Khulusi v. Southwestern Bell Yellow Pages, Inc., WD

• Decision Date: 28 November 1995
• Docket Number: No. WD,WD
• Citation: 916 S.W.2d 227
• Parties: Bassam KHULUSI, M.D., and Metcalf Medical Group, Inc., Appellants, v. SOUTHWESTERN BELL YELLOW PAGES, INC., Respondent. 50429.
• Court: Missouri Court of Appeals

Page 227

916 S.W.2d 227

Bassam KHULUSI, M.D., and Metcalf Medical Group, Inc., Appellants, v. SOUTHWESTERN BELL YELLOW PAGES, INC., Respondent.

No. WD 50429.

Missouri Court of Appeals,

Western District.

Nov. 28, 1995.

Motion for Rehearing and/or Transfer to

Supreme Court Denied Jan. 30, 1996.

Application to Transfer Denied

March 26, 1996.

Jeremiah D. Finnegan, Finnegan, Conrad & Peterson and Thomas B. Sullivan, III, Sullivan & Williams, Kansas City, for appellants.

Lawrence A. Rouse, Phillip G. Greenfield, and Melissa C. Hinton, Rouse, Hendricks, German, May & Shank, P.C., Kansas City, for respondent.

Before BERREY, P.J., and ULRICH and ELLIS, JJ.

ULRICH, Judge.

Bassam Khulusi, M.D., appeals the trial court's grant of summary judgment to Southwestern Bell Yellow Pages, Inc. (SWBYPS) on Count IX of his petition for intentional tort, Count IV--negligence, and on Counts IV and V on grounds that SWBYPS is not a public utility. Dr. Khulusi also claims error in the trial court's dismissal of count II--interference with business relationships, for failure to state a claim upon which relief could be granted. ¹

The judgment is affirmed.

In 1986, Bassam Khulusi and Metcalf Medical Group, Inc., of which Dr. Khulusi is the sole shareholder, contracted with SWBYPS to place certain listings and advertisements in the 1986-1987 Greater Kansas City Yellow Pages (Yellow Pages) under listings entitled Physicians and Surgeons and Weight Control Services. Dr. Zaremski, a physician who rented office space from Dr. Khulusi, also separately contracted with SWBYPS for a listing at the same address and telephone number. Both these arrangements were conducted by Laura Khulusi, the authorized representative of both Dr. Khulusi and Dr. Zaremski. She arranged for SWBYPS to bill Dr. Zaremski separately for his listing.

In 1987 Appellants contracted with SWBYPS to re-publish in the 1987-88 Yellow Pages the same listings and advertisements that appeared in the 1986-87 Yellow Pages. At the same time, Dr. Zaremski also contracted to have his 86-87 Yellow Pages listing re-published in the 1987-88 Yellow Pages. Both contracts were signed by Laura Khulusi. Both listings were under the account designation N0094066 with suffixes of 00 and 01 for Dr. Khulusi and Dr. Zaremski, respectively.

On September 23, 1987, Richard Kruckemeyer, sales representative of SWBYPS, contacted Dr. Khulusi by telephone in an effort to speak to Dr. Zaremski. The purpose of the call was to notify Dr. Zaremski that due to non-payment of his charges for the 1986-87 Yellow Pages, his listing for the 1987-88 Yellow Pages was at risk of being excluded. His account was sufficiently past due that SWBYPS had "written it off." Mr. Kruckemeyer assured Dr. Khulusi that his account was current and only Zaremski's listings were in jeopardy. The next day Dr. Zaremski paid the outstanding balance on his account in person at SWBYPS Kansas City office. Mr. Kruckemeyer, then sent the payment along with an "unlock" request to the St. Louis office. SWBYPS policy provides that unlocking an account permits publishing in the directory.

SWBYPS St. Louis office rejected the unlock request for failure to receive thirty-five percent advance payment, the sum of $169.05, on the contract. SWBYPS policy requires advertisers to pay in full any delinquent balances before new advertisement will be published. Additionally, if the amount past due has been written off, an additional thirty-five percent advance is required for future advertisements.

Mr. Kruckemeyer was notified that the request to unlock had been rejected on October 2, 1987. He then tried to resubmit the unlock request without the advance payment. On October 6, 1987, St. Louis office rejected the request again. Neither Dr. Khulusi nor Dr. Zaremski were contacted until October 7, 1987, when Dr. Khulusi was told that if the additional payment was not received, Dr. Zaremski's advertising would not appear in the 1987-88 Yellow Pages. Dr. Khulusi then wrote a Metcalf Medical Group check for the $169.05 payment and mailed it that day to the Kansas City Office. The likeness of the check was faxed from the Kansas City office to St. Louis on October 9, 1987, as proof that the check had been received by the SWBYPS Kansas City office. The St. Louis office claims it did not receive the check until October 13, 1987, three days after the "unload date." The unload date is the last date upon which advertisements can be released for inclusion in the next Yellow Pages edition.

No one from the SWBYPS thereafter contacted either doctor to inform them that the advertisements had been excluded. Not until Dr. Khulusi received his copy of the 1987-88 Kansas City Yellow Pages did he discover that neither Dr. Zaremski's listing nor his own was included.

Upon inquiry, Dr. Khulusi learned that the listings were excluded for failure to receive the advance payment by the unload date of October 10, 1987. The SWBYPS complaint department determined that the sales department was responsible for the error and offered a return equal to one hundred percent of the contract price. This was consistent with the Disclaimer of Warranties and Limitation of Liability provision contained in the contract between the parties.

Appellants' amended petition contained nine counts against SWBYPS. Counts II, VII, and VIII were dismissed by the trial court. SWBYPS then moved for summary judgment on the remaining six counts which alleged breach of contract, prima facie tort, undue discrimination, inadequate service, negligence and intentional tort. The trial court granted summary judgment to all counts except count IX which pleaded intentional tort. However, SWBYPS's oral motion to reconsider the order granting summary judgment resulted in the trial court granting reconsideration and ordering summary judgment on all counts in favor of SWBYPS.

I. Summary Judgment

A. Intentional Tort Theory

Dr. Khulusi claims in his first point on appeal that the trial court erred in granting summary judgment as to Count IX--Intentional Tort, in that the limitation of liability provision in the contract is inapplicable to damages suffered as a result of willful and wanton conduct.

Summary judgment is proper if there are no genuine issues of material fact and movant is entitled to judgment as a matter of law. Rule 74.04(c)(3). In considering appeals from summary judgment, appellate courts review the record in the light most favorable to the party against whom judgment was granted. ITT Commercial Finance Corp. v. Mid-America Marine Supply Corp., 854 S.W.2d 371, 376 (Mo. banc.1993). Review is de novo, testing the propriety of summary judgment as the trial court would. Id.

The courts of this state have never recognized a mere breach of contract as providing a basis for tort liability. American Mortg. Inv. Co. v. Hardin-Stockton Corp., 671 S.W.2d 283, 293 (Mo.App.1984). The act, not the breach gives rise to tort liability. Id. Thus, if the act done independent of the contract would result in a tort, it will continue to do so. See Engman v. Southwestern Bell Telephone Co., 591 S.W.2d 78 (Mo.App.1979) (Invasion of privacy is an intentional tort and tariff will not bar action). The contrary does not hold true. If absent a contract the act would not be a tort, the mere breach of an agreement will not create one. Here, SWBYPS's duty arose from the contract. ² The omission of Dr. Khulusi's ad in the 1987-88 Yellow Pages would not have been a tort had the contractual relationship not existed. SWBYPS owed no duty to Dr. Khulusi external to the contract.

A limitation of liability provision within a contract is effective if defendant's conduct is negligent but is ineffective for willful and wanton conduct. Warner v. Southwestern Bell Telephone Co., 428 S.W.2d 596, 603 (Mo.1968). Willful and wanton conduct means an intentional act. Engman v. Southwestern Bell Telephone Co., 591 S.W.2d 78, 81 (Mo.App.1979). A contractual limitation will not protect from acts which are intentional torts. Tobler's Flowers, Inc. v. Southwestern Bell Tel. Co., 632 S.W.2d 15, 17 (Mo.App.1982). The question then becomes whether omission of Dr. Khulusi's advertisement from the 87-88 Yellow Pages was an intentional tort or negligent omission.

Intentionally implies that an act done was not a mere accident. Sanders v. Daniel International Corp., 682 S.W.2d 803, 813 (Mo. banc.1984). Intent to cause injury is an intent to cause harm to plaintiff not merely an intent to do the act purportedly resulting in the claimed injury. Gary Surdyke Yamaha, Inc. v. Donelson, 743 S.W.2d 522, 525 (Mo.App.1987).

In this case, omission of Dr. Khulusi's listing and advertisement was due to the negligence of the SWBYPS in not entering payment into the computer system in time to meet the unload date. No evidence of ill will toward Dr. Khulusi or evidence to suggest SWBYPS intended to cause injury was offered in response to the motion for summary judgment. The omission was intentional only in that the advertisement was omitted from the 1987-88 Yellow Pages purposefully due to company policy regarding payment before the unload date. The payment however, was not recorded as received because of SWBYPS's negligence.

B. Negligence Theory

Dr. Khulusi next claims that granting summary judgment as to Count IV--Negligence was error in that the contractual limitation of liability provision was not applicable because SWBYPS had breached the contract first. The alleged breach is based on the SWBYPS requirement of an advance payment when an account is delinquent and has been written off. This argument is now raised on appeal for the first time. Such argument will not be permitted when raised on appeal for the first time, thereby denying the trial court the opportunity to address the claimed error. Cline v. Graves, 641 S.W.2d 151 (Mo.App.1982).

Point I is denied.

II. Motion to Dismiss Count II--Interference with Business

relationships

Dr. Khulusi asserts as his...