AT & T INFORMATION SYSTEMS INC., APPELLANT/CROSS-APPELLEE,
v.
ENTERPRISES, A.B.C., INC., D/B/A/ AMERICAN BILINGUAL SCHOOL, APPELLEE/CROSS-APPELLANT
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AT&T appeals a jury verdict awarding $75,000 in damages for breach of contract and negligence arising from communication system failures. The court holds that the Service/Purchase Agreement's damage-limiting provision is unambiguous and valid, restricting recovery to contract-specified remedies of approximately $5,207, and reverses the judgment.
The damage-limiting provision in paragraph 15 is both unambiguous and valid, restricting customer recovery to contract-specified remedies. The trial court erred in denying AT&T's motion for reduction of the damage award, as the court had already made an implicit pre-trial determination that the contract was unambiguous.
[1] A contract provision limiting damages for equipment failure is enforceable if it is unambiguous and valid.
[2] A jury's award of damages exceeding contractual limitations may be reduced by the court when the contract's damage limitation is clear.
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Join FLexlaw to unlock all legal intelligence“We agree with AT & T that the damage-limiting provision is both unambiguous and valid.”
The court's central holding that the contractual damage limitation clause is enforceable and unambiguous.
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Join FLexlaw to unlock all legal intelligenceAT&T installed a communication system for American Bilingual School that experienced periodic breakdowns. American sued AT&T for damages caused by equ…
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PER CURIAM.
AT & T was a defendant in a suit brought by one of its customers, American Bilingual School (American), to recover damages occasioned by periodic break downs in a newly installed communication system. The case went to the jury on issues of breach of contract and negligence. A verdict of $75,000 for the plaintiff was returned. AT & T appeals from orders denying its motion for a new trial on damages or for remittitur. At issue is the clarity of paragraph 15 of a Service/Purchase Agreement which pro vides an exclusive remedy and limits damages in the event of equipment failure. Paragraph 15 provides in part:
15. EXCLUSIVE REMEDIES
B. If a failure or defect in a product under a service order continues for more than twenty-four (24) hours, Customer’s account then shall be credited in an amount equal to any recurring charge applicable to the failed or defective products or services for the period of such failure or defect.
C. Customer’s sole remedies against ABI1 or any affiliated subcontractor or supplier for loss or damage caused by any product defect or any partial or total failure of any product or service provided under this Agreement or arising from the performance, delays, or nonperformance of any installation, maintenance, warranty or repair work under this Agreement; regardless of the form of action, whether in contract, tort including negligence, strict liability or otherwise, shall be, where applicable (i) Customer’s right to receive the repair or replacement service described in Section 12, (ii) Customer’s right to receive the credit set forth in (B) above for products provided under service orders, (iii) Customer’s right to terminate under Section 17(c), and (iv) the lesser of (a) the amount of actual direct damages which are proven or (b) the equivalent of one (1) month’s recurring charges for the products or services directly involved which would apply if they were provided on a month-to-month service agreement at the time of loss.
D. The foregoing remedies of Customer, together with the remedies provided in the section entitled “Patent and Copyright Indemnity,” shall be exclusive of all other remedies at law or in equity except for Customer’s right to claim damages for bodily injury to any person caused by the negligence of ABI.
AT & T argues that the damage-limiting provision of the contract is clear and that American was entitled to recover no more than $5,207 in damages.2 American contends that paragraph 15 is vague and ambiguous, in which case a proper interpretation thereof was a jury question. The verdict of $75,000 approximates the purchase price of the system.
We agree with AT & T that the damage-limiting provision is both unambiguous and valid. See Rollins, Inc. v. Heller, 454 So. 2d 580 (Fla. 3d DCA 1984) (a husband and wife were bound by clause in burglar alarm contract which limited loss damages in the event of an equipment malfunction even though the wife did not know the terms of the contract), rev. denied, 461 So. 2d 114 (Fla.1985). In accordance with its pre-trial orders that damages would be limited to those provided by terms of the contract — an implicit determination that the contract was unambiguous — the court should have granted AT & T’s motion for reduction of the damage award. The jury could have awarded a higher amount of damages if there had been evidence to sustain a finding of fraud, see Mankap Enterprises, Inc. v. Wells Fargo Alarm Services, 427 So. 2d 332 (Fla. 3d DCA 1983), but it found a breach of contract only and no fraud.
The issues raised by the cross-appeal are without merit.
Reversed and remanded for further proceedings consistent with this opinion.
. American Bell Inc. (ABI) was the name of AT & T Information Systems at the time the Service/Purchase Agreement was entered into.
. Plaintiff made an election to recover for damages rather than terminate the contract.
The amount of damages computed according to paragraph 15 equals the daily average charge, $63.50 x number of malfunction days, 52 + one month’s (recurring) charge, $1,905. AT & T produced evidence of the calculation method and the total damages.
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Middelthon v. Crowder, 563 So. 2d 94 (Fla. 3d DCA 1990)…e measure of damages upon the breach is fixed and the jury was not at liberty, as in an unliquidated situation to pick a figure, but were required to conform to the court’s instructions. AT & T Information Systems, Inc. v. Enterprises, A.B.C., Inc., 486 So. 2d 652 (Fla. 3d DCA 1986), review denied, Enterprises, A.B.C., Inc. v. AT & T Information Systems, Inc., 492 So. 2d 1331 (Fla.1986). We find no merit in the cross-appeal. A binding real estate contract may be proven by a series of documents or instruments…
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Authorities Cited
- Rollins, Inc. v. Heller, 454 So. 2d 580 (Fla. 3d DCA 1984)
- Mankap Enters., Inc. v. Wells Fargo Alarm Servs., 427 So. 2d 332 (Fla. 3d DCA 1983)