Background
On May 11, 2009, Community Hospital of Long Beach (CHLB) filed this complaint, requesting that Verizon California Inc. (Verizon) pay it $27,854.52 in late payment charges pursuant to Verizon's Tariff Rule 10(E) on the $84,992.02 that Verizon refunded to it for overcharges CHLB incurred between 2001 and 2007. CHLB states that it had earlier submitted an informal complaint to the Commission in 2008 and been denied.
In its response to the complaint, Verizon asserts that while it initially refused to refund any amounts to complainant it did later provide CHLB three years of reimbursement under Claim number RAL-022207 and the full reimbursement of all charges under Claim number CAL-031307. It considers this as settlement of the entirety of the dispute.
Verizon asserts that an interest penalty is not applicable under its Tariff Rule 10(E) due to the three-year statute of limitations under Public Utilities Code Section 736 and CHLB's failure to exercise reasonable diligence in discovering the billing errors. On July 16, 2009, Verizon filed a motion to dismiss this complaint on the grounds that the facts established in the complaint demonstrate that the relief requested is barred by the statute of limitations.
A prehearing conference (PHC) was held on August 20, 2009. At the PHC, Verizon asserted that due to the length of time that had passed since the events in dispute, it would not be able to bring the key people to an evidentiary hearing and, therefore, it would be best to handle the matter on the written pleadings. CHLB agreed that evidentiary hearings would not be necessary.1 Following this discussion, parties agreed to a procedural schedule for additional filings.2
On February 24, 2010, the assigned Commissioner and Administrative Law Judge (ALJ) issued a scoping memo that found evidentiary hearings are not necessary. This finding is affirmed here since a preliminary determination that hearings were necessary was made earlier under Rule 7.1(b) of the Commission's Rules of Practice and Procedure. The scoping memo denied Verizon's motion to dismiss, finding that the underlying facts presented in the complaint and the pleadings must first be examined to determine when the cause of action accrued.
Finally, the scoping memo found that the scope of this proceeding is to determine if Verizon should pay CHLB late payment charge interest penalties under its Tariff Rule 10(E) for the following two claims:
Claim number RAL-022207. CHLB requests $22,109.88 in Late Payment Charges as interest on three years of billed charges refunded by Verizon on December 27, 2007 in the amount of $81,819.61. Under this claim, CHLB asserts it faxed on July 21, 2001 a disconnect order to Verizon for services at a Long Beach facility that was soon to be closed and vacated. As a result of an audit undertaken in November 2006 by Ariel Link, CHLB discovered the lines had never been disconnected. On February 22, 2007 CHLB submitted a claim to Verizon requesting it stop billing for these lines and refund in full the 6 years of incorrect billing.
Claim number CAL-031307. CHLB requests $1,744.64 in Late Payment Charges as interest on twenty-seven months of billed charges totaling $4,555.00; this refund was made in two increments by Verizon on August 2007 and October 2007. Under this claim, CHLB asserts that on March 22, 2004 Verizon disconnected a circuit but failed to stop billing for the associated tie lines that ride over the circuit. Based on an independent audit by Ariel Link, CHLB discovered this error and requested a full refund on March 30, 2007.
In addressing the above claims, the Commission must first determine if the cause of action for either claim is within the three-year period of time required by Public Utilities Code Section 736, and if one or both claims are within the Commission's statute of limitations, we must then determine if Verizon's Tariff Rule 10(E) applies to these billing errors.
On March 19, 2010, Verizon submitted a motion for summary judgment.
In Decision (D.) 10-04-005, issued on April 8, 2010, the Commission extended the statutory deadline in this proceeding until May 11, 2011.
1 CHLB was granted the opportunity to submit this declaration in order to address Verizon's assertion that the statements contained in CHLB's August 25, 2009 response to Verizon's motion to dismiss should not be given evidentiary weight as the statements were not submitted under oath within a declaration or affidavit.
2 Specifically, CHLB was granted permission to late-file responses to Verizon's answer to the complaint and motion to dismiss and Verizon was granted permission to respond to CHLB's response to its motion to dismiss and to file a motion for summary judgment.
