A dispute between Omnipoint Communications Enterprises L.P. and one of its site-acquisition consultants highlights the potential problems that can occur when wireless carriers loosen their control on tower siting.
Omnipoint and TeleSearch Properties Inc. are embroiled in a legal battle in the U.S. District Court for the Eastern District of Pennsylvania that began when Omnipoint sought an emergency injunction against TeleSearch concerning certain documents.
Omnipoint’s filing against TeleSearch revolves around an allegation that Kenneth Moss, a TeleSearch employee, was receiving kickbacks from property owners for contracting their sites to Omnipoint. TeleSearch denies that allegation.
Moss is a licensed real-estate broker in New Jersey and operates a real-estate business out of the same office as TeleSearch. Omnipoint claims Moss’ relationships with property owners was a conflict of interest, and Moss didn’t supply Omnipoint with the best possible sites.
“An unusually large number of leases submitted to Omnipoint by TeleSearch are for unimproved parcels, which are expensive for Omnipoint to develop, but which can be far more lucrative for landowners than leases involving existing structures,” said Omnipoint’s complaint.
However, TeleSearch’s lawyers say not only did Omnipoint know about Moss’ relationship with a long list of land and property owners before the contract was signed, but that it purposely selected TeleSearch because those relationships could expedite the leasing process. Omnipoint’s filing denies it ever knew about or consented to Moss’ representation of owners in connection with transactions involving Omnipoint.
The dispute began just more than one year after Omnipoint and TeleSearch entered an agreement that called for TeleSearch to locate and provide leasing and zoning services for sites within more than 100 geographical search rings provided by Omnipoint. The original consulting agreement and work order was signed on Feb. 4, 1997, and had a two-year term.
But on Feb. 4, 1998, Omnipoint issued a letter to TeleSearch saying the work order expired that day and would not be extended. Omnipoint said TeleSearch failed to meet certain milestones detailed in the agreement.
According to the letter signed by Omnipoint Technical Director Steven L. Boyle, “It was expected that by early July 1997 every primary site would have a fully executed lease. It was expected by early September 1997, every primary site would have received zoning approval.”
According to the letter, Omnipoint had given TeleSearch more than 100 search rings as of Feb. 4, 1998, and only half had a fully executed primary lease and only 20 percent had zoning completed.
However, according to a counterclaim filed by TeleSearch, Omnipoint only issued 35 search rings during the first 30 days of the contract, and it wasn’t until December 1997 that Omnipoint issued all agreed-upon search rings. The counterclaim further asserts Omnipoint slowed the leasing and zoning process by, among other things, delaying the release and approval of architectural and engineering drawings.
Following the Feb. 4, 1998, letter, Omnipoint and TeleSearch apparently agreed TeleSearch would continue its work within the issued search rings because it would put Omnipoint too far behind its competitors if it started over. In connection with the oral agreement, TeleSearch was required to provide weekly reports to Omnipoint on the status of its work within the search rings.
One of TeleSearch’s attorneys, however, asserted Omnipoint already had decided it would allow TeleSearch to work to the brink of completing the project and then take TeleSearch’s work without paying for it.
On March 25, the relationship between Omnipoint and TeleSearch completely broke down. During one of their regular update meetings in Omnipoint’s offices, Omnipoint supplied a court order to TeleSearch partners Steven Durst and Moss demanding access to all of TeleSearch’s records with regard to its work for Omnipoint, according to documents filed by TeleSearch. When Durst and Moss initially refused to leave files with the carrier, Omnipoint filed the emergency injunction paperwork.
TeleSearch’s answer asserts the court order was a draft and therefore not official. Legal counsel for TeleSearch also said the company was willing to supply all relevant files to Omnipoint, as long as Omnipoint paid for the services rendered. According to TeleSearch’s counterclaim, Omnipoint still owes the company about $500,000.
A spokesman for Omnipoint said the company cannot comment on pending litigation.
A trial date has not been set.
