Opinion
KNLCV166027335S
12-23-2016
Raspberry Junction Holding, LLC v. Southeastern Connecticut Water Authority
UNPUBLISHED OPINION
RULING ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
Robert F. Vacchelli, J.
This case is an action by the plaintiff, Raspberry Junction Holding, LLC. The plaintiff operates The Bellissimo Grande Hotel at 411A Norwich Westerly Road in North Stonington, CT. It alleges that it lost water service for several days starting on June 23, 2015, due to the explosion of a hydro-pneumatic tank at a pumping station operated by the defendant, Southeastern Connecticut Water Authority (" Water Authority"). It alleges that the defendant was negligent in its construction, operation, inspection or maintenance of the tank, causing the plaintiff to loose revenue due to its inability to rent rooms, or the need to give refunds, to hotel guests due to the water outage. Pending before the court is a motion for summary judgment filed by the defendant arguing, inter alia, that, pursuant to rules promulgated by the Water Authority in accordance with its enabling legislation, it is not liable for damages for such service outages as alleged in this case. For the following reasons, the court finds that the material facts are not in dispute and the defendant is entitled to judgment as a matter of law. Therefore, the motion for summary judgment is granted and judgment shall enter in favor of the defendant, accordingly.
I
The law governing summary judgment is well-settled. As our Appellate Court has summarized:
Practice Book § [17-49] requires that judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. A material fact is a fact that will make a difference in the result of the case . . . The facts at issue are those alleged in the pleadings." (Citation omitted; internal quotation marks omitted.) Gohel v. Allstate Ins. Co., 61 Conn.App. 806, 809, 768 A.2d 950 (2001).
In seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact. The courts are in entire agreement that the moving party for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law, entitle him to a judgment as a matter of law. The courts hold the movant to a strict standard. To satisfy his burden the movant must make a showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact . . . As the burden of proof is on the movant, the evidence must be viewed in the light most favorable to the opponent. (Citations omitted; internal quotation marks omitted.) Allstate Ins. Co. v. Barron, 269 Conn. 394, 405, 848 A.2d 1165 (2004).
It is frequently stated in Connecticut's case law that, pursuant to Practice Book § § 17-45 and 17-46, a party opposing a summary judgment motion " must provide an evidentiary foundation to demonstrate the existence of a genuine issue of material fact." Harvey v. Boehringer Ingelheim Corp., 52 Conn.App. 1, 4, 724 A.2d 1143 (1999). As noted by the trial court in this case, typically " [d]emonstrating a genuine issue requires a showing of evidentiary facts or substantial evidence outside the pleadings from which material facts alleged in the pleadings can be warrantably inferred." (Internal quotation marks omitted.) New Milford Savings Bank v. Roina, 38 Conn.App. 240, 244, 659 A.2d 1226, cert. denied, 235 Conn. 915, 665 A.2d 609 (1995). Moreover, " [t]o establish the existence of a material fact, it is not enough for the party opposing summary judgment merely to assert the existence of a disputed issue . . . Such assertions are insufficient regardless of whether they are contained in a complaint or a brief . . . Further, unadmitted allegations in the pleadings do not constitute proof of the existence of a genuine issue as to any material fact." (Citations omitted; internal quotation marks omitted.) Id., 244-45.Rockwell v. Quintner, 96 Conn.App. 221, 227-29, 899 A.2d 738, cert. denied, 280 Conn. 917, 908 A.2d 538 (2006)
The Practice Book further mandates that " [a]ny adverse party shall at least five days before the date the motion is to be considered on short calendar file opposing affidavits and other available documentary evidence. Affidavits, and other documentary proof not already part of the file, shall be filed and served as are pleadings." Practice Book § 17-45. " Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein. Sworn or certified copies of all papers or parts thereof referred to in an affidavit shall be attached thereto." Practice Book § 17-46.
II
In support of its motion, the defendant filed a copy of the Special Act creating the Southeastern Connecticut Water Authority and a copy of its Rules Governing Service. The plaintiff supplies the court with an affidavit of Patrick M. Levantino, a member of the plaintiff limited liability company.
The plaintiff objects to the defendant's motion for summary judgment on the grounds that it is not supported by an affidavit. The Practice Book does not require an affidavit in all cases. It requires that such motions be supported " by such documents as may be appropriate, including but not limited to affidavits, certified transcripts of testimony under oath, disclosures, written admission and the like." Practice Book § 17-45. Plaintiff does not otherwise object to the materials submitted by the defendant.
Based on the admissible materials supplied and undisputed facts, and viewing the evidence in the light most favorable to the opponent as required, the court finds that the following pertinent, material facts are not in dispute: The plaintiff, Raspberry Junction Holding, LLC, is the operator of the Bellissimo Grand Hotel, located at 411A Norwich Westerly Road in North Stonington, CT. It alleges, but does not offer proof, that it lost water service for several days starting on June 23, 2015, due to the explosion of a hydro-pneumatic tank at a pumping station operated by the defendant. It alleges that the defendant was negligent in its construction, operation, inspection or maintenance of the tank, causing the plaintiff to loose revenue due to its inability to rent rooms, or the need to give refunds, to hotel guests due to the water outage. It seeks money damages for those losses.
The defendant admits that on June 23, 2015, a pumping station that it maintains experienced a problem that resulted in a water outage at the Bellissimo Grand Hotel. The submissions show that the defendant was created by a 1967 Special Act of the Connecticut General Assembly. Its powers are enumerated in Section 14 of that Special Act. The Act provides, in pertinent part, as follows:
The authority shall have the power: (a) to sue and be sued; . . . (d) to purchase, in the name of the authority, any water supply system or parts thereof situated within or outside the district . . . for the purpose of supplying water for domestic, commercial and public purposes at retail to individual consumers within the district . . . (i) to make bylaws for the management and regulation of its affairs and for the use of its properties and, subject to the provisions of any bond issue, rules for the sale of water and the collection of rents and charges therefor . . . (m) to fix rates and collect charges for the use of the facilities of, or services rendered by, or for any commodities furnished by the authority such as to provide revenues sufficient at all times to pay, as the same shall become due, the principle and interest on the bonds or notes of the authority together with proper reserves, in addition to paying, as the same shall become due, the expenses of operating and maintaining the properties of the authority together with proper reserves for depreciation, maintenance and contingencies and all other obligations and indebtedness of the authority; . . . (p) to do all things necessary or convenient to carry out the powers expressly given in this act . . .33 Spec. Acts 381, § 14 (1967) (emphasis added).
Pursuant to that authority, the defendant promulgated certain rules setting forth the basis on which its services are provided, and which constitute part of the contract between it and its customers existing upon commencement of service. In particular, it promulgated a rule respecting the supply of water, which provides, in pertinent part, as follows:
The Authority undertakes to use reasonable care and diligence to provide a constant supply of water at reasonable pressure to customers but reserves the right at any time, without notice, to shut off the water in its mains for the purpose of making repairs or extension or for other purposes. The Authority shall whenever possible, notify customers of anticipated interruptions in service, such notification being made through local newspapers and/or radio stations. It is expressly agreed that the Authority shall not be liable for a deficiency or failure in the supply of water or the pressure thereof for any cause whatsoever, or for any damage caused thereby, or for the bursting or breaking of any main or service pipe or any attachment to the Authority's property.Rules Governing Service § 5 (emphasis added).
Mr. Levantino attests that at no time was there any negotiation of the terms of the provision of water service to the hotel, and that if he did not agree to the terms dictated by the Water Authority, the Water Authority would not provide water to the hotel. He also attests that he owns another hotel of the same size, and with the same amount of water usage, in Preston, CT serviced by a different water company, and that the defendant's bills are double the amount he pays in Preston, CT. The defendant does not dispute those statements.
III
The defendant seeks summary judgment arguing that judgment should enter in its favor as a matter of law because (a) pursuant to the rules promulgated by the Water Authority made in accordance with its enabling legislation, the Water Authority is not liable for damages caused by the failure to supply the water in this case; and (2) recovery of the plaintiff's alleged losses is barred by the economic loss doctrine. The issues are discussed, seriatim.
A
With respect to the first issue, the Water Authority argues that it has promulgated a rule for water service that renders it not liable for water outages, that its rule is legally enforceable, and, therefore, it is entitled to summary judgment as a matter of law. The plaintiff argues that that the Water Authority, although it is a municipal corporation, when it operates a water system for sale for private consumption and use as in this case, it is acting in a proprietary capacity, and it is liable for injury or damage to the property of others to the same extent and upon the same basis as a privately owned water company and not subject to immunity. It further argues that the enabling act does not contain a limitation of liability. The court finds that, under the circumstances and claims in this case, the rule limiting liability is enforceable, and the defendant is not liable under that rule.
The Water Authority, by virtue of the special act, is a municipal corporation. Monroe v. Middlebury Conservation Commission, 187 Conn. 476, 483-84, 447 A.2d 1 (1982); Windham Community Memorial Hospital v. Willimantic, 166 Conn. 113, 121, 348 A.2d 651 (1974); Sachem's Head Property Owners' Assn. v. Guilford, 112 Conn. 515, 517, 152 A. 877 (1931). As a creature of the state, it possesses no inherent power of its own. It can exercise only such powers as are expressly granted or necessarily implied to enable it to carry into effect the objects and purposes of its creation. Board of Police Commissioners v. White, 171 Conn. 553, 559, 370 A.2d 1070 (1976).
That the defendant can be sued like a private company cannot be doubted. The Special Act that created it specifically states that it has the power to sue and be sued. 33 Spec. Acts 381, § 14(a) (1967). Unlike a private company, it is an administrative agency with the power to promulgate regulations that have the force and effect of law. Id. § 14(i); Monroe v. Middlebury Conservation Commission, supra, 187 Conn. 484. However, its authority is not unbridled. If its regulations are unreasonable, oppressive, extortionate, discriminatory, in derogation of legal rights, or in conflict with the franchise of the company, they are unenforceable against the consumer. 78 Am.Jur.2d Waterworks and Water Companies (2016) § 73.
On the issue of whether a water authority can promulgate a rule limiting its liability for service outages, neither party has brought to the attention of the court any Connecticut caselaw on point, and the court has not found any either. Other jurisdictions have considered the issue.
The majority hold that such rules limiting liability for ordinary negligence are reasonable and enforceable. See Danisco Ingredients U.S.A., Inc. v. Kansas City Power & Light Company, 267 Kan. 760, 769, 986 P.2d 377 (1999); Pilot Industries v. Southern Bell Tel. & Tel. Co., 495 F.Supp. 356, 361-62 (D.S.C. 1979); Olson v. Mountain States Tel. & Tel. Co., 119 Ariz. 321, 323, 580 P.2d 782 (Ct.App. 1978); Professional Answering Serv. v. Chesapeake Tel., 565 A.2d 55, 63-65 (D.C. 1989); Landrum v. Florida Power & Light Co., 505 So.2d 552, 554 (Fla.Dist.App. 1987); Sou. Bell Tel. Co. v. Invenchek, 130 Ga.App. 798, 800, 204 S.E.2d 457 (1974); In re Ill. Bell Switching, 161 Ill.2d 233, 244, 204 Ill.Dec. 216, 641 N.E.2d 440 (1994); Computer Tool & Engineering v. NSP, 453 N.W.2d 569, 573 (Mm.App. 1990); Warner v. Southwestern Bell Telephone Company, 428 S.W.2d 596, 601-02 (Mo. 1968); Bulbman, Inc. v. Nevada Bell, 108 Nev. 105, 108-09, 825 P.2d 588 (1992); Lee v. Consolidated Edison, 98 Misc.2d 304, 306, 413 N.Y.S.2d 826 (1978); Garrison v. Pacific N.W. Bell, 45 Or.App. 523, 531-32, 608 P.2d 1206 (1980); Behrend v. Bell Tele. Co., 242 Pa.Super. 47, 74-75, 363 A.2d 1152 (1976), vacated 473 Pa. 320, 374 A.2d 536 (1977), reinstated 257 Pa.Super. 35, 390 A.2d 233 (1978); Southwestern Bell Telephone Co. v. Rucker, 537 S.W.2d 326, 331-32 (Tex.Civ.App. 1976). The theory underlying the enforcement of liability limitations is that because a public utility is strictly regulated, its liability should be defined and limited so that it may be able to provide service at reasonable rates. Bulbman, Inc. v. Nevada Bell, supra, 108 Nev. 109. See Waters v. Pacific Telephone Co., 12 Cal.3d 1, 7, 114 Cal.Rptr. 753, 523 P.2d 1161 (1974) (stating that " [r]easonable rates are in part dependent upon such a rule [limiting liability]"). As the court in Landrum v. Florida Power & Light Co. stated: " [a] broadened liability exposure must inevitably raise the cost and thereby the rates, of electric service." Supra, 505 So.2d at 554.
The same cannot be said where the promulgated rules purport to limit liability beyond that caused by ordinary negligence. " It is true that a few jurisdictions have allowed public utilities to enact rules which limit their liability for even gross negligence. See Professional Answering Serv. v. Chesapeake Tel., 565 A.2d at 63-65; In re Ill. Bell Switching, 161 Ill.2d at 244, 204 Ill.Dec. 216, 641 N.E.2d 440. However, the majority of jurisdictions have held limitations on liability to be unenforceable with regard to claims of gross negligence or willful and wanton conduct. See Sou. Bell Tel. Co. v. Invenchek, 130 Ga.App. at 800-01, 204 S.E.2d 457; Warner v. Southwestern Bell Telephone Company, 428 S.W.2d at 602-03; Bulbman Inc. v. Nevada Bell, 108 Nev. at 108-09, 825 P.2d 588; Garrison v. Pacific N.W. Bell, 45 Or.App. at 531-32, 608 P.2d 1206; Behrend v. Bell Tele. Co. 242 Pa.Super. at 74-75, 363 A.2d 1152; Southwestern Bell Telephone Co. v. Rucker, 537 S.W.2d at 332-33. Other jurisdictions have predicated the reasonableness of a limitation on liability on whether it purports to limit more than ordinary negligence. See Computer Tool & Engineering v. NSP, 453 N.W.2d at 573 (finding that limitation of liability was reasonable because it was narrowly tailored and did not attempt to exonerate power company from injuries not caused by disturbances in power, gross negligence, or willful or wanton acts); Lee v. Consolidated Edison, 98 Misc.2d at 306, 413 N.Y.S.2d 826 (exculpatory clause is reasonable " so long as the company has not attempted to absolve itself from its own willful misconduct or gross negligence"). The Kansas Court of Appeals in Burdick v. Southwestern Bell Tel. Co., 9 Kan.App.2d 182, 675 P.2d 922 (1984), addressed a similar question. Without citing Milling Co., 101 Kan. 307, 166 P. 493, and McNally Pittsburg, 186 Kan. 709, 353 P.2d 199, the court held that a public utility may limit its liabilities for service interruptions but may not relieve itself of liability for its willful and wanton activity. 9 Kan.App.2d at 184-85, 675 P.2d 922. The Kansas Court of Appeals noted that '[t]he general rule is that the only exception to the application of the tariff limitations is made when the defendant's conduct has been shown to be willful and wanton." (Citations omitted.) 9 Kan.App.2d at 184, 675 P.2d 922." Danisco Ingredients U.S.A., Inc. v. Kansas City Power & Light Company, supra, 267 Kan. 770.
The limitation rule promulgated by the defendant in the instant case is not limited to damage caused by ordinary negligence. It purports to cover damages caused " for any cause whatsoever." Rules Governing Service § 5. Other jurisdictions addressing this question have held that duly promulgated limitations on liability should be enforced insofar as they are lawful and declared invalid only insofar as they seek to limit liability for greater than ordinary negligence. See Danisco Ingredients U.S.A., Inc. v. Kansas City Power & Light Company, supra, 267 Kan. 773; Sou. Bell Tel. Co. v. Invenchek, supra, 130 Ga.App. 800-01; Warner v. Southwestern Bell Telephone Company, supra, 428 S.W.2d 603; Behrend v. Bell Tele. Co., supra, 242 Pa.Super. at 74-75. Inasmuch as the plaintiff has only alleged ordinary negligence, the court is only called upon to apply the limitation as to the alleged ordinary negligence. Therefore, the fact that its rule may be invalid in other circumstances is not dispositive of the case before the court.
Plaintiff argues that this rule is not applicable in the instant case because the instant case involves negligence, not a service interruption. The argument is unpersuasive. The case involves a service interruption allegedly cause by negligence.
Plaintiff's member complains in his affidavit, that there was no negotiation over the terms of his water service and he never agreed to the limitation on liability. That is not grounds for voiding the rule. Such liability limitations contained are binding on rate payers regardless of knowledge or assent because the rate, which includes the limitation on liability, is the lawfully established rate. See Computer Tool & Engineering, Inc. v. Northern Slates Power Company, supra, 453 N.W.2d 573 Komatz Construction, Inc. v. Western Union Telegraph Co., 290 Minn. 129, 137, 186 N.W.2d 691 (1971), cert. denied, 404 U.S. 856, 92 S.Ct. 102, 30 L.Ed.2d 98 (1971). It is an essential part of the rate charged for a public utility's service. Computer Tool & Engineering, Inc. v. Northern States Power Company, supra ; Landrum v. Florida Power & Light Co., 505 So.2d 552, 554 (Fla.Dist.Ct.App. 1987), rev. denied, 513 So.2d 1061 (Fla. 1987); Lee v. Consolidated Edison Co., 98 Misc.2d 304, 305, 413 N.Y.S.2d 826, 828 (N.Y.Sup.Ct. 1978). It is a law, not a contract. Adams v. N. Ill. Gas Co., 211 Ill.2d 32, 55, 284 Ill.Dec. 302, 809 N.E.2d 1248 (2004).
Finally, plaintiff argues that the limitation on liability is not keeping its rates low because the defendant's bills are double what he pays for the same usage from a different water company. The argument misses the point. The limitation on liability is permitted to help the public utilities keep their rates reasonable, not to beat the rates of other water companies. Plaintiff does not identify what his rate is, let alone demonstrate that it is unreasonable.
Accordingly, the court concludes that the defendant's limitation on liability rule is enforceable in the instant case, and the defendant is entitled to summary judgment.
B
Inasmuch as the court has concluded that the defendant is entitled to summary judgment on the first ground, it is unnecessary to resolve the alternative of whether plaintiff's claim is barred by the economic loss doctrine.
IV
For all of the foregoing reasons, the court finds that the material facts are not in dispute and the defendant is entitled to judgment as a matter of law. Therefore, the motion for summary judgment is granted and judgment shall enter in favor of the defendant, Southeastern Connecticut Water Authority, accordingly.