Halliburton v. Public Service Co. of Colorado, 88CA1368

• Decision Date: 28 June 1990
• Docket Number: No. 88CA1368,88CA1368
• Parties: Ola HALLIBURTON, Virgil Halliburton, and Eddie Owens, Plaintiffs-Appellees, and Glen Falls Insurance Company, Plaintiff-Intervenor-Appellee, v. PUBLIC SERVICE COMPANY OF COLORADO, a Colorado corporation, Defendant-Appellant. . V
• Court: Colorado Court of Appeals

Page 213

804 P.2d 213

Ola HALLIBURTON, Virgil Halliburton, and Eddie Owens, Plaintiffs-Appellees, and Glen Falls Insurance Company, Plaintiff-Intervenor-Appellee, v. PUBLIC SERVICE COMPANY OF COLORADO, a Colorado corporation,

Defendant-Appellant.

No. 88CA1368.

Colorado Court of Appeals,

Div. V.

June 28, 1990.

Rehearing Denied July 26, 1990.

Certiorari Denied Jan. 28, 1991.

Wilcox & Ogden, Ralph Ogden, Denver, for plaintiffs-appellees.

Walberg, Dagner & Loyd, P.C., Wendelyn K. Walberg, Barbara C. Loyd, Englewood, for plaintiff-intervenor-appellee.

Kelly, Stansfield & O'Donnell, Timothy J. Flanagan, Kevin W. Hecht, Denver, for defendant-appellant.

Opinion by Judge DUBOFSKY.

Defendant, Public Service Company of Colorado, appeals the judgment awarding damages to plaintiffs, Ola Halliburton, Virgil Halliburton, Eddie Owens, and Glen Falls Insurance Company, based on defendant's negligence. We affirm.

Plaintiffs brought this negligence action against defendant, a supplier of natural gas, for an explosion which occurred on February 2, 1985, at the Halliburton home in Denver, Colorado. Ola Halliburton and Eddie Owens were injured in the explosion. Ola Halliburton's husband, Clarence Halliburton, died as a result of the explosion. Virgil Halliburton lost property which was stored at the house, and Glen Falls Insurance Company, the casualty insurer of the premises, intervened in the action.

The cause of the explosion was a leaking flexible tube which connected the gas piping in the interior of the home to the gas range in the kitchen. The chemical ethyl mercaptan, which is added to natural gas to give it an odor, caused a gradual deterioration of the connector tube which in turn caused it to leak gas. The identity of the manufacturer of the connector tube is unknown.

As early as 1978, defendant knew that a large number of connector tubes of the type used in the Halliburton home were failing because of the interaction between its gas and the tubes. The evidence suggests that as many as 45,000 customers in the Denver area use this type of connector and were, therefore, at risk for a gas leak and resulting explosion.

In 1980 defendant started a campaign to warn its customers of the risks presented by these failing connectors. In February 1980, the defendant held a news conference during which it discussed its campaign to check customer owned connectors and to disseminate information about this hazard. Defendant also made several radio and television announcements and sent periodic messages in its newsletter with the customers' monthly billing. At trial, however, there was no evidence that plaintiffs had received actual notice of the problems with the connectors.

Prior to the explosion, defendants' servicemen went to the Halliburton's home on several occasions, including March 28, 1979, and March 12, 1982, to correct problems with the hot water tank and furnace. An internal memorandum written by a supervisor for defendant recognized the hazard and instructed servicemen to inspect all gas appliances for the tubes and to provide warning information, but the servicemen did not inspect either the stove or the connector tube.

Plaintiffs claim that defendant was negligent when it failed during its two service calls to inspect, replace, or otherwise deal with the connector tube. Plaintiff also claimed defendant was negligent in not adequately warning of the dangers of the connectors.

Defendant argues that the trial court erred in finding that defendant had a duty to plaintiffs in regard to the hazard presented by the connector. Defendant also appeals other alleged errors at trial.

I.

Defendant first argues the trial court erred in finding that defendant owed plaintiffs a legal duty to check the connector tube and, if necessary, to take corrective action. We disagree.

Natural gas is considered a product of the selling and distributing company and, because of the recognized hazards connected with the use of natural gas, a higher duty of care is owed by manufacturers and distributors of natural gas. See Blueflame Gas, Inc. v. Van Hoose, 679 P.2d 579 (Colo.1984); see also Smith v. Home Light & Power Co., 734 P.2d 1051 (Colo.1987) (electricity while used in the home is a product).

In addition to supplying natural gas, defendant also maintains and repairs certain items which are involved in the use of its gas. A service company's duty for providing upkeep and repair services may go beyond the mere replacement or repair of a part. Depending upon the particular factual circumstances, there can be a duty to use reasonable skill in inspecting or repairing the item involved with the use and delivery of a product, i.e., natural gas. See Metropolitan Gas Repair Service, Inc. v. Kulik, 621 P.2d 313 (Colo.1980) (fn. 6).

In enunciating some of the important factors to be considered in determining if a duty exists, the court in Smith v. City & County of Denver, 726 P.2d 1125 (Colo.1986) stated:

"Whether the law should impose a duty requires consideration of many factors including, for example, the risk involved, the foreseeability and likelihood of injury as weighed against the social utility of the actor's conduct, the magnitude of the burden of guarding against injury or harm, and the consequences of placing the burden upon the actor."

Here, several reasons lead us to impose a duty upon defendant to inspect the Halliburton connector tube. These factors include: (a) the relatively insignificant amount of time and expense that would have been required of defendant to evaluate the connector tube and to take corrective action; (b) the two service calls at the Halliburton home after the company knew of a substantial hazard affecting approximately 45,000 homes in the Denver area; (c) the likelihood of the tube leaking and ultimately causing an explosion unless corrective action were taken; and (d) defendant's expertise in dealing with such problems and the legitimate expectation of its customers that defendant would undertake reasonable efforts to prevent injury or damage from hazards associated with its product.

The most compelling reason, however, for imposing a duty upon defendant is that its product, natural gas, which contained the corrosive ethyl mercaptan, was a substantial factor in causing the deterioration of the connector tube. See University of Denver v. Whitlock, 744 P.2d 54 (Colo.1987).

When a party can reasonably foresee that its product will be used as an integral component of a defective and unreasonably dangerous product, there is a duty upon that party to undertake corrective action to alleviate, if possible, the hazard. See Union Supply Co. v. Pust, 196 Colo. 162, 583 P.2d 276 (1978); see also United States Fidelity & Guaranty Co. v. Salida Gas Co., 793 P.2d 602 (Colo.App.1989).

Therefore, primarily because of the service component of defendant's business and the involvement of defendant's gas product in the deterioration of the tube, we conclude that the trial court properly determined there was a duty upon defendant to use reasonable care in dealing with the connecting tube hazard.

II.

Defendant next argues that a negligence action for failure to warn cannot be maintained because the duty to warn is based on a strict liability claim under Restatement (Second) of Torts § 402A (1965). Plaintiffs admit they did not plead a Restatement strict liability claim but argue, however, that they can proceed with a negligence claim based on general products liability law. We agree with plaintiff.

The arrival of strict liability law did not abrogate the right of an injured party also to proceed on a negligence claim. See Halter v. Waco Scaffolding & Equipment Co., 797 P.2d 790 (Colo.App.1990); Bailey v. Montgomery Ward & Co., 635 P.2d 899 (Colo.App.1981); see also T. Travers, American Law of Products Liability § 8:13 (3rd ed. 1988). In addition to the duty to warn recognized under strict liability law, the principles of general product liability law impose a duty on the manufacturer of a product to act reasonably in the design, manufacture, and sale of the product. This duty includes providing adequate warnings.

The duty to warn is derived from a manufacturer's broader duty to act appropriately in the manufacture, distribution, and sale of its goods. Typically, a warning is required when the manufacturer has not designed the product so that a given hazard is eliminated. See Union Supply Co. v. Pust, supra; see also Voss v. Black & Decker Manufacturing Co., 59 N.Y.2d 102, 463 N.Y.S.2d 398, 450 N.E.2d 204 (1983).

We conclude that the reasons which impose a duty to warn under Restatement (Second) of Torts § 402A, also exist where the claim is based on negligence and, generally, the law applicable to warnings under § 402A are instructive in negligence cases as well.

In Downing v. Overhead Door Corp., 707 P.2d 1027 (Colo.App.1985), this court noted:

"The difference between negligence and strict liability is the focus of the trier of fact. Under a negligence theory, the reasonableness of the manufacturer's conduct must be determined. Under a strict liability theory, the determination is whether the product is defective, or, if not defective, unreasonably unsafe, and whether, under an objective standard, after weighing the relevant costs and benefits, a warning was required."

Therefore, we conclude that if, as under the circumstances here, a supplier of natural gas knows its customers' appliances or connectors are leaking gas, then that supplier has a duty to take corrective action which includes, inter alia, adequately warning of the danger. See Van Den Hul v. Baltic Farmers Elevator Co., 716 F.2d 504 (8th Cir.1983); see also Claxton Poultry Co. v. City of Claxton, 155 Ga.App. 308, 271 S.E.2d 227 (1980); Denniston v. Skelly Oil Co., 47 Ill.App.3d 1054, 6 Ill.Dec. 77, 362 N.E.2d 712 (1977).

III.

Defendant asserts the trial court committed reversible error when it refused to provide a court reporter to record voir...