Wavecom Solutions Corporation v. Verizon Hawai'i International Inc. et al
Filing
43
ORDER DENYING DEFENDANT SOUTHERN CROSS CABLES LIMITED'S MOTION FOR SUMMARY JUDGMENT 22 . ~ "Southern Cross shall have fourteen (14) days from the filing of this Order to answer the Complaint." ~ Signed by JUDGE DAVID ALAN EZRA on 11/ 7/2011. [Order follows hearing held 11/7/2011 on Motion for Summary Judgment, doc no. (22). Minutes of hearing: 42 ] (afc)CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). All participants are registered to receive electronic notifications.
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
WAVECOM SOLUTIONS
CORPORATION fka PACIFIC
LIGHTNET, INC., a Hawaii
corporation,
)
)
)
)
)
Plaintiff,
)
)
vs.
)
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VERIZON HAWAII
)
INTERNATIONAL INC., a
)
Delaware corporation; SOUTHERN )
CROSS CABLES LIMITED, a
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Bermuda corporation; and DOES 1 )
through 10,
)
)
Defendants.
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_____________________________ )
CV. NO. 11-00337 DAE-KSC
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 1999.1 (Amend
Decl. ¶ 4.) It is described in the Complaint as “a subsurface enclosure that
1
Jeremy Amen, the CEO of Wavecom, states in his declaration that the
manhole was built in 1999. (Amend Decl. ¶ 4.) However, Plaintiff’s Complaint
cites to an “August 20, 1997 Conduit Occupancy Agreement” between
GST/Wavecom and GTE Hawaiian Telephone Company Incorporated regarding
the occupancy rate for the Spencer Beach Manhole that was charged by
GST/Wavecom. (Comp. ¶¶ 14–16.) In any event, the precise date of construction
is not particularly important for purposes of deciding the instant Motion for
Summary Judgment.
2
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 oceanside conduits of the Manhole without permission from GST. (Id. ¶ 20–22.)
3
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.)
4
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)
5
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, Southern Cross filed its
Reply. (“Reply,” Doc. # 41.)
STANDARD OF REVIEW
Federal Rule of Civil Procedure (“Rule”) 56 requires summary
judgment to be granted when “the pleadings, the discovery and disclosure materials
on file, and any affidavits show that there is no genuine issue as to any material
fact and that the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(c); see also Porter v. Cal. Dep’t of Corr., 419 F.3d 885, 891 (9th Cir. 2005);
Addisu v. Fred Meyer, Inc., 198 F.3d 1130, 1134 (9th Cir. 2000). A main purpose
6
of summary judgment is to dispose of factually unsupported claims and defenses.
Celotex Corp. v. Catrett, 477 U.S. 317, 323–24 (1986).
Summary judgment must be granted against a party that fails to
demonstrate facts to establish what will be an essential element at trial. See id. at
323. A moving party without the ultimate burden of persuasion at trial—usually,
but not always, the defendant—has both the initial burden of production and the
ultimate burden of persuasion on a motion for summary judgment. Nissan Fire &
Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1102 (9th Cir. 2000). The burden
initially falls upon the moving party to identify for the court those “portions of the
materials on file that it believes demonstrate the absence of any genuine issue of
material fact.” T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass’n, 809 F.2d
626, 630 (9th Cir. 1987) (citing Celotex Corp., 477 U.S. at 323).
Once the moving party has carried its burden under Rule 56, the
nonmoving party “must set forth specific facts showing that there is a genuine
issue for trial” and may not rely on the mere allegations in the pleadings. Porter,
419 F.3d at 891 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256
(1986)). In setting forth “specific facts,” the nonmoving party may not meet its
burden on a summary judgment motion by making general references to evidence
without page or line numbers. S. Cal. Gas Co. v. City of Santa Ana, 336 F.3d 885,
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889 (9th Cir. 2003); Local Rule 56.1(f) (“When resolving motions for summary
judgment, the court shall have no independent duty to search and consider any part
of the court record not otherwise referenced in the separate concise statements of
the parties.”). “[A]t least some ‘significant probative evidence’” must be
produced. T.W. Elec. Serv., 809 F.2d at 630 (quoting First Nat’l Bank of Ariz. v.
Cities Serv. Co., 391 U.S. 253, 290 (1968)). “A scintilla of evidence or evidence
that is merely colorable or not significantly probative does not present a genuine
issue of material fact.” Addisu, 198 F.3d at 1134. Further, the Ninth Circuit has
“refused to find a ‘genuine issue’ where the only evidence presented is
‘uncorroborated and self-serving’ testimony.” Villiarimo v. Aloha Island Air, Inc.,
281 F.3d 1054, 1061 (9th Cir. 2002) (citing Kennedy v. Applause, Inc., 90 F.3d
1477, 1481 (9th Cir. 1996)). “Conclusory allegations unsupported by factual data
cannot defeat summary judgment.” Rivera v. Nat’l R.R. Passenger Corp., 331 F.3d
1074, 1078 (9th Cir. 2003).
When “direct evidence” produced by the moving party conflicts with
“direct evidence” produced by the party opposing summary judgment, “the judge
must assume the truth of the evidence set forth by the nonmoving party with
respect to that fact.” T.W. Elec. Serv., 809 F.2d at 631. In other words, evidence
and inferences must be construed in the light most favorable to the nonmoving
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party. Porter, 419 F.3d at 891. The court does not make credibility determinations
or weigh conflicting evidence at the summary judgment stage. Id.; see also Nelson
v. City of Davis, 571 F.3d 924 (9th Cir. 2009) (“[C]redibility determinations, the
weighing of the evidence, and the drawing of legitimate inferences from the facts
are jury functions, not those of a judge.”) (citations omitted). However, inferences
may be drawn from underlying facts not in dispute, as well as from disputed facts
that the judge is required to resolve in favor of the nonmoving party. T.W. Elec.
Serv., 809 F.2d at 631.
DISCUSSION
In its Motion for Summary Judgment, Southern Cross advances the
following arguments:
(1) Wavecom cannot prove that it conferred a benefit on Southern Cross
because Southern Cross does not own, nor has it ever owned, the cables
installed in the Manhole;
(2) Wavecom’s unjust enrichment claim against Southern Cross is barred by
the doctrine of laches;
(3) Wavecom’s claim for declaratory relief is improper because it is based
on allegations regarding Defendants’ past wrongs and, in essence, duplicates
Plaintiff’s other causes of action.
In response, Plaintiff contends that Southern Cross’ Motion for Summary
Judgment fails because Southern Cross is deemed to have admitted the allegations
9
in the Complaint by not timely filing a responsive pleading. Plaintiff asserts that
the instant Motion also fails because: (1) there are disputed issues of material fact
concerning Southern Cross’ alleged ownership of the cables; (2) even assuming
Southern Cross does not own the cables, it is nonetheless unjustly enriched by
making beneficial use of the cables; (3) Southern Cross has failed to show that it is
entitled to summary judgment based on laches; and (4) Wavecom’s claim for
declaratory relief does not merely duplicate its unjust enrichment claim.
I.
Southern Cross’ Failure to File a Responsive Pleading
As a preliminary matter, Plaintiff argues that Southern Cross’ failure
to file a responsive pleading to the Complaint, i.e., either an answer or a dispositive
motion under Rule 12(b), warrants denial of its Motion for Summary Judgment.
(Opp’n. at 14–17.) As set forth below, this Court disagrees.
First, to the extent that Plaintiff claims that Southern Cross may not
file a motion for summary judgment until it has filed a responsive pleading, that
argument fails because the filing of an answer is not a prerequisite to the filing of a
motion for summary judgment. Specifically, Rule 56(b) provides that “[a] party
against whom relief is sought may move at any time, with or without supporting
affidavits, for summary judgment on all or part of the claim.” Fed. R. Civ. P. 56(b)
(emphasis added). “Courts and commentators have acknowledged that no answer
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need be filed before a defendant’s motion for summary judgment may be
entertained.” Marquez v. Cable One, Inc., 463 F.3d 1118, 1120 (10th Cir. 2006)
(quoting INVST Fin. Group, Inc. v. Chem-Nuclear Sys., Inc., 815 F.2d 391, 404
(6th Cir. 1987)); see also 10A Charles Alan Wright, Arthur R. Miller, Mary Kay
Kane, Federal Practice & Procedure § 2718 at 301 (3d ed. 1998) (“A defending
party is not required by the rule to file an answer before moving for summary
judgment.”). Accordingly, Southern Cross was not required to file a responsive
pleading before filing the instant motion.
Further, to the extent that Plaintiff asserts that Southern Cross has not
complied with Rule 12 because it has not timely filed a responsive pleading, the
Court concludes that the filing of the instant motion effectively extended the time
for Defendant to file a responsive pleading until after the Motion for Summary
Judgment has been decided. While Rule 12(a) provides that the period for filing an
answer is extended when a Rule 12 motion is made, see Fed. R. Civ. P. 12(a),
neither the text of Rule12 nor Rule 56 addresses whether the filing of a summary
judgment motion likewise tolls the time to file an answer. However, some courts
have determined that the tolling effect of Rule 12(a) may be extended by analogy
to the filing of a motion for summary judgment where such motion adequately
contests the action. See Rashidi v. Albright, 818 F. Supp. 1354, 1356 (D.
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Nev.1993), aff’d, 39 F.3d 1188, 1994 WL 594637 (9th Cir. 1994) (denying motion
for default judgment for failure to file timely answer where summary judgment
motion “demonstrate[d] a concerted effort and an undeniable desire to contest the
action”); Mann v. Lee, No. C 07-00781 MMC, 2009 WL 5178095, at *2–3 (N.D.
Cal. Dec. 22, 2009) (extending the time for defendants to answer the complaint
until after the summary judgment motion had been decided where such motion
“demonstrate[d] defendants’ intent to defend against plaintiff’s action and [might]
be dispositive of all of plaintiff’s claims”); Bova v. City of Medford, No. 06-1369
PA, 2008 WL 89620, at * 2 (D. Or. 2008) (denying motion to strike answer as
untimely where defendants adequately defended against action by filing motion for
summary judgment), rev’d on other grounds, 564 F.3d 1093 (9th Cir. 2009).
Commentators similarly support tolling under these circumstances. See 10A
Charles Alan Wright, Arthur R. Miller, Mary Kay Kane, Federal Practice &
Procedure § 2718 at 303–04 (“[A] summary judgment motion made prior to
answer should have the benefit of the Rule 12(a) language tolling the period of
time in which an answer must be filed.”); 6 James Moore, et al., Moore’s Federal
Practice ¶ 56–08, nn.18 & 19 (2d ed. 1985).
Here, Southern Cross’ Motion for Summary Judgment clearly
demonstrates an “undeniable desire to contest [Plaintiff’s] action.” Rashidi, 818 F.
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Supp. at 1356. Indeed, the instant motion expressly denies the allegations in the
complaint and seeks to dispose of all of the claims against Southern Cross. Thus,
although the Summary Judgment Motion is not a pleading responsive to the
Complaint, it gives Plaintiff clear notice that Southern Cross’ alleged liability is a
matter to be litigated in this case. Accordingly, the Court concludes that the filing
of the Summary Judgment Motion effectively tolled the time for Southern Cross to
file a responsive pleading.
II.
Unjust Enrichment Claim
Plaintiff claims that Southern Cross has been unjustly enriched by its
use of the ocean-side conduits of the Manhole without making any payments to
Wavecom or its predecessors for such use. (Compl. ¶¶ 57, 59, 62.) In order to
prevail on an unjust enrichment claim under Hawaii law, a plaintiff must prove the
following two elements: (1) that he or she conferred a benefit upon the opposing
party and (2) that the retention of that benefit would be unjust. Durette v. Aloha
Plastic Recycling, Inc., 100 P.3d 60, 74 (Haw. 2004). The Hawaii Supreme Court
has explained that “[i]t is a truism that a person confers a benefit upon another if he
gives to the other possession of or some other interest in money, land, chattels, or
cho[]ses in action, . . . , or in any way adds to the other’s security or advantage.”
Id. at 72 (quoting Restatement of Restitution § 1 cmt. b (1937)). To be sure,
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“while [r]estitution is concerned with the receipt of benefits that yield a measurable
increase in the recipient’s wealth,” the “benefit that is the basis of a restitution
claim may take any form, direct or indirect.” Restatement 3d of Restitution § 1
cmt. d (2011). In deciding whether there should be restitution, the court is “guided
by the underlying conception of restitution, the prevention of injustice.” Durette,
100 P.3d at 73.
A.
Benefit Conferred Upon Southern Cross
Southern Cross contends that Plaintiff’s unjust enrichment claim
against Southern Cross fails because Wavecom cannot prove that it conferred a
benefit on Southern Cross. Specifically, Southern Cross asserts that the undisputed
facts demonstrate that Wavecom did not confer a benefit on Southern Cross
because Southern Cross does not own, nor has it ever owned, the cables in the
Manhole. (Mot. at 7.) Southern Cross maintains that its affiliate, Pacific Carriage
Limited (“PCL”), is the entity that owns the cables at issue. (Reply at 9.)
Even assuming the veracity of these contentions, the Court concludes
that there nonetheless exists a genuine issue of material fact as to whether
Wavecom conferred a benefit on Southern Cross. To be sure, in the unjust
enrichment count of the Complaint, Plaintiff alleges that:
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[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.) Plaintiff further alleges, in the same count, that:
[i]t would be unjust for Southern Cross to retain the benefit of its past
and continuing use of the ocean-side conduits in the Spencer Beach
Manhole without paying reasonable value therefor.
(Id. ¶ 62.) Based on these allegations, the Court concludes that the unjust
enrichment claim against Southern Cross turns, at least in part, on use rather than
ownership of the cables in the ocean-side conduits.2 Therefore, even if Southern
Cross does not own the cables at issue, Plaintiff may still be able to prove that
Southern Cross derived a benefit from Wavecom by using the cables in the
Manhole to operate its communications network. See Durette, 100 P.3d at 72 (“[a]
person confers a benefit upon another if he . . . in any way adds to the other’s
security or advantage”); cf. Restatement 3d of Restitution § 1 cmt. d (2011) (“[a]
2
In reaching this conclusion, the Court rejects Defendant’s argument that
Wavecom only requests relief for the occupancy of the ocean-side conduits and not
for the use of the cables. As set forth above, the express language in the Complaint
makes clear that the unjust enrichment claim against Southern Cross is based on its
past and continuing beneficial use of the ocean-side conduits. Therefore, contrary
to Defendant’s assertion, Wavecom is not asking this Court to infer additional
allegations not found in the language of the Complaint.
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benefit that is the basis of a restitution claim may take any form, direct or
indirect”).
Indeed, the evidence submitted by Plaintiff shows that Southern Cross
does benefit from the use of the cables in the Manhole. First, Plaintiff has
submitted a declaration from Wavecom’s CEO, Jeremy Amen, attesting to the fact
that “Southern Cross uses the cables to operate, manage, and ensure the transport
of data across its Southern Cross Cable Network.” (Amen Decl. ¶ 22.) Amen also
states in his declaration that:
[b]ecause the Southern Cross Cable Network functions as a network,
Southern Cross makes beneficial use of the Cables [in the
Manhole] . . . whenever information on parts of the network owned by
Southern Cross passes through Hawaii, just as the alleged owner of
the Cables makes beneficial use of parts of the network owned by
Southern Cross when traffic is sent to or from Hawaii.
(Id. ¶ 21.) Plaintiff has also submitted an October 7, 2004 Decision and Order by
the Hawaii Public Utilities Commission in In re Pacific Carriage Ltd., No. 04-0172
(“PUC Decision”), wherein the PUC identifies Southern Cross as one of the
“collective owners of the Southern Cross Cable Network” that was formed “to
finance, construct, operate, and maintain the Southern Cross Cable Network.”
(“PUC,” Doc. # 38-3 at 4.) The PUC Decision explains that the collective owners
of the Network, including Southern Cross, execute contracts with various
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customers to determine the usage of the cable network capacity. (Id.)
Additionally, Plaintiff has submitted graphs from a website maintained by
Southern Cross illustrating the routes by which data is transmitted through the
Southern Cross Cable Network. These graphs demonstrate that any
telecommunications data sent to the Big Island from any other parts of the Network
necessarily pass through the cables. Viewing the evidence in the light most
favorable to the Plaintiff, the Court concludes that Plaintiff has established a triable
issue of fact as to whether Wavecom conferred a benefit on Southern Cross
through the use of the cables in the Manhole.
B.
Doctrine of Laches
Southern Cross also contends that Wavecom’s unjust enrichment
claim is barred by the doctrine of laches. “The doctrine of laches reflects the
equitable maxim that equity aids the vigilant, not those who slumber on their
rights.” Ass’n of Apartment Owners of Newton Meadows v. Venture 15, Inc., 167
P.3d 225, 284 (Haw. 2007) (quoting Adair v. Hustace, 640 P.2d 294, 300 (Haw.
1982)). In order for the doctrine to apply, two components must be present.
First, there must have been a delay by the plaintiff in bringing his
claim[ ] and that delay must have been unreasonable under the
circumstances. Delay is reasonable if the claim was brought without
undue delay after plaintiff knew of the wrong or knew of facts and
circumstances sufficient to impute such knowledge to him. Second,
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that delay must have resulted in prejudice to defendant. Common but
by no means exclusive examples of such prejudice are loss of
evidence with which to contest plaintiff’s claims, including the fading
memories or deaths of material witnesses, changes in the value of the
subject matter, changes in defendant’s position, and intervening rights
of third parties.
Id. (quoting Adair, 640 P.2d at 321).
Southern Cross argues that Plaintiff unreasonably delayed in bringing
this action because the Complaint was filed on April 25, 2011, nearly twelve years
after the Cables were allegedly installed. (Mot. at 8.) Plaintiff, for its part,
contends that any alleged delay is reasonable in light of the circumstances. (Opp’n
at 30.) As set forth above, the reasonableness of the delay may turn on when
Plaintiff obtained knowledge of the alleged wrongdoing or of facts and
circumstances sufficient to impute such knowledge to it. Newton Meadows, 167
P.3d at 284.
Here, Plaintiff has submitted evidence demonstrating that when
Wavecom acquired the Manhole in March 27, 2001, it did not know that the Cables
were installed in the Manhole. (Amen. Decl. ¶¶ 7–8.) Further, the Manhole was
not, and is not, routinely accessed or inspected since it is buried under several feet
of sand and filled with seawater. (Id. ¶ 9–10.) According to Wavecom’s CEO,
Wavecom did not actually discover the cables until November 2008, when the
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Manhole was excavated and drained. (Id. ¶ 13.) Based on this evidence, the Court
concludes that there is a triable issue of fact as to the reasonableness of Plaintiff’s
delay in bringing this action.3
In sum, since Plaintiff has established triable issues of fact with
respect to the unjust enrichment claim against Southern Cross, the Court DENIES
the portion of the summary judgment motion directed at Count II.
III.
Declaratory Relief Claim
In Count IV of the Complaint, Plaintiff seeks a declaratory judgment
establishing, inter alia, that Southern Cross has no right to occupy the ocean-side
conduits in the Manhole without payment to Wavecom and that, unless Wavecom
receives such payments, Wavecom may remove the Southern Cross cable at its
discretion. (Compl. ¶ 74.) Southern Cross contends that Plaintiff’s claim for
declaratory relief against Southern Cross is improper because it is based on
3
Defendant also contends that the delay resulted in prejudice to Southern
Cross because Plaintiff now seeks twelve years of damages. The Court is skeptical
that this constitutes a tenable argument. See TransWorld Airlines, Inc. v. Am.
Coupon Exchange, Inc., 913 F.2d 676, 696 (9th Cir. 1990) (“the prejudice
requirement does not mean merely that the defendant will be worse off if the relief
is granted than he would be if it were not; that sort of prejudice could be claimed
by all defendants all of the time”). In any event, the Court need not reach this issue
in light of its finding that there is a triable issue of fact as to the reasonableness of
the delay.
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Defendant’s alleged past wrongs and in essence duplicates Plaintiff’s other causes
of action. (Mot. at 10.)
“A declaratory judgment offers a means by which rights and
obligations may be adjudicated in cases brought by any interested party involving
an actual controversy that has not reached a stage at which either party may seek a
coercive remedy and in cases where a party who could sue for coercive relief has
not yet done so.” Seattle Audubon Soc. v. Moseley, 80 F.3d 1401, 1405 (9th
Cir.1996) (citing 28 U.S.C. § 2201). Since a declaratory judgment is not a
corrective action, it should not be used to remedy past wrongs. See, e.g., Marzan
v. Bank of Am., 779 F. Supp. 2d 1140, 1146 (D. Haw. 2011) (“[B]ecause
Plaintiffs’ claims are based on allegations regarding Defendants’ past wrongs, a
claim under the Declaratory Relief Act is improper and in essence duplicates
Plaintiffs’ other causes of action.” (citations omitted)); Mangindin v. Wash. Mut.
Bank, 637 F. Supp. 2d 700, 707–08 (N.D. Cal. 2009) (“[T]he Court finds that the
declaratory relief Plaintiffs seek is entirely commensurate with the relief sought
through their other causes of action. Thus, Plaintiffs’ declaratory relief claim is
duplicative and unnecessary.”). Rather, the “useful purpose served by the
declaratory judgment is the clarification of legal duties for the future.” Amsouth
Bank v. Dale, 386 F.3d 763, 786 (6th Cir. 2004); see also Societe de
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Conditionnement en Aluminum v. Hunter Eng’g Co., 655 F.2d 938, 943 (9th Cir.
1981) (“[The Declaratory Judgment Act] brings to the present a litigable
controversy, which otherwise might only by (sic) tried in the future.”)
Here, Plaintiff asserts two causes of action against Southern Cross: (1)
unjust enrichment and (2) declaratory judgment. Plaintiff’s claim for declaratory
relief against Southern Cross is not commensurate with the relief sought through
Plaintiff’s unjust enrichment claim. Specifically, Plaintiff’s unjust enrichment
claim seeks restitution for its past and continuing use of the ocean-side conduits.
(See Compl. ¶ 62–63.) By contrast, Plaintiff’s declaratory relief claim seeks, inter
alia, a declaration by this court that if Wavecom does not receive timely
compensation for the ocean-side conduits of its Manhole, it may remove the cables
at its discretion. In other words, the declaratory relief claim seeks clarification
with respect to Wavecom’s future right to remove the cables if and when it does
not receive payment. Therefore, contrary to Defendant’s assertion, the declaratory
relief claim is not based on Southern Cross’ alleged past wrongs and does not
merely duplicate Plaintiff’s other cause of action against Southern Cross.
Accordingly, the Court DENIES the portion of the summary
judgment motion challenging the declaratory relief claim.
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CONCLUSION
For the reasons stated above, the Court DENIES Defendant’s Motion
for Summary Judgment (Doc. # 22). Southern Cross shall have fourteen (14) days
from the filing of this Order to answer the Complaint.
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, November 7, 2011.
_____________________________
David Alan Ezra
United States District Judge
Wavecom Solutions Corp. v. Verizon Hawaii Int’l Inc., et al., CV No. 11-00337
DAE KSC; ORDER DENYING DEFENDANT SOUTHERN CROSS CABLES
LIMITED’S MOTION FOR SUMMARY JUDGMENT
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