ofthe NEC governs installation of the cable at issue in this case, that"chapter 820" does not have a minimum depth requirement for coaxialcable, and that Table 300-5 is inapplicable. See Plaintiff'sMem. at 6. At the hearing on the present motion, Defendants' counselconceded that it was not clear to him, in reading the code, whether therecould be a citation issued against Defendants for the cable being buriedat less than eighteen inches. See Tape of June 25, 2003,Hearing. The court has obtained copies of the cited portions of the NECand, although it is unable to make a definitive determination as to howor whether they apply to the cable used at Bayside, it notes thatPlaintiff's claims, which are consistent with Mr. Shulman's testimony,seem plausible. See NEC § 820-1 ("Scope. Thisarticle covers coaxial cable distribution of radio frequency signalstypically employed in community antenna television (CATV) systems.").Article 820 does not specify minimum burial depths. Chapter 8, whichencompasses Article 820, applies to "Communications Systems," seeNational Electrical Code Handbook at vii (8th ed. 1999), whileChapter 3, which encompasses Table 300-5, covers "Wiring Methods andMaterials." See id at v.

8. Even if the court had found that an eighteen inch requirementclearly was part of the contract, the question of whether Starlightsubsequently waived the requirement would remain, and there appears to beconflicting evidence on that point as well. "As defined by the RhodeIsland Supreme Court, `waiver is the voluntary intentional relinquishmentof a known right. It results from action or nonaction[.]'" URICogeneration Partners. L.P. v. Bd. of Governors for Higher Educ.,915 F. Supp. 1267, 1285 (D.R.I. 1996)(quoting Pacheco. v. NationwideMut. Ins. Co., 337 A.2d 240, 242 (R.I. 1975)). "`As a general rule,the question of whether a party has voluntarily relinquished a knownright is one of fact for a jury.'" Id. (quoting Haxton'sof Riverside. Inc. v. Windmill Realty. Inc., 488 A.2d 723, 725-26(R.I. 1985)). Verizon claims that Starlight waived the requirement on at least twooccasions: "[f]irst, when Starlight `authorized' Plan B to dig as deeplyas it co[u]ld and [indicated] that 18" was a `goal' rather then a minimumand, second, when Mr. Derderian signed the Customer Acceptance Form withcomplete knowledge of the cable's depth." Plaintiff's Mem. at 19.Starlight disputes this claim of waiver by arguing that Mr. Derderian, atthe time he signed the form, did not know the actual depth of the cableand, therefore, could not have waived a latent defect. SeeDefendant's Mem. at 10. Starlight further claims that even if Mr.Derderian knew the depth was less than eighteen inches, his waiver wasbased on Plan B's misrepresentation of the soil conditions and thus wasnot binding. See id. There is obviously conflicting evidence as to these matters. Mr.Derderian, in a certification submitted to the court in support of thismotion, states that he was unaware of the cable depth at the time hesigned the Customer Acceptance Form. See Certification of MikeDerderian in Support of Motion by Defendant Starlight CommunicationsHoldings, Inc[.] for Partial Summary Judgment Dismissing the Sixth Causeof Action ¶ 5. However, Mr. Shulman, who was present at Baysideduring the time Plan B was performing the work, stated in his depositionthat he witnessed the cable being buried at depths between 6 and 13 or 14inches and that he relayed that information to Mr. Derderian.See Defendant's Ex., Ex. D (Excerpts from the Deposition ofHarris B. Shulman) at 6. Starlight's claim of misrepresentation is based on arguablyinconsistent deposition testimony regarding Plan B employee DavidMcCaul's characterization of the soil conditions at Bayside. Mr. Shulmanstated that Mr. McCaul, while the work was ongoing, told him that PlanB's equipment could not dig any deeper because of difficulties with thesoil. See id. at 6-9. Mr. McCaul, at his deposition, afterstating that he remembered the Bayside project "vaguely," Defendant'sEx., Ex. C (Excerpts from Deposition of David McCaul) at 4, testifiedthat he "th[ought] it was easy to dig out there," id. Hesubsequently clarified that "[i]n some areas, I'd say it was very simpleto trench . . .," id. at 5, and that he thought "the first fewtrenches went easily . . .," id. Because the excerpt ofMcCaul's deposition provided to the court ends here, it is unable todetermine what, if anything, Mr. McCaul had to say about the remainder ofthe trenches and consequently, whether his testimony taken as a wholeconflicts with Mr. Shulman's. In any event, the evaluation of thecredibility of the witnesses and the resolution of conflicting testimonyare matters for a jury.

9. Starlight's bad faith claim rests almost entirely on twoisolated, out-of-context statements regarding Bayside soil conditionsmade by Plan B employee David McCaul, see Discussionsupra at 14 n.8, which are arguably inconsistent with oneanother. The significance of inconsistencies in a witness' statements,as well as his credibility and sincerity, are factual matters for a juryto evaluate, see Perez-Perez v. Popular Leasing Rental. Inc.,993 F.2d 281, 286 (1st Cir. 1993), not the court on a motion for summaryjudgment. Defendants also rely on their allegation that Plaintiff failedto comply with licensing and permit requirements. Even if the evidence asto these matters were unequivocal, which it is not, it is not clear tothe court how it would establish Plaintiff's bad faith deviation inperforming the cable installation work.

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