Iwen v. U.S. West Direct, a Div. of U.S. West Marketing Resources Group, Inc.
| Citation | 1999 MT 63,293 Mont. 512,977 P.2d 989 |
| Decision Date | 01 April 1999 |
| Docket Number | No. 98-064,98-064 |
| Parties | John F. IWEN, Plaintiff and Appellant, v. U.S. WEST DIRECT, a DIVISION OF U.S. WEST MARKETING RESOURCES GROUP, INC., and Kim Holzer, its Agent, Servant, and Employee, Defendants and Respondents. |
| Court | United States State Supreme Court of Montana |
Timothy J. McKittrick, McKittrick Law Firm, P.C.; Great Falls, Montana, For Appellant.
Sarah M. Power; Gough, Shanahan, Johnson & Waterman; Helena, Montana, For Respondents.
¶1 John Iwen brought this action against U.S. West Direct in the District Court for the Eighth Judicial District, Cascade County, to recover damages for a negligently constructed yellow page advertisement, infliction of emotional distress, and punitive damages. U.S. West Direct failed to answer Iwen's complaint and a default was entered. Prior to a hearing regarding a judgment on the default, U.S. West Direct moved to set aside the default. The District Court granted the motion and U.S. West Direct moved to stay litigation and compel arbitration. By an order dated January 21, 1998, the District Court granted U.S. West Direct's motion. Iwen appeals from that order. We reverse.
¶2 The issue presented on appeal is whether the District Court erred when it concluded that the arbitration provision in U.S. West Direct's directory advertising order is valid and enforceable and, therefore, whether Iwen is compelled to arbitrate his dispute with U.S. West Direct.
¶3 John Iwen is a licensed practicing attorney in Great Falls, Montana. On June 9, 1995, Iwen called U.S. West Direct to obtain an 800 telephone number and a new office telephone number to closely parallel the 800 number. These new telephone numbers were to be effective July 14, 1995. Iwen sent letters on July 10, 1995, in which he advised his clients, some attorneys, and judges of his new telephone numbers. He also ordered new business cards and stationary printed with the new telephone numbers.
¶4 On July 5 or 6, 1995, Iwen met with Kim Holzer, a sales representative for U.S. West Direct, to arrange advertisement of his law practice and new telephone numbers in the U.S. West Direct yellow page directory. At that meeting, Iwen discussed with Holzer the size, content, and price of the yellow page advertisement. Holzer thereafter drafted a proof of the advertisement for Iwen to review.
¶5 In July 28, 1995, Iwen received a proof of the yellow page advertisement from Holzer which contained his new telephone numbers. Upon review of the proof, Iwen determined that he was not satisfied with the advertisement. On the same day, Iwen attempted to contact Holzer but found that she was unavailable. Iwen was then directed to a different sales representative whom he advised that he did not want the advertisement and instructed the sales representative to use the same advertisement he had used in the prior year's(1994-1995) U.S. West Direct yellow page directory, but to update it by adding his new office telephone numbers. Later that day, Iwen spoke to Holzer and gave her the same information he gave to the other sales representative. To assure that there was no mistake, Iwen wrote a letter dated July 28, 1995, which set forth the information he had conveyed verbally to Holzer and the other sales representative.
¶6 In early August 1995, Iwen received an unsolicited postcard dated August 4, 1995, from Kelly Frankenfeld, customer relations manager for U.S. West Direct, which requested Iwen's opinions regarding the service provided by Holzer. Iwen responded that Holzer's service and ideas for improving the advertisement were worse than expected. He also complained that Holzer's follow-up was poor and that he was rushed by Holzer.
¶7 As soon as the new U.S. West Direct yellow page directory was published and delivered to customers, Iwen noticed that his yellow page advertisement was incomplete because his 800 telephone number was missing. He also noticed that his residence address and home telephone number was deleted from the white pages. Iwen wrote a letter dated October 6, 1995, to Kelly Frankenfeld regarding these errors but received no response.
¶8 Iwen received a bill dated October 1, 1995, from U.S. West Communications, the billing agent for U.S. West Direct, which was to be paid by October 23, 1995. Upon receipt of that bill, Iwen wrote a letter dated October 16, 1995, to U.S. West Communications which advised that he was not going to pay that bill until an agreement was reached with U.S. West Direct regarding the negligently constructed advertisement in the yellow pages and deletion of his white page telephone number and residence address.
¶9 In November 1996, Iwen received another bill from U.S. West for the months of October and November. In letters to U.S. West Communications and U.S. West Direct dated November 10, 1995, Iwen again advised that he was not going to pay the bill until an agreement was reached regarding his yellow page advertisement and the white page listing.
¶10 On November 30, 1995, Iwen received a disconnect notice from U.S. West Communications. Iwen immediately called U.S. West Communications and advised them of the dispute he had concerning the yellow page advertisement and white page listing. The person to whom Iwen spoke advised him that U.S. West Direct and U.S. West Communications are two separate entities. She advised Iwen to pay the sum of $545.11, the sum allegedly owed to U.S. West Communications. To prevent U.S. West Communications from disconnecting the phone service to his law firm, Iwen wrote a letter to U.S. West Communications on November 30, 1995, and enclosed a check in the amount of $545.11. Iwen sent a copy of that letter to Frankenfeld and Holzer. Iwen refused to pay the bill for the negligently constructed yellow page advertisement.
¶11 On January 3, 1996, Iwen spoke to Charlene Garberson, a customer service associate for U.S. West Direct, about the faulty yellow page advertisement and the white page deletion. Garberson wrote a letter to Iwen on January 3, 1996, which Iwen received several weeks later on January 24, 1996, concerning the conversation. Garberson acknowledged that the yellow page advertisement was faulty and apologized on behalf of U.S. West Direct. She also stated:
¶12 On January 30, 1996, Iwen received another disconnect notice which stated that his phone service was going to be shut down for nonpayment of his bill to U.S. West Communications and U.S. West Direct. The disconnect notice advised Iwen that the total amount was due two days later, February 1, 1996. Once again, Iwen wrote letters to U.S. West Communications and U.S. West Direct, dated January 31, 1996, complaining of the treatment he received and enclosed a check in the amount of $225.94 payable to U.S. West Communications. Iwen still refused to pay the U.S. West Direct bill for the faulty yellow page advertisement.
¶13 On February 20, 1996, Iwen's attorney received a letter from Garberson dated February 6, 1996, apologizing for the mistakes made and offering to settle the matter. The very next day, Iwen received a final collection notice from U.S. West Communications, the billing agent for U.S. West Direct. The notice demanded that Iwen pay for the erroneously constructed U.S. West Direct yellow page advertisement and threatened to deny Iwen credit for future advertising if he did not pay in full. The notice further threatened to demand a deposit for full payment for future advertising in advance, refer nonpayment information to major credit reporting agencies, refer Iwen to an outside collection agency, and not allow Iwen to advertise in the yellow pages at all if he did not make the payment in full.
¶14 On March 21, 1996, Iwen filed suit against U.S. West Direct for damages for negligent construction of the yellow page advertisement, infliction of emotional distress, and for punitive damages. On June 3, 1997, Iwen received a notice that U.S. West Direct's billing agent, U.S. West Communications, turned him over to the Credit Bureau of Missoula for collection of a debt in the amount of $1,779.38 for failing to pay for the yellow page advertisement.
¶15 U.S. West Direct moved to stay litigation and compel arbitration pursuant to the arbitration clause in the directory advertising order; the contract Iwen entered into with U.S. West Direct for the yellow page advertisement. Iwen resisted the motion by arguing that the arbitration provision in the directory advertising order was invalid. By order dated January 21, 1998, the District Court ruled that the arbitration provision is valid and granted U.S. West Direct's motion to stay litigation and compel arbitration.
¶16 The issue presented on appeal is whether the District Court erred when it concluded that the arbitration provision in U.S. West Direct's directory advertising order is valid and enforceable and, therefore, whether Iwen is compelled to arbitrate his dispute with U.S. West Direct.
¶17 A district court's order compelling arbitration is subject to de novo review. See Zolezzi v. Dean Witter Reynolds, Inc. (9th Cir.1986), 789 F.2d 1447. As we stated in Ratchye v. Lucas, 1998 MT 87, 288 Mont. 345, 957 P.2d 1128, we review a district court's conclusion of law regarding arbitrability to determine whether it is correct.
¶18 Without filing a motion to dismiss, U.S. West Direct has raised the issue of whether this Court has jurisdiction to hear this appeal. We have recently addressed the issue of the appealability of orders to arbitrate within the context of the Federal Arbitration Act and concluded that an order compelling arbitration is final and appealable. See Larsen v. Opie (1989), 237 Mont. 108, 110, 771 P.2d 977,...
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