ITT Terryphone Corp. v. Tri-State Steel Drum, Inc., TRI-STATE

• Decision Date: 08 April 1986
• Docket Number: TRI-STATE,71980,Nos. 71979,s. 71979
• Parties: ITT TERRYPHONE CORPORATION v.STEEL DRUM, INC.STEEL DRUM, INC. v. ITT TERRYPHONE CORPORATION.
• Court: Georgia Court of Appeals

Page 686

344 S.E.2d 686

178 Ga.App. 694

ITT TERRYPHONE CORPORATION v. TRI-STATE STEEL DRUM, INC.

TRI-STATE STEEL DRUM, INC. v. ITT TERRYPHONE CORPORATION.

Nos. 71979, 71980.

Court of Appeals of Georgia.

April 8, 1986.

Fred M. Milligan, John D. Barry, Chattanooga, Tenn., for ITT terryphone.

Charles W. Dooley, James R. McKoon, David Noblitt, Chattanooga, Tenn., for Tri-State Steel.

Norman S. Fletcher, Lafayette, Robert Boehm, Chattanooga, Tenn., for South Cent. Bell. BIRDSONG, Presiding Judge.

Tort--Apportionment of Damages. Considering the facts in the light of the jury's verdict, we conclude the following circumstances and events gave rise to the controversy between these parties. Tri-State Steel Drum, Inc. (Tri-State) is an enterprise located in north Georgia close to the Tennessee state line. It buys used steel 55-gallon drums and refurbishes these steel drums for resale. Prior to 1979, Tri- State leased telephone services from South Central Bell Telephone which included three telephone numbers, incoming telephone lines, numerous telephone receivers strategically placed throughout the plant and the necessary lines and switches to connect the instruments to the main box where the three telephone numbers were delivered by the incoming telephone lines. On one of these incoming lines was attached a CAU coupler which allowed Tri-State to own and operate a fire and burglar alarm. This coupler was owned by Bell and was furnished at a fee to Tri-State for the limited purpose of connecting the alarm systems to one of the leased telephone numbers. Tri-State needed and utilized the alarm systems because it was in an isolated rural area not near a fire or police station. Thus if a fire or burglary occurred, when heat in the plant reached a certain point a heat sensor was activated immediately causing a tape recorded message to be telephoned out to the police or fire station and designated employees of Tri-State notified. If an entry into the plant occurred, a similar call was placed.

In early 1979 in addition to the Bell telephone equipment, Tri-State also owned an intraplant communications system manufactured and installed in the plant by ITT Terryphone Corporation (ITT), a subsidiary of International Telephone and Telegraph. A sales representative of ITT approached the owner and CEO of Tri-State in 1979 suggesting that Tri-State could buy a telephone system from ITT, connect it with the ITT intercom system already in place in the plant and make an ultimate savings by eliminating the leased Bell equipment. Tri-State made the purchase and ITT installed its telephone equipment in the plant in May 1979.

When the CEO of Tri-State made the purchase of ITT equipment, he specifically inquired of the sales representative as to the continued availability of the fire and burglar alarm which was attached to Bell's incoming line. There is no dispute that ITT did not sell or service burglar or fire alarms and Tri-State did not expect such service from ITT. However, the ITT representative expressly reassured Tri-State's CEO that there would be no interruptions of the alarm service and for Tri-State not to worry about the service as a result of the changeover from Bell telephone service to the ITT system. In accordance with usual practice, ITT exacted from Tri-State an agency agreement so that all inquiries and problems arising during the cut over from Bell to ITT would be dealt with between ITT and Bell, eliminating Tri-State from problem solving during the cut over. In accordance with the agency agreement, ITT sent a request to Bell asking Bell to remove all its internal telephone equipment from the plant on the same day that ITT completed the installation of the ITT system. The proposed plan was that ITT would install a complete telephone system and run that to the box on the wall of the plant to which the three incoming Bell numbers ended. Then by a series of clips (or connectors) at the box, the three numbers were connected to the ITT system. It was clear therefore that the ITT system (now owned by Tri-State) did not include a fire or a burglar alarm inasmuch as the two alarms were connected to one of the three incoming lines owned by Bell and leased by Tri-State and connected to the incoming line by a CAU coupler also owned by Bell. This was on the "Bell" side of the connecting box (in effect on the outside of the plant) rather than on the "ITT" side on the inside of the plant.

In the request submitted by ITT to Bell for the removal of Bell's intraplant telephone equipment, ITT made no mention of the fire or burglar alarm systems nor the retention of the connection of the alarm to the incoming Bell line and number. ITT's testimonial excuse for the absence of any reference to the alarm systems was that the ITT equipment had nothing to do with the incoming lines (except where the incoming line was connected to the ITT equipment) and the alarms were connected to Bell's leased equipment outside the connector box through a coupler also owned by Bell. Nevertheless, it was shown that on the request form from ITT to Bell there was a section dealing with special instructions where it was conceded if ITT had any special requests of Bell those instructions would have there been incorporated. When the request was received by Bell for removal of all its equipment in May 1979, the request was processed through to the Bell business office where a computer operator originated a work order for the removal of all Bell's telephone equipment. Inasmuch as no mention was made of the alarm systems or the coupler connecting the alarm systems to the incoming leased line and number (which of course was retained by Tri-State), the work order directed the removal of all equipment outside of the three numbers coming into the plant. It was equally clear however that Bell was or should have been aware that the coupler attaching the alarm systems to an incoming leased number was not affected by the replacement and removal of its intraplant telephone equipment by that of ITT because the coupler was attached to the incoming line and number before that line was connected to the ITT system. Nevertheless, in spite of its contract to furnish the coupler service to Tri-State for the alarm system and all the previous billing for that service, it is manifest that Bell made no inquiry of ITT nor of Tri-State as to what disposition was desired of the coupler and the use to which it had been put.

Thus in May 1979, the ITT equipment was installed and connected to the Bell incoming lines and numbers, the Bell equipment was removed (as ordered by ITT), and the coupler likewise was removed and the alarm service disconnected. During the months of May, June, July, and August 1979, weekly routine tests were continued by Tri-State of the fire alarm and burglar alarm (but not to include an actual outgoing call) to ascertain if the systems were functional. Each system tested as fully operational. On the night of Friday, August 24, 1979, the Tri-State maintenance team conducted its routine weekly maintenance check of the plant, turned off the power, activated the fire and burglar systems and left the plant at about 8:00 p.m. At about 8:30 p.m., a nearby neighbor observed a faint glow as of a small brush fire in the vicinity of the plant, but the neighbor did not feel any apprehension. At about 9:20 p.m. that same neighbor was aroused by two fishermen who excitedly notified her that the plant was on fire. When she looked on this occasion, she noted the plant was engulfed in flame and the fire was very advanced. She called the fire department which arrived on the scene within less than 20 minutes. Because of the magnitude of the fire, other nearby firefighters were called and the fire was ultimately extinguished about 12:00 p.m. Expert testimony was received to the effect that if the fire alarm had been connected to the telephone line, the heat sensor probably would have alerted the firefighters within 10-15 minutes and the firefighters would have been on the scene within approximately 30 minutes. In actual fact, the firefighters did not arrive until approximately 9:45 p.m. or more than an hour after the fire apparently was first observed. It was further stated in expert opinion that the damages would have been much less significant had the firefighters arrived 30-40 minutes earlier, it being shown that a fire doubled in size approximately every 5 minutes.

Tri-State brought this action against ITT alleging...