Peoples Gas Sys. v. Posen Constr., Inc.

• Citation: 322 So.3d 604
• Decision Date: 10 June 2021
• Docket Number: No. SC19-1305,SC19-1305
• Court: United States State Supreme Court of Florida
• Parties: PEOPLES GAS SYSTEM, etc., Petitioner, v. POSEN CONSTRUCTION, INC., etc., Respondent.

322 So.3d 604

PEOPLES GAS SYSTEM, etc., Petitioner,

v.POSEN CONSTRUCTION, INC., etc., Respondent.

No. SC19-1305

Supreme Court of Florida.

June 10, 2021

Julissa Rodriguez, Miami, Florida, Jason Gonzalez, Daniel E. Nordby, and Amber Stoner Nunnally of Shutts & Bowen LLP, Tallahassee, Florida; and V. Stephen Cohen, Pedro F. Bajo, Jr., and James C. Mooney of Bajo Cuva Cohen & Turkel, P.A., Tampa, Florida, for Appellant

Hinda Klein of Conroy Simberg, Hollywood, Florida, for Appellee

Frank A. Shepherd of Gray Robinson, P.A., Miami, Florida; and William W. Large of Florida Justice Reform Institute, Tallahassee, Florida, for Amicus Curiae Florida Justice Reform Institute

MUÑIZ, J.

The U.S. Court of Appeals for the Eleventh Circuit has certified to us a question about the Underground Facility Damage Prevention and Safety Act, codified in chapter 556 of the Florida Statutes.¹

The question asks:

Whether a member-operator has a cause of action under Fla. Stat. § 556.106(2)(a)-(c) to recover damages (or obtain indemnification) from an excavator for payments to a third party for personal injuries related to the excavator's alleged violation of the statute?

Peoples Gas System v. Posen Construction, Inc., 931 F 3d 1337, 1342 (11th Cir. 2019).

As we explain, we conclude that the Act creates a standalone cause of action; that the cause of action sounds in negligence; that liability under the Act is therefore subject to proof of proximate causation and to the defense of comparative fault; that "losses" recoverable under the Act can include purely economic damages, independent of personal injury or property damage; and that the Act does not create a cause of action for "statutory indemnity." We leave it to the court of appeals to apply the Act's liability provisions, so understood, to the claims involved in this case.

I.

The Legislature adopted the Underground Facility Damage Prevention and Safety Act in 1993, expressing the intent "to provide a single toll-free telephone number for excavating contractors and the general public to call for notification of their intent to engage in excavation or demolition." Ch. 93-240, § 1, Laws of Fla. The function of the newly created notification system would be to "provide the member operators an opportunity to identify and locate their underground facilities." Id. One of the Act's express purposes was to "[a]id the public by preventing injury to persons or property" resulting from excavation accidents that damage underground facilities. Id .

As defined in the Act, the term "underground facility" refers broadly to buried equipment like pipelines, sewers, and cables. § 556.102(13), Fla. Stat. (2019). A "member operator" is a person or entity that "furnishes or transports materials or services by means of an underground facility." § 556.102(8), Fla. Stat. (2019). And an "excavator" is "any person performing excavation or demolition operations." § 556.102(7), Fla. Stat. (2019).

Initially, the Act made membership in the notification system optional, meaning that some underground facility users would not be "member operators" for purposes of the Act. See ch. 93-240, § 2 Laws of Fla. (defining a "member operator" as "any person who furnishes or transports materials or services by means of an underground facility and who elects to participate as a member of the one-call notification center ") (emphasis added). But by 2006, a series of amendments to the Act had made participation in the notification system mandatory for underground facility users. § 556.102(8), Fla. Stat. (2006).

Along with establishing the notification system, the Act imposes various duties on member operators and excavators. For example, an excavator must use the system to give two days’ advance notice before beginning an excavation. § 556.105(1)(a), Fla. Stat. (2019). Then, after receiving notice, a member operator whose underground facility could be affected by the excavation must mark the area involved. § 556.105(5)(a)-(b), Fla. Stat. (2019).

The Act also imposes duties that govern the actual performance of an excavation. For example, in defined instances the Act requires excavators "to use increased caution" and to supervise "[a]ny use of mechanized equipment." § 556.105(5)(c), Fla. Stat. (2019). If underground facility markings are no longer visible, an excavator must stop the excavation and notify the system to have the area re-marked. § 556.105(11), Fla. Stat. (2019). And the Act says that, even after complying with the statutory advance notice requirements, an excavator must "perform[ ] an excavation or demolition in a careful and prudent manner, based on accepted engineering and construction practices." § 556.106(2)(c), Fla. Stat. (2019).

Finally, certain provisions in the Act address the liability of excavators when there is a damage-causing excavation. This case specifically is about the excavator liability provisions in sections 556.106(2)(a) and (2)(b), which we will later review in detail.

II.

The parties in this case are Peoples Gas System (PGS) and Posen Construction, Inc. PGS is a natural gas distributor and member operator. Posen is a road construction company and excavator.

In November 2010, a Posen employee named Mario Santos ruptured a PGS pipeline during an excavation. Peoples Gas Sys. v. Posen Constr., Inc. , 323 F. Supp. 3d 1362, 1364 (M.D. Fla. 2018). The accident caused an explosion that left Santos severely injured. Id. Although Posen had given advance notice of the excavation, PGS maintained that the notice was deficient under the Act. Id. PGS and Posen sued and countersued each other in federal court, eventually settling. Id.

Santos (the injured employee) concurrently brought a personal injury lawsuit against both Posen and PGS in state court. Santos alleged in part that PGS had failed to carry out its statutory duty to mark its facilities within the statutorily prescribed time. Id. Santos ultimately dismissed Posen from suit and settled with PGS. Id.

After settling with Santos, PGS sued Posen in federal court, claiming that the Act entitled PGS to recover the amount of the settlement payment it had made to Santos. Id. The federal district court dismissed PGS's complaint. Id. at 1368. The court reasoned that "PGS has failed to state a claim for relief because Posen had no duty to indemnify under the Act." Id. at 1366. More specifically, the court concluded that "[w]hile the statute provides liability for bodily injuries, the plain language creates no duty to indemnify a member operator for money it paid during the settlement of a third-party bodily injury claim." Id. at 1367.

In PGS's ensuing appeal, the court of appeals recognized PGS's position that it could recover the settlement payment either as damages or as "statutory indemnity" under the Act. Peoples Gas Sys. v. Posen Constr., Inc. , 931 F.3d 1337, 1340 (11th Cir. 2019). As to damages, the court of appeals concluded that Florida law does not conclusively establish "whether [the Act] authorizes damages incurred under circumstances as remote as these." Id. at 1340. As to indemnity, the court concluded that "the caselaw is not conclusive and the statute is subject to multiple plausible interpretations, including the one PGS embraces, which caselaw still does not foreclose." Id. at 1341.

Given its "substantial doubt" about the "potentially novel" issues in play, the court of appeals decided to certify to us its question about the Act. Id. at 1340, 1342.

III.

We begin with a threshold question identified by the court of appeals: "whether the Act provides a standalone cause of action, or whether it simply clarifies the legal analysis in a negligence claim."

Id. at 1340. This question arises because the Act does not expressly create a cause of action.

Our precedent says that "whether a cause of action exists when a statute does not expressly provide for one" is primarily a matter of "legislative intent." Murthy v. N. Sinha Corp. , 644 So. 2d 983, 985 (Fla. 1994). Any such intent must be gleaned from the text, structure, and purpose of the Act.

We believe that the Act does implicitly create a standalone cause of action. Importantly, the Act goes beyond simply imposing regulations that advance public safety. See id. at 986 (finding no cause of action in a statute that was "created merely to secure the safety and welfare of the public by regulating the construction industry"). Instead, the Act imposes specific duties on member operators and on excavators, and it expressly links violations of those duties to potential civil liabilities. That textual evidence is decisive.

The Nature of the Cause of Action Created by the Act

The parties’ dispute in this case thus turns on identifying the nature of the cause of action implicitly created by sections 556.106(2)(a) and (2)(b). Those provisions read as follows:

(2)(a) If a person violates s. 556.105(1) or (6), and subsequently, whether by himself or herself or through the person's employees, contractors, subcontractors, or agents, performs an excavation or demolition that damages an underground facility of a member operator, it is rebuttably presumed that the person was negligent. The person, if found liable, is liable for the total sum of the losses to all member operators involved as those costs are normally computed. Any damage for loss of revenue and loss of use may not exceed $500,000 per affected underground facility, except that revenues lost by a governmental member operator whose revenues are used to support payments on principal and interest on bonds may not be limited.

(b) If any excavator fails to discharge a duty imposed by this chapter, the excavator, if found liable, is liable for the total sum of the losses to all parties involved as those costs are normally computed. Any damage for loss of revenue and loss of use may not exceed $500,000 per affected underground facility, except that revenues lost by a governmental member operator whose revenues are used to support payments on principal and interest on bonds may not be

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