Massachusetts Municipal Wholesale Electric Co. v. City of Springfield

726 N.E.2d 973, 49 Mass. App. Ct. 108, 2000 Mass. App. LEXIS 275
CourtMassachusetts Appeals Court
DecidedApril 13, 2000
DocketNo. 97-P-1399
StatusPublished
Cited by26 cases

This text of 726 N.E.2d 973 (Massachusetts Municipal Wholesale Electric Co. v. City of Springfield) is published on Counsel Stack Legal Research, covering Massachusetts Appeals Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Massachusetts Municipal Wholesale Electric Co. v. City of Springfield, 726 N.E.2d 973, 49 Mass. App. Ct. 108, 2000 Mass. App. LEXIS 275 (Mass. Ct. App. 2000).

Opinion

Celinas, J.

After hearing, a Superior Court judge allowed Massachusetts Municipal Wholesale Electric Company’s (variously MMWEC or plaintiff)2 motion for summary judgment and [109]*109denied the city’s cross-motion for summary judgment; the hearing judge also denied the city’s motion for reconsideration. We review the allowance of summary judgment to determine whether, viewing the materials in the light most favorable to the nonmoving party, all material facts have been established and the moving party is entitled to judgment as matter of law. Mass.R.Civ.P. 56(c), 365 Mass. 824 (1974). See Leavitt v. Mizner, 404 Mass. 81, 88 (1989); Yakubowicz v. Paramount Pictures Corp., 404 Mass. 624, 626 (1989). We may consider any ground supporting the judgment. Champagne v. Commissioner of Correction, 395 Mass. 382, 386 (1985). Augat, Inc. v. Liberty Mut. Ins. Co., 410 Mass. 117, 120 (1991). We determine that the city, opposing the motion, had no reasonable expectation of proving an essential element of its case. Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716 (1991). Judson v. Essex Agric. & Technical Inst., 418 Mass. 159, 162 (1994). We affirm the judgment of the Superior Court, modifying only the amount of damages.

Needing a large supply of water for use in generating electricity that it then sold to member Massachusetts municipal light departments, MMWEC entered into an agreement in 1978 to purchase water from the city. The 1978 agreement contained an appendix (Appendix A) establishing the rates to be charged for the water. According to the agreement, the city could amend Appendix A once each year, and rates might be increased “to reflect general increases in the City’s costs,” but in no event could the rates in any one year “be greater than the rates as shown on Appendix A as amended for that year.”

The 1978 agreement was to be effective for a period of twenty years, beginning January 1, 1981, and ending December 31, 2001. The rates charged under the agreement, established in the original Appendix A, remained unchanged through 1988.

Three rate increases, which form the basis of this litigation, were then initiated by the city. The first occurred on January 1, 1989, when the city raised MMWEC’s rates by fifty per cent, [110]*110from an average of approximately twenty-two cents to thirty-three cents per hundred cubic feet (CCF) of water. The second raise, initiated on July 1, 1989, and apparently in contravention of the agreement’s provision that rates could not exceed those established by Appendix A as amended in any one year, increased the rate from approximately thirty-three cents to slightly over fifty cents per CCF. The final raise, implemented as of the October 1, 1991, billing,3 increased MMWEC’s rates to $1.09 per CCF. That rate was rescinded on January 1, 1992, when the city reduced the rate to ninety-nine cents per CCF, where it remained through initiation of this litigation. The cumulative effect of these increases was to raise MMWEC’s rates by approximately 350 per cent. Concurrently, the city’s other customers also experienced rate increases. Residential customers in both Springfield and Ludlow saw their rates increased by about one hundred per cent, from fifty cents to ninety-nine cents per CCF. Rates for industrial customers in Springfield increased, effective as of the April 1, 1991, billing, from twenty-two cents to thirty-six cents per CCF, or approximately sixty-three per cent. Wholesale rates, based on charges per million gallons, increased from $400 to $479 per million gallons, an increase of approximately twenty per cent.4

In January, 1992, MMWEC appeared before the city’s board of water commissioners (board) to protest the inequity of the rate increases. Fruitless negotiations followed, and MMWEC instituted this action challenging the three rate increases in the period 1989 through 1991, and the rates charged by the city from January 1, 1992, forward. The appeal claims four principal errors, which we discuss in turn.

1. Breach of the agreement. The city claims that it was error for the judge to determine, as matter of law, that it had breached the 1978 agreement. It contends that the judge improperly limited the definition of “costs” to expenses already incurred and excluded from “costs” amounts needed for future capital improvements. The city contends that the components of what the parties intended in the definition of “costs” were a matter of fact, resolution of which required trial. We think the judge was right.

[111]*111The judge properly construed the term “costs” according to its usual and ordinary meaning. Interpretation of language in a written contract is a question of law for the court, and if the words are plain and free from ambiguity, they must be construed in accordance with their ordinary and usual sense. See Ober v. National Cas. Co., 318 Mass. 27, 30 (1945); Edwin R. Sage Co. v. Foley, 12 Mass. App. Ct. 20, 28 (1981). Evidence may be reviewed that elucidates the meaning of a contract term. Kobayashi v. Orion Ventures, Inc., 42 Mass. App. Ct. 492, 496-497 (1997). Considering the undisputed evidence offered in the summary judgment materials on this basis, in the light most favorable to the nonmoving party, Colley v. Benson, Young & Downs Ins. Agency, Inc., 42 Mass. App. Ct. 527, 528 (1997), the term “costs” as applied by the judge included all costs supported by the evidence before him. The city maintains that in his interpretation of the term, the judge excluded any amounts attributable to capital improvements. Contrary to this assertion, the judge’s ruling did not exclude all capital improvement expenses. Rather, the evidence showed, and the judge ruled, that the city failed properly to identify and provide for specific future capital improvement expenses in its accounting procedures and thus in its rate structure. Both at the trial court hearing and on appeal, the city simply listed numerous capital projects proposed for possible future implementation, without establishing an estimate of their cost and without making specific provision for them in the accounts established for the water business. On the basis of this evidence, the judge properly concluded as matter of law that at the time of the rate increases, any attempt to assign costs to those capital projects was speculative.5 The evidence further showed that the city had changed one account, originally identified as a “capital improvement account,” to an undifferentiated “retained surplus” account. The city provided no evidence relating this amount to its “costs” in any way, especially as regards the rate charged MMWEC.6 The [112]*112retained surplus was significant,7 and there was no particular future project with which it was identified. Nothing in the judge’s decision precludes the city from planning future capital improvements, developing their associated projected costs in a specific way, and including those specific costs in an amended rate schedule, applicable to all ratepayers.

2. Discriminatory rates. The city claims that the judge erred in ruling that, as matter of law, the rate increases imposed on MMWEC were discriminatory. We disagree.

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Bluebook (online)
726 N.E.2d 973, 49 Mass. App. Ct. 108, 2000 Mass. App. LEXIS 275, Counsel Stack Legal Research, https://law.counselstack.com/opinion/massachusetts-municipal-wholesale-electric-co-v-city-of-springfield-massappct-2000.