Indiana Const. Corp. v. Chicago Tribune Co.

• Decision Date: 02 December 1986
• Docket Number: Civ. No. F 85-248.
• Citation: 648 F. Supp. 1419
• Parties: INDIANA CONSTRUCTION CORP., Plaintiff, v. CHICAGO TRIBUNE COMPANY, Defendant.
• Court: U.S. District Court — Northern District of Indiana

648 F. Supp. 1419

INDIANA CONSTRUCTION CORP., Plaintiff, v. CHICAGO TRIBUNE COMPANY, Defendant.

Civ. No. F 85-248.

United States District Court, N.D. Indiana, Fort Wayne Division.

December 2, 1986.

Jon Bomberger, Baker, Daniels & Shoaff, Fort Wayne, Ind., for plaintiff.

William F. McNagny, James P. Fenton and Bert J. Dahm, Barrett & McNagny, Fort Wayne, Ind., and Lynn R. Jordan, Tribune Co., Chicago, Ill., for defendant.

ORDER

WILLIAM C. LEE, District Judge.

This matter is before the court on defendant Chicago Tribune Company's (Tribune's) motion for summary judgment. Plaintiff Indiana Construction Corporation (Indiana Construction) brought this action under negligence and implied contract theories. Both parties have thoroughly briefed their respective positions. For the following reasons, the Tribune's motion is granted.

SUMMARY JUDGMENT

Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R. Civ.P. 56(c). The plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery, against a party "who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and in which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, ___ U.S. ___, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986). Thus, summary judgment serves as a vehicle with which the court "can determine whether further exploration of the facts is necessary." Hahn v. Sargent, 523 F.2d 461, 464 (1st Cir.1975).

In making this determination, the court must keep in mind that the entry of summary judgment terminates the litigation, or an aspect thereof, and must draw all inferences from the established or asserted facts in favor of the non-moving party. Munson v. Friske, 754 F.2d 683, 690 (7th Cir.1985). The non-moving party's reasonable allegations are to be accepted as true for purposes of summary judgment. Yorger v. Pittsburgh Corning Corp., 733 F.2d 1215, 1218-19 (7th Cir.1984). A party may not rest on the mere allegations of the pleadings or the bare contention that an issue of fact exists. Posey v. Skyline Corp., 702 F.2d 102, 105 (7th Cir.), cert. denied, 464 U.S. 960, 104 S.Ct. 392, 78 L.Ed.2d 336 (1983). See Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). See also Atchison, Topeka & Santa Fe Railway Co. v. United Transportation Union, 734 F.2d 317 (7th Cir.1984); Korf v. Ball State University, 726 F.2d 1222 (7th Cir.1984). See generally C. Wright, Law of Federal Courts, § 99 (4th ed. 1983); 6 Moore's Federal Practice, § 56.15 (2d ed. 1984).

Thus, the moving party must demonstrate the absence of a genuine issue of material fact. Even if there are some disputed facts, where the undisputed facts are the material facts involved and those facts show one party is entitled to judgment as a matter of law, summary judgment is appropriate. Egger v. Phillips, 710 F.2d 292, 296-97 (7th Cir.1983); Collins v. American Optometric Assn., 693 F.2d 636, 639 (7th Cir.1982). See also Bishop v. Wood, 426 U.S. 341, 348 n. 11, 96 S.Ct. 2074, 2079 n. 11, 48 L.Ed.2d 684 (1976).

FACTUAL BACKGROUND

Viewed in Indiana Construction's favor, the facts are as follows. Indiana Construction is a general contracting corporation located in Fort Wayne, Indiana. The Tribune is located in Chicago, Illinois, and publishes a general circulation newspaper known as the Chicago Tribune (newspaper).

Some time prior to May, 1984, the City of Plano, Illinois (Plano) sought bids for a wastewater sewage treatment plant. To qualify for federal funding, Plano required prospective bidders to submit proof of a published legal notice announcing subcontracting opportunities for all "Qualified small, minority and women's businesses." Plano required that the legal notices be published fifteen days prior to the bid opening, scheduled for May 30, 1984.

On May 8, 1984, Indiana Construction sent the Tribune a letter by certified mail with return receipt requested. The letter set out a legal notice which was to be placed in the paper's classified advertising section "as soon as possible" for three consecutive days. The letter also required that the legal notice be published at Indiana Construction's expense.

The advertisement was mailed to a United States post office box number provided by the newspaper and known as the "Lockbox." On May 11, 1984, the return receipt was signed by one of the Tribune's mailroom clerks, Robert J. Urycki. Urycki's duties included picking up mail, signing receipts for certified mail, and returning the mail (by truck) to Tribune's mailroom.

The legal notice was never published. No one knows what happened to the envelope containing the letter after the return receipt was signed by Urycki. Indiana Construction never contacted the Tribune to see if its legal notice had been published. Indiana Construction never contacted the Tribune to see why the requested certified copies of the ad had never been sent. On one prior occasion Indiana Construction had a similar legal notice published after following the same procedure.

On May 30, 1984, Plano opened the bids; Indiana Construction's bid of $3,451,500 was the lowest. Indiana Construction's bid was disqualified by Plano because the legal notice had not been published. Upon rebid, Indiana Construction's bid was not the lowest and it was not awarded the contract. It now seeks $250,000 for lost profits.

PLAINTIFF'S CLAIMS

I. Negligence

Indiana Construction claims that the Tribune was negligent because it failed to publish the legal notice or because it did not notify Indiana Construction of its decision not to publish the legal notice. This assumes that the Tribune had a duty; in essence, a duty not to lose the envelope containing the legal notice.

Absent some duty, negligence cannot exist. State v. Flanigan, 489 N.E.2d 1216, 1217 (Ind.App.1986); Alm v. Van Nostrand Reinhold Co., Inc., 134 Ill.App.3d 716, 89 Ill.Dec. 520, 522, 480 N.E.2d 1263, 1265 (1985).¹ While summary judgment is rarely appropriate in negligence actions, Gracyalny v. Westinghouse Elec. Corp., 723 F.2d 1311, 1316 (7th Cir.1983); Ember v. B.F.D., Inc., 490 N.E.2d 764, 768 (Ind.App. 1986), it is appropriate if no duty exists. Whether a duty exists is a question of law for the court to decide. Flanigan, 489 N.E.2d at 1217; Wimmer v. Koenigseder, 108 Ill.2d 435, 92 Ill.Dec. 233, 236, 484 N.E.2d 1088, 1091 (1985). The court will thus turn to the question of whether the Tribune has any duty.

Whether newspapers have a duty "not to lose" an advertisement, or more particularly a legal notice, is apparently an undecided question. The court holds that a private newspaper does not have a duty "not to lose" an advertisement. A newspaper like the Tribune cannot be held liable in negligence because it loses an advertisement, the loss of which causes pecuniary harm. That the law does not recognize such a duty can be seen by examining cases which define the parameters of a private newspaper's duties.²

Newspapers have been held negligent for advertising mistakes. Meridian Star v. Kay, 207 Miss. 78, 41 So.2d 30 (1949). See also Annotation, Mistake in Advertisement, 10 A.L.R.2d 686 (1950). But see Kings Creations L.T.D. v. Conde Nast Publications, Inc., 34 A.D.2d 935, 311 N.Y. S.2d 757 (1970) (mistake in advertising does not establish cause of action in negligence). In Meridian Star, as in all the "mistake" cases, the advertiser had run an ad containing a mistake. The Tribune had not run Indiana Construction's notice. There was no mistake in advertising. Mistake cases are distinguishable in that the advertiser has undertaken some responsibility in printing the ad and can reasonably be expected to print what is supplied.³ Mistake cases do not suggest that a newspaper has any exposure to negligence liability for simply losing an ad.

Newspapers may also be held liable when an advertisement is libelous, Pettengill v. Booth Newspapers, Inc., 88 Mich. App. 587, 278 N.W.2d 682 (1979), or when it invades a person's privacy rights. Barr v. Southern Bell Tel. & Tel. Co., 13 N.C.App. 388, 185 S.E.2d 714 (1972). See also 58 Am.Jur.2d, Newspapers, Periodicals, Etc., § 22 (1971). These cases rely on the peculiar principles of libel law and privacy rights. Like the "mistake" cases, these cases do not suggest that a private newspaper may have a duty not to lose an advertisement.

It has universally been held that private newspapers may reject an advertisement, even where the advertisement is proper and the fee has been paid. See Annotation, Advertisement—Publisher's Refusal, 18 A.L.R.3d 1286, 1287 (1968), and cases cited therein. In the absence of a contractual obligation a newspaper may refuse to print an advertisement, even if the refusal is the result of mere caprice, prejudice, or malice. Poughkeepsie Buying Service v. Poughkeepsie Newspapers, 205 Misc. 982, 131 N.Y.S.2d 515 (1954). This rule is based in part on a newspaper's first amendment right to choose what it does and does not print. Miami Herald Publishing Co. v. Tornillo, 418 U.S. 241, 94 S.Ct. 2831, 41 L.Ed.2d 730 (1974). This rule is applicable to legal notices. Lake County v. Lake County Publishing and Printing Co., 280 Ill. 243, 117 N.E. 452 (1917).

This line of cases makes it clear that a private newspaper may reject an ad which it does not want to print.⁴ While rejection implies a conscious refusal, the cases even extend to capricious "rejection," Poughkeepsie, supra, thereby reducing the role of reason. The extent of the right to reject suggests that a newspaper which loses an ad cannot be held to have breached any duty.

But there is a more fundamental reason for holding that the law does not recognize a duty "not to lose." A duty "not to...