Key Sales Co. v. South Carolina Electric and Gas Company, Civ. A. No. 66-375.

• Decision Date: 29 August 1968
• Docket Number: Civ. A. No. 66-375.
• Citation: 290 F. Supp. 8
• Court: U.S. District Court — District of South Carolina
• Parties: KEY SALES COMPANY, Plaintiff, v. SOUTH CAROLINA ELECTRIC AND GAS COMPANY, Defendant.

290 F. Supp. 8

KEY SALES COMPANY, Plaintiff, v. SOUTH CAROLINA ELECTRIC AND GAS COMPANY, Defendant.

Civ. A. No. 66-375.

United States District Court D. South Carolina, Columbia Division.

August 29, 1968.

COPYRIGHT MATERIAL OMITTED

Julius W. McKay, McKay, McKay, Black & Walker, Columbia, S. C., for plaintiff.

Harold W. Jacobs, Frank B. Gary, Wiburn R. Brewer, Jr., Cooper, Gary, Nexsen & Pruet, Charles W. Knowlton, Boyd, Bruton, Knowlton & Tate, Columbia, S. C., for defendant.

ORDER

SIMONS, District Judge.

This action was commenced by plaintiff, a North Carolina Corporation, against defendant seeking damages allegedly suffered as a result of the flooding of plaintiff's property by waters released from defendant's hydro-electric dam on June 15 and 16, 1965.

In its first cause of action based upon negligence plaintiff alleges a breach of duty on the part of defendant in the maintenance and operation of its hydroelectric facility at Lake Murray Dam and reservoir, by its failure to anticipate the oncoming flood waters and to reduce its pond level sufficiently to accommodate them. In its second cause of action, plaintiff alleges that, even in the absence of negligence or wrongdoing on defendant's part, the latter's erection and operation of its dam was the proximate cause of plaintiff's loss and damage, which would not have occurred had the dam not been in existence. In its third cause of action plaintiff alleges a taking of its property without compensation within the meaning of the South Carolina Constitution, on the theory of a continuing trespass. As a fourth cause of action plaintiff seeks damages to its property resulting from defendant's wrongful trespass thereon and seeks to enjoin defendant from continued future trespasses which will cause irreparable damages to plaintiff's property.

Plaintiff asserts that during the critical period of June 8-15, 1965 defendant collected a full head of water in its Lake Murray Reservoir, allowing the lake level to exceed its license limit of 360 feet above sea level; that it was negligent in the operation of its facility by such impoundment of the water, and by then releasing it in large and uncontrollable quantities into the Saluda River basin below its dam when it knew or reasonably should have known that such quantities of water would flood plaintiff's Pineglen residential subdivision and destroy its use as a real estate development.

Defendant's answer sets up as defenses: (1) A general denial, (2) Act of God, (3) release of liability for flooding of plaintiff's land by virtue of a release granted to defendant for the land in question by plaintiff's predecessor in title, (4) contributory negligence, and (5) assumption of risk. Defendant denies that it discharged any more water than it received into its reservoir, and asserts that plaintiff's property would have been flooded on June 13-14, and June 15-16, 1965, even if defendant's dam had not been in existence. It specifically denies any negligence or wrongdoing on its part, and contends that it used due diligence and accepted operating procedures in the maintenance and operation of its hydro-electric plant and reservoir.

The cause was tried before the court without a jury during the week of April 15, 1968. The issues for determination are: (1) Was defendant negligent in the operation of its dam during the period of June 8 through June 16, 1965; and if so, was such negligence the proximate cause of the plaintiff's damages. (2) Did the conduct of defendant during this period in casting flood waters over the lands of plaintiff amount to an unconstitutional taking or a wilful trespass for which plaintiff is entitled to recover damages, and should defendant be enjoined from continued future trespasses. (3) If defendant were negligent, was plaintiff contributorily negligent so as to bar its recovery for defendant's negligence. (4) Was the flooding of plaintiff's land the sole result of an Act of God so as to relieve defendant of all responsibility therefor. (5) Did defendant's purchase of a portion of the tract of land from a predecessor in title of plaintiff's property to accommodate waters discharged from defendant's Saluda dam constitute a release of liability of defendant for future flooding of the remainder of the tract, including plaintiff's subdivision. (6) What amount of damages, if any, has plaintiff proximately suffered by reason of the flooding of its property by defendant.

In accordance with Rule 52(a) of the Federal Rules of Civil Procedure, the court makes the following findings of fact and conclusions of law.

FINDINGS OF FACT

1. Plaintiff is a North Carolina corporation and for many years has been in the business of purchasing land for development of residential subdivisions.

2. Defendant is a corporation created by an act of the General Assembly of South Carolina, and is engaged in the generation of electricity for sale to the public. Under South Carolina statute and the license granted it by the Federal Power Commission it was authorized to erect a dam on the Saluda River for such purpose.

3. At all times in question Lake Murray was owned and operated by defendant under license of the Federal Power Commission designated as Project No. 516. Article 14 of the license of the Federal Power Commission provides:

"The United States specifically retains and safeguards the right to use water in such amount, to be determined by the Secretary of War, as may be necessary for the purposes of navigation and the operation of the licensee so far as they affect the use, storage and discharge from storage of waters affected by this license, shall at all times be controlled by such reasonable rules and regulations as the Secretary of War may prescribe in the interest of navigation and as the Federal Power Commission may prescribe in the interest of flood control and of the fullest practicable use of the said water for power purposes."

Article 32 of the license provides:

"The licensee shall operate the spillway at Saluda Dam in accordance with the accepted operating practices up to its full controllable capacity, so that the water surface elevation shall not exceed 360 feet. In case the water surface elevation exceeds 360 feet, the licensee shall continue to utilize the full controllable capacity of the spillway until the water surface elevation has receded to 360 feet."

4. The defendant acquired its rights in and around Lake Murray for the primary purpose of electrical generation and operated the dam for this primary purpose. The Saluda Dam impounds the waters of the Saluda River water shed which forms Lake Murray. The lake covers approximately 50,000 acres or 78 square miles, and has a storage capacity of 750 billion gallons or 100 billion cubic feet of water. The Saluda River water shed covers approximately 2,420 square miles. This area can be generally subdivided into three sections: (1) The northernmost 1,150 square mile area which drains through Lake Greenwood, a man-made lake with a controlled outflow; (2) A 470 square mile area which drains into the section of the Saluda River extending from the Greenwood Dam to Silverstreet where a United States Geological Survey automatically recording river gauge is located; (3) the remaining 800 square mile area of watershed drains into the Saluda River below Silverstreet or directly into Lake Murray, and is not metered by a river gauge. The waters of Lake Murray are used to turn turbines in the defendant's hydro plant to produce electrical energy, and water discharged through these turbines is passed downstream. Water is money to the defendant, for it is through the use of this water that the defendant produces the electricity which it in turn sells to customers. Naturally defendant attempts to conserve as much water as possible.

5. Since the construction of a steam generating plant located at the Saluda Dam site, the Saluda Hydro-Plant is generally used as a "peaking plant" to meet electricity demands during different times of the day. Generally its peak periods or peak demand times are approximately 10:00 o'clock in the morning and 8:00 o'clock in the evening. Accordingly, during this time or at other times of peak demand defendant uses its water supply to turn the turbines in producing electrical energy. At other times of the day its base load is supplied by its steam generating plant. During construction of the Saluda Dam four turbine generator units were installed which, when operating at full capacity, require a discharge downstream of approximately 11,000 cubic feet of water per second. However, defendant had plans to increase its generators to six and provisions were made to allow a water discharge of approximately 16,500 cubic feet per second. An additional 1,500 cubic feet per second was also included in the plans for discharge capacity, making a total of 18,000 cubic feet per second. In order to accommodate this amount of discharge defendant purchased or condemned property below its dam on both sides of the river to its confluence with the Broad River just above the City of Columbia up to a contour line of 178 feet above sea level. Any discharge over 18,000 cubic feet per second exceeds defendant's flowage rights and results in flooding downstream. Included with other property purchased by the defendant for this purpose was all land up to the 178th contour line from a tract owned by William H. Freshly. This purchase was made in 1930. The remainder of the Freshly tract was acquired by Michael J. Mungo, in 1963, who in turn sold same to plaintiff for a residential development in 1963 which plaintiff named Pineglen. The total purchase price at that time was $145,000.00. The purchase price was subsequently reduced to $125,233.40 by virtue of a settlement with Mr. Mungo on work that had not been completed at the time of flooding. The development was to include all land improvements, the erection of single family residences, and the sale of the residences...