Warner v. Southwestern Bell Tel. Co.

• Decision Date: 13 May 1968
• Docket Number: No. 2,No. 52841,52841,2
• Citation: 428 S.W.2d 596
• Parties: William A. WARNER and B. D. Warner, doing business as Warner Oil Company, Appellants, v. SOUTHWESTERN BELL TELEPHONE COMPANY, a Corporation, Respondent
• Court: Missouri Supreme Court

Page 596

428 S.W.2d 596

74 P.U.R.3d 512

William A. WARNER and B. D. Warner, doing business as Warner

Oil Company, Appellants, v. SOUTHWESTERN BELL TELEPHONE COMPANY, a Corporation, Respondent.

No. 52841.

Supreme Court of Missouri, Division No. 2.

May 13, 1968.

Motion for Rehearing or to Transfer to Court En Banc Denied

June 10, 1968.

Robert W. Spangler, James E. Thompson, Jr., Crouch, Crouch, Spangler & Douglas, Harrisonville, for appellants.

Karl F. Schmidt, Robert M. Kroenert, Kansas City, John Mohler, Jean Charles Smith, St. Louis, for respondent; Morrison, Hecker, Cozad, Morrison & Curtis, Kansas City, of counsel.

EAGER, Judge.

This is an action for damages charging the negligent and incorrect listing of plaintiffs' business in two successive telephone directories. There was a verdict for plaintiffs, the Court granted a new trial and plaintiffs appealed. Plaintiffs operate a service station and a sales business in oil, bulk gasoline, farm chemicals and tires, and have done so since 1946. Their place of business is in Archie, Missouri, and a telephone listing had been regularly carried there under the name of 'Warner Oil Co.' Plaintiffs also carried an advertisement in the classified section of the directory. The directories of Archie and Adrian were printed in one book of about 15 pages. It also carried some classified advertising for businesses in surrounding towns. There was no telephone operator at Archie. Plaintiffs arranged for their usual listings for the 1964 directory to be delivered by March 1, 1964, but when it came out they found that 'Warner Oil Co.' was listed in the Adrian section and omitted from the Archie section, although the number given was correct; the number contained an 'AX 3' prefix, correct for Archie, but incorrect for Adrian ('AX--7'). William Warner, upon discovering the error, promptly called the Kansas City Supervisor, complained to her and 'tried to get some action.' It is essentially conceded that the Kansas City office had jurisdiction over the matter, although it did not prepare the directory. The Supervisor seemed 'concerned' and agreed to see 'what could be done'; Warner talked with her on several subsequent occasions, and she said they 'might consider' sending out cards, but he did not insist on that because it 'wouldn't have helped much'; Warner was told that the company could not consider reissuing the book. Nothing further was done until the latter part of 1964 when two agents of the telephone company came around for a renewal contract. Plaintiffs did renew both the business listing and the advertising; these agents apologized for the incorrect 1964 listing, and promised that it would not reoccur. When Mr. Warner got the 1965 directory about March 1, he found immediately that the business was still listed in Adrian, as it was in 1964. He called Kansas City again, asked for the 'chief man,' but ended up with the same woman to whom he had talked previously; he complained rather bitterly of the repeated error. She, in turn, did not see how it could have happened. The principal difficulty experienced in plaintiffs' business, according to the testimony, was on incoming long distance or 'toll' calls from farmers and others in relatively nearby communities, who wished to order something, did not have the telephone number, and relied on the telephone 'Information.' Mr. Warner testified that a great part of his better business came to him in this manner. Two or three witnesses testified that in such interchanges they had heard the operators say that there was no such business listed in Archie. At times Mr. Warner tried to correct the operators. Under date of March 3, 1965, a 'Directory Error Report' was made through Kansas City to the Directory Production Office at St. Louis, but by that time the 1965 Directory had already been printed and distributed.

It was developed in defendant's evidence that it issued to its long distance or 'toll' operators 'reprints' of the alphabetical listings from its directories approximately every six weeks. These were to take care of moves, new subscribers and changes generally. Defendant produced such a reprint, dated August 12, 1965, for Adrian and Archie, listing plaintiffs' business correctly, but was wholly unable to show that any such correction had been made prior to that date with the long distance operators or otherwise. That correction seems to have taken care of plaintiffs' principal complaints after that date, for it permitted their long distance calls to come through, even if the number was not available to the caller. The Directory Sales Manager testified: that in preparing the directories a slip is prepared for each customer and that plaintiffs' slip had been placed in the wrong box or container by error, before the material was sent to a printer in Oklahoma; that directories for communities of less than 50,000 are not proofread by the defendant; that defendant lists more than five million subscribers in five states and part of another.

The 'General Exchange Tariff' filed by defendant with the Missouri Public Service Commission, under the heading 'Telephone Directors,' contained the following: 'C. ERRORS--The Telephone Company's liability for damages arising from errors or omissions in the making up or printing of its directories or in accepting listings as presented by customers or prospective customers shall be limited to the amount of actual impairment of the customer's service, and in no event shall it exceed the amount paid for the service during the period covered by the Directory in which the error or omission occurs.'

The alphabetical listing is an automatic part of the service furnished to the subscriber; advertising is handled by a separate and supplemental contract. Certain further evidence will be mentioned briefly later; it concerns plaintiffs' claim for actual damages and it may be more appropriately discussed when we rule on its sufficiency.

Plaintiffs alleged that defendant's acts and neglect were so grossly negligent that they constituted 'willful, intentional and malicious conduct,' and they prayed both actual and punitive damages. Defendant admitted certain formal allegations, denied the substantive claims, and pleaded affirmatively the limitation set out above as a complete bar to any recovery in excess of $189.84, the amount concededly paid for service during the period in question. The verdict was for $2,000 actual damages and $15,000 punitive damages. A new trial was granted for error in giving plaintiffs' damage instruction (MAI 4.01), and in refusing one offered by defendant which limited the damages to an amount not exceeding $189.84.

Some question has been raised by respondent concerning our jurisdiction upon the theory that there is no evidence in the record to support any award of punitive damages, and that the actual damages should have been limited to $189.84 as a matter of law. So far as our jurisdiction is concerned, the point is of no essential merit. The trial court submitted the issues of both actual and punitive damages to the jury, and the jury awarded plaintiffs damages totaling $17,000. The order from which this appeal was taken, took away that verdict in its entirety. For jurisdictional purposes the amount of the verdict is controlling.

Defendant first asserts that plaintiffs have improperly shifted their theory on this appeal in that they pleaded, tried and submitted their case upon the existence of errors in the directories, but now claim negligence by reason of the failure to furnish the toll operators with accurate listings. We recognize the legal principle, but we have considered the question as applied to this case and find it to be of no merit. The whole difficulty arose out of the errors in the directories, and the other acts constituted merely a continuation of the negligence. The basic theory has not been changed.

The controlling question here is the effect of the limitation included in defendant's filed tariff or schedules. As quoted, in limits recovery to the amount paid for service (here concededly $189.84) in all claims for 'errors or omissions in the making up or printing of its directories or in accepting listings * * *.' Plaintiffs say that this provision is not applicable because the 'mislisting' here was not merely in the directories but was continued at the toll centers for the long distance and information operators. Nevertheless, and as already indicated, all of the difficulty arose out of the erroneous listings in the two directories, and the reprints furnished to the operators were merely continuations of the original errors and negligence. These facts do not make the limitation inapplicable. We must proceed to consider the validity and effect of the provision.

Defendant is subject to the provisions of our law establishing the Public Service Commission and to its lawful regulations, insofar as its intrastate business is concerned. Ch. 386 and Ch. 392, RSMo 1959, V.A.M.S. It is specifically required to file its rate schedule, Section 392,220, sometimes referred to as a 'General Exchange Tariff.' The present limitation was included in defendant's Rules and Rugulations applicable to its customers' contracts. Our statutes constitute a complete system for the regulation of public utilities.

We find that by the weight of authority such limitations of liability are upheld as binding upon subscribers, chiefly upon the theory that when so filed under authority of law, and unless found to be unreasonable, they become a part of the law. In this view it makes no difference whether customer knows of the limitation or not. The cases further reason that, since the utility is strictly regulated in its rights and privileges, it should likewise be regulated to some extent in its liabilities, and that such limitations are at least indirectly considered and involved in establishing its rates. These principles are enunciated and elaborated in the following cases: ...