Southwestern Elec. Power Co. v. Grant

• Decision Date: 28 March 2002
• Docket Number: No. 00-0625.,00-0625.
• Citation: 73 S.W.3d 211
• Parties: SOUTHWESTERN ELECTRIC POWER COMPANY, Petitioner, v. Mur Lee GRANT, Respondent.
• Court: Texas Supreme Court

73 S.W.3d 211

SOUTHWESTERN ELECTRIC POWER COMPANY, Petitioner, v. Mur Lee GRANT, Respondent.

No. 00-0625.

Supreme Court of Texas.

Argued March 7, 2001.

Decided March 28, 2002.

William H. Church, Jr., Thomas S. Leatherbury, Eric Thomas Stahl, Vinson & Elkins, Dallas, Stayton L. Worthington, Coghlan Crowson Fritzpatrick Westbrook & Worthington, Longview, for petitioner.

Joseph L. Rosenfield, Dallas, for respondent.

Justice BAKER delivered the opinion of the Court in which Chief Justice PHILLIPS, Justice HECHT, Justice OWEN, Justice HANKINSON, Justice O'NEIL and Justice RODRIGUEZ joined.

This case involves a personal-injury claim that Mur Lee Grant, a customer, brought against Southwestern Electric Power Company, a public utility that provides electric service to East Texas, arising out of a power fluctuation in her home. The issue is whether a provision in SWEPCO's tariff that limits SWEPCO's liability for personal injury damages resulting from power outages or service interruptions is enforceable. The trial court granted SWEPCO's summary-judgment motion based on this tariff provision. The court of appeals concluded that the tariff is prima facie unconscionable under the Uniform Commercial Code and that Grant produced enough evidence to raise a material fact issue about whether SWEPCO owed Grant a duty to prevent her injuries. 20 S.W.3d 764. We disagree that, in this case, SWEPCO's tariff limiting liability for personal injury is prima facie unconscionable under the UCC. Rather, we conclude that the liability limitation in the tariff here is reasonable as a matter of law and thus enforceable against Grant's negligence claim. Accordingly, we reverse in part and affirm in part the court of appeals' judgment and render judgment for SWEPCO.

I. BACKGROUND

On June 10, 1995, Grant noticed that lights were flickering and several appliances were not working in her home. Grant called SWEPCO to report trouble with her electrical service. Upon arriving at Grant's home, SWEPCO's representative measured the voltage flowing into the house from the outside meter and found it was steady. Thus, SWEPCO's representative advised Grant to contact an electrician to determine if the problem was in her wiring or appliances.

The electrician found a fluctuating-voltage problem and concluded that it came from SWEPCO's line. SWEPCO's technician returned to Grant's home and also discovered the irregular-voltage problem. Upon checking the surrounding power lines, the technician discovered a tree limb on an adjacent property had fallen and damaged a line. SWEPCO's technician repaired the line and restored regular voltage to the Grant home.

Later, Grant spoke with a SWEPCO customer-service agent, who allegedly assured Grant that a representative would pick up the damaged appliances for repair. When SWEPCO did not come to Grant's home, she again contacted the customerservice agent, who advised Grant that she had to have her appliances checked and, if necessary, repaired. After learning SWEPCO would not repair her appliances, Grant unplugged several appliances and placed them on her kitchen table. Later, as she walked by her kitchen table, Grant alleges she suffered an electrical shock to her face that she claims came from either an unplugged television set, an electrical wall outlet, or a light switch.

Grant sued SWEPCO, claiming that it negligently failed to disconnect Grant's electricity service after it knew the fluctuating voltage had damaged Grant's appliances. SWEPCO moved for a summary judgment under Rules 166a(c) and 166a(i) of the Texas Rules of Civil Procedure. SWEPCO asserted that its tariff precluded liability for personal injuries unless the utility acted with gross negligence or willful misconduct. SWEPCO's tariff, in relevant part, provides:

The Company shall not be liable for damages occasioned by interruption, failure to commence delivery, or voltage, wave form, or frequency fluctuation caused by interruption or failure of service or delay in commencing service due to accident to or breakdown of plant, lines, or equipment, strike, riot, act of God, order of any court or judge granted in any bonafide adverse legal proceedings or action or any order of any commission or tribunal having jurisdiction; or, without limitation by the preceding enumeration, any other act or things due to causes beyond its control, to the negligence of the Company, its employees, or contractors, except to the extent that the damages are occasioned by the gross negligence or willful misconduct of the Company.

(emphasis added). The Public Utility Commission approved SWEPCO's tariff. The trial court granted summary judgment for SWEPCO on Grant's negligence claim. The court of appeals affirmed in part, reversed in part, and remanded the case. 20 S.W.3d at 776. The court of appeals determined that Grant alleged negligence claims for her personal-injury damages and property damage to her appliances, but she did not assert a grossnegligence claim. Then, the court of appeals determined that the UCC applies to SWEPCO's tariff, and under the UCC, limiting liability for personal injury in a consumer-goods transaction is prima facie unconscionable. 20 S.W.3d at 771; see also Tex. Bus. & COM.CODE § 2.719(c). Because SWEPCO failed to overcome the prima facie presumption, the court of appeals held that SWEPCO's tariff limiting liability for personal injury violated public policy. 20 S.W.3d at 772. But the court of appeals affirmed summary judgment for SWEPCO on Grant's property-damage claim. 20 S.W.3d at 772. Finally, the court of appeals concluded that a material fact issue existed about whether SWEPCO owed Grant a duty, and thus, the court of appeals remanded Grant's personal-injury claim to the trial court. 20 S.W.3d at 776.

We granted SWEPCO's petition for review to determine: (1) whether SWEPCO's tariff, which limits its liability for personal injuries, is prima facie unconscionable under the UCC; and, if not, (2) whether such a limitation on liability for ordinary negligence is reasonable.

II. APPLICABLE LAW

A. Summary Judgment

To prevail on a traditional summary-judgment motion, a movant must show that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. Tex.R. Civ. P. 166a(c). A movant who conclusively negates at least one essential element of a cause of action is entitled to summary judgment on that claim. Elliott-Williams Co. v. Diaz, 9 S.W.3d 801, 803 (Tex.1999). When reviewing a summary judgment, we take as true all evidence favorable to the nonmovant, and we indulge every reasonable inference and resolve any doubts in the nonmovant's favor. Science Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex.1997); Friendswood Dev. Co. v. McDade & Co., 926 S.W.2d 280, 282 (Tex.1996).

To prevail on a no-evidence summaryjudgment motion, a movant must allege that there is no evidence of an essential element of the adverse party's claim. Tex.R. Civ. P. 166a(i). Although the nonmoving party is not required to marshal its proof, it must present evidence that raises a genuine fact issue on the challenged elements. See Tex.R. Civ. P. 166a, notes and cmts.

B. State Utilities Regulation

1. Public Utility Regulatory Act

From 1975 to 1999, the Public Utility Regulatory Act existed to "establish a comprehensive and adequate regulatory system for electric utilities to assure rates, operations, and services that are just and reasonable to the consumers and to the electric utilities." Tex. Util.Code § 31.001(a). Because electric utilities were regional and service monopolies, the PURA authorized the PUC to regulate utilities as a substitute for competitive forces. See Tex. Util.Code § 31.001(b). The PURA prohibited an electric utility from charging a rate that the PUC did not authorize, granting an unreasonable preference or advantage to persons in a particular service class, or establishing an unreasonable difference in rates between localities or service classes. Tex. Util. Code §§ 36.002, 36.003, 38.021. Moreover, the PURA prohibited an electric utility from raising rates to pass cost increases to retail customers. Tex. Util. Code § 36.201.

The PUC is a legislative creation with only those powers expressly conferred and necessary to accomplish its duties. See State v. Public Util. Comm'n, 883 S.W.2d 190, 194 (Tex.1994). The PURA gave the PUC broad powers "to do anything specifically designated or implied by [the PURA] that is necessary and convenient" to the PUC's authority. See Tex. Util.Code § 14.001. The PURA also gave the PUC exclusive jurisdiction to regulate utility rates, operations, and services. Tex. Util.Code §§ 32.001(a), 36.001; see also Houston Lighting & Power Co. v. Auchan USA, Inc., 995 S.W.2d 668, 674 (Tex.1999); Public Util. Comm'n v. AT & T, 777 S.W.2d 363, 365 (Tex.1989). The PUC required each utility to file a tariff that listed the utility's services and rates and governed the utility's relationship with its customers. Tex. Util.Code § 32.101; 16 Tex. Admin. Code § 23.24. The PUC defined a "tariff" as a schedule containing all charges, rules, and regulations listed separately by type of service and customer class. 16 Tex. Admin. Code § 23.3. The PUC could reject any tariff that did not comply with the PUC's rules and regulations. 16 Tex. Admin. Code § 23.24(g). Once the PUC approved the tariff, an electric utility could not charge a fee or impose any practices, rules, or regulations different from those the tariff described. Tex. Util.Code § 36.004(a); 16 Tex. Admin. Code § 23.24(b). Furthermore, upon approval, the PUC required that every utility make its tariff publicly available and that the utility's employees assist the public in reviewing the tariffs. 16 Tex. Admin. Code § 23.24(f). To change its rates, standards, classifications, rules, or practices, a utility had to file an amended tariff with the PUC. Tex. Util.Code §§ 36.102, 38.003.

The Legislature amended the PURA in 1999 to...