Lee v. Consolidated Edison Co. of New York

• Citation: 98 Misc.2d 304,413 N.Y.S.2d 826
• Court: New York Supreme Court — Appellate Term
• Decision Date: 15 December 1978
• Parties: William J. LEE, Plaintiff-Respondent, v. CONSOLIDATED EDISON CO. OF NEW YORK, Defendant-Appellant.

Page 826

413 N.Y.S.2d 826

98 Misc.2d 304

William J. LEE, Plaintiff-Respondent, v. CONSOLIDATED EDISON CO. OF NEW YORK, Defendant-Appellant.

Supreme Court, Appellate Term, First Department.

Dec. 15, 1978.

Ernest J. Williams and Joseph D. Ahearn, New York City, for defendant-appellant.

B. Robert Piller and Jill Kupferberg, New York City, for Public Utility Law Project, amicus curiae.

Rosengarten & Weinreich, New York City (Howard B. Weinreich, New York City, of counsel), for New York State Food Merchants, Inc., amicus curiae.

Before TIERNEY, HUGHES and RICCOBONO, JJ.

PER CURIAM:

Judgment entered June 1, 1978, reversed, without costs, and complaint dismissed, without costs.

This is a Small Claims action brought by a customer of Consolidated Edison Company for property damage sustained as a result of the summer blackout of July 13-14, 1977. At trial, plaintiff did not introduce any evidence on the liability aspect of the case, and defendant rested on the limitation of liability provision contained in its rate schedule filed with the Public Service Commission. That provision provides as follows:

"Continuity of supply: The company will endeavor at all times to provide a regular and uninterrupted supply of service, but in case the supply of service shall be interrupted or irregular or defective or fail from causes beyond its control or through ordinary negligence of employees, servants, or agents the company will not be liable therefor".

The trial court concluded that this provision, which essentially exempts Edison from liability for ordinary negligence and renders it liable for gross negligence only, was contrary to public policy and unenforceable. The court cast the utility in damages for ordinary negligence under the doctrine of res ipsa loquitur, as well as on the basis of its own independent findings of negligence after having taken judicial notice of various investigative reports on the blackout.

As a public utility, defendant is requested by the Public Service Commission, and is required to file with the Commission a schedule showing all rates and charges made and all rules and regulations relating to rates (Public Service Law, § 65, subd. 5; § 66, subd. 12). Limitation of liability provisions are an inherent part of the ratemaking process (Western Union Tel. Co. v. Esteve Bros. & Co., 256 U.S. 566, 571, 41 S.Ct. 584, 65 L.Ed. 1094). "A broadened liability exposure must inevitably raise the costs, and thereby the rates, of (electricity) service" (Abraham v. New York Telephone Co., 85 Misc.2d 677, 681, 380 N.Y.S.2d 969, 972). Once accepted by the Commission, the tariff schedule (including the limitation of liability provision) takes on the force and effect of law and governs every aspect of the utility's rates and practices; neither party can depart from the measure of compensation or standard of liability contained therein (Public Service Law, § 66, subd. 12).

We do not find the exculpatory clause in question to be violative of public policy. In fact, similar provisions have been repeatedly sustained by the appellate courts of this state as reasonable limitations on the liability of...