*1 Telephone Corporation Indiana Indiana
Telephone Company, Inc. Rehearing granted 2-475A115. Filed December [No. 7, 1977.] March Warren, Snider, Warren, Warren, Koeller & Claude M. *2 Irwin, Fuller, Stewart, Gilliom, Fuller
Indianapolis, A. Samuel Meyer, Indianapolis, appellant. & of for Folley, Indianapolis, Cracraft, L. for
Bruce N. Harold appellee. money adjudged dam- J. The Court below
Sullivan, ages Telephone Company, plaintiff, Indiana Bell were owed Telephone Corporation (Bell) defendant, Indiana Inc. (ITC). appeals. ITC part. part affirm in and reverse
We January 6, 1973, suit was when Bell commenced on against injunctive complaint filed for relief and a ITC money alleged thereon, due, plus to recover to be Agreement long delivery a Traffic connection with telephone (toll) service and in connection with a distance Agreement delivery private Special services.* Service Although telephone companies specified in Indiana serve a required geographic area, provide each is interconnections equipment, lines, and services with the others to enable delivery long special of services like distance and services. 1973). company keeps (Bums Code Each IC 8-1-2-5 Ed. collects the revenue from the calls or of and services record * Daugherty presided regular Judge over trial of cause as Following qualification successor, judge Judge on the Motion election and his Court. Daugherty appointed Special Judge purpose ruling 63(A). to Correct Errors. TR. designed private time, specially “full services are described as 1. The private perhaps, customers for lines . tailor made various . . services a city a home office in one and a branch office full time line between in another.” appro- companies send Then all
it initiates and handles. clearinghouse because priate acts as a data to Bell Bell. accounting procedures superior ability to handle the its equip- larger proportionate share of the much because of its computes monthly basis, ment, personnel. lines On a companies for the use company the amount each owes other rendering issues the initiated service and of facilities billings accordingly. called “settle- transactions are These ments.” computed specified
The method which settlements are agreement independent between Bell contractual and each company. sought change case, In this ITC in the relevant provisions agree. began contractual and Bell would delay payment eventually of the settlements and discon- payment altogether Agreement tinued under both the Traffic Agreement. Special Services rendering three There are basic functions involved in toll service, namely, (originating the “A” function call which *3 telephone instrument, involves the use of the local the wire switching equipment), or cable local “B” function (operating automatically manually by call—either long timing operator ticketing call), distance and —and (the wire, the “C” and function use of cable or microwave reaching point placed from place where the call is to the where the call is frequently received —this function is called represents haul” and “line the number of miles, or fractions thereof, wire, telephone cable or microwave that each com- pany call). furnishes for each toll computing The method for the “C” function is at issue. computing
Three different methods settlements exist: (1) Average Schedules”, the “Nationwide (2) full cost, and (3) a combination of full cost and the Average Nationwide Schedules. Average
The Nationwide represent Schedules costs de- veloped study from a 500 to 600 telephone exchanges (not throughout owned companies) and United States located study companies. operated by independent telephone The repre- by System representatives is made of the Bell Telephone Independent Associ- sentatives United States “average costs, average on the ation. These nationwide based per message”, produce of dollars to which revenue the amount independent company each in settlements. is entitled the- remaining revenue is retained Bell. single
“Full cost” independent is a which a method company study makes a of its own costs for each of the three rendering functions in study involved This done service. cooperation requires separation with Bell and and allo- expenses among cation (1) service; toll (2) interstate intrastate (3) exchange toll service and local service. Fre- quently, always, but not rendering the costs of toll service company higher for an individual are than the nationwide average costs and thus full produces cost method often larger independent. settlements to the Under full cost settle- ments, independent company recovers from the toll reve- nues all of its performing costs functions, incurred all three “B”, (“A”, “C”) plus profit. All of independents in Indiana make settlements on the Average Nationwide Schedules method of computation, except independent four companies which utilize the full cost method.
Bell and Special ITC entered the Agreement Services disputed and entered Agreement Traffic June Later, change desired to from the Nationwide Average Schedules, which was the specified method in both contracts, to the combination using method Nationwide Aver- age Schedules on the “A” and “B” functions and “full costs” on the “C” function. On November 1971, ITC delivered *4 “Separation to Bell its Study,” which embodied a study cost necessary to switch to the combination method. Bell would agree accept study the cost because employed method of accounting objectionable to Bell. As hereinbefore
noted, began payments payments ITC and then cease defer Agreement on statements Bell under both the Traffic issued Special Agreement. Services Bell, January 6, 1973, complaint on trial filed its with the court, alleging Agreement that had the Traffic ITC breached Special Agreement by Services virtue of its deferred non-payments. subsequently
ITC filed a motion dismiss action in grounds the trial on court that the matter was within jurisdiction exclusive of the Public Commission. Service 30,1973, motion was petition On denied. June Bell filed a with which, essence, the Public Service Commission asked disputed computing Commission to consider method of requested ITC settlements. the trial court to reconsider its light pending motion dismiss action, Commission again but the was motion denied. The Commission issued January 11, an order 1974, payments resume ITC Averages on the based Nationwide Schedules while further investigation pursuant agreement was made and that to an parties between the the contracts stood terminated as of January 1,1974. payments,
ITC resumed court, and in dropped the trial request injunctive proceeded its relief but on its claim damages. jury The case went to trial without on October judgment November and on 1974 a for Bell was rendered $2,329,505.49. in the amount of The trial court determined Agreement the amount due on the Traffic $1,717,- was together $194,148.52 pre-judgment 417.56 with interest and per post-judgment diem accruing until $381.65 paid amount due be and determined that the amount due Special Agreement on the $359,150.73 together Services $48,200.17 pre-judgment with. per interest and diem $78.72 post-judgment Corresponding interest. credits held *5 against acknowledged $20,925.60 the amounts were in $1,179.01. and
I. OF COURT BELOW JURISDICTION judgment premised appeals from the first the con- jurisdiction tention that the trial court lacked over the sub- ject money judgment, matter of the case. It asserts that the by using specified ascertained the method settlements in contracts, finding was tantamount to the written that such produced compensation”, methods “reasonable hence the trial jurisdiction usurped the court exclusive of the Public Service compensa- of Indiana to determine Commission “reasonable provided by (Burns 1973). IC 8-1-2-5 tion” as Code Ed. parts upon pertinent section which ITC relies
read as follows: Every utility conveyance public telephone . . “. messages to permit physical connection shall or connections made, telephone furnished, service be be and between telephone system operated by any it, telephone toll public operated by utility another such line toll or its between system telephone public line and the of another such utility, such its toll toll or between line and the line of another utility, public telephone system or between its and system telephone public utility, of another such the ever when- necessity require public physical convenience and such physical or connections and such connection or connections will connection irreparable injury not result in to the utilities, public other users of the facilities of such or owner any detriment substantial to the service to
nor be rendered public utilities. such section, ‘physical The term connection’ as used . . . complete of trunk lines or mean such number wire shall circuits and reasonably adequate may required connections as be to furnish telephone public service between such utilities. agree upon “(b) In case such use or the of failure compensation use, such or or in case of failure conditions upon physical agree connection or or such connections^ conditions which the same be shall the terms made, utility any corpo- any public person, or association or may apply the commission and ration interested after if public ascertain that
investigation commission shall require physical necessity use or such such convenience and physical connections, or connections connection that such use or such irreparable injury to the result in would equipment or of the facilities or of such owner of other users utilities, public substantial detriment nor such public owner or other to be such the service utilities shall scribe reasonable joint be made rendered facilities, equipment or or users of such other permitted pre- order direct such use compensations conditions and such physical such connection connections use and that such within what time how and and determine *6 made, whom connection or connections shall be and maintaining making expense connections shall such or of and connection paid. be “(c) permitted so ordered use shall be Such such and physical or connection connections so ordered shall made be compensation prescribed and such conditions so for such such use; [,] upon terms and such conditions physical connection connections shall made, be as so determined, for such which such made, to the courts as be compensations shall lawful conditions and use, upon and the lawful terms and conditions physical connection or connections shall be observed, paid, subject to be followed and to recourse complaint any upon party inclu- interested provided seventy-eight in sections eighty-six, sive,2 applicable, and such sections so far apply as shall arising any complaint action on such Any so such made. may order of the commission be time to time revised from upon application the commission party interested 1913, or 1933, 167; its own motion. 76, 8, p. ch. [Acts § p. 928; 190, 1935, 293, ch. §3, p. ch. §2, 1447.]” (Emphasis supplied). expression We this section to be an read of Indiana’s law- public makers that the requires telephone communica- tion available to the Indiana consumer without inter- ruption might of service which come about as a result disagreements between the telephone various companies over the interconnection of lines, equipment their See, and services. present provisions 2. For see IC 8-1-3-1—8-1-3-12. Sections 84 and compiled 8-1-2-73, 86 are as IC 8-1-2-74. These pertain sections judicial review Commission actions. Telephone 59, App. (1923), Co. 87 Ind. McCardle v. Akron 469, 160 48. 156 N.E. N.E. delegates statutory authority to the Public
This
section
Commission to order such interconnection where tele
Service
agree
companies
phone
themselves
are unable to
between
See,
Michigan Tele
do so.
Northern Indiana and Southern
graph
Peoples
(1916),
Telephone
and Cable Co. v.
Mutual
Co.
268,
267,
In this construction we prin are bound the well-settled ciple power authority the Commission derives its
solely statute, grant power from the and unless a statute, found in can be it must be concluded that Telephone there none. General Co. Indiana v. Public Commission 646, Service Ind. 154 N.E.2d 372, 373; Utility Town Merrillville v. Lincoln Gardens Co. App. 245, 170 Ind. 351 N.E.2d 919. We note that quoted statutory specifically section addresses the “failure agree upon such or the compensation use conditions or Only such use.” then is the Commission authorized to order compensation a connection or to order conditions or See, connection. Telephone Northern Indiana Co. v. United Telephone Companies (1939), 215 19 N.E.2d voluntarily Since ITC and Bell had entered a written *7 agreement, the cited section application. is without fact, In parties provided many have years interconnections arrangements, under various contractual present dispute brought by before the trial court Bell on the complaint that ITC had breached the of terms the existent non-payment contracts written its and deferred of the settlements. question
Therefore, submitted to trial court involved voluntary aof the breach contract. The construction and judicial such contracts are breach matters for determina- jurisdic- I The Public Service tion. Commission does not have See, App. of such matters. In (1949), tion Re Gumm 118 Ind. 624 adjudicate authority has no to 487, 488. It 83 N.E.2d
695, grant money judgment. a action or to contract a breach of 240 Indianapolis v. Niblack (1959), ex rel. Water Co. State See, 377, 378; Town Merrillville 32, 161 N.E.2d Ind. Utility supra, at Co. Lincoln Gardens 919. order, is an administrative of the Commission
An order Valparaiso Lighting judgment, v. Public Service a Co. not 253, (1921), 267, 190 N.E. Indiana 129 Commission of might regard settlements, make with to 13, and, order it nature, rates, fixing compensation prospective in must be like past. for the Public future but not Service Commission Indianapolis City (1956), 70, 235 Ind. 131 N.E.2d v . County Membership 315; Corp. 308, Electric Boone Rural 525, (1959), 239 Ind. 159 Commission N.E.2d v. Public Service Corp. Telephone 125; 121, Indiana v. Public Commis Service App. 314, 111, 131 Ind. N.E.2d 124. (1960), sion following language apt: We find investigates, judicial inquiry declares, “A and enforces they present past as stand facts under liabilities laws already purpose supposed to exist. That is its Legislation, hand, on the other the future looks to end. existing making changes rule, conditions a new and be part subject applied to all or some those thereafter making power. establishment a rate is the to its future, legislative, is an and therefore act of a rule judicial, in kind.....” Co., 150, in 210, Coast Line v. Atlantic Prentis U.S. 69, 158, (quoted 226, dissenting 53 L.Ed. 29 S.Ct. opinion Emmert of J. State v. Marion Circuit 216).3 230 Ind. N.E.2d Court ground practical perhaps middle where matters is There depending- presentment, are, the manner of their nature agency jurisdiction subject of the administrative as well as to the Perhaps judicial jurisdiction court law. a variant of the prove advantageous. doctrine, such would Under doctrine abstention bring might properly damages, though party lawsuit for civil even underlying might agency claim better be resolved the issues whose properly expertise more suited to the consideration and might consciously instance, In such the court on those issues. decision agency opportunity until has had make from decision abstain might presented a case been Such have the trial determination. its provided parties had absent a contract interconnections here if the court *8 correctly subject all observes that contracts are made statutory Therefore, to the relevant of the laws state. the question certainly subject contracts in were modifica- such as laws Indiana tion the sanction the to make. Commission has, Supreme however, impact Our the Court limited legislative may contract that modification make: through legislative department government “The state its may pass regulations respecting peace, all laws and the safety, health, happiness, general the the well- being people state; and, power, of the under this it may prescribe persons the conditions under which and corporations engaged furnishing utility service to resi- may may dents the state do fix business and the rates to charged be for such service.” [*] [*] v “In accordance with the principle, courts, same also all hold that public contracts made for services to be furnished regarded utilities must be contemplation as made in regulatory power of the state, that, of the and when power by changing state exercises such of rates or conditions change services, impair suck does not obligations existing contracts, although yield such contracts must to the changes (Emphasis supplied). so made.” Central Union Telephone Indianapolis Telephone Co. v. Co. 227, 126
Ind. 210 at 219 and N.E. 628. determining telephone In whether a contract between two companies routing as to the of toll calls awas valid bind- and ing obligation parties, Appellate between Court Telephone Home Telephone Co. North Manchester Co. App. 411, 421, 47 Ind. N.E. 234 said: “However, judgment case, appellee under the may in this we concede, deciding, without that so far as seeks provision contract, regard enforce without public, fail; the convenience may it must also public concede the rule to be is entitled to the best, expensive available, most convenient least service appellant compelled cannot be comply with fixing Although only or a could order the settlements. Commission the court money judgment grant circumstances, might in such better fixing computing await action Commission method of the settle- judgment ments from which the could calculated. agreement appellee, in violation of its with the terms *9 appellant yet should right. clear that public It remains this contract, disregard this permitted the terms to not of this disregard a not involve violation such does when public right .... affect it question, so far as does The contract in contracting power public, the parties is fair within can, fairness make, it in all far to and thus (Emphasis supplied). should be enforced.” compensation by the terms Defendant ITC was bound agreed, compensation terms of (settlements) which it or to they might the Public prospectively modified as have been felt that public If ITC interest. Service Commission purview compensation modifiable within term was Act, its recourse was Public Commission Service sustaining petition grounds be- appropriate such a show to with- rather than Commission fore the Public Service its contract. hold breach of case, this the circumstances of hold that under we While contemplation application, within is IC had no 8-1-2-5 utility companies provision in a contract between two that a public ability to serve the impair of one both could subject degree properly the matter to a which would example, For jurisdiction of the Commission. Public Service of the Public Commission to those sections Service in addition give seq. (Burns 1973)] which et Code Act 8-1-1-1 Ed. [IC transactions, utility authority specific col- to control direct brought been the Commis- have often before matters lateral indirect effect rate establishment of their sion because proper found to be within considera- have been and therefore the Commission.4 tion of representative following are but not citations exhaustive: 4. The (valuation 1973) property affecting (Burns Ed. as Code IC 8-1-2-6 (1955), Ind. Bell Tel. Co. 235
rates) Service Commission v. Ind. Public City 467; Indianapolis Public Service Commission v. 1, 130 N.E.2d 308; (Burns 70, 131 IC 8-1-2-19 & 20 Ind. N.E.2d Code depreciation affecting making) 1973) (method of rate Public Service Ed. Commission 462, 668; 193 N.E. 8-1-2-48 v. LaPorte IC (excessive salaries, employees, 1973) and other items (Burns Ed. Code (taxation affecting affecting rates); rates) funds expense Boone Co. case, pre- In hearings Commission and orders which recogni- proceedings dated the court reflect the Commission’s integrally tion that the matter of settlements is related to See, 5, long rate establishment. fn. distance While infra. required throughout rates are to be consistent the State of Indiana, given company’s a rate return affected will be long its settlements for distance with other com- services panies. company’s pivotal Since of return factor rate determining rates, long distance settlements company agrees may indirectly. affect rate establishment Whether such parties condition exists between the to this properly action is a matter determined the Public Service 42, 8-1-2-4, 54, 58, IC (Burns Commission. 1973). Code Ed. however, That determination as have we *10 resolution, may here, held not control the of common law disputes.
If
put
such
properly
circumstances were
exist as would
the
of
matter
Commission,
settlements before the
the order
of the Commission
only
would
prospective
nonetheless have
a
effect and
work
would
of
modification
of
the terms
the
only
contract
entry
from the
Any
the Commission’s order.
resulting
breach of contract
non-payment
from
before or
after the
only
order could be redressed
in a court of
In
law.
a case
the
damages
like
one
us,
before
for a breach which
occurred before
entry
such
by
Commission
are measured
the
provision existing
settlements
entry.
before the
In another
case,
might
a breach
be found
(or
to occur
continue)
after
entry,
such a Commission
in
damages
which case the
would
part by
measured at least
provision
the
by
as modified
entry.
the Commission
In no event could the Commission
adjust
provision
the contract
retrospectively,
any party
injured by non-payment
only by
could recover
proceeding in
judicial
Chenango
the
forum.
Telephone
&
Corp.
Unadilla
Cf.
Membership Corp.
Elec.
v. Public
Rural
Service
Commission
239
121;
Evansville v. Southern Ind. Gas & Elec. Co.
N.E.2d
Ind.
App. 472,
Upon petition the the Commission January 11, respect with to the issue of settlements and termi- an that the contract stand entered interim order agreement parties, nated mutual service, present parties maintain interconnections their in accordance payment of and that ITC settlements resume testimony as further with contract method until such time investigation Commission made could be taken and ITC, pur- necessary. But since adjust settlements, if future resume January order, did 11, 1974, suant to the Commission which payment, non-payment and deferred damages granted the court asked redress for which sub- period the interim order5 covered unaffected might worked have sequent Commission order arrangement. of the settlement a modification jurisdiction. properly The trial court exercised its jurisdiction argues below in that the court lacked such argument presupposes jurisdiction final. This exclusive order judicial subject only subject of review, and, opinion, matter to be in the Commission reasoning body in the of this to this accordance with the stated in finality or lack thereof such order is irrelevant cause of action. only prospective fact that the interim order had addition to the In this case did not contract the measure therefore alter effect and from had contract voluntary terms, we also note that the Commission year hearings prior to the execution of traffic held considering long purpose question distance here in *11 in the standardization of such rates the role of settlements rates and all computing companies .telephone operating in Indiana. method parties settlements, contract in their written which these included hearings orders), '(within which was year a method Commission after those Moreover, by approved in those the Commission proceedings. subject by to modification Commission terms remained the contract since impaired ability its its action, a method serve felt such if ITC petitioned rather consumers, have Commission intervention should payments from Bell. withhold than II. TERMINATION OR SEVERABILITY OF
CONTRACT PROVISIONS argues ITC that the written prior contracts were terminated January 1,
to the parties date which the stipulated purposes of the Public Service Com hearing. mission
If is correct ITC earlier occurred, termination parties situation these after the date of such termination put then would have them within the contemplation of IC supra. 8-1-2-5, Undoubtedly, complete termination of inter- presented would emergency connections have an situation for City Realty Corp. Clay the Commission. Twin Utilities, App. Inc. 146 Ind. 686, 694, 257 N.E.2d case, parties This was perform continued to exception the contracts with the nonpayment of ITC’s payment. However, proposes deferred ITC alternatively that provisions the settlements were severable and were terminated terminating the without entire contract. provisions
The relevant contract concerning termination read as follows: AGREEMENT,
TRAFFIC EXECUTED JULY 1971— “Unless sooner terminated as herein provided, Agree- period ment will continue in force year for a of one from date of execution hereof and thereafter, unless terminated thirty by (SO) days’ prior writing notice in from either company to the other.”
SPECIAL SERVICES AGREEMENT, EXECUTED MAY 1966— agreement “This will continue in period force for a of one year from date of execution and thereafter until terminated sixty (60) days’ prior writing notice in from either company (Emphasis to the other.” supplied). argued required below given notice was never argued given ITC. that notice virtue a *12 namely (1) correspondence practice6 trade, in the custom computing indicating change settle- to the method of its desire study delivery to Bell. (2) its “cost basis” ments and/or severability question of because we not reach the doWe findings following special error trial court’s find no were not terminated: that the contract clauses any at no' action “14. The defendant has time taken Agreement Special or the Services the Traffic cancel either as Agreement by providing provided notice of cancellation written agreements. such Defendant under terms of expressed has at no intention or desire time moreover cancelling two contracts. either amendment, agreed cancellation, parties no 21. Agreement, is the which of the Traffic or other modification subject cancel, I, action was taken to and no of Count Agreement, modify amend, is the Traffic which or otherwise subject I. of Count cancel, parties taken 22. No action was Agree- modify Special amend, or otherwise Services Complaint. subject ment, II of the is of Count attempted prove in the a custom The defendant 24. telephone compa- establishing independent industry study action, could, by a unilateral undertake cost nies portion traffic effectively or all a toll terminate a and agreement upon The study. completion of the submission regard subject only to such fact established with companies can, by agreement, independent and Bell arrangement based a new settlements contract into enter upon study acceptable to the Bell to and cost submitted company. study unaccept- cost substitution 25. The unilateral haul) (line replace the “C Schedule” to Indiana able Agreement, of in or the termination portion of the Traffic Agreement portion Traffic is not only haul the line practice, contemplated industry is not with accord argument appeal proposing Appellee an below and on Bell briefed usage altering parol show custom and evidence to the use that unambiguous light contract would be error. In of our terms any, prejudiced error, herein, if not Bell and opinion has therefore disposi- lengthen opinion Consequently, do with a we harmless. the issue. tion of Agreement, terms of the Traffic and would contradict and vary existing Agreement.” of the Traffic terms correspondence its claim first stakes to termination between Bell and as con- ITC. Those letters offered exhibits *13 express Instead, they tain no of termination. notice evidence disagreement the parties in between the as the manner to preparing study. fact, which ITC was its In own cost ITC’s expert usage witnesses testified that the custom and in the telephone industry study was that when a cost is delivered System” company to a by independent “Bell telephone an parties company, agree the to a new contract which exe- writing, payments by cuted independent in made the computed retroactively are on the new cost basis to the date upon study which the cost was delivered to The wit- Bell. nesses could practice cite no instance in which this was fol- disagreement parties lowed when there was between the over Therefore, usage upon cost the basis. the custom and relies ITC does include circumstances of sort the presented Furthermore, disagree- in this case. the crux of the accounting ment particular was a here method utilized objectionable inception ITC and to Bell from the of ITC’s study. testimony to unable adduce instance particular accounting in which this method had used been independent company agreed in which Bell and an had new computing contract cost executed based on a method settlements. We are unable in to find evidence the record which would controvert this find- evidence or concomitant ings Accordingly, trial court. we no in error fin'd findings. trial court argument supplementary
ITC makes a its breach non-payment was induced in deferred Bell’s behavior withholding “Jasper-Evansville settlements under a Micro- facility agreement making “catch-up” pay- wave” and in including without interest. ment later court found:
The trial Agreement, page By at its the Traffic “27. terms A, Evans- Exhibit the settlement defendant’s excluded ville-Jasper and such facilities were microwave facilities agreement subject separate between parties Jasper interim respecting the Evansville- outside the settlement plaintiff made facilities, has microwave but facilities, and payments to the for such defendant receipt thirty days from payments such by plaintiff pute commenced within com- in order of the cost information needed Evansville-Jasper payments. the interim Since controversy issues the contract microwave before this is not one of herein Court, decision the issues the Court’s respect rights parties will have no effect Evansville-Jasper facilities.” defendant’s microwave finding. negate this find no evidence the record We finding supports Rather, it. In evidence of record perceive committed fact, to have been we therefore no error by the trial court. allega-
Although it is intends that unclear whether ITC its breach tion be considered as an excuse for own *14 proof. mitigation damages, fails for lack the assertion case, appropriate the of this the dis- Under circumstances allegation might by posal made counter- have been such pursuant Procedure, Trial Rule to Indiana Rules of claim by separate or of action. cause trial
Therefore, affirm the conclusion reached the we contract, we that breached terms of the and court ITC the money granted. appropriately judgment hold that was the
III. DAMAGES alleged ap- presented errors ITC The balance of the on damages. peal to the trial court’s determination of relate damages employed by trial court in- measure equal Agreement (1) amount to Traffic settlements cluded pay ITC be- did Special settlements which Services and through January, 1974, plus ginning (2) interest7 mid-1972 non-paid computed the time that each settlement was from (30 days judgment (3) billing) and due after to the time equal computed period of timé amount interest outstanding days (30 deferred after each settlement was . billing) paid, plus (4) until it interest on amounts was such computed paid was from the time deferred settlement judgment. addition, post-judgment the time of In interest non-payments both and deferred allowed for payments.8 urges (1) error for the assessment- of interest on unpaid, (2)
settlements it left for the assessment interest covering periods of payments, deferral on (3) for the assess- interest,” (4) ment of “interest such appoint- thirty (30) days ment of a due date measured from the date billing. of each n
(A) ASSESSMENT OF PRE-JUDGMENT INTEREST UNPAID ON SETTLEMENTS Agreement Because the Traffic Special Services Agreement stipulations contain no shall be charged in non-payment the event payment, deferred or pre-judgment ITC asks hold that us to post-judgment interest should not have been levied. argues
ITC also practice there exists a custom and in' telephone pay service trade “not to principal interest on company one amounts owed another.” There is no testi- mony support testimony evidence this claim. The support ITC misconstrues its claim is the statement of one witness, employee, prac- that he knew of no custom or *15 computation tice allowed of interest but that ' computed Each to basis. 7. reference “interest” means interest on a. straight per annum 8% post-judgment per merely contest 8. does not interest se. It post-judgment computed upon it disputed interest insofar as is contests amounts judgment within the itself. There computations advise of counsel. on the prepared he pay”; “no between custom great deal difference is however, claim pay.” Bell, for its relies not to “a custom 1974).9 (Bums Code on IC 24-5A-1-3 Ed. interest to such at the rate interest allowed. —Interest from which “Date per eight annum shall be allowed: per cent [8%] - . money on due on of settlement (a) From date writing specify a rate of inter- which does instrument 24-4.5-6-203, is not covered [24-4.5-1-101 est and which 24-5-3A-1, — ;' 24-5-6A-1, 24-5A-1-1, 24-5A-1-3] shall have an intemized bill (b)' from the date And stated, on an account demanded rendered been money for the use had received closed or for account 1971, P.L. his consent. without another and retained [Acts 366, 10(5), p..1557.]” § the basis application of this section ITC contests involves “liquidated claims, while this case pertains to arising disputed alleged from a discovery indebtedness authority agree Indiana since must decline claim.” We allowing inter sufficiently amplifies the crucial factor in damages in accordance were ascertainable est is whether accepted valua standards of rules of evidence and with fixed liquidated. York, tion, New Chi were not whether 497, Roper Railway (1911), Ind. cago Louis Co. v. & St. 468; Bank Trust 506, Merchants Nat’l & Hirsch v. 96 N.E. App. Indiana N.E.2d Co. Ind. Corp. A. 838; Portage V. Indiana School Construction App. 366, (1972), 153 287 N.E.2d Co. Stackhouse 567. contract make the claim ascertain terms of the
Where the computa mere amount of the claim rests able tion, computed from time pre-judgment interest principal due is allow amount was demanded or statutory permissible rate, the absence able at the specifying provision express contractual of an Independent Ten Cent Store v. Heller Five & rate. Supp. 1976). (Burns provision now 24-4.6-1-103 IC This
635 554, 439; City 561, 189 Mc- 127 N.E.2d Vincennes v. Ind. App. 493, 76, 77; (1968), Carter 142 Ind. 236 N.E.2d Kuhn v. 131, 133, (1915), App. Powell Ind. 111 N.E. 639.
(B) DAMAGES FOR DEFERRAL OF PAYMENTS
MEASURED IN INTEREST legal authority concerning ITC has overlooked the damages measure payment. for late (deferred) Our Supreme adopted following Court position: has the “When one is indebted to pay another fails to damages due, delay same when are provided for allowance of interest. This is the damages adopted by measure the creditor the law in all actions against the debtor. Loudon v. Taxing District Co. v. 771; Piaggio, Insurance (U.S.) U.S. 16 Wall v. 378; and Goddard, 212, 232; (Mass) Greene 9 Mete. 5 Am. Eng. Ency. 27, Law, p. note, 25.” Lowe v. 2, p. Turpie 25; see 44 N.E. also Kuhn Powell, supra at 135. Therefore, damages correctly for payments the deferred were assessed the trial court.
(C) ASSESSMENT OF PRE-JUDGMENT INTEREST
ON DEFERRED PAYMENTS CHALLENGED
AS “INTEREST ON INTEREST” period Since the interest for assessed from the date each settlement paid deferred was due to the date damages represents delay for payment, it is somewhat misleading argument frame an in terms of on “interest actually damages interest.” trial court assessed payments statutory the late and then allowed interest damages pursuant amount these (Burns to IC 24-5A-1-3 1974). Code Ed. appropriate
It is here to note computation that the of dam- ages impose need to accomplish full com- injured
pensation party are matters within to the supported if evi trial court the discretion Corporation Sparks, T. v. M. dence of record. Valcan App. 543, 241 lnc. 143 Ind. N.E.2d compensation why include see reason full We no should money payments amount of late a sum which the injured presumably earned in hands have would However, party. like of interest on other the allowance *17 owing, legal precedent we must follow amount ascertainable by requiring plaintiff that the must have made a demand for performed payment or have some act which is sufficient to See, Crapp (1878), demand. Marsteller v. constitute a supra Additionally, 359, 361; Powell, at 135. lnd. Kuhn imposition statutory provision inter which authorizes the of 1974). requires (Burns 24-5A-1-3 a demand. IC Code Ed. est provisions the contractual are devoid of reference to Since (i.e. compensation payment charges), late late for the con standing alone are insufficient tracts constitute demand. Furthermore, any is no that there evidence other demand for charges via correspondence, billing, made Bell was late Nonetheless, it would be within discretion of otherwise. complaint conclude that when Bell’s was the trial court filed a demand the court with occurred. damages
Therefore, to the extent that on for period prior payments reflects a time to the date late money filed, judgment complaint was excessive and amended. must be
Otherwise, no error or find abuse discretion on the we damages.10 assessing trial court part of the damages assessed, credit were held memoranda issued When ITC by Bell, were toward memoranda allocable indebtedness which to it to Bell. ITC argues as amount of these that memoranda should have thereby against damages, reducing amounts offset allowed been , was in the upon calculated. These memoranda are which interest which would or setoff effect the' advocated of a counterclaim nature greater Furthermore, waived ITC has consideration this result. to include it in its Motion to Correct Errors. for failure issue (D) APPOINTMENT OF DUE DATE MEASURED (30)
THIRTY FROM DATE OF BILLING DAYS Agreement provision The Traffic embodied written re- quiring full settlement remittance on statements the debtor company thirty days billing; Special however, within Agreement provision type. Services contained no trial court found that: parties recognized have, conduct, “. . . The their that period thirty days payment state- is reasonable Special Agreement.
ments rendered under Services representatives that testified an established practice telephone industry in the within to remit thirty days billing. testimony testimony This and other regarding dealing companies the course of between the two provide finding. sufficient basis the trial court
Appellant essentially reweigh asks us to the evidence presents challenge no issue of trial law Therefore, court we will action. not disturb the trial court finding period billing (de- of credit existed after each mand) principal amounts could imposed period from the date the of credit was at an end.
Since error, pre- we find no save the assessment of some judgment damages payment interest on the for late settle- ments, we remand the to court cause the trial for the limited purpose modifying money judgment in accordance with opinion. this
Bell has moved for assessment of an additional in 10% damages pursuant Procedure, to Appellate Indiana Rules of 15(G). showing appeal Rule There is no ITC’s that taken in wholly bad faith or it is frivolous or without Accordingly, merit. the motion is denied. Marshall Reeves 403, 828, 262 Ind. N.E.2d 316 829. part; part; in in Affirmed reversed cause remanded judgment conformity for opinion. modification of with this J., Buchanan, White, P.J. concur. Reported N.E.2d at 358
Note. — Reheaeing
Opinion foe on Petition Company Telephone Appellee, Indiana Bell Sullivan, J. pur- (Bell), Rehearing for the sole its Petition for has filed alleged allowing rectify pose is what Court an not further erroneous statement of law. Bell does seek below, judgment because modification or correction following 1976, parties made our decision of December controversy. respect full matters settlement with necessary Notwithstanding fact, the latter we deem (C) in Part III reexamine those matters decided heretofore Corp. Telephone opinion of our December [Indiana Telephone App. v. Indiana Bell Co. 218],
N.E.2d opinion In trial court’s we concerned with the were computation damages 1) payments for Indiana which Telephone (non-pay- Corp. (ITC) never remitted wrongfully ments), 2) payments also for periods (deferred withheld from Bell certain time payments). non-payments upheld
As to we trial court’s allowance damages plus unpaid pre-judgment the full amount left Pre-judgment (A)]. III interest thereon Part interest [See only law, Indiana also IC sanctioned case but (Burns 1976), Supp. 24-4.6-1-103 which states that interest “from date an shall be allowed itemized bill shall have been rendered and demanded on an account stated . . payments upheld toAs we the trial allow- deferred court’s simple deferral, ance measured in the period such amounts would have drawn over the III(B)]. pre- Part of deferral. then disallowed [See We *19 inasmuch judgment for deferral on the interest simple is, principal, (that payment no as demand for damages), been made had ever interest form on Pre-judgment interest complaint. until it its filed simple interest principal composed part of amount interest”, challenged by and we erred as “interest at our decision it not. We arrived our conclusion that was by analogy pre prerequisites for the to the allowance outstanding judgment principal on other amounts at interest 359; Crapp (1878), judgment. Kuhn Marsteller v. 639; App. Powell 61 Ind. IC 24-4.6-1-103 N.E. 1976). Supp. (Burns
The existence or of a principal non-existence demand owing proper no amount has relevance resolution of (C), case III at Part and we must now recant holding.1 portion of our Rehearing prompted Petition for
Bell’s our search for a satisfactory more resolution of the issue and led us to the following commentary: regard compound “In interest, interest, interest on there has opinion. existed much doubt and difference of rigorously prohibited by It was modo the Roman law: Nullo ¤ exigantur. usurarum usurae a debitoribus The English law followed in early the same track. inSo an in chancery, Cowper case Lord mortgage, held a clause in a if the interest months, was behind six then it should principal compound interest, be accounted was ‘void use;’ and of no uisite that ‘that principal, req- interest make due, it is grown agreement it be and then an con- cerning may principal.’ regarded make it It is not as Rehearing, In its Petition for Bell asserts that our discussion of principal, charges”, demand for in the form of “late would create
duty upon “payment creditors to demand both of the bill and compensation of the interest as well.” IC 24-4.6-1-103 allows money wrongfully creditor his lost use of which has been withheld required him. from demand which principal is a demand for the sought as a matter sum computed of notice to the If debtor. interest is to be an simple amount which been has transformed from principal by agreement into additional virtue of a lawful debtor, between the creditor and principal a demand for the increased be made. must *20 leading usury, statutory but as prohibition of within the said, ‘There is Eldon has oppression Lord abuse. So to and covenant, taking illegal nothing perhaps in unfair or year, paid not at the end originally, if interest is that not court will principal. But this into it shall be converted permit ” though usury.’ usury, tending it is not that, as (cid:127))* ^ í ; judge subsequent case, laid the . . . learned . “. [I]n ‘compound interest cannot be demanded the rule down agreement taken, except upon special made after and the interest . . .” has become . due’ pay- ascertaining due on a note made amount the “So only annually, simple be interest is to able with interest computed; But if a new note converted interest will be allowed. and interest on the thereby given interest, it is is for the given may capital, with interest.” and it into been, exception however, has “WHERE ALLOWED. —An general usages by trade to the rule the modern introduced compound merchants interest. As between which denies upon upon of accounts, it is the custom to cast interest their mutual balance at the items, and to strike a end the several interest, principal year those of of the items and the footing account, carry of the two to a new as the and forming ensuing year. principal item of the first rests, they called, manner, yearly as are have for In this a long acquiesced and the made mercantile time been dealings the mutual trade and have But after world. ceases; right ceased, annual rests and in the the to make agreement, any specific the creditor is allowed absence of only account; simple the balance his interest growing yearly mutuality right of the debts and rests out of the to make the credits; allowing of interest on side.” each general denying exception compound to the rule “Another defendant; grows conduct out where
interest
that
intentionally
grossly delinquent
contrary
or
his
is
by way
duty, compound interest
is sometimes inflicted
partial payments have
punishment.
been made
Where
profits,
payments
cash,
are to be
then
tion of
otherwise,
or
rents
applied to the satisfaction of the interest
first
only
go
due,
is to
towards
reduc-
and the balance
principal.”
DAMAGES,
1874),
SEDGWICK,
(6th
also
See
ed.
1920)
(9th
; McCORMICK,
ed.
SEDGWICK, DAMAGES
;
DAMAGES,
(1935)
Blackford v. West 22. elements, In the absence these however,. an pre-judgment interest already award which are simple in terms of interest must measured be disallowed. may compounded therefore hold that interest now not be
We computing an amount awarded as damages in form- delayed of interest for of a debt. also, note the contracts here 2. We considered did not come statutory provisions sales, for consumer credit
within the IC 24-4.5-2-202 1971), loans, (Burns (Burns or consumer Ed. 24-4.5-3-202 Code IC 1971). Code Ed. . conformity opinion 1976 is Our of December modified herewith. White, J.,
Buchanan,
concur.
P.J. and
Reported at
Frank Luker Starcraft 2-1075A280. Filed December [No. 1976.] n & Epstein Epstein, Connor, Frisch, Robert D. of Indian- apolis, appellant. Fisher, Ohleyer, Ice
James R. Edward J. Miller Donadío & Ryan, Indianapolis, appellee. plaintiff-appellant (Luker) J. The asks us to over-
White, application the Board’s dismissal of his turn for increased partial impairment years permanent filed within two his year day more than one after accident but the last for which Agreeing paid. compensation was with the Board that application section was barred 45 of the Workmen’s Act, Compensation we affirm.
Th¿ dispute. not in injury facts are Luker sustained an 21, 1972, which, pursuant November accident on to a