Skip Maine state header navigation

Agencies | Online Services | Help
Guilford Transportation v. P.U.C.

Back to Opinions page

MAINE SUPREME JUDICIAL COURT						Reporter of Decisions
Decision:	2000 ME 31 
Docket: 	PUC-99-398
Argued:	December 7, 1999
Decided:	February 24, 2000




	[¶1]  Guilford Transportation Industries (Guilford) appeals from a
summary judgment issued by the Public Utilities Commission (PUC) in a
contract dispute between Guilford and Central Maine Power Company
(CMP).  The PUC held that the license agreement between CMP and Guilford
gives CMP the right to cross Guilford's land with fiber optic cable.  Guilford
contends that the PUC misinterpreted the license agreement and that it
does not cover fiber optic cable.  We vacate the judgment and remand the
matter to the PUC for further proceedings.
	[¶2]  In 1992, Guilford and CMP entered into a master license
agreement which was intended to be a consolidation of various agreements
whereby Guilford granted CMP licenses to maintain and use "occupations"
and "appurtenances" over, across, along, and under land belonging to
Guilford and its affiliated railroads.  The license agreement provides that
CMP has the right to request that additional "appurtenances" be installed in
or over Guilford's land and that Guilford is required to grant the request
unless Guilford's engineering officer determines that the installation would
interfere with rail operations.  In 1997, Guilford refused CMP's request to
cross Guilford's land in Scarborough with fiber optic cable.   CMP requested
the PUC to resolve this dispute. 
	[¶3]  The PUC is authorized to act in this case by 35-A M.R.S.A. § 2311
(Supp. 1999) and by the agreement between the parties to submit such
disputes to the PUC.  The relevant portion of section 2311 states:
[I]f a railroad company and a telephone or electric utility enter
into an agreement involving a utility crossing of railroad property
and that agreement or some other agreement provides that the
commission shall resolve disputes arising under the original
agreement, the commission may resolve those disputes.
The license agreement provides:
If [Guilford] denies the request [for additional appurtenances] as
presented by [CMP] or does not respond within said 45 day
period, [CMP] may submit the issue to the Maine Public Utilities
Commission for resolution after giving [Guilford] at least 30 days
notice of its intent to do so.
	[¶4]  The dispute between the parties centers on whether the license
agreement allows CMP to cross Guilford's premises with fiber optic cable. 
The parties filed summary judgment motions before the PUC, and both
argued that the license agreement is unambiguous.  The PUC found that the
license agreement unambiguously grants CMP the right to cross Guilford's
land with fiber optic cable or wire,{1} and Guilford appealed that judgment to
this court.{2}
	[¶5]  The threshold issue before us is the standard of review.  If this
were an appeal from the Superior Court on summary judgment, we would
independently review the record to ascertain that summary judgment was
appropriate, see Kezar v. Mark Stimson Associates, 1999 ME 184, ¶ 11, 742
A.2d 898, 902, and we would review questions of law de novo, see Francis v.
Pleasant Point Passamaquoddy Hous. Auth., 1999 ME 164, ¶ 5, 740 A.2d
575, 577.
	[¶6]  When we review decisions of the PUC, however, "we limit our
review to determining whether the agency's conclusions are unreasonable,
unjust or unlawful in light of the record."  Pine Tree Tel. & Tel. Co. v. Public
Util. Comm'n, 634 A.2d 1302, 1304 (Me. 1993) (affirming a PUC order
requiring a telephone company to reduce its revenues).  "We do not attempt
to second-guess the Commission on matters falling within its realm of
expertise."  Millinocket Water Co. v. Maine Pub. Util. Comm'n, 515 A.2d
749, 752 (Me. 1986) (affirming the PUC's calculation of cost of equity). 
	[¶7]  Both the PUC and CMP argue that the decision of the PUC in this
case is entitled to deference because implicit in the Legislature's grant of
authority to the PUC to resolve this dispute is an acknowledgement that the
PUC will use its expertise and superior knowledge of the utility industries in
judging the matter.  Guilford, on the other hand, argues that deference is
granted the PUC in ratemaking, utility finance, costs of service and other
topics within its particular expertise, but this case is simply a contract
dispute and does not involve the PUC's expertise.   
	[¶8]  The federal courts have grappled with the standard of review
when an administrative agency interprets a contract.  The Court of Appeals
for the District of Columbia holds that, when reviewing a federal regulatory
agency's interpretation of a contract, courts should determine first if the
contract is ambiguous or unambiguous, giving no deference to the agency's
determination in this regard.  See Cajun Elec. Power Coop., Inc. v. F.E.R.C.,
924 F.2d 1132, 1135-36 (D.C. Cir. 1991).  If the contract is unambiguous,
the court interprets the contract, giving no deference to the agency; but if
the contract is ambiguous, deference is given to the agency's construction of
the contract.  Id.
	[¶9]  The Cajun Electric court based its conclusion, in large part, on
Chevron U.S.A., Inc. v. Natural Resource Defense Council, Inc., 467 U.S. 837
(1984) in which the Supreme Court ruled that a court could not substitute
its construction of an ambiguous statute administered by an agency when the
agency's interpretation was reasonable,  See id. at 843-44.  The two-part
test announced in Chevron requires a court, when reviewing an agency's
interpretation of a statute it administers, to determine first if the intent of
Congress is clear from the statute.  If the intent is clear, "that is the end of
the matter; for the court as well as the agency, must give effect to the
unambiguously expressed intent of Congress."  Id. at 842-43.  If, however,
the statute is ambiguous, a court's review is limited to determining whether
the agency's interpretation is a reasonable one.  Id. at 843-44.  
	[¶10]  The Cajun Electric court also relied upon National Fuel Gas
Supply Corp. v. F.E.R.C., 811 F.2d 1563 (D.C. Cir. 1987), in which it held
that, for the standard of review analysis, there is no difference between
construing a statute and construing a contract.{3}  Other circuits have
concluded that when the legal issue decided by the agency is an issue in
which the courts have particular competence, there is no reason for the
court to defer to the agency.  See Maloley v. R.J. O'Brien & Assoc., Inc., 819
F.2d 1435 (8th Cir. 1987) (reviewing de novo whether reparations claims
before the Commodity Futures Trading Commission were barred by the
statute of limitations).
	[¶11]  We have utilized an analysis similar to the two-part Chevron
inquiry when reviewing an agency's interpretation of a statute it
administers.{4}  If the statute is plain, we give effect to the unambiguous
intent of the Legislature.  See National Indus. Constrs., Inc. v.
Superintendent of Ins.,  655 A.2d 342, 345 (Me. 1995) (vacating agency's
interpretation of statute); Central Maine Power Co. v. Public Util. Comm'n,
436 A.2d 880, 885 (Me. 1981) (deferring to PUC's statutory interpretation
"must yield to the fundamental approach of determining the legislative
intent, particularly as it is manifest in the language of the statute itself");
State v. York Util., 142 Me. 40, 45 A.2d 634 (1946) (holding agency's long-
standing interpretation of the statute does not overcome the clear meaning
of the statute).  If the statute is ambiguous, however, we review whether the
agency's construction is reasonable.  See Berube v. Rust Eng'g, 668 A.2d
875, 877 (Me. 1995) (upholding Workers' Compensation Commission's
reasonable interpretation of ambiguous workers' compensation statute). 
	[¶12]  When we review an agency's construction of a contract, it is
logical to apply the same methodology utilized when an agency interprets a
statute which it administers.  The contract in this case is analogous to a
statute administered by the PUC.  The Legislature's grant of authority to the
PUC to resolve the contract dispute implies that it presumed that the PUC's
expertise in utility matters would provide a more informed resolution. 
Furthermore, the fact that the parties in this case explicitly agreed to have
the PUC resolve the dispute suggests that the parties themselves believed
that a decision-maker with specialized knowledge was preferable.
	[¶13]  Applying the same analysis that we would if this were an
instance of statutory interpretation, we first ascertain whether the contract
is ambiguous or unambiguous, and in making that determination we do not
defer to the agency's characterization.  If we decide that the contract is
unambiguous, we then interpret it.  The interpretation of an unambiguous
contract is a question of law.  See Century Homes, Inc. v. Plaisted, 412 A.2d
389, 391 (Me. 1980).  If the contract is ambiguous, its meaning is a question
of fact for the factfinder, and extrinsic evidence can be admitted to show the
intention of the parties.  See Portland Valve, Inc. v. Rockwood Sys. Corp.,
460 A.2d 1383, 1387 (Me. 1983).  Therefore, if we determine that this
contract is ambiguous, we will remand the case to the PUC.  See Cajun
Electric, 924 F.2d at 1137.
	[¶14]  "Contract language is ambiguous when it is reasonably
susceptible of different interpretations."  Portland Valve, 460 A.2d at 1387. 
Both parties argue that the license agreement is unambiguous, and both
parties have set forth reasonable, but contradictory, interpretations of the
	[¶15]  The portion of the license agreement at issue is the definition
of "appurtenances."  The agreement provides that CMP has the right to
request that appurtenances be installed in or over Guilford's land and that
Guilford must grant the request unless Guilford's engineering officer
determines that the installation would interfere with rail operations. 
"Appurtenances" are defined in the license agreement as "pipes, poles,
wires and other equipment."  CMP argues that "appurtenances"
unambiguously includes fiber optic wires or cables and that "wires" is not
limited to wires that carry electric current.  Guilford contends that "wires"
refers only to strands of metal capable of carrying electric current, and,
because fiber optic cable or wire is made of glass and does not carry electric
current, the term "wires" cannot mean fiber optic wire.   
	[¶16]  We interpret language in a contract by its "generally prevailing
meaning."  Restatement (Second) of Contracts § 202(3)(A) (1981).  Both
parties have supplied the court with numerous dictionary definitions of
"wire."  Dictionaries support Guilford's position that wire is made of metal. 
See, e.g., Random House Unabridged Dictionary 2080-81 (2d ed. 1993) ("1. a
slender, stringlike piece or filament of relatively rigid or flexible metal"
(emphasis added)); American Heritage Dictionary 2048 (1992) ("1. A usually
pliable metallic strand or rod made in many lengths . . . used chiefly for
structural support or to conduct electricity.")  There are dictionary
definitions, however, that support CMP's position that "wire" includes
communication cable. See, e.g., Chambers Science and Technology Dictionary
972 (1988) ("(Telecomm.) A continuous connection through a system,
particularly a telephone exchange, whether automatic or manual)"; Oxford
American Dictionary 798 (1980) ("2. a cable used to carry telephone or
telegraph messages.")  We have used the term "fiber wire" to refer to fiber
optics.  See A.A.R.P. v. Public Util. Comm'n, 678 A.2d 1025, 1029 (Me.
	[¶17]  There appear to be "generally prevailing meanings" of "wire"
that would support the meaning urged by Guilford and the meaning urged by
CMP.  We conclude that the contract term "wires" is susceptible to
differing, but reasonable, interpretations.  
	[¶18]  We look at the entirety of the contract to see if this apparent
ambiguity is resolved elsewhere in the document.  See T-M Oil Co., Inc. v
Pasquale, 388 A.2d 82, 86 (Me. 1978) (viewing the entire lease to
determine if the ambiguity in one paragraph could be resolved).  CMP finds
support for its argument in another part of the license agreement,
paragraph nine, which requires it to remedy any interference with the
railroad that results from appurtenances "which consist of electrical power
or communication wires and equipment."{5} Thus, CMP contends,
"appurtenances" include communication wires, and fiber optic wires or
cables are communication wires.  Guilford counters this argument by
contending that paragraph nine refers only to CMP's communication wires
used to communicate between a control center and a switch.  Guilford's
interpretation of paragraph nine, however, is not evident from the four
corners of the license agreement, and CMP's interpretation, while helpful to
its position, is not so persuasive as to be determinative.
	[¶19]  Guilford supports its argument, that the parties never intended
to include fiber optic cable in "appurtenances," by reference to the fee
schedule attached to the license agreement.  The fee schedule is based on
voltage, and for transverse crossings of appurtenances that carry between
zero and 750 volts, the annual fee is $75.  Guilford argues that because fiber
optic cable does not have an electrical charge, the fee schedule
demonstrates that the parties could not have intended the agreement to
cover fiber optic cable.  CMP argues in response that because the fee
schedule includes zero volts, the parties intended that wires with no
electric current are included within the definition of "appurtenances."  The
fee schedule lends support to Guilford's argument because it seems that if
the parties had anticipated extensive fiber optic crossings Guilford would
have insisted on more of a fee.  On the other hand, the fee schedule can be
seen as a boost to CMP's argument because it would appear that the parties
anticipated at least some wires with zero voltage.
	[¶20]  The contract dispute boils down to two basic contentions:  (1)
CMP's argument that if the parties had intended to exclude fiber optic cable
they would have done so explicitly and nothing in the agreement limits
"appurtenances" to conduits of electricity; and (2) Guilford's argument that
at the time the parties entered into the license agreement, CMP was only an
electric utility and was not engaged in telecommunications, and therefore,
the parties could only have intended "appurtenances" to mean conduits
integral to the business of an electric utility.  
	[¶21]  We conclude that an examination of the entire document does
not resolve the ambiguity in the terms "appurtenances" and "wires" and
does not resolve whether it was the intention of the parties to include fiber
optics within the license.  Although both parties argued before the PUC and
this Court that the agreement was unambiguous and neither contended that
they have extrinsic evidence to submit to a factfinder, it is apparent from
Guilford's statement of material facts filed with the PUC that extrinsic
evidence exists.{6}  In addition, the briefs filed with this Court from both
Guilford and CMP contain references to the history of dealings between the
parties on the fiber optic issue and the impact of proposed legislation on
their negotiation of the master license agreement.  Because the license
agreement is ambiguous, its interpretation is a matter of fact, and we must
remand to the factfinder.
	The entry is:
Judgment vacated.  Case remanded to the PUC
for further proceedings consistent with this

Attorneys for appellant: Gordon H.S. Scott, Esq., (orally) P. Andrew Hamilton, Esq. Eaton, Peabody, Bradford & Veague, P.A. 77 Sewall Street, Suite 3000 Augusta, ME 04330-3000 Attorneys for appellees: Lisa C. Fink, Esq., (orally) Joanne B. Steneck, Esq. Public Utilities Commission 18 State House Station Augusta, ME 04333-0018 William D. Hewitt, Esq., (orally) Catherine R. Connors, Esq. Pierce Atwood One Monument Square Portland, ME 04101-1110 (for Central Maine Power)
FOOTNOTES******************************** {1} . One commissioner dissented on the ground that the license agreement was not free from ambiguity and that extrinsic evidence should be considered in order to determine the intentions of the parties when they entered into the agreement. {2} . "An appeal from a final decision of the commission may be taken to the Law Court on questions of law in the same manner as an appeal taken from a judgment of the Superior Court in a civil action." 35-A M.R.S.A. § 1320 (1988). {3} . In setting forth its reasons for deferring to the agency, the National Fuel court stated that Congress's grant of authority to the agency to resolve the contract dispute indicated "that the agency's interpretation typically will be enhanced by technical knowledge." Id. at 1570 (emphasis supplied). Furthermore, the interpretation of the agreement "will be influenced by the agency's expertise in the technical language of that field and by its greater knowledge of industry conditions and practices, including its more comprehensive experience with the kinds of disputes and negotiations that generally produce such an agreement." Id. The court went on to state that even when the agency was not making policy but searching "for the parties' contractual intent, that search nonetheless profits from familiarity with the field of enterprise to which the contract pertains." Id. (quoting Kansas Cities v. F.E.R.C., 723 F.2d 82, 87 (D.C. Cir. 1983)). {4} . We do not defer to an agency's interpretation of a statute or legal doctrine when that statute or doctrine is beyond that agency's expertise. See LeBlanc v. United Eng'rs Constructors Inc., 584 A.2d 675, 677 (Me. 1991) (holding that the Workers' Compensation Commission is not entitled to deference in its determination of the jurisdictional requirements of the federal constitution); Dorr v. Maine Maritime Academy, 670 A.2d 930, 932 (Me. 1996) (refusing to give deference to the Workers' Compensation Commission's interpretation of a federal statute); Van Houten v. Harco Const. Inc., 655 A.2d 331, 333 (Me. 1995) (reviewing independently the agency's decision that an employer was not collaterally estopped from relitigating an issue). {5} . Paragraph 9 states: 9. COMMUNICATION OR INDUCTED INTERFERENCE. For those Appurtenances which consist of electrical power or communication wires and equipment, Licensee shall promptly remedy any inductive interference with railroad operations growing out of, or resulting from, the presence of such Appurtenances. {6} . In its opinion, the PUC stated that it would not consider paragraphs four and five of Guilford's statement of material facts because they referred to matters outside the four corners of the agreement. Specifically, paragraphs four and five, and the affidavit to which they refer, describe the history of dealings between CMP and Guilford concerning fiber optic crossings.