## Facts

- Eugene C. DeLanney, a real estate broker, contracted with Southwestern Bell Telephone Company to publish a Yellow Pages advertisement in the Galveston directory.
- DeLanney had two business phone lines; the advertisement was billed to one line.
- Before publication, DeLanney’s wife requested cancellation of the billed line and addition of another number to the remaining service.
- Under the company’s internal procedures, cancellation of the billed line triggered automatic deletion of the advertisement.
- The advertisement was not published, and DeLanney sued for negligence and statutory consumer-law violations, seeking lost profits.
- The trial court directed a verdict for the company on the statutory claim, submitted negligence to the jury, and entered judgment on a negligence verdict awarding past and future lost profits (with a remittitur reducing future damages).
- The court of appeals affirmed, concluding nonperformance could support tort recovery and that a contractual limitation-of-liability clause could not limit tort damages.

## Issues

1. Whether failure to publish an advertisement promised in a contract can support a negligence claim when the alleged duty arises only from the contract.
2. Whether purely economic losses (lost profits) from nonperformance are recoverable in tort rather than limited to contract remedies.
3. Whether a negligence judgment can stand where the plaintiff pursued only negligence theories and did not submit breach-of-contract issues to the jury.

## Decision

- The Supreme Court of Texas reversed the court of appeals and rendered judgment that DeLanney take nothing.
- The Court held the alleged wrong was solely breach of a contractual promise to publish the advertisement and did not constitute negligence.
- Because the case sounded only in contract and no contract liability issues were submitted to the jury, the negligence findings could not support recovery.

## Legal Principles

- A tort duty is imposed by law; a contract duty arises from the parties’ agreement. If the pleaded duty exists only because of the contract, the claim is contractual, not tortious.
- When the plaintiff seeks only the benefit of the bargain or other purely economic loss tied to the contract’s subject matter, the action ordinarily lies in contract rather than negligence.
- A plaintiff cannot recharacterize nonperformance of a contract as negligence to obtain tort remedies or avoid contractual limits on liability.
- If the proper theory is breach of contract, tort findings are not a substitute for submitting and proving contract liability elements to the factfinder.

## Conclusion

The Texas Supreme Court treated the omission of the Yellow Pages advertisement as nonperformance of a contractual obligation causing only economic loss, held that negligence was unavailable on those facts, and rendered a take-nothing judgment because the case was tried without submitting breach-of-contract issues.


Sw. Bell Tel. Co. v. DeLanney, 809 S.W.2d 493 (Tex. 1991)