The opinion of the court was delivered by: Anita B. Brody, United States District Judge.
Plaintiff EarthData International of North Carolina, Inc.
("EarthData"), the subcontractor, and defendant STV, Incorporated
("STV"), the contractor, entered into a subcontract agreement. The
parties filed cross motions for summary judgment that require me to
interpret the payment provision in their subcontract. Because I conclude
that both parties have proffered reasonable interpretations of the
disputed terms, I will deny both motions.
On April 23, 1999, STV entered into a contract with third-party
defendant Universal Communication Networks — Pennsylvania, L.L.C.
("Universal"). STV agreed to provide architectural and engineering
services for Universal's Fiber Optic Resource Sharing Project. On April
29, 1999, STV subcontracted with EarthData to provide the aerial mapping
services component of the project. Universal concurred in the choice of
EarthData to perform the subcontracted services.
STV admits that EarthData supplied the services requested and regularly
issued invoices reflecting the work performed. EarthData submitted
invoices totaling $215,749. To date STV has paid EarthData a total of
$35,000. The dispute concerns STV's obligation to pay the outstanding
balance of $180,749 that the parties agree is due EarthData.
Article IV of the subcontract sets forth the relevant terms of
A. The Consultant [STV] will compensate the
Subconsultant [EarthData] for the satisfactory
performance of the Scope of Services in Attachment A
in accordance with the Prime Agreement and this
Subcontract as may be modified in writing from time to
time. If the Client [Universal] sets a specific
retention rate in the Prime Agreement to be withheld
from the Consultant, then the Consultant may retain a
corresponding percentage from payments to the
Subconsultant, where appropriate. . . .
B. The Subconsultant invoices approved for payment
by the Client shall be paid to the Subconsultant when
such payment is received by the Consultant. Any item
in the Subconsultant's invoice disallowed by the
Client will not be paid by the Consultant. Payments
made to the Subcontractor on fee and/or costs that are
later disallowed by the Client shall either be
withheld by the Consultant from subsequent payments to
the Subconsultant or refunded promptly by the
Subconsultant to the Consultant where such subsequent
payments are insufficient to cover such
Plaintiff's Complaint, Exhibit A, "Subcontract," Article IV —
Compensation [emphasis added].
Universal has paid $25,000 of the $496,460 due STV under the Prime
Agreement. On January 16, 2001, STV filed a third-party complaint against
Universal, claiming that Universal is liable for all of EarthData's
claims against STV.
Both plaintiff EarthData and defendant STV have moved for summary
judgment,*fn1 each asking that the court interpret the payment provision
as a matter of law. When a party files a cross motion, it claims that it
alone is entitled to summary judgment and that, for the limited purpose
of the disposition of its own motion, there are no outstanding issues of
material fact. See Transportes Ferreos de Venezuela II CA v. NKK Corp.,
239 F.3d 555, 560 (3d Cir. 2001) (quoting Rains v. Cascade Indus., Inc.,
402 F.2d 241, 245 (3d Cir. 1968)). By making contradictory claims, the
parties neither agree that the rejection of one claim justifies the other
nor waive judicial determination of whether material fact issues exist.
Summary judgment is proper where the "pleadings, depositions, answers
to interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to judgment as a
matter of law." Fed.R.Civ.P. 56(c). The court should determine whether
there are factual issues that merit a trial. See Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 247-48 (1986). Summary judgment is appropriate
if no factual issues exist and the only issues before the court are
legal. See Sempier v. Johnson and Higgins, 45 F.3d 724, 727 (3d Cir.
To grant either party summary judgment on an issue of contract
interpretation, a court must conclude that the disputed payment provision
is subject to only one reasonable interpretation. See Emerson Radio
Corp. v. Orion Sales, Inc. et al., 253 F.3d 159, 163-64 (3d Cir. 2001)
(quoting Arnold M. Diamond, Inc. v. Gulf Coast Trailing Co., 180 F.3d 518,
521 (3d Cir. 1999)). Each party believes that the provision unambiguously
supports its position, and therefore suggests that disposition of this
matter at summary judgment is appropriate.
The question, therefore, is
whether EarthData has advanced a reasonable alternative reading of the
payment provision to that advanced by STV, and whether STV has ...