Little Bay Corp. v. Virginia Elec. & Power Co., 741185
| Decision Date | 01 December 1975 |
| Docket Number | No. 741185,741185 |
| Citation | 219 S.E.2d 677,216 Va. 406 |
| Parties | LITTLE BAY CORPORATION v. VIRGINIA ELECTRIC AND POWER COMPANY. Record |
| Court | Virginia Supreme Court |
H. Joel Weintraub, Norfolk (Melvin Friedman, Steingold, Steingold & Friedman, Norfolk, on brief), for appellant.
Joseph L. Kelly, Jr., Norfolk (Williams, Worrell, Kelly & Greer, Norfolk, on brief), for appellee.
Before I'ANSON, C.J., and CARRICO, HARRISON, COCHRAN, POFF and COMPTON, JJ.
At issue in this case is the application of Article IX, Section 4 of the Constitution of Virginia. The constitutional section, while providing an appeal of right to this court from any final finding, order, or judgment of the State Corporation Commission, also provides that no other court of this Commonwealth shall have jurisdiction to review, reverse, correct, or annul any action of the Commission. The question for decision here is whether, in light of Article IX, Section 4, the trial court had jurisdiction to entertain a breach of contract action in which the court, to award damages for the breach, necessarily would have been required to review and annul an order of the Commission.
The present action was brought by Little Bay Corporation against Virginia Electric and Power Company to recover $4,900 in damages for the alleged breach of a 1970 contract between the parties. In the contract, it was alleged, VEPCO agreed to pay Little Bay 'installation allowances and related advertising allowances' for Little Bay's use of electric heat in 28 dwelling units under construction in the City of Norfolk.
To Little Bay's action, VEPCO filed a 'Plea to Jurisdiction,' alleging that the Commission had ordered cessation of installation and advertising allowances and that 'no Court other than the Supreme Court of Virginia has jurisdiction to review, reverse, correct or annul said order of the . . . Commission.' After a hearing, the trial court sustained VEPCO's 'Plea to Jurisdiction' and dismissed Little Bay's action. 1
The record shows that, for a number of years prior to 1970, VEPCO had engaged in a promotional program designed to induce use of electric service to the exclusion of other types of energy. The program took the form of monetary allowances for use of electric equipment and appliances and of credits, based upon anticipated revenue, for installation of underground electric facilities.
In 1966, the Commission undertook an investigation of the promotional practices of the electric and gas utilities in Virginia. Later in the same year, the General Assembly amended Code § 56--247 to provide that the Commission 'shall investigate the promotional allowances and practices of public utilities and shall take such action as such investigation may indicate to be in the public interest.' 2 As a result of its 1966 investigation, the Commission directed each electric and gas utility to file and thereafter adhere to a schedule describing its promotional activities and allowances.
In 1970, the Commission undertook another investigation of the promotional activities of public utilities. On February 17 of that year, the Commission directed the electric and gas utilities to show cause why it should not disapprove 'further use of promotional allowances and underground electric service plans which provide for credit for anticipated revenue.' After a hearing, the Commission, on April 15, 1970, entered an order prohibiting the electric and gas utilities from offering or making any payment to influence the use of any equipment or appliances and from offering or giving any credit, based upon anticipated revenue, for installation of underground facilities. To provide for 'an orderly phaseout of existing programs,' the order exempted, so far as is pertinent here, commitments for allowances for appliances and equipment to be installed in new dwelling units under construction on December 31, 1970.
On February 1, 1971, VEPCO informed Little Bay by letter that it had inspected Little Bay's construction site in Norfolk and found 28 dwelling units under construction as of December 31, 1970. VEPCO stated in the letter that it would 'allow the appropriate installation allowance for these 28 units' that qualified when they were completed pleted and connected to VEPCO's lines.
On June 28, 1972, in a separate case involving an application by VEPCO to increase its rates, the Commission disallowed as an operating expense the amount of installation allowances VEPCO had paid during the year 1971. Then, on July 13, 1972, the Commission entered the order which is now under attack, prohibiting VEPCO from making further payments of 'installation allowances or related advertising allowances with respect to any premises to which permanent electric service shall not have been connected before August 1, 1972.'
None of Little Bay's 28 dwelling units was permanently connected to VEPCO's lines until several months following August 1, 1972. After the units were connected, VEPCO, according to the allegations of the present action, refused to pay the installation allowances although Little Bay had completed construction on its property 'in accordance with all provisions of its contract with VEPCO.'
In sustaining VEPCO's 'Plea to Jurisdiction,' the trial court held that the relief prayed for by Little Bay could not 'be granted without reviewing, reversing or annulling (the) order of the State Corporation Commission . . . dated July 13, 1972,' which, the trial court further held, it was 'without jurisdiction to do.' On appeal, Little Bay concedes that, to grant the relief it sought, the trial court would have been required to 'review' the July 13, 1972 order of the Commission and 'to determine its constitutionality.' Little Bay contends, however, that Article IX, Section 4 does not prohibit such review and determination by a trial court where an action of the Commission is 'challenged collaterally,' but only where a direct attack is made upon Commission action. Thus, Little Bay asserts, while Article IX, Section 4 would preclude if 'from suing the (Commission) in the Circuit Court in an attempt to overturn its Order,' the constitutional section does not oust the trial courts of jurisdiction to entertain breach of contract actions in which orders of the Commission are attacked only collaterally. The trial court, therefore, should have taken jurisdiction of its claim, Little Bay concludes, declared the Commission's July 13, 1972 order unconstitutional as an unlawful impairment of contract, and awarded damages for VEPCO's breach.
We disagree with Little Bay. We believe the prohibition of Article IX, Section 4 applies whether Commission action is attacked directly or collaterally. If, in...
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