FLOWELL ELECTRIC ASSOCIATION, INC., аnd DIXIE ESCALANTE RURAL ELECTRIC ASSOCIATION, INC., Appellees, v. RHODES PUMP, LLC, Appellant.
No. 20130834
IN THE SUPREME COURT OF THE STATE OF UTAH
Filed September 25, 2015
2015 UT 87
Fourth District, Spanish Fork; The Honorable Donald J. Eyre, Jr.; No. 1210300019
Attorneys:
James R. Black, Matthew J. Black, Salt Lake City, for appellant
JUSTICE HIMONAS authored the opinion of the Court, in which CHIEF JUSTICE DURRANT, ASSOCIATE CHIEF JUSTICE LEE, and JUSTICE DURHAM joined.
JUSTICE HIMONAS, opinion of the Court:
INTRODUCTION
¶ 1 This case is about a demand for indemnification under the High Voltage Overhead Lines Act (HVOLA).
¶ 2 Based on these provisions, Flowell Electric Association, Inc. (FEA), and Dixie Escalante Rural Electric Association, Inc., (collectively, Flowell) sought indemnification from Rhodes Pump II, LLC, (Rhodes) for liability to Brian Wade incurred by Flowell. Mr. Wade, in the course of servicing a well situated under one of Flowell‘s high voltage lines, came into contact with the line, which resulted in a severe electric shock and, ultimately, the amputation of both of his legs. Mr. Wade sought and received workers’ compensation benefits from his employer, Rhodes, on whose behalf he was acting at the time of the accident. He also filed a tort suit against Flowell, alleging negligence and breach of warranty and requesting punitive damages.1 A jury found that Flowell had acted negligently and awarded Mr. Wade both compensatory and punitive damages. Flowell then brought this action for HVOLA indemnification against Rhodes. The district court concluded that Rhodes had failed to give Flowell adequate notice of its intended activity and therefore granted Flowell summary judgment. Rhodes timely appealed.
¶ 3 We first address the legal challenges Rhodes brings to HVOLA and conclude that HVOLA does apply to Rhodes and is not unconstitutional. But because we conclude there exists genuine issues of material fact regarding Rhodes‘s notice, we reverse the grant of summary judgment and remand for further proceedings.
BACKGROUND
¶ 4 On May 20, 2002, Mr. Wade and Darrin Rhodes went to service the Sundown Well, which is located in Meadow, Utah.2 In the course of performing their work, they raised the boom on their well-servicing truck to within three or four feet of Flowell‘s high
¶ 5 Mr. Iverson and Mr. Stevens arrived at the site and placed three “cover-ups” on the energized line to cover fifteen feet of the line, “centering them with the raised boom.” Mr. Iverson testified that he instructed Mr. Rhodes and Mr. Wade “not to move the boom from its current position” and to contact him before lowering the boom so that he could return and “assist” the men in “safely lowering” it. Mr. Rhodes and Mr. Wade denied receiving the instruction. Mr. Rhodes and Mr. Wade “completed their work of installing the pipes and putting the well back together.” Without moving the boom from its initial location, they loaded their equipment back onto Mr. Rhodes‘s truck. Then, without notifying anyone, they “began lowering” the boom. At that point, Mr. Wade noticed that they had forgotten to load certain equipment—the “well collars.”3 Mr. Rhodes again raised the boom into the air near the overhead line.4 They loaded the well collars and began to lower the boom a second time. As they were lowering it, the boom came in contact with the power line, resulting in Mr. Wade‘s injury.5
¶ 6 Mr. Wade and his wife filed the tort suit against Flowell in April 2006. The case went to trial in 2010. The jury found in favor of Mr. Wade and awarded him $9,841,627.03 in compensatory damages and $10,000 in punitive damages.
¶ 7 The following year, Flowell filed this action against Rhodes for indemnification under HVOLA. The parties filed cross-motions for summary judgment. On July 31, 2013, the district court entered summary judgment in favor of Flowell. Rhodes timely appealed. We have jurisdiction under
STANDARD OF REVIEW
¶ 8 We review a district court‘s grant of summary judgment for correctness, giving no deference to its conclusions of law. Keith v. Mountain Resorts Dev., L.L.C., 2014 UT 32, ¶ 16, 337 P.3d 213. Summary judgment is appropriate when there is “no genuine issue as to any material fact” and “the moving party is entitled to a judgment as a matter of law.”
ANALYSIS
¶ 9 Rhodes contends that the district court erred in granting summary judgment in favor of Flowell fоr a variety of reasons. We first address Rhodes‘s claim that the indemnification action was not timely filed under the statute of limitations. Second, we address Rhodes‘s claim that the exclusive remedy provision of the Workers’ Compensation Act (WCA) precludes Flowell from bringing an HVOLA indemnification action against Rhodes. Third, we address Rhodes‘s argument that, as applied, HVOLA violates the principles of due process and equal protection guaranteed under the United States and
I. FLOWELL TIMELY FILED ITS HVOLA INDEMNIFICATION ACTION
¶ 10 HVOLA grants public utilities a right of action for indemnification when a “responsible party” fails to follow HVOLA‘s requirements.
¶ 11 The parties’ error does not influence the outcome of this case, nor would their arguments have changed absent that error. Rhodes argues that Flowell‘s cause of action for indemnifiсation under HVOLA accrued on the day of the accident, more than four years before Flowell attempted to include Rhodes in the tort case. Flowell argues that the statute of limitations could not have begun to run until Flowell had actually “incurred” liability, which was when the jury returned its verdict in the tort case against Flowell. We agree with Flowell.
¶ 12 A cause of action accrues when it “becomes remediable in the courts“—or, in other words, when “all of the elements that must be proved at trial under the statute allegedly creating liability on the part of the defendant are existing and may be established.” State v. Huntington-Cleveland Irrigation Co., 2002 UT 75, ¶ 24, 52 P.3d 1257 (citation omitted). Here, Flowell could not satisfy all the elements of its indemnification claim against Rhodes until Flowell was held liable for the injuries to Mr. Wade. Because Flowell had not actually “incurred” any liability “as a result of” Mr. Wade‘s injurious contact with the high voltage overhead line until the jury rendered its verdict, the statute of limitations did not begin to run until then.
II. THE WORKERS’ COMPENSATION ACT‘S EXCLUSIVE REMEDY PROVISION DOES NOT PRECLUDE LIABILITY UNDER HVOLA
¶ 13 Rhodes argues that the WCA‘s exclusive remedy provision shields it from a civil suit brought under HVOLA.
¶ 15 An independent statutory or contractual cause of action between a third party and an employer is not barred by the WCA where that action is not brought “on account of” or “based upon” the accident, injury, or death of the employee. Snyder v. PacifiCorp, 316 F. Supp. 2d 1247, 1252–53 (D. Utah 2004) (internal quotation marks omitted). This curb on the scope of the WCA‘s exclusive remedy provision scope is grounded in the language of the statute. To be sure, the WCA provides that the legal responsibility of the employer is “in place of any and all other civil liability whatsoever.”
¶ 16 The reasoning in Shell Oil is highly instructive here. Much like an indemnity clause in a contract between the employer and a third party, HVOLA provides an independent obligation that is distinct from the WCA‘s exclusive remedy provision. In other words, by enacting HVOLA, “the legislature has mandated a relationship between public utilities and responsible parties,” and, “in effect,” has “written the contract between responsible parties and the public utility.” Snyder, 316 F. Supp. 2d at 1252. Accordingly, the WCA does not preclude an entity‘s liability under HVOLA.
¶ 17 Rhodes acknowledges that the United States District Court for the District of Utah addressed a nearly identical question in Snyder, 316 F. Supp. 2d at 1248–49. There, an employee was burned during the course of his employment when a crane boom came in contact with an overhead power line. Id. at 1248. There too, the employer argued that PacifiCorp (the public utility that owned the
¶ 18 Rhodes acknowledges that Snyder and the “line of cases” it cites “appears on the surface to present an argument from multiple other jurisdictions contrary to application of WCA immunity to HVOLA” claims. But it attempts to distinguish these cases by pointing out that in this case, a jury found that Flowell had been negligent. We fail to see how the jury‘s finding of negligence bears on the statutory question of whether the WCA‘s exclusive remedy provision bars this HVOLA action. And Rhodes has not provided this court with any factually similar case where an HVOLA-type statute was found to be barred by a workers’ compensation act, nor have we been able to find one. Moreover, we find the reasoning in Shell Oil and Snyder persuasive. As in Shell Oil, Flowell‘s indemnification action is for reimbursement—not cоmpensation—pursuant to an independent, “express” statutory “obligation” between the parties. Shell Oil Co., 658 P.2d at 1190–91. Accordingly, the action is neither brought “on account of” nor “based upon” Mr. Wade‘s injuries—and the WCA is not implicated.
III. HVOLA DOES NOT VIOLATE DUE PROCESS OR EQUAL PROTECTION AS APPLIED TO RHODES
A. Due Process
¶ 19 Rhodes argues that HVOLA, as applied, deprives it of a property right—the exclusive remedy provision of the WCA—without due process of law. The Fourteenth Amendment provides that no state shall “deprive any person of life, liberty, or property, without due process of law.”8 The first step in showing a violation of the Due Process Clause is to show that there has been a deprivation of life, liberty, or property. Rhodes fails to make this showing and its claim accordingly fails.
¶ 20 “[A] cause оf action is a species of property protected by the Fourteenth Amendment‘s Due Process Clause.” Logan v. Zimmerman Brush Co., 455 U.S. 422, 428 (1982). But HVOLA deprives Rhodes of neither a cause of action nor its rights under the WCA. The exclusive remedy provision and HVOLA are
B. Equal Protection
¶ 21 The Equal Protection Clause of the Fourteenth Amendment provides that no state shall “deny to any person within its jurisdiction the equal protection of the laws.” Similarly,
¶ 22 The most fundamental principle of equal protection is that those who are “similarly situated should be treated similarly” and those who are “in different circumstances should not be treated as if their circumstances were the same.” Malan, 693 P.2d at 669. “General rules that apply evenhandedly to all persons within the jurisdiction unquestionably comply with [the] principle [of equal protection of the laws].” N.Y.C. Transit Auth. v. Beazer, 440 U.S. 568, 587 (1979). In order to determine whether there is an equal protection problem, we must first decide whether the law applies evenhandedly or whether it makes a classification. Id. at 587–88 (“Only when a governmental unit adopts a rule that has a special impact on less than all the persons subjеct to its jurisdiction does the question whether this principle [of equal protection] is violated arise.“). Rhodes claims that HVOLA creates two classes: employers who benefit from the WCA‘s exclusive remedy provision and employers who do not because they may be sued under HVOLA. In essence, Rhodes asks us to read HVOLA in combination with the WCA and find that, together, they create
¶ 23 In federal equal protection claims, “courts exercise strict scrutiny of legislative classifications when fundamental constitutional rights are affected or suspect classifications are created.” Malan, 693 P.2d at 674 n.17. Benefitting from WCA‘s exclusive remedy provision is not a fundamental constitutional right, and the purported classes are not based on suspect classifications. Therefore, the classification created through HVOLA is subject to rational basis review. See State v. Canton, 2013 UT 44, ¶ 36, 308 P.3d 517 (“[M]ost classifications are presumptively permissible, and thus subject only to ‘rational basis review.’ . . . [O]ther classifications [such as discrimination on the basis of a suspect class] are so generally problematic . . . that they trigger heightened scrutiny.” (citation omitted)). The classification easily passes rational basis review because imposing restrictions upon those who bring objects near dangerous high voltage power lines is an eminently reasonable way for the legislature to pursue the goal of increasing safety and accountability around such lines. See Malan at 671 (“If the relationship of the classification to the stаtutory objectives is unreasonable or fanciful, the discrimination is unreasonable.“). Thus, the Equal Protection Clause is not violated.
IV. DISPUTED AND UNKNOWN FACTS PRECLUDE SUMMARY JUDGMENT
¶ 24 Summary judgment is appropriate when “there is no genuine issue as to any material fact” and “the moving party is entitled to a judgment as a matter of law.”
¶ 25 The question of whether Rhodes violated HVOLA requires two factual determinations. First, whether Rhodes gave adequate notice of the intended activity under
A. Notice of Intended Activity
¶ 26 It is undisputed that Rhodes notified Flowell that it was doing work within ten feet of the power lines near the Sundown Well, and it is undisputed that Flowell implemented safety precautions in response to that information. However, the district court found that Rhodes violated the notice provision of HVOLA when it failed to notify Flowell that it was raising the boom a second time. In essence, the court held that each individual time Rhodes moved the boom and brought it within ten feet of the power line, a separate notice was required under
¶ 28 Whether a given notification covers the responsible party‘s activities near high voltage lines is a fact-intensive question that hinges on the relationship between the notice given and the responsible party‘s actual activities at the site. See
certain intended activity within ten feet of a power line and then wants to take actions outside of the scope of that intended activity, then that party would be required to renotify the utility. For example, if Rhodes told Flowell that it was going to service the well by raising a boom over the well, it would unquestionably be outside of the scope of that notice for Rhodes to drive ten miles down the road and raise a boom next to the power lines there.
¶ 29 The district court erred when it concluded that on the record facts here Flowell violated the notice provision as a matter of law simply by reraising the boom. On remand the court must determine the nature of the notice Rhodes gave to Flowell.13 If Rhodes‘s act of bringing the boom within ten feet of the power lines a second time was outside of the scope of the intended activity it initially communicated to Flowell, then Rhodes violated
¶ 30 Because a factual issue remains regarding whether Rhodes adequately notified Flowell of its “intended activity,” we reverse the grant of summary judgment on this issue.
B. Completion of Mutually Satisfactory Precautions
¶ 31 An issue of fact also exists as to whether Rhodes was to contact Flowell before
C. Causation
¶ 32 Under
¶ 33 Because the findings in the tort case do not control, and because there have been no findings on causation in this case, our inquiry might end here, with a remand for further factual development. However, we write further in order to address the nuances of Rhodes‘s argument concerning the effect of what it terms Flowell‘s “gross negligence.” Rhodes argues that, as a matter of public policy, indemnification under HVOLA should be per se barred where the public utility acted in gross negligence. It contends that the issue of Flowell‘s gross negligence was settled in the tort case, but as exрlained, Rhodes has not made a valid argument that those findings control in the instant action. Thus, a key premise underlying Rhodes‘s argument is gone. We nevertheless note that a public utility‘s negligent actions will not per se preclude a responsible party‘s obligation to indemnify the public utility under HVOLA. See
¶ 34 Because we will not alter the meaning of a statute by judicial fiat, we must try to interpret it in accordance with the legislature‘s intent. See Heaps v. Nuriche, LLC, 2015 UT 26, ¶ 13, 345 P.3d 655. The best indication of legislative intent is the statute‘s plain language. Id. In evaluating
A responsible party is liable to the public utility operating the high voltage overhead line for all damages to the facilities and for all liability incurred by the public utility as a result of any contact if: (a) the responsible party causes, permits, or allows a function or an activity in violation of any provision of this chapter; and (b) as a result, a physical or electrical contact with a high voltage overhead line occurs.
¶ 35 For authority, Rhodes cites our well-established rule that indemnification agreements are enforceable only so long as the agreement is clear and unambiguous and does not violate public policy. See Rothstein v. Snowbird Corp., 2007 UT 96, ¶ 6, 175 P.3d 560. However, this rule applies to contracts, not statutes. In this specific context, this is an important distinction. For although historically we have been willing to intervene in private contracts in very limited ways through exercise of our cоmmon law authority, we are not similarly free to “supplant the interests” of the legislature in pursuit of judicial notions of public policy. Id. ¶ 8. When it comes to statutes, our role is to “interpret[] and implement[] the policies enacted into law by the legislature.” McArthur v. State Farm Mut. Auto. Ins. Co., 2012 UT 22, ¶ 12, 274 P.3d 981. And since
¶ 36 Finally, in addressing the gross negligence issue, it has become apparent to the court that the question of causation is a crucial one that was not litigated below. Rhodes‘s arguments, though incomplete, suggest that it believes that the causation requirement of
CONCLUSION
¶ 37 Rhodes‘s arguments that HVOLA does not or should not apply to Rhodes fail. But because there are unresolved factual issues that bear on the key statutory questions of (1) whether Rhodes actually violated HVOLA and (2) whether Rhodes‘s violation, if any, caused the accident, we reverse the grant of summary judgment and remand for
