Singer Co., Link Simulation Systems Div. v. Baltimore Gas and Elec. Co., 741

CourtCourt of Special Appeals of Maryland
Writing for the CourtGARRITY
Citation79 Md.App. 461,558 A.2d 419
Docket NumberNo. 741,741
Decision Date01 September 1988

James A. Dunbar (Jeffrey A. Dunn and Venable, Baetjer & Howard on the brief), Baltimore, for appellant.

Laurie R. Bortz, Baltimore, for appellee.



We shall decide whether electricity remaining in a utility company's distribution system prior to being transformed into a useable state by passing through a customer's electric meter falls within the classification of "goods" to which the Uniform Commercial Code (UCC), Title 2 of the Maryland Commercial Law Code Annotated is applicable. We shall also examine the application of the statute of limitations to common law breach of contract and negligence claims which are based upon successive interruptions of a utility company's service to a customer. Finally, we shall determine the extent to which a utility company is liable for service interruptions when a provision of its service tariff exempts the company from liability for any such interruption which is not due to "willful default or neglect" on the utility's part.

The action giving rise to these questions was initiated on June 7, 1987, when the appellant, the Singer Company, Link Simulation Systems Division (Singer), filed suit in the Circuit Court for Howard County against the appellee, the Baltimore Gas & Electric Company (BG & E), asserting causes of action for (Count I) common law breach of contract; (Count II) breach of the UCC implied warranty of merchantability; (Count III) breach of the UCC implied warranty of fitness for a particular use; (Count IV) negligence in the supply of electric power; (Count V) negligent repair; and (Count VI) gross negligence. Singer's claims were premised upon various power outages it had experienced at its place of business from June 8, 1984 through September 9, 1986.

BG & E responded to Singer's complaint by moving to dismiss, or in the alternative, for summary judgment with respect to all counts raised in the complaint. The circuit court (Sybert, J.) dismissed Singer's UCC implied warranty claims and ruled that BG & E was entitled to judgment on the common law contract and negligence counts as a matter of law.

Standards of Review

As a threshold matter, we address our role in reviewing the circuit court's granting of BG & E's motion.

Singer's UCC implied warranty claims were disposed of on a motion to dismiss. Under Md. Rule 2-322, a motion to dismiss for failure to state a claim serves the same function as a demurrer under former Rules 345 and 371b. Sharrow v. State Farm Mutual Automobile Insurance Co., 306 Md. 754, 768, 511 A.2d 492 (1986); Broadwater v. State, 303 Md. 461, 466-67, 494 A.2d 934 (1985). Consequently, in considering the propriety of the trial court's order dismissing Singer's causes of action for breach of UCC warranties, we must assume the truth of all well-pleaded facts in Singer's complaint, as well as inferences which may reasonably be drawn from those well-pleaded facts. See Wimmer v Richards, 75 Md.App. 102, 105, 540 A.2d 827, cert. denied, 313 Md. 506, 545 A.2d 1344 (1988).

Summary judgment was entered in favor of B G & E with respect to Singer's common law contract and negligence counts. A grant of summary judgment is appropriate only where the moving party demonstrates the absence of any genuine dispute as to any material fact and that the party is entitled to judgment as a matter of law. Md.Rule 2-501(a). See Dietz v. Moore, 277 Md. 1, 4, 351 A.2d 428 (1976); DeGroft v. Lancaster Silo Co., 72 Md.App. 154, 159, 527 A.2d 1316 (1987); Castiglione v. Johns Hopkins Hospital, 69 Md.App. 325, 332, 517 A.2d 786 (1986), cert. denied, 309 Md. 325, 523 A.2d 1013 (1987). A fact is "material" if it somehow affects the outcome of the case. King v. Bankerd, 303 Md. 98, 111, 492 A.2d 608 (1985). The court, in ruling on a motion for summary judgment, must consider the pleadings, depositions, answers to interrogatories, admissions and affidavits submitted by the parties. Md. Rule 2-501(e). In determining whether to grant summary judgment, the trial court must view all disputed facts and reasonable inferences therefrom in the light most favorable to the party against whom the motion is made. DiGrazia v. County Executive, 288 Md. 437, 445, 418 A.2d 1191 (1980); Honaker v. W.C. & A.N. Miller Dev. Co., 285 Md. 216, 231-32, 401 A.2d 1013 (1979); Barb v. Wallace, 45 Md.App. 271, 275, 412 A.2d 1314 (1980). Consequently, in reviewing the trial court's grant of B G & E's motion for summary judgment with respect to Singer's common law contract and negligence claims, we must also decide whether there is a genuine dispute as to any material fact, with inferences drawn in favor of Singer, and whether B G & E is entitled to judgment as a matter of law. See Brady v. Ralph Parsons Co., 308 Md. 486, 496, 520 A.2d 717 (1987); Liscombe v. Potomac Edison Co., 303 Md. 619, 621, 495 A.2d 838 (1985); Washington Homes, Inc. v. Interstate Land Dev., Inc., 281 Md. 712, 717-18, 382 A.2d 555 (1978). See also King v. Bankerd, 303 Md. at 110-12, 492 A.2d 608; Lynx, Inc. v. Ordnance Products, Inc., 273 Md. 1, 8, 327 A.2d 502 (1974).


As the matter sub judice is in an early stage of factual development, the facts are gleaned from the allegations contained in Singer's complaint, along with the evidentiary materials submitted in connection with the motions that developed during discovery. 1 The facts are substantially as follows:

BG & E is a regulated public utility which furnishes gas and electricity to consumers in Maryland. The Link Division of Singer is a high technology software engineering firm which makes training simulators for government and industry. In 1982, Singer opened a manufacturing facility at the Sieling Industrial Park, located in Columbia, Maryland. As BG & E was the exclusive supplier of electricity to the Sieling Industrial Park, Singer contracted with the utility company for a supply of electrical power to its facility.

During all relevant time periods, Singer's business was dependent upon a constant and uninterrupted supply of electricity. Singer's simulators were run by computer systems which could not be operated without electrical power. The heating, ventilation and air conditioning systems in the building Singer occupied were also driven by electrical power.

During 1983, Singer experienced eight electrical power interruptions or outages at its Columbia facility. 2 The date, time and duration of those interruptions follows:

After the October 13, 1983 outage, the power interruptions ceased for nearly eight months. Commencing June 8, 1984, however, Singer's Columbia facility experienced the following interruptions in its supply of electricity:

                     Date                 Time              Duration
                --------------  ------------------------  ------------
                June 8, 1984    11:40 a.m. to 1:15 p.m.   1.5 hours
                June 21, 1984    6:20 p.m.                Minutes
                Oct. 23, 1984    5:30 a.m. to 6:30 a.m.   1 hour
                Nov. 30, 1984   10:00 a.m. to 11:00 a.m.  1 hour
                Dec. 7, 1984    12:00 noon to 3:30 p.m.   3.5 hours
                Jan. 10, 1985   11:10 a.m. to 12:40 p.m.  1.5 hours
                Jan. 10, 1985    2:30 p.m.                Minutes
                Apr. 29, 1985    1 Power Dip              Minutes
                May 21, 1985    12:45 p.m.                Minutes
                June 5, 1985     5:30 p.m.                Minutes
                July 24, 1985    1:30 p.m. to 2:15 p.m.   .  75 hour
                Aug. 1, 1985     1:30 p.m.                Minutes
                Aug. 11, 1985   Time Not Recorded         2.5 hours
                Aug. 13, 1985   10:50 a.m. to 1:15 p.m.   2.5 hours
                Sept. 15, 1985   2:30 p.m.                Minutes
                Oct. 31, 1985   Time Not Recorded         3 Separate
                                                            Power Dips
                Nov. 30, 1985   Time Not Recorded         1.5 hours
                Dec. 30, 1985   10:00 a.m.                Minutes
                Feb. 5, 1986     9:30 a.m. to 10:20 a.m.  1 hour
                Mar. 22, 1986    4:30 p.m.                Duration Not
                Apr. 5, 1986     8:40 p.m.                Minutes
                June 2, 1986     5:15 p.m.                Minutes
                June 3, 1986     3:00 p.m. to 5:30 p.m.   2.5 hours
                June 6, 1986     2:50 p.m. to 5:30 p.m.   2.75 hours
                July 8, 1986    10:30 a.m. to 2:00 p.m.   3.5 hours
                July 8, 1986     8:30 p.m. to 8:45 p.m.   .  25 hours
                July 17, 1986   12:30 p.m. to 2:30 p.m.   2 hours
                July 29, 1986    5:40 p.m. to 10:00 p.m.  4.75 hours
                July 30, 1986    1:35 p.m. to 3:00 p.m.   1.5 hours
                Aug. 7, 1986     3:26 p.m. to 10:32 p.m.  7 hours
                Sept. 9, 1986    3:00 p.m. to 4:30 p.m.   1.5 hours

Upon the occurrence of those power outages which were more than momentary interruptions or dips in power, Singer contacted BG & E and reported the incident. During extended power outages, Singer would contact BG & E at thirty minute intervals throughout the time period of the outage. Upon the restoration of electric power after an outage, four Singer employees usually were required to devote approximately two hours to restore the simulator computer facility; another four employees usually were required to devote approximately three hours to repair and restart the simulator equipment.

On August 29, 1986, shortly after the seven hour August 7, 1986 power outage, BG & E sent a letter to Singer explaining the cause of the power interruptions experienced at Singer's facility. That letter stated, in pertinent part, as follows:

During the past several months your portion of the Sieling Industrial Park has been subjected to frequent service interruptions. These were due primarily to multiple failures on the underground cable leading from our Columbia Sub-Station. Additionally, we have experienced damage to cable terminations at several transformers supplying the Industrial Park following severe lightning storms.

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