Williams Ford, Inc. v. Hartford Courant Co.

• Citation: 657 A.2d 212,232 Conn. 559
• Decision Date: 11 April 1995
• Docket Number: No. 14937,14937
• Court: Supreme Court of Connecticut
• Parties: WILLIAMS FORD, INC., et al., v. The HARTFORD COURANT COMPANY.

Page 212

657 A.2d 212

232 Conn. 559

WILLIAMS FORD, INC., et al., v. The HARTFORD COURANT COMPANY.

No. 14937.

Supreme Court of Connecticut.

Argued Jan. 6, 1995.

Decided April 11, 1995.

Steven M. Greenspan, with whom was Kent I. Scott-Smith, Hartford, for appellant-appellee (defendant).

Peter M. Appleton, with whom was Morton W. Appleton, Hartford, for appellees-appellants (plaintiffs).

Before PETERS, C.J., and CALLAHAN, BORDEN, KATZ and PALMER, JJ.

BORDEN, Justice.

The dispositive issue in this appeal is whether the trial court improperly admitted evidence of unrelated conduct between the defendant and automobile dealerships who were not parties to the litigation. The plaintiffs comprise three groups of automobile dealerships: the Newman group; ¹ the Hoffman group; ² and the Morande group ³ (dealerships). The dealerships sued the defendant, The Hartford Courant Company ⁴ (Courant), alleging intentional misrepresentation or fraud, negligent misrepresentation, and violation of the Connecticut Unfair Trade Practices Act (CUTPA), ⁵ General Statutes § 42-110a et seq. At the close of evidence, and prior to submitting the case to the jury, the trial court directed a verdict in favor of the Courant on the dealerships' claims of intentional misrepresentation, thus ruling out of the case the first, fifth and ninth counts of the amended complaint, and the intentional misrepresentation aspects of the third, seventh and eleventh counts. ⁶

Thereafter, the jury returned verdicts in favor of the dealerships on both the negligent misrepresentation claims and the CUTPA claims, and awarded damages accordingly, reducing the dealerships' award by 10 percent, which represented the degree of contributory negligence ascribed to them by the jury. ⁷ Thereafter, the trial court granted the Courant's motion to set aside the verdicts with respect to the CUTPA claims, and rendered judgment for the dealerships on the jury's verdicts with respect to the negligent misrepresentation claims. The defendant appeals and the plaintiffs cross appeal. ⁸

In its appeal, the Courant claims that: (1) Connecticut law does not recognize negligent misrepresentation as a cause of action between commercial parties under the facts of this case; (2) the dealerships' contributory negligence acts as an absolute bar to recovery in negligent misrepresentation actions (3) the trial court improperly rendered judgment against the Courant with respect to the Morande group's claims because there was insufficient evidence from which the jury reasonably could have concluded that any misrepresentation was made; and (4) the trial court improperly admitted evidence of unrelated conduct between the Courant and nonparty automobile dealerships that was irrelevant to the dealerships' claims and prejudicial to the Courant.

In their cross appeal, the dealerships claim that: (1) the trial court improperly refused to charge the jury on innocent misrepresentation; (2) neither contributory nor comparative negligence is a proper defense to innocent misrepresentation, which the dealerships claim to have pleaded; and (3) the trial court improperly set aside the jury verdicts in favor of the dealerships on their CUTPA claims.

We agree with the Courant that the trial court improperly admitted evidence of unrelated conduct and that the Courant was prejudiced thereby. Accordingly, we reverse the trial court's judgment in part and remand the case for a new trial.

The jury reasonably could have found the following facts. From the early 1980s through at least 1991, the dealerships purchased advertising space from the Courant on a regular basis. Two of the dealership groups, Newman and Hoffman, typically expended between 80 and 90 percent of their advertising budget with the Courant. In some years, that amount exceeded one million dollars. The Courant generally refused to negotiate prices, and the dealerships considered the Courant to hold a monopoly position in the market.

The Courant published its classified rates in a Classified Advertising Rate Card (rate card), which it mailed annually in late November with a cover letter announcing rate adjustments for the following year. The rate card set forth numerous price schedules detailing the cost of classified advertising for the various types of purchasers. For example, an individual placing an advertisement for a single day would pay a certain rate, whereas a company placing larger advertisements with more frequency would pay a lesser rate. The rate card detailed two methods of classified advertising relevant to this appeal: "bulk rate" and "consecutive contract." These two methods were available for advertisers willing to contract one year in advance for a certain minimum volume or frequency.

A bulk rate contract reduced the per line rate as annual volume increased. The advertiser could meet its volume obligation at any time during the period of the contract. A consecutive contract differed in that the advertiser did not agree to any specific volume of advertising, but agreed to advertise every day.

Until the 1991 rate schedule was introduced, the most cost effective method of advertisement for the dealerships was the bulk rate contract, which the dealerships generally used. The bulk rate contract provided significant savings over other methods of advertising offered by the Courant. Accordingly, each of the dealerships executed a bulk rate contract for 1990. The price of the 1990 bulk contracts had been established in the Courant's rate card that the dealerships had received in late 1989.

In November, 1990, the Courant mailed the 1991 rate card to the dealerships. The rate card included a cover letter that said "[a]dvertising rates will be adjusted effective January 1, 1991." A change in the 1991 rate card expanded the consecutive contract to make it more cost effective than a bulk contract for the dealerships. Each plaintiff received the 1991 rate card with complete and accurate rate information in advance of their 1991 contract. Two of the dealership groups, Newman and Hoffman, had previously entered into consecutive contracts and were familiar with the requirements of those contracts. The dealerships nonetheless entered into bulk contracts as they had done in previous years. ⁹

The dealerships dealt with the Courant through the Courant's sales representatives, J. Ernest Scharper and Warren Smith. Scharper was the Courant's sales representative for the Newman dealerships and the Hoffman dealerships. Smith was the Courant's sales representative for the Morande dealerships. These sales representatives believed that it was their responsibility to advise their customers of the availability of rates and the most cost-effective methods of advertising.

The dealerships frequently complained about the high cost of advertising in the Courant. Each of the dealerships specifically asked its respective sales representative whether there was any way to lower its advertising costs for 1991. In early 1991, Robert Newman, owner and operator of the Newman dealerships, asked Scharper "if there wasn't some way we could save some money somehow, someway?" Scharper responded that the Courant did not negotiate and that the only way to reduce costs was to buy a bigger contract.

Prior to entering into the 1991 bulk contract with the Courant, Eric Tulin, a representative of the Hoffman dealerships, specifically asked Scharper "whether a [consecutive] ... contract was available to the Hoffmans." Scharper responded that the "[consecutive] contract was not available for auto dealers, and if it was it would not have saved the Hoffmans money."

Smith had a telephone conversation with Robert Morande, of the Morande dealerships, and later met with him in Morande's office to sign a contract for 1991. During the telephone conversation and the meeting, Smith informed Morande that the only way to reduce the cost of advertising with the Courant was to increase the quantity of its advertising under the bulk contract. Although the Courant disputes the date that this conversation took place, Smith testified that it had occurred sometime around December, 1990.

Each of the dealerships entered into a bulk rate contract for 1991, relying on the statements of the Courant's representatives that it was the most cost effective method of advertising in the Courant. Had the Courant's representatives advised the dealerships of the availability of the consecutive contract and had they chosen to take advantage of it, the dealerships would have realized a savings of approximately 22 percent over the bulk contract.

At some time in November, 1991, the Courant learned about discussions between the dealerships and a corporation considering the formation of a new publication that would compete with the Courant. According to William Richardson, the sales manager for the Courant, "[t]he news of a new competitor was very concerning for us, and we wanted to make sure that we did anything that we could to compete against the competitor."

In December, 1991, after learning about the potential advertising competition, Richardson told the dealerships, at a meeting of trade organizations attended by approximately seventy-two automobile dealers, that in 1991 there had been a significant reduction in the consecutive contract rates and that the dealerships could have made use of them. Until this disclosure, none of the dealerships had known that the consecutive contract was available to it for 1991. Also, neither Scharper nor Smith knew, until they were so informed by Richardson late in 1991, that the consecutive contract rate had changed for 1991 such that it would be more attractive to the dealerships than the bulk contract. Richardson also testified that he did not know until late 1991 of the change in the consecutive contract rates.

I

We address first the Courant's claim that the trial court improperly admitted evidence that none of seventy-two nonparty automobile dealers had...