Bevill Co. v. Sprint/United Management Co.

304 F. App'x 674
CourtCourt of Appeals for the Tenth Circuit
DecidedDecember 22, 2008
Docket08-3063
StatusUnpublished
Cited by3 cases

This text of 304 F. App'x 674 (Bevill Co. v. Sprint/United Management Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bevill Co. v. Sprint/United Management Co., 304 F. App'x 674 (10th Cir. 2008).

Opinion

ORDER AND JUDGMENT *

BOBBY R. BALDOCK, Circuit Judge.

This breach of contract case is before us for the third time. The Bevill Company, Inc. (Bevill) now appeals from (1) the district court’s decision, entered after a bench trial, that Sprint/United Management Company (Sprint) properly terminated the contract with Bevill both for convenience and for cause and Bevill failed to prove any damages and (2) the district court’s order granting Sprint’s motion for partial summary judgment to strike Bevill’s request for a jury trial because Bevill had waived its right to a jury trial in its contract with Sprint. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.

FACTS AND PROCEDURAL HISTORY

On August 1, 2000, Bevill and Sprint entered into a Master Services Agreement (MSA) and a Contract Order as a single agreement. Robert Bevill negotiated the agreement on behalf of Bevill. The agreement provided that Bevill would provide dial-up internet access services to soldiers living in the barracks of military bases where Sprint provided telecommunications services pursuant to a separate contract with the Army and Air Force Exchange Services (AAFES). The agreement included Bevill’s projection that it would provide dial-up internet access to 20% of the base populations within one year of beginning service. 1

Bevill was to provide dial-up access for a three-month trial period to four military bases to evaluate profitability and viability of the program before providing service to all bases. After Bevill provided this service for three full months at all four bases, *676 the parties were to meet to review the program performance statistics and future direction of the program. If the parties determined

that program penetration levels and profitability goals have been reasonably met, Sprint will issue formal written acceptance of the program test period. At that time, Sprint will also issue formal authorization to proceed with a build-out of the remaining base locations which have been determined to be viable. If it is agreed by the parties that all stated program goals have been reasonably met, this formal authorization to proceed cannot be unreasonably withheld by Sprint.

Aplt.App., Vol. I at 71. But, if upon their review, the parties determined

that the program has not achieved its stated goals, the representatives of the parties will work together to develop a formal, written cure plan detailing the steps that will be taken by all parties to effect the necessary changes to bring the program into compliance. If the parties are unable, after all due effort, to reach agreement on the cure plan or the future direction of the program, Sprint reserves the right to unilaterally terminate the program under section k of this agreement.

Id. (emphasis added).

On October 3, 2001, the parties’ representatives met to discuss whether the dial-up internet sales could be profitable based on the results of the test period. During the meeting, Sprint’s representatives expressed concern that there were not enough subscribers and no showing of sufficient profitability and stated that Sprint expected Bevill to have subscribers totaling 5% of the base population, which was one quarter of the 20% figure projected by the agreement, or 533 subscriptions for the trial period. Mr. Bevill stated that this would be difficult to achieve. One Sprint representative, D.J. McDyre, told Mr. Bevill that Bevill must have at least 400 subscribers for Sprint to move forward and end the trial period. That number was based on Mr. Bevill’s representation that he needed 100 subscribers per base to break even. Sprint extended the trial period for ninety days so that Bevill could reach this goal.

In a later communication with Mr. McDyre, Mr. Bevill suggested a trial period goal of 283 subscribers, which was 5% of Sprint’s telephone customers. Sprint refused to accept this. Bevill and Sprint could not agree on the subscriber levels needed for the program to proceed. On October 15, 2001, Mr. Bevill sent an email message to the AAFES complaining about the subscriber goal established by Sprint.

On October 23, 2001, Sprint sent Bevill a letter terminating the contract for convenience pursuant to MSA § 4.2. Section 4.2, titled “Termination for Convenience,” provides that “Sprint may terminate this Agreement or any Contract Order(s) or both at any time without liability by providing a termination notice to [Bevill]. Unless otherwise provided in the notice, the termination is effective 10 days after the date of the notice.” Id. at 42.

On November 2, 2001, before the effective date of the termination, Bevill filed its complaint asserting that Sprint had no cause to terminate the agreement. Bevill sought an injunction to prevent termination of the contract unless Sprint showed cause or, if termination occurred, an award of compensatory damages and lost profits.

In November 2001, Sprint agreed to reconsider its termination for convenience. It requested that Bevill provide Sprint with a business plan and other financial information. Sprint again requested a *677 revenue report that had been requested on October 3, but never received. On December 3, 2001, Bevill provided Sprint with the report along with an email note indicating that Bevill had set up an escrow account for commissions. Also during December, Bevill provided Sprint with a bank statement showing a zero balance as of October 31, 2001; a bank statement from another company of Mr. Bevill’s, World Wide OnLine, indicating that credit card payments for the agreement had been deposited in that account; deposit slips for the World Wide OnLine account reflecting payments from individual soldiers; Bevill’s business plan showing assets of $81; and financial information indicating that Bevill had $33,000 in cash as of December 17. Based on this information, Sprint concluded that Bevill was commingling money from the agreement with money in other accounts. Additionally, Bevill never paid Sprint or AAFES any commissions because there was no money available in the Bevill account to do so, and Bevill never actually set up an escrow account. Also, Sprint received notice in December that some of Bevill’s equipment was being repossessed.

Mr. Bevill and his attorney met with Sprint representatives on December 28, 2001, to further discuss whether the termination for convenience should be reconsidered. Again, the parties were unable to reach agreement on the subscriber goals or future direction of the program.

On January 21, 2002, Sprint sent Bevill another letter confirming that it would not change its decision to terminate for convenience. Although the letter noted that no reasons were required to terminate for convenience, it pointed to the commingling of Bevill funds with Mr. Bevill’s personal funds and with the funds of other business interests, Bevill’s failure to pay bills resulting in repossession of equipment used to perform under the agreement, and the lack of a reasonable and attainable business plan showing a likelihood that Bevill could achieve profitability.

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304 F. App'x 674, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bevill-co-v-sprintunited-management-co-ca10-2008.