Wivagg v. Duquesne Light Co.

• Decision Date: 09 July 1975
• Docket Number: 80
• Parties: Wivagg v. Duquesne Light Company
• Court: Pennsylvania Commonwealth Court

73 Pa. D. & C.2d 694

Wivagg v. Duquesne Light Company

No. 80

Common Pleas Court of Allegheny County, Pennsylvania

July 9, 1975

October term, 1972.

Plaintiffs' motion for new trial; defendant's motion for judgment n.o.v.

Loyal H. Gregg and Jack Palkovitz, for plaintiffs.

James E. Coyne, for defendant.

OPINION

LOUIK, J.

This matter is before the court en banc on defendant's motion for judgment n.o.v. and plaintiffs' motion for new trial.

Plaintiffs brought this action against the Duquesne Light Company to recover economic loss and property damage to their printing business and the building in which it was located. Plaintiffs claim that the fire which destroyed the building and its contents was proximately caused by (1) negligent installation and maintenance of electrical wires and equipment immediately outside and leading into the printing shop; and (2) breaches of defendant's implied warranties of merchantability and fitness to provide safe and hazard-free electrical service. The jury found no negligence, but returned a verdict for $ 50,000 for breach of the implied warranties. Defendant's contention throughout trial and in its motion for judgment n.o.v. raises the recently disputed issue of whether the courts will imply a warranty of fitness or merchantability in a sales-service hybrid transaction. More particularly, this court is confronted with the problem of determining whether an implied warranty of safe and hazard-free electrical service can arise from the supply of electricity by a public utility. Basically, defendant argues that the supply of electrical power is essentially a transaction for services, not a sale of goods within the scope of the Uniform Commercial Code of April 6, 1953, P.L. 3, as amended, 12A P. S. § § 2-104(1) (merchant), 2-105(1) (goods), 2-106(1) (contract for sale; sale), 2-314 (implied warranty of merchantability and fitness for ordinary purposes), and 2-315 (implied warranty of fitness for particular purpose). Defendant argues that the implied warranties attach to sales, and since this transaction was not a sale, there can be no warranties, exclusive of those expressed. Consequently, defendant suggests that the court should apply only the traditional standard of negligence to the power company's activities relating to its electrical service. See York Heating & Vent. Co. v. Flannery, 87 Pa.Super 19, 23-4 (1926).

To determine whether warranty or negligence law applied to a particular transaction, the Pennsylvania courts, as well as the majority of American jurisdictions, have distinguished between a sale and a service. The courts have made the distinction on the basis of whether the work or service is the essence of the transaction or whether it is merely incidental to the materials supplied. See Farnsworth, Implied Warranties of Quality in Non-Sales Cases, 57 Colum. L. Rev. 654, 663-64 (1957). However, to apply warranty concepts in those cases where the court can " find" a technical sale would seem to elevate from far beyond the true substance of a given transaction. Few sales of goods can be deemed pure sales. The manufacture, distribution and sale of a product involves the interplay of many individuals who provide various services to insure the ultimate sale to the consumer or user. See Nordstrom, Law of Sales, 47 (1970). The extremes of mere sale and the rendition of professional skill are separated by a continuum of sales-service hybrid transactions. Within this broad area falls the " service" of providing electricity. However, even if we refer to this product as a " service," it does not necessarily require this court to conclude that no warranties of safe and hazard-free electrical power can arise. The supply of electricity is intimately associated with the apparatus and equipment by which it is generated and conducted. It is doubtful that the sales-service dichotomy does any more than describe a result reached upon the analysis of a variety of factors: White and Summers, Handbook of the Law Under the Uniform Commercial Code 289 (1972). See Delaney v. Towmotor Corp., 339 F.2d 4, 6 (2d Cir., 1964).

In Hoffman v. Misericordia Hospital, 439 Pa. 501, 267 A.2d 867 (1970), the Supreme Court resolved this issue of whether an implied warranty can attach to a sales-service hybrid transaction. In Misericordia, the court vacated the lower court's order sustaining the hospital's preliminary objections to the claim by plaintiff that his contraction of serum hepatitis from a blood transfusion was a breach of the hospital's implied warranties of merchantability and fitness for particular purpose. The court recognized that the adoption of the code did not impede the parallel development of warranties in non-sales situations, stating:

" We therefore do not feel obligated to hinge any resolution of the very important issue here raised on the technical existence of a sale. In this respect, we agree with the following statement made by a court of a sister state: 'It seems to us a distortion to take what is, at least arguably, a sale, twist it into the shape of a service, and then employ this transformed material in erecting the framework of a major policy decision': Russell v. Community Blood Bank, Inc., 185 So.2d 749, 752 (Fla. Ct. App. 1966). In view of our case law implying warranties in non-sales transactions, it cannot be said with certainty that no recovery is permissible upon the claim here made, even if it should ultimately be determined that the transfer of blood from a hospital for transfusion into a patient is a service: See also, Note, A New Principle of Products Liability in Service Transactions, 30 U. Pitt. L. Rev. 508 (1969)." Misericordia, supra at 507.

To arrive at this conclusion, the court relied upon Uniform Commercial Code, Comment 2 to § 2-313, 12A P.S. § 2-313, which provides:

" Although this section is limited in its scope and direct purpose to warranties made by the seller to the buyer as part of a contract for sale, the warranty sections of this Article are not designed in any way to disturb those lines of case law growth which have recognized that warranties need not be confined either to sales contracts or to the direct parties to such a contract. They may arise in other appropriate circumstances such as in the case of bailments for hire, whether such bailment is itself the main contract or is merely a supplying of containers under a contract for the sale of their contents. The provisions of Section 2-318 on third party beneficiaries expressly recognize this case law development within one particular area. Beyond that, the matter is left to the case law with the intention that the policies of this Act may offer useful guidance in dealing with further cases as they arise."

One of the drafters of the code and a leading authority in the areas of commercial and contract law has written:

" To say that a warranty is implied in a sale is not to say that none is implied if there is no sale. Implied warranties of the quality of goods are today firmly entrenched in sales law and their growth has been paralleled by that of similar warranties where goods have been supplied under conditions not amounting to a sale.... Where a statute purports principally to remold the common law in a limited area to produce uniformity, there is less basis for argument that the express provisions with regard to that area imply contrary rules in other areas, and more reason to regard the act as one would the common law which it replaced." Farnsworth, supra, at 663-64.

See also Nordstrom, supra, at 43, 239 (1970). And Justice Francis wrote in Cintrone v. Hertz Truck Leasing Co., 45 N.J.Super. 434, 446 (1965):

" There is no good reason for restricting such warranties to sales. Warranties of fitness are regarded by law as an incident of a transaction because one party to the relationship is in a better position than the other to know and control the condition of the chattel transferred and to distribute the losses which may occur because of a dangerous condition the chattel possesses. These factors make it likely that the party acquiring possession of the article will assume it is in a safe condition for use and therefore refrain from taking precautionary measures himself. 2 Harper and James, Torts, § 28.19 (1956). Harper and James point out that the presence of such factors in sales set in motion the development of the doctrine of implied warranties. They decry the notion, however, that because the doctrine had its origin in sales, the warranty protection should be withheld in other situations when the same considerations obtain. And they argue persuasively that in the face of present-day forms of business enterprise, development of the warranty doctrine in sales would point the way by suggestive analogy to similar results in cases where a commodity is leased. Id., at p. 1577.

" In this connection it may be observed also that the comment to the warranty section of the Uniform Commercial Code speaks out against confining warranties to sales transactions."

See also Newmark v. Gimbel's Inc., 102 N.J.Super. 279 (1968).

In acknowledging that decisional warranties can be implied in nonsales transactions by analogy to the Uniform Commercial Code (see Farnsworth, supra, at 667-69), the Misericordia court sanctioned a case-by-case approach to the resolution of this issue. The trial court must determine " whether the policies for which warranties are implied in law would be furthered by their implication in this situation." Misericordia, supra, at 508. Subsequent to the decision in Misericordia, the Pennsylvania legislature enacted a statute which eliminated the cause of action for breach of implied warranty in cases involving blood transfusions medical transplants and the like: Act of...