Pacific Gas and Electric Co. v. Hart High-Voltage etc.
F072904
| Cal. Ct. App. | Dec 12, 2017Background
- PG&E and Merced Irrigation District (MID) sued HART after a HART employee dropped a flat washer into a large transformer at Exchequer Dam, rendering the transformer unusable; PG&E seeks over $8.1 million in repair/replacement and related costs.
- The transformer was installed and governed by a 1964 power purchase contract: MID was listed as the project’s “sole owner (under Federal Power Commission License),” while PG&E had exclusive rights to the plant’s electrical output and contractual obligations to pay operation and maintenance costs, plus conditional rights to enter and operate the plant if MID failed to perform.
- HART contracted with MID (not PG&E) to service the transformer; the maintenance contract named MID as the additional insured, not PG&E.
- HART moved for summary adjudication arguing PG&E lacked standing because MID was the transformer’s owner; the trial court granted summary adjudication and entered judgment for HART, dismissing PG&E’s negligence and Public Utilities Code § 7952 claims.
- On appeal the Court of Appeal reversed as to PG&E’s negligence and § 7952 claims, holding PG&E may be a real party in interest (standing) based on its bundle of property interests and that § 7952 can apply to partial owners who meet certain conditions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to sue for negligence (real party in interest) | PG&E had concrete, vested interests (exclusive right to output; obligation to pay O&M; conditional possession rights) so it is a real party in interest and may sue for negligence | HART: only the owner may sue for damage to property; MID was the sole owner, so PG&E lacks standing | PG&E is a real party in interest under Code Civ. Proc. §367 because it holds multiple concrete, substantial property interests (sufficient "sticks") and suffered damages; standing affirmed for negligence claim |
| Duty of care / third‑party negligence | PG&E urged Biakanja factors support a duty from HART to PG&E despite lack of privity | HART argued absence of contractual privity and lack of ownership defeat duty and thus claim | Court held HART failed to carry its summary‑adjudication burden on duty: material facts relevant to Biakanja balancing were not developed, so summary disposition on duty was improper |
| Interpretation of Pub. Util. Code §7952 ("equipment of any … electrical … corporation") | Section’s purpose is to let utilities recover direct and indirect repair costs and avoid passing them to ratepayers; "of" should include substantial partial ownership | HART: "of" means owned by (proprietary sense) and PG&E did not own the transformer, so §7952 does not apply | "Of" is ambiguous; statutory purpose favors including equipment partially owned by an electrical corporation where (1) the corporation’s property interests are substantial, (2) it incurs actual direct/indirect repair liability, and (3) a substantial portion of costs affect consumers; HART did not disprove PG&E could meet these conditions |
| Summary adjudication burden / evidence | PG&E contended trial court improperly treated contract language and deposition testimony as dispositive and excluded some evidence | HART relied on the 1964 contract and deposition statements to show no ownership interest by PG&E | Court found HART failed its prima facie burden because the contract, read as a whole, and other evidence showed PG&E held relevant interests; deposition testimony did not conclusively negate those interests |
Key Cases Cited
- Union Pacific R.R. Co. v. Santa Fe Pacific Pipelines, Inc., 231 Cal.App.4th 134 (Cal. Ct. App.) (discusses "property" as a bundle of rights)
- Wolfsen v. Hathaway, 32 Cal.2d 632 (Cal. 1948) (recognizes actions for property damages by non‑possessors in varied circumstances)
- Vaughn v. Dame Constr. Co., 223 Cal.App.3d 144 (Cal. Ct. App.) (injury to one’s interests in property, not necessarily title, is central to defect/damage claims)
- Biakanja v. Irving, 49 Cal.2d 647 (Cal. 1958) (factors for imposing duty to third parties without privity)
- Aguilar v. Atlantic Richfield Co., 25 Cal.4th 826 (Cal. 2001) (standards and burdens for summary judgment/summary adjudication)
- Hallner, People v., 43 Cal.2d 715 (Cal. 1954) (preposition "of" can have multiple meanings in statute; context controls)
- Harlan v. Industrial Acc. Com., 194 Cal. 352 (Cal. 1924) ("of" may be identification/relationship rather than proprietorship)
- Friendly Village Community Assn. v. Silva & Hill Constr. Co., 31 Cal.App.3d 220 (Cal. Ct. App.) (standing requires a real, substantial interest; those who bear repair costs have standing)
- Martin v. Bridgeport Community Assn., Inc., 173 Cal.App.4th 1024 (Cal. Ct. App.) (limitations on standing where duty arises from statutory scheme governing association members)