Pigman v. Ameritech Pub., Inc.

• Court: Indiana Appellate Court
• Writing for the Court: NAJAM
• Citation: Pigman v. Ameritech Pub., Inc., 641 N.E.2d 1026 (Ind. App. 1994)
• Decision Date: 24 October 1994
• Docket Number: No. 82A01-9311-CV-364,82A01-9311-CV-364
• Parties: Robert J. PIGMAN, Appellant-Plaintiff, v. AMERITECH PUBLISHING, INC. and Indiana Bell Telephone Company, Incorporated, Appellees-Defendants.

Page 1026

641 N.E.2d 1026

Robert J. PIGMAN, Appellant-Plaintiff, v. AMERITECH PUBLISHING, INC. and Indiana Bell Telephone Company, Incorporated, Appellees-Defendants.

No. 82A01-9311-CV-364.

Court of Appeals of Indiana First District.

Oct. 24, 1994.

Theodore Lockyear, James A. Kornblum, Lockyear & Kornblum, Evansville, for appellant.

F. Wesley Bowers, David E. Gray, Bowers, Harrison, Kent & Miller, Evansville, for appellees.

OPINION

NAJAM, Judge.

STATEMENT OF THE CASE

Robert J. Pigman brings this interlocutory appeal from the trial court's order granting partial summary judgment in favor of Ameritech Publishing, Inc. ("API"). ¹ Pigman filed an action for damages against API and Indiana Bell Telephone Company, Incorporated ("Indiana Bell"), both wholly owned subsidiaries of Ameritech, Inc., and alleged that they had wrongfully omitted his advertising listing both as a member of his law firm and as an individual attorney from the 1992 Evansville Metropolitan Area White/Yellow Ameritech PagesPlus Telephone Directory ("Yellow Pages"). API filed a motion for partial summary judgment and asserted that its liability was limited under the contract with Pigman's employer, who had subscribed for advertising in the Yellow Pages on his behalf. The trial court then granted API's motion based on the limitation of liability clause in the advertising contract.

We reverse and remand. ²

ISSUES

Pigman raises three issues for our review. Because we conclude that one issue is dispositive, we address only the following question: whether an exculpatory clause contained in API's Yellow Pages advertising contract is unconscionable and void as against public policy as a matter of law.

FACTS

While soliciting advertising orders for the 1992-93 Yellow Pages, an API representative contacted Sheila Corcoran, a partner in the law firm of Berger & Berger, to discuss and finalize the firm's advertising listing for that year. Acting on behalf of both the law firm and Pigman, who was then an associate with Berger & Berger, Corcoran met with the API representative on August 7, 1991, and placed an order for advertising in the 1992 Yellow Pages. Corcoran ordered a display ad for the law firm and an individual advertising listing for each attorney in the firm, including Pigman.

Following that meeting, Corcoran spoke with the API representative over the telephone, and on August 27, 1991, the representative mailed Corcoran a copy of the Advertising Order for Berger & Berger's 1992-93 Yellow Pages ad. The Advertising Order is a standard form prepared by API which lists the customer's request for advertising. Corcoran did not sign the Advertising Order and made no changes to the firm's ad as it appeared on the order form. Berger & Berger then paid the full subscription price required under the contract. When the 1992-93 Yellow Pages directory was published, Pigman discovered that he did not have an individual listing and had been omitted altogether from the firm's advertisement.

Pigman filed his complaint for damages with the Vanderburgh Circuit Court on September 28, 1992. API then filed its motion for partial summary judgment and alleged that any damages to which Pigman may be entitled were limited to the amount set forth in a clause of the Advertising Order designated "PUBLISHER'S LIABILITY." After a hearing on API's motion, the trial court entered an order granting partial summary judgment in favor of API. Shortly thereafter, Pigman filed his motion for certification of interlocutory appeal, and the trial court granted his motion.

API then filed a motion to amend the trial court's order and requested that the court "specify the facts that appear without substantial controversy," in accordance with Trial Rule 56(D). Record at 274. On November 19, 1993, the court entered its amended order, which provides in pertinent part:

THIS CAUSE came to be heard on the Motion of Defendant, Ameritech Publishing, Inc. ("API"), for Partial Summary Judgment pursuant to Trial Rule 56, Indiana Rules of Procedure, and the Court having considered the pleadings in the action, the memorandum submitted, and having heard the oral statements of counsel, concludes that Defendant is entitled to partial summary judgment as a matter of law, and the Court further specifies the following facts that appear without substantial controversy:

1. Plaintiff, Robert J. Pigman ("Pigman"), at all relevant times was an Attorney-at-Law and associate with the law firm of Berger & Berger, in Evansville, Indiana.

2. Defendant, API, is a Delaware corporation engaged in the publishing and distribution of the 1992 Evansville Metropolitan Area White/Yellow Pages Ameritech PagesPlus Telephone Directory (the "Directory").

3. On behalf of Pigman and for itself, and acting through its agent, Sheila M. Corcoran, Berger & Berger contracted with API for the placement of an advertisement in the 1992 Directory by virtue of a "Directory Advertising Order."

4. The Directory Advertising Order placed the Berger & Berger advertisement in the 1992 Directory for a monthly fee (specifically One Thousand One Hundred Eighty Dollars Fifty Cents ($1,180.50) per month).

5. The back page of the contract contains the terms which govern the rights and duties of the parties.

6. The paragraph entitled PUBLISHER'S LIABILITY states:

IF PUBLISHER SHOULD BE FOUND LIABLE FOR LOSS OR DAMAGE DUE TO A FAILURE ON THE PART OF PUBLISHER OR ITS DIRECTORY, IN ANY RESPECT, REGARDLESS OF WHETHER CUSTOMER'S CLAIM IS BASED ON CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE, THE LIABILITY SHALL BE LIMITED

TO AN AMOUNT EQUAL TO THE CONTRACT PRICE FOR THE DISPUTED ADVERTISEMENTS, OR THAT SUM OF MONEY ACTUALLY PAID BY CUSTOMER TOWARD THE DISPUTED ADVERTISEMENTS, WHICHEVER SUM SHALL BE LESS, AS LIQUIDATED DAMAGES AND NOT AS A PENALTY, AND THIS LIABILITY SHALL BE EXCLUSIVE. IN NO EVENT SHALL PUBLISHER BE LIABLE FOR ANY LOSS OF CUSTOMER'S BUSINESS, REVENUES, PROFITS, THE COST TO CUSTOMER OF OTHER ADVERTISEMENTS OR ANY OTHER SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES OF ANY NATURE, OR FOR ANY CLAIM AGAINST CUSTOMER BY ANY THIRD PARTY.

7. The Directory Advertising Order was sent to Sheila Corcoran, as agent for Berger & Berger and Pigman, on or about August 27, 1991.

8. Ms. Corcoran is a partner in the law firm of Berger & Berger.

9. Berger & Berger has paid in full the amounts due under the Directory Advertising Order.

10. The Court further finds that the damages to which the Plaintiff may be entitled at the trial of this cause are limited to as set forth under PUBLISHER'S LIABILITY as hereinabove stated.

AND IT IS HEREBY ORDERED that Defendant's Motion for Partial Summary Judgment is in all respects granted; and it is

FURTHER ORDERED AND ADJUDGED that Ameritech Publishing, Inc.'s liability is limited to an amount equal to the contract price for the disputed advertisements, or the sum of money actually paid toward the disputed advertisements, whichever sum shall be less.

Record at 279-81. Pigman then filed his petition for interlocutory appeal with this court, which we accepted. We will state additional facts where necessary.

DISCUSSION AND DECISION

Standard of Review

When reviewing a ruling on a motion for summary judgment, we conduct the same inquiry followed by the trial court. Selleck v. Westfield Insurance Co. (1993), Ind.App., 617 N.E.2d 968, 970, trans. denied. The party seeking summary judgment bears the burden of establishing the propriety of the motion. Gaboury v. Ireland Road Grace Brethren, Inc. (1983), Ind., 446 N.E.2d 1310, 1313. Summary judgment is appropriate only if the designated evidentiary matter shows that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Ind. Trial Rule 56(C). All facts and inferences from the designated evidentiary matter must be liberally construed in favor of the nonmoving party. Selleck, 617 N.E.2d at 970. We will affirm summary judgment on any legal theory which is consistent with the designated evidence in the record. See Valley Federal Sav. Bank v. Anderson (1993), Ind.App., 612 N.E.2d 1099, 1102.

Exculpatory Clauses

Pigman contends the exculpatory clause in API's advertising contract is unconscionable and should be held void as against public policy. Our courts have previously addressed whether exculpatory clauses in general are against public policy. However, the enforceability of such clauses in a contract for Yellow Pages advertising is a question of first impression in Indiana. API maintains that while Indiana courts have not addressed this particular question, the majority of jurisdictions which have considered the issue have held that such an exculpatory clause in a Yellow Pages advertising contract is enforceable.

A contract is thought to be the product of the free bargaining of the parties. Weaver v. American Oil Co. (1971), 257 Ind. 458, 463, 276 N.E.2d 144, 147. As a general rule, the law allows persons of full age and competent understanding the utmost liberty of contracting, and their contracts, when entered into freely and voluntarily, are enforced by the courts. See id. It is in the best interest of the public that persons should not be unnecessarily restricted in their freedom of contract. Hodnick v. Fidelity Trust Co. (1932), 96 Ind.App. 342, 350, 183 N.E. 488, 491. Accordingly, "Indiana has long adhered to the rule that contracting parties may enter into any agreement they desire so long as it is not illegal or contrary to public policy." Greenhaven Corp. v. Hutchcraft & Associates (1984), Ind.App., 463 N.E.2d 283, 285 n. 1.

Likewise, Indiana recognizes exculpatory clauses. General Bargain Center v. American Alarm Co. (1982), Ind.App., 430 N.E.2d 407, 411; see Loper v. Standard Oil Co. (1965), 138 Ind.App. 84, 211 N.E.2d 797; Franklin Fire Ins. Co. v. Noll (1945), 115 Ind.App. 289, 58 N.E.2d 947. In General Bargain Center, we described how our courts have viewed contracts...