Kazmaier Supermarket, Inc. v. Toledo Edison Co.

• Decision Date: 17 July 1991
• Docket Number: No. 90-1239,90-1239
• Citation: 573 N.E.2d 655,61 Ohio St.3d 147
• Parties: KAZMAIER SUPERMARKET, INC., Appellee, v. TOLEDO EDISON COMPANY, Appellant.
• Court: Ohio Supreme Court

Page 147

61 Ohio St.3d 147

573 N.E.2d 655

KAZMAIER SUPERMARKET, INC., Appellee, v. TOLEDO EDISON COMPANY, Appellant.

No. 90-1239.

Supreme Court of Ohio.

Submitted April 10, 1991.

Decided July 17, 1991.

In an appeal by Kazmaier, the Sixth District Court of Appeals reversed the trial court's order and held that the claim was not inherently either a rate or service dispute subject to the exclusive jurisdiction of the commission. The court of appeals determined that Kazmaier's action was one sounding in tort and breach of contract, and accordingly that such claims were within the jurisdiction of the common pleas court.

In order to provide a basis for understanding the arguments presented in this case, a historical background is necessary.

The specific allegations of the first cause of action set forth in Kazmaier's complaint were that:

"4. Plaintiff and Defendant activated an account on November 5, 1980 for the provision of electrical service. This account was to be billed on Rate GS-12, however, it was inadvertently billed on Rate GS-16 from November 5, 1980 to December, 1987 resulting in Plaintiff overpaying for electrical service in the amount of Thirty-eight Thousand Eight Hundred Fifty-eight and 81/100 Dollars ($38,858.81).

"5. Defendant has acknowledged the excess charges referred to in Paragraph 4 above and has re-paid the same to Plaintiff.

" * * *

"7. Because of Defendant's negligence, Plaintiff suffered losses of Thirty-eight Thousand Eight Hundred Fifty-eight and 81/100 Dollars ($38,858.81) plus the reasonable interest value on said amount for a period of seven and one-half years.

"8. Such a reasonable rate of interest equals Fifteen Thousand Five Hundred Forty-two and 23/100 Dollars ($15,542.23)."

Plaintiff's second cause of action as set forth in the complaint was as follows:

"9. Plaintiff hereby incorporates its allegations contained in the First Cause of Action of its Complaint, Paragraphs 1 through 8 herein, as if the same were fully rewritten, word for word and paragraph for paragraph.

"10. Defendant, in charging a higher rate, was in breach of the account contract. This breach resulted in an overpayment of Thirty-eight Thousand Eight Hundred Fifty-eight and 81/100 Dollars ($38,858.81).

"11. Defendant's breach gave it possession and use of Plaintiff's money, thereby barring Plaintiff from the same. Plaintiff deserves damages for Defendant's retention and use of Plaintiff's money and such damages should equal the reasonable value of interest as stated in Paragraph 8 herein."

Toledo Edison filed a motion to dismiss on the basis of lack of jurisdiction of the common pleas court, arguing in support of its motion that the commission has sole and exclusive jurisdiction to resolve these types of claims under R.C. 4905.22 since allegations of failing to apply the correct rate challenge the amount of money Toledo Edison charged for electric service. Toledo Edison further argued that a customer who wishes to challenge the fairness of charges by a utility may do so by filing a petition with the commission pursuant to R.C. 4905.26.

Kazmaier, in response to Toledo Edison's motion to dismiss, argued to the trial court that this case did not involve a rate dispute but rather was a common-law claim to allow the court to determine the plaintiff's damages as a result of the utility company's negligence in overcharging the plaintiff for a period of seven and one-half years. Further, Kazmaier argued that Toledo Edison had acknowledged its negligence by admitting the overpayment and refunding this overpayment to Kazmaier.

Toledo Edison replied in its brief to the trial court that Kazmaier erred in "its mistaken belief that the Defendant has admitted to negligently overcharging the Plaintiff for electric service. In fact, the Defendant has made no admission to the Plaintiff. Therefore, because there has been no admission on the Defendant's part, this claim involves the issue of the Company's rates, rules, and regulations." Accordingly, Toledo Edison argued that any attempt by Kazmaier to advance a claim for interest "must certainly wait for a determination by the PUCO on the present dispute over the Defendant's rates and adequacy of service." Toledo Edison, in its argument to this court, sets forth an enlargement of the issue of the claimed overcharge for electrical services to Kazmaier by stating that "[t]he dispute had its genesis when a Toledo Edison marketing representative approached Kazmaier in September of 1987 and indicated that it might be advantageous for Kazmaier to be served under the rates, terms and conditions of 'Large General Service Rate GS-12' rather than the provisions of 'Small General Service Rate GS-16.' The marketing representative had noted that some supermarkets similar to Kazmaier in size could meet the eligibility requirements of Rate GS-12, and depending upon such factors as kilowatt (KW) demand levels and kilowatt hours (KWH) of usage, could possibly realize lower electric charges. Both Rate GS-12 and Rate GS-16 are Toledo Edison tariff schedules on file and approved by the commission pursuant to the requirements of R.C. 4905.30. Each rate contains numerous eligibility requirements which a customer must satisfy to receive service under that rate. Based upon the Rate GS-12 eligibility requirements and an analysis of Kazmaier's current usage characteristics, it was ultimately determined that Kazmaier could be switched from Rate GS-16 to Rate GS-12. This was accomplished in January of 1988.

"During the course of analyzing Kazmaier's usage characteristics and discussing the potential change in rates, an issue arose concerning the possibility of a refund to Kazmaier for past charges. In accordance with its normal policy, Toledo Edison conducted an investigation to determine the appropriateness of the rate applied to the customer upon application for service. Upon review of the information originally supplied by the customer in its initial application for service in 1980, Toledo Edison concluded that the customer's usage characteristics qualified it to be served under the terms and conditions of Rate GS-16, as opposed to Rate GS-12. Toledo Edison placed Kazmaier on the correct tariff and it then charged the customer in accordance with its filed tariffs. Therefore, Toledo Edison was under no obligation to proffer any refund. Nevertheless, Toledo Edison recognized that the customer usage characteristics had changed over time and it voluntarily agreed with Kazmaier to credit the customer's account approximately $38,000 in order to maintain good customer relations.

"Toledo Edison considered the matter resolved until receiving a demand from Kazmaier's attorney for an additional payment of approximately $12,000 in interest. No discussion or negotiations concerning any interest payment had occurred prior to this time. Toledo Edison reiterated its position that it had charged Kazmaier in accordance with its filed tariffs and was under no obligation to make any payment and would certainly not remit an interest charge. * * * "

Thus, Kazmaier filed suit to recover the funds stemming from Toledo Edison's error.

This cause is before the court pursuant to the allowance of a motion to certify the record.

Gary F. Kuns, Maumee, for appellee.

Fred J. Lange and Douglas J. Hogan, Toledo, for appellant.

Lee I. Fisher, Atty. Gen., James B. Gainer and William L. Wright, Columbus, urging reversal for amicus curiae, Public Utilities Com'n of Ohio.

HOLMES, Justice.

Based upon the stance of this matter relative to the contract between the parties for electrical services, it is understandable that some confusion existed as to the exact nature of the plaintiff's claim. It does have the elements and characteristics of a common-law right to be asserted in tort or in contract; however, when the plaintiff's complaint is viewed in the light of public policy considerations and pronouncements by the General Assembly and by this court, we must conclude that the trial court correctly dismissed it.

The General Assembly has created a broad and comprehensive statutory scheme for regulating the business activities of public utilities. R.C. Title 49 sets forth a detailed statutory framework for the regulation of utility service and the fixation of rates charged by public utilities to their customers. As part of that scheme, the legislature created the Public Utilities Commission and empowered it with broad authority to administer and enforce the provisions of Title 49. The commission may fix, amend, alter or suspend rates charged by public utilities to their customers. R.C. 4909.15 and 4909.16. Every public utility in Ohio is required to file, for commission review and approval, tariff schedules that detail rates, charges and classifications for every service offered. R.C. 4905.30. And a utility must charge rates that are in accordance with tariffs approved by, and on file with, the commission. R.C. 4905.22.

The General Assembly has by statute pronounced the public policy of the state that the broad and complete control of public utilities shall be within the administrative agency, the Public Utilities Commission. This court has recognized this legislative mandate.

"There is perhaps no field of business subject to greater statutory and governmental control than that of the public utility. This is particularly true of the rates of a public utility. Such rates are set and regulated by a general statutory plan in which the Public Utilities Commission is vested with the authority to determine rates in the first instance, and in which the authority to review such rates is vested exclusively in the Supreme Court by Section 4903.12, Revised Code * * *." Keco Industries, Inc. v. Cincinnati & Suburban Bell Tel. Co. (1957), 166 Ohio St. 254, 256, 2 O.O.2d 85, 86, 141 N.E.2d 465, 467; see, also, Inland Steel Dev. Corp. v. Pub. Util. Comm. (1977), 49 Ohio St.2d 284, 288-289, 3 O.O.3d 435, 437-438, 361 N.E.2d...