Dudley v. Baltimore Gas & Electric Co.

MOTZ, Judge. This case involves the liability, vel non, of a gas company to one of its customers for damages resulting from an unexplained fire in the customer’s home. Appellant, Susie J. Dudley, appeals from the entry of summary judgment against her and in favor of appellee, Baltimore Gas & Electric Company (BG & E), by the Circuit Court for Baltimore City (Ward, J.). Until March 18, 1989, Ms. Dudley resided at 4300 Fairview Avenue in Baltimore City; since 1963, she had purchased gas from BG & E. Ms. Dudley left her home on the afternoon of March 18, 1989.

When she returned that evening her home had been totally demolished by fire. On April 4, 1991, Ms. Dudley filed a five-count complaint against BG & E in the circuit court. She alleged that BG & E was negligent in “failing to properly select, maintain, test and ¹⁸⁷ inspect its meter box, gas piping and appurtenances ... and in failing to warn [her] of the dangerous condition of same” (Count 1); that BG & E was strictly liable to her because it provided “gas piping, a meter box and natural gas which were defective and in an unreasonably dangerous condition in that the gas was flammable and highly explosive and the pipes, appurtenances and meter box were faulty, deteriorated and subject to leaking (Count 2); that BG & E breached its implied warranty to deliver gas in a safe and effective manner (Count 3); that BG & E breached its contract to supply her with gas in a safe and effective manner (Count 4); and finally that BG & E’s placement “within its land, property and piping system highly volatile and explosive natural gas” subjected it to “liability without fault” (Count 5). BG & E answered the complaint and the parties engaged in discovery for a number of months.

Ms. Dudley conceded in deposition that prior to March 18, 1989, she never had any problems with natural gas leaks in her home, never smelled the odor of natural gas in or around her house, never notified BG & E of any gas leaks in or around her house, did not know of any neighbors who had notified BG & E of any gas leaks in the area of her house, and did not recall ever observing BG & E employees working in the area around her house. BG & E’s corporate designee testified in his deposition that BG & E records indicated “no calls for gas leaks at any of the homes of the 4300 block of Fairview Avenue were received” at any time during the week before the explosion. Another BG & E official confirmed that BG & E records for a “five year period” prior to the accident indicate BG & E “has no record of a call for a gas leak at any of the houses in the 4300 block of Fairview Avenue prior to the March 18, 1989 occurrence at issue.” The Baltimore City Fire Department’s fire investigation report stated that the first officer on the scene found “heavy blue flames from the front of the basement and the walls were already down” and that “it is the opinion of this investigator there was a natural gas leak in the area of the gas meter, which over a period of time built up in the basement ceiling and upper regions of the house.” The report of a BG ¹⁸⁸ & E customer service supervisor stated that after the fire a test “on the existing service and metal installation ... indicated a slight gas leak.” Other facts are set forth -within as necessary. On November 4, 1992, BG & E moved for summary judgment; Ms. Dudley opposed the motion.

On December 28, 1992, the circuit court issued an order granting the motion. Ms. Dudley raises five questions on appeal, one paralleling each of the five counts of her complaint: 1. Did the trial court err in granting summary judgment to the defendant on plaintiffs claims that BG & E had been negligent when there were sufficient facts presented from which the jury could reasonably conclude that BG & E failed to properly select, maintain, test and inspect its meter box, gas piping and appurtenances and failed to warn Dudley of the dangerous conditions of these components? 2. Did the trial court err in granting summary judgment to the defendant on plaintiffs claims that BG & E should be held strictly liable when there were sufficient facts presented from which the jury could reasonably conclude that BG & E furnished defective and unreasonably dangerous gas piping, meter box and natural gas which items were defective at the time they left the possession and control of BG & E? 3.

Did the trial court err in granting summary judgment to the defendant on plaintiffs claims that BG & E breached its warranty when there were sufficient facts presented from which the jury could reasonably conclude that BG & E failed to deliver gas in a safe and effective manner so as not to damage the plaintiffs property? 4. Did the trial court err in granting summary judgment to the defendant on plaintiffs claims that BG & E breached its contract when there were sufficient facts presented from which the jury could reasonably conclude that BG & E failed to supply Dudley with natural gas in a ¹⁸⁹ safe and effective manner so as not to damage her property? 5. Did the trial court err in granting summary judgment to the defendant on plaintiffs claims that BG & E should be held liable without regard to fault when there were sufficient facts presented from which the jury could reasonably conclude that BG & E placed within its land, property and piping system highly volatile and explosive natural gas, permitted the artificial accumulation of natural gas within its property which escaped into the plaintiffs property causing an explosion and destroying Dudley’s home and personal property? The circuit court did not issue an oral or written opinion in granting the summary judgment motion.

Rather, its order stated in its entirety: Upon consideration of Defendant Baltimore Gas and Electric Company’s Motion for Summary Judgment, and any response filed thereto, it is this 28 day of December, 1992 ORDERED, by the Circuit Court for Baltimore City, that said Motion for Summary Judgment regarding the Plaintiffs Complaint is hereby GRANTED. Costs assessed to plaintiff. Although it would be preferable to have the benefit of the circuit court’s rationale as to why summary judgment was proper here, in the absence of any such explanation, “we must assume that the circuit court carefully considered all of the asserted grounds and determined that all or at least enough of them as to merit the grant of summary judgment were meritorious.” Bond v. NIBCO, Inc., 96 Md.App. 127, 133 , 623 A.2d 731 (1993). In reviewing a lower court’s grant of summary judgment, we determine whether the lower court was “legally correct.” Beatty v. Trailmaster Products, Inc., 330 Md. 726, 737 , 625 A.2d 1005 (1993); Heat & Power Corp. v. Air Prods. & Chems., 320 Md. 584, 592, 578 A.2d 1202 (1990). ¹⁹⁰ (i) Ms. Dudley’s first and principal contention is that the circuit court “erred in concluding as a matter of law that there was insufficient evidence presented to raise a jury issue on [her] negligence claim.” BG & E asserts that because it had no notice of a gas leak in Ms. Dudley’s house, under Maryland law, it has no liability to her for damage caused by the leak.

There is no recent Maryland case involving the liability of a utility in a similar situation. Three early Court of Appeals cases, however, assertedly provide the basis for BG & E’s argument. In the first, Consolidated Gas Co. v. Crocker, 82 Md. 113 , 33 A. 423 (1895), the Court found that a gas company was negligent when it had been given notice of a gas leak and failed to resolve the problem. The Crocker court reasoned: When a gas company is made aware, as in this case, that large quantities of gas are escaping into a building, it becomes its plain duty to use reasonable diligence to discover and to stop the leak.

It cannot discharge that duty by assuming without knowing that the leak proceeds from one source, when, in fact, it proceeds from a totally different source which could have been discovered by proper inspection. This rule requires nothing unreasonable — it does not require that the company shall keep up a constant inspection all along its lines, without reference to the existence or non-existence of aprobable cause for the occurrence of leaks or escapes of gas — but it does require that when notice of ,the existence of a leak has been given to a company, the company shall use reasonable care to discover the cause of the leak and appropriate means to remedy it. Id. at 124 , 33 A. 423 (emphasis added). Two years later in Brady v. Consolidated Gas Co., 85 Md. 637 , 37 A. 263 (1897), the Court used the Crocker dicta as the basis for holding that a gas company was not negligent as a matter of law when it was not given notice of a gas leak.

It was not negligence on the part of the company to leave its pipes on the premises, nor does the fact that it made no ¹⁹¹ examination of the pipes raise any presumption of negligence, in the absence of any notice of the existence of any cause for an examination. Had there been such notice its duty would have been to have discovered the cause of the leak, and to have used proper means to remedy it. It was not required to keep up a constant inspection all along its lines, without reference to the existence or non-existence of a probable cause for the occurrence of leaks, or escape of gas. Id. at 642, 37 A. 263 .

See also Consolidated Gas Co. v. Connor, 114 Md. 140, 151-52 , 78 A 725 (1910) (when gas company was notified of a gas leak three or four days before inhalation of gas injured plaintiffs, sufficient evidence to show negligence on part of gas company). Contrary to BG & E’s vigorous assertions, we do not believe that under Maryland law a plaintiff can recover against a gas supplier on a negligence theory only if the supplier had actual notice of a leak and failed to remedy the situation. Indeed, the language, if not the holdings, of the very cases upon which BG & E so heavily relies is to the contrary. For example, although the Crocker court held that it was “not called on to go farther or to lay down a broader rule than this in the pending case,” id. at 125 , 33 A. 423 , it noted that a “system of inspection should be maintained as would insure reasonable promptness in the detection of all leaks that might occur from the deterioration of the material of the pipes, or from any other cause within the circumspection of men of ordinary skill in the business.” Crocker, 82 Md. at 123 , 33 A. 423 (quoting Koelsch v. Philadelphia Co., 152 Pa. 355 , 25 A. 522 (1893)).

Similarly, in Connor , the Court of Appeals noted that: The substance which the [gas company] manufactures and delivers to its consumers through its system of mains and connections is highly dangerous to persons and property, and the duty of the company is to use all reasonable precautions to confine this agency within the channels where it may be employed with safety and utility. ¹⁹² Connor, 114 Md. at 154 , 78 A. 725 . The Connor court also quoted with approval a case holding that “the [gas] company ... owed a duty to all persons who might be injured by the gas to use ordinary and adequate care in delivering the substance into the residence in question.” Id. at 155 , 78 A. 725 (quoting Richmond Gas Co. v. Baker, 146 Ind. 600 , 45 N.E. 1049 (1897)). In sum, although the Court of Appeals has to date not directly addressed precisely a claim like that in the case at hand, the language in its cases clearly suggests that a supplier of natural gas has a duty to act reasonably in supplying natural gas to its customers. Therefore, a supplier could be charged with constructive notice if it failed to act reasonably in detecting a leak.

In reaching this conclusion, we note that, although ignored for the most part by the parties, there is a wealth of more recent out-of-state law supplementing the Crocker, Brady, and Connor decisions. Courts across the country impose upon gas companies an obligation to act with reasonable care in the delivery of their services. See, e.g., Auriemme v. Bridgeport Gas. Co., 144 A.2d 701, 702 , 144 A.2d 701 (Conn.Super.Ct.1958); Pappas v. Peoples Gas Light & Coke Co., 350 Ill.App. 541 , 113 N.E.2d 585, 589 (1953).

Variously articulated as due care, great care, or high degree of care, the standard is that of ordinary care given the dangerous propensities of gas. See, e.g., Herbst v. Northern States Power Co., 432 N.W.2d 463, 467 (Minn.Ct.App.1988) (finding that a gas company had “a high duty of care, proportionate to the great danger associated with maintaining a gas transmission pipeline”); Karle v. National Fuel Gas Distrib. Corp., 448 F.Supp. 753, 759 (W.D.Pa.1978); Fields v. Western Kentucky Gas Co., 478 S.W.2d 20, 22 (Ky.1972); Lewis v. Vermont Gas Corp., 121 Vt. 168 , 151 A.2d 297, 306 (1959); Everly v. Columbia Gas of West Virginia, 171 W.Va. 534 , 301 S.E.2d 165, 168 (1982); see also 38 C.J.S. Gas § 42a (1943 & 1993 Cum.Supp.). Certainly once a gas company has notice of defects in gas lines or even in a customer’s appliances, it has a duty to repair the defects or shut off the gas.

Reed v. Smith Lumber Co., 165 W.Va. 415 , 268 S.E.2d 70, 72 (1980). ¹⁹³ Although actual knowledge of a problem, such as the smell of gas or prior repairs in the same section of pipe, may require a gas company to take additional action in order to act reasonably, the duty to exercise ordinary care exists at all times in the delivery of gas. Karle, 448 F.Supp. at 759 . Absent actual notice, for example, a gas company must still use reasonable care in the inspection and maintenance of its lines. Id. at 759, 762 ; Fields, 478 S.W.2d at 23 (stating that gas company has “the duty of reasonable inspection and maintenance according to the circumstances of the particular case”); Pioneer Natural Gas Co. v. K & M Paving Co., 374 S.W.2d 214, 218 (Tex.1963); Lewis, 151 A.2d at 306 .

There must, however, be a showing that the gas company knew or should have known that there was a problem with its equipment. Carlile-Doughty Corp. v. Philadelphia Elec. Co., 210 Pa.Super. 117 , 232 A.2d 631, 633 (1967). See also L.S. Tellier, Annotation, Liability of Gas Company for Injury or Damage Due to Defects in Service Lines on Consumer’s Premises, 26 A.L.R.2d 136 (1952); B. Finberg, Annotation, Liability of Gas Company for Personal Injury or Property Damage Caused by Gas Escaping from mains in Street, 96 A.L.R.2d 1007 (1964); and 38 C.J.S. Gas §§ 38, 40-42 (1943 & 1993 Cum.Supp.) for further discussion of gas companies’ liability for harm caused by escaping gas.

Finally, some courts have held that compliance with relevant State and federal statutes and regulations may be considered in determining whether a gas company has acted reasonably. For example, it has been held that there was sufficient evidence to uphold a jury’s finding that the defendant gas company had made a thorough inspection to discover leaks when it followed federal mandates as to the method of inspection and, in fact, inspected more frequently than required. See Gray v. Enserch, Inc., 665 S.W.2d 601, 604 (Tex.Ct.App.1984); see also Kearney v. Kansas Pub. Serv.

Co., 233 Kan. 492 , 665 P.2d 757, 766 (1983) (holding that trial court was correct to exclude evidence of gas company’s compliance with state and federal regulations, including those promulgated under the Natural Gas Pipeline Safety Act, where there was ¹⁹⁴ no showing of which sections were complied with and that they were relevant to the alleged negligence). With these principles in mind, we turn to the specific claims of negligence made by Ms. Dudley. Her first argument is based on alleged violations of the Natural Gas Pipeline Safety Act (the “Act”). The Act authorizes and requires the Secretary of Transportation to “establish minimum Federal safety standards for the transportation of gas and pipeline facilities.

Such standards may apply to the design, installation, inspection, emergency plans and procedures, testing, construction, extension, operation, replacement, and maintenance of pipeline facilities.” 49 U.S.C.App. § 1672(a) (1988). Pursuant to this authority, the Secretary promulgated 49 C.F.R. § 192.457 , which establishes “external corrosion control” standards for pipelines that, like those at issue here, were installed before August 1, 1971. That regulation states, inter alia, (b) Except for cast iron or ductile iron, each of the following buried or submerged pipelines installed before August 1, 1971, must be cathodically protected in accordance with this subpart in areas in which active corrosion is found: (1) Bare or ineffectively coated transmission lines. (2) Bare or coated pipes at compressor, regulator, and measuring stations.

(3) Bare or coated distribution lines. The operator shall determine the areas of active corrosion by electrical survey, or where electrical survey is impractical, by the study of corrosion and leak history records, by leak detection survey, or by other means. (c) For the purpose of this subpart, active corrosion means continuing corrosion which, unless controlled, could result in a condition that is detrimental to public safety. 49 C.F.R. § 192.457 (1992) (emphasis added). Ms. Dudley asserts that BG & E was negligent in failing to inspect for areas of “active corrosion” in order to determine whether cathodically protected piping was required.

The federal regu ¹⁹⁵ lation requires that cathodically protected piping be used “in areas in which active corrosion is found.” Id. Areas of active corrosion may be detected, inter alia, “by the study of corrosion and leak history records, by leak detection survey, or by other means.” Id. In uncontroverted deposition testimony, BG & E’s corporate designees explained the pipeline inspection procedures undertaken by BG & E to ascertain corrosion: Q. Let’s move on with these enumerated questions so we can follow the script for a while. Number 16, did you make regular inspections of the mains, service pipes, connections, or valves prior to March 18, 1989? [A], Yes.

Q. Can you tell me how frequently you made inspection of the main, service pipes, valves and other connections? [A]. Our records indicate that leak surveys were conducted on January U, 1977, November 16, 1982, October 26th, 1985, and again on March 22, 1988. Q. What was the thrust of these leak surveys, what was done? [A]. The main and services were leak surveyed using hydrogen flame ionization equipment as required by federal law.

Q. Can you describe that procedure for us ... ? [A]. The main is driven over with a very sensitive instrument that will pick up gas in parts per million, the service lines are walked over with a similar hand-held instrument to pick up leaking gas at the rate of 50 parts per million. The mains and services were surveyed in 1988 and no leakage was found. They are surveyed every three years as [required by] DOT standards.

Q. Is there — are you telling me that all of these mains and specifically that the Dudley service pipe was in fact surveyed in 1988? ¹⁹⁶ [A]. Yes, it was. (emphasis added). Thus, it is undisputed that BG & E conducted a “leak detection survey.” It is also, as noted above, undisputed that there was no leak history for the Dudley residence, nor for any buildings in the area of that residence.

Accordingly, the uncontroverted testimony is that BG & E' has complied with the federal regulation by determining where active corrosion exists by use of “leak history reports,” and a “leak detection survey.” Of course, as Ms. Dudley asserts, compliance with statutory requirements will not prevent a finding of negligence where a reasonable person would take additional precautions. Leonard v. Sav-A-Stop Servs., 289 Md. 204, 212 , 424 A.2d 336 (1981). Cf. Honolulu Ltd. v. Cain, 244 Md. 590, 598 , 224 A.2d 433 (1966) (conformity to industry standards is not conclusive of non-negligence).

The uncontroverted evidence here, however, suggests no reason why a reasonable person in BG & E’s position should have taken additional precautions to determine where active corrosion exists. Of course, the whole discussion of underground pipe leak detection is a bit of a red herring. There is no suggestion that the fire/explosion originated with an underground leak — Ms. Dudley had to rely on a theory that the leak was at the meter — inside the house — not in an area of corrosion. Ms. Dudley further argues that summary judgment with regard to the negligence count was error because “material facts ... are in dispute [that] relate to BG & E’s policies which required their meters to be replaced every 14 years.” Ms. Dudley, in affidavit, testified that her gas meter was never replaced from 1963 to March 18, 1989.

A BG & E employee asserted in affidavit, which was substantiated by attached company records, that the meter in Ms. Dudley’s house at the time of the fire, has been “taken from 247 St. Helena Avenue to BG & E’s meter shop on December 11, 1967 where it was tested and then installed at [Ms. Dudley’s] address on January 17, 1968.” Ms. Dudley asserts that this factual dispute is a material one precluding summary judgment. A material fact ¹⁹⁷ is one that will in some way affect the outcome of the case. King v. Bankerd, 303 Md. 98, 111 , 492 A.2d 608 (1985). “A dispute as to a fact ‘relating to grounds upon which the decision is not rested is not a dispute with respect to a material fact and such dispute does not prevent the entry of summary judgment.’ ” Seaboard Surety Co. v. Kline, Inc., 91 Md.App. 236, 242-43 , 603 A.2d 1357 (1992) (quoting Salisbury Beauty Schools v. State Bd. of Cosmetologists, 268 Md. 32, 40 , 300 A.2d 367 (1973)). There is surely a factual dispute here.

It is, however, not material for two reasons. First, the regulation assertedly violated here was designed not to protect consumers but to assure the accuracy of the meters; and second, there is no legal requirement that every gas meter be replaced, or even tested, every 14 years. The regulations on which Ms. Dudley relies provide, in pertinent part: .07 Periodic Test Program A. Periodic Test Requirements. Each utility shall peri- odically test its meters, associated devices, and instruments to assure