Walton Elec. Membership Corp. v. Snyder

508 S.E.2d 167 (1998)

270 Ga. 62

WALTON ELECTRIC MEMBERSHIP CORPORATION v. SNYDER.

No. S97G1593.

Supreme Court of Georgia.

October 26, 1998.

*168 E.R. Lambert, Lambert & Roffman, L.L.C., Marvin J. Reitman, Jr., Madison, for Walton Electric Membership Corporation.

James Michael Green, Crowther & Green, LLC, Gerald W. Bruce, Watkinsville, for Howard Snyder.

Richard G. Tisinger, Sr., Tisinger, Tisinger, Vance & Greer, Carrollton, for Amicus Appellant.

HINES, Justice.

We granted certiorari in Walton Electric Membership Corp. v. Snyder, 226 Ga.App. 673, 487 S.E.2d 613 (1997), to determine whether an electric membership corporation (EMC) may be subject to tort liability for wrongful termination of electric service, and if so, whether an award of punitive damages may be allowed. Finding that an EMC may be tortiously liable for wrongful termination, and that punitive damages may be awarded where appropriate, we affirm.

On August 26, 1992, Deborah Patton arranged with Walton Electric Membership Corporation (Walton) for electricity to her residence at Kings Mill Run in Clarke County.[1] Howard Snyder began receiving electricity from Walton for his separate residence in September 1993. In October 1993, Patton vacated her Kings Mill Run residence leaving an overdue balance on her electric bill. She moved in with Snyder and they were married in December 1994. In January 1995, Snyder purchased the Kings Mill Run residence that was formerly occupied by his wife and the couple moved into it together.

Snyder applied for electric service to the Kings Mill Run residence under his existing account; no new membership application was required because he had previously signed an application. After electric service was begun at Kings Mill Run, Walton became aware that Snyder's wife had a past due account for the same residence. Snyder's application for electric service stated that membership of a husband and wife would be a joint membership, a policy repeated in Walton's bylaws; Snyder's application also stated he would be bound by those bylaws. Walton transferred Patton's outstanding debt to Snyder's membership account, but Snyder refused to pay the outstanding balance. Walton's regulations stated that one reason for discontinuing service would be: "Member having old debt living at [service] location with account in some other name." After notice, Walton disconnected Snyder's electricity for approximately 24 hours for the failure to pay $301.28 plus late fees. Snyder was forced to stay overnight in a motel and paid the debt "under protest." He filed suit claiming wrongful termination of electric service, seeking actual and punitive damages.

The trial court granted Snyder's motion for summary judgment as to Walton's liability in tort for wrongful termination, and denied Walton's cross-motions for summary judgment, reserving the issues of actual and punitive damages for trial. The Court of Appeals affirmed.

1. Walton argues that no tort liability may lie because its termination of Snyder's electric service was, if in any way wrong, simply the breach of a contractual obligation. However, in some instances the breach of a contractual duty may also constitute a tort. See Viney v. Aero-Mayflower Transit Co., 176 Ga.App. 556, 557(1), 336 S.E.2d 825 (1985); Atlanta Gas Light Co. v. Newman, 88 Ga.App. 252, 76 S.E.2d 536 (1953); see also OCGA § 51-1-11(a).

A tort may lie, even when a contract exists, when a public duty also exists. See Viney, supra; Bulmer v. Southern Bell &c. Co., 170 Ga.App. 659, 659-660, 317 S.E.2d 893 (1984). An EMC is a business of a public nature designed to meet a public necessity, in the same manner as is a gas *169 company. See Lawrence v. Atlanta Gas-Light Co., 49 Ga.App. 444, 447(1), 176 S.E. 75 (1934). The statutory scheme giving rise to EMCs is similar to the grant of a franchise from the state to operate a utility for the benefit of the citizenry, and this grant imposes a duty to the public.[2] See Freeman v. Macon Gas &c. Co., 126 Ga. 843, 845-846, 56 S.E. 61 (1906). Thus, this duty may provide a basis for tort liability even when a contract exists for the provision of electric service. Accordingly, the tort of wrongful termination of utilities has been recognized.[3] See Freeman, supra; Southern Bell &c. Co. v. Earle, 118 Ga. 506, 510-511(5), 45 S.E. 319 (1903); Hunnicutt v. Ga. Power Co., 168 Ga.App. 525, 309 S.E.2d 862 (1983); Lawrence, supra.

Walton also argues that, because its customers are also its members who ultimately control the corporation, an EMC should not be liable for wrongful termination in the same manner as a for-profit corporation might be. Such a distinction does not demand a shield from tort liability. An EMC is also possessed of a public duty, and as such, an action in tort for wrongful termination of utilities will lie.

2. Walton contends that, as a matter of public policy, punitive damages should not be assessed against an EMC. An EMC has statutory power to sue and be sued, see OCGA § 46-3-201(a)(3)(C), and there is no statutory exemption from liability for punitive damages. In MARTA v. Boswell, 261 Ga. 427, 405 S.E.2d 869 (1991), this Court held that the public policy of this state required that, as a governmental entity, MARTA not be subject to an award for punitive damages. An EMC is not a governmental entity and the same interests of preventing punishment of the taxpayers is not present. See Martin v. Hospital Auth. of Clarke Cnty., 264 Ga. 626, 627 (n. 3), 449 S.E.2d 827 (1994). The legislature has provided for punitive damages, see OCGA § 51-12-5.1, and in this circumstance, there is no public policy interest that would prevent the application of that statute.

Judgment affirmed.

All the Justices concur.

[1] Walton is a member-owned electric supply corporation, also known as an "electric co-op."

[2] That EMCs are intended to have a public duty can be seen in their stated purposes, OCGA § 46-3-200, and the breath of authority given them, such as the power to condemn property. OCGA § 46-3-201 (b)(9).

[3] When termination is due merely to the defendant's neglect, the action will usually lie only in contract. See Wittke v. Home's Enterp. Inc. 118 Ga.App. 211, 216, 162 S.E.2d 898 (1968); Atlanta Gas Light Co. v. Newman, 88 Ga.App. 252, 76 S.E.2d 536 (1953).