Davidian v. Pacific Tel. & Tel. Co.

• Decision Date: 31 March 1971
• Citation: 16 Cal.App.3d 750,94 Cal.Rptr. 337
• Court: California Court of Appeals Court of Appeals
• Parties: E. Jan DAVIDIAN, Plaintiff and Appellant, v. The PACIFIC TELEPHONE AND TELEGRAPH COMPANY, a corporation, Defendant and Respondent. Civ. 37120.

Page 337

94 Cal.Rptr. 337

16 Cal.App.3d 750

E. Jan DAVIDIAN, Plaintiff and Appellant, v. The PACIFIC TELEPHONE AND TELEGRAPH COMPANY, a corporation, Defendant and Respondent.

Civ. 37120.

Court of Appeal, Second District, Division 1, California.

March 31, 1971.

Thomas K. Haney, Santa Barbara, for plaintiff and appellant.

Pillsbury, Madison & Sutro, and Francis N. Marshall and Gary H. Anderson, San Francisco, for defendant and respondent.

WOOD, Presiding Justice.

This is an action by plaintiff dentist for damages for alleged negligence by defendant telephone company in omitting plaintiff's name (and other information) from the 'Yellow Pages' of the San Luis Obispo Telephone Directory, published in 1969. Plaintiff appeals from a judgment of dismissal entered after defendant's demurrer to his complaint was sustained without leave to amend.

Appellant contends that a tariff rule filed by defendant company with the Public Utilities Commission (referred to as Rule 17(B), Cal.P.U.C. No. 36--T), which was in effect when plaintiff contracted with defendant for the 'listing' of plaintiff's name (and other information) in the directory, did not limit the liability of defendant for damages for the alleged negligence.

The complaint alleged in substance: Defendant prints telephone directories which include a subscriber's name, occupation, specialty, address, and telephone number; and the directories are 'disseminated' to the general public. In August 1969 plaintiff and defendant entered into an oral contract whereby defendant agreed to publish, in the 'Yellow Pages' of a directory, the following information: plaintiff's name, under a column entitled, 'Dentists'; information that plaintiff's practice was limited to orthodontics; and information that plaintiff's office was located at 1495 Palm Street, in San Luis Obispo.

It was alleged further therein: Plaintiff agreed to pay the rate 'called for' by defendant, and plaintiff has performed every act required of him under the contract. In November 1969 defendant printed and distributed the directory, and negligently failed to include therein the aforementioned information regarding plaintiff. As a proximate result of said negligence, plaintiff lost customers and clients who otherwise would have contacted him for professional services by utilizing the yellow pages of the directory; plaintiff has no other means of advertising that he is a dentist in the practice of orthodontics in San Luis Obispo; and his loss 'in this regard' to the date of the complaint is $13,200. As a further proximate result of said negligence of defendant, plaintiff will sustain future loss of clients and business, and will lose an accumulation of clients which would have resulted from referrals from the clients who would have come to him through the advertisement in the yellow pages; and he will sustain damage in this regard in the amount of $50,000. Prior to the preparation of the directory, defendant could reasonably foresee that plaintiff would sustain damages as above alleged. (The prayer is for $63,200.00.)

Defendant demurred to the complaint on the ground that it failed to state facts sufficient to constitute a cause of action in that the allegations, when read with matters of judicial notice, failed to state a cause of action within the tariff limitation of liability rule that is part of every contract for telephone directory listing as a matter of law. The court sustained the demurrer without leave to amend, and entered judgment dismissing the complaint.

Appellant contends that the tariff rule did not limit the alleged liability of defendant.

The tariff rule (Rule 17(B) of Schedule Cal.P.U.C. No. 36--T) was submitted to the trial court, and it appears that the court judicially noticed it. (In his brief, appellant states that he 'concedes' that said Rule 17(B) was in effect when the contract was entered into and that its provisions were part of the contract.) Said Rule 17 provides, in part, as follows:

'17. TELEPHONE DIRECTORIES, LISTINGS AND NUMBERS

'* * *.LEP

'(B) Credit Allowance for Errors or Omissions in Directories

'The Company shall allow credit for errors or omissions in listings of its subscribers in the alphabetical and classified telephone directories in accordance with the following:

'1. Listing furnished without additional charge; In amount not in excess of the charge for the exchange service (excluding the charges for messages in excess of those included in the minimum monthly rate) during the effective life of the directory in which the error or omission is made.

'2. Listing furnished at additional charge in the alphabetical telephone directory: In amount not in excess of the charge for that listing during the effective life of the directory in which the error or omission is made.

'3. Listing furnished at additional charge in the classified telephone directory: In accordance with the provisions of Schedule Cal.P.U.C. No. 39--T, Classified Telephone Directory Advertising--Northern California and Schedule Cal.P.U.C. No. 40--T, Classified Telephone Directory Advertising--Southern California, as follows:

'In case of the omission of a part of or other error in an advertisement, the extent of the Company's credit allowance shall be a pro rata abatement of the charge in such a degree as the error or omission shall affect the entire advertisement which may amount to abatement of the entire charge and in case of the omission of an entire advertisement, the extent of the Company's credit allowance shall be an abatement of the entire charge.'

Section 761 of the Public Utilities Code provides that the Public Utilities Commission shall prescribe rules for the performance of any service or the furnishing of any commodity of the character furnished by any public utility, and, on proper demand and tender of rates, such public utility shall furnish such commodity or render such service within the time and upon the conditions provided in such rules.

It appears that in approving tariff rules with reference to limitation of liability of a telephone company, the commission has considered such limitation of liability in conjunction with the rates for service fixed by the commission. As said in Cole v. Pacific Tel. & Tel. Co., 112 Cal.App.2d 416, 419, 246 P.2d 686, 688, wherein a judgment of dismissal of plaintiff-subscriber's action for damages for alleged negligence by defendant-telephone-company in failing to include plaintiff's advertisement in a directory was affirmed: 'The theory underlying these decisions is that a public utility, being strictly regulated in all operations with considerable curtailment of its rights and privileges, shall likewise be regulated and limited as to its liabilities. In consideration of its being peculiarly the subject of state control, 'its liability is and should be defined and limited.' (Citation.) There is nothing harsh or inequitable in upholding such a limitation of liability when it is thus considered that the rates as fixed by the commission are established with the rule of limitation in mind. Reasonable rates are in part dependent upon such a rule.' ¹ Appellant states that in November 1965, the commission made a decision (referred to as Decision No. 69942, Ross v. Pacific Tel. & Tel. Co., 65 Cal.P.U.C. 103) which ordered the respondent telephone company to delete from its directory a statement relating to liability of respondent, and ordered changes in the provisions of 'Rule 17(B).' Appellant argues that by reason thereof, Rule 17(B) as presently constituted (rule hereinabove quoted) does not contain a disclaimer of liability for 'damages,' and it is not the exclusive remedy for a subscriber who is damaged as the result of negligent omissions from a directory.

The statement which respondent included in its directories prior to November 1965, and which was deleted after said Decision No. 69942, was as follows: 'The Company assumes no liability for damages arising from errors or omissions in the making up or printing of its directories.' (Appellant states in his brief that it is conceded that if such 'wording' had been in respondent's directory at the time (1969) of the contract in the instant case, then 'appellant would not have a cause of action.')

The change (as ordered by Decision No. 69942 in 1965) in the provisions of Rule 17(B) was in substance that the words 'credit allowance' were substituted in said provisions instead of the word 'liability.'

Appellant argues that by reason of such deletion from respondent's directory and such change in the provisions of Rule 17(B), there is no specific disclaimer of liability for damages for negligent omissions by respondent; and that if respondent expected to limit such liability, it should have been required to 'specify such limitation with clarity.'

In said Decision No. 69942 (65 Cal.P.U.C. 103) cited by appellant herein, the issue was whether Rule 17(B) was reasonable (p. 105), and the...