TOWN OF MONTEZUMA аnd Montezuma Municipal Gas Utility, Appellants/Cross-Appellees-Defendants, v. Kristy S. DOWNS, Individually and as personal representative of the estate of Ivan Dean Downs, and as Guardian of Susan Downs and Matthew Downs, Appellee/Cross-Appellant-Plaintiff.
No. 61A01-9701-CV-13.
Court of Appeals of Indiana.
Sept. 9, 1997.
I believe that the consideration of the factors set out in Schmith is a factual inquiry which renders summary judgment inappropriate. Thus, while I concur that the trial court erred in entering summary judgment for the Development Commission, I respectfully dissent from the order that judgment be entered summarily for the owner.
George M. Plews, Jeffrey D. Claflin, Donna C. Marron, Plews Shadley Racher & Braun, Indianapolis, for Appellee.
BAKER, Judge.
In this interlocutory appeal, appellants/cross-appellees Town of Montezuma and Montezuma Municipal Gas Utility (Montezuma) challenge the trial court‘s grant of partial summary judgment in favor of appellee/cross-appellant Kristy S. Downs individually, as personal representative of the Estate of Ivan Dean Downs, and as guardian of Susan and Matthew Downs. In particular, Montezumа contends that genuine issues of material fact exist which preclude the entry of summary judgment on the issue of its violation of several federal regulations. On cross-appeal, Downs contends that the trial court erroneously denied her motion for summary judgment on the issue of whether Montezuma waived the limitation of liability provisions of Indiana‘s Tort Claims Act (ITCA).1
FACTS
At approximately 1:30 a.m. on January 21, 1993, a natural gas explosion destroyed the Downs’ home, killing Ivan Dean Downs and injuring Kristy, Suzanne and Matthew Downs (hereinafter collectively the Downs). Specifically, the explosion occurred after a natural gas pipeline leading into the Downs’ home corroded and leaked gas, which ignited. This pipeline was installed by Montezuma in 1934 and placed into service in 1942. Although the pipeline leading into the Downs’ home was made of bare steel, Montezuma had implemented a plan in thе early 1990‘s to systematically replace all of the pipelines within its system with polyethylene pipe, which is less susceptible to corrosion than steel. As part of this plan, Montezuma had replaced the steel gas main on Jefferson Street, in front of the Downs’ home, with a polyethylene gas main. During this excava-
Following the explosion, federal, state and local authorities investigated. Soon thereafter, the National Transportation and Safety Board (NTSB) concluded that the explosion had been caused by corrosion of the bare steel service pipe which connected the Downs’ home with the gas main on Jefferson Street. Specifically, the NTSB‘s repоrt provided as follows:
[T]he probable cause of the accident was the failure of a corroded bare steel coupling under stress from a growing tree root pressing downward on the curb box and transferring the load to the pipe and coupling. Contributing to the accident was the failure of Montezuma Utilities to have an adequate surveillance program to detect corrosion and external forces such as those created by the tree.
Record at 86.
On March 8, 1994, the Downs filed a complaint against Montezuma, alleging that it negligently operated and maintained its pipeline system.2 Thereafter, the Downs filed a motion for partial summary judgment, claiming that Montezuma was negligent per se for violating several federal pipeline safety regulations. R. at 44. Additionally, the Downs argued that because Montezuma had purchased insurance in excess of the liаbility limitations provided in the ITCA, it had waived those liability limits.
On September 20, 1996, the trial court granted the Downs’ motion in part and denied it in part. Specifically, the trial court concluded that Montezuma was negligent per se for violating
DISCUSSION AND DECISION3
I. Standard of Review
Summary judgment is appropriate only when no genuine controversy exists. O‘Neal v. Throop, 596 N.E.2d 984, 986 (Ind.Ct.App. 1992), trans. denied. In reviewing the propriety of the grant of summary judgment, this court applies the same standard as the trial court. Id. The party seeking summary judgment has the initial burden of demonstrating that no genuine issue of material fact exists and that he or she is entitled to judgment as a matter of law. Ind. Trial Rule 56(C); Whiteco Industries, Inc. v. Nickolick, 571 N.E.2d 1337, 1339 (Ind.Ct.App.1991), trans. denied. Once the movant presents pleadings, depositions, answers to interrogatories, admissions or affidavits showing he or she is entitled to summary judgment, the
II. Federal Regulations
Montezuma challenges the trial court‘s grant of summary judgment in favor of the Downs on the basis of its alleged violation of several federal regulations. Under Indiana law, an unexcused or unjustified violation of a duty dictated by a statute is negligence per se. Inland Steel v. Pequignot, 608 N.E.2d 1378, 1383 (Ind.Ct.App.1993), trans. denied. Before determining that the violation of a statute constitutes nеgligence, however, the court must scrutinize the statute and consider “the purpose of the enactment, the persons whom it was intended to protect and the injuries which it was intended to prevent.” Id., quoting Reuille v. Bowers, 409 N.E.2d 1144, 1148 (Ind.Ct.App.1980).
In addition to determining whether a defendant violated a duty dictated by statute, the court must also consider whether the breach was the proximate cause of any injury. Id. “The violation of a statute raises no liability for injury to another unless the injury was in some manner the result of such violation.” Conway v. Evans, 549 N.E.2d 1092, 1095 (Ind.Ct.App.1990). In order for an injury to be the proximate result of a statutory violation, the injury must have been a foreseeable consequence of the violation and would not have occurred if the requirements of the statute had been observed. Ray v. Goldsmith, 400 N.E.2d 176, 179 (Ind.Ct.App.1980).
A. Valve Maintenance Regulation
First, Montezuma contends that the trial court erred in determining, as a matter of law, that it violated the Valve Maintenance Regulation,
1. Application of the Regulation
Initially, we address Montezuma‘s argument regarding the application of the Valve Maintenance Regulation. As previously stated, the inspection requirements of the Valve Maintenance Regulation only apply to valves which are necessary for the safe operation of a distribution system. According to Montezuma, the regulation is inapplicable because the valve at issue in the present case was a service-line valve, rather than a distribution valve.
In support of its argument, Montezuma designated the affidavit of Rick Nichols, the superintendent of Montezuma Utilities, who stated that a distribution valve services a large area and would only be found on a main
The Valve Maintenance Regulation is a subpart of Part 192, which is entitled, Transportation of Natural and Other Gas by Pipeline: Minimum Federal Safety Standards. The definitions applicable to Part 192 are contained in
Having determined that the Downs’ service-line valve was a distribution valve, we now consider whether the valve was necessary for the safe operation of the distribution system. As previously noted, the yearly inspection requirement contained in the Valve Maintenance Regulation applies only to those valves which are necessary for the safe operation of the distribution system. However, the regulation does not contain а test or other provision for determining whether a valve is within the regulation. Thus, we turn to another court which has considered this issue for guidance.
In Brady v. Consol. Edison Co. of New York, Inc. 103 Misc.2d 124, 425 N.Y.S.2d 444 (N.Y.Sup.Ct.1979), a New York trial court considered the scope of a utility‘s duty to inspect pursuant to the Valve Maintenance Regulation after a gas line inside a building separated, leaked gas and exploded. According to the utility, the gas line did not fall within the Valve Maintenance Regulation‘s inspection requirements because it was located inside a building. In addressing this issue, the New York court first noted that through its natural gas regulations, the Office of Pipeline Safety “has jurisdiction ... to regulate the transportation of gas to the point where it is used by the consumer.” Id. at 445. The court then determined that the valve in question, which was located inside the building, did not fall within the regulations because:
[t]he valves encompаssed by [the Valve Maintenance Regulation] are only those which would significantly reduce the time
it takes an operator to safely stop the flow of gas in an emergency. Intended by this section are only curb valves or distribution system sectionalizing valves which enable the operator to shut down a section or grid the distribution system in an emergency.
Similarly, we find that the Valve Maintenance Regulation‘s reference to valves which are necessary for the safe operation of a distribution system is intended to include those valves which enable the utility to safely handle a natural gas emergency. In the instant case, the accident report prepared by the NTSB, which Montezuma does not dispute, reveals that immediately after the explosion, Montezuma shut down several gas lines in order to minimize the damage. In particular, the report reveals that Montezuma shut down the gas meter to the Downs’ demolished home and another polyethylene gas line, presumably located on the main gas line running outside the Downs’ home. Additionally, Montezuma shut down the valve located in the curb box outside the Downs’ home, which connected the Downs’ service line to the main gas line. In order to access the curb box, however, Montezuma had to excavate a large tree which had “grown over and around the curb box and the service line. The roots from this tree had to be cut with a backhoe to complete the excavation.” R. at 85.
From this evidence, it is apparent that the Downs’ service-line valve, located inside the curb box, was necessary for Montezuma to shut off the flow of gas to the Downs’ home in an emergency. Because Montezuma failed to present evidence to the contrary, other than its argument that the valve was not part of the distribution system, we must conclude that the Downs’ service-line valve was necessary for the safe operation of the distribution system and, thus, was within the scope of the Valve Maintenance Regulation.
2. Violation of the Regulation
Having determined that the Downs’ service-line valve was subject to the yearly inspection requirements of the Valve Maintenance Regulation, we must consider whether Montezuma violated these requirements.
The record in the instant case reveals that the tree root which overgrew the curb box placed pressure on the corroded steel service line, which caused the gas to leak. Further, it is apparent from the extent of effort necessary to access the curb box that Montezuma did not inspect or maintain the valves on a yearly basis as required by the regulation. Finally, Montezuma presents no evidence, suсh as records or testimony, that it engaged in such inspection. Although we are required to construe all facts and inferences in favor of the nonmoving party, we find no issue of fact exists regarding whether Montezuma violated its statutory duty to inspect and maintain the Downs’ service-line valve. Thus, we affirm the trial court‘s grant of summary judgment in favor of the Downs on this issue.
3. Proximate Cause
Next, Montezuma contends that the trial court erred in determining as a matter of law that its violation of the Valve Maintenance Regulation was the proximate cause of the Downs’ damage. As we previously noted, the violation of a statute does not result in liability unless the injury was in some manner proximately caused by the violation. Conway, 549 N.E.2d at 1095. A negligent act or omission is the proximate cause of an injury if the injury is a natural and probable consequence which, in light of the circumstances, should reasonably have been foresеen or anticipated. City of Portage v. Lindbloom, 655 N.E.2d 84, 86 (Ind.Ct.App.1995), trans. denied.
In the instant case, Montezuma does not challenge the finding of the NTSB that the explosion at the Downs’ home was caused by the corrosion of the service line which was enhanced by pressure from tree roots which had overgrown the curb box containing the valve. Instead, Montezuma argues that the Downs presented no evidence that its failure to inspect the curb box contributed to the explosion. Further, Montezuma argues that the only foreseeable consequence of its failure to inspect the service-line valve “would be that a leak in the valve or some other problem with the valve would go undetected.” Appellant‘s Brief at 13. We disagree.
B. Exposed Pipeline Regulation8
Next, Montezuma challenges the trial court‘s determination that it was negligent per se for violating the Exposed Pipeline Regulation,
Whenever an operator has knowledge that any portion of a buried pipeline is exposed, the exposed portion must be examined for evidence of external corrosion if the pipe is bare, or if the coating is deteriorated. If external corrosion is found, remedial action must be taken to the extent required by § 192.483 and the applicable paragraphs of §§ 192.485, 192.487, or 192.489.
In the instant case, the evidence is undisputed that the Downs’ service line was exposed in late 1991 or early 1992 when Black‘s Pipeline replaced the gas mаin under Jefferson street, in front of the Downs’ home, with a polyethylene pipeline. The only issue, then, is whether Montezuma inspected the Downs’ service line at that time.
In support of their motion for summary judgment on this issue, the Downs designated the deposition of Rick Nichols, the superintendent for Montezuma Utilities, who Montezuma had designated as its representative. In his deposition, Nichols testified as follows:
Q: Going back to, in 1992, when the service pipes would have been exposed as part of the installation of the four-inch pipe, did—were the service pipes at that time inspected for corrosion?
A: I did not inspect them.
Q: Do you know if they were inspected by the town?
A: No, I did not.
...
Q: Did the town have as a goal inspection of those service lines during the time they were exposed during the installation of the four-inch line below the line, service line?
A: Not to my knowledge.
...
Q: When you say not to your knowledge, wouldn‘t you be aware of that if it had occurred?
A: Not necessarily, not at that time.
R. at 856-857. In addition, the Downs designated the NTSB accident report, which provided as follows:
In 1991, when the 4-inch PE line was installed, along the west side of Jefferson Street, Montezuma Utilities could have inspected the bare steel service line to 1113 Jefferson Street for corrosion. The Safety
Board has learned that there is no record of this having been done.
R. at 86.
In response, Montezuma submitted the affidavit of Monte Black of Black Pipeline, who stated that “[a]fter the excavation in question, the area was inspected by representatives of the Town of Montezuma who were then and there present....” R. at 904. According to Montezuma, this affidavit raises a genuine issue regarding whether it inspected the exposed pipeline at the time of the excavation. In addition, Montezuma argues that the Downs’ evidence did not definitively show that no inspection took place; rather, it only revealed that Nichols and the NTSB had no information regarding whether an inspection occurred. We disagree.
Initially, we note that Black‘s affidavit was submitted in support of Black Pipeline‘s motion for summary judgment. The purpose of Black‘s testimony was to show that its excavation activities did not dent or bend existing pipes. The affidavit indicates that the inspection to which Mr. Black referred occurred after the excavation project was complete, not during the time that the pipeline was exposed. Further, Black‘s affidavit does not indicate that Montezuma personnel inspected the pipeline for external corrosion or deterioration.
Additionally, the evidence presented by the Downs, including the NTSB report and Nichols’ deposition, indicates, at the very least, that no evidence exists that Montezuma inspected the pipeline. Although Nichols did not state conclusively that the pipeline was not inspected, he stated that he was unaware of an inspection. Given that Nichols was designated by Montezuma as its representative for the deposition, his statements are binding upon it. See Ind. Trial Rule 30(B)(6) (organization named in discovery request shall designate person authorized to testify on its behalf, who shall testify to matters known or available to organization). Under these circumstances, we conclude that Montezuma presented no evidence to raise a genuine issue as to whether it inspected the pipelines.9 Thus, the trial court correctly determined that Montezuma was negligent per se for violating the Exposed Pipeline Regulation.
C. Surveillance and Excavation Regulations
In a third challenge to the trial court‘s summary judgment order, Montezuma contends that the court erred in determining, as a matter of law, that it violated the Survеillance Regulation,
(a) Each operator shall have a procedure for continuing surveillance of its facilities to determine and take appropriate action concerning changes in class location, failures, leakage history, corrosion, substantial changes in cathodic protection requirements, and unusual operating and maintenance conditions.
Initially, we note that the parties disagree as to whether the Surveillance and Excavation Regulations require the utility to have written policies or procedures, or
The clear intent of the regulations is to require natural gas utilities to establish written policies and procedures to ensure a reasonable level of safety. Further, the regulations, particularly the Excavation Regulation, identify specific provisions that must be included in the written programs, including procedures for identifying persons who normally engage in excavation activities, notifying persons in the vicinity of the pipelines of the excavation, receiving and recording notification of excavation activities and temporarily marking pipelines in the area of excavation activities. Therefore, to comply with the Surveillance and Excavation Regulations, Montezuma was required to have written plans or policies for surveillance and damage prevention.10
Here, in support of their motion for summary judgment, the Downs designated evidence demonstrating that no such written policies or procedures existed. Specifically, the Downs presented the NTSB report, which provides in part:
[The Surveillance Regulation] states that each operator shall have a procedure for continuing surveillance of its facilities to determine and take appropriate action con-
cerning changes in leakage history, corrosion and other unusual operating and maintenance conditions. Although this procedure has been requested from Montezuma Utilities, to date the Safety Board has not received this procedure.
R. at 85. Additionally, the Downs presented the affidavit of an expert, Dr. Douglas Chisholm, who was formerly the Chief of Research of the Office of Pipeline Safety of Research and Special Programs Administration for the Department of Transportation. Dr. Chisholm reviewed Montezuma‘s materials and concluded that it “has not provided the NTSB its procedures for continuing surveillance and there is no evidence of such a procedure in place or being followed.” R. at 221-222.
In response, Montezuma designated evidence showing that it had conducted cathodic protection and leak surveys, that its meter readers made monthly checks for leaks and that it had a program for reconditioning lines and replacing lines which could not be reconditioned. Further, Montezuma presented its Operating and Maintenance Plan, which discusses the policy and procedure for surveillance of the lines. R. at 1045-59. Specifically, the Plan includes policies for leakage surveys, inspecting and servicing valves and cathodic protection surveys, which includes corrosion control monitoring. Based upon this evidence, we find that Montezuma presented a question of fact regarding whether it complied with the requirements of the Surveillance Regulatiоn. However, none of Montezuma‘s designated evidence showed that it had similar policies or procedures for excavation activities.11
Nevertheless, we find it hard to believe that the Excavation Regulation was solely intended to protect those persons involved in excavation activities. Were that the case, the regulation would not require written procedures for informing persons in the vicinity of the excavation activities. Instead, we believe, as stated previously, that the purpose of the regulations is to ensure the safety of all persons, including the Downs, from the highly-explosive properties of natural gas.
IV. Limitation of Liability
On cross-appeal, thе Downs contend that the trial court erroneously denied their motion for summary judgment on the issue of the limitation of liability provision of the Indiana Tort Claims Act (ITCA).12 Under the ITCA, the amount of damages that may be assessed in tort against a governmental entity is limited as follows:
The combined aggregate liability of all governmental entities and of all public employees, acting within the scope of their employment and not excluded from liability under section 3 of this chapter, does not exceed three hundred thousand dollars ($300,000) for injury to or death of one (1) person in any one (1) occurrence and does not exceed five million dollars ($5,000,000) for injury to or death of all persons in that occurrence.
In support of their argument, the Downs rely on another section of the ITCA which permits governmental entities to purchase insurance. This section provides:
[a] governmental entity may purchase insurance to cover the liability of itself or its employees. Any liability insurance so purchased shall be purchased by invitation to and negotiation with providers of insurance and may be purchased with other types of insurance. If such a policy is purchased, the terms of the policy govern the rights and obligations of the governmental entity and the insurer with respect to the initiation, settlement and defense of claims or suits brought against the governmental entity or its employees covered by the policy.
When construing a statute, our foremost duty is to determine and give effect to the true intent of the legislature. Indiana Dep‘t of Human Services v. Firth, 590 N.E.2d 154, 157 (Ind.Ct.App.1992), trans. denied. To do this, we must view the statute within the context of the entire act, rather than than in isolation. Id. Absent a clearly manifested purpose to the contrary, we endeavor to give words appearing in the statute their plain and ordinary meaning. Id. We will not construe statutes in a manner leading to absurdity or hardship. Id.
Another panel of this court recently addressed the issue presented here. In In re Train Collision at Gary, Ind. on Jan. 18, 1993, 654 N.E.2d 1137 (Ind.Ct.App.1995), trans. denied, plaintiffs, who were passengers and personal representatives of deceased passengers involved in a head-on train collision, appealed the trial court‘s determination that the Northern Indiana Commuter Transportation District‘s (NICTD) liability was limited by the ITCA. Specifically, the plaintiffs claimed, similar to the instant case, that the NICTD‘s procurement of excess liability insurance constituted a waiver of the liability limitations of the ITCA to the extent of the insurance coverage.
In support of their argument, the plaintiffs in In re Train Collision relied on Flowers v. Board of Com‘rs of Vanderburgh County, 240 Ind. 668, 168 N.E.2d 224 (1960), a case also cited by the Downs. In Flowers, a plaintiff filed a complaint against the Board of Commissioners and the Park Board after she suffered injuries while roller-skating in the park. At that time, governmental entities were entitled to immunity from tort liability for their negligence. However, Burns 39-1819, the predecessor to
Since Flowers, the common law defense of governmental immunity has been replaced by the ITCA. The ITCA no longer provides for waiver of the limitations of liability. For this reason, this court held in In re Train Collision that the NICTD did not waive the statutory limitation on its liability by purchasing insurance. In particular, we found:
Neither the fact that the Legislature required NICTD to purchase liability insurance under the Transportation Act nor the fact that governmental entities have the power to purchase insurance under the Tort Claims Act lead us to conclude that the Legislature intended for such purchases to provide a waiver of the liability limitations.
Id.13 See also Rodgers v. Martinsville School Corp., 521 N.E.2d 1322, 1325 (Ind.Ct.App.1988) (governmental entity‘s purchase of liability insurance did not waive notice requirements of ITCA), trans. denied.
We find In re Train Collision persuasive. The purpose of the limitation of liability provision of the ITCA is to limit the financial responsibility of the state by restricting damages in tort in order to protect the fisсal integrity of governmental bodies. Liability limitations on a person‘s recovery against the state or a political subdivision are designed to preserve public treasuries, protect against the possibility of unusually large recoveries, and discourage excessive litigation. Id., 654 N.E.2d at 1146 (citation omitted). In accordance with this purpose, therefore, we do not believe that a governmental entity that chooses to insure itself, even in excess of its liability, has waived the limits expressly established by the legislature. Were we to find otherwise, we would ignore the intent of the legislature as expressed in the statute. Further, we are mindful of the general rule that once the legislature acts in a particular area, it has preempted all other activity in that area. Yeager v. Bloomington Obstetrics and Gynecology, Inc., 585 N.E.2d 696, 699 (Ind.Ct.App.1992), aff‘d 604 N.E.2d 598 (Ind.1992). Because the legislature has chosen to restrict governmental liability in this area, we cannot stray from its express limitations. For these reasons, we agree with the trial court‘s determination that the Downs’ recovery is limited by the ITCA and we affirm summary judgment in favor of Montezuma on this issue.14
V. Conclusion
In sum, we affirm the trial court‘s grant of summary judgment in favor of the Downs on the issue of Montezuma‘s negligence per se for violating the Valve Maintenance Regulation, the Exposed Pipeline Regulation and the Excavation Regulation. Additionally, we affirm the trial court‘s determination that
Judgment affirmed in part, reversed in part and remanded.
ROBERTSON, J., concurs.
KIRSCH, J., concurs and dissents, with opinion.
KIRSCH, Judge, concurring and dissenting.
I fully concur in the majority‘s resolution of all issues in the appeal brought by the Town of Montezuma and the Montezuma Municipal Gas Utility. From their denial of the Downs’ cross-appeal, however, I respectfully dissent.
The majority follows In re Train Collision at Gary, Ind. on Jan. 18, 1993, 654 N.E.2d 1137 (Ind.Ct.App.1995), in which a panel of this court held that a governmental entity‘s procurement of liability insurance coverage in excess of the liability limitation in the Indiana Tort Claims Act (ITCA) did not constitute a waiver of the limitation. The In re Train Collision case was based upon the conclusion that there was no showing “that the Legislature intended for such purchases to provide a waiver of the liability limitations.” Id. at 1149. ITCA, however, contains no indication of legislative intent on the issue. ITCA did not restrict the ability of governmental entities to purchase liability insurancе. Such entities are free to purchase coverage in excess of the limitation on their liability. When they do so, they must do so with the intent that the insurance which they procure and pay for will be available to compensate those who are injured as the result of governmental torts.
None of the purposes of the limitation of liability provision of ITCA which are set out in the majority opinion will be thwarted by this construction. The financial integrity of governmental bodies will not be threatened; public treasuries will be preserved; unusually large recoveries will not be common place; excessive litigation will not be encouraged. Rather, all that will happen is that an insurance carrier will be held liable for the coverage it agreed to provide.
The Downs’ family sustained a devastating loss. The Town of Montezuma insured against that loss by procuring liability insurance coverage in excess of the limitation of the Indiana Tort Claims Act. The liability insurance carrier bargained for and received premiums for the full amount of the coverage provided. This court is faced with the choice between under compensating the Downs for their terrible loss or unjustly enriching the liability carrier which bargained for and received a premium for the excess coverage. The choice is clear. Failing to hold an insurance company liable for the coverage which it freely agreed to provide and for which it was fully compensated is neither good law nor good policy.