Ariz. Pub. Serv. v. Mount. States Tel. & Tel.

717 P.2d 918, 149 Ariz. 239
CourtCourt of Appeals of Arizona
DecidedSeptember 19, 1985
Docket1 CA-CIV 7273
StatusPublished

This text of 717 P.2d 918 (Ariz. Pub. Serv. v. Mount. States Tel. & Tel.) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ariz. Pub. Serv. v. Mount. States Tel. & Tel., 717 P.2d 918, 149 Ariz. 239 (Ark. Ct. App. 1985).

Opinion

149 Ariz. 239 (1985)
717 P.2d 918

ARIZONA PUBLIC SERVICE COMPANY, Plaintiff-Appellant,
v.
The MOUNTAIN STATES TELEPHONE AND TELEGRAPH COMPANY, Defendant-Appellee.

No. 1 CA-CIV 7273.

Court of Appeals of Arizona, Division 1, Department C.

September 19, 1985.
Reconsideration Denied December 18, 1985.
Review Denied April 15, 1986.

*240 Snell & Wilmer by Loren W. Counce, Jr., Douglas W. Seitz, James P. Muehlberger, Phoenix, for plaintiff-appellant.

Fennemore, Craig, von Ammon, Udall & Powers by Calvin H. Udall, Nancy L. Rowen, Phoenix, for defendant-appellee.

OPINION

FROEB, Chief Judge.

This appeal follows the trial court's denial of the petition of Arizona Public Service Company (APS) for confirmation of arbitration award and for judgment involving pole rental rate for the years 1977-1979.

The dispute arises out of a contract dated April 7, 1938, signed by the predecessor of APS, Central Arizona Light and Power Company, and Mountain States Telephone and Telegraph Company (Mountain Bell). The contract states that the parties agree to "establish joint use of their respective poles...." Such agreement provided each party with common support for their "wires, cables and other appurtenances" used for the "construction, operation and maintenance" of each party's respective plant.

Article XI of the contract discusses the method used to determine the rental charges for the shared use of poles:

As a basis for determining the rental charges under this Agreement, it is agreed that the rental for the use of a joint pole, any portion of which is occupied by or reserved for the attachments, of the Licensee shall be an amount equal to one-half(1/2) of the average total annual cost per pole of providing and maintaining the standard joint pole covered by this Agreement.

It was also agreed that an adjustment of the rental charges could be made every three years at the timely, written request of either party. If the parties could not agree on the rental charges, Article XI, section a, provides that the dispute would proceed to arbitration.

In 1938, both parties owned approximately the same number of poles and both parties charged a $2.60 per pole, per annum rental rate for the joint use of their poles. This rate was not adjusted until 1968 when both parties agreed to charge a $4.50 per *241 pole, per annum rental rate. Thereafter, the rate increased on two more occasions. In 1976, APS requested a readjustment of the rental rate for the 1977-1979 term. A rental rate could not be agreed upon, so the dispute proceeded to arbitration.

After almost one year of arbitration, the Arbitration Board established "as the pole rental rate to be applied under the terms of the 1938 joint use pole agreement for the triennium 1977, 1978, 1979, the sum of $17.62 per pole, per annum." APS thereafter filed a motion to clarify decision and award "to indicate expressly that the rental rate [the Board] determined is that owing APS from Mountain Bell, and, if appropriate, to set the rate Mountain Bell [was] entitled to receive from APS."

The Board found in its "Ruling on Post Award Motions" that, while the parties had, up to this point, always established a uniform rental rate, this was only because, in the past, the parties costs had been closely parallel. The Board concluded that the rate specified in its Decision and Award was the rate payable by Mountain Bell to APS for use of APS's owned joint use poles. Additionally, the Board concluded that since APS's "call for Arbitration did not request a determination of two rates, and since Mountain Bell ... never expressly submitted to the board the question of its rate ..." the board would not determine the rate to be charged by Mountain Bell to APS.

Thereafter, APS filed a petition for confirmation of arbitration award and for judgment. In a minute order, the trial court found the 1938 contract to be void pursuant to A.R.S. § 40-285(A). In the subsequent judgment, the court denied APS's motion to confirm arbitration award and granted Mountain Bell's motion to dismiss. This appeal followed.

Does A.R.S. § 40-285(A) void the 1938 contract between APS and Mountain Bell for joint use of poles?

In its motion to dismiss, Mountain Bell argued, in part, that A.R.S. § 12-1512(A)(3) prohibited confirmation of the arbitrators' pole rental rate award to APS because the arbitrators had exceeded their power by basing their award on a void contract. Prior to entering judgment denying the petition of APS to confirm the arbitration award and granting the motion of Mountain Bell to dismiss, the trial court issued a minute order stating that the 1938 contract for joint use of poles was void because it lacked authorization from the Corporation Commission pursuant to A.R.S. § 40-285(A).[1]

At the time this matter was before the trial court, A.R.S. § 40-285(A) read, in pertinent part:

[An] ... electrical, telephone, telegraph ... corporation shall not sell, lease, assign, mortgage or otherwise dispose of or encumber ... any part of its line, plant, or system, necessary or useful in the performance of its duties to the public, or any franchise or permit or any right thereunder ... with any other public service corporation without first having secured from the [corporation] commission an order authorizing it so to do. Every such disposition, encumbrance or merger made other than in accordance with the order of the commission authorizing it is void. (Emphasis added)

APS argues the contract is not a disposition of its property within the meaning of the statute and relies upon American Cable T.V. v. Arizona Public Service Co., 143 Ariz. 273, 693 P.2d 928 (App. 1983). Alternatively, it argues that ARS § 40-285(A) does not void contracts for dispositions falling within the province of A.R.S. § 40-285(A), rather it voids only the dispositions themselves. In addition, APS asserts that because the arbitrators granted a pole-rental rate award, they necessarily found the 1938 contract not to be void and such a determination is final and conclusive. Last, APS argues that Mountain Bell *242 waived its right to contest the validity of the 1938 contract.

In support of the judgment, Mountain Bell asserts that "[b]ecause the property leased under the [1938] Agreement was a substantial part of the plant or system of public service corporations, and because the parties never obtained Corporation Commission approval of their arrangement, their Agreement was void under A.R.S. § 40-285A."

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Bluebook (online)
717 P.2d 918, 149 Ariz. 239, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ariz-pub-serv-v-mount-states-tel-tel-arizctapp-1985.