City of Commerce v. Duncan & Godfrey, Inc.

• Decision Date: 21 January 1981
• Docket Number: No. 61197,61197
• Citation: 277 S.E.2d 266,157 Ga.App. 337
• Court: Georgia Court of Appeals
• Parties: CITY OF COMMERCE v. DUNCAN & GODFREY, INC.

Page 266

277 S.E.2d 266

157 Ga.App. 337

CITY OF COMMERCE v. DUNCAN & GODFREY, INC.

No. 61197.

Court of Appeals of Georgia.

Jan. 21, 1981.

Rehearing Denied Feb. 4, 1981.

Certiorari Denied March 4, 1981.

L. Eddie Benton, Jr., Commerce, for appellant.

Gibson Dean II, Buford, for appellee.

BANKE, Judge.

The plaintiff/appellee owns and operates a supermarket which purchases electricity from the City of Commerce, Georgia. It sued to recover over-payments allegedly made for that service from July of 1975, when it took over the operation of the supermarket, through the end of 1978, when the city began billing the plaintiff for electricity at a cheaper rate, which was based on peak demand rather than total consumption. The plaintiff alleges that up until the end of 1978, the city kept it in ignorance of the availability of this alternate rate, despite its complaints to the city that it was being overcharged for electricity.

The standard rate at which the city billed for electricity was based on the number of kilowatt-hours consumed, as measured by a standard meter. In 1974, the city established a policy of allowing commercial customers who consumed more than 1,000 kilowatt-hours per month the option of being billed on the basis of peak demand, as measured during half-hour intervals by a special meter designed for that purpose. This billing method was evidently designed to favor businesses which consumed electricity at a more or less constant rate.

When the plaintiff acquired the supermarket in July of 1975, the building was equipped with a standard meter. The city accordingly began sending bills based on the standard kilowatt-hour rate. Upon receipt of the first bill, the store manager immediately complained to the city's director of operations that he felt the charge was excessive. The director responded by sending an employee to check the meter but, when no malfunction or reading error was discovered, did nothing further. Over the next three and a half years, the manager made numerous other complaints to the city of the same nature; and the city responded by rechecking the meter on at least six occasions. However, it was only on the last such occasion, in late 1978, that the plaintiff was advised that it would benefit by converting to a demand meter. The plaintiff immediately elected to do so; and, when the new meter was finally installed in early 1979, the electric bills dropped significantly.

The city's director of operations testified that to his knowledge the plaintiff's was the only supermarket in town which had operated without a demand meter during the period in question. He further testified that although it was the city's policy not to install a demand meter unless one was specifically requested by an eligible customer, a request from the plaintiff to be billed at the most favorable rate available would have "opened the door" to its being advised of the benefits of converting to the demand rate.

To establish damages, the plaintiff offered the testimony of an expert in electrical engineering to the effect that if the supermarket had been on a demand meter throughout the entire period, its total electric bill would have been $10,950 less than it actually was. The witness testified that he had arrived at this opinion by taking the monthly kilowatt-hour readings recorded from July of 1975 to the date the demand meter was installed, and comparing them with the demand readings recorded thereafter. He stated that he was able to calculate a relationship between the readings based on information which he received to the effect that there had been no substantial change in the store's operating hours and equipment between the two periods, combined with his own knowledge of the relationships between these two types of measurement in other commercial establishments. The jury returned a verdict of $10,950 in accordance with his opinion. The city appeals. Held :

1. The central question before us is whether, based on the facts known to it, the city had a legal duty to disclose to the plaintiff the existence of the demand meter rate and the benefits which could be achieved by converting to it. Faced with an almost identical situation in a 1937 case, the Texas Supreme Court held that customers of a public electric utility who are not in a position to understand the utility's complex and highly technical rate structure are entitled to assume that the utility is charging them at the most favorable rate available to them. El Paso Elec. Co. v. Raynolds Holding Co., 128 Tex. 495, 100 S.W.2d 97, 108 ALR 744 (1937). Specifically, the court stated that, "(b)eing in a position both as to an understanding of the true meaning of the schedule and as to the appliances or methods for ascertaining the measured demand applicable to (its customers), (the utility's) obligation was to deal fairly and give (its customers) the benefit of the most favorable rate which they were entitled to receive. Oklahoma Gas & Electric Co. v. Shipley, 190 Ark. 758, 80 S.W.2d 635; Salisbury & S. R. Co. v. Southern Power Company, 179 N.C. 18, 101 S.E. 593, 12 ALR 304." Id. at 100 S.W.2d 101. See also 64 AmJur2d, Public Utilities, § 133, p. 658. This court delivered itself of an analogous ruling in Macon Gas Co. v. Crockett, 58 Ga.App. 361, 365, 198 S.E. 267 (1938). The plaintiff in that case had entered into a contract with a gas company whereby he paid the company to extend a gas line to his house, and the company agreed to pay him a rebate for each new customer who was later connected to the extension. Called upon to decide whether the plaintiff was obligated to find out for himself when a new customer was connected to the line, or whether the gas company was obligated to disclose this to him and pay him as a matter of course, the court held as follows: "The taking on of a consumer was always within the knowledge of the gas company, but not...