INSULT TO INJURIES – Already suffering from untenable matrix pricing, some Dish Wireless contractors recently received correspondence from a collection agency that they were obligated to pay $5,000 for 5’x7′ equipment sites they had previously built for the carrier within Crown Castle compounds, bleeding any possible profits from the installs.
Dish Network has aggressively pursued alleged debts from contractors involved in its dispute with Crown Castle, engaging a third-party debt collection firm rather than initiating litigation. Alternately, Dish could agree that the contractors were not at fault in developing Dish sites within Crown Castle compounds that extended Dish’s lease area because they explicitly followed the construction plans provided.
A Colorado jury had agreed with Dish that their footprint for their equipment layout did not exceed what was allowed in their lease agreement with Crown Castle. Crown Castle is appealing the Denver jury’s decision.
At the same time, Crown Castle appealed a Denver jury’s decision that ruled in Dish’s favor, not requiring them to pay an additional $325 million in lease payments. Crown Castle argued that a pretrial ruling led to an incorrect verdict. These parallel developments highlight the ongoing financial and legal turmoil caused by the companies’ leasing dispute.
Debt Collection Tactics Raise Legal and Ethical Concerns, According to Contractors
According to contractors who contacted Wireless Estimator, a notice sent by Rauch Milliken, a debt collection agency acting on behalf of Dish, raises significant legal and ethical questions. The notice demands immediate payment for alleged debts related to the Crown Castle lease dispute. The contractors believe it includes language that could threaten the contractor’s reputation and business relationships.
The notice states, in part:
“As part of my asset report, I may be contacting your company’s vendors and suppliers, the results of which would be included in my report, along with a suit recommendation.”
A debt collection professional who reviewed the letter informed Wireless Estimator that the collection agency email is not well-drafted. Threatening to contact the debtor’s vendors and suppliers could create liability, such as violation of general business obligation laws of the state involved and tortious interference of contract (common law claim), among other potential liabilities if they were to follow through on their threats, he noted.
Most creditors contract with collection agencies before engaging in litigation to potentially expedite and reduce expenses.
Contractor Pushback and Potential Legal Violations
When there are conflicts with a major towerco and one of its key clients, the dispute is usually undisclosed and resolved internally. However, Crown Castle took its feud with Dish Wireless before a Denver County, Colorado court and lost. The towerco is appealing the decision, arguing that a pre-trial ruling led to an incorrect verdict. Crown Castle alleges that a door on their leased area, when opened, extends up to three feet into the compound.
Contractors who received these collection notices argue that Dish’s claims are unfounded. According to one contractor, one site had minor overhang issues, which were corrected at their expense after being notified. The contractor believed the matter was resolved until receiving an unexpected collection demand months later.
A month after the verdict, Dish sent invoices to some contractors who installed the disputed sites, demanding $5,000 per site for those constructed in Crown Castle’s compounds. Due upon receipt, the chargeback invoices included details such as the number of sites, site identifiers, and the item description: “Project Overhang Crown lease area remediation.”
The current demand letter from the collection agency states: “If the decision has already been made not to pay this balance owed to my client, then I suggest you turn this matter over to your attorney and have them contact my office.”
One contractor who registered his concern regarding Dish’s demand to remediate the site footprint said he did not receive a letter from a collection agency.
“Let them send one. We closed our doors a few weeks ago because of practices like this and matrix pricing, which is untenable,” he said. “You can’t survive anymore working for carriers.”
Dish’s move comes when contractors already feel the financial strain from industry-wide cost-cutting measures. Smaller and even mid-sized contractors are vulnerable to such aggressive collection tactics, as they often operate with razor-thin margins and fewer resources to engage in prolonged disputes.
Crown Castle’s Appeal Against the Jury Verdict
While Dish pursues contractors for disputed charges, Crown Castle is taking its fight against Dish to the Colorado Court of Appeals. The company is challenging the jury’s ruling that Dish did not violate its master lease agreement regarding additional rental space usage. Crown Castle claims that a judge’s pretrial decision unfairly shaped the case, leading the jury to rule incorrectly in Dish’s favor.
Had Crown Castle won the case, Dish could have been liable for millions in additional rent, potentially exacerbating its financial troubles. By appealing the verdict, Crown Castle hopes to overturn the decision and secure the rent payments it argues it is owed. However, an appeal process can be lengthy, meaning Dish is unlikely to face immediate financial consequences from this legal battle.
Wheeler Trigg O’Donnell LLP (WTO), representing Dish Network in the lawsuit, did not return a request for additional information. Lead trial counsel for WTO, Hugh Gottschalk, regarding the central issue in the case, said following the jury’s decision, “The question is, is Dish entitled to have repair people come by once a year and check the equipment and repair it? Or, for that right, are they obligated to pay hundreds of millions of dollars more in rent?”
As Dish and Crown Castle continue their legal battles, contractors and industry stakeholders remain caught in the crossfire.
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