Houston Lighting & Power Co. v. Reynolds

Decision Date10 April 1986
Docket NumberNo. 01-84-00414-CV,01-84-00414-CV
Citation712 S.W.2d 761
Parties, Prod.Liab.Rep. (CCH) P 11,057 HOUSTON LIGHTING & POWER COMPANY, Appellant, v. Carol Ann Hauser REYNOLDS, Individually and as Natural Mother of Carl David Reynolds, and Carl David Reynolds, Individually, Appellees. (1st Dist.)
CourtTexas Court of Appeals

Larry F. York, Stephen G. Tipps, Leslie Stark Wolff, Joe R. Greenhill, Baker & Botts, Houston, for appellant.

G.P. Hardy, Hardy, Milutin, Johns & Sherrod, Donna Cywinski, McKenna & Cywinski S.G. Johndroe, III, Cantey, Hanger, Gooch, Munn & Collins, Beth Krugler, Cantey, Hanger, Gooch, Munn & Collins, Fort Worth, amicus curiae for Texas Elec. Service Co.

W. James Kronzer, Houston, for appellees.

John G. Tucker, Paul W. Gertz, Orgain, Bell & Tucker, Beaumont, amicus curiae for Gulf States Utilities Co.

B.D. St. Clair, McGinnis, Lochridge & Kilgore, Austin, amicus curiae for Texas Cooperatives, Inc.

H.K. Howard, V. Elizabeth Ledbetter, Kelberg, Dyer, Redford & Weil, Corpus Christi, amicus curiae for Central Power & Light Co.

F.W. Baker, Annalyn G. Smith, Matthews & Branscomb, San Antonio, amicus curiae for City of San Antonio & Texas Public Powers Assoc. and its member Cities.

Before WARREN and DUGGAN, JJ., and TOM COLEMAN, Retired Judge.

OPINION

TOM COLEMAN, Retired Judge.

Carl David Reynolds was severely injured when he used an aluminum pole to touch a powerline that ran through a residential neighborhood. This is an appeal from a judgment awarding him substantial damages based on a jury verdict. A major contention of Houston Lighting & Power Company in this appeal is that there is no strict products liability cause of action against electric utility companies for injuries caused by contact with high voltage distribution lines.

Carl David, a 16 year-old boy, was visiting at the home of a friend, Eric Everroad. While they were disassembling a tent that they had erected earlier in Eric's backyard, Carl David decided to connect the aluminum tent poles together to see if he could touch a powerline that was located within a six foot utility easement extending into Eric's backyard. After putting eight poles together he was able to touch the powerline, which carried approximately 35,000 volts, and as a result suffered second and third degree burns over most of his body and the eventual amputation of both of his legs and his right arm.

Houston Lighting & Power Company (hereinafter referred to as H.L. & P.) asserts that the trial court erred in submitting special issues one, two, and three, and in rendering judgment thereon, because strict products liability is not applicable to electric utilities in electrical contact cases.

An executive vice-president of H.L. & P. testified that H.L. & P. is in the business of manufacturing and selling electricity; that once electricity passes into the transmission lines, it cannot be recalled or stored; and that electricity is transmitted through its lines from the power source only in response to a demand by a consumer.

A manufacturer who places in commerce a product rendered dangerous to life or limb by reason of some defect is strictly liable in tort to one who sustains injury because of the defective condition. Darryl v. Ford Motor Co., 440 S.W.2d 630, 633 (Tex.1969). In order for liability to attach, it is not necessary for the defendant to actually manufacture or sell the defective product. In order to recover for an injury on the theory of strict liability in tort, the plaintiff bears the burden of proving that the defendant: (1) placed in the stream of commerce a product; (2) that such product was in a defective or unreasonably dangerous condition; and (3) that there was a causal connection between such condition and the plaintiff's injuries or damage. Armstrong Rubber Co. v. Urquidez, 570 S.W.2d 374, 376 (Tex.1978).

A jury found that the failure of H.L. & P. to give adequate warnings of the danger of coming into contact with the distribution system used by it in furnishing electricity to houses located in a residential neighborhood rendered its "product," electricity, unreasonably dangerous. The jury further found that this failure to warn was a producing cause of the injuries and damages sustained by Carl David.

H.L. & P. contends that the trial court erred in rendering judgment on these findings because electricity in a power line is not a product in the context of products liability. We do not agree. Electricity is a form of energy that can be made or produced by man, confined, controlled, transmitted, and distributed to be used as an energy source for heat, power, and light and is distributed in the stream of commerce. While the distribution of the electricity through a system of towers, poles, and wires may well be considered a service, the electricity itself is a consumable product. Pierce v. Pacific Gas and Electric Co., 166 Cal.App.3d 68, 212 Cal.Rptr. 283 (Cal.Ct.App.1985); Ransome v. Wisconsin Electric Power Co., 87 Wis.2d 605, 275 N.W.2d 641 (1979); see also Aversa v. Public Service Electric & Gas Co., 186 N.J.Super. 130, 451 A.2d 976, 979 (1982); Hedges v. Public Service Co. of Indiana, 396 N.E.2d 933, 935 (Ind.Ct.App.1979); Genaust v. Illinois Power Co., 62 Ill.2d 456, 343 N.E.2d 465 (Ill.1976).

While the furnishing of electrical energy is a service, this does not mean that the energy furnished is not also a product. See Woods v. Littleton, 554 S.W.2d 662 (Tex.1977). In Woods, the plaintiff purchased a house from a builder who promised to repair any defects that appeared within one year. The court held that the plaintiff had purchased "not only real property, but also, and in addition," services. Id. at 666. In that case, there was no indication that a separate consideration was paid for the service. In the case of electricity, the consumer not only purchases a product, the electricity, but in addition, the transportation of the product to the consumer's home, a service.

A more difficult question is posed by the appellant's contention that while electricity is being transported in high voltage lines, it has not yet entered the stream of commerce. In Genaust, the court reasoned that until electrical energy being transmitted at high voltage is changed by the use of transformers or other electrical devices into a form that a consumer can use in his home or factory, the electricity remains in the control of the power company.

The Indiana courts also follow the rule that so long as electricity is transmitted by equipment over lines under the exclusive control of the power company, the electricity has not been placed in the stream of commerce. For this reason, these courts hold that the doctrine of strict liability, as set forth in the Restatement (Second) of Torts, sec. 402A (1964), is not applicable in a case of an injury caused by coming into contact with power lines owned by a public utility. Hedges v. Public Service Co. of Indiana, 396 N.E.2d 933.

The plaintiff has asserted that because electric current is introduced into the defendant's transmission lines only in response to demand from customers, and cannot be recalled or stored, the electricity is no longer under the control of H.L. & P. and, therefore, has been introduced into the stream of commerce. A New Jersey Court has stated in dicta that while a sale of electricity is conclusive as to the placement of the product into the stream of commerce, evidence that the utility company relinquished exclusive control over its product may be sufficient to establish that fact. Aversa v. Public Service & Gas Co., 186 N.J.Super. 130, 451 A.2d 976.

H.L. & P. asserts that it had not completely surrendered control of the electricity in its transmission lines because the electricity was not in a marketable form until it was reduced in voltage by the transformers installed for that purpose, and cites in support of its position Genaust v. Illinois Power Co., 62 Ill.2d 456, 343 N.E.2d 465.

"Stream of commerce" has been defined by a Texas court in these words:

The stream of commerce includes the manufacture of the object and its distribution, including the activities of retailers.... [I]t is clear that continuation of the flow of commerce does not require transfers of possession.

Davis v. Gibson Products Co., 505 S.W.2d 682, 691 (Tex.Civ.App.--San Antonio 1973, writ ref'd n.r.e.).

The evidence supports a conclusion that while the electricity is in the process of being delivered to the consumer through the transmission lines of the power company, it is in the stream of commerce.

A product cannot be said to be unreasonably dangerous because of a failure to warn unless there is a duty to warn. Electricity cannot be separated from its distribution system. The electricity contained within the distribution system is very similar to a stock of merchandise displayed for sale. A sale of electricity by H.L. & P. requires delivery from the H.L. & P. power lines to the purchaser's lines. Unless H.L. & P. could reasonably foresee danger to the general public arising out of the nature of its product while being conducted through the transmission lines, there was no duty to warn. Texas & Pacific Railway Co. v. Bigham, 90 Tex. 223, 225-26, 38 S.W. 162, 163 (1896).

It is said that a seller is strictly liable, even though his product is faultlessly manufactured and designed, if the product as marketed is unreasonably dangerous or likely to harm the user unless properly used. In such a case, the product would be in a "defective condition unreasonably dangerous" by virtue of the absence of an adequate warning. Lopez v. Aro Corp., 584 S.W.2d 333 (Tex.Civ.App.--San Antonio 1979, writ ref'd n.r.e.). In Lopez, the court also stated that if a seller knows or should know of potential harm to a user because of the nature of its product, the seller is required to give an adequate warning of such danger.

However, the seller of a product only has a duty to...

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