Pierce v. Pacific Gas & Electric Co.

• Decision Date: 26 March 1985
• Citation: 212 Cal.Rptr. 283,166 Cal.App.3d 68
• Court: California Court of Appeals Court of Appeals
• Parties: , 60 A.L.R.4th 709, 41 UCC Rep.Serv. 20 Gail PIERCE and Kenneth Pierce, Plaintiffs and Appellants, v. PACIFIC GAS & ELECTRIC COMPANY, Defendants and Respondents. Civ. 23282.

Page 283

212 Cal.Rptr. 283

166 Cal.App.3d 68, 60 A.L.R.4th 709, 41 UCC Rep.Serv. 20

Gail PIERCE and Kenneth Pierce, Plaintiffs and Appellants, v. PACIFIC GAS & ELECTRIC COMPANY, Defendants and Respondents.

Civ. 23282.

Court of Appeal, Third District, California.

March 26, 1985.

Trezza, Ithurburn & Steidlmayer, Bertrand F. Ithurburn and Mark G. Steidlmayer, Yuba City, for plaintiffs and appellants.

Robert L. Bordon, David H. Fleisig and David W. Anderson, San Francisco, for defendants and respondents.

SIMS, Associate Justice.

In this indisputably shocking case we hold that a consumer, who was injured when a mechanical failure in an electric utility transformer sent 7000 volts of electricity into her home, may state a cause of action against Pacific Gas and Electric Company (PG & E) for strict liability in tort.

FACTUAL AND PROCEDURAL BACKGROUND

A lightning storm struck the Meridian area of Sutter County on the afternoon of November 21, 1978. Several PG & E power transformers were struck and damaged by lightning, including two on plaintiffs' property. Plaintiffs' home lost its electricity.

Plaintiff Gail Pierce summoned PG & E, whose crew arrived at about 1:30 A.M. the morning of November 22. The PG & E crew, working in the rain, removed the lightning-damaged transformers from the pole and lifted their replacements into position. One of the replacements had previously been used at another location and had been removed and stored when it was no longer needed. There was no evidence that the transformer had malfunctioned in its previous location, but the PG & E crew did not test the transformer before connecting it to the powerline.

The PG & E crew made two of the three connections from the 12,000-volt powerline to the top of the transformers without incident, but, as a lineman attempted the third connection, the used transformer exploded in a ball of fire.

Gail observed a bit of smoke coming from the motor area of her freezer and saw a red glow in her storage shed. A fire had started in the shed. Upon closer examination Gail saw that the fire was coming from a propane gas pipe, which had ruptured.

A PG & E employee who was nearby extinguished the fire and told Gail that gas was still coming out of the pipe. He asked, "Where's the shut off valve?" Gail replied that she would go shut it off.

As Gail grasped the propane gas tank's shut-off valve she received a terrible shock. The shock tightened her hand around the valve and she could not let go. At some point, maybe ten or twenty seconds later, Gail fell or slid onto the propane tank, and the force of the electricity blew her hand free of the valve. Gail tumbled away from the tank and down an embankment about six feet high. She was injured.

Plaintiffs' expert witness testified that the transformer malfunction had energized their house wiring, designed for 120 and 240 volts, with approximately 7,000 volts. Post-accident investigation revealed poorly-insulated wiring and a ground wire unlawfully connecting plaintiffs' electrical system to the propane gas system.

Plaintiffs filed this action on August 28, 1979, alleging negligence and strict liability in tort for defective products. Plaintiffs' second cause of action for products liability alleged that PG & E was "engaged in the business of designing, manufacturing, distributing, selling, leasing, renting, to the general public electrical equipment, including the particular equipment involved in this matter." Plaintiffs' complaint did not identify the electricity itself as a defective product. PG & E answered, and plaintiffs have never amended their complaint.

The case was tried before a jury, and after plaintiffs rested PG & E moved for a nonsuit on the issue of products liability. Plaintiffs responded with a motion for directed verdict. Plaintiffs' motion was After both sides rested the trial court denied plaintiffs' motion for directed verdict and granted PG & E's motion for nonsuit.

premised on theories of (1) strict products liability, (2) absolute liability for ultra-hazardous activity, and (3) breach of implied warranty of fitness for particular purpose. The latter two theories were not contained in plaintiffs' pleadings and were not advanced until the date of the motion (June 20, 1983), nearly four years after the case was originally filed.

The case went to the jury on the negligence cause of action, and the jury found by special verdict that PG & E was not negligent. Judgment was entered for PG & E. Plaintiffs' motions for judgment notwithstanding the verdict and new trial were denied, and plaintiffs filed a timely notice of appeal.

DISCUSSION

I

We first consider the trial court's entry of nonsuit on plaintiffs' second cause of action for products liability.

"A motion for nonsuit allows a defendant to test the sufficiency of the plaintiff's evidence before presenting his or her case. Because a successful nonsuit motion precludes submission of plaintiff's case to the jury, courts grant motions for nonsuit only under very limited circumstances. (Campbell v. General Motors Corp. (1982) 32 Cal.3d 112, 117 [184 Cal.Rptr. 891, 649 P.2d 224].) A trial court must not grant a motion for nonsuit if the evidence presented by the plaintiff would support a jury verdict in the plaintiff's favor. (Id. at pp. 117-118 [184 Cal.Rptr. 891, 649 P.2d 224]; Ewing v. Cloverleaf Bowl (1978) 20 Cal.3d 389, 395 [143 Cal.Rptr. 13, 572 P.2d 1155].)

" 'In determining whether plaintiff's evidence is sufficient, the court may not weigh the evidence or consider the credibility of witnesses. Instead, the evidence most favorable to plaintiff must be accepted as true and conflicting evidence must be disregarded. The court must give "to the plaintiff['s] evidence all the value to which it is legally entitled, ... indulging every legitimate inference which may be drawn from the evidence in plaintiff['s] favor...." ' (Campbell v. General Motors Corp., supra, 32 Cal.3d at p. 118 [184 Cal.Rptr. 891, 649 P.2d 224], quoting Elmore v. American Motors Corp. (1969) 70 Cal.2d 578, 583 [75 Cal.Rptr. 652, 451 P.2d 84, 33 A.L.R.3d 406]; accord Ewing v. Cloverleaf Bowl, supra, 20 Cal.3d at p. 395 [143 Cal.Rptr. 13, 572 P.2d 1155]; Estate of Lances (1932) 216 Cal. 397, 400 .)

"In an appeal from a judgment of nonsuit, the reviewing court is guided by the same rule requiring evaluation of the evidence in the light most favorable to the plaintiff. 'The judgment of the trial court cannot be sustained unless interpreting the evidence most favorable to plaintiff's case and most strongly against the defendant and resolving all presumptions, inferences and doubts in favor of the plaintiff a judgment for the defendant is required as a matter of law.' (Mason v. Peaslee (1959) 173 Cal.App.2d 587, 588 ; accord Miller v. Los Angeles County Flood Control Dist. (1973) 8 Cal.3d 689, 699 [106 Cal.Rptr. 1, 505 P.2d 193]; Hughes v. Oreb (1951) 36 Cal.2d 854, 857 .)" (Carson v. Facilities Development Co. (1984) 36 Cal.3d 830, 838-839, 206 Cal.Rptr. 136, 686 P.2d 656.)

Plaintiffs' second cause of action was premised on the theory of strict liability in tort for defective products. Under this theory "A manufacturer is strictly liable in tort when an article he places on the market, knowing that it is to be used without inspection for defects, proves to have a defect that causes injury to a human being." (Greenman v. Yuba Power Products, Inc. (1963) 59 Cal.2d 57, 62, 27 Cal.Rptr. 697, 377 P.2d 897; see Hasson v. Ford Motor Co. (1982) 32 Cal.3d 388, 406, 185 Cal.Rptr. 654, 650 P.2d 1171.) Undisputed evidence at trial established that the defective transformer was manufactured not by PG & E but by Federal Pacific Evidence presented at trial also established, however, that PG & E's electricity arrived at plaintiffs' home at nearly 60 times its intended voltage, ¹ ultimately causing Gail to suffer bodily injury. Plaintiffs contend that household electricity must be considered a product for strict-liability purposes, that their evidence was sufficient to support a verdict in their favor, and that the entry of nonsuit was therefore erroneous. (Carson v. Facilities Development Co., supra, 36 Cal.3d at pp. 838-839, 206 Cal.Rptr. 136, 686 P.2d 656.)

Electric Company, and that PG & E never placed the transformer "on the market" or in the stream of commerce. PG & E was, in essence, a consumer rather than a manufacturer of the transformer, and cannot be held strictly liable in tort for the transformer's defects per se. (Price v. Shell Oil Co. (1970) 2 Cal.3d 245, 258, 85 Cal.Rptr. 178, 466 P.2d 722.)

Before we consider the merits of plaintiffs' contention, however, we must confront two jurisdictional and procedural obstacles raised by PG & E.

PG & E contends a "determination" that it can be held strictly liable in tort is beyond the jurisdiction of this court because it would contradict an order of the Public Utilities Commission (PUC), whose decisions are reviewable only by our highest court. (Pub.Util.Code, § 1759; Waters v. Pacific Telephone Co. (1974) 12 Cal.3d 1, 4, 114 Cal.Rptr. 753, 523 P.2d 1161.) PG & E asserts the PUC has shielded it from liability for non-negligent acts in Rule 31.1 of General Order No. 95, as set out in the margin. ² PG & E's argument, although ingenious, is totally without merit.

It has long been acknowledged that the PUC has the power, by rule, to limit the liability of utilities subject to PUC regulation and supervision. (Waters v. Pacific Telephone Co., supra, 12 Cal.3d at pp. 6, 10, 114 Cal.Rptr. 753, 523 P.2d 1161; Cole v. Pacific Tel. & Tel. Co. (1952) 112 Cal.App.2d 416, 417, 246 P.2d 686; Davidian v. Pacific Tel. & Tel. Co. (1971) 16 Cal.App.3d 750, 757, fn. 3, 94 Cal.Rptr. 337.)

Although the PUC is empowered to limit utilities' liability, we conclude it has not done so in rule 31.1. Rule 31.1 provides that electrical supply and communication systems shall be maintained in safe condition and specifically imposes a duty...