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Beth Israel Deaconess
Medical Center, Inc. v. MATEP, LLC, 2005 Mass.
Super. LEXIS 292 (June 16, 2005) (van
Gestel, J.). |
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On remand from the Appeals Court with
directions to interpret a utilities contract the Appeals
Court had held ambiguous, the Court reached the same
result it had reached before the appeal and trial on
remand – judgment plaintiffs.
Five hospitals sued the operat-ors of an
energy plant to determine the proper contract price for
elec-tricity used to chill water. Harvard University had
originally construc-ted the plant in 1980, and
through-out most of the history of the relationship
between the hospitals and the plant, the price of
electricity was set by reference to the rates of Boston
Edison Company (“BECO”), at a time when electricity
rates were subject to government regulation.
Harvard sold the plant to the defendants
shortly after the deregulation of the electricity market
and contemporaneously with an announcement by PECO
Energy Company (“PECO”) that it would enter the
Massachusetts market.
The parties negotiated an amendment to
the utilities contract to provide that the |
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plaintiffs were entitled to the more
competitive PECO rate for electricity, but the pricing
for chilled water was set forth separately to include
several other components in addition to the price of
electricity. The basic issue presented was “whether the
reference standard for electricity charged for chilled
water should be the same as the reference standard for
electricity charged for all other uses.” The defendants
asserted they were entitled to the higher BECO rate with
regard to chilled water.
Prior to the remand, the Court had ruled
that the contract itself was unambiguous and that the
PECO rate applied. After trial on remand, the Court
reached the same conclusion based upon consideration of
the extrinsic evidence. The Court also held that, if on
further appeal the Appeals Court were to hold that the
extrinsic evidence did not cure the ambiguity, then it
would reach the same result by applying “community
standards of fairness and policy” to fill in the
ambiguous term.
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