Tate v. Mountain States Telephone & Telegraph Co.

647 P.2d 58, 1982 Wyo. LEXIS 348

• Court: Wyoming Supreme Court
• Decided: June 8, 1982
• Docket: 5632
• Status: Published

Opinions

ROONEY, Justice.

Appellants-plaintiffs’ complaint in this case sets forth two claims for relief; one founded on negligence and one founded on breach of contract, both of which resulted from the same incident. Appellants and appellee-defendant entered into an agreement whereby appellee agreed to furnish and install a “call director” and a private branch exchange service (hereinafter referred to as PBX) at appellants’ business location for use in operation of an answering service. Appellants contend that the delay in the installation of the PBX damaged them in the amount of $30,000.00. In its answer, appellee alleged, among other things, that any delay was caused by appellants’ negligence and that appellants’ negligence was equal to or greater than any negligence of appellee.

The trial court granted appellee’s motion for a summary judgment and found that the incident was governed by the provisions of the appellee’s General Exchange Tariff which provides in pertinent part:

“G. LIABILITY

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“2. When service is interrupted for a period of at least 24 hours after notice by the customer to the Company, a credit allowance equal to Vao of the tariff monthly rate for all services and facilities furnished by the Company rendered useless shall apply for each 24 hours, or major fraction thereof, during which the interruption continues after notice to the Company. Credit allowances in any billing period shall not exceed the total charges for that period for the services and facilities which were rendered useless.

******

“5. APART FROM THE CREDIT ALLOWANCE STATED ABOVE, NO LIABILITY SHALL ATTACH TO THE TELEPHONE COMPANY FOR DAMAGES ARISING FROM ERRORS, MISTAKES, OMISSIONS, INTERRUPTIONS, OR DELAYS OF THE TELEPHONE COMPANY, ITS AGENTS, SERVANTS OR EMPLOYEES, IN THE COURSE OF ESTABLISHING, FURNISHING, REARRANGING, MOVING, TERMINATING, OR CHANGING THE SERVICE OR FACILITIES (INCLUDING THE OBTAINING OR FURNISHING OF INFORMATION IN RESPECT THEREOF OR WITH RESPECT TO THE SUBSCRIBERS OR USERS OF THE SERVICE OR FACILITIES) IN THE ABSENCE OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.”

It found, further, that appellants’ recovery would be limited to the credit allowance set forth in paragraph G.2 of the tariff in the absence of proof of gross negligence or willful misconduct and that the trial would be limited to appellants’ “claims based upon the alleged gross negligence of” appellee. After a trial so limited, the jury found that the actions of appellee did not constitute gross negligence.

Appellants word several issues on this appeal, but each is included in the general question as to whether or not the summary judgment was proper as a matter of law.

Inasmuch as it was not, we reverse and remand the case.

The above quoted limitations contained in the appellee’s General Exchange Tariff were accepted by the court in the grant of a summary judgment. We will consider them separately.

G.5 LIMITATION

Turning first to the limitation of any liability on the part of appellee absent “gross negligence or willful misconduct” as provided in paragraph G.5 of the General Exchange Tariff, supra, we find such to be in conflict with the standard set by the legislature for determining liability for negligence in Wyoming.

Since the enactment of the comparative negligence statute, § 1-1-109, W.S.1977,¹ the determination of liability in a negligence case must be considered with reference to comparative negligence on a percentage basis. In Danculovich v. Brown, Wyo., 593 P.2d 187 (1979), we said at pages 192-193:

“Procedurally, a new and important element results from the statute. When contributory negligence is a factor, the jury must determine the percentage of negligence attributed to each party, rather than the broad categorizations of ‘ordinary negligence’ and ‘gross negligence’ as before. Mitchell v. Walters, supra [55 Wyo. 317, 100 P.2d 102 (1940) ]. This can result in exact computations such as those in Quady v. Sickl, 260 Wis. 348, 51 N.W.2d 3 (1952), in which the jury found plaintiff Quady 15.42 percent negligent, defendant Sickl 47.08 percent negligent, defendant Belden 14.17 percent negligent, and defendant Pankratz 23.33 percent negligent. The category of ‘gross negligence’ will no longer be pertinent except in a few isolated circumstances. The obsolescence of the term ‘gross negligence’ will be no great loss toward the attainment of equity. The term has been characterized as ‘an unhappy term of ill-defined content.’ Prosser, Torts 4th Ed., p. 10 (1971).” (Footnote omitted and bracketed material added.)

The case before us is an example of the inconsistency which results from an effort to correlate “gross negligence” with comparative fault. The trial court defined “negligence” as “the failure to use ordinary care” and “gross negligence” as “acts or omissions which are the result of a conscious indifference to the rights or welfare of the persons affected by them. Gross negligence is somewhat greater than ordinary negligence and somewhat less than willful and wanton misconduct.” It then instructed the jury that the “defendant is at fault when it is grossly negligent” and the “plaintiffs are at fault when they are guilty of negligence.” It instructed the jury “to determine the percentage of fault, if any, of each of the parties.” The following special verdict form was submitted to the jury:

“SPECIAL VERDICT FORM

“We, the jury, present the following answers to the questions submitted by the Court regarding Plaintiffs’ claims against the Defendant:

“1. Did the actions of the Defendant constitute gross negligence?

“Yes_

“No_

“If your answer to Question No. 1 is yes then proceed to Question No. 2. If your answer to question No. 1 is no do not answer Questions 2 through 6.

“2. Was the gross negligence of Defendant the proximate cause of any damages sustained by the Plaintiffs?

“Yes_

“No_

“If your answer to Question No. 2 was yes then proceed to Question No. 3. If your answer, to Question No. 2 was no then do not answer Questions 3 through 6.

“3. Did the actions of the Plaintiffs constitute negligence?

“Yes_

“No_

“If your answer to Question No. 3 is yes then proceed to Question No. 4. If your answer to Question No. 3 is no then proceed to Question No. 6.

“4. Was the plaintiffs’ negligence a proximate cause of any damages sustained by the plaintiffs?

“Yes_

“No_

“If your answer to Question No. 4 is yes, then proceed to Question No. 5. If your answer to Question No. 4 is no, then proceed to Question No. 6.

“5. Considering all of the fault at one hundred percent, what percentage of the total fault is attributable to each of the following persons?

“Jeanine Tate and Walter F. Tate, Plaintiffs (0% to 100%)_%

“Mountain Bell, defendant (0% to 100%)_%

“6. Without considering the percentage of fault found in Question No. 5, what total amount of damages do you find was sustained by?

“Jeanine Tate and Walter F. Tate, plaintiffs $_•”

The jury answered the first question “no,” and, pursuant to directions, did not answer the other questions.

The instructions requested the jury to “determine the percentage of fault.” To do so between gross negligence and ordinary negligence, an additional element is necessary, i.e., the exact quantative relationship between the two. How much ordinary negligence is required to make 1 percent of gross negligence? The verdict form, in effect, directs that if appellee is not found to be grossly negligent, a comparison of fault is unnecessary. This is not that which is said in the comparative negligence statute. The statute provides that recovery would be barred if appellants’ negligence was found to be at least 50 percent of the 100 percent attributable to the two parties.' But gross negligence is not defined in a determinate percentage fashion. As said by Professor Prosser, supra, it is “an unhappy term of ill-defined content.”

The public policy, then, as established by the comparative negligence statute is to abolish “gross” as a measure of negligence in negligence actions.

The parties to this action cannot change the state policy by contract. They cannot contract that liability in future instances will be measured only by gross negligence any more than they can contract that liability in future instances will be measured only by the old contributory negligence standard. To attempt to do so is quite different than placing a contractual limit on liability. It is an attempt to contractually change the standard or policy set by the state for determining the existence of liability. Such will not be allowed. “Contractual provisions cannot rise above constitutional and statutory law,” Tri-County Electric Association, Inc. v. City of Gillette, Wyo., 584 P.2d 995, 1004 (1978).

“Willful misconduct” referred to in paragraph G.5 of appellee’s General Exchange Tariff, supra, differs in kind from negligence. Danculovich v. Brown, supra. The trial court properly instructed the jury that willful misconduct was not an issue in this case.

Generally, a contract which is contrary to public policy will not be recognized by the court, and the parties to such contract will be left as the court finds them. Owens v. Capri, 65 Wyo. 325, 202 P.2d 174 (1949); and Claus v. Farmers & Stockgrowers State Bank, 51 Wyo. 45, 63 P.2d 781 (1936).

“ * * * [B]ut that rule is not applicable in a case where the contract is merely unauthorized rather than illegal and hence immoral. * * * ” Town of Cody v. Buffalo Bill Memorial Ass’n, 64 Wyo. 468, 196 P.2d 369, 382 (1948).

Nor will we apply the general rule in this case when the contract is contrary to public policy only because of a provision in a single paragraph of a voluminous work which is made part óf the contract by reference, and when the considerations from both sides are sufficient for performance absent such paragraph. See Fuchs v. Goe, 62 Wyo. 134, 163 P.2d 783, 166 A.L.R. 1329 (1945); Board of Commissioners of Natrona County v. Casper National Bank, 56 Wyo. 132, 105 P.2d 578, 130 A.L.R. 727 (1940); and Laibly v. Halseth, Wyo., 345 P.2d 796 (1959).

The contract is valid, but paragraph G.5 of appellee’s General Exchange Tariff limiting liability to gross negligence or willful misconduct, being contrary to public policy, cannot be made part of the contract.

G.2 LIMITATION

The limitation of liability contained in paragraph G.2 of appellee’s General Exchange Tariff is of a different sort. Public policy is not involved. An agreement to hold one blameless or harmless for damages resulting from his negligence or other conduct “may be enforced if it is not contrary to public policy.” Brittain v. Booth, Wyo., 601 P.2d 532, 535 (1979). This general rule has its qualifications.

“ * * * [T]he law does not look with favor on provisions which relieve one from liability for his own fault or wrong. It is a well-settled general doctrine that the law will not sustain a covenant of immunity which protects against fraud or relieves one of a duty imposed by law for the public benefit. It has been held that clauses limiting liability are given rigid scrutiny by the courts, and will not be enforced unless the limitation is fairly and honestly negotiated and understanding^ entered into; this is especially true where the contract involves services of a public or semipublic nature, but has also been applied in some controversies involving private contracts, particularly where, as in the case of a public or semi-public contract, the private contract is the only means one of the parties has of filling an important need. * * * ” 17 Am.Jur.2d Contracts, § 188, p. 557.

Scrutinizing paragraph G.2 of appel-lee’s General Exchange Tariff, supra, with these qualifications in mind, we note that it limits damages to a specified credit allowance “when service is interrupted for a period of at least 24 hours” (emphasis added). Inasmuch as the claim here is not one for interruption of services but is for damages resulting from failure to begin the designated service, paragraph G.2 is not applicable. We also note that paragraph G.l of appellee’s General Exchange Tariff provides:

“1. In view of the fact that the customer has exclusive control of his communications over the facilities furnished him by the Telephone Company, and of the other uses for which facilities may be furnished him by the Telephone Company, and because of unavoidability of errors incident to the services and to the use of such facilities of the Telephone Company, the services and facilities furnished by the Telephone Company are subject to the terms, conditions and limitations specified in Paragraphs 2. through 7. following.” (Emphasis added.)

The emphasized portion of this paragraph anticipates control and use by the customer before the “terms, conditions and limitations” specified in the next six paragraphs apply. In this case, the appellants did not have such control or use when the alleged damages were sustained.²

Accordingly, the limitation to a specified credit allowance is not applicable to the facts of this case; and appellee cannot be said, as a matter of law, to be entitled to a summary judgment because of such limitation. Construction and interpretation of an unambiguous contract is done by the court as a matter of law. Amoco Production Company v. Stauffer Chemical Company of Wyoming, Wyo., 612 P.2d 463 (1980); and Joslyn v. Professional Realty, Wyo., 622 P.2d 1369 (1981).

1 . Section 1-1-109, W.S.1977, provides:

“(a) Contributory negligence shall not bar a recovery in an action by any person or his legal representative to recover damages for negligence resulting in death or in injury to person or property, if the contributory negligence was not as great as the negligence of the person against whom recovery is sought. Any damages allowed shall be diminished in proportion to the amount of negligence attributed to the person recovering.

“(b) The court may, and when requested by any party shall:

“(i) If a jury trial, direct the jury to find separate special verdicts;

“(ii) If a trial before the court without jury, make special findings of fact, determining the amount of damages and the percentage of negligence attributable to each party. The court shall then reduce the amount of such damages in proportion to the amount of negligence attributed to the person recovering:

“(iii) Inform the jury of the consequences of its determination of the percentage of negligence.”

2 . Such is equally applicable to the contractual limitation of liability to “gross negligence or willful misconduct” addressed in the next preceding section of this opinion.