Darling v. Central Vermont Public Service Corp.

Darling v. Central Vermont Public Service Corp. (98-519); 171 Vt. 565;
762 A.2d 826

[Filed 21-Sep-2000]


                                 ENTRY ORDER
	
                       SUPREME COURT DOCKET NO. 98-519

                              MARCH TERM, 2000


Elizabeth A. Darling, Daniel Darling,	}	APPEALED FROM:
Rebecca Caffery and Susan Caffery	}
                                        }
                                        }	Windsor Superior Court
v.					}
                                        }
                                        }	DOCKET NO. 102-3-97 Wrcv
Central Vermont Public Service          }
Corporation	                        }							
					}
                                                Trial Judge: Richard W. Norton	

						
             In the above-entitled cause, the Clerk will enter:


       Plaintiffs Elizabeth and Daniel Darling, and Rebecca and Susan Caffery
  (the Darlings) appeal  from a judgment entered in Windsor Superior Court
  following a jury verdict in favor of defendant  Central Vermont Public
  Service Corporation (CVPSC).  According to the Darlings, electricity 
  escaped from nearby storm-damaged power lines, set fire to their rented
  house and garage, and  destroyed all of their personal belongings.  The
  Darlings sued CVPSC, alleging negligence and strict  product
  liability. (FN1)  The court refused to instruct the jury to apply the
  doctrine of strict product  liability, and the case was sent to the jury
  solely on the theory of negligence.  The jury returned a  special verdict
  finding the Darlings seventy-seven percent negligent and CVPSC twenty-three 
  percent negligent.  Consequently, the court entered judgment for CVPSC. 
  See 12 V.S.A. § 1036  (comparative negligence); Howard v. Spafford, 132 Vt.
  434, 438, 321 A.2d 74, 76 (1974) (under 12  V.S.A. § 1036, contributory
  negligence bars recovery where plaintiff's negligence exceeds fifty 
  percent of total causal negligence).  On appeal, the Darlings contend that
  the court erred by refusing  to instruct the jury to apply the doctrine of
  strict product liability.  We affirm.

       On the night of January 19, 1996, a tree limb fell across three
  7200-volt power lines and one  neutral line located between 600 and 1,800
  feet from the Darlings' rented  house.  The tree limb,  lying across the
  live wires while still attached to the tree trunk, created an alternative
  ground that  released current at approximately 7200 volts into the earth.  


 

  CVPSC had a safety system in place to prevent release of such fault, or
  escaping, current.   Either excessive voltage flowing back from the tree
  trunk along the neutral line should have tripped a  circuit breaker on a
  preceding pole, or the escaped current taken back to the circuit breaker by
  ground  rods in the delivery system should have tripped it.  Neither
  method, however, triggered the breaker,  which failed to stop the current. 
  Instead, the current traveled into and along the wet earth.  

       According to the Darlings, the current flowed into their metal well
  casing, into which their  house was also grounded with a copper grounding
  wire.  The Darlings further contend that the  current traveled into their
  garage through the copper grounding wire.  They claim that the continuous 
  and excessive current overloaded their electrical wiring and appliances,
  causing their garage and  house to catch on fire. The garage and house,
  including most of the Darlings' personal belongings,  were completely
  destroyed.

       CVPSC, however, contends that the fire was caused by a space heater in
  the garage which the  Darlings had left plugged in and that this situation
  was further exacerbated by a damaged extension  cord linking the garage to
  the house wiring.

       The Darlings sued CVPSC, alleging negligence based on the failure of
  CVPSC's neutral and  ground rod circuit breaker system.  They also alleged
  strict product liability, contending that because  CVPSC failed to control
  its "product," the electricity crossed into the house wiring system in a 
  defective and unreasonably dangerous condition.  The trial court refused to
  instruct the jury on the  doctrine of strict product liability, concluding
  that the Darlings had not met their burden of proving  that the electricity
  was defective and unreasonably dangerous.  The Darlings appealed to this
  court.  

       To be entitled to a jury instruction, a plaintiff "must establish a
  prima facie case on each of  the elements" of its theory of the case. 
  State v. Knapp, 147 Vt. 56, 59, 509 A.2d 1010, 1011 (1986).   In Zaleski v.
  Joyce, 133 Vt. 150, 333 A.2d 110 (1975), we adopted the doctrine of strict
  product  liability set forth in the Restatement (Second) of Torts, the
  elements of which are as follows:

    (1) One who sells any product in a defective condition
    unreasonably  dangerous to the user or consumer or to his property
    is subject to  liability for physical harm thereby caused to the
    ultimate user or  consumer, or to his property, if 
         (a) the seller is engaged in the business of selling such a 
    product, and 
         (b) it is expected to and does reach the user or consumer 
    without substantial change in the condition in which it is sold. 


  Id. at 154, 333 A.2d  at 113 (emphasis added).

       CVPSC argues that the Darlings cannot establish a prima facie case of
  strict product liability  because (1) electricity is a service, not a
  product, (2) even if electricity is a product, CVPSC did not 
    
 

  "sell" the electricity alleged to have caused the fire, (3) even if
  electricity is a product and CVPSC  sold the electricity alleged to have
  caused the fire, the electricity was not in a defective condition.  
  Furthermore, CVPSC argues that public policy concerns counsel against
  applying strict product  liability to electricity.  Finally, CVPSC contends
  that contributory and comparative negligence  applies in strict product
  liability cases, and thus, because the jury found the Darlings
  seventy-seven  percent negligent, even if the court had instructed the jury
  to apply strict product liability, the  Darlings could not recover.

       Some courts have held that, as a matter of law, electricity is a
  service, not a product, and  therefore, strict product liability can never
  apply in cases involving electricity. See Otte v. Dayton  Power & Light
  Co., 523 N.E.2d 835, 839 (Ohio 1988) ("Consumers . . . . are not paying for 
  individual products but for the privilege of using [the electric company's]
  service."); Bowen v.  Niagara Mohawk Power Corp., 590 N.Y.S.2d 628, 631-32
  (App. Div. 1992).  Most courts, however,  have held that electricity is a
  product for purposes of strict product liability. See Smith v. Home  Light
  and Power Co., 734 P.2d 1051, 1057 (Colo. 1987) ("electricity that has
  reached a location in  the distribution system where it is . . . delivered
  to a consumer is a product for the purposes of §  402A"); Ransome v.
  Wisconsin Elec. Power Co., 275 N.W.2d 641, 643 (Wis. 1979).  In this case,
  we  need not reach the question of whether electricity is a service or a
  product because we hold that, even  if electricity is a product, CVPSC did
  not sell the electricity alleged to have caused the fire.

       Courts have formulated two main tests to determine whether electricity
  has been "sold" for  the purposes of strict product liability.  Under the
  meter test, the electricity must have passed through  the customer's meter
  along the regularly wired pathway into the house to be quantified before it
  is  considered "sold."  See Bryant v. Tri-Country Elec. Membership Corp.,
  844 F. Supp. 347, 350  (W.D.Ky. 1994) ("Although identifying the moment of
  sale is a . . . challenging task, a reasonable  consensus prevails:
  electricity is typically held to be 'sold' when it passes through the
  customer's  meter. It is at this moment that the customer's charges are
  computed, the seller relinquishes control  over its product, and the
  electricity has been reduced to a voltage suitable for ordinary use."); 
  Ransome, 275 N.W.2d  at 643 ("The 'sale' of electricity takes place at the
  meter where charges are  generally computed.").
  	
       Under the stream-of-commerce test, courts concerned about the
  inflexibility of the meter test  look to whether electricity has been
  placed in the stream of commerce for use by the consumer,  rather than
  whether a technical sale has occurred.  See Petroski v. Northern Indiana
  Pub. Serv. Co.,  354 N.E.2d 736, 747 (Ind. Ct. App. 1976) ([T]he test is
  not whether there has been a technical sale  but rather whether the product
  has been placed in the stream of commerce."); Public Serv. Indiana,  Inc.,
  v. Nichols, 494 N.E.2d 349, 355 (Ind. 1986) ("Electricity is considered to
  be placed into the  stream of commerce when it reaches its destination in
  the home or factory.").

       Courts applying the stream of commerce test follow one of two
  approaches in order to  determine if electricity has been placed in the
  stream of commerce.  Under the marketable-voltage  approach, electricity is
  considered in the stream of commerce when the current has been stepped 
  down from its transmission voltage to the 110/220 voltage which is of use
  to the customer.  See id.  ("[E]lectricity must be in a marketable and
  marketed state at the time it causes the injury . . . meaning 

 

  that it has been reduced from a transmission voltage to a consumption
  voltage."); Priest v. Brown,  396 S.E.2d 638, 641 (S.C. Ct. App. 1990)
  (strict product liability denied because "the electricity  through these
  lines was of such high a voltage that it was not in a form immediately
  usable by a  consumer.").

       Under the relinquishment-of-control approach, electricity is
  considered in the stream of  commerce when the utility company has
  relinquished exclusive control over the current.  See  Monroe v. Savannah
  Elec. and Power Co., 471 S.E.2d 854, 857 (Ga. 1996) ("[R]elinquishment of 
  control over electricity and/or the marketable condition of that
  electricity are essential factors in  determining whether the electricity
  had been placed in the stream of commerce by the manufacturer  for purposes
  of strict liability."). In Aversa v. Public Serv. Elec. and Gas Co., 451 A.2d 976 (N.J.  Super. Ct. Law Div. 1982), the plaintiff was injured when
  he tested the voltage of a wire running  through the "switchouse" where the
  power company's electricity tied into the plaintiff's employer's  wiring. 
  See id. at 977.  The question for the jury in Aversa  was who had control
  and dominance  over the dropline, a spliced line, and the exact place the
  plaintiff touched the carrying source to  receive the electric current. 
  The court determined that, "[w]hile a sale is conclusive as to the 
  placement of the product in the stream of commerce, evidence that an
  electric company relinquished  exclusive control over its product may
  establish strict liability at a point prior to its running through a  meter
  where charges are computed."  Id. at 980.  In relinquishment of control
  cases, the relevant  question is whether the consumer has control over the
  equipment.  If the consumer has control over  the equipment, the utility
  company has relinquished exclusive control over the electricity, and the 
  electricity has been placed in the stream of commerce.  See id. at 977 n.1.  
  If the consumer does not  have control over the equipment, the utility
  company has not relinquished exclusive control over the  electricity, and
  the electricity has not been placed into the stream of commerce.  See id.

       In this case, applying the meter test, the stream of commerce test, or
  the relinquishment of   control test,  the electricity that allegedly
  caused the fire had not been sold.  As previously noted, the  Darlings
  contend that the electricity escaped from storm-damaged transmission lines
  and traveled  through the earth before entering their home through the
  ground wire connected to their well casing.   It is undisputed that the
  electricity did not pass through the Darlings' electrical meter, that the 
  electricity was never at a marketable voltage, and that the storm-damaged
  power lines were not  within the Darlings' control.


       Because CVPSC did not sell the electricity that allegedly caused the
  fire in this case, the trial  court correctly refused to instruct the jury
  to apply the doctrine of strict product liability.  

 


  Affirmed.


                                       BY THE COURT:



                                       _______________________________________
                                       Jeffrey L. Amestoy, Chief Justice

                                       _______________________________________
                                       John A. Dooley, Associate Justice

                                       _______________________________________
                                       James L. Morse, Associate Justice

                                       _______________________________________
                                       Marilyn S. Skoglund, Associate Justice

                                       _______________________________________
                                       David Suntag, District Judge, Specially 
                                         Assigned
 

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                                  Footnotes


FN1.  The Darlings also raised a claim of strict liability for
  ultra-hazardous activities.  It is not  clear whether the court dismissed
  this claim or whether the Darlings voluntarily withdrew it.  That  claim,
  however, is not before us.