CCT Communications, Inc. v. Zone Telecom, Inc.

153 A.3d 1249, 324 Conn. 654, 2017 Conn. LEXIS 29
CourtSupreme Court of Connecticut
DecidedFebruary 21, 2017
DocketSC19574
StatusPublished
Cited by2 cases

This text of 153 A.3d 1249 (CCT Communications, Inc. v. Zone Telecom, Inc.) is published on Counsel Stack Legal Research, covering Supreme Court of Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
CCT Communications, Inc. v. Zone Telecom, Inc., 153 A.3d 1249, 324 Conn. 654, 2017 Conn. LEXIS 29 (Colo. 2017).

Opinion

EVELEIGH, J.

**657 The plaintiff, CCT Communications, Inc., appeals from the judgment of the trial court rendered in favor of the defendant, Zone Telecom, Inc., 1 on the plaintiff's complaint and the defendant's counterclaim for damages. The case arises from a purchase agreement (purchase agreement) entered into by the parties in which the plaintiff was to provide various telecommunications equipment, software, and services to the defendant for a switch room *1252 located in Los Angeles, California (switch room). On appeal, the plaintiff claims that the trial court incorrectly rendered judgment in favor of the defendant on its complaint and **658 the defendant's counterclaim. Specifically, the plaintiff asserts that the trial court incorrectly: (1) concluded that it breached the purchase agreement; (2) failed to award the plaintiff certain damages on count one of its complaint; and (3) awarded damages, costs and attorney's fees in excess of a limitation of liability clause in the purchase agreement. 2 We disagree with the plaintiff and, accordingly, affirm the judgment of the trial court.

The following facts, as found by the trial court, are relevant to the issues on appeal. "The plaintiff ... and the defendant ... first began doing business together in September, 2005. [The plaintiff] provided various telecommunications equipment, software, and services to [the defendant for the switch room]. This relationship was memorialized in an original contract and subsequent modifications by way of letters of intent.

"By September, 2006, the relationship was deteriorating. [The plaintiff] is the alter ego of Dean Vlahos, its president. He was and is the sole decision maker, negotiator, and overseer of [the plaintiff]. ... Vlahos met with [the defendant's] decision makers on September 14, 2006, at [the defendant's] Cherry Hill, New Jersey office. Present at the meeting ... were Daniel Boynton [the defendant's senior vice president] and Eamon Egan [the defendant's vice president and chief legal counsel]. The meeting grew heated and ended without an agreement to continue to do business together. Over the ensuing weeks, however, the parties finally reached a meeting of the minds to restructure their relationship.

"The new contract was memorialized in [the purchase agreement, which was] dated November 1, 2006....

**659 This is the sole document that requires reference regarding all of the terms and conditions of the parties' agreement ....

"[T]here is a third entity that was involved in the activities that underlie this case. It interrelated with both [the plaintiff] and [the defendant] but never was made a party, namely, Global Crossing Telecommunication, Inc. [Global].

"[Global] is a supplier of long-distance telephone service, providing national and international long-distance [calling] as well as ... toll-free service. [Global] markets its product to industry by varying rates depending on what services the customer requires. If [a customer] contracts for [Global's] services, then calls made under [that] contract would be run through a ... DS-3 circuit [circuit], which would be provided as part of the transaction for the services. [A circuit] normally is purchased by the consumer as part of [an] agreement to use [Global's] long-distance services and rates.

"[Global] was a vital component to the fulfillment of the [purchase agreement] .... By virtue of the [purchase] agreement, [the plaintiff] was acting as a middle man in providing long-distance ... service *1253 to [the defendant]. What [the plaintiff] 'sold' to [the defendant] was two ... circuits [that the plaintiff] owned located in the [switch room]. In return for [the plaintiff's] purchase and ownership of the ... circuits, [the defendant] purchased from [the plaintiff] its long-distance ... service at the rates enumerated in the [purchase agreement] for the specified geographical areas. [The defendant] needed [one of these circuits] to enable it to run long-distance service to [Global] for placement of calls for [the defendant's] clients. [The plaintiff] was providing [the defendant] with long-distance service through its own agreement with [Global]. Stated differently, [Global] sold long-distance service to [the plaintiff] **660 at a certain rate per minute, and [the plaintiff] resold that long-distance service to [the defendant] at a marked up rate. Even the marked up rate proved to be favorable to [the defendant], as it was not a rate that [the defendant] itself could have acquired from [Global]. [The plaintiff] profited from the marked up amount that it was charging to [the defendant] above the rate it was being charged by [Global]. [The defendant] in turn provided long-distance service at a marked up rate per minute based on what it was paying [the plaintiff] for those minutes. More facts will be provided as needed in this decision concerning the interplay between the parties' reliance on [Global's] circuitry and the performance of the [purchase agreement].

"The [purchase agreement] ... was executed and effective on November 1, 2006. Long-distance service to be provided by [the plaintiff] to [the defendant] was to commence on December 1, 2006. The [purchase agreement] had a minimum usage guarantee ... on a 'take or pay' basis. What this means is that [the defendant] was to pay a set amount per month as a minimum for long-distance service to be provided by [the plaintiff]. Any usage above the minimum required amount would be billed to [the defendant] at the agreed rate per minute. Also, because the price for use was on a 'take or pay' basis, [the defendant] was not required to use or run any traffic over [its circuit]. Even if [the defendant] did not run any calls through [its circuit] or failed to run enough minutes to satisfy the monthly [minimum usage guarantee, the defendant] nevertheless would be obligated to pay [the minimum usage charge].

"By December 1, 2006, the ... circuit[s] that [the plaintiff] purchased [were] moved ... to [the switch room] to handle [the defendant's] long-distance service. [The defendant] did run enough long-distance service **661 through [its] circuit in the month of December, 2006, to meet its minimum usage requirement.

"Also, in December, 2006, [the plaintiff] and [Global] amended their retail customer agreement [retail customer agreement]. After execution of [this amendment], [the plaintiff] began to run more long-distance service through [Global]. ...

"By mid-January, 2007, there was an ongoing dispute between [Global] and [the plaintiff] about the amount and scope of the long-distance service being sent by [the plaintiff] through [Global]. [Global] was concerned that [the plaintiff] was violating the amended retail customer agreement and taking unfair advantage to exploit [Global].

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Cite This Page — Counsel Stack

Bluebook (online)
153 A.3d 1249, 324 Conn. 654, 2017 Conn. LEXIS 29, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cct-communications-inc-v-zone-telecom-inc-conn-2017.