Background
This adversarial proceeding arose from the bankruptcy of Paniolo Cable Company, which owns undersea telecommunications infrastructure connecting five Hawaiian Islands. The bankruptcy court awarded partial summary judgment to the Chapter Eleven Trustee and denied Clearcom’s motion for reconsideration. The Bankruptcy Appellate Panel affirmed, and Clearcom timely appealed to the Ninth Circuit.
The court’s reasoning
The court reviewed the breach of contract claim de novo, finding that a reasonable factfinder could conclude the Master Services Agreement and Emergency Service Order concerned the Paniolo infrastructure and remained in effect. Clearcom failed to introduce evidence showing the agreements did not relate to the infrastructure or that they had terminated. Regarding unjust enrichment, the court held that retaining payments for leasing access constitutes enrichment, though the specific amount may be challenged on remand. Finally, the court found no abuse of discretion in denying reconsideration because Clearcom did not explain why it could not have used formal discovery processes to secure witness testimony.
What it means going forward
The ruling confirms that Clearcom is liable for breach of contract and unjust enrichment based on the existing agreements, while allowing the parties to litigate the precise restitution amount on remand.