Cincinnati Insurance v. PPL Corp.

979 F. Supp. 2d 602, 2013 WL 5786185, 2013 U.S. Dist. LEXIS 154046
District Court, E.D. Pennsylvania·Decided October 28, 2013·No. Civil Action No. 10-4960·Published·Cited by 1 cases

Opinion

MEMORANDUM

EDUARDO C. ROBRENO, District Judge.

I. INTRODUCTION

Plaintiff the Cincinnati Insurance Company (“Plaintiff’) brought this subrogation action seeking damages from PPL Corpo[604] ration, PPL Electric Utilities Corporation, and PPL Energyplus, LLC (collectively “Defendants”). Plaintiffs Complaint pleads three counts: (1) negligence; (2) strict liability; and (3) breach of contract. Compl. ¶ 18-38, ECF No. 1.

Plaintiffs Complaint arises from an electrical incident on September 29, 2008 that caused damage to Wright Veterinary Medical Center, P.C. (“Wright”). Plaintiff insured Wright, the building it occupied, its business property, and business interests against loss pursuant to an insurance policy (the “Policy”). Id. ¶ 10. Wright purchased its electricity from Defendants.1 Answer ¶ 11, ECF No. 10; see also Compl. ¶ 11. Defendants, along with their various contractors and subcontractors, installed, maintained, owned, and operated equipment necessary for delivery of electricity to Wright according to the terms of the sale of electricity. Answer ¶ 12; see also Compl. ¶ 12. On September, 29, 2008, a transformer malfunctioned. Compl. ¶ 14. The malfunction caused a severe fluctuation in the power supply to Wright causing a fire and other extensive damage to Wright’s building and property. Id. ¶ 13, 15. Additionally, Plaintiff claims that Wright suffered lost profits from the resulting loss of business. Id. Plaintiff claims that for losses stemming directly from the September 29, 2008 incident, and pursuant to the Policy, Plaintiff made payments to Wright in the amount of $805,559.08. Compl. ¶ 16.

Pending before the Court is Plaintiffs Motion for Partial Summary Judgment (“Motion”). ECF No. 37. Plaintiff contends that, under Pennsylvania law, the sale of electricity is subject to strict liability under Section 402A of the Restatement (Second) of Torts. Id. ¶ 26-28; see also Schriner v. Pennsylvania Power & Light Co., 348 Pa.Super. 177, 501 A.2d 1128, 1134 (1985) (holding that utility will be held to strict liability, under certain circumstances, for sale of electricity). For the reasons that follow, the Court will grant Plaintiffs motion as to Count II (strict liability).

II. BACKGROUND2

At all relevant times and specifically on September 29-30, 2008, Wright operated a veterinary medical center at 3247 Wimmer Road, Bethlehem, PA.3 Defs.’s Resp. PL’s Mot. Partial Summ. J. 1, ECF No. 49-2. Plaintiff insured Wright medical center pursuant to the terms of the Policy. See id. “Wright was a customer of Defendants] ... and [they] provided electric power service to Wright.” Id. at 2. The electric power which Defendants provided to Wright passed through a single-phase 100KVA transformer owned and operated by Defendants and manufactured by the McGraw-Edison Company.4 The transformer contains “three leads that connect two hot leads and a neutral from the transformer’s interior to the exterior.” Id. The neutral is designed to “carry unbalanced current” to “keep the voltage stabilized [605] and balanced”. Id. The two “hot leads”5 “have their alternating currents flowing in opposite directions (reversing 120 times per second for 60-cycle power) so that the current goes back and forth at the same instant but in opposite directions.” Pl.’s Mot. Partial Summ. J., Ex. 8, Fire Investigation Report of John F. Goetz, CFI 5-6, July 26, 2012, ECF No. 44-7 (citing NFPA 921, Guide for Fire & Explosion Investigations § 8.3.2.1 (2008 ed.)). The “voltage between either of the [hot leads] and the [neutral] is 120v,” while the “voltage between the two [hot leads] is 240v.” Id. at 6 (citing NFPA 921 § 8.3.2.1.). After passing through the transformer, the electric power passes though Wright’s meter and is then used by Wright.

On the night of September 29, 2008, a problem developed with the neutral, which the parties refer to as a “floating neutral” or a “break at the neutral connection.”6 See Defs.’s Resp. PL’s Mot. Partial Summ. J. 2; see also Report of Mr. Goetz 6. A “floating neutral creates uneven voltage to power supply for a structure” and the “higher voltage can overheat or burn out some equipment and the lower voltage can damage some electronic equipment.” Report of Mr. Goetz 6, (citing NFPA 921 § 8.5.2). Following the break in the neutral, the voltages on the hot leads on either side of the transformer became unbalanced. Defs.’s Resp. PL’s Mot. Partial Summ. J. 2. Prior to disconnecting the Transistor, a PPL troubleman (Raymond Bringhurst) measured the voltage as 215 volts on one hot lead and 40 volts on the other and recorded his measurement by writing on the transformer itself. See PL’s Mot. Partial Summ. J., Ex. 8, Report of Robert A. Neary, P.E., C.F.E.I. fig. 3, August 15, 2012, ECF No. 44-6 (displaying writing on transformer); see also Defs.’s Resp. PL’s Mot. Partial Summ. J. 2 (“the voltage output was measured to be 215 volts on one hot lead and 40 volts on the other lead”).

When the electrical malfunction began, the initial indication of a problem was, according to Plaintiff, that an ultrasound machine at the veterinary facility began smoking and making “terrible electrical noises.” See PL’s Mot. Partial Summ. J., Ex. 3, Dr. Patrick Thomas Wright Dep. 90:13-91:9, Apr. 17, 2012, ECF No. 44-4. Wright employees contacted the fire department who responded to the fire at around 11:00 p.m. and then, after determining there was no fire, left around 11:22 p.m. Id. at 91:7-91:24; see also PL’s Mot. Partial Summ. J., PL’s Statement of Uncontested Material Facts ¶ 8-9, Nov. 16, 2012, ECF No. 44-3.

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Cincinnati Insurance v. PPL Corp., 979 F. Supp. 2d 602, 2013 WL 5786185, 2013 U.S. Dist. LEXIS 154046 (E.D. Pa. 2013).

979 F. Supp. 2d 602 (Cincinnati Insurance v. PPL Corp.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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