Everett v. Baltimore Gas and Elec. Co.

• Decision Date: 01 September 1985
• Docket Number: No. 56,56
• Parties: Janice EVERETT v. BALTIMORE GAS AND ELECTRIC COMPANY et al. ,
• Court: Maryland Court of Appeals

Page 286

307 Md. 286

513 A.2d 882

Janice EVERETT v. BALTIMORE GAS AND ELECTRIC COMPANY et al.

No. 56, Sept. Term, 1985.

Court of Appeals of Maryland.

Aug. 26, 1986.

Robert M. McCaig, Legal Aid Bureau, Inc., Baltimore, for Janice Everett, appellant.

Paul S. Buckley, Asst. People's Counsel (John K. Keane, Jr., Maryland People's Counsel, Thomas C. Gorak, Asst. People's Counsel), Baltimore, brief of amicus curiae Maryland People's Counsel.

Gregory V. Carmean, Acting People's Counsel, Thomas C. Gorak, Asst. People's Counsel and Paul S. Buckley, Asst. People's Counsel, Baltimore, reply brief of amicus curiae filed by Maryland People's Counsel.

Stephen J. Rosasco (Paul W. Davis, on brief), Baltimore, for appellee Baltimore Gas and Elec. Co.

Sandra Hall-Eckroade, Asst. General Counsel (Kirk J. Emge, General Counsel, on brief), Baltimore, for appellee Public Service Com'n of Maryland.

Argued before MURPHY, C.J., and SMITH, ^* ELDRIDGE, COLE, RODOWSKY, COUCH and McAULIFFE, JJ.

COLE, Judge.

We shall decide in this case whether a utility company may terminate a customer's service because the customer failed to pay for service at a prior address where she allegedly resided. We shall also decide whether the utility company or the customer bears the burden of proof in a service termination proceeding. Finally, we must determine the standard of proof that applies in the service termination proceeding at issue.

We set forth the facts giving rise to these questions as follows. Appellee, the Baltimore Gas & Electric Company (BG & E), proposed to terminate the service of appellant, Janice Everett, at 1600 Chilton Street. After Everett requested an explanation of the basis for the proposed termination, BG & E on May 7, 1981 wrote to Everett as follows:

In reference to your inquiry, the following information is submitted.

We have evidence which we feel holds you responsible for $4242.60 in unpaid bills. Listed below are the addresses, amounts and time periods of those bills.

Cut-in - Cut-out Address Amount Miscellaneous Charges

5/69 1737 Abbottston St. $139.03 $6.50 Court Cost

7/73 - 3/74 1520 Homestead St. 207.95

4/75 - 4/77 508 E. 43rd St. 691.25 6.00 Recon Chg.

5/77 - 8/78 508 E. 43rd St. 1078.04

8/78 - 5/79 508 E. 43rd St. 772.77 3.00 Recon Chg.

5/79 - 9/79 508 E. 43rd St. 544.03

9/79 - 5/80 508 E. 43rd St. 794.03

If you dispute these billings, you do have the right to request a formal hearing by the Public Service Commission of the State of Maryland.

On June 4, 1981, Everett filed a complaint ¹ against BG & E with the Public Service Commission. In her complaint, Everett asserted that she had never resided or had service in her name at any of the addresses listed in the letter. She asked that the Commission stay the proposed termination, that BG & E be prohibited from collecting the alleged debt, and that a hearing be held on the matter. After informal attempts to resolve the dispute failed, the Commission ordered BG & E to answer the complaint and referred the case to a hearing examiner pursuant to Maryland Code (1957, 1980 Repl.Vol.), Art. 78, §§ 20(b) and (c). In its answer to Everett's complaint, BG & E alleged that

between May 1977 and May 1980, Complainant resided at 508 E. 43rd Street and fraudulently used gas and electric service supplied from BG & E by (1) failing to contract for service in May 1977, (2) making application in a fictitious name or in the name of another family member or occupant in August 1978, (3) failing to contract for service in May 1979 and (4) making application in a fictitious name or name of another family member or occupant in September 1979. BG & E further avers that Complainant is liable for such fraudulent use in the amount of $3,188.87 and that BG & E is entitled to terminate service for non-payment of said outstanding amount. [Emphasis supplied.]

On October 28, 1981, a hearing was held before a hearing examiner. At the outset of the hearing, Everett's counsel, relying upon the allegation of "fraudulent use" set forth in BG & E's answer, moved that the burden be placed on BG & E to "go forward and present proof to that effect rather than my client having to disprove an allegation for which no basis has yet been presented." In opposition to Everett's motion, BG & E contended that the answer's allegations of "fraudulent use" merely "tracked" the applicable regulation and that Everett, as the complaining party, bears the burden of proof as to facts necessary to establish her basis for relief. The hearing examiner, agreed with Everett, however, and granted her motion. BG & E proceeded to present its evidence, after which Everett presented evidence in rebuttal. BG & E's evidence indicated that Everett did reside at 508 E. 43rd Street during the period in question and that she did obtain service unlawfully at that address. On the other hand, Everett produced evidence that tended to show that she lived with her mother and brothers on Round Road, not at the 43rd Street address, during the relevant time period. According to her evidence, the house on 43rd Street was occupied by her daughter Janet, her grandchildren and a boarder.

The hearing examiner issued his proposed order on May 17, 1982. He concluded that the burden of proof should be borne by BG & E and that BG & E must satisfy this burden by clear and convincing evidence. Applying this standard, the hearing examiner found that the evidence was not "sufficiently reliable" in showing that Everett was living at the premises in question. Thus, he held that BG & E had failed to satisfy the standard of proof and proposed that the utility company be prohibited from terminating service to Everett "on the basis of its claim of fraudulent use at 508 E. 43rd Street."

BG & E appealed to the Commission. In its final order issued on November 5, 1983, the Commission agreed with the hearing examiner as to the burden of proof, declaring that "where a utility seeks to terminate service for fraudulent use, the burden of proof shall be upon the utility to show the customer has engaged in such fraudulent use." The Commission disagreed, however, that the standard of proof should be clear and convincing evidence. Rather, the Commission determined the appropriate standard to be preponderance of the evidence. Applying the preponderance standard to the record before the examiner, the Commission concluded that BG & E met its burden of showing fraudulent use and that Everett was responsible for the disputed bills. Thus, the Commission dismissed her complaint.

Everett appealed the Commission's order to the Circuit Court for Baltimore City. BG & E also appealed that part of the Commission's order placing the burden of proof on the utility. The circuit court, in a memorandum opinion filed February 24, 1984, held that BG & E had the burden of proof and that the proper standard was clear and convincing evidence, not merely preponderance of the evidence. Thus, the court reversed the Commission's order and remanded the case to the Commission for further proceedings.

BG & E and the Commission appealed the circuit court's decision to the Court of Special Appeals. In Baltimore Gas & Electric Co. v. Everett, 61 Md.App. 288, 486 A.2d 248 (1985), the intermediate appellate court agreed with the Commission and the circuit court that the burden was on BG & E to justify the proposed termination. The Court of Special Appeals, however, disagreed with the prior rulings of the Commission and the circuit court as to the applicability of the fraudulent use regulation, COMAR 20.31.02.04. Instead, the court declared "at issue was not the characterization of Everett's actions as fraudulent, but only whether they, or her alleged residence at that address, sufficed to make her liable for the charges." Id. at 296, 486 A.2d at 252. The court applied the preponderance of the evidence standard to the resolution of that issue and concluded that the Commission did not err in finding that BG & E had met its burden. Everett petitioned this Court to issue a writ of certiorari. Shortly thereafter, BG & E cross-petitioned, raising the question pertaining to the allocation of the burdens. We granted both petitions and issued a writ of certiorari.

I

We begin by addressing the issue concerning the allocation of the burdens of proof. BG & E contends that the Commission failed to allocate the burdens in accordance with the procedures for handling complaints set forth in Article 78, § 77(a) and COMAR 20.07.03.02A. ² BG & E asserts that these provisions impose on Everett, as complainant the burden to plead a prima facie case or face dismissal. According to BG & E's argument, if Everett meets this burden, then the burden shifts to BG & E to rebut with evidence of "fraudulent use" or facts making Everett responsible for the bills in question. Further, BG & E contends that because Everett disputes the proposed termination on the ground that she never lived at the address in question, she bears the burden of persuasion as to where she resided during the relevant time period. In response, Everett asserts that the provisions relied upon by BG & E do not apply to her complaint and that BG & E, under the regulations governing termination of gas and electric service, bears the burden in service termination disputes. Along with Everett, Maryland People's Counsel (MPC), amicus curiae, contends that BG & E is misguided in its attempt to place the burden of proof on the customer. MPC argues that BG & E should bear the burden of proof because it desires to change the status quo and it alleges that Everett acted wrongfully. Further, MPC asserts that BG & E should bear the burden because it possesses the facts that prompted its allegation of fraudulent use.

The regulations set forth in Subtitle 31 of Title 20 of the Code of Maryland Regulations govern all terminations of electric service, gas service, or both, where the service is for residential use. COMAR 20.31.01.03c requires that the customer...