Guilford Transportation Industries v. Public Utilities Commission
746 A.2d 910, 2000 ME 31, 2000 Me. 31 (2000)
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Rule of Law:
When a court reviews an administrative agency's interpretation of a contract, the court first determines de novo whether the contract is ambiguous. If the contract is ambiguous, its interpretation becomes a question of fact for the agency as the factfinder, which may then consider extrinsic evidence to determine the parties' intent.
Facts:
- In 1992, Guilford Transportation Industries (Guilford) and Central Maine Power Company (CMP) entered into a master license agreement.
- The agreement was a consolidation of various prior agreements and granted CMP licenses to maintain and use 'appurtenances' on, over, and under Guilford's railroad land.
- The agreement defined 'appurtenances' as 'pipes, poles, wires and other equipment.'
- The agreement required Guilford to grant CMP's requests for additional appurtenances unless the installation would interfere with rail operations.
- In 1997, CMP requested permission from Guilford to cross its land in Scarborough with fiber optic cable.
- Guilford refused CMP’s request.
Procedural Posture:
- Central Maine Power Company (CMP) submitted its dispute with Guilford Transportation Industries (Guilford) to the Maine Public Utilities Commission (PUC) for resolution, as provided for in their license agreement.
- Both parties filed motions for summary judgment before the PUC, each arguing the license agreement was unambiguous.
- The PUC granted summary judgment in favor of CMP, finding that the agreement unambiguously permitted the installation of fiber optic cable.
- Guilford, as the appellant, appealed the PUC's final decision to the Law Court (the highest court in Maine), with CMP and the PUC as appellees.
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Issue:
Does a license agreement that grants a utility the right to install 'appurtenances,' defined in part as 'wires,' unambiguously permit the installation of fiber optic cables?
Opinions:
Majority - Calkins, J.
No. A license agreement that grants the right to install 'wires' is ambiguous as to whether it includes fiber optic cables when the term is reasonably susceptible to different interpretations. The court adopts a two-step standard of review for an agency's contract interpretation, analogous to the Chevron standard for statutory interpretation. First, the court determines de novo, without deference to the agency, whether the contract is ambiguous. Here, the term 'wires' is ambiguous because dictionary definitions support both Guilford's interpretation (metal strands carrying electric current) and CMP's interpretation (including communication cables). Other provisions, such as a reference to 'communication wires' and a fee schedule based on voltage that includes a 'zero volt' category, also support conflicting but reasonable interpretations and fail to resolve the ambiguity. Because the contract is ambiguous, its meaning is a question of fact, and the Public Utilities Commission (PUC) erred in granting summary judgment. The case must be remanded to the PUC, as the designated factfinder, to consider extrinsic evidence and determine the parties' original intent.
Analysis:
This case establishes the standard of judicial review for an administrative agency's contract interpretation in Maine, adopting a framework similar to the federal Chevron deference model. The court clarifies that it will not defer to an agency's threshold determination of whether a contract is ambiguous. The ruling underscores the legal challenges that arise when new technologies, like fiber optics, test the limits of language in older agreements. This precedent signals that courts will require factual inquiries into the parties' intent when contractual terms like 'wires' are applied to technologies not contemplated at the time of drafting, potentially impacting numerous utility easements and license agreements.
