Ex-Owners Forgery Costs AT & T $4.5M5/07/2000 8:00 PM Eastern
A questionable signature on an easement agreement for a Houston apartment complex has cost AT & T Broadband a $4.5 million civil judgment.
The apartment owner, David O'Brien III, asserted that his name was forged on a 1995 contract binding him to his then-cable operator, TCI-TKR of Houston Inc. The system has since been traded to AT & T Broadband.
AT & T Broadband attorneys were tight-lipped, but said the actions described in the suit were attributable to a "contractor of a contractor." Attorney Jerome Kashinski said the company is discussing an appeal.
At issue are the actions of a man plaintiff's attorneys identified as Mike Hill, whom AT & T Broadband argued was an employee of Wavelength CATV Inc. of Missouri. Wavelength reportedly did construction and procured multiple-dwelling-unit contracts for then-Tele-Communications Inc.
But Jerry Walker Jr., attorney for the plaintiff, said Wavelength does not exist as a legal company in Texas and Arkansas. He added that a Missouri company bearing that name forfeited its charter and filed for dissolution in 1990. Mike Hill was a TCI employee, Walker asserted.
The dispute began in 1996, when O'Brien contracted with InteliCable Inc., a South Carolina consulting firm that aids property owners in negotiations with telecommunications companies.
O'Brien's tenants bought cable directly from vendors, and O'Brien wished to negotiate a bulk-billing or revenue-sharing contract with a video provider. InteliCable CEO Larry Kessler researched the property and told O'Brien he had no easement or other agreement with TCI-TKR.
But when O'Brien checked in with the cable operator's contract manager, the system employee maintained that TCI-TKR had a valid contract on file. He offered to fax O'Brien a copy if O'Brien would make a written request.
A suspicious O'Brien complied, but he altered the appearance of his signature. When he received the contract copy back two hours later, the TCI-TKR signature matched the altered endorsement from his fax request, according to O'Brien and his attorney.
When O'Brien challenged the company, the contract manager noted that the contract was notarized. Walker said he has since determined that the notary stamp was forged, as well. That endorsement has surfaced on at least four other MDU contracts in Houston, according to attorneys.
O'Brien tried to negotiate with TCI-TKR and presented dozens of documents displaying his valid signature, but the operator would not invalidate the contract. He filed a civil suit in 1998.
At trial, the plaintiffs alleged that TCI-TKR employees faked signatures to collect commissions. Hill, in a deposition, denied forging signatures.
Following a trial in U.S. District Court for the Southern District of Texas, Houston Division, the jury deliberated for about six hours before finding for O'Brien.
Kessler-who does business with home builders and property managers across the country-said he has never before seen an actual forgery.
"We have seen, more often than not, what I'll call interesting strategies by franchised cable operators to get property owners to sign contracts," he said. Property owners who have little or no knowledge of contract laws or Federal Communications Commission rules have been manipulated, he added.
Large real estate developers understand the complex nature of telecommunications contracts with telephone, Internet and video providers, but they account for only 10 percent of the apartment owners in the country.
The smaller guys are under intensifying pressure because apartment contracts are viewed by telecommunications providers as the "Holy Grail," Kessler said. For instance, a deal with an apartment owner can deliver 200 new potential customers with a single signature.
O'Brien had potential suitors for his properties, Kessler said, but they all evaporated because the property owner would not indemnify them against a lawsuit by TCI-TKR when the operator was still asserting that it had a valid contract.
In an ironic twist, O'Brien is now an AT & T Broadband MDU customer.
The suit was originally filed in state court, alleging that the clock on damages was running for every day O'Brien was not free to negotiate with video vendors.
It was remanded to federal court, and the judge directed the parties to allow O'Brien to reach a contract with someone so that the time frame on damages would end. In the end, TCI-TKR made the best bid.
Forgeries of signatures and notary stamps are felonies. Walker said it is improper for a civil attorney to discuss possible criminal charges.