MCI WorldCom Communications Inc. v. Atiyeh

82 Pa. D. & C.4th 414
CourtPennsylvania Court of Common Pleas, Lehigh County
DecidedNovember 29, 2006
Docketno. 2004-C-1405
StatusPublished

This text of 82 Pa. D. & C.4th 414 (MCI WorldCom Communications Inc. v. Atiyeh) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Lehigh County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
MCI WorldCom Communications Inc. v. Atiyeh, 82 Pa. D. & C.4th 414 (Pa. Super. Ct. 2006).

Opinion

JOHNSON, J,

INTRODUCTION

Before the court for disposition is the plaintiff’s complaint filed on May 28, 2004. A non-jury trial was held [416]*416on August 21-23,2006. Plaintiff, MCI WorldCom Communications Inc. (MCI) filed suit against Dennis Atiyeh, U.S. TalkCheap.com LLC (USTC), U.S. Direct Inc. (USD), Irish Call Centers Limited and Jamaica Call Centers Limited (against both of whom MCI obtained a default judgment on April 25, 2005), English Sports Information Processors Ltd. and English Sports Betting Inc. (both of whom were never served with process in this lawsuit).

MCI seeks compensation for telecommunications services.

FINDINGS OF FACT

(1) Atiyeh is an adult individual who resides at 5828 Park Valley Road, Schnecksville, PA.

(2) MCI, now known as Verizon Business, is a global telecommunications company that provided, among other things, local and long distance telephone service.

(3) USD was a telecommunications company with offices at 850 Third Street, Whitehall, PA and 730 Boulevard, Kenilworth, NJ.

(4) USD was owned and controlled by Dennis Atiyeh.

(5) USD engaged in the sale of prepaid telephone calling cards.

(6) On January 4, 2002, Atiyeh, in his capacity as president of USD, executed a credit application on a form provided by MCI in which he represented that USD’s estimated monthly usage with MCI would be $10,000 and listed himself as president of USD. (Exhibit 46.)

(7) As part of the credit application process with MCI, USD submitted a balance sheet as of June 18, 2002.

[417]*417(8) On July 10, 2002, MCI and USD entered into a telecommunications service agreement for the sale and purchase for certain telecommunications services (MCI/ USD agreement). Under the MCI/USD agreement, MCI agreed to provide switched telecommunications services to USD, and USD agreed to pay for those services according to the terms of the agreement. (Exhibit 1.)

(9) On July 19,2002, USD filed for Chapter 11 bankruptcy protection. (Exhibits 52, 59.)

(10) Atiyeh directed that the July bankruptcy petition be filed on behalf of USD.

(11) USD began receiving services from MCI in August of 2002. By the end of August, it had exceeded its credit limit, and billed over $140,000. (Exhibit 53.)

(12) USD failed to make payments according to the terms of the USD contract.

(13) USD received weekly invoices of its account that were addressed to “Atiyeh President of U.S. Direct.” (Exhibits 62, 63, 65-67, 69, 71, 72, 75, 78, 81, 83, 85, 90, 98.)

(14) MCI threatened to shut off service to USD due to USD’s failure to cure its delinquencies. (Exhibits 86, 100, 129.)

(15) Atiyeh represented to MCI that USD intended to cure its delinquencies. (Exhibit 45.)

(16) MCI entered into several repayment plans with USD through Atiyeh, but USD failed to make payments pursuant to the terms of those plans. (Exhibits 53, 73, 74, 89, 93, 102.)

(17) USD’s July 2002 bankruptcy was dismissed on September 24, 2002. (Exhibit 126.)

(18) On October 4,2002, MCI sent a demand disconnection notice to Atiyeh and USD. (Exhibit 124.)

[418]*418(19) On October 11,2002, USD again filed for Chapter 11 bankruptcy protection. (Exhibits 64, 127.)

(20) Atiyeh directed the filing of USD’s October 2002 bankruptcy petition.

(21) USD’s October 2002 bankruptcy was dismissed on November 26, 2002. (Exhibits 79, 127.)

(22) After USD’s October 2002 bankruptcy was dismissed, MCI terminated USD’s service. (Exhibit 100.)

(23) In an attempt to collect the monies owed by USD, MCI filed an action in the District Court of Tulsa County, Oklahoma. (Exhibit 112.) (Oklahoma action.)

(24) In the Oklahoma action, judgment was entered in favor of MCI and against USD in the amount of $1,732,401.87, plus allowable interest and costs (USD judgment). (Exhibit 112.)

(25) The USD judgment was transferred to the Court of Common Pleas of Lehigh County, Pennsylvania and was indexed at docket no. 2003-N-0959. (Exhibit 112.)

(26) No payments have been made, nor have any assets been recovered, to satisfy the USD judgment.

(27) The defendants did not produce any corporate records for USD, nor did they satisfactorily explain the absence of corporate records for USD.

(28) Atiyeh is listed as USD’s sole (100 percent) shareholder in USD’s first bankruptcy petition and is listed as USD’s sole director, president and shareholder in USD’s second bankruptcy petition. (Exhibits 64 at USD00047 and 00060; 128.)

(29) An October 25,2002 letter from Atiyeh to Joshua Fondren identifies Atiyeh as CEO of USD. (Exhibit 68.)

(30) A November 7, 2002 letter from MCI to Atiyeh regarding USD’s payment obligations is addressed to Atiyeh as president of USD. (Exhibit 73.)

[419]*419(31) MCFs weekly billing account reports were addressed to Atiyeh as president of USD. (Exhibits 62 at USD00178; 65 at USD00173; 67 at USD00161; 69 at USD00154; 71, 72 atUSD00139; 75, 78 atUSD00125; 81 atUSD00118; 83 atUSDOOllO; 85, 90, 98.)

(32) Atiyeh identified himself as president of USD in a letter he sent by email to Josh Fondren of MCE (Exhibit 45.)

(33) Atiyeh hired the employees of USD.

(34) Atiyeh directed the employees of USD in their work.

(35) Atiyeh determined which bills to pay on USD’s behalf.

(36) Atiyeh also owned and controlled several companies including the following: U.S. TalkCheap.com LLC (USTC), Fisheries of the Future, Telephone USA, and English Sports Information Processors (ESIP).

(37) USD was merely a facade for the operations of Atiyeh.

(38) USD failed to keep proper corporate records or to observe corporate formalities.

(39) Despite MCFs requests, neither Atiyeh nor USD produced any documents in discovery in this case. Specifically, neither USD nor Atiyeh produced any tax returns and/or documents regarding the corporate form or structure of Atiyeh’s companies including minutes, resolutions, by-laws, articles of incorporation, registrations to do business and/or stock transfer books, general ledgers, journals, financial statements, balance sheets, income statements, profit and loss statements and/or cash flow statements.

(40) Atiyeh was ordered by the court to produce tax returns, corporate formation documents and accounting documents in discovery, but he failed to do so.

[420]*420(41) MCI requested that Atiyeh produce these tax returns, corporate formation documents and accounting documents at time of trial, but he failed to do so.

(42) No evidence of the existence of any tax returns, accounting records or corporate formation documents for USD, USTC or any other companies owned and controlled by Atiyeh were produced, nor was any explanation for their absence given.

(43) No tax returns, accounting records or corporate formation documents existed for USD.

(44) USD was never incorporated in any state.

(45) USD never held any corporate meetings nor issued any dividends.

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