Court of Appeals of Texas, Second District, Fort Worth
NEW TALK, INC. APPELLANT
SOUTHWESTERN BELL TELEPHONE COMPANY D/B/A AT&T TEXAS APPELLEE
THE 141ST DISTRICT COURT OF TARRANT COUNTY TRIAL COURT NO.
WALKER, GABRIEL, and KERR, JJ.
ELIZABETH KERR JUSTICE.
to ameliorate the monopoly that local telecommunications
carriers such as Southwestern Bell Telephone Company-now more
recognizable as AT&T Texas-had historically enjoyed and
to foster competition, by law they must now allow local
competitors to use their infrastructure. Those competitors,
of which New Talk, Inc., is one, must of course pay for the
piggybacked services. This dispute arose because New Talk
believed that AT&T Texas was overcharging it by not
giving certain credits under their agreement; over a period
of time, then, New Talk engaged in what was essentially
self-help by unilaterally reducing what it paid AT&T
Texas. Dissatisfied that the trial court sided with AT&T
Texas by concluding that an earlier Public Utility Commission
arbitration in AT&T Texas's favor precluded New Talk
from getting a do-over, New Talk is now before this court.
issues, New Talk appeals from the summary judgment entered in
favor of AT&T Texas. We affirm.
Texas (which we will shorten to simply AT&T) is an
incumbent local-exchange carrier (ILEC) under the Federal
Telecommunications Act of 1996. See 47 U.S.C.A.
§ 251(h) (West 2014). The Act requires ILECs to provide
"interconnection with the [ILEC's] network" for
"the facilities and equipment of any requesting
telecommunications carrier." Id. §
251(c)(2); see Sw. Bell Tel. Co. v. Fitch, 801
F.Supp.2d 555, 559 (S.D. Tex. 2011). This is accomplished
through "interconnection agreements" with
competitive local-exchange carriers (CLECs) like New Talk.
See 47 U.S.C.A. §§ 251-52 (West 2014);
see also Fitch, 801 F.Supp.2d at 559. All
interconnection agreements must be approved by the
appropriate state commission, which, in this case, is the
Public Utility Commission of Texas (PUC). See 47
U.S.C.A. § 252(e)(1).
August 2008, AT&T and New Talk entered into an
interconnection agreement under which New Talk agreed to pay
AT&T for the wholesale resale telecommunication services
it provided to New Talk. The agreement became effective when
the PUC approved it in September 2008.
interconnection agreement provided that in the event of any
dispute related to it, including "billing disputes,
" either party could "invoke dispute resolution
procedures available pursuant to the dispute resolution rules
. . . of the [PUC]." A billing dispute did eventually
arise between the parties, and in June 2010, New Talk filed a
complaint with the PUC alleging that AT&T had threatened
to discontinue service to New Talk and seeking injunctive
relief to prevent AT&T from doing so. New Talk alleged
that AT&T owed New Talk roughly $2.8 million in
promotional credits under the interconnection agreement. New
Talk also claimed that AT&T wrongfully assessed roughly
$300, 000 in late charges and inappropriately required a
$260, 000 security deposit. In addition to injunctive relief,
New Talk also requested that the PUC enter an order directing
AT&T to credit the promotional credits and late charges
to New Talk's account and to return New Talk's
security deposit. PUC arbitrators entered an order
prohibiting AT&T from discontinuing or suspending service
to New Talk.
August 2010, New Talk and AT&T agreed to stay the PUC
proceeding, and the proceeding was stayed for over a year,
until November 2011. After the stay was lifted, AT&T
counterclaimed based on New Talk's failure to pay for the
wholesale resale services that AT&T had provided under
the interconnection agreement from May 2009 through March
2012. In response, New Talk admitted that it was not paying
the full amounts of AT&T's invoices but asserted that
the interconnection agreement allowed it to withhold disputed
the next year, the parties conducted discovery. AT&T and
New Talk each moved for a summary decision regarding
AT&T's methodology for calculating the promotional
credits that New Talk claimed. The arbitrators determined
that AT&T's methodology was correct and granted
AT&T's motion. In August 2012, the arbitrators then
held a two-day evidentiary hearing on the parties'
a year later, the arbitrators entered a 42-page arbitration
award finding that New Talk "unlawfully withheld
payments for wholesale resale services provisioned and billed
by AT&T in violation of the parties' [interconnection
agreement]." Concerning the amounts AT&T claimed New
Talk owed for unpaid wholesale services from May 2009 through
March 2012, the arbitrators further found:
Based on review of AT&T's evidence in support of its
claim for $12, 678, 536.90 and New Talk's evidence in
support of its disputed claim amounts, the Arbitrators grant
AT&T the past due amount of $12, 255, 887.25 before
credits for late payment charges for disputed amounts
resolved in New Talk's favor are applied to New
arbitrators also required AT&T to issue credits for the
late-payment charges after the arbitration award was issued.
According to AT&T, the late-payment charges were $31,
698.72, which reduced New Talk's past-due balance to $12,
224, 188.53. New Talk did not move for reconsideration or for
rehearing and did not, as it could have, seek judicial review
of the arbitrators' decision.
Talk did not pay the arbitration-determined amounts due to
AT&T. In October 2013, AT&T sued New Talk, asserting
claims for breach of contract and unjust enrichment based on
New Talk's failure to pay for wholesale resale services
provided under the interconnection agreement. AT&T also
asserted an attorney's-fees claim. New Talk generally
denied AT&T's claims and asserted several affirmative
defenses, including limitations, offset, credit, and
Talk counterclaimed for breach of contract, and AT&T
moved to dismiss the counterclaim. At the hearing on the
motion, the trial court deferred its ruling, suggested that
AT&T move for summary judgment on its claims for
affirmative relief, and stayed discovery for 60 days to allow
AT&T time to file, and the trial court to hear, such a
motion. The trial court further concluded that no discovery
was necessary because AT&T would be moving for summary
judgment on the legal effect of the PUC arbitration award,
not on any factual issues.
moved for summary judgment in late July 2014. In mid-August
2014, New Talk moved to continue the summary-judgment
hearing, arguing that it needed to conduct discovery so that
it could respond to the motion. The trial court granted a
continuance, but it denied New Talk's request to conduct
discovery because AT&T's summary-judgment motion was
based on legal, not factual, issues.
September 2014, AT&T amended its summary-judgment motion,
arguing that it was entitled to summary judgment as a matter
of law on its breach-of-contract claim and on each of New
Talk's affirmative defenses because the arbitration award
had res-judicata and collateral-estoppel effects. New Talk
responded that the award had no preclusive effect and that
AT&T's claims were barred by limitations. In its
response, New Talk also again objected to the trial
court's considering AT&T's summary-judgment
motion without allowing New Talk the opportunity to conduct
discovery and asked the trial court to continue the
summary-judgment response deadline and hearing so that it
could do so. New Talk also filed a motion to show authority,
asserting that AT&T's attorney did not have authority
to represent AT&T because she was employed by AT&T
Services, Inc., not by AT&T. See Tex. R. Civ. P.
October 2014, the trial court heard New Talk's motion to
show authority and AT&T's amended summary-judgment
motion. The court orally denied New Talk's motion to show
authority and indicated that New Talk's request for a
continuance to conduct discovery was also denied.
December 2014, the trial court granted AT&T summary
judgment on its breach-of-contract claim and awarded AT&T
$12, 224, 188.53 in damages. AT&T abandoned its claims
for unjust enrichment and for attorney's fees.
See Tex. R. Civ. P. 165. On AT&T's motion,
the trial court severed AT&T's breach-of-contract
claim, making its order on AT&T's summary-judgment
motion final and appealable.
Motion to Show Authority
address New Talk's fourth and fifth issues first because
they challenge AT&T's trial counsel's authority
to file and maintain a suit on AT&T's behalf. In its
fourth issue, New Talk argues that the trial court erred by
denying its motion to show authority. See Tex. R.
Civ. P. 12. In its fifth issue, New Talk asserts that because
AT&T's trial counsel lacked authority, the trial
court consequently erred by considering and granting
AT&T's summary-judgment motion.
Talk asserted in the trial court and continues to assert on
appeal that because AT&T's trial counsel was employed
by a different AT&T entity-AT&T Services, Inc.-she
did not have the legal authority to represent AT&T. We
will review the trial court's denial of New Talk's
motion de novo. See Penny v. El ...