Bevill Co. v. Sprint/United Management Co. , 154 F. App'x 49 ( 2005 )

F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
October 25, 2005
FOR THE TENTH CIRCUIT
Clerk of Court
THE BEVILL COMPANY, INC.,
Plaintiff-Appellant,
v. No. 04-3401
(D.C. No. 01-CV-2524-CM)
SPRINT/UNITED MANAGEMENT (D. Kan.)
COMPANY,
Defendant-Appellee.
ORDER AND JUDGMENT *
Before EBEL , HARTZ , and McCONNELL , Circuit Judges.
After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument.
Plaintiff, The Bevill Co., Inc., appeals from a district court order granting
summary judgment to defendant Sprint/United Management Co. on the ground
*
This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
that under the terms of the agreement between the parties, Sprint could terminate
its contract with Bevill at Sprint’s convenience. We exercise jurisdiction under
28 U.S.C. § 1291. Because we determine the contract to be ambiguous, we
reverse and remand for further proceedings.
Bevill and Sprint entered into a Master Services Agreement (MSA) and a
Contract Order as part of a single set of documents. The MSA provided that
Bevill would provide internet services to certain military bases where Sprint was
providing telephone services. Part E of the Contract Order is entitled
“Acceptance Procedures.” It provides that after a three-month trial period, the
parties would meet to review program performance and, if necessary, would work
together to form a written cure plan to bring the program into compliance. Sprint
allegedly terminated the contract rather than work with Bevill to produce a cure
plan.
The dispute between the parties focuses on the contractual terms relating to
termination of their relationship. One such term appears in the “Acceptance
Procedures” provision. The last sentence of the provision states: “If the parties
are unable, after all due effort, to reach agreement on the cure plan or the future
direction of the program, Sprint reserves the right to unilaterally terminate the
program under section 4 of [the MSA].” Aplt. App., Vol. 1 at 98. Part F of the
Contract Order, entitled “Term and Termination,” immediately follows that
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sentence. It states: “The term of this Contract Order begins on August 1, 2000
and ends October 31, 2008. This Contract Order may be terminated in accordance
with the [MSA].” Id. The termination provisions of the MSA appear in Part 4.0,
also entitled “Term and Termination.” Section 4.1 sets forth the term of the
MSA. Section 4.2, entitled “Termination for Convenience,” permits Sprint to
terminate the MSA, Contract Order, or both at any time without liability by
providing notice. Unless the notice provides otherwise, termination is effective
10 days after the date of the notice. Section 4.3 permits either party to terminate
for cause if one party believes the other has materially breached the MSA or
Contract Order. Under the termination-for-cause provision, the party giving
notice of the breach can terminate the contract if the breaching party does not
cure within 30 days. Section 4.4 provides for termination if the control of Bevill
changes, and § 4.5 provides for termination if the control of Sprint changes.
Part I of the Contract Order and § 18.15 of the MSA both provide that if there is a
conflict between the MSA and the Contract Order, the Contract Order controls.
Sprint sent Bevill notice that it was terminating for convenience. Bevill
then filed a complaint for breach of contract in the district court. Sprint moved
for summary judgment on the ground that the contract provided for termination
for convenience by Sprint at any time and without liability. Bevill responded that
Sprint could not unilaterally terminate for convenience but had to comply with the
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Contract Order Acceptance Procedures. If Sprint could terminate for
convenience, Bevill argued, the Acceptance Procedures were meaningless. Sprint
countered that the Acceptance Procedures did not specifically override the
termination-for-convenience provision and that termination for convenience
should be considered an alternative means of proceeding with termination.
According to Sprint, “This is consistent with the coexistence of termination for
convenience and termination for cause provisions in the contract.” Id., Vol. II at
146.
The district court granted Sprint’s motion for summary judgment. It
decided “as a matter of law that the [MSA] as written gives [Sprint] the absolute
right to terminate the agreement ‘without liability’ and ‘at any time,’ subject only
to the notice requirement which was fulfilled here.” Id., Vol. I at 37. Even
though the court recognized that the Contract Order would prevail if there was a
conflict with the MSA, the court ruled that the MSA termination language did not
conflict with the Acceptance Procedures in the Contract Order. The court viewed
the Acceptance Procedures as an alternative because they did “not expressly
p[ur]port to remove or revoke the termination for convenience provision,” the
termination-for-cause provision immediately followed the termination-for-
convenience provision, and the termination-for-convenience language was clear.
Id. at 37-39.
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Thereafter, Bevill filed a motion to alter or amend the judgment. The
district court denied the motion. This appeal followed.
“We review the district court’s grant of summary judgment de novo,
applying the same legal standard [to be] used by the district court.” Simms v.
Okla. ex rel. Dep’t of Mental Health & Substance Abuse Servs. , 165 F.3d 1321,
1326 (10th Cir. 1999). The district court appropriately grants summary judgment
“if the pleadings, depositions, answers to interrogatories, and admission on file,
together with the affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment as a matter of
law.” Fed. R. Civ. P. 56(c). “When applying this standard, we view the evidence
and draw reasonable inferences therefrom in the light most favorable to the
nonmoving party.” Simms , 165 F.3d at 1326.
The parties agree that Kansas law applies. “In interpreting a contract, the
primary role of the court is to ascertain and effectuate the parties’ intentions
where possible.” Time Warner Entm’t Co., L.P. v. Everest Midwest Licensee,
L.L.C. , 381 F.3d 1039, 1044 (10th Cir. 2004) (applying Kansas law). “In Kansas,
extrinsic evidence is not admissible if the intent of the parties in the contract is
clearly ascertainable from the ‘four corners’ of the document.” City of Wichita v.
Sw. Bell Tel. Co. , 24 F.3d 1282, 1287 (10th Cir. 1994). All contract provisions
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are construed together, “in harmony rather than in isolation.” Decatur County
Feed Yard, Inc. v. Fahey , 974 P.2d 569, 574 (Kan. 1999).
Our disagreement with the district court is that we do not believe that the
intent of the parties is “clearly ascertainable from the ‘four corners’ of the” MSA
and Contract Order. City of Wichita , 24 F.3d at 1287. Both the MSA and
Contract Order provide that the terms of the Contract Order prevail over those of
the MSA if they conflict. The Acceptance Procedures state that “[i]f the parties
are unable, after all due effort, to reach agreement on the cure plan or the future
direction of the program, Sprint reserves the right to unilaterally terminate the
program under section 4 of [the MSA].” Aplt. App., Vol. I at 98. The natural
inference is that if Sprint has not exerted “all due effort” (and Bevill has) to reach
an agreement with Bevill, then Sprint cannot unilaterally terminate under
section 4. Otherwise, there would be no purpose to the clause preceding the
language “Sprint reserves the right to unilaterally terminate the program under
section 4.”
On the other hand, the second sentence of the provision immediately
following the above-quoted sentence states: “This Contract Order may be
terminated in accordance with the Agreement.” Id. On its face this incorporates
into the Contract Order the Termination for Convenience provision of the MSA.
Again, however, such a reading would seem to render surplusage the language in
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the Acceptance Procedures that apparently sets a condition on unilateral
termination by Sprint.
We cannot say with confidence that the parties clearly intended to permit
Sprint to invoke the Termination for Convenience provision without exerting the
effort required by the Acceptance Procedures. The contract is ambiguous on this
score. That ambiguity must be resolved by further proceedings below.
Bevill raises several other arguments on appeal. In light of our decision to
reverse and remand, we need not reach those arguments. The judgment of the
district court is REVERSED, and the case is REMANDED for further
proceedings.
Entered for the Court
Harris L Hartz
Circuit Judge
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