Flowell Elec. Ass'n, Inc. v. Rhodes Pump, LLC

• Decision Date: 25 September 2015
• Docket Number: No. 20130834.,20130834.
• Citation: 361 P.3d 91,2015 UT 87
• Parties: FLOWELL ELECTRIC ASSOCIATION, INC., and Dixie Escalante Rural Electric Association, Inc., Appellees, v. RHODES PUMP, LLC, Appellant.
• Court: Utah Supreme Court

361 P.3d 91

2015 UT 87

FLOWELL ELECTRIC ASSOCIATION, INC., and Dixie Escalante Rural Electric Association, Inc., Appellees,

v.RHODES PUMP, LLC, Appellant.

No. 20130834.

Supreme Court of Utah.

Sept. 25, 2015.

Susan Black Dunn, Kathleen M. Liuzzi, Salt Lake City, for appellees.

James R. Black, Matthew J. Black, Salt Lake City, for appellant.

Justice HIMONAS, opinion of the Court:

INTRODUCTION

¶ 1 This case is about a demand for indemnification under the High Voltage Overhead Lines Act (HVOLA). Utah Code§ § 54–8c–1to –6. HVOLA prohibits any activity within ten feet of a high voltage overhead line unless the public utility operating the line has been notified of the “intended activity” and, together with the party responsible for the triggering activity, has implemented “mutually satisfactory” safety precautions. Id.§ 54–8c–2(1). If the party responsible for the activity violates HVOLA and, as a result, a person or thing comes into contact with the line, then that party “is liable to the public utility ... for all liability incurred by the public utility as a result of [the] contact.” Id.§ 54–8c–4(3).

¶ 2 Based on these provisions, Flowell Electric Association, Inc. (FEA), and Dixie Escalante Rural Electric Association, Inc., (collectively, Flowell) sought indemnification from Rhodes Pump II, LLC, (Rhodes) for liability to Brian Wade incurred by Flowell. Mr. Wade, in the course of servicing a well situated under one of Flowell's high voltage lines, came into contact with the line, which resulted in a severe electric shock and, ultimately, the amputation of both of his legs. Mr. Wade sought and received workers' compensation benefits from his employer, Rhodes, on whose behalf he was acting at the time of the accident. He also filed a tort suit against Flowell, alleging negligence and breach of warranty and requesting punitive damages.¹A jury found that Flowell had acted negligently and awarded Mr. Wade both compensatory and punitive damages. Flowell then brought this action for HVOLA indemnification against Rhodes. The district court concluded that Rhodes had failed to give Flowell adequate notice of its intended activity and therefore granted Flowell summary judgment. Rhodes timely appealed.

¶ 3 We first address the legal challenges Rhodes brings to HVOLA and conclude that HVOLA does apply to Rhodes and is not unconstitutional. But because we conclude there exist genuine issues of material fact regarding Rhodes's notice, we reverse the grant of summary judgment and remand for further proceedings.

BACKGROUND

¶ 4 On May 20, 2002, Mr. Wade and Darrin Rhodes went to service the Sundown Well, which is located in Meadow, Utah.²In the course of performing their work, they raised the boom on their well-servicing truck to within three or four feet of Flowell's high voltage lines. At that point, Mr. Rhodes contacted Flowell and informed Flowell's operations manager and lineman, Steve Iverson, that he had raised the boom near the high voltage lines. Mr. Iverson responded that he and another lineman, Neil Stevens, would come to the Sundown Well within a couple of hours to assist.

¶ 5 Mr. Iverson and Mr. Stevens arrived at the site and placed three “cover-ups” on the energized line to cover fifteen feet of the line, “centering them with the raised boom.” Mr. Iverson testified that he instructed Mr. Rhodes and Mr. Wade “not to move the boom from its current position” and to contact him before lowering the boom so that he could return and “assist” the men in “safely lowering” it. Mr. Rhodes and Mr. Wade denied receiving the instruction. Mr. Rhodes and Mr. Wade “completed their work of installing the pipes and putting the well back together.” Without moving the boom from its initial location, they loaded their equipment back onto Mr. Rhodes's truck. Then, without notifying anyone, they “began lowering” the boom. At that point, Mr. Wade noticed that they had forgotten to load certain equipment—the “well collars.”³Mr. Rhodes again raised the boom into the air near the overhead line.⁴They loaded the well collars and began to lower the boom a second time. As they were lowering it, the boom came in contact with the power line, resulting in Mr. Wade's injury.⁵

¶ 6 Mr. Wade and his wife filed the tort suit against Flowell in April 2006. The case went to trial in 2010. The jury found in favor of Mr. Wade and awarded him $9,841,627.03 in compensatory damages and $10,000 in punitive damages.

¶ 7 The following year, Flowell filed this action against Rhodes for indemnification under HVOLA. The parties filed cross-motions for summary judgment. On July 31, 2013, the district court entered summary judgment in favor of Flowell. Rhodes timely appealed. We have jurisdiction under Utah Code section 78A–3–102(3)(j).

STANDARD OF REVIEW

¶ 8 We review a district court's grant of summary judgment for correctness, giving no deference to its conclusions of law. Keith v. Mountain Resorts Dev., L.L.C.,2014 UT 32, ¶ 16, 337 P.3d 213. Summary judgment is appropriate when there is “no genuine issue as to any material fact” and “the moving party is entitled to a judgment as a matter of law.” Utah R. Civ. P.56(c). When evaluating the propriety of summary judgment on cross-motions for summary judgment, we view the facts and any reasonable inferences to be drawn therefrom in the light most favorable to the losing party. Keith,2014 UT 32, ¶ 16 n. 10, 337 P.3d 213.

ANALYSIS

¶ 9 Rhodes contends that the district court erred in granting summary judgment in favor of Flowell for a variety of reasons. We first address Rhodes's claim that the indemnification action was not timely filed under the statute of limitations. Second, we address Rhodes's claim that the exclusive remedy provision of the Workers' Compensation Act (WCA) precludes Flowell from bringing an HVOLA indemnification action against Rhodes. Third, we address Rhodes's argument that, as applied, HVOLA violates the principles of due process and equal protection guaranteed under the United States and Utah Constitutions. Fourth and finally, we analyze Rhodes's argument that summary judgment was improperly granted. Rhodes's argument on this issue is twofold. It contends: (1) Rhodes did not violate HVOLA and therefore cannot be required to indemnify Flowell; and (2) in a separate tort case against Flowell, a jury found that Flowell had caused Mr. Wade's injuries through gross negligence and thus Rhodes should not be required to indemnify Flowell for public policy reasons. We reject Rhodes's statute of limitations, WCA exclusive remedy, and constitutional arguments. We also hold that a public utility's gross negligence does not preclude indemnification under HVOLA. But because we conclude that there are unresolved genuine issues of material fact regarding whether Rhodes violated HVOLA, we reverse the grant of summary judgment and remand for further proceedings.

I. FLOWELL TIMELY FILED ITS HVOLA INDEMNIFICATION ACTION

¶ 10 HVOLA grants public utilities a right of action for indemnification when a “responsible party” fails to follow HVOLA's requirements. Utah Code§ 54–8c–4. The parties suggest the period of limitations applicable to an HVOLA indemnification action can be found at Utah Code section 78B–2–307(1)(a), which provides that an action based on a “liability not founded upon an instrument in writing” must be brought within four years. They are mistaken. The relevant statute of limitations for an HVOLA action is found at Utah Code section 78B–2–305(4), which states that “[a]n action may be brought within three years ... for a liability created by the statutes of this state.” Although section 78B–2–307(1)(a)might appear to apply because the liability here is not based upon a written instrument, section 78B–2–305(4)specifically applies to liabilities created by statutes. And “[w]ell-established principles of statutory construction” tell us that the “more specific statute governs.” Pan Energy v. Martin,813 P.2d 1142, 1145 (Utah 1991). Here, the cause of action and associated liability are created wholly by a statute—HVOLA. SeeUtah Code§ 54–8c–4. Thus, the relevant statute of limitations is three years. Id.§ 78B–2–305(4).

¶ 11 The parties' error does not influence the outcome of this case, nor would their arguments have changed absent that error. Rhodes argues that Flowell's cause of action for indemnification under HVOLA accrued on the day of the accident, more than four years before Flowell attempted to include Rhodes in the tort case. Flowell argues that the statute of limitations could not have begun to run until Flowell had actually “incurred” liability, which was when the jury returned its verdict in the tort case against Flowell. We agree with Flowell.

¶ 12 A cause of action accrues when it “becomes remediable in the courts”—or, in other words, when “all of the elements that must be proved at trial under the statute allegedly creating liability on the part of the defendant are existing and may be established.” State v. Huntington–Cleveland Irrigation Co.,2002 UT 75, ¶ 24, 52 P.3d 1257(citation omitted). Here, Flowell could not satisfy all the elements of its indemnification claim against Rhodes until Flowell was held liable for the injuries to Mr. Wade. Because Flowell had not actually “incurred” any liability “as a result of” Mr. Wade's injurious contact with the high voltage overhead line until the jury rendered its verdict, the statute of limitations did not begin to run until then. Utah Code§ 54–8c–4(3). The jury in the tort case issued a verdict against Flowell on January 3, 2011. Flowell filed its indemnification action five months later, in June 2011. Because Flowell filed its HVOLA action within five months of the jury verdict, the indemnification action was timely filed.

II. THE WORKERS' COMPENSATION ACT'S EXCLUSIVE REMEDY PROVISION DOES NOT PRECLUDE LIABILITY UNDER HVOLA

¶ 13 Rhodes argues that the WCA's exclusive remedy provision shields it from a civil suit brought under HVOLA. Utah Code§ 34A–2–105(1). Because we...