Court Opinion

ID: 9779519
Source: CourtListenerOpinion
Date Created: 2023-08-29 22:05:03.13531+00
Date Added: 2024-06-11T07:33:25.404156
License: Public Domain

BLEIL, Justice.
In Southwestern Bell Telephone Company’s appeal from a judgment on a verdict finding that it negligently damaged Eugene Delanney, Southwestern Bell raises issues concerning the questions asked of the jury, the denial of its motions for a directed verdict and a new trial, the enforceability of a contractual limitation and the sufficiency of the evidence. We find no error affecting the trial court’s judgment and affirm.
Delanney operated Delanney & Associates, a real estate firm in Galveston, which had successfully advertised in Southwestern Bell’s Yellow Pages. In April of 1980, Delanney and Southwestern Bell agreed to a Yellow Pages listing of Delanney’s real estate business in the 1980-81 telephone directory. Also in 1980, Delanney decided to include a third line on his rotary system and to add another line to one of his two remaining inactive lines. This required the cancellation of one line and the transfer of this line to the rotary system. The can-celled line was the number to which the Yellow Pages listing was billed. Delanney requested the change before the Yellow Pages listings were sent to the printer. Because of Southwestern Bell’s internal billing procedure, Delanney’s request resulted in the deletion of his Yellow Pages advertisement from the 1980-81 directory.
Delanney sued Southwestern Bell for negligence. The jury found that Southwestern Bell’s deletion of Delanney’s Yellow Pages advertisement resulted from negligent acts which caused Delanney to suffer lost profits in the amount of $109,-200.00 during the year his firm was not listed and $40,000.00 for loss of future profits. The trial court remitted the future damage award to $11,840.00.
Initially Southwestern Bell contends that the trial court erred in submitting a question to the jury asking if Southwestern Bell was negligent, claiming that in reality it had merely breached a contract with Delan-ney and that the underlying action sounded in contract alone. Southwestern Bell cites authorities which distinguish actions in con*774tract from actions in tort, and argues that Delanney’s action is based solely in contract because the duty imposed on Southwestern Bell arose purely by virtue of the contract. Southwestern Bell claims that an action in contract is for breach of a duty arising out of a contract, while an action for tort is for a breach of duty imposed by law, relying on International Printing Pressmen and Assistants’ Union v. Smith, 145 Tex. 399, 198 S.W.2d 729, 735 (1946).
A party to a contract owes a common law duty to perform with care, skill, reasonable expedience and faithfulness the thing to be done, and a negligent failure in performing any of these conditions can be the basis for recovery in tort as well as a breach of contract. Coulson v. Lake L.B.J. Municipal Utility District, 734 S.W.2d 649 (Tex.1987); Montgomery Ward & Co. v. Scharrenbeck, 146 Tex. 153, 204 S.W.2d 508 (1947). Southwestern Bell relies on Jim Walter Homes, Inc. v. Reed, 711 S.W.2d 617 (Tex.1986), which provides some guidance as to when an action sounds in tort and when an action sounds in contract. In that case, the Reeds brought an action against the housing contractor who breached their construction contract by failing to build the house according to contract specifications. In addition to breach of contract, the Reeds claimed negligent supervision of construction by the contractor. In determining whether an action is based in tort or contract, the court noted that it is the substance of the cause of action and not necessarily the manner of pleading which controls, and that the nature of the injury most often determines the duties that are breached. Generally, when the injury is only the economic loss to the subject of a contract itself, the action sounds in contract alone. Jim Walter Homes, Inc. v. Reed, 711 S.W.2d at 618.
Delanney did not receive the advertisement he paid for and as a result suffered damages. When Southwestern Bell cancelled a listing and added a third rotary line, it was negligent in so doing and responsible for the damages proximately caused thereby. The specific findings of negligence on the part of Southwestern Bell were:
(1) failing to inform Delanney that the installation of a rotary system would cancel the Yellow Pages listing;
(2) failing to adequately train and inform its employees that an order to cancel one of the telephone numbers would cancel the Yellow Pages advertisement; and
(3) failing to recognize that the automatic cancellation of the Yellow Pages advertisement would occur when the billing procedure was changed.
Most of the cases relied on by Southwestern Bell focus on the award of exemplary damages. The plaintiff in those cases was required to have proven—in addition to a breach of contract and damages —a distinct tortious injury with actual damages to support an additional award of exemplary damages. Exemplary damages are not involved in this case. The only damages awarded to Delanney were for lost profits, which are actual damages.
Turning to other issues, Southwestern Bell claims that the trial court erred in overruling its motions for directed verdict and for new trial because the evidence adduced at trial failed to establish a negligence cause of action. Delanney’s negligence action is based on Southwestern Bell’s handling of Delanney’s request for an additional rotary line. Delanney claimed that Southwestern Bell failed to inform him that the addition of an extra rotary line would cancel his Yellow Pages listing, that Southwestern Bell negligently failed to recognize that automatic cancellation would take place, and that Southwestern Bell failed to inform and properly train its employees.
Lorraine Miller, a Southwestern Bell employee, testified that she received training to become a service representative. She stated that Delanney’s wife called to request that one of the Delanney listings be cancelled and added as a third number to the rotary line, so Miller pulled the equipment listing, got the information and told Delanney she would get back with her. Miller wrote the order, disconnected the *775listing and put the requested number as a third number at the end of Delanney’s rotary line. Miller testified that she did not inform Delanney that the Yellow Pages advertising would be cancelled. The line that Delanney asked to have cancelled was the listing for D. and D. Enterprises and was not the listing for Delanney. Miller testified that at the time she filled out the order she did not know the Yellow Pages advertisement for Delanney would be can-celled. Miller also testified that she had indicated on a report she had made that the omission of Delanney’s listing was due to an error in production. The jury could reasonably infer from these facts that Southwestern Bell did not perform its agreement with Delanney with care; thus, the evidence supports a finding of Southwestern Bell’s negligent performance of a duty it owed to Delanney. Montgomery Ward & Co. v. Scharrenbeck, supra.
Southwestern Bell additionally complains that the trial court erroneously submitted the limitation of liability question to the jury because public policy issues are not proper for jury consideration and the limitation of liability clause is enforceable as á matter of law. Also, Southwestern Bell claims that the trial court erroneously held that the limitation of liability clause is unenforceable.
The trial court submitted a question to the jury, as follows:
Do you find from a preponderance of the evidence that there was a disparity of bargaining power between the plaintiff and the defendant in negotiating the contract for Yellow Page advertising.
INSTRUCTION: A disparity of bargaining power exists when one party has no real choice in accepting an agreement limiting the liability of the other party.
Apparently, the trial court submitted this question because Delanney claimed in his petition that the limitation of liability clause is void and unenforceable. The limitation of liability clause reads as follows: “The applicant agrees that the Telephone Company shall not be liable for errors in or omissions of the directory advertising beyond the amount paid for the directory advertising omitted, or in which errors occur, for the issue life of the directory involved.” A similar limitation of liability clause was upheld in a breach of contract suit. Wade v. Southwestern Bell Telephone Company, 352 S.W.2d 460 (Tex.Civ.App.— Austin 1961, no writ); see also Helms v. Southwestern Bell Telephone Co., 794 F.2d 188 (5th Cir.1986); Calarco v. Southwestern Bell Telephone Co., 725 S.W.2d 304 (Tex.App.— Houston [1st Dist.] 1986, writ ref’d n.r.e.). However, in Helms the court followed the. case of Reuben H. Donnelley Corp. v. McKinnon, 688 S.W.2d 612 (Tex.App.— Corpus Christi 1985, writ ref’d n.r.e.), which held a similar limitation of liability clause in a Yellow Pages advertisement contract unenforceable because the plaintiff’s action was based on negligence and the defendant could not limit its liability for negligence. 688 S.W.2d at 616.
The trial court’s refusal to enforce the limitation of liability clause was proper, and the existence or nonexistence of a disparity in bargaining power was irrelevant because this is a negligence action. While courts may refuse to enforce limitation of liability clauses where there is such a disparity of bargaining power that the contract is one of adhesion, Allright, Inc. v. Elledge, 515 S.W.2d 266 (Tex.1974), this contractual provision would not serve to limit Southwestern Bell’s damages for its negligent conduct. Helms v. Southwestern Bell Telephone Co., 794 F.2d at 192-94; Reuben H. Donnelley Corp. v. McKinnon, 688 S.W.2d at 616. The error, if any, concerning the trial court’s submission of the question on the disparity of bargaining power is harmless. Although a disparity in bargaining power would not of itself necessarily limit liability under the circumstances present, no harm resulted from asking the jury that question.
Southwestern Bell also maintains that the asking of this question constitutes an impermissible comment on the weight of the evidence in that the accompanying instruction omitted elements of the definition and did not give the jury any real guidance to answer the issue. The trial court has considerable discretion in submitting spe*776cial questions to the jury, and in deciding what instructions are necessary and proper in submitting questions to the jury. Mobil Chemical Company v. Bell, 517 S.W.2d 245 (Tex.1974). We need only decide whether the trial court’s action was arbitrary or unreasonable. Markantonis v. Tropoli, 730 S.W.2d 91, 96 (Tex.App.— Houston [14th Dist.] 1987, writ ref'd n.r.e.).
Southwestern Bell argues that the issue allows the jury to consider the Yellow Pages advertisement only and that its requested instruction, which instructs the jury to consider the parties’ relative bargaining power, alternative sources of advertisement and the reasonableness of the challenged term, should have been submitted. Although Southwestern Bell may have requested a proper instruction, the one the trial court submitted is also proper. Where the enforceability of a limitation of liability clause is in issue, the relative bargaining power of the parties is a relevant fact to be determined. Allright, Inc. v. Elledge, 515 S.W.2d at 267, 268. And, the instruction submitted by the trial court is a correct statement of the law. Id. Clearly, the trial court’s instruction was not arbitrary or unreasonable. Moreover, in light of our determination that the contractual limitation of liability would not apply to limit liability for damages caused by tor-tious conduct, this issue and the issue questioning the exclusion of evidence showing a business necessity for the liability limitation become immaterial.
Southwestern Bell asserts that there is insufficient evidence to support the jury’s award of $109,200.00 as damages for lost profits and that the award was so excessive as to shock one’s conscience and sense of justice. Southwestern Bell claims insufficient evidence because Delanney’s expert witness, who testified that Delanney suffered damages in the amount of $112,-621.00, made a deduction for commissions only and not for other variable expenses. Southwestern Bell complains that Delan-ney’s expert did not take increased selling expenses into account in calculating lost profits and, thus, the amount stated in his testimony was not a proper basis for the jury award.
Delanney’s expert, Rolando Pelaez, testified that during the period that Delanney’s listing was omitted from the Yellow Pages, Delanney’s closings decreased from 9.68 per month to 7.92 per month while the closings for all other realtors increased. Pelaez testified that, during that period, Delanney would have closed an average of five more homes every month had the ratio of Delanney’s closings to other closings remained equal. Based on an estimated additional sixty-five homes Delanney could have closed, at an average value of $55,-000.00, Pelaez calculated $216,000.00 as the amount of commission loss; deducting the amount paid to sales agents leaves a broker’s share of $112,621.00.
Southwestern Bell’s expert witness, F. Gerome Sweeney, testified that Delanney paid out an average of forty-five percent of his gross commissions to his agents and that such commissions are just one part of selling expenses. Sweeney stated that fifty-nine percent was a three-year average of total expenses, forty-five percent of which is commissions and the rest is other selling expenses. Sweeney also testified, based on Delanney’s administrative costs in the years 1980 through 1982, that if Delanney had achieved the sales volume he claims, he would have incurred an additional $10,-000.00 in administrative expenses.
To recover for lost profits, it is not necessary that the loss be shown by exact calculation. It is sufficient that the amount of loss is shown by competent evidence with reasonable certainty. White v. Southwestern Bell Telephone Co., 651 S.W.2d 260 (Tex.1983).
Both parties presented competent evidence of the amount of loss Delanney suffered as a result of the omission of his advertisement from the Yellow Pages listings. It is within the province of the jury to determine which testimony to accept. Thus, it was the jury’s prerogative to give whatever credit to the testimony of Pelaez and Sweeney it deemed appropriate. The evidence supports the jury’s finding on damages.
*777We find no reversible error and affirm the trial court’s judgment.