Art's Flower Shop, Inc. v. Chesapeake and Potomac Telephone Co. of West Virginia, Inc., No. 20085

CourtSupreme Court of West Virginia
Writing for the CourtBROTHERTON
Citation186 W.Va. 613,413 S.E.2d 670
PartiesART'S FLOWER SHOP, INC., a Corporation, Plaintiff Below, Appellant, v. The CHESAPEAKE AND POTOMAC TELEPHONE COMPANY OF WEST VIRGINIA, INC., a Corporation, and the Reuben H. Donnelley Corporation, a Corporation, Defendants Below, Appellees.
Decision Date13 February 1992
Docket NumberNo. 20085

Page 670

413 S.E.2d 670
186 W.Va. 613
ART'S FLOWER SHOP, INC., a Corporation, Plaintiff Below, Appellant,
v.
The CHESAPEAKE AND POTOMAC TELEPHONE COMPANY OF WEST
VIRGINIA, INC., a Corporation, and the Reuben H.
Donnelley Corporation, a Corporation,
Defendants Below, Appellees.
No. 20085.
Supreme Court of Appeals of
West Virginia.
Submitted Sept. 25, 1991.
Decided Dec. 5, 1991.
Rehearing Denied Feb. 13, 1992.

Page 671

[186 W.Va. 614] Syllabus by the Court

1. "[W]here a party alleges that the arbitration provision was unconscionable or was thrust upon him because he was unwary and taken advantage of, or that the contract was one of adhesion, the question of whether an arbitration provision was bargained for and valid is a matter of law for the court to determine by reference to the entire contract, the nature of the contracting parties, and the nature of the undertakings covered by the contract." Syllabus point 3, in part, Board of Education of Berkeley County v. W. Harley Miller, 160 W.Va. 473, 236 S.E.2d 439 (1977).

2. "An analysis of whether a contract term is unconscionable necessarily involves an inquiry into the circumstances surrounding the execution of the contract and the fairness of the contract as a whole." Syllabus point 3, Troy Mining Corp. v. Itmann Coal Co., 176 W.Va. 599, 346 S.E.2d 749 (1986).

3. "Loss of profits can not be based on estimates which amount to mere speculation and conjecture but must be proved with reasonable certainty." Syllabus point 5, State ex rel. Shatzer v. Freeport Coal Co., 144 W.Va. 178, 107 S.E.2d 503 (1959).

4. A determination of unconscionability must focus on the relative positions of the parties, the adequacy of the bargaining position, the meaningful alternatives available to the plaintiff, and "the existence of unfair terms in the contract."

5. "Compensatory damages recoverable by an injured party incurred through the breach of a contractual obligation must be proved with reasonable certainty." Syllabus point 3, Kentucky Fried Chicken of Morgantown v. Sellaro Co., 158 W.Va. 708, 214 S.E.2d 823 (1975).

Nisar A. Kalwar, Dunbar, for appellant.

Page 672

[186 W.Va. 615] Trina L. Leone, David B. Thomas, Spilman, Thomas, Battle & Klostermeyer, Charleston, for appellees.

BROTHERTON, Justice:

This case involves an appeal by Art's Flower Shop from the March 14, 1989, order of the Circuit Court of Kanawha County which partially granted the post-trial motion of the defendants, the Chesapeake & Potomac Telephone Company and the Reuben H. Donnelley Corporation, for judgment notwithstanding the verdict. The court set aside a jury verdict granting Art's Flower Shop $50,245 in damages and ordered that a new trial be set.

Art's Flower Shop is a closely held corporation which owns and operates a flower and gift shop in Dunbar, West Virginia. Art's has advertised in the Yellow Pages since 1963, when the business was opened. On February 2, 1981, the plaintiff signed a new contract under which C & P Telephone Co. (C & P), upon the payment of a fee, promised to publish the plaintiff's advertisement in the annual issue of the Yellow Pages of the 1981 Nitro-St. Albans area telephone directory. The Reuben H. Donnelley Company (Donnelley) solicited and sold advertising space on behalf of C & P during the time in question. However, the 1981 directory did not contain the contracted-for advertisement. The plaintiff argues that he suffered immediate set-backs and showed a steep decline in business following the omission.

Thereafter, the plaintiff filed this action in the Circuit Court of Kanawha County alleging a breach of contract and that the contracted Yellow Pages advertisement was intentionally and deliberately left out of the telephone directory by Donnelley. 1 The plaintiff sought compensatory and punitive damages in the amount of $250,000 each. The defendants denied that the advertisement was deliberately omitted, stating that the omission was inadvertent, and also denied that the omission constituted a breach of their contractual duties.

As an affirmative defense, C & P and Donnelley asserted that their liability, if any, was limited to the amount equal to twice the cost of the advertisement, by virtue of the contract signed on February 12, 1973, and a second contract with the same liability terms signed in 1978. C & P also argues that the plaintiff is barred from collecting punitive damages since it did not ratify or affirm the conduct of its alleged agent.

At trial, two contracts were brought to the court's notice. The 1978 contract, which limited any liability to twice the amount of the cost of the advertisement, and a 1981 contract, which stated that "all other terms and conditions remain as previously signed." The Kanawha County Circuit Court ruled that the 1981 contract was a renewal of the prior contract signed in 1978, and the parties were bound by the terms and conditions contained in the 1978 contract. 2 After reviewing both contracts, the circuit court found that:

I think that the (1981 contract) by the language on its face, it is referring to prior writings and documents, because if you excluded all prior agreements and you tried to say this is just a contract in and of itself, I don't think that it gets there. Number one, it doesn't look like a contract, and it does not even say it is a contract, and it just refers to too many prior things, about change copy and no

Page 673

[186 W.Va. 616] change copy. And, so, I think a fair characterization of it, it is a renewal of a prior contract.

Thus, the circuit court read the 1978 contract in conjunction with the 1981 contract.

At the close of the plaintiff's evidence, the circuit court entered a directed verdict for the defendants. The circuit court noted that since there were no intervening contracts between 1978 and 1981, the 1981 contract contained the same terms limiting liability that were spelled out in the 1978 contract. The court also ruled that the evidence was insufficient to present the case to the jury for an award of punitive damages. The case was then submitted to the jury on the issue of compensatory damages, and the jury returned a verdict in the amount of $50,245. However, the defendant then moved for a judgment notwithstanding the verdict. The court granted the motion and ordered that a new trial be held because the compensatory damages should have been limited to twice the cost of advertisement, as stated in the 1978 contract.

The plaintiff below, now appellant, argues that first, it was error for the court to consider the 1978 contract to be part and parcel of the 1981 advertising contract. The appellant also maintains that even if the 1981 contract is read to contain, by reference to the 1978 contract, the limitation of liability clause, the contract was unconscionable and unenforceable as a matter of public policy.

The 1978 contract, including the liability clause, provides, in pertinent part:

[t]he undersigned applies for advertising as described herein, for a minimum of one issue, commencing with the 1978 issue, and for subsequent issues until terminated by either party as set forth below, and agrees to pay The Chesapeake and Potomac Telephone Company of West Virginia therefor at the rate of $62.70 Per Month, in advance and to be Bound by the Terms and Conditions Stated On the reverse side of this form.

* * * * * *

In the event of any error in or omission of the advertising for which application is hereby made, the Telephone Company will not be held liable for an amount exceeding the amount of the charge for...

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65 practice notes
  • State ex rel. Dunlap v. Berger, No. 30035.
    • United States
    • Supreme Court of West Virginia
    • June 13, 2002
    ...arbitration agreement exists between the parties. See Syllabus Points 1 and 2, Art's Flower Shop, Inc. v. C & P Telephone Co., 186 W.Va. 613, 413 S.E.2d 670 567 S.E.2d 272 (1991). Thus we review the circuit court's legal determinations de III. Discussion A. The central issue in this case is......
  • Adkins v. Labor Ready, Inc., No. Civ.A.2:00-0884.
    • United States
    • United States District Courts. 4th Circuit. Southern District of West Virginia
    • September 28, 2001
    ...weaker party had no meaningful, no real alternative, to the unfair terms." Art's Flower Shop, Inc. v. Chesapeake and Potomac Tel. Co., 186 W.Va. 613, 413 S.E.2d 670, 674 (1991) (quoting Restatement (Second) of Contracts 234 Page 637 d).11 The court can assume that often, a Labor Ready job a......
  • New v. Gamestop, Inc., No. 12–1371.
    • United States
    • Supreme Court of West Virginia
    • November 6, 2013
    ...terms in the contract.” ’ Syllabus Point 4, Art's Flower Shop, Inc. v. Chesapeake and Potomac Telephone Co. of West Virginia, Inc., 186 W.Va. 613, 413 S.E.2d 670 (1991).” Syl. Pt. 6, Brown v. Genesis Healthcare Corp., 229 W.Va. 382, 729 S.E.2d 217 (2012). 8. “ ‘A contract term is unenforcea......
  • Verizon West Virginia, Inc. v. West Virginia Bureau of Employment Programs, No. 30899.
    • United States
    • Supreme Court of West Virginia
    • July 9, 2003
    ..."an offer and an acceptance supported by consideration." Art's Flower Shop, Inc. v. Chesapeake & Potomac Tel. Co. of West Virginia, Inc., 186 W. Va. 613, 616-617, 413 S.E.2d 670, 673-674 (1991). See also City of El Centro v. United States, 922 F.2d 816, 820 (Fed. Cir.1990) (indicating an im......
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65 cases
  • United States ex rel. TBI Invs., Inc. v. BrooAlexa, LLC, Civil Action No. 2:14–cv–29074.
    • United States
    • United States District Courts. 4th Circuit. Southern District of West Virginia
    • August 10, 2015
    ...and the existence of unfair terms in the contract," Art's Flower Shop, Inc. v. Chesapeake & Potomac Tel. Co. of W. Va., 186 W.Va. 613, 413 S.E.2d 670, 671 (1991) ; see also Brown v. Genesis Healthcare Corp. (Brown II), 229 W.Va.382, 729 S.E.2d 217, 226 (2012) ( "Unconscionabil......
  • Adkins v. Labor Ready, Inc., No. Civ.A.2:00-0884.
    • United States
    • United States District Courts. 4th Circuit. Southern District of West Virginia
    • September 28, 2001
    ...party had no meaningful, no real alternative, to the unfair terms." Art's Flower Shop, Inc. v. Chesapeake and Potomac Tel. Co., 186 W.Va. 613, 413 S.E.2d 670, 674 (1991) (quoting Restatement (Second) of Contracts 234 Page 637 d).11 The court can assume that often, a Labor Ready job app......
  • Brown v. Genesis HealthCare Corp., Nos. 35494
    • United States
    • Supreme Court of West Virginia
    • June 29, 2011
    ...terms in the contract.’ ” Syllabus Point 4, Art's Flower Shop, Inc. v. Chesapeake and Potomac Telephone Co. of West Virginia, Inc., 186 W.Va. 613, 413 S.E.2d 670 (1991). 15. “Unconscionability is an equitable principle, and the determination of whether a contract or a provision therein is u......
  • Verizon West Virginia, Inc. v. West Virginia Bureau of Employment Programs, No. 30899.
    • United States
    • Supreme Court of West Virginia
    • July 9, 2003
    ...and an acceptance supported by consideration." Art's Flower Shop, Inc. v. Chesapeake & Potomac Tel. Co. of West Virginia, Inc., 186 W. Va. 613, 616-617, 413 S.E.2d 670, 673-674 (1991). See also City of El Centro v. United States, 922 F.2d 816, 820 (Fed. Cir.1990) (indicating an imp......
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