Sierra Pac. Power Co. v. Nye, s. 4654

• Decision Date: 19 February 1964
• Docket Number: 4655,Nos. 4654,s. 4654
• Citation: 80 Nev. 88,389 P.2d 387
• Parties: SIERRA PACIFIC POWER COMPANY, Appellant, v. Earl NYE and Golda Nye, husband and wife, Respondents. Earl NYE and Golda Nye, husband and wife, Appellants, v. SIERRA PACIFIC POWER COMPANY, Respondent.
• Court: Nevada Supreme Court

Page 387

389 P.2d 387

80 Nev. 88

SIERRA PACIFIC POWER COMPANY, Appellant, v. Earl NYE and Golda Nye, husband and wife, Respondents.

Earl NYE and Golda Nye, husband and wife, Appellants, v. SIERRA PACIFIC POWER COMPANY, Respondent.

Nos. 4654, 4655.

Supreme Court of Nevada.

Feb. 19, 1964.

Woodburn, Forman, Wedge, Blakey, Folsom & Hug, Reno, for Sierra Pacific Power Co.

Goldwater, Taber & Hill and Wayne L. Mortimer, Reno, for Earl Nye and Golda Nye.

McNAMEE, Justice.

This is an action to recover certain sums of money allegedly overpaid by the Nyes to the Sierra Pacific Power Company. The case was submitted to the lower court on stipulated facts. The court adopted said stipulated facts as its findings of fact and concluded therefrom that the Nyes were entitled to judgment in the sum of $8,484.84. It refused to allow the sum of $4,034.77, which was the amount of the overpayment made more than four years prior to the filing of the complaint, and it refused to allow the Nyes any interest.

The Power Company appealed from the judgment and the Nyes cross-appealed from the judgment denying them a recovery of said $4,034.77 and denying them interest.

The agreed facts are as follows (the Nyes will be referred to as plaintiffs and the Power Company as defendant):

Plaintiffs, since May 15, 1955, have been the owners of the Pony Express Trailer Park in Sparks, consisting of 110 rental spaces for trailers, plus buildings incidental thereto. Defendant is a public utility authorized by the Public Service Commission to sell electricity to consumers.

Pursuant to regulations, defendant filed its rates for the sale of electricity with the Public Service Commission, among which were a Schedule C rate and a Schedule K rate. Plaintiffs' predecessor in interest, Harold's Club, was charged the K rate. When plaintiffs purchased the trailer park on May 15, 1955, the defendant changed the trailer park to the C rate and continued to charge for power used by plaintiffs under that rate until May 5, 1961, when plaintiffs made application to defendant to be placed under Schedule K. They were placed under Schedule K effective as of that date. The difference between the C and K rates for the amount of power used by the plaintiffs between June 1, 1955 and May 5, 1961 amounted to $12,519.61, of which $4,034.77 was for the power used during the period of more than four years prior to the filing of the complaint. Upon defendant's refusal to reimburse the plaintiffs for any part of this difference, this action was commenced.

At all times prior to April 4, 1961 defendant had had an unwritten policy which it had formulated and adopted of not serving trailer parks under its Schedule K; ¹ no rule or regulation authorizing or approving such a policy had been filed with the Public Service Commission, nor has said Commission any rule denying Schedule K to trailer parks.

On April 4, 1961 the case of Eikelberger v. Sierra Pacific Power Company was decided by the Commission. In that case it was held that the owner of a trailer park was entitled to Schedule K if the park had a total connected load exceeding 20 horsepower. Until this decision, plaintiffs did not know of the existence of the K schedule, nor of defendant's unwritten and unfiled rule or policy. At all times since plaintiffs purchased the trailer park they have owned the transformer located on their property and have had a total connected load in excess of 20 horsepower.

The power sold by defendant to plaintiffs and delivered at plaintiffs' trailer park was by plaintiffs resold to various trailer owners in their park. Plaintiffs have never secured a certificate of public convenience from the Public Service Commission. ²

In its written decision the lower court after reciting the stipulated facts and considering the briefs determined the five points raised by the defendant as hereinafter stated.

1. Is a power company bound to sell power to others for resale?

The court answered this question in the affirmative where the resale is not to the public but only to the buyer's tenants.

2. Where there are two optional rates is a public utility bound to select a rate most favorable to the consumer?

The court answered this 'Yes,' stating that the plaintiffs were entitled to the K rate as a matter of right, because they owned their transformer and the C rate is not applicable where the consumer owns the transformer.

3. What damages are the plaintiffs entitled to recover?

The damages are the difference between the K and C rate.

4. Is the four-year statute of limitations applicable?

Yes.

5. Is interest allowable on the recoverable overpayment?

The lower court refused to allow interest.

The same five points are urged on these appeals.

The contention that defendant was not bound to sell its power to the plaintiffs because they intended to resell the same to their tenants is without merit. It was customary and usual for defendant to serve most trailer parks by delivering electricity to the owner and not by serving each trailer individually. In serving the individual trailer, the owner of the trailer park could charge a rate higher than that paid to the utility, not in excess however of the maximum rate on resale fixed by the rules of the Public Service Commission.

Under the decision in the Eikelberger case the owner of a trailer park was and is entitled to Schedule K if qualified as a K user. At all times since acquiring the trailer park, plaintiffs were qualified as K users, having had a total connected load exceeding 20 horsepower, and having been the owners of the transformer on their property, the high voltage service line, and the underground lines to the individual units.

As a result of the Eikelberger decision all trailer courts in the Reno-Sparks area were placed under Schedule K. Thus, there can be no question that a power company must sell to those trailer park owners qualified as K users under Schedule K even though there is a resale of the power to the trailer park tenants. The plaintiffs by restricting the resale of power to their tenants only did not become competitors of the utility. In fact, in making such distribution of this power they accommodated the utility by assuming the duties of the maintenance of the individual meters and the connecting lines thereto, the reading of the meters, and the billing and collection of charges, all of which otherwise would have been the obligations of the defendant. Authorities cited by the defendant which hold that a utility is not required to sell its product to a competitor for resale by the latter to other parties are not applicable.

Defendant contends that NRS 704.320 contemplates that where one purchases power for resale it would be under contract and not according to the regular rate. This statute is restricted in its application to public utilities and we hold it was not intended to apply to trailer courts which resell power to their tenants only.

It is questionable whether the two schedules were optional. Assuming however that a trailer park owner had the option of selecting either schedule, it would then become the duty of the utility to inform the customer of the optional schedules in order to enable the customer to select the schedule more beneficial to him. Here the utility acted wrongfully in making the selection itself, a selection which resulted in a material benefit to the utility, without notifying the plaintiffs of their right to a schedule more advantageous to them.

Inasmuch as plaintiffs were entitled to the K rate as a matter of right when they were qualified K users, the charges made by the defendant under Schedule C were improper, and the lower court correctly determined that the payments made thereunder constituted overpayments to the extent of the difference between the K and C rates. Plaintiffs therefore were entitled to judgment for a refund of such overpayments if not barred from recovery by the statute of limitations.

If plaintiffs had paid under the K rate rather than under the C rate, it is conceded that their payments would have been $12,519.61 less for the period between May 15, 1955 and May 5, 1961, $4,034.77 of which was received by the defendant more than four years prior to the filing of the complaint.

Plaintiffs claim that they did not discover that they were entitled to the Schedule K rate until after the Eikelberger decision, and that therefore under paragraph (d) of subsection 3 of NRS 11.190, their cause of action is not deemed to have accrued until such discovery. It is conceded that if plaintiffs had made a demand for the K rate prior to the Eikelberger decision, it would have been denied by the defendant. In this connection, there was no showing that the defendant knew or did not know that any cause of action had accrued in favor of the plaintiffs until after the Eikelberger decision.

Paragraph (d) of subsection 3 of NRS 11.190 is applicable to a party seeking relief on the ground of fraud. This, the plaintiffs concede. But they argue that the conduct of the defendant in placing plaintiffs under Schedule C when they were eligible for Schedule K and maintaining an unwritten policy of not serving trailer parks under Schedule K constituted fraud.

The complaint was not based on fraud; and overcharge and overpayment are alleged. See NRCP 9(b). It does not appear that the question of fraud was presented to the trial court. ³ In any event neither in its findings nor in its written opinion did the trial court mention fraud. The absence of such an express finding implies a finding that there was no fraud if the question had been presented to the trial court. Cf. Kernan v. Kernan, 78 Nev. 93, 369 P.2d 451. Furthermore, as evidence of such an implied finding, the lower court, in determining that the four-year statute of limitations was applicable, cited 54 C.J.S. Limitations of Actions § 205, p. 216. This section states in part: 'Except where by statute limitations do not begin to run...