MIAMI – The former Verizon Florida has been ordered to pay nearly $2.6 million in damages to Florida Power & Light (FPL) after a state appeals court sided with FPL in a disagreement that saw Verizon Florida refusing to pay to use the electric utility’s poles over a pole attachment agreement, according to a report from News 4 Jax, a Florida news service.
FPL filed a breach of contract lawsuit against Verizon Florida, now called Frontier Florida LLC, which was heard by trial court Miami-Dade County Circuit Judge John W. Thornton Jr.
On Nov. 23, 2016, 3rd District Court of Appeal Judge Kevin Emas, joined by Judges Vance Salter and Ivan Fernandez, affirmed the trial court’s ruling granting that Verizon Florida was to pay FPL damages amounting to nearly $2.6 million plus prejudgement interest.
The appeals court heard how from 1975 FPL and Verizon Florida had been operating under an agreement stating how much they would receive for the use of each other’s poles.
The appeals court decision states that for more than 35 years FPL submitted invoices to Verizon and Verizon paid the amounts as invoiced. It’s alleged that at no time did Verizon Florida question how the invoices were calculated nor that the invoices were contrary to the terms of the agreement.
But in 2012, the appeals court heard that Verizon Florida stopped paying the invoices submitted by FPL and consequently started paying around 25 percent of the amounts billed.
Verizon Florida is reported to have paid this amount due to an application of a Pole Attachment Order that was issued by the Federal Communications Commission (FCC) in 2011.
However, while the independent agency didn’t determine the rate Verizon Florida was required to pay to FPL, it did provide the ability for Verizon to file a complaint with the FCC if it believed that the rate initially agreed to was not "just and reasonable."
According to the appeals court decision while Verizon subsequently filed a complaint with the agency, the FCC found that the rate in contention was not supported by the Pole Attachment Order.
Both parties, however, have been arguing over what is considered a reasonable rate.
Law 360 reports that in March 2015, Verizon filed a complaint, arguing that FPL was utilizing an ‘evergreen’ contractual clause. It’s reported that this was to continue charging higher rates than its competitors even though the deal was terminated several years before. Verizon argued that the FPL should charge the same rates as its competitors.
However, after the FPL filed a breach of contract lawsuit, last year’s appeals court three-page decision stated that:
“We conclude that the trial court properly determined that there were no material facts in dispute; that the agreement under which the parties had operated for more than 35 years was a valid contract; that FPL had complied with the material terms of the agreement; that Verizon failed and refused to make the required payments invoiced by FPL pursuant to the agreement; and that Verizon’s actions constituted a breach of its obligations under the agreement, resulting in damages as set forth in the final judgement.”