Ray Tucker & Sons, Inc. v. GTE Directories Sales Corp.

• Decision Date: 05 December 1997
• Docket Number: No. S-96-246,S-96-246
• Citation: 571 N.W.2d 64,253 Neb. 458
• Parties: RAY TUCKER & SONS, INC., a Nebraska Corporation, Appellant, v. GTE DIRECTORIES SALES CORPORATION, a Delaware Corporation, Appellee.
• Court: Nebraska Supreme Court

Page 64

571 N.W.2d 64

253 Neb. 458

RAY TUCKER & SONS, INC., a Nebraska Corporation, Appellant, v. GTE DIRECTORIES SALES CORPORATION, a Delaware Corporation, Appellee.

No. S-96-246.

Supreme Court of Nebraska.

Dec. 5, 1997.

Syllabus by the Court

1. Evidence: Stipulations: Appeal and Error. When a case is tried on stipulated facts, the appellate court reviews the case as if trying it originally in order to determine whether the facts warranted the judgment.

2. Contracts: Appeal and Error. The construction of a contract is a matter of law, in conjunction with which an appellate court has an obligation to reach an independent conclusion irrespective of the determinations made by the trial court.

3. Motions for New Trial: Appeal and Error. A motion for new trial is addressed to the discretion of the trial court, whose decision will be upheld in the absence of an abuse of that discretion.

4. Contracts. In interpreting a contract, it must first be determined, as a matter of law, whether the contract is ambiguous.

5. Contracts: Words and Phrases. A contract is ambiguous when a word, phrase, or provision in the contract has, or is susceptible of, at least two reasonable but conflicting interpretations or meanings.

6. Contracts. In general, a party is charged with knowledge of the contents of a writing when he signs it and cannot avoid a contract simply because he failed to read the entire writing.

7. Contracts: Intent. Generally, a contract will be read in accordance with the parties' intent despite the fact that the writing may contain clerical errors or inadvertent omissions.

8. Contracts: Liability: Public Policy. Whether a limitation of liability clause in a contract is void as contrary to public policy depends upon the facts and circumstances of the contract and the parties involved.

9. Contracts: Public Policy. A contractual provision should not be declared void as contrary to public policy unless it is clearly and unmistakably repugnant to the public interest.

10. Judicial Notice. A court may not take judicial notice of disputed facts.

Thomas E. Zimmerman, of Jeffrey, Hahn, Hemmerling & Zimmerman, P.C., Lincoln, for appellant.

Paul M. Schudel, of Woods & Aitken, Lincoln, for appellee.

WHITE, C.J., and CAPORALE, WRIGHT, CONNOLLY, GERRARD, STEPHAN, and McCORMACK, JJ.

STEPHAN, Justice.

Ray Tucker & Sons, Inc. (Tucker & Sons), sued GTE Directories Sales Corporation (GTE) to recover damages resulting from the failure to include Tucker & Sons' classified advertisement in the then Lincoln Telephone and Telegraph Company (LT & T) directory published in December 1993. Tucker & Sons contended that a limitation of liability clause relied upon by GTE was not included in its agreement with GTE or, in the alternative, that the clause was void because it was unconscionable and against public policy. Following submission on stipulated facts, the district court for Lancaster County entered judgment for GTE from which Tucker & Sons appeals. We find no error and, therefore, affirm the judgment.

FACTS

GTE was LT & T's agent for sales of directory advertising and publication of LT & T's Lincoln and nearby communities telephone directory. Tucker & Sons, an asphalt repair and paving business, placed classified advertisements in the LT & T yellow pages from 1970 to 1993.

In securing orders for classified advertising to be included in the December 1993 LT & T directory, GTE utilized a form entitled "Contract for Directory Advertising," which was printed on both sides of a single sheet of paper. The front of the form included blank spaces in which specific information was typed, as well as a space for the advertiser's signature. The reverse side contained printed "Terms and Conditions," including the following:

6. Neither the Telephone Company nor its agent, GTE Directories Service Corporation, shall be liable to the advertiser for damages resulting from failure to include in the directory any individual item of advertising or for errors in the advertising printed in the directory, whether or not occasioned through the fault of the Telephone Company, or its agent, in excess of the amount paid by the advertiser for said item of advertising shown on the face of this Contract. If any advertising is omitted or the entire classified advertising program is omitted, whether occasioned through the fault of the Telephone Company, or its agent, advertiser acknowledges and agrees it is difficult, if not impossible, to determine the exact amount of damages resulting from such omission. Accordingly, the parties agree an advertising credit shall be provided for the subsequent issue of the directory in an amount equal to the omitted advertising as liquidated damages.

On August 25, 1993, GTE sent an unsigned Contract for Directory Advertising for the December 1993 LT & T directory to Tucker & Sons by facsimile transmission. The front side of the document was transmitted but the reverse side was not. However, the following statement was located immediately above the signature line on the front side: "ADVERTISER ACKNOWLEDGES HE/SHE RECEIVED A DUPLICATE COPY OF THIS AGREEMENT AND HAS READ, UNDERSTANDS AND AGREES TO THE TERMS AND CONDITIONS ON THE REVERSE, INCLUDING LIMITATION OF LIABILITY PARAGRAPH NO. 6."

On August 26, 1993, Ray Tucker, president of Tucker & Sons, signed the document and returned it to GTE by facsimile transmission.

As of that date, Tucker & Sons had not received the reverse side of the contract containing the terms and conditions referred to on the front side.

On August 28, 1993, Dan Gabel, GTE's division manager, mailed a confirmation letter to Tucker & Sons which included a copy of the entire Contract for Directory Advertising, including the reverse side containing the limitation of liability clause. Another clause on the reverse side of the form stated that the agreement could be canceled by either party within 7 days of the effective date of the contract. Tucker & Sons received this confirmation letter on August 29, and the effective date stated on the contract was August 26. Tucker & Sons did not exercise its right to cancel. Through GTE's inadvertence, Tucker & Sons' advertisement was not included in the LT & T directory published in December.

Upon realizing its error, GTE offered to waive all charges for the advertising and offered to print Tucker & Sons' advertisement in the next directory free of charge. In addition, GTE offered to print Tucker & Sons' advertisement in errata sheets that are distributed to each user of the directory. Tucker & Sons declined these offers and filed suit against GTE, alleging that GTE breached its contractual obligation and requesting damages for lost profits. The district court bifurcated the issues of liability and damages. By agreement, the parties submitted the liability issue on stipulated facts and exhibits.

The district court entered judgment for GTE on December 19, 1995. In an accompanying order, the district court held that there was an enforceable contract between GTE and Tucker & Sons and that the limitation of liability clause was a part of that contract. The court reasoned that the clause was referred to above the signature line on the first page of the signed agreement and that Ray Tucker had signed similar agreements with GTE for more than 20 years.

The district court stated that a necessary element in determining the validity of such a clause is the relative bargaining power of the parties. Because Tucker & Sons presented no evidence on this issue, the court held that the clause was valid and enforceable against Tucker & Sons.

After the district court overruled its motion for a new trial, Tucker & Sons commenced this appeal. Pursuant to our authority to regulate the dockets of the Nebraska Court of Appeals and this court, we removed the case to our docket on our own motion.

ASSIGNMENTS OF ERROR

Restated, Tucker & Sons asserts that the district court erred in (1) determining that the terms and conditions from the reverse side of GTE's standard form contract were a part of the 1993 agreement between the parties, (2) determining that the limitation of liability clause in GTE's standard form contract was valid and enforceable, and (3) denying Tucker & Sons' motion for a new trial.

STANDARD OF REVIEW

When a case is tried on stipulated facts, the appellate court reviews the case as if trying it originally in order to determine whether the facts warranted the judgment. Anderson v. State, 247 Neb. 871, 530 N.W.2d 899 (1995).

The construction of a contract is a matter of law, in conjunction with which an appellate court has an obligation to reach an independent conclusion irrespective of the determinations made by the trial court. Stephens v. Radium Petroleum Co., 250 Neb. 560, 550 N.W.2d 39 (1996); C.S.B. Co. v. Isham, 249 Neb. 66, 541 N.W.2d 392 (1996).

A motion for new trial is addressed to the discretion of the trial court, whose decision will be upheld in the absence of an abuse of that discretion. Koehler v. Farmers Alliance Mut. Ins. Co., 252 Neb. 712, 566 N.W.2d 750 (1997); Blose v. Mactier, 252 Neb. 333, 562 N.W.2d 363 (1997); Ackles v. Luttrell, 252 Neb. 273, 561 N.W.2d 573 (1997).

ANALYSIS

In order to resolve the issue of whether the limitation of liability clause was a part of the contract between the parties, we must first determine, as a matter of law, whether the contract is ambiguous. See Estate of Stine v. Chambanco, Inc., 251 Neb. 867, 560 N.W.2d 424 (1997); Daehnke v. Nebraska Dept. of Soc. Servs., 251 Neb. 298, 557 N.W.2d 17 (1996). A contract is ambiguous when a word, phrase, or provision in the contract has, or is susceptible of, at least two reasonable but conflicting interpretations or meanings. Estate of Stine, supra; Daehnke, supra. The document which GTE initially transmitted to Tucker & Sons makes specific reference to terms and conditions, including a limitation of liability clause, appearing on the reverse side;...