Springfield Hydroelectric Co. v. Copp, No. 00-044.

Docket NºNo. 00-044.
Citation779 A.2d 67
Case DateJuly 06, 2001
CourtUnited States State Supreme Court of Vermont

779 A.2d 67

SPRINGFIELD HYDROELECTRIC COMPANY, et al.
v.
Lawrence D. COPP and Jonathan Downer

No. 00-044.

Supreme Court of Vermont.

July 6, 2001.


779 A.2d 68
Mary P. Kehoe of Saxer Anderson Wolinsky & Sunshine PC, Burlington, for Plaintiffs-Appellants

Thomas F. Heilmann and D. James Mackall of Heilmann, Ekman & Associates, Inc., Burlington for Defendants-Appellees.

Present: AMESTOY, C.J., DOOLEY, MORSE and SKOGLUND, JJ., and ALLEN, C.J. (Ret.), Specially Assigned.

AMESTOY, C.J.

Appellants Springfield Hydroelectric Company, et al., appeal the superior court's summary judgment ruling on behalf of appellees Lawrence Copp and Jonathan

779 A.2d 69
Downer, former employees of Vermont Power Exchange (VPX). Appellants, all owners of commercial hydroelectric facilities, allege that appellees in their individual capacities negligently administered a power purchase agreement which resulted in shared economic damages. The trial court granted appellees' motion for summary judgment, ruling that appellants' claims fall within the scope of the economic loss rule, prohibiting tort recovery for purely economic losses. We affirm

Between 1984 and 1996, VPX1 served as the designated purchasing agent for Vermont's Public Service Board (PSB), administering the sale of hydroelectric power from small power producers to retail utility companies in Vermont. To perform this function, VPX entered into power purchase agreements with each of the appellants, owners of small commercial hydroelectric generating facilities, and was paid a fee by them.

Managing the construction and financial security concerns of new power producers to ensure that they could meet the terms of the power sales agreements was among VPX's responsibilities. As part of the scheme set up under the federal Public Utility Regulatory Policy Act of 1978 § 210, 16 U.S.C.A. § 824a-3 (2000), power producers qualify for "levelized rates," which sometimes provide them with compensation greater than the cost of production during the early years of a 30-year power sales contract, and less compensation over later years. In effect, the levelized rates operate as a loan to producers.

In order to safeguard ratepayers against producers going out of business before the end of their agreement, a pooled trust fund was set up to which all producers contributed a percentage of their receipts. The fund functioned to secure the power producers' performance of their agreements with VPX, and to provide protection to Vermont ratepayers in the event that any of the producers became insolvent during the 30-year levelized rate period. Otherwise, the fund would be returned to the producers. One of VPX's duties was to administer the pooled trust fund. The PSB, however, maintained sole authority and control over disbursement of the fund, the authority to order payment of proceeds into the fund, and the power to liquidate the fund in the event of a default by one of the power producers.

The appellants represent all of the participants in the pooled trust fund, with the exception of Williams River, which, although not a party, is the subject of this action. Williams River constructed a hydroelectric facility, Brockways Mill, which produced power from March 1988 to November 1989. Williams River subsequently defaulted, and shut down the Brockways Mill facility. As a result, the PSB ordered the monies from the pooled trust fund be disbursed.

At the trial court, appellants alleged that appellees Copp and Downer, in their capacities as officers or employees of VPX, acted as their agents in the administration of the power purchase agreement with Williams River. As such, appellants contended that defendants negligently rendered professional services in permitting the facility to go "on-line," which, due to its subsequent insolvency, resulted in the diminution of the trust fund by $161,144.

779 A.2d 70
Appellants sought damages for their reliance upon appellees' "negligently rendered professional services," and asserted that appellees were negligent in their duty to exercise due care under agency theory. Appellees moved to dismiss the action, asserting that economic damages cannot be recovered in tort actions. The trial court granted summary judgment to appellees, finding the case to fall squarely within the economic loss doctrine

On appeal, appellants claim that: 1) the economic loss doctrine does not bar them from recovery because they are not asserting economic loss; 2) alternatively, in the event that the damages requested are economic losses, the professional services exception to the economic loss rule permits recovery; and 3) appellants and VPX entered into a principal/agent relationship in which VPX, as agent, violated its duty of care.

In reviewing a summary judgment ruling, we use "the same standard as the trial court," and affirm the granting of a motion for summary judgment "if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law." Granger v. Town of Woodford, 167 Vt. 610, 611, 708 A.2d 1345, 1346 (1998) (mem.); V.R.C.P. 56(c).

Appellants first contend that the trial court erred in concluding that their claims were barred under the economic loss rule, which prohibits recovery under tort for purely economic losses. The rule, as previously set forth in this Court, states that "`[n]egligence law does not generally recognize a duty to exercise reasonable care to avoid intangible economic loss to another unless one's conduct has inflicted some accompanying physical harm.'" Gus' Catering, Inc. v. Menusoft Systems, 171 Vt. ___, ___, 762 A.2d 804, 807 (2000) (mem.) (quoting O'Connell v. Killington, Ltd., 164 Vt. 73, 77, 665 A.2d 39, 42 (1995)) (alteration in original). The underlying premise of the economic loss rule is that negligence...

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52 practice notes
  • Jenkins v. Miller, Case No. 2:12–CV–184.
    • United States
    • United States District Courts. 2nd Circuit. District of Vermont
    • October 24, 2013
    ...386 (2d Cir.1994) (quoting Restatement (Second) of Agency § 1 cmt. b (1958)); accord Springfield Hydroelectric Co. v. Copp, 172 Vt. 311, 779 A.2d 67, 72–73 (2001) (citing Restatement (Second) of Agency § 1). It is undisputed that Hyden has never been an officer, director, manager or authori......
  • Sullivan v. Saint-Gobain Performance Plastics Corp., Case No. 5:16-cv-125
    • United States
    • United States District Courts. 2nd Circuit. District of Vermont
    • December 27, 2019
    ...breach of contract case where an economic entity acts through employees."). See also Springfield Hydroelectric Co. v. Copp , 172 Vt. 311, 779 A.2d 67 (2001) (power purchase contract); Gus' Catering, Inc. v. Menusoft Sys. , 171 Vt. 556, 762 A.2d 804 (2000) (purchase of software package). The......
  • Moffitt v. Icynene, Inc., No. 1:04-CV-115.
    • United States
    • United States District Courts. 2nd Circuit. District of Vermont
    • December 27, 2005
    ...Economic loss generally includes any damages "other than physical harm to persons or property." Springfield Hydroelectric, 172 Vt. at 315, 779 A.2d 67 (quoting Town of Alma v. AZCO Constr., Inc., 10 P.3d 1256, 1264 (Colo.2000)). For example, a plaintiff cannot recover in tort for "disappoin......
  • Sutton v. Vt. Reg'l Ctr., No. 18-158
    • United States
    • Vermont United States State Supreme Court of Vermont
    • July 31, 2020
    ...as the obligation to avoid violating a "professional duty" (quotations omitted)); Springfield Hydroelectric Co. v. Copp, 172 Vt. 311, 316, 779 A.2d 67, 71 (2001) ("[C]ourts have permitted recovery for economic loss [where there is] a special relationship between the alleged tortfeasor and t......
  • Request a trial to view additional results
52 cases
  • Jenkins v. Miller, Case No. 2:12–CV–184.
    • United States
    • United States District Courts. 2nd Circuit. District of Vermont
    • October 24, 2013
    ...386 (2d Cir.1994) (quoting Restatement (Second) of Agency § 1 cmt. b (1958)); accord Springfield Hydroelectric Co. v. Copp, 172 Vt. 311, 779 A.2d 67, 72–73 (2001) (citing Restatement (Second) of Agency § 1). It is undisputed that Hyden has never been an officer, director, manager or authori......
  • Sullivan v. Saint-Gobain Performance Plastics Corp., Case No. 5:16-cv-125
    • United States
    • United States District Courts. 2nd Circuit. District of Vermont
    • December 27, 2019
    ...breach of contract case where an economic entity acts through employees."). See also Springfield Hydroelectric Co. v. Copp , 172 Vt. 311, 779 A.2d 67 (2001) (power purchase contract); Gus' Catering, Inc. v. Menusoft Sys. , 171 Vt. 556, 762 A.2d 804 (2000) (purchase of software package). The......
  • Moffitt v. Icynene, Inc., No. 1:04-CV-115.
    • United States
    • United States District Courts. 2nd Circuit. District of Vermont
    • December 27, 2005
    ...Economic loss generally includes any damages "other than physical harm to persons or property." Springfield Hydroelectric, 172 Vt. at 315, 779 A.2d 67 (quoting Town of Alma v. AZCO Constr., Inc., 10 P.3d 1256, 1264 (Colo.2000)). For example, a plaintiff cannot recover in tort for "disappoin......
  • Sutton v. Vt. Reg'l Ctr., No. 18-158
    • United States
    • Vermont United States State Supreme Court of Vermont
    • July 31, 2020
    ...as the obligation to avoid violating a "professional duty" (quotations omitted)); Springfield Hydroelectric Co. v. Copp, 172 Vt. 311, 316, 779 A.2d 67, 71 (2001) ("[C]ourts have permitted recovery for economic loss [where there is] a special relationship between the alleged tortfeasor and t......
  • Request a trial to view additional results

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