Appalachian Power Co. v. John Stewart Walker, Inc.

• Decision Date: 14 January 1974
• Citation: 214 Va. 524,201 S.E.2d 758
• Court: Virginia Supreme Court
• Parties: APPALACHIAN POWER COMPANY v. JOHN STEWART WALKER, INC.

Page 758

201 S.E.2d 758

214 Va. 524

APPALACHIAN POWER COMPANY v. JOHN STEWART WALKER, INC.

Supreme Court of Virginia.

Jan. 14, 1974.

Rehearing Denied March 4, 1974.

Wm. Rosenberger, Jr., Lynchburg, for appellant.

S. J. Thompson, Jr., Lynchburg (Caskie, Frost, Davidson, Hobbs & Hamblen, Lynchburg, on brief), for appellee.

Richard D. Rogers, Jr.; Joel H. Peck, Richmond, on brief, for the State Corp. Comm., amicus curiae.

Before SNEAD, C.J., and I'ANSON, CARRICO, HARRISON, COCHRAN, HARMAN and POFF, JJ.

POFF, Justice.

On a bill of complaint filed by John Stewart Walker, Inc., (Walker) against Appalachian Power Company (Appalachian) seeking Inter alia damages of $10,000.00 for breach of an alleged contract to install, free of charge, underground electrical service, the trial court by order dated October 13, 1972 entered final judgment on the jury's verdict awarding Walker damages in the sum of $6,000.00. Upon Appalachian's appeal, we granted the petition of the State Corporation Commission (Commission) to appear Amicus curiae.

For a number of years prior to 1970, Appalachian conducted a sales promotion program designed to encourage real estate developers to build 'all electric' residences. Under that program, Appalachian agreed to install underground rather than overhead electrical service. Against the cost of installation, the developer was allowed a credit based upon anticipated revenues. If the credit exceeded the cost, installation was provided free of charge to the developer. In order to calculate the credit, Appalachian needed a plat of the subdivision.

In 1968, Appalachian acquired the plats of three subdivisions developed by Walker, prepared written contracts on standard printed forms and installed underground facilities free of charge. In the summer of 1969, Walker contracted to buy property in Lynchburg which he later developed as Sections I and II, Locksview Subdivision. Section I containing 20 lots was platted October 28, 1969, and the plat was approved by the city planning commission on November 19, 1969. Section II containing 6 lots across the street from Section I was platted May 12, 1970, and the plat was approved on June 23, 1970. A composite plat showing both sections was dated June 24, 1970.

In the fall of 1969, Walker asked Earl Driskill and Lloyd Miller, Appalachian's representatives, to install underground electrical service on the same terms used in the earlier Walker subdivisions, and they agreed. Miller testified that the customary understanding between Appalachian and the developer was that Appalachian would reduce the contract to writing 'in a reasonable time' and submit it for signature to the developer. Driskill and Miller told Walker, 'Fine, we will work it up for you.'

The contract was never reduced to writing. Walker testified that in his previous dealings with Appalachian, Appalachian had taken the initiative to acquire plats from the surveyor, a custom confirmed by the surveyor and by Driskill; that the surveyor had told him that he mailed the Locksview plat to Appalachian in February or March, 1970; and that sometime prior to the first week in May 1970 when Walker moved to a new business office Driskill picked up a second set of Locksview plats from Walker's old office. Miller testified that Appalachian did not receive the plat for Section I until a 'couple of days after May 22, 1970.' Driskill testified that he could not remember the date he picked up that plat but that when he did so he was told 'to hold up and they would have it (the plat for Section II) ready so we could do the whole job at one time.' Walker testified that Driskill was not told that.

On April 15, 1970, following a hearing held pursuant to a show cause order entered on February 17, 1970, the State Corporation Commission entered an order prohibiting public utilities from conducting sales promotion programs such as that Appalachian conducted, provided that '(B) Written contracts heretofore entered into may be carried out in accordance with their terms . . .' These proceedings were unknown to Walker until sometime after May 15, 1970 when Miller advised Walker a new rule was going into effect but that 'we are going to get you under the wire on the old rule.' On August 17, 1970, learning that the street adjacent to Section I was about to be paved, Walker called Miller asking that the underground facilities be installed before paving was commenced. Miller advised Walker that under the mandate of the April 15, 1970 Commission order, the program was no longer lawful and Walker would have to pay the full cost of installation.

On August 21, 1970 Walker filed a petition under Code § 56--6 (Repl.Vol.1969) in the State Corporation Commission praying 'that the State Corporation Commission permit and require Appalachian Power Company to honor its oral contract with complainant to install underground electrical service in its subdivision free of charge, and, to the extent necessary, relax the requirements of the order entered on April 15, 1970'. On September 16, 1970, the Commission entered an order denying Walker's prayer.

On September 30, 1970, to Walker's bill of complaint filed in the trial court on August 25, 1970, Appalachian filed a plea challenging the jurisdiction of the trial court on the ground that the State Corporation Commission had exclusive jurisdiction; a plea of res judicata based on the ground that the subject matter of the bill of complaint was the same as that already finally adjudicated as to the same parties by the Commission; a plea of illegality based on the ground that the contract alleged in the bill of complaint was unlawful and unenforceable under the rates, rules and regulations adopted by the Commission; and an answer.

In an opinion dated April 19, 1971, the trial court held that Appalachian's plea of illegality raised two issues of fact. A jury was empaneled, and on September 17, 1971 at the conclusion of the evidence, the trial court submitted the following inquiries to the jury:

'(1) Has the Complainant, John Stewart Walker, Inc., proven by a preponderance, or greater weight, of the evidence, that Appalachian Power Company had a duty or obligation to prepare and have signed a written contract for installation of underground electric service for Walker prior to April 15, 1970?

'(2) If the answer to the above question is 'yes', did Appalachian unreasonably fail to perform such duty?'

The jury answered both questions in the affirmative.

On June 2, 1972 the trial court overruled Appalachian's several pleas. The parties agreed to submit to the trial court upon the evidence previously taken and the transcript of the hearing before the Commission the question whether there was a contract between the parties and to submit to a jury the question of damages. The trial court instructed the jury to determine '(t)he difference, if any, in the fair market value of the 20 lots in Section I of Locksview Subdivision with overhead electrical service on August 17, 1970.' Appalachian offered and the trial court refused an instruction which told the jury that 'the difference, if any, cannot exceed $3,546.00', the cost of installation. The jury returned a verdict for Walker in the sum of $6,000.00.

In an opinion dated July 11, 1972 the trial court said that 'I feel that all issues should be resolved in favor of the complainant' and asked for briefs limited to the question whether damages should be measured by the 'cost rule' or the 'value rule'. By letter opinion dated September 15, 1972 and final order dated October 13, 1972 the trial court entered judgment for Walker on the jury verdict.

Upon two of its nine assignments of error Appalachian poses for our determination four issues, viz.,

'A. Whether the State Corporation Commission has exclusive jurisdiction (Assignment E);

'B. Whether the Order of the Commission was res judicata (Assignment E);

'C. Whether the performance of the alleged contract was illegal (Assignment E);

'D. Whether damages are limited to cost of installation (Assignment H).'

We approach consideration of these issues seriatim, ever conscious of a fact central to each issue, viz., that Walker's cause of action is based upon an alleged breach of a common law contract right to have an oral agreement reduced to writing within a reasonable time and prior to April 15, 1970.

I. EXCLUSIVE JURISDICTION

We have said repeatedly that '(t)he Commission has no inherent power simply because it was created by the Virginia Constitution; and therefore its jurisdiction must be found either in constitutional grants or in statutes which do not contravene that document.' City of Norfolk v. Virginia Electric & Power Co., 197 Va. 505, 514, 90 S.E.2d 140, 146 (1955); Commonwealth v. Old Dominion Power Co., 184 Va. 6, 34 S.E.2d 364, cert. denied, 326 U.S. 760, 66 S.Ct. 139, 90 L.Ed. 457 (1945); City of Richmond v. Chesapeake & Potomac Telephone Co., 127 Va. 612, 105 S.E. 127 (1920).

In looking to the Constitution and statutes for an explication of the Commission's power, we must first ascertain the nature of the proceedings involved, for the Commission "has been clothed with legislative, judicial and executive powers." Clifton Forge-Waynesboro Telephone Co. v. Commonwealth, 165 Va. 38, 47, 181 S.E. 439, 443 (1935); Winchester & Strasburg R.R. v. Commonwealth, 106 Va. 264, 267, 55 S.E. 692, 693 (1906). Which of the Commission's several powers is exercised in a particular proceeding 'depends not upon the character of the (Commission) but upon the character of the proceedings.' Prentis v. Atlantic Coast Line Co., 211 U.S. 210, 226, 29 S.Ct. 67, 69, 53 L.Ed. 150 (1908). Addressing the definition of powers delegated to the Vermont Public Service Commission, the Supreme Court of Vermont said:

'It is often difficult to distinguish between functions that are judicial and those that are not. Executive or administrative acts frequently involve the exercise of judgment and discretion, qualities ...