Wards Co. v. Lewis & Dobrow, Inc.
| Decision Date | 27 April 1970 |
| Citation | 210 Va. 751,173 S.E.2d 861 |
| Court | Virginia Supreme Court |
| Parties | WARDS CO., Incorporated v. LEWIS & DOBROW, INC. |
Howard W. Dobbins, Richmond (E. Milton Farley, III, Wallerstein, Goode, Dobbins & Shuford, Hunton, Williams, Gay, Powell & Gibson, Richmond, on the brief), for plaintiff in error.
Eli S. Chovitz, Norfolk (Albert C. Selkin, Steingold, Steingold & Chovitz, Norfolk, on the brief), for defendant in error.
Before I'ANSON, CARRICO, GORDON, HARRISON, COCHRAN and HARMAN, JJ.
Appellee, Lewis & Dobrow, Inc., an advertising agency, brought an action against Wards Co., Incorporated on a contract for advertising services. The trial court, sitting without a jury, found that there was a contract for one year beginning January 1, 1966 which was breached by Wards. Judgment was entered for Lewis & Dobrow for damages in the sum of $12,321.21. Included in the amount of the judgment was $2321.21, for fees and charges through February, 1966, stipulated by Wards to be payable. We granted a writ of error.
Wards contends that the court erred in holding that the contract was not terminable at will and, secondarily, in determining the measure of damages.
Lewis & Dobrow, of which Lawrence Dobrow was president at the time of trial, is located in Washington, D.C., where Samuel S. Wurtzel, president of Wards, had known Mr. Dobrow for some years.
In the summer of 1965 Wards acquired a department store in Richmond which it renamed The Carousel. Shortly thereafter Wurtzel communicated with Dobrow about providing advertising and promotional services for the grand opening of the store in November. Negotiations between the parties were carried on by correspondence, conferences and telephone conversations.
Lewis & Dobrow rely upon the finding of the trial court that their proposal to Wards dated August 17, 1965, and Wards' letter to them dated November 18, 1965, constituted the offer and unqualified acceptance of a one year contract. The only additional evidence consisted of other letters between the parties and the testimony of Dobrow and Wurtzel heard Ore tenus by the lower court.
After a preliminary conference, in which a program for the opening and a continuing program were discussed, Dobrow submitted to Wurtzel an 'Advertising Outline for the Carousel, Richmond, Va.' dated August 17, 1965. This unsigned writing, referred to by both parties as a 'proposal', consisted of two parts: first, 'Preopening and Opening', and second, 'Continuing Promotion'. The 'total estimated cost' or budget for 'Preopening and Opening' was $44,250, including an agency fee of $7,500 to Lewis & Dobrow for their creative skills. Under the 'Preopening and Opening' part of the proposal it was specified that commissions received from advertising media, i.e., 15% Of radio, television, bus and poster, but not newspaper, advertising cost, would be credited on the agency fee.
The record shows that Wards rejected the August 17 proposal as unreasonably expensive. Dobrow then submitted in a letter (not in evidence) a less expensive program of preopening, opening and post- opening advertising ending two weeks after the opening, which Wurtzel approved. The store opened on November 11 and the bill for advertising costs and fees through November 25, in excess of estimates, was nevertheless accepted and paid. So the first part of the August 17 proposal was modified and superseded by a consummated agreement with which we are not concerned.
Wurtzel was not satisfied with the 'Continuing Promotion' part of the proposal, which recommended that $57,700 of the annual advertising budget of The Carousel be allocated under the following headings:
I. Newspaper Advertising 25 full page insertions $15,700
II. Radio and Television 12,000
III. Outdoor and Transportation Advertising 3,000
IV. Art and Protection 12,500
'V. Agency Fee
As its fee, the agency will require $1,000.00 per month 12,000'
VI. Reserve 2,500
-------
$57,700
At Wurtzel's request an alternative program was submitted by letter from Dobrow dated November 17, 1965, proposing drastic 'adjustments' based upon reduced budget figures supplied by Wurtzel. This letter recommended the following allocations:
1. Miscellaneous $1,000
2. 12 full page engravings 1,000
3. Buses and Posters 2,500
4. Updating radio commercials 1,500
'5. 10,000 budget be established
for the advertising agency
fee. This sum to be paid
monthly in equal amounts
commencing January, 1966.' 10,000
6. Art and Production 6,000
7. Radio 10,000
The figures aggregate $32,000. Exclusive of agency fees the difference in a year between this proposal and that of August 17 is $23,700. The November 17 proposal provided that Lewis & Dobrow would retain commissions received from advertising media.
Upon receipt of this proposal on November 18 Wurtzel rejected it by telephone. To confirm the telephone conversation he sent the following letter to Dobrow:
(Letterhead omitted)
'November 18, 1965
Mr. Lawrence Dobrow
Lewis & Dobrow, Inc.
5100 Wisconsin Aven., N.W.
Dear Larry:
Following our telephone conversation today, I am confirming the arrangement we have.
First we are disregarding the proposal in your letter of November 17th and proceeding on the basis of the proposal you made to us on August 17th which provides for an agency fee to you of $1000 per month. It is understood that all commissions will be refunded to us.
While your August 17th proposal calls for a plan of 25 full page color insertions throughout the year, we may not necessarily follow this nor any of the other items for radio, television, etc. It is our understanding that you will spearhead and plan our advertising program to co-ordinate with our own advertising department.
Since I am leaving tomorrow, I will not have time to work out the precise program but I suggest that you hold a meeting with Bruce Prince and Marty Ross at the earliest possible date so that our arrangement will begin operating in full force on January 1st.
During your visit here this week Bruce Prince outlined to you the part that he felt your agency should play in the advertising for The Carousel and I believe this is how you understand it.
I am real pleased to know that you will be handling the Carousel program. Best regards.
...
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