MCI Worldcom Communications v. Communications Network International, Ltd. (In Re Worldcom Inc.)

386 B.R. 496, 2008 Bankr. LEXIS 1233, 50 Bankr. Ct. Dec. (CRR) 5, 2008 WL 1885623
CourtUnited States Bankruptcy Court, S.D. New York
DecidedApril 30, 2008
Docket19-35321
StatusPublished
Cited by1 cases

This text of 386 B.R. 496 (MCI Worldcom Communications v. Communications Network International, Ltd. (In Re Worldcom Inc.)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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MCI Worldcom Communications v. Communications Network International, Ltd. (In Re Worldcom Inc.), 386 B.R. 496, 2008 Bankr. LEXIS 1233, 50 Bankr. Ct. Dec. (CRR) 5, 2008 WL 1885623 (N.Y. 2008).

Opinion

OPINION, AFTER TRIAL, REGARDING WORLDCOM’S MOTION IN LIMINE AND REQUEST FOR DAMAGES

ARTHUR J. GONZALEZ, Bankruptcy Judge.

I. INTRODUCTION

This opinion discusses the Court’s findings following the damages trial of World-Com Communications, Inc. and its subsidiaries’ (the “Debtors” or “WorldCom”) and Communications Network International, Ltd.’s (“CNI”), as well as WorldCom’s motion in limine. The procedural background is explained fully below, but, in brief, CNI filed a timely proof of claim against the Debtors, alleging that World-Com improperly billed CNI by (i) failing to provide certain rebates, (ii) failing to reimburse CNI for switching telephone numbers, and (iii) by charging CNI taxes. WorldCom subsequently initiated an adversary proceeding against CNI, objecting to the proof of claim and asserting that CNI failed to pay for services it provided to CNI under the relevant tariffs (the Interstate Domestic Telecommunications Services Tariff (the “Domestic Tariff’) and the International Message Telecommunications Services Tariff (the “International Tariff’), together, the “Tariffs”) and the parties’ contract 1 that, combined, governed their relationship.

After multiple pre-trial motions and several opinions by the Court, the dispute proceeded to trial. Prior to trial and subsequent to the parties’ submission of their Joint Pre-Trial Order, WorldCom filed a motion in limine seeking to exclude CNI’s evidence in support of any contention previously rejected by the Court.

In support of its motion in limine, WorldCom argues that the Court has already ruled on certain “issues” in prior rulings, such as whether WorldCom can charge for “Unused Mínimums,” and whether CNI is owed $120,000 in promised credits. 2 Therefore, WorldCom argues that the law of the case doctrine precludes CNI from re-litigating issues that the Court has already decided. CNI argues that the evidence would be presented only to refute WorldCom’s proof of damages.

Regarding the issue of damages, World-Com argues that CNI owes it $480,030.45 for actual charges plus interest and attorneys’ fees. CNI argues that WorldCom’s business books and records are inaccurate and WorldCom actually owes it $98,484 3 once the proper credits are applied.

*500 Having reviewed the parties’ pleadings and exhibits, and having held a trial on February 19, 2008, the Court grants WorldCom’s motion in limine to the limited extent that evidence of promised credits and the alleged written agreement that CNI entered into with Bruce Donohue, a sales manager of WorldCom (the “Dono-hue Agreement”), are precluded by the Court’s prior rulings that the filed-rate doctrine precludes CNI from enforcing discounts outside of the Tariffs. Further, WorldCom is awarded $478,588.51 in actual damages plus interest under the Tariffs to the date of judgment and is entitled to attorney fees in the amount of $174,718.70 on behalf of work performed by Stinson Morrison Hecker LLP (“Stinson”). The Court denies WorldCom’s request for attorney fees on behalf of work performed by Buchanan Ingersoll & Rooney, P.C. (“Buchanan”) due to its failure to properly support the request. WorldCom must resubmit its request for attorneys’ fees for work performed by Buchanan with the proper documentation by May 7, 2008. The Court schedules a hearing for May 14, 2008 to reconsider WorldCom’s request as to Buchanan attorney fees, provided supporting documentation is submitted.

II. JURISDICTION

The Court has subject matter jurisdiction over this proceeding under sections 157 and 1334 of title 28 of the United States Code and under the July 10, 1984 “Standing Order of Referral of Cases to Bankruptcy Judges” of the United States District Court for the Southern District of New York (Ward, Acting C.J.). This matter is a core proceeding under section 157 of title 28 of the United States Code. Venue is proper before the Court under sections 1408 and 1409 of title 28 of the United States Code.

III. BACKGROUND

A. Background Information About the Debtors

Debtors provided a broad range of communications services in over 200 countries on six continents. Through their core communications service business, which included voice, data, internet, and international services, the Debtors carried more data over their networks than any other telecommunications entity. The Debtors were the second largest carrier of consumer and small business long distance telecommunications services in the United States and provided a wide range of retail and wholesale communications services.

On July 21, 2002 and November 8, 2002, the Debtors commenced cases under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”). By orders dated July 22, 2002 and November 12, 2002, the Debtors’ chapter 11 cases were consolidated for procedural purposes only and were jointly administered.

On October 29, 2002, the Court entered an order establishing January 23, 2003 as the deadline for the filing of proofs of claim against the Debtors. On October 31, 2003, the Court entered an order confirming the Debtors’ Modified Second Amended Joint Plan of Reorganization (the “Plan”). The Plan became effective on April 20, 2004 (the “Effective Date”). Upon the Effective Date, WorldCom changed its name to MCI, Inc. On January 6, 2006, Verizon Communications, Inc. and MCI, Inc. merged. MCI, LLC is now *501 doing business as Verizon Business Global, LLC.

B. Business Relationship Between WorldCom and CNI

The background information about WorldCom and its business relationship and litigation with CNI are set out in detail in the Court’s earlier opinion. See In re WorldCom, 2006 WL 693370, at **1-

3.

In brief, CNI resells telecommunications services from common carriers like World-Com to its own customers. In December

1997, WorldCom and CNI entered into a written agreement, the “Intelenet Agreement,” which, according to CNI, World-Com eventually deemed inappropriate for the parties’ relationship. In November

1998, CNI provided WorldCom with a copy of the WorldCom Rebiller 4 Service Agreement (the “Rebiller Agreement”) that was signed only by CNI. On January 29, 1999, WorldCom gave a copy of the Rebiller Agreement signed by both parties to CNI. On that same day, CNI signed an amendment to the Rebiller Agreement and WorldCom signed it on February 4, 1999. WorldCom invoiced CNI monthly for services provided pursuant to the Rebiller Agreement.

C. Procedural History

The procedural history regarding the instant matter is set out in detail in the Court’s earlier opinions. See In re World-Com,

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386 B.R. 496, 2008 Bankr. LEXIS 1233, 50 Bankr. Ct. Dec. (CRR) 5, 2008 WL 1885623, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mci-worldcom-communications-v-communications-network-international-ltd-nysb-2008.