Strategy - Diligence - Results

In 2003, SBC Michigan made an offer to Michigan competitive carriers to enter into a “mutual waiver agreement.”   Both SBC Michigan and the competitive carriers had long-term contracts with their business customers requiring the customer to pay significant termination penalties if the customer dropped its service prior to the end of the contract and switched to another carrier.  Under the Mutual Waiver Agreement, both SBC Michigan and a competitive carrier would agree to waive the early termination charges in their customers’ long-term contracts if a customer wished, before the end of their contract, to switch from SBC Michigan to the competitive carrier or from the competitive carrier to SBC Michigan.

However, SBC Michigan did not honor the contract and charged significant early termination penalties to its customers who had switched their services to ACD Telecom in reliance upon the Mutual Waiver Agreement.  ACD Telecom is a CLEC, based in Lansing, Michigan.  Initially, the Ingham County Circuit Court dismissed ACD Telecom’s breach of contract claim.  However, the Michigan Court of Appeals reversed and remanded the case for trial.  The Court of Appeals’ order can be viewed at:

http://coa.courts.mi.gov/documents/OPINIONS/FINAL/COA/20080318_C274767_36_274767.OPN.PDF

After a trial lasting almost three weeks, the Jury found that the refusal of SBC Michigan (which had since become AT&T Michigan) to honor the Mutual Waiver Agreement had caused ACD Telecom to suffer damages in the amount of $7,994,590 and entered a judgment ordering AT&T Michigan to pay ACD Telecom.

The case was prepared by Mssrs. Field, Witte, Gensch, and Stephens.  Mr. Witte tried the case.