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Wavecom Solutions Corporation Fka Pacific v. Verizon Hawaii International Inc.

November 7, 2011

WAVECOM SOLUTIONS CORPORATION FKA PACIFIC LIGHTNET, INC., A HAWAII CORPORATION, PLAINTIFF,
v.
VERIZON HAWAII INTERNATIONAL INC., A DELAWARE CORPORATION; SOUTHERN CROSS CABLES LIMITED, A BERMUDA CORPORATION; AND DOES 1 THROUGH 10, DEFENDANTS.



The opinion of the court was delivered by: David Alan Ezra United States District Judge

ORDER DENYING DEFENDANT SOUTHERN CROSS CABLES LIMITED'S MOTION FOR SUMMARY JUDGMENT

On November 7, 2011, the Court heard Defendant Southern Cross Cables Limited's Motion for Summary Judgment. Duane R. Miyashiro, Esq., and Michael J. Scanlon, Esq., appeared at the hearing on behalf of Plaintiff; Peter W. Olson, Esq., and Andrew G. Odell, Esq., appeared at the hearing on behalf of Defendants Verizon and Southern Cross. After reviewing the motion and the supporting and opposing memoranda, the Court DENIES Defendant's Motion for Summary Judgment (Doc. # 22).

BACKGROUND

I. Factual Background

The instant action involves a dispute over certain fiber optic cables installed in the Spencer Beach Manhole on the Big Island of Hawaii ("Manhole"). (Compl. ¶¶ 30--36.) Plaintiff Wavecom Solutions Corporation ("Plaintiff" or "Wavecom") owns the Manhole at issue. ("Amen Decl.," Doc. # 38-1 ¶ 3.) Wavecom alleges that Defendants Southern Cross Cables Limited ("Defendant" or "Southern Cross") and Verizon Hawaii International Inc. ("Verizon") own, operate, and/or benefit from fiber optic cables installed in the Manhole without providing compensation to Wavecom. (Compl. ¶¶ 17--30.)

The Manhole at Spencer Beach was constructed in 1999.*fn1 (Amend Decl. ¶ 4.) It is described in the Complaint as "a subsurface enclosure that personnel may enter and use for the purpose of installing, operating, and maintaining communications facilities." (Compl. ¶ 8.) More specifically, the Manhole "contains both land-side and ocean-side access points, known as ducts or conduits, in which communications facilities . . . can be installed." (Id. ¶ 10). The "[o]cean-side access points are used to connect sub-sea cables, which are laid by vessel on the ocean floor, with land-based telecommunications networks." (Id. ¶ 11.) According to Plaintiff, "customarily throughout the telecommunications industry, and specifically at Spencer Beach, the occupancy fee for land-side conduit access is much lower than for ocean-side conduit access . . . ." (Id. ¶ 13. (emphasis in original).)

The first owner of the Manhole was GST Telecom Hawaii, Inc. ("GST"), which owned the Manhole from the time it was built in 1999 until March 2001. (Amen Decl. ¶ 4.) Plaintiff alleges that in early 1999, GST entered an agreement with Verizon's predecessor-in-interest, GTE Hawaiian Tel International Incorporated ("GTE"), that provided GTE with access to the Manhole for the sole purpose of accessing GTE's specified land-side conduits. (Compl. ¶ 17--19.) Plaintiff further alleges that around June and/or July of 1999, GTE installed undersea fiber cables belonging to Defendant Southern Cross in six of the ocean-side conduits of the Manhole without permission from GST. (Id. ¶ 20--22.)

On or about May 17, 2000, GST filed for bankruptcy. (Amend Decl. ¶ 5.) In connection with the bankruptcy proceedings, certain assets belonging to GST were sold to TM Communications Hawaii LLC ("TMC"). (Id. ¶ 6.) Wavecom subsequently acquired from TMC a variety of assets that formerly belonged to GST, including the Manhole, pursuant to an agreement dated March 27, 2001. (Id. ¶ 7.)

Wavecom maintains that when it took ownership of the GST assets in 2001, it did not know that the undersea fiber cables were installed in the Manhole. (Id. ¶ 8.) The Manhole is not routinely accessed or inspected since it is typically buried under several feet of sand and filled with seawater. (Id. ¶ 9--10.) Further, the presence of the Cables in the Manhole is indiscernible from outside. (Id. ¶ 11.)

In November 2008, Wavecom inspected the Manhole pursuant to an agreement to land a third party's undersea cable in the Manhole. (Id. ¶ 12.) During this inspection, Wavecom discovered the cables, which were labeled with a sign reading: "SOUTHERN CROSS CABLE NETWORTH SYSTEM EARTH CABLE; ALCATEL; Segment 1; 1999." (Id. ¶ 13.) In February 2010, Verizon confirmed to Wavecom that it had granted access to the Manhole for the purpose of installing the cables in the Manhole's ocean-side portals. (Id. ¶ 14.)

Plaintiff now brings suit against Verizon and Southern Cross alleging, inter alia, that "[s]ince 1999, Southern Cross has continuously used the valuable occupancy rights for the ocean-side conduits in the Spencer Beach Manhole, but has made no payment to Wavecom Solutions or any of its predecessors for such use." (Compl. ¶ 57.) According to Plaintiff, "[t]he occupancy of the ocean-side conduits of the Spencer Beach Manhole by Southern Cross . . . constitutes a benefit conferred on Southern Cross." (Id. ¶ 59.) Plaintiff claims that:

Southern Cross' continued occupancy of the ocean-side conduits in the [] Manhole, without Wavecom [] being paid for those rights, is a challenge to or denial of [Wavecom's] ownership and possession rights to the Spencer Beach Manhole. (Compl. ¶ 72.) Based on these contentions, Plaintiff asserts that it is entitled to payment for past and ongoing access to and occupancy of the ocean-side conduits in the Manhole and that, if such payment is not received, Wavecom may remove the Southern Cross cables in its discretion. (Id. ¶ 74.)

II. Procedural Background

On April 25, 2011, Plaintiff filed the instant action in Hawaii state court. ("Compl.," Doc. # 1, Ex. A.) On May 25, 2011, Defendant Verizon removed the action to this Court. (Doc. # 1.) In the Complaint, Plaintiff alleges claims for: (1) breach of implied contract against Verizon (Compl. ¶¶ 37--54); (2) unjust enrichment/quasi contract against Verizon and Southern Cross (id. ¶¶ 55--63); (3) unfair competition against Verizon (id. ¶¶ 64--69); and (4) declaratory judgment against Verizon and Southern Cross (id. ¶¶ 70--74).

On June 9, 2011, Verizon was served with the Complaint. (Doc. # 6.) Verizon filed an Answer to the Complaint on June 30, 2011. (Doc. # 9.) On July 21, 2011, Southern Cross was served with the Complaint. (Doc. # 20.) To date, Southern Cross has not filed an answer in this case.

On August 11, 2011, Southern Cross filed the instant Motion for Summary Judgment. ("Mot.," Doc. # 22.) On October 19, 2011, Plaintiff filed its Opposition. ("Opp'n," Doc. # 37.) On October 26, 2011, ...


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