Opinion
Civil Action No. 00-1125 Section: "R" (4).
June 18, 2001.
ORDER AND REASONS
Before the Court is a motion to alter or amend judgment by plaintiff Broadwing Communications, Inc. For the following reasons, the Court denies plaintiff's motion.
I. Background
Defendant Gene W. Harris, as president of and on behalf of LDC Consultants, Inc., signed a telecommunications services resale agreement with Network Advanced Services, Inc. on January 6, 1993. (Plaintiff Broadwing Communications, Inc. is Network's successor in interest.) Under the terms of the agreement, Network billed LDC monthly for the agreed fees and the actual cost of transport. Harris also signed a personal guarantee on January 6, 1993, guaranteeing payment to Network of any obligation of LDC.
Over the next three and a half years, Network provided LDC telecommunications services and billed LDC monthly for those services. From the beginning of their business relationship, however, LDC believed Network overcharged it and disputed the monthly bills. (Pl.'s Mem. Opp'n Mot. Summ. J., Ex. 1 at 14, 23, 32-33, 63, 65.) As a result, Network consistently maintained a monthly balance on LDC's account. (Def.'s Mem. Supp. Mat. Summ. J., Ex. 3 at 1-2.) Despite these billing disputes and outstanding balances, Network continued to provide LDC with telecommunications services.
On June 6, 1996, Network, LDC, and Quantum Communications, another telecommunications company, entered into a release and settlement agreement in which Network released LDC from $237,114.48 of debt, Quantum canceled notes totaling $237,114.48 owed by Network, and LDC paid Quantum the difference between $237,144.48 and the $180,000.00 that Quantum owed LDC. Included in the agreement was a recital stating: "LDC is indebted to [Network] (in an amount in excess of the outstanding principal and unpaid interest balance remaining on the Notes) pursuant to the terms of [the resale agreement]." (Pl.'s Mem. Opp'n Mot. Summ. J., Ex. 1 at Ex. D.) After signing the agreement, LDC believed that it did not owe Network any money after credits and adjustments for overcharges by Network were taken into account. ( Id., Ex. 1 at 32-34.) A week later, on June 14, 1996, LDC paid Network its May 5, 1996 invoice, after deducting a finance charge and an asserted credit. ( Id., Ex. 1 at Ex. K.) That $48,443.35 payment was the last payment LDC made to Network.
On July 5, 1996, Network terminated service to LDC, claiming LDC had defaulted because the account was thirty days past due. After sending LDC and Harris several demand letters, Network filed a petition on open account against LDC in Louisiana state court on September 23, 1996. Although LDC filed an answer on November 15, 1996, no further pleadings were filed by either party, and the action was abandoned as of November 1999. See LA. CODE Civ. PROC. art. 561. Plaintiff then filed this suit on April 12, 2000 against Harris as guarantor.
Harris filed a motion for summary judgment, arguing that the agreement between Network and LDC was an open account subject to a three-year prescription period, which had expired. Broadwing argued that prescription was interrupted, extending the prescription period to ten years. The Court found that the parties' relationship was an open account, that the prescription period had not been interrupted, and granted Harris' motion to dismiss. Broadwing now asks this Court to amend or alter that judgment pursuant to Federal Rule of Civil Procedure 59(e).
II. Discussion
A. Reconsideration Standard
A district court will entertain a motion to alter or amend judgment under Federal Rule of Civil Procedure 59(e) if the movant files the motion no later than ten days after the entry of judgment. See FED. R. Civ. P. 59(e). Here, Broadwing filed its motion on March 20, 2001, eight days after the entry of judgment.
A district court has considerable discretion to grant or to deny a motion under Rule 59(e). See Edward H. Bohlin Co. v. Banning Co., 6 F.3d 350, 355 (5th Cir. 1993). A court's reconsideration of a prior order is an extraordinary remedy, which should be used sparingly. See Fields v. Pool Offshore, Inc., 1998 WL 43217, at *2 (E.D. La. Feb. 3, 1998), aff'd, 182 F.3d 353 (5th Cir. 1999); Bardwell v. George G. Sharp, Inc., 1995 WL 517120, at *1 (E.D. La. Aug. 30, 1995). The court must "strike the proper balance between the need for finality and the need to render a just decision on the basis of all the facts." Edward H. Bohlin Co., 6 F.3d at 355. Courts in this district hold that a moving party must satisfy at least one of the following criteria to prevail on a Rule 59(e) motion: (1) the motion is necessary to correct a manifest error of fact or law; (2) the movant presents newly discovered or previously unavailable evidence; (3) the motion is necessary in order to prevent manifest injustice; and (4) the motion is justified by an intervening change in the controlling law. See Fidelity Deposit Co. of Md. v. Omni Bank, 1999 WL 970526, at *3 (E.D. La. Oct. 21, 1999); Jupiter v. BellSouth Telecomms., Inc., 1999 WL 796218, at *1 (E.D. La. Oct. 5, 1999); Burma Navigation Corp. v. M/V Reliant Seahorse, 1998 WL 781587, at *1 (E.D. La. Nov. 3, 1998); Fields, 1998 WL 43217, at * 2.
B. Analysis
1. Inadmissible Evidence
Here, Broadwing asks the Court to reconsider its order granting summary judgment on the grounds that the Court relied on inadmissible evidence in dismissing the plaintiff's claims. The written instrument in dispute is the June 6, 1996 Release and Settlement Agreement ("Agreement") between Network Long Distance, Inc. (Broadwing's predecessor), Quantum Communications, Inc., and LDC. At issue is the second recital in the Agreement, which states, "Whereas LDC is indebted to [Network] (in an amount in excess of the outstanding principal and unpaid interest balance remaining on the Notes) pursuant to the terms of the [resale agreement]." (Pl.'s Mem. Opp'n Mot. Summ. J., Ex. 1 at Ex. D. (emphasis in original)) Broadwing claims that since the Agreement is unambiguous, the Court improperly relied upon parol evidence to determine its meaning.
The Court implicitly found that the Agreement was ambiguous, and therefore used parol evidence to interpret it. McDuffie v. Riverwood Int'l Corp., 660 So.2d 158, 160 (La.App. 2nd Cir. 1995) ("[w]hen the terms of a written contract are susceptible to more than one interpretation, or where there is uncertainty or ambiguity as to its provisions, or the intent of the parties cannot be ascertained from the language employed, extrinsic evidence is admissible to clarify the ambiguity or to show the parties' intent."). The second recital can be interpreted in two ways. Broadwing argued that it should be read to mean that LDC unconditionally acknowledged that it owed Network the disputed account balance. Mr. Harris, in contrast, argued that the second recital merely recognized the disputed claim. The text of the second recital is consistent with both understandings.
Since the Agreement was ambiguous, the Court was justified in turning to extrinsic evidence to determine the intent and meaning of the provision. The Court examined Harris' sworn deposition testimony, in which he asserted that Network's billing "was constantly wrong and never right" and that when LDC signed the settlement agreement it did not owe Network any money after "credits and adjustments" for overcharges by Network were taken into account. (Pl.'s Mem. Opp'n Mot. Summ. J., Ex. 1 at 14, 23, 33-34, 62-63, 65.) ( See also Def.'s Mem. Supp. Mot. Summ. J., Ex. 3 at 2.) This parol evidence bolstered Harris' interpretation of the second recital as recognition of, but not as acknowledgment of, a particular debt.
In response, Broadwing now offers an August 28, 1996 letter from Mr. Harris' attorney, H. Wayne Green, to Network to support its argument that the second recital of the Agreement was an acknowledgment of liability, rather than a recognition. (Pl.'s Mem. Supp. Mot. Am. J., Ex. A.) However, if a party seeks to upset a summary judgment on the basis of evidence that was not timely presented, the district court must balance the following factors: (1) the reasons for the failure to file the evidence in a timely fashion; (2) the importance of the evidence to the moving party's case; (3) whether the evidence was available before the summary judgment decision was made; and, (4) the likelihood that the non-moving party will suffer prejudice is the motion to alter is granted. See Hale v. Townley, 45 F.3d 914, 921 (5th Cir. 1995) (citing Lavespere, 910 F.2d at 174)
In this case, the plaintiff concedes that it had this evidence in its possession well in advance of this Court's Order dismissing its claims. See Waltman v. International Paper Co., 875 F.2d 468, 474 (5th Cir. 1989) (refusing to consider documents attached to motion for reconsideration of order granting summary judgment when all of the materials were available to plaintiff when she filed opposition to summary judgment). Broadwing explains that it failed to provide this letter before the Court's order for summary judgment because Broadwing had no reason to believe that the letter would have been admissible as parol evidence since the defendant did not allege that the contract was ambiguous in his motion for summary judgment.
However, the issue of whether Mr. Harris acknowledged a debt to Network was one of the central issues in the defendant's motion for summary judgment, and in the plaintiff's opposition. In fact, Broadwing offered the Agreement as evidence in support of its argument that Harris acknowledged his debt to Network. Broadwing could have easily introduced this letter into evidence in support of that same argument. In fact, Broadwing itself admits in its motion to amend or alter judgment that the letter could have been offered as evidence that Harris acknowledged some debt to Network.
Based on the foregoing facts, the Court finds that this evidence does not constitute "newly discovered evidence" sufficient to warrant reconsideration of a prior order under Rule 59(e). See Fields, 1998 WL 43217, at * 3.
2. Disputed Claim Versus Disputed Amount
Finally, the plaintiff urges the Court to reconsider its order granting summary judgment on the grounds that while the second recital disputes the amount of liability, it does not dispute liability itself, and therefore, should not be characterized as a "disputed claim." Broadwing asserts that since a "debtor may acknowledge a debt without knowing the amount due," a disputed claim, for purposes of acknowledgment, only occurs where liability itself is disputed. Flowers v. United States Fidelity Guaranty Co., 381 So.2d 378, 380 (La. 1980).
Broadwing cites Sotomayor v. Lewis, which is factually distinguishable from this case. 673 So.2d 1201 (La.App. 4th Cir. 1996). In Sotomayor, the question of liability was never at issue; the only disagreement between parties was the extent of the liability. Id. at 1205. That is not the case here. Harris disputed owing Network any money at all. He conditioned his statement of liability on the belief that Network owed him an equal sum of money, and that once those set-off s were taken into account, no liability existed at all. See First Nat'l Bank of Commerce v. Band, 727 So.2d 1171, 1172 (La.App. 4th Cir. 1998). That Harris did not know the exact amount that he owed Network and that Network owed him, does not transform this into a dispute over the amount of liability rather than a dispute as to liability. Therefore, the Court reiterates its finding that Harris' execution of the Agreement was a recognition of a disputed claim, which is not sufficient to interrupt prescription.
III. Conclusion
For the reasons stated above, the Court denies the motion to alter or amend judgment by plaintiff Broadwing Communications, Inc.