Free Letter - District Court of Delaware - Delaware

Case 1 :04-cv-01266-SLR Document 89 Filed O3/O3/2005 Page 1 of 2
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IOHNT DORSET
BY HAND DELIVERY
The Honorable Sue L. Robinson
United States District Court
844 N. King Street
Wilmington, DE 19801
Re: Teleglobe Cominunications Corporation, er nl. vi BCE Inc., et al.
CLA. No. (}¢t—C\/-1266
Dear Chiefliudge Robinson:
At the conclusion ofthe hearing held on February I6, 2005, the Court mentioned
recent decisions ofthe Court of Appeals for the Third Circuit addressing the proposition that "a
contract says what it says, and you are bound by the four corners of the contract? (Tr. at 66:22-
23..) The Court suggested that the parties review those recent decisions and advise of their
import in this case. (Tr. at 67:2-4.)
The recent decisions ofthe Third Circuit addressing principles of contract
interpretation focus on the words the parties used, not inferences by implication. In .i.C. Penney
Life lns. Co. v. Piiosi, the Third Circuit applied Pennsylvania law and held that, where "‘the
language of an insurance contract is clear and unanibiguous, a court is required to enforce that
language? That is, ‘a court must refrain from torturing the language of a policy to create
ambiguities where none exists."’ 393 F.3d 356, 36.3 (3d Cir. 2004) (citations omitted). Again,
"[w]hen a word or phrase is specifically defined within the policy, that definition controls in
WP3:10905t9 1 59825 IGDE

Case 1:04-cv-01266-SLR Document 89 Filed O3/O3/2005 Page 2 of 2
Youno CONAWAY STARGATT & TAYLOR, LLP
The Honorable Sue L. Robinson
March 3, 2005
Page 2
determining the applicability of the policy." ld, at 364 (citation omitted). The Court reversed
and denied coverage.
ln ln re Tops Appliance City. Inc., the Third Circuit affirmed a grant of sumrnary
judgment by a bankruptcy court on a matter of contract interpretation. 372 F.3d 5l0 (Bd Cir.
2004). The Third Circuit quoted a decision of the United States Supreme Court for the
proposition that "wl1ile the plain—meaning rule is not absolute, ‘the words used, even in their
literal sense, are the primary, and ordinarily most reliable, source of interpreting the measure of
any writing: be it a statute, a contract, or anything else."’ Ld; at 514 (citing Watt v. Alaska, 451
U.S. 259, 266 n.9 (1981)) (citation omitted).
In a recent unreported decision ofthe Third Circuit, Commerce Nat’l lris. Servs.,
inc. v. Buchler, the Court of Appeals held that "[i]f the language ofthe agreement is
unambiguous, it must be given its plain meaning. lf it is ambiguous, it rnust be construed against
the drafter in accordance with the ‘well—accepted connrz prqjiarcrrram principle of construction.’”
No. 04-1028, 2004 WL 27863 I 5, at *1 (3d Cir. Dec. 6, 2004) (citation omitted) (unpublished
opinion). ln Buchler, the Third Circuit held that a ncnsolicitation provision in a contract was
ambiguous, but aflirmed this Court’s grant of summary judgrnent nonetheless, on the ground that
the construction ofthe contract by the district court was "reasonable" and satisfied the contra
projhranrem principle. Q at *2..
We are mindful that we are proceeding on the basis of a motion to dismiss under
Rule l2(‘o)(6) and not summary judgment Nonetheless, as we hope we demonstrated at the
hearing, the actual words of BCE and Teleglobe are properly before the Court since they are
embodied in many documents that either have been referenced in the complaint or are integral to
the complaint. And, once the Court focuses on the words that BCE and 1`eleglobe actually used,
we respectfully believe that the conclusions are compelled that an implied "additional $2.5
billion comrnitrnent" simply did not exist and that no reasonable creditor or investor could have
relied on the existence of such a commitment in the face of a constant stream of disclaimers to
the contrary.
Respectfully,
Pauline K. Morgan
PKM:dw
cc: Gregory V. Varallo, Esq. (by Hand Delivery)
Kevin Gross, Esq. (by Hand Delivery)
John P. Amato, Esq. (by Facsimile)
Stuart Baskin, Esq. (by Facsimile)
John Shaw, Esq.
wrsnesosia 1 assis iam