Court Opinion

ID: 8050174
Source: CourtListenerOpinion
Date Created: 2022-09-09 04:11:04.23345+00
Date Added: 2024-06-11T16:37:40.157947
License: Public Domain

Batchelder and Johnson, JJ.,
dissenting: We respectfully dissent from the prevailing view of this court. This is not a case where PK’s advertisement was omitted because of a negligent oversight by NET in not placing the advertisement in the directory. Our colleagues have cited cases from the many States which have considered such negligent oversight cases, and the majority view is that the limited liability clause is controlling. However, our colleagues admit that there is a limit to the enforceability of such clauses, specifically in cases where there is gross negligence or intentional misconduct. We find this to be a case where the limitation of liability clause should not be enforced.
In this action, PK’s has claimed that NET intentionally failed to include PK’s advertisement in its Yellow Pages because of a company policy, and that NET: (1) failed to make this policy known to PK’s; and (2) failed to allow PK’s to remedy the defect, e.g., by listing the services under one of PK’s business phones or purchasing a third business phone.
In our view, there is a need for factual findings in this case and, consequently, the granting of NET’S motion for summary judgment was error. We do not know what NET’S representative told PK’s concerning the need to have a business phone in order to advertise in the Yellow Pages; what efforts were made by NET to inform PK’s that a new telephone was needed, once it was discovered that the number submitted was not a business telephone number; or whether PK’s was informed that one of the already existing business telephone numbers could be used.
Our dissent is based on a finding that NET acted intentionally and a conclusion that the provision in the contract limiting NET’S liability to the amount paid for Yellow Pages advertising is uncon*759scionable. A minority of States have held such clauses to be unconscionable because of the unique nature of Yellow Pages advertising or because the telephone company is a public utility with duties to the general public. See Rozeboom v. Northwestern Bell Telephone Co., 358 N.W.2d 241 (S.D. 1984); Allen v. Michigan Bell Telephone Company, 18 Mich. App. 632, 171 N.W.2d 689 (1969); Discount Fabric House v. Wis. Telephone Co., 117 Wis. 2d 587, 345 N.W.2d 417 (1984). The court in Louisville Bear Safety Service Inc. v. South Central Bell Telephone Co., 571 S.W.2d 438 (Ky. Ct. App. 1978), although holding that the telephone company can limit its liability, stated at the outset that “[i]t is quite true that telephone companies are generally monopolies in each service area and that the Yellow Pages are a unique advertising device for which there is no practical substitute.” Id. at 439-40 (emphasis added). Also, NET, in seeking advertisers in the Yellow Pages, emphasizes the uniqueness of the advertising medium: “[t]he number of advertisers and their expenditures in the Yellow Pages has increased every year — regardless of economic conditions — as astute business people recognize this unique link in the sales process.” (Emphasis added.)
The unconscionability factor stems, in no small part, from the fact that PK’s, a small New Hampshire business, is dealing with a monopoly, NET. The language in Rozeboom v. Northwestern Bell Telephone is compelling. “We do not have two corporations dealing at arms length nor two individuals dealing at arms length. As a result of [the] economic inequality and monopoly of Bell, the terms of this contract became substantively unreasonable and should not be enforced.” 358 N.W.2d at 245. We agree with the reasoning of the Rozeboom court and believe that the minority view ought to be adopted by this court. The Fifth Circuit, in its most recent interpretation of case law in this area, has reached the same conclusion. This increases the number of jurisdictions supporting the view that limitation of liability clauses in telephone company contracts may be held unenforceable and leads us to conclude that there may be a developing trend toward wider adoption of this view. See Helms v. Southwestern Bell Telephone Co., 794 F.2d 188 (5th Cir. 1986) (finding cause of action in negligence for misprint in Yellow Pages advertisement). Accordingly, we believe that the motion for summary judgment should not have been granted and that the case should be remanded to the superior court for trial.