Court Opinion

ID: 9779521
Source: CourtListenerOpinion
Date Created: 2023-08-29 22:05:03.146704+00
Date Added: 2024-06-11T07:33:26.380617
License: Public Domain

GRANT, Justice,
dissenting.
I dissent. While I agree that negligence may occur in the performance of a contract, I do not agree that the present case presents a tortious action.
The mere fact that the contract was breached through the defendant’s negligence does not in and of itself change the action into one in tort. 1 Am.Jur.2d Actions § 9 (1962). The form of pleading does not determine whether the action is in tort or contract, but rather the relationship between the parties and the damages sought must be looked to for this determination. It is important that we maintain the proper distinction between tort and contract in Texas, because many substantive rights are dependent upon this distinction. This can be done by looking at the various factors expressly separating these causes of action:
*778(1) An action in contract is for the breach of a duty arising out of a contract, while an action in tort is for a breach of duty imposed by law. International Printing Pressmen and Assistants’ Union v. Smith, 145 Tex. 399, 198 S.W.2d 729 (1946). In that case, the Texas Supreme Court stated:
If an action is not maintainable without pleading and proving the contract, where the gist of the action is the breach of the contract, either by malfeasance or non-feasance, it is, in substance, an “action on the contract,” whatever may be the form of the pleading.
In other words, if the duty to take due care arises from a relationship outside the contract, then the action sounds in tort. Atlantic & Pacific Railway Co. v. Laird, 164 U.S. 393, 17 S.Ct. 120, 41 L.Ed. 485 (1896). In the present case, it was the obligation to place the advertisement in the Yellow Pages that was breached, and this duty could not have existed but for the intent set forth in the contract. Therefore, contract law should be the only theory upon which liability can be imposed. See W. Keeton, Prosser and Keeton on the Law of Torts § 92, at 656 (5th ed. 1984).
(2) The nature of the injury most often determines which duty or duties are breached. Jim Walter Homes, Inc. v. Reed, 711 S.W.2d 617 (Tex.1986). In the present case, the substance of the cause of action is the recovery of an intangible economic loss flowing directly from the breach of an obligation under the contract. Delan-ney wanted an advertisement for his floral shop in the Yellow Pages of Southwestern Bell Telephone Company for the purpose of getting business from people reading the advertisement. Thus, the nature of the injury, i.e., the failure to place the advertisement, is the subject of the contract itself, and the action sounds in contract alone.1
(3)The concurring opinion offers a third rule: There is no tort liability for nonfea-sance. This test requires distinguishing misfeasance (or negligent affirmative conduct) from nonfeasance. There is some question as to whether or not Texas courts continue to recognize this difficult distinction. In the case of Montgomery Ward & Co. v. Scharrenbeck, 146 Tex. 153, 204 S.W.2d 508 (1947), the Texas Supreme Court said that “torts may be based on nonfeasance or omissions to act as well as on acts of commission.” J. Edgar & J. Sales, 1 Texas Torts and Remedies § 103(4)(b) (1988). The results reached in applying the misfeasance-nonfeasance test may depend upon the semantic application of that test, i.e., Did he do it wrong or did he fail to do it right? 2
The difficulty of applying this test is illustrated by the present case. Southwestern Bell Telephone Company totally omitted Delanney’s advertisement. This would seem to be clearly a case of nonfeasance, and therefore there would be no tort liability. However, the concurring opinion does not look to see whether there was actual performance, but instead looks to the reason why Southwestern Bell Telephone Company omitted this advertisement. The fact that there was a misunderstanding and *779a lack of awareness by employees in performing another contract which in turn caused the company to omit the Delanney advertisement does not alter the fact that Southwestern Bell failed to do what it had promised in the contract. This rule is easier to apply to a situation in which there is physical harm to a person or a tangible thing because of the negligent performance of a contract. In that situation there is a breach of a duty imposed by law to perform with reasonable skill and care to avoid injury to others or their property. W. Keeton, Prosser and Keeton on the Law of Torts § 92 (5th Ed.1984).
In Farina v. Southwestern Bell Media, Inc., 658 F.Supp. 826 (S.D.Tex.1987), a case in which a publisher failed to perform a contract to place an advertisement in the Yellow Pages, the court said that:
Misfeasance in the performance of a promise will give rise to a tort action, whereas nonfeasance will not unless there is a duty independent of the contract to do the thing promised.... In other words, complete failure to perform a contract will not give rise to a tort action unless there is intentionally tor-tious conduct, such as fraud, or the non-feasance is negligent and results in physical harm, which a person always has a duty to avoid.
In the present case, Delanney’s damages were a loss of the expected benefits of the contract itself, and the application of all three tests demonstrates that this is a cause of action based upon contract.
The concurring opinion cites numerous cases for the blanket proposition that accompanying every contract is a common law duty to perform the act agreed upon with care, skill, and faithfulness, and a negligent failure to observe any of those conditions is a tort as well as a breach of contract. I agree that such a common law duty does accompany every contract, but a careful study of the cases cited supports the position that a common law duty was not violated in the present case. In the case of Panhandle Gravel Co. v. Wilson, 248 S.W.2d 779 (Tex.Civ.App.-Amarillo 1952, writ ref d n.r.e.), the court was dealing with a personal injury brought about by a two-pound rock falling from the defendant’s gravel truck and going through the windshield of the injured party’s vehicle. The personal injury did not involve a party to the contract; however, in performing a contract, a common law duty not to injure was also owed to nonparties. In the case of Davis v. Anderson, 501 S.W.2d 459 (Tex.Civ.App.-Texarkana 1973, no writ), an action was brought by a worker who was injured when a ditch in which he was working caved in. Again, this was a personal injury to a person not a party to the contract but to whom a common law duty was owed. The case of H.M.R. Construction Co. v. Wolco of Houston, Inc., 422 S.W.2d 214 (Tex.Civ.App.-Houston [14th Dist.] 1967, writ ref’d n.r.e.), was a suit for contribution, but the underlying tort involved the injury to an employee caused by the collapse of a building. Again, the tort arose from a common law duty not to erect a building which was inherently dangerous. This duty is owed to the public in general.
In the cases of Coulson v. Lake L.B.J. Municipal Utility District, 734 S.W.2d 649 (Tex.1987), Texas Power & Light Co. v. Barnhill, 639 S.W.2d 331 (Tex.App.-Texarkana 1982, writ ref’d n.r.e.), Compton v. Polonski, 567 S.W.2d 835 (Tex.Civ.App.-Corpus Christi 1978, no writ), the respective courts noted in dicta that contracts typically create contractual obligations and implied duties, the breach of which may create liabilities in contract and in tort. All of these cases cite Montgomery Ward & Co. v. Scharrenbeck, supra, for this proposition. In the Scharrenbeck case, the defendants sent an expert to repair a heater in the Scharrenbeck home. The expert’s negligence in repairing the heater caused the home to be destroyed by fire. The defendant had a common law duty to all persons not to damage them or their property by negligently causing a fire. Thus, the damages in the Scharrenbeck case were not the loss of an expected benefit under the contract (which was “to repair *780and adjust the heater”).3 These cases confirm the need to look to the type of damages incurred and the duty which was violated in order to determine whether the action is in tort or contract.
Litigation involving errors in telephone directories are by no means new to our jurisprudence. At least twenty-two other states found this type of litigation to involve a breach of contract action.4
The Corpus Christi Court of Appeals in Reuben H. Donnelley Corp. v. McKinnon, 688 S.W.2d 612 (Tex.App.-Corpus Christi 1985, writ ref’d n.r.e.), treated the failure to provide Yellow Pages advertising as a tort of negligence. The following state and federal cases decided in Texas also treated an omission from the telephone book as a contractual breach: Faber v.
Southwestern Bell Telephone Company, 155 F.Supp. 162 (S.D.Tex.1957); Russell v. Southwestern Bell Telephone Co., 130 F.Supp. 130 (E.D.Tex.1955); Calarco v. Southwestern Bell Telephone Co., 725 S.W.2d 304 (Tex.App.-Houston [1st Dist.] 1986, writ ref’d n.r.e.); Martin v. Lou Poliquin Enterprises, Inc., 696 S.W.2d 180
(Tex.App.-Houston [14th Dist.] 1985, writ ref’d n.r.e.); Goldson v. Southwestern Bell Telephone Co., 659 S.W.2d 902 (Tex.App.Corpus Christi 1983, no writ); and Wade v. Southwestern Bell Telephone Co., 352 S.W.2d 460 (Tex.Civ.App.-Austin 1961, no writ).
The Court in Martin v. Lou Poliquin Enterprises, Inc., supra, held that when the DTPA is involved, a limitation-of-liability clause cannot be used to avoid damages available under that Act for deceptive trade practices. The present case was initiated under pleadings which included allegations of DTPA violations; however, no issues were submitted on that basis and the trial court in its judgment specifically excludes any DTPA violations.5
The question of the validity of a limitation clause of this nature in the contract was raised in White v. Southwestern Bell Telephone Co., 651 S.W.2d 260 (Tex.1983), a case which involved the telephone company’s incorrect listing of a florist’s telephone number in the Yellow Pages. However, the Supreme Court found that this point was not fully briefed and that it could be addressed after being remanded.
Delanney pled that the limitation clause was against public policy and unenforceable. The jury found that there was a disparity of bargaining power between the parties to the suit.6 Certainly, a disparity *781of bargaining power standing alone does not void a contract or a clause in a contract, but it is one element in determining if the clause or contract is unconscionable.7
In the interest of justice, I would remand this case to the trial court to be decided on the basis of a contract action.

. There are times when this test is not workable because there is both a breach of contract and a tort which results in the same damages. For example, a breach of a fiduciary duty may be both a tort and a breach of contract. InterFirst Bank Dallas, N.A. v. Risser, 739 S.W.2d 882 (Tex.App.-Texarkana 1987, no writ). In a tor-tious interference case, the measure of actual damages is the same as for a breach of contract, the court attempting to put the plaintiff in the same economic position he would have been in had the contract not been breached. Capital Title Co. v. Donaldson, 739 S.W.2d 384 (Tex.App.-Houston [1st Dist.] 1987, no writ); Armendariz v. Mora, 553 S.W.2d 400 (Tex.Civ.App.-El Paso 1977, writ refd n.r.e.). Also the damages awardable in a fraudulent misrepresentation case may be on the basis of the loss of the benefit of the bargain or the out-of-pocket measure, both being appropriate recoveries in a breach of contract case. Leyendecker & Associates, Inc. v. Wechter, 683 S.W.2d 369 (Tex.1984).

. Prosser demonstrates the confusion by examples in which failure to blow a whistle or shut off steam was found to be the negligent operation of a train, the failure to repair a gas line was found to be the negligent distribution of gas, the act of discharging an employee was found to be a nonperformance of an employment agreement and the ejection of a theater patron was found to be a nonperformance of an agreement.

. If the facts had been altered so that Schrarren-beck had hired the defendant to repair a dangerous defect in the heater and through the expert’s negligent efforts the heater remained defective and started a fire, then the action could be in either tort or contract.

. McTighe v. New England Telephone and Telegraph Co., 216 F.2d 26 (2d Cir.1954); University Hills Beauty Academy v. Mountain States Telephone and Telegraph Co., 38 Colo.App. 194, 554 P.2d 723 (1976); Ed Fine Oldsmobile, Inc. v. Diamond State Telephone Co., 494 A.2d 636 (Del.1985); Southern Bell Telephone and Telegraph Co. v. C & S Realty Co., 141 Ga.App. 216, 233 S.E.2d 9 (1977), overruled in part on other grounds, Georgia-Carolina Brick & Tile Co. v. Brown, 153 Ga.App. 747, 266 S.E.2d 531 (1980); McClure Engineering Associates, Inc. v. Reuben H. Donnelley Corp., 95 Ill.2d 68, 69 Ill. Dec. 183, 447 N.E.2d 400 (1983); Woodburn v. Northwestern Bell Telephone Co., 275 N.W.2d 403 (Iowa 1979); Louisville Bear Safety Service v. South Central Bell Telephone Co., 571 S.W.2d 438 (Ky.1978); Wilson v. Southern Bell Telephone & Telegraph Co., 194 So.2d 739 (La.App. 1967); Baird v. Chesapeake and Potomac Telephone Co., 208 Md. 245, 117 A.2d 873 (1955); Warner v. Southwestern Bell Telephone Co., 428 S.W.2d 596 (Mo.1968); Cunha v. Ohio Bell Telephone Co., 26 Ohio Misc. 267, 271 N.E.2d 321 (1970); Smith v. Southern Bell Telephone and Telegraph Co., 51 Tenn.App. 146, 364 S.W.2d 952 (1962); Allen v. General Telephone Co. of the Northwest, 20 Wash.App. 144, 578 P.2d 1333 (1978).

. The judgment contained the following language:
No issues were submitted to the Jury on plaintiffs allegations surrounding deceptive trade practices by defendant, SOUTHWESTERN BELL TELEPHONE COMPANY. At the dost (sic) of plaintiffs case, this Court was to direct a verdict for lack of proof concerning same.

. Although Section 2.302 of the Uniform Commercial Code may not be applicable to this transaction because the sale of goods was not involved, it offers some guidance to the determination of unconscionable clauses. It provides that the determination of unconscionability is a matter of law to be made by the court. Tex. Bus. & Comm.Code Ann. § 2.302 (Vernon 1968).

. In determining whether a contract is unconscionable, the court must look to the entire atmosphere in which the agreement was made, the alternatives, if any, which were available to the parties at the time of the making of the contract, the non-bargaining ability of one party, whether the contract is illegal or against public policy, and whether the contract is oppressive or unreasonable. Wade v. Austin, 524 S.W.2d 79 (Tex.Civ.App.-Texarkana 1975, no writ).