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05/25/83 DISCOUNT FABRIC HOUSE RACINE v. WISCONSIN

May 25, 1983

DISCOUNT FABRIC HOUSE OF RACINE, INC., PLAINTIFF-RESPONDENT,
v.
WISCONSIN TELEPHONE COMPANY, A WISCONSIN CORPORATION, DEFENDANT-APPELLANT



Appeal from a judgment of the Circuit Court for Racine County: John C. Ahlgrimm, Judge.

Petition to Review Granted.

Scott, C.j., Voss, P.j., and Brown, J. Brown, J. (concurring).

The opinion of the court was delivered by: Scott

This is an appeal from a judgment awarding $9,000 to Discount Fabric House of Racine, Inc. for negligent omission of part of its advertisement from the 1978 Racine yellow pages. Because this court concludes that the limitation of liability provision in the Wisconsin Telephone Company's yellow pages advertising contract is not unconscionable and unenforceable, we reverse.

The facts of this case are not in dispute. Discount Fabric House of Racine, Inc. is a Wisconsin corporation engaged in the business of selling draperies and fabrics. Edward and Oryne Flatten started the business in 1968 and incorporated it in 1974. Commencing in 1976, the company did business as The Inside Look, a Division of Discount Fabric House of Racine, Inc. The business had been listed and advertised in the Racine and Kenosha yellow pages for many years.

Mr. Flatten, acting as corporate vice president, entered into a contract with Wisconsin Telephone for advertising in the 1978 Racine and Kenosha telephone directories. The contract provided for a quarter-page ad and three listings in the Racine yellow pages and an advertisement in the Kenosha yellow pages, in addition to the white pages listings. The contract contained the following statement, placed immediately below the buyer's signature:

UNDERSIGNED AGREES THAT THE TERMS ON THE REVERSE SIDE HEREON CONSTITUTE PART OF THIS APPLICATION. READ REVERSE SIDE BEFORE SIGNING.

The reverse side of the contract contained, inter alia, the the following provision:

4. Applicant agrees that the Telephone Company shall not be liable for errors or omissions (including total omissions) in directory advertising beyond the applicable charges for the item or items in which errors or omissions occur for the issue life of the directory involved.

When the 1978 telephone directories were published, Flatten discovered that the words "Discount Fabric House" were omitted from the quarter-page ad. All of the other information in the ad was correct, including the name, The Inside Look, the firm's address and telephone number. Further, all of the other listings in both the Racine and Kenosha directories were without error.

Upon notification, Wisconsin Telephone admitted the error and adjusted the charges in accordance with paragraph four of the contract. Discount Fabric House subsequently initiated this lawsuit, alleging a breach of the contract and seeking $300,000 in damages due to lost profits. Wisconsin Telephone raised as a defense the limitation of liability clause contained in paragraph four.

The case was tried to a jury on the damages issue with the legal question reserved to the trial court. The jury awarded $9,000 to Discount Fabric House and $388 to Wisconsin Telephone for unpaid charges relating to the correct listings. The trial court subsequently ruled that the limitation clause was unconscionable and invalid on general consumer protection and public policy grounds.

Wisconsin Telephone appealed, and this panel certified the case to the Wisconsin Supreme Court as a matter of statewide importance. The appeal now comes before this court upon denial of certification by the supreme court.

Wisconsin Telephone argues that the trial court erred in holding that the limitation clause was ...


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