Amy Silvis v. Ambit Energy LP
674 F. App'x 164
3rd Cir.2017Background
- Plaintiff Amy Silvis enrolled in Ambit Energy’s variable-rate residential electricity plan governed by a Terms of Service and a Disclosure Statement.
- Terms of Service stated variable rates “are subject to change at the discretion of Ambit Energy.”
- Disclosure Statement said rates “may vary dependent upon price fluctuations in the energy and capacity markets, plus all applicable taxes.”
- Silvis alleged Ambit charged rates higher than the utility (Penelec) and sued for breach of contract (class action), claiming Ambit was limited to varying rates based on market factors.
- District Court granted summary judgment for Ambit, holding the contract unambiguously granted Ambit discretion to set prices and that Silvis offered no evidence of bad faith; Silvis appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the pricing provisions unambiguously allow Ambit to set any rates | Silvis: Disclosure Statement limits rate changes to energy/capacity market fluctuations, so Ambit breached by charging rates based on other factors | Ambit: Terms of Service grants broad discretion; Disclosure Statement is non-exclusive description | The clauses, read together, are ambiguous about the scope of Ambit’s discretion; ambiguity precludes summary judgment for Ambit and requires remand |
| Proper interpretation method for ambiguous contract language | Silvis: Ambiguity permits extrinsic evidence and construes Disclosure Statement as limiting general Terms of Service | Ambit: Contract read plainly favors its broad discretion and no limitations | Court: If ambiguous, interpret in light most favorable to non-movant and permit factual development; remand for district court factfinding |
| Whether the Disclosure Statement’s word “may” restricts Ambit’s authority | Silvis: “May” qualifies that rates may vary only when dependent on market fluctuations | Ambit: “May” is permissive and does not limit basis for changing rates; market language is one non-exclusive basis | Court: The placement of “may” creates two reasonable readings; ambiguity exists and must be resolved below |
| Whether Silvis raised a viable claim for breach of the implied covenant of good faith and fair dealing | Silvis: Ambit acted in bad faith by concealing bases for rates and making misleading promises | Ambit: No evidence of intentional misconduct; claims amount to breach allegations or waived/regulatory claims | Court: District court properly granted summary judgment on good faith claim — no separate bad-faith cause apart from contract breach and Silvis offered no evidence of intentional mischief |
Key Cases Cited
- In re Diet Drugs, 706 F.3d 217 (3d Cir. 2013) (clear contract terms are interpreted from the contract’s four corners)
- Kripp v. Kripp, 849 A.2d 1159 (Pa. 2004) (ambiguous contract terms permit resort to extrinsic/parol evidence)
- Bohler-Uddeholm Am., Inc. v. Ellwood Grp., Inc., 247 F.3d 79 (3d Cir. 2001) (contract is ambiguous if reasonably susceptible to different constructions)
- In re Phila. Newspapers, LLC, 599 F.3d 298 (3d Cir. 2010) (specific contractual provisions prevail over general ones)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (summary judgment: genuine issue exists only if reasonable jury could return verdict for nonmoving party)
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (party moving for summary judgment entitled to judgment when nonmovant fails to make a sufficient showing on an essential element)