Balke v. Central Missouri Elec. Cooperative

• Decision Date: 23 December 1997
• Docket Number: No. WD,WD
• Citation: 966 S.W.2d 15
• Parties: Richard W. BALKE and Ruth Balke, Respondents, v. CENTRAL MISSOURI ELECTRIC COOPERATIVE, Appellant. 54559.
• Court: Missouri Court of Appeals

Page 15

966 S.W.2d 15

Richard W. BALKE and Ruth Balke, Respondents, v. CENTRAL MISSOURI ELECTRIC COOPERATIVE, Appellant.

No. WD 54559.

Missouri Court of Appeals,

Western District.

Dec. 23, 1997.

Motion for Rehearing and/or Transfer to

Supreme Court Denied Jan. 27, 1998.

Application for Transfer Sustained

Feb. 24, 1998.

Case Retransferred May 26, 1998.

Court of Appeals Opinion Readopted

June 2, 1998.

J. Christopher Spangler, Sedalia, for Appellant.

G. Spencer Miller, Kansas City, for Respondents.

Before SPINDEN, P.J., and LAURA DENVIR STITH and EDWIN H. SMITH, JJ.

EDWIN H. SMITH, Judge.

Central Missouri Electric Cooperative appeals from the judgment of the Circuit Court of Cooper County, following a jury trial, awarding $783,333 to its electrical customers Richard W. Balke and Ruth Balke, respondents, on their claim for property and business damages arising from an alleged over-voltage caused by appellant's defective electrical transformer.

Appellant asserts seven points on appeal. It alleges that the trial court erred: (1) in failing to grant its motion for judgment notwithstanding the verdict (JNOV) in that the applicable five-year statute of limitations had run on respondents' claim; (2) in allowing respondents' trial counsel to argue in closing argument an adverse inference arising from appellant's decision not to call an engineer retained by it as an expert witness; (3) in alternatively submitting respondents' claim on a defective product-strict (hereinafter DP-S) liability theory in that there is no authority in Missouri for such a submission as to a supplier of electricity; (4) in denying appellant's request that the jury be instructed as to the respondents' comparative fault as to their DP-S liability submission; (5) in alternatively submitting respondents' claim on a res ipsa loquitur theory; (6) by refusing to include in respondents' comparative fault verdict director as to their res ipsa loquitur submission the issue of their failure to mitigate damages; and (7) in failing to grant appellant's motion for a mistrial or, in the alternative, for a continuance, based upon the absence at trial of respondent, Richard W. Balke.

We reverse and remand.

Facts

Central Missouri Electric Cooperative, appellant, is in the business of supplying electricity to the members of its cooperative. Although appellant sells electricity to its members, it does not generate the electricity; rather, it acquires the electricity from Central Missouri Power of Jefferson City, Missouri. However, all of the equipment from the substation up to the customer's meter is owned by and maintained exclusively by appellant.

Appellant's distribution system of the electricity included a regulator, which served the function of regulating the voltage on the line to points down line or further away from the substation. The regulator would either increase or decrease the voltage depending on the circumstance. If the regulator sensed that the voltage at that point was either too high or too low, based upon the parameters of the system, then there was a 45-second to one-minute delay before the regulator was activated. On the regulator there was a device to record the number of times it was activated.

The voltage on any particular electrical supply line would vary depending on a variety of conditions. These conditions included the potential variations associated with the output from the substation, seasonal load variants, daily load variations and load variations caused by usage of particular customers. If a customer received voltages that were higher than the design parameters of the transmission system, the customer could experience motors overheating, motors burning out, and light bulbs burning out. Appellant had design parameters for their customers to receive no greater than 130 volts on the low side of the system and 260 volts on the high side of the system. The output of voltage from a line could be tested at the point of the transformer.

A transformer is a piece of electrical equipment which is designed to change the voltage which is received by the transformer from an electrical source. The transformer is designed to reduce the voltage from the distribution line down to a level that can be used by the customer to operate electrical equipment and devices in a residence or on a farm. The distribution line which began at the substation and continued to the respondents' property was energized with an average of 7,620 volts. The purpose for having a line with such a high voltage when a residence requires significantly less is that since the source of the electrical power is some distance from the ultimate consumer and the voltage will decrease with the distance traveled over a line due to resistance, a higher voltage is used on the line so that, in theory, all customers on a particular line will have sufficient voltage.

The actual flow of electricity through a line is measured in amps. The work that is done by the electricity is measured in watts, and the formula to determine watts is simply the volts times amps. The amount of electricity which is purchased by a customer is measured at the customer's meter in kilowatts.

A transformer reduces the voltage received from an electrical source by means of internal windings. These windings are wrapped around a metal core with a high side and a low side. The output of volts from the transformer is based upon an established ratio for both the high and low sides. It will vary based upon the input. If there is a higher input into the transformer from the distribution line because of load variations, then there is a corresponding variation based upon the specific ratio for the transformer. It was well known in the electrical distribution field that a lightning strike could cause some of the windings or turns in a transformer to be shorted out and, as a result, the turns ratio would be altered.

Respondents began their dairy operation in 1972. They initially started with a herd of 30 dairy cows. The dairy operation grew in size from 30 cows to 200 cows between 1983 and 1991. The operation included state of the art computer technology, including a computer feeder system that was designed to provide each cow with a customized diet to enable it to produce the maximum amount of milk possible. The respondents' operation was one of the first dairy operations to utilize the computer feeder technology. In addition, they worked with their feed supplier to obtain the best quality of diet for their herd. The testimony was that a good dairy cow would produce 60 pounds of milk per day, and that respondents had cows that produced up to 120 pounds per day.

In 1982, the transformer servicing the respondents' farm was changed by the appellant because of increased electrical usage by them. The new transformer which was installed on the respondents' property had earlier been part of a bank of three transformers at another location. When the transformer was removed from its prior location, it was not checked to determine whether it was in good working order. When it was installed on the respondents' farm, the records from the appellant do not reflect that its output voltage was checked. However, employees of the appellant stated that it was normal practice to check the voltage on a transformer that was installed at a new location. The appellant had maintenance forms concerning the installation of transformers which had a specific blank for voltage information to be recorded, which was not completed on the form concerning the installation of the new transformer on respondents' farm.

Following the installation of the new transformer, the respondents began experiencing electrical problems before which they had not experienced. On April 15, 1983, a few months after the installation of the new transformer, Stan Nienhueser, a trained technician who was employed by the company who serviced respondents' equipment, made a service call to the respondents' farm and was concerned that "something just was not right." On April 19, 1983, Mr. Nienhueser spoke to a representative of the appellant about his concerns in regard to the electrical problems on the respondents' farm. He also made a subsequent telephone contact with the appellant again and expressed his concerns. In early 1984, there was a fire in respondents' milk barn. It started during the early morning hours. During the night, there was equipment which operated to keep the milk cool. There was testimony that this equipment was on at the time of the fire.

Appellant had no system for recording customer complaints. However, office personnel of appellant did remember Mr. Balke being in the office for complaints, but did not recall on how many occasions. The appellant did have records indicating that there were complaints from respondents which were classified as high bill complaints on at least three occasions. In response to the respondents' high bill complaints of record made in 1984, 1987 and 1990, an employee of the appellant went to the farm and found some electrical devices running that might have caused the bills to be higher at the times of the 1984 and 1987 complaints. In this respect, the manager for the appellant acknowledged that it was possible to determine whether the equipment that its employee found running, assuming that it was running continually, could have accounted for respondents' high electrical bills, but he admitted that that determination was not done. The manager could think of no explanation for the higher electric bill in 1990.

In regard to the respondents' dairy herd, there was evidence that their cows developed an increased frequency of mastitis, an inflammation of a cow's udder, after 1982. Most dairy farms have some mastitis, but the mastitis on respondents' farm got worse as time passed and ultimately forced them to sell their entire dairy herd in the early part of 1993. In addition, hundreds of cows died between 1983 and 199...