Colonial Pipeline Co. v. Brown

• Decision Date: 17 March 1988
• Docket Number: Nos. 44925,44926,s. 44925
• Citation: 365 S.E.2d 827,258 Ga. 115
• Parties: COLONIAL PIPELINE COMPANY v. BROWN et al. COLONIAL PIPELINE COMPANY v. WRIGHT CONTRACTING COMPANY et al.
• Court: Georgia Supreme Court

Page 827

365 S.E.2d 827

258 Ga. 115

COLONIAL PIPELINE COMPANY v. BROWN et al.

COLONIAL PIPELINE COMPANY v. WRIGHT CONTRACTING COMPANY et al.

Nos. 44925, 44926.

Supreme Court of Georgia.

March 17, 1988.

Reconsideration Denied March 30, 1988.

James V. Davis, Landau, Davis & Farkas, P.C., Albany, Edgar A. Neely III, Neely & Player, Ross Arnold, Harold N. Hill, Jr., Atlanta, for Colonial Pipeline Co.

Mark A. Gonnerman, Hilliard P. Burt, John F. Salter, Albany, for Wright Contracting Co. et al.

Spearman, Dunham & Gaugher, William L. Spearman, amicus curiae.

SMITH, Justice.

This appeal consolidates two related cases stemming from the destruction of a bulldozer after it hit and ruptured Colonial Pipeline's underground petroleum pipeline. The owner of the bulldozer, Wright Contracting Company, sued Colonial, Baxter Brown, the real estate developer who hired Wright to do grading work, and Malcolm Burnsed, the surveyor who did the grading plan.

Case No. 44925 is Colonial's appeal from a jury verdict requiring Colonial to indemnify Brown for his expenses incurred in defending this lawsuit. We affirm case No. 44925.

Case No. 44926 is Colonial's appeal from a jury verdict awarding Wright $52,728.46 actual damages, $304.75 consequential damages and $5,000,000 punitive damages. We affirm in part and reverse in part case No. 44926--the punitive damages award is reversed.

Colonial purchased a right-of-way easement from Reese W. Cross and Eloise H. Cross in 1976. Colonial's pipeline was to be installed on part of their property that faced Westover Road, and it was to run parallel to the road. The property subject to the easement was higher than the road, and the easement required Colonial to bury the pipeline at least thirty inches below the grade of Westover Road.

Baxter Brown, an experienced real estate broker, purchased five acres of land out of a larger parcel owned by the Crosses. The five acres Mr. Brown purchased were subject to Colonial's recorded easement.

Mr. Brown hired Malcolm Burnsed, a registered land surveyor, to survey the property and prepare a boundary line survey and a grading plan.

Although a preliminary title opinion was prepared four days prior to the purchase of the property in December 1981, Mr. Brown asserted that he had not seen it prior to the date the pipeline was ruptured on June 15, 1982. Both the preliminary title opinion and the final title opinion contained identical language: "Right-of-way easement from REESE WILSON CROSS and ELOISE HUCKABEE CROSS to COLONIAL PIPELINE COMPANY, A DELAWARE CORPORATION, dated August 26, 1976, and recorded in Deed Book 568, pages 329-330, in the aforesaid Clerk's Office."

Neither the boundary line survey nor the grading plan prepared by Mr. Burnsed contained a hint of Colonial's easement. Mr. Burnsed found a warranty deed dated 1966 from L.W. Cross to R.W. Cross in the court records. Because the deed stated that it was "[s]ubject to easements of record," Mr. Burnsed used the grantor/grantee index to determine if there was an easement prior to 1966. He testified that he had looked at the property and did not see any physical evidence of a pipeline, therefore, he had no reason to check to see if an easement had been conveyed after 1966. Mr. Burnsed testified that he did not know that the pipeline was under the property he had surveyed until the pipeline was ruptured.

Mr. Burnsed testified that he did not obtain a copy of the title opinion in preparing his boundary line survey and admitted that the Rules of State Board of Registration for Professional Engineers and Land Surveyors, Section 180-7-. 02 provides: "The surveyor prior to making [a boundary line survey] shall acquire all necessary data, including deeds, maps, certificates of title...." (Emphasis supplied.)

David James, the area manager for Wright Contracting Company, testified that he did not see any evidence of the pipeline on the property that Wright was hired to grade. He further testified that he did not see the Colonial Pipeline marker that was located 670 feet south of the property. He did indicate that he knew that the pipeline was in the area, but he did not know that it was under the property.

Mr. James stated that if he had known about the pipeline he would not have relied upon the terms of the easement, he would have called Colonial and they would have located the pipeline for him.

The Wright Contracting Company "Safety Rules Procedure" manual provides in part: "Construction Practices ... Excavating and Trenching operations will include proper safeguards and inspections to determine location and extent of underground utilities...." (Emphasis supplied.)

An expert witness, Mr. John Sperry, testified that if he were going to cut a five acre tract out of a larger tract and provide a boundary line survey, he would look forward from the 1966 deed to see if any parcels or easements had been deeded out of the property. [If the surveyor had looked forward, he would have found the easement.] In answer to another question, Mr. Sperry testified that if he was hired to do a grade plan and topographical survey that he would ask for the title opinion. [If the surveyor had obtained the title opinion The bulldozer operator was grading between eight and nine inches below the level specified in the grading plan when the pipeline was ruptured.

he would have found the easement.] Mr. Sperry indicated that there is no difficulty in securing a map from Colonial Pipeline that shows the location of the pipeline. He testified that the general standards by which one should conform as a surveyor are in Section 180-7-.02 of the [258 Ga. 117] Rules of State Board of Registration for Professional Engineers and Land Surveyors.

Federal regulations require Colonial to conduct an aerial inspection of the entire pipeline every fourteen days to discover unusual activities. Colonial had contracted with a new aerial patrol contractor on May 1, 1982. He had difficulty finding the line from the air; as a result, only two partial inspections were conducted in the fourteen days preceding the occurrence. The red clay field where Wright was grading was observed by a Colonial employee on a June 11, 1982 flight, but he assumed the activity was farming and failed to report it.

The pipeline was installed approximately 48 inches below the surface of the land; however, it was approximately one and three-quarter inches above the center of Westover Road. Although a marker was located 1,120 feet south of the ruptured line and 670 feet south of the property line and another 2,245 feet north of the rupture at the intersection of Old Dawson Road and Westover Road, there were no markers on the property at the time of the rupture. The distance between the two markers was 3,358 feet. Federal law requires, "[e]ach operator shall place and maintain line markers over each buried line in accordance with the following: (1) Markers must be located at each public road crossing, at each railroad crossing and in sufficient number along the remainder of each buried line so that the location is accurately known."

There was also evidence that six years earlier another construction worker had hit a portion of the pipeline that was on property that was unmarked, but there were no damages.

The jury's verdict exonerated Mr. Brown and Mr. Burnsed and awarded Wright $52,728.46 actual damages, $304.75 consequential damages, and $5,000,000 punitive damages.

1. The section of the pipeline ruptured by Wright's bulldozer was located on the property of appellee Baxter Brown. ¹

2. The appeal of the punitive damages award raises several issues. One is whether or not the complaint sounds in contract or tort. We hold that it sounds in tort, and inasmuch as we are reversing on the punitive damages phase of the case, we will not go into detail as to that point.

3. Colonial challenges the punitive damages element of this case on two grounds, due process and the Eighth Amendment prohibition against excessive fines contending that this prohibition applies to civil as well as criminal cases. Colonial then asserts that five million dollars in punitive damages violates this amendment. ²

a. Ingraham v. Wright, 430 U.S. 651, 97 S.Ct. 1401, 51 L.Ed.2d 711 (1977), has been relied upon to find that the Eighth Amendment does not apply to civil cases. But, Ingraham dealt only with the cruel and unusual punishment clause of the Eighth Amendment, it did not concern the excessive fines clause. It cannot be viewed as excluding punitive damages from scrutiny under the excessive fines clause of the Eighth Amendment. Moreover, even if Ingraham had held that the Eighth Amendment of the United States Constitution applied only to criminal cases, there would be nothing to prevent the application of the excessive fines clause of Art. I, Sec. I, Par. XVII of the 1983 Georgia Constitution Justice White writing for the dissent in Ingraham stated, "[t]he Court would have us believe ... that there is a recognized distinction between criminal and noncriminal punishment for purposes of the Eighth Amendment. This is plainly wrong." Id., 686. Justice White cited Trop v. Dulles, 356 U.S. 86, 78 S.Ct. 590, 2 L.Ed.2d 630 (1958) (plurality opinion), for the appropriate test: "The relevant inquiry is not whether the offenses for which a punishment is inflicted has been labeled as criminal, but whether the purpose of the deprivation is among those ordinarily associated with punishment, such as retribution, rehabilitation, or deterrence." Ingraham, supra, 430 U.S. at 686-87, 97 S.Ct. at 1420-1421 (White, J., dissenting).

to civil cases, thereby affording greater protection under state law.

b. Punitive damages "are private fines levied by civil juries to punish reprehensible conduct and to deter its future occurrence." Gertz v. Robert Welch, Inc., 418 U.S. 323, 350, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974). In Georgia, when the tortious conduct amounts to "wilful misconduct, malice, fraud,...