South Eastern Indiana Natural Gas Co., Inc. v. Ingram

Decision Date19 July 1993
Docket NumberNo. 69A01-9208-CV-263,69A01-9208-CV-263
Citation617 N.E.2d 943
PartiesUtil. L. Rep. P 26,343 SOUTH EASTERN INDIANA NATURAL GAS CO., INC., Appellant-Defendant, v. Frank and Donna INGRAM, Appellees-Plaintiffs.
CourtIndiana Appellate Court

William H. Wolf, Michael R. Burrow, Wolf & Burrow, Greenfield, Stephen T. Taylor, Fitch & Taylor, Greensburg, for appellant-defendant.

John Emry, Franklin, for appellees-plaintiffs.


South Eastern Indiana Natural Gas Co., Inc. (hereinafter referred to as South Eastern) brings this interlocutory appeal from an order denying its motion for judgment on the pleadings in an action for negligence brought by Frank and Donna Ingram (Ingrams).

We affirm.

The Ingrams allege in their complaint that, on January 10, 1982, South Eastern, a utility which supplied gas to them, experienced a partial interruption of service to its customers in the form of a reduction in line pressure. 1 Employees of South Eastern spent the early hours of January 10, 1982 responding to calls; however, at no time did South Eastern attempt to advise the Ingrams to switch to an emergency source of heat. The reduction in line pressure caused a loss of heat in the Ingrams' greenhouse which was not discovered by the Ingrams until 5:00 a.m. at which time the temperature in the greenhouse was zero degrees and the contents then a total loss. The Ingrams allege that South Eastern's negligence in not warning them to switch to an emergency source of heat was the proximate cause of their damages, including loss of inventory, profits, customers, labor, interest on borrowed money, and other damages.

In its motion for judgment on the pleadings, South Eastern contended both that the trial court lacked subject matter jurisdiction to hear the Ingrams' complaint because the Ingrams had failed to exhaust administrative remedies and that the legislature had vested exclusive jurisdiction to consider the Ingrams' claim in the Indiana Utility Regulatory Commission (IURC). In addition, South Eastern argued that the Ingrams had failed to state a claim upon which relief could be granted. The Ingrams moved to have their depositions published and urged the trial court to consider South Eastern's motion under Ind.Trial Rule 56. South Eastern objected. The court did not consider the depositions when ruling upon the motion for judgment on the pleadings.

Accordingly, the standard for review of South Eastern's motion is the same as that applied to an Ind. Trial Rule 12(B)(6) motion made solely on the pleadings. The motion tests the sufficiency of the complaint to state a redressable claim, not the facts to support it. Anderson v. Anderson (1979), Ind.App., 399 N.E.2d 391, 405-6. The test to be applied is whether, in the light most favorable to the nonmovants and with every intendment regarded in their favor, the complaint is sufficient to constitute any valid claim. Id. (citing State v. Rankin (1973), 260 Ind. 228, 294 N.E.2d 604). The movant admits the facts pleaded. Anderson, 399 N.E.2d at 405-6.

At this late date, there can be no serious dispute that an Indiana circuit court has original subject matter jurisdiction to hear a claim sounding in negligence. See Ind. Code 33-4-4-3 ("The circuit court has original jurisdiction in all civil cases ... except where exclusive jurisdiction is conferred by law upon other courts of the same territorial jurisdiction"); State v. Schuetter (1987), Ind.App., 503 N.E.2d 418, 420. This grant of jurisdiction notwithstanding, South Eastern's position is that by granting the IURC the authority to investigate any "practice or act whatsoever affecting or relating to the service of any public utility" or a complaint that any service "is in any respect unreasonable, ... insufficient ... or inadequate," I.C. 8-1-2-54, and to issue an order "fix[ing] just and reasonable measurements, regulations, acts, practices or service to be furnished, imposed, observed and followed in the future in lieu of those found to be unjust ...," I.C. 8-1-2-69, the legislature has precluded an exercise of jurisdiction over the Ingrams' complaint by an Indiana trial court, requiring dismissal. South Eastern's contention raises two considerations: first, which if any of the legal or factual questions posed by the Ingrams' complaint are within the IURC's "exclusive" grant of authority, and second, does the existence of a collateral issue within the IURC's jurisdiction require the courts to defer consideration of the entire matter until the IURC has acted.

We begin our discussion with the basic proposition that the IURC derives its power solely from the legislature; if the power to act has not been conferred by statute, it does not exist. The legislature does not intend to grant other and greater authority than it has itself seen fit to exercise. Citizens Action Coalition v. Northern Indiana Public Service Co. (1985), Ind., 485 N.E.2d 610, 612, cert. denied, 476 U.S. 1137, 106 S.Ct. 2239, 90 L.Ed.2d 687; Chicago & E.I.R. Co. v. Public Service Commission (1943), 221 Ind. 592, 594, 49 N.E.2d 341, 341-2. Accordingly, any doubt about the existence of authority must be resolved against a finding of authority. United Rural Electric v. Ind. & Michigan Electric Co. (1990), Ind., 549 N.E.2d 1019, 1021.

Had the legislature explicitly stated that it intended to modify the common law of negligence and expressly provided that the existence and scope of a utility's duty in tort to private citizens is to be determined exclusively by the Public Service Commission Act as implemented by the IURC, the present dispute would not be before us. It has not so stated. Therefore, we must determine the legislature's intent from the specific grants of authority contained in Title 8 and the Act as a whole.

Indiana Code 8-1-2-107 provides a statutory remedy for injury sustained as a consequence of a neglect or violation of the regulatory scheme by a utility. This court has held that an action brought pursuant to this section for damages sustained as a result of a utility's discrimination in service or unreasonable preference must be preceded by a determination by the IURC that the utility's conduct is unlawful. Indiana Bell Telephone Co. v. Friedland (1978), 175 Ind.App. 622, 654, 373 N.E.2d 344, 352, cert. denied, 440 U.S. 916, 99 S.Ct. 1233, 59 L.Ed.2d 465. But, neither I.C. 8-1-2-107 nor Friedland speaks to the violation of common law duties by a public utility. The Indiana Supreme Court has held that the legislature did not intend to displace the common law with respect to duties by enacting the predecessor to this section. Trustees of Jennie De Pauw Memorial Methodist Episcopal Church v. New Albany Waterworks (1923), 193 Ind. 368, 140 N.E. 540. Indiana Code 8-1-2-107 therefore grants the IURC no authority to determine the underlying facts or liability of a utility to a private litigant in a dispute which does not involve a neglect or violation of the regulatory scheme.

The legislature has explicitly given the IURC the authority, upon its own motion, I.C. 8-1-2-58, or when the issue is otherwise properly presented to it, to investigate into the "service" provided by a regulated utility, to find facts based upon the evidence before it, and to prospectively rectify any perceived inadequacies in the utility's practices or the regulatory scheme. I.C. 8-1-2-54, 69. Inherent in this grant of power is the implicit power and authority to do that which is necessary to effectuate the regulatory scheme. Northern Indiana Public Service Co. v. Citizens Action Coalition (1989), Ind., 548 N.E.2d 153, 158, cert. denied, 476 U.S. 1137, 106 S.Ct. 2239, 90 L.Ed.2d 687.

The courts of this state have already concluded that the IURC does not possess the power to make declaratory rulings in the manner contemplated by the Declaratory Judgment Act. U.S. Steel Corp. v. Northern Indiana Public Service Co. (1985), Ind.App., 482 N.E.2d 501, 506, trans. denied. The IURC's duty is to enter orders based upon impartial findings of fact. It has not been empowered to enter judgments which determine the parties' rights, status or legal relationship, even when the subject matter of the determination appears to fall within the IURC's broad grant of authority. National Rural Utilities Cooperative Finance Corp. v. Public Service Commission of Indiana (1990), Ind., 552 N.E.2d 23, 25 (summarily affirming National Rural Utilities Cooperative Finance Corp. v. Public Service Commission of Indiana (1988), Ind.App., 528 N.E.2d 95, 98); Office of Utility Consumer Counselor v. Northern Indiana Public Service Co. (1989), Ind.App., 538 N.E.2d 957, 959, trans. denied; Kentucky-Indiana Municipal Power Association v. Public Service Commission of Indiana (1979), 181 Ind.App. 639, 645, 393 N.E.2d 776, 780. Neither the Ingrams nor South Eastern could therefore file a petition under I.C. 8-1-2-54 to obtain a declaration of South Eastern's liability to the Ingrams.

Nonetheless, by empowering the IURC to determine the reasonableness and adequacy of South Eastern's service to its customers, the IURC appears to possess the inherent authority to investigate into whether South Eastern used reasonable care in the provision of service and whether some other action was warranted under the circumstances. While an inquiry into the reasonableness of the service provided by South Eastern ultimately may be necessary to effectuate the regulatory scheme, the results of such an investigation can have no binding effect upon the judiciary. The IURC possesses only such power as the legislature can constitutionally confer upon it.

The Indiana Constitution expressly reposes the power to find facts in the jury and guarantees in Art. I, Sec. 20 that "[i]n all civil cases, the right of trial by jury shall remain inviolate. 2 Schembri v. Shearer (1935), 208 Ind. 97, 194 N.E. 615. The constitutional provision means that the substantial elements and incidents, which pertained to a trial by jury at common...

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