NATIONAL UNION INSURANCE COMPANY OF PITTSBURGH, PA., ET AL., Appellants, v. PUGET SOUND POWER & LIGHT, Respondent.
No. 40979-4-I
Division One. February 16, 1999.
94 Wash. App. 163
The trial court having properly instructed the jury with respect to unwitting possession, and there being sufficient evidence to support Anderson‘s conviction, we affirm.
A majority of the panel having determined that the remainder of this opinion lacks precedential value and will not be printed in the Washington Appellate Reports but will be filed for public record in accord with
AGID and BECKER, JJ., concur.
Review granted at 138 Wn.2d 1007 (1999).
Peter D. Byrnes, Paul R. Raskin, and Ralph E. Cromwell, Jr., of Byrnes & Keller, L.L.P., for respondent.
KENNEDY, C.J. — National Union Insurance Company and various other insurers (collectively, National Union), as subrogees of The Boeing Company (Boeing), sued Puget Sound Power & Light (Puget Power), among others, to recover insurance proceeds paid to Boeing for business losses during a windstorm-related electric service interruption. Puget Power moved for summary judgment dismissing it from the lawsuit, contending that its “continuity-of-service” tariff absolves it from liability for any electric service interruption damages that “result from” circumstances beyond its reasonable control—such as windstorms—notwithstanding its possible negligence in failing to utilize available backup equipment to serve its customers while storm damage to regular sources of electricity is being repaired. Alternatively, Puget Power
We hold that Puget Power‘s continuity-of-service tariff does not absolve it from liability for negligent failure to utilize available backup equipment in order to provide power to its customers while storm damage to regular sources of power is being repaired. And viewing the evidence admitted by the trial court for purposes of the summary judgment hearing in the light most favorable to National Union, we conclude that Puget Power‘s unexplained failure to utilize apparently available backup generators to supply Boeing with electric service during the windstorm-related service interruption—the only factual basis upon which National Union seeks reversal of the trial court‘s summary judgment order—raises a genuine issue of material fact for trial regarding Puget Power‘s alleged negligence. Accordingly, we reverse and remand for trial on the factual issue of whether Puget Power negligently failed to utilize backup generators to supply Boeing with electric service while the windstorm damage to regular sources of power was being repaired, resulting in damage to Boeing.
SUBSTANTIVE FACTS
Puget Power entered into a contract with Boeing to provide power and lighting service, subject to the regulatory authority of the Washington Utilities and Transportation Commission (WUTC) and Puget Power‘s schedules and tariffs on file with the WUTC. On January 20, 1993, the “Inauguration Day Storm” interrupted electric service to over 500,000 utility customers in the Puget Sound area, including Boeing‘s Renton plant.
Eighteen hours before the windstorm reached the Puget
PROCEDURAL HISTORY
Boeing filed a claim with National Union for $4 million in business losses caused by the electric service interruption. Following various adjustments, National Union paid Boeing insurance proceeds of $2,958,631. National Union, as subrogees to Boeing‘s business interruption losses, then filed a summons and complaint against Puget Power, the City of Seattle, and Snohomish County Public Utility District No. 1 to recover the insurance proceeds paid to Boeing—alleging negligence, breach of contract, breach of implied warranty of fitness for a particular use, and breach of statutory duties.
Puget Power moved for summary judgment dismissing it from the lawsuit, contending that its “continuity-of-service” tariff—incorporated by reference into its contract with Boeing—shields it from liability for service interruption damages caused by windstorms:
CONTINUITY OF SERVICE - Electric service is inherently subject to interruption, suspension, curtailment and fluctuation. Neither the Company nor any other person or entity shall have any liability to any Customer or any other person or entity for any interruption, suspension, curtailment, or fluctuation in service or for any loss or damage caused thereby if such interruption, suspension, curtailment, or fluctuation results from any of the following:
a. Causes beyond the Company‘s reasonable control
including, but not limited to, fire, flood, drought, winds, acts of the elements[.]
Clerk‘s Papers at 51-52. Alternatively, Puget Power contended that National Union failed to raise a genuine issue of material fact regarding Puget Power‘s alleged negligence in failing to fire up the Shuffleton plant, stating: “Although not relevant to this motion which seeks dismissal of the claims asserted herein because of the clear tariff exemption, Puget Power‘s construction, maintenance, and storm-related practices were, at the time of the Storm, as good as other power providers in the industry.” Clerk‘s Papers at 23.
In response, National Union argued that Puget Power‘s continuity-of-service tariff does not absolve it from liability for service interruption damages concurrently caused by circumstances beyond its reasonable control and its own negligence in failing to fire up the Shuffleton plant. National Union further argued that Puget Power‘s failure to utilize the Shuffleton plant to supply Boeing with electric service during the windstorm-related service interruption raises genuine issues of material fact regarding Puget Power‘s concurrent negligence. Puget Power then filed an affidavit, which the trial court struck based on the affiant‘s lack of personal knowledge, stating that the Shuffleton plant could not have been used to supply Boeing with electric service during the windstorm-related service interruptions.
After ruling on the parties’ respective motions to strike, granting some of them and denying others, the trial court granted Puget Power‘s motion for summary judgment, dismissing Puget Power from the lawsuit. National Union petitioned the Supreme Court for direct review. The Supreme Court denied National Union‘s petition and transferred the appeal to this court.
On appeal, National Union continues to contend that Puget Power‘s continuity-of-service tariff does not absolve Puget Power from liability for service interruption dam-
The factual issue in dispute here is whether [Puget Power‘s] failure to use Shuffleton to the end of avoiding or mitigating Boeing‘s outage (as well as the outages of other customers) was a negligent breach of common law, contractual and statutory duties. [Puget Power‘s] general maintenance practices, though perhaps relevant to this issue, are not dispositive and not the basis for the Insurers’ claim.
Appellants’ Reply Br. at 15. In addition, both parties appeal various aspects of the trial court‘s rulings on the motions to strike.
DISCUSSION
I. Does Puget Power‘s continuity-of-service tariff absolve it from liability for service interruption damages caused by its negligent failure to utilize available backup sources of power to serve its customers while windstorm damage to regular sources of power is being repaired?
As an initial matter, it should be noted that
Although the parties dispute the proper interpretation of the continuity-of-service tariff, they do not dispute that the tariff was properly filed with and approved by the WUTC. Therefore, for purposes of summary judgment, we will assume that the continuity-of-service tariff has the force and effect of state law. And “[i]n view of this assumption, we conclude that standard principles of statutory construction apply to the interpretation of the tariff.” US West Communications, Inc. v. City of Longmont, 924 P.2d 1071, 1079 (Colo. Ct. App. 1995), aff‘d, 948 P.2d 509 (Colo. 1997); accord State v. McGinty, 80 Wn. App. 157, 160, 906 P.2d 1006 (1995) (noting that statutory rules of construction “apply equally to administrative rules and regulations“).
Under standard principles of statutory construction, when legislative language is plain and unambiguous, its meaning must be derived from the words themselves without judicial construction or interpretation. Welch v. Southland Corp., 134 Wn.2d 629, 633, 952 P.2d 162 (1998). But if the legislative language is ambiguous—i.e., susceptible to more than one meaning—the court must resort to rules of construction to ascertain the drafters’ intent when they promulgated the language. Id. The proper interpretation of a tariff, like the proper interpretation of a statute, is a question of law. US West, 924 P.2d at 1079.
In support of its proposed interpretation of the continuity-of-service tariff, Puget Power argues that the plain language of the tariff does not require that the circumstances beyond its reasonable control be the sole cause of the service interruption damages to absolve it from liability, but only that the service interruption damages “result from” a cause beyond its reasonable control. And,
National Union, on the other hand, argues that the plain language of the tariff does not absolve Puget Power from liability for service interruption damages that result from a cause beyond its reasonable control, but only from service interruption damages solely caused by circumstances beyond its reasonable control. And, according to National Union, Puget Power‘s interpretation conflicts with
Looking only to the plain language of the continuity-of-service tariff, both parties’ interpretations seem reasonable. That is, the language could reasonably be interpreted as absolving Puget Power from liability when the service interruption damage “results from” a cause beyond its reasonable control (notwithstanding its concurrent negligence)
Both parties cite a number of cases interpreting a wide variety of statutes and regulations to support their respective proposed interpretations of the continuity-of-service tariff. But these cases shed little light on what interpretation the WUTC intended when it approved this particular tariff. Therefore, instead of focusing on these cases, we look to the public utilities statutory and regulatory scheme as a whole to ascertain the WUTC‘s intent when it approved Puget Power‘s continuity-of-service tariff. See, e.g., ITT Rayonier, Inc. v. Dalman, 122 Wn.2d 801, 807, 863 P.2d 64 (1993) (considering “regulatory and statutory scheme as a whole” to ascertain meaning of Department of Labor and Industries’ notice regulation).
To permit the WUTC to carry out its mission, the WUTC is authorized to enact necessary rules and regulations. Tanner Elec. Coop. v. Puget Sound Power & Light Co., 128 Wn.2d 656, 666, 911 P.2d 1301 (1996) (quoting
Maintenance—each utility shall maintain its plant and system in such condition as will enable it to furnish adequate service.
Interruptions of service—each utility shall endeavor to avoid interruptions of service, and, when such interruptions occur, to reestablish service with a minimum of delay.
Given this statutory and regulatory scheme as a whole, it seems highly unlikely that the WUTC, when it approved this particular tariff, intended to absolve Puget Power from liability for its own allegedly negligent failure to utilize available backup equipment in order to reestablish service with a minimum of delay while storm damage to regular equipment is being repaired. First, absolving Puget Power of liability for its negligent failure to utilize available backup equipment would be at odds with its statutory duty to provide “adequate and efficient” electric service,
Puget Power next contends that because Boeing‘s service contract incorporated by reference the continuity-of-service tariff, the parties contractually allocated the risk from service interruptions. Therefore, Puget Power maintains that the economic loss rule prevents National Union, as Boeing‘s subrogee, from recovering damages under a tort theory:
The economic loss rule marks the fundamental boundary between the law of contracts, which is designed to enforce expectations created by agreement, and the law of torts, which is designed to protect citizens and their property by imposing a duty of reasonable care on others. The economic loss rule was developed to prevent disproportionate liability and allow parties to allocate risk by contract. Economic loss is a conceptual device used to classify damages for which a remedy in tort or contract is deemed permissible, but are more properly remediable only in contract. Moreover, “economic loss describes those damages falling on the contract side of ‘the line between tort and contract.‘”
Berschauer/Phillips Constr. Co. v. Seattle School Dist. No. 1, 124 Wn.2d 816, 821-22, 881 P.2d 986 (1994) (citations omitted).
As discussed above, the parties do not dispute that the continuity-of-service tariff has the force and effect of state law. And once the tariff took effect, the parties could not negotiate around its terms:
No gas company, electrical company or water company shall charge, demand, collect or receive a greater or less or different compensation for any service rendered or to be rendered than the rates and charges applicable to such service as specified in
its schedule filed and in effect at the time, nor shall any such company directly or indirectly refund or remit in any manner or by any device any portion of the rates or charges so specified, or furnish its product at free or reduced rates . . . No gas company, electrical company or water company shall extend to any person or corporation any form of contract or agreement or any rule or regulation or any privilege or facility except such as are regularly and uniformly extended to all persons and corporations under like circumstances.
Contract law is designed to enforce the expectancy interests created by agreement between private parties. The law imposes no standards to judge each party‘s performance; the only standards are those that the parties have agreed upon. As such, contract law seeks to enforce standards of quality as defined in the contract.
Sidney R. Barrett Jr., Recovery of Economic Loss in Tort for Construction Defects: A Critical Analysis, 40 S.C. L. REV. 891, 901 (1989), cited in Berschauer/Phillips, 124 Wn.2d at 821-22.
Moreover, National Union‘s claims against Puget Power are for breaches of statutory and regulatory duties independent of Boeing and Puget Power‘s contract. Therefore, National Union‘s claims are better described as sounding in tort:
In contrast, tort law is designed to secure the protection of all citizens from the danger of physical harm to their persons or to their property. Tort standards are imposed by law without reference to any private agreement. They obligate each citizen to exercise reasonable care to avoid foreseeable physical harm to others. As such, tort law primarily is concerned with enforcing standards of conduct.
Sidney R. Barrett Jr., Recovery of Economic Loss, 40 S.C. L. REV. at 901-02. And the Legislature specifically authorizes
III. Did National Union set forth sufficient facts to raise a genuine issue of material fact for trial regarding Puget Power‘s alleged negligence in failing to fire up the Shuffleton plant, thereby precluding summary judgment?
Puget Power contends that even assuming that it can be held liable for service interruption damages concurrently caused by circumstances beyond its reasonable control and its own negligent failure to utilize available alternate sources of power, National Union failed to set forth sufficient facts to raise a genuine issue of material fact for trial regarding its alleged concurrent negligence.
Summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.”
“A defendant may move for summary judgment by either (1) pointing out the absence of competent evidence to support the plaintiff‘s case or (2) establishing through affidavits that no genuine issue of material fact exists.” Fisher v. Aldi Tire, Inc., 78 Wn. App. 902, 906, 902 P.2d 166 (1995), review denied, 128 Wn.2d 1025 (1996). “The plaintiff must then set forth specific facts showing that there is a genuine issue of material fact for trial.” Ernst Home Ctr., Inc. v. United Food & Commercial Workers Int‘l Union, 77 Wn. App. 33, 40, 888 P.2d 1196 (1995) (citing Young v. Key Pharm., Inc., 112 Wn.2d 216, 225-26, 770 P.2d 182 (1989)). “The motion will be granted, after considering the evidence in the light most favorable to the nonmoving party, only if reasonable persons could reach but one conclusion.” Reynolds v. Hicks, 134 Wn.2d 491, 495, 951 P.2d 761 (1998). “When reviewing a summary judgment order, an appellate court engages in the same inquiry as the trial court.” Id.
Under Washington tort law, “to prove an actionable claim for negligence, the plaintiff must show (1) the existence of a duty to the complaining party, (2) a breach of that duty, (3) a resulting injury, and (4) that the breach was the proximate cause of the injury.” Id. at 495. “A breach of a duty imposed by statute, ordinance, or administrative rule shall not be considered negligence per se, but may be considered by the trier of fact as evidence of negligence[.]”
In support of its motion for summary judgment dismissal of National Union‘s complaint, Puget Power presented an affidavit from Jerry L. Henry, Puget Power‘s Vice President of Engineering and Operating Services, to establish the absence of a material fact for trial. Henry stated that “Puget Power‘s practices, including its construction, maintenance, and storm-related practices are as good as if not better, than those of most other providers in the industry.” Clerk‘s Papers at 40 (Henry Aff. ¶ 12). Henry also stated that the windstorm‘s severity interrupted electric service at Boeing‘s Renton plant even though it is served by multiple backup lines. (Henry Aff. ¶¶ 10-11). According to Henry, the only way to ensure that windstorms of that magnitude do not interrupt electric service is to bury the
In response, National Union presented an affidavit from William A. Thue, an engineering consultant with experience in the electric utilities industry. Thue stated that at the time of the Inauguration Day Storm, Puget Power maintained a generator facility, the Shuffleton Steam Plant, immediately adjacent to Boeing‘s Renton plant. (Thue Aff. ¶ 7). According to Thue, the Shuffleton plant had the capacity to serve Boeing‘s Renton plant‘s electric service needs during the windstorm-related service interruption and was interconnected to Boeing‘s Renton plant via a substation. (Thue Aff. ¶ 7). Thue also stated that Puget Power lists the Shuffleton plant as a fixed asset for regulatory purposes, meaning that the plant is an available and working source of electric power. (Thue Aff. ¶ 6). In addition to Thue‘s affidavit, National Union presented evidence that Puget Power had represented the Shuffleton plant as “a cold standby, electric generating facility which is primarily used during peak load operating and emergencies, and equipment outages, and to maintain reliability of service during adverse water or weather conditions.” Clerk‘s Papers at 121 (Letter from Puget Power to Puget Sound Air Pollution Control Agency 1 (Nov. 15, 1979)).2
In support of its reply brief, Puget Power presented an
National Union moved to strike Fleisher‘s affidavit because Fleisher, who did not work at the Shuffleton plant at the time of the Inauguration Day Storm, lacked personal knowledge about the amount of time it would have taken to start up the Shuffleton generators. In its cross-appeal, Puget Power contends that the trial court erred in granting the motion, because National Union “did not submit evidence indicating that Fleisher did not still have knowledge about the Shuffleton operations, notwithstanding his transfer to another facility in 1992, or that the Shuffleton plant was modified in any way after Mr. Fleisher was transferred.” Resp‘t‘s Br. at 42. But the burden is on the affiant to “affirmatively show competence to testify to the matters stated. It is not enough that the affiant be ‘aware of’ or be ‘familiar with’ the matter; personal knowledge is required.” Marks v. Benson, 62 Wn. App. 178, 182, 813 P.2d 180 (1991). Fleisher states nothing in his affidavit that indicates he had personal knowledge regarding the start-up procedures at the Shuffleton plant after he was transferred to another facility. Therefore, the trial court did not err in striking Fleisher‘s affidavit.
As discussed above, National Union presented evidence that at the time of the Inauguration Day Storm, Puget Power maintained the Shuffleton plant as a backup generator facility. The Shuffleton plant was located immediately adjacent to and was interconnected with Boeing‘s Renton plant, and had the capacity to provide Boeing‘s Renton plant‘s electric service needs during the
CONCLUSION
Puget Power‘s continuity-of-service tariff does not absolve it from liability its allegedly negligent failure to utilize the Shuffleton plant to provide power to Boeing while storm damage to its regular equipment was being repaired. And viewing the admitted evidence in the light most favorable to National Union, Puget Power‘s unexplained failure to use the Shuffleton plant to supply Boeing with electric service—the only factual basis upon which National Union seeks reversal of the trial court‘s summary judgment order—raises a genuine issue of material fact for trial regarding Puget Power‘s alleged negligence. Accordingly, we reverse and remand for trial on the sole factual issue of whether Puget Power negligently failed to use the Shuffleton plant to supply Boeing with interim electric service, thereby proximately causing business interruption losses to Boeing.
BECKER, J. (dissenting) — I respectfully dissent from the majority‘s holding that Puget Sound Power & Light must stand trial for failing to fire up the generator at the Shuffleton plant in anticipation of the Inauguration Day storm. I would hold that National Union Insurance Company did not establish duty in its response to Puget Power‘s motion for summary judgment.
National Union relies on
Interruptions of service—each utility shall endeavor to avoid interruptions of service, and, when such interruptions occur, to reestablish service with a minimum of delay.
When it is necessary for a utility to make repairs to or change its facilities the utility may, without incurring any liability therefor, interrupt service for such periods as may be reasonably necessary, and in such manner as to minimize the inconvenience to customers, provided that, when practicable, such interruption shall be during working hours regularly maintained by the utility. Police and fire departments affected by the interruption shall be individually notified. All customers affected by a scheduled interruption shall be given notification,
through newspapers, radio announcements or other means, at least one day in advance.
Provisions in a statute are read in context of the statute as a whole. Pope v. University of Wash., 121 Wn.2d 479, 489, 852 P.2d 1055, cert. denied, 510 U.S. 1115, 114 S. Ct. 1061 (1993). Read in context, the regulation relied on does not impose upon Puget Power any specific duty with respect to the reestablishment of service after a natural disaster.3
Precluding Puget Power‘s liability here is consistent with the language of the tariff enacted by Washington Utilities and Transportation Commission, providing that “Neither the Company nor any other person or entity shall have any liability to any Customer . . . for any interruption . . . in service for any loss or damage caused thereby if [it] results from any of the following: . . . Causes beyond the Company‘s reasonable control including, but not limited to, fire, flood, drought, winds, acts of the elements.”
If Puget Power‘s failure to start the backup generator can be found to breach a duty imposed by
I would hold the regulation was not intended to give rise
Review denied at 138 Wn.2d 1010 (1999).
Notes
First, instead of addressing the language of the continuity-of-service tariff, the dissent concludes that summary judgment was appropriate because “National Union did not establish duty in its response to Puget Power‘s motion for summary judgment.” But Puget Power does not dispute that
Second, even if the dissent‘s approach is analytically correct, we do not agree that
Finally, the dissent‘s statement that “any customer who suffered power loss damage in the Inauguration Day storm could have been a plaintiff along with Boeing” assumes facts not in the record and, in any event, would be true of only those customers whose damages could have been mitigated by firing up the Shuffleton plant.