National Union Insurance v. Puget Sound Power & Light

972 P.2d 481, 94 Wash. App. 163
CourtCourt of Appeals of Washington
DecidedFebruary 16, 1999
Docket40979-4-I
StatusPublished
Cited by22 cases

This text of 972 P.2d 481 (National Union Insurance v. Puget Sound Power & Light) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National Union Insurance v. Puget Sound Power & Light, 972 P.2d 481, 94 Wash. App. 163 (Wash. Ct. App. 1999).

Opinions

Kennedy, C.J.

— National Union Insurance Company and various other insurers (collectively, National Union), as subrogees of The Boeing Company (Boeing), sued Puget Sound Power & Light (Puget Power), among others, to recover insurance proceeds paid to Boeing for business losses during a windstorm-related electric service interruption. Puget Power moved for summary judgment dismissing it from the lawsuit, contending that its “continuity-of-service” tariff absolves it from liability for any electric service interruption damages that “result from” circumstances beyond its reasonable control—such as windstorms—notwithstanding its possible negligence in failing to utilize available backup equipment to serve its customers while storm damage to regular sources of electricity is being repaired. Alternatively, Puget Power [167]*167contended that National Union failed to set forth sufficient facts to raise a genuine issue of material fact for trial regarding its alleged negligence in failing to utilize the backup equipment in order to mitigate losses to its customers during the period before regular power was restored. The trial court granted Puget Power’s motion.

We hold that Puget Power’s continuity-of-service tariff does not absolve it from liability for negligent failure to utilize available backup equipment in order to provide power to its customers while storm damage to regular sources of power is being repaired. And viewing the evidence admitted by the trial court for purposes of the summary judgment hearing in the light most favorable to National Union, we conclude that Puget Power’s unexplained failure to utilize apparently available backup generators to supply Boeing with electric service during the windstorm-related service interruption—the only factual basis upon which National Union seeks reversal of the trial court’s summary judgment order—raises a genuine issue of material fact for trial regarding Puget Power’s alleged negligence. Accordingly, we reverse and remand for trial on the factual issue of whether Puget Power negligently failed to utilize backup generators to supply Boeing with electric service while the windstorm damage to regular sources of power was being repaired, resulting in damage to Boeing.

SUBSTANTIVE FACTS

Puget Power entered into a contract with Boeing to provide power and lighting service, subject to the regulatory authority of the Washington Utilities and Transportation Commission (WUTC) and Puget Power’s schedules and tariffs on file with the WUTC. On January 20, 1993, the “Inauguration Day Storm” interrupted electric service to over 500,000 utility customers in the Puget Sound area, including Boeing’s Renton plant.

Eighteen hours before the windstorm reached the Puget [168]*168Sound area, the National Weather Service (NWS) issued a High Wind Watch. And eight hours before the windstorm, NWS issued a High Wind Warning. At the time, Puget Power maintained a backup generator facility, the Shuffle-ton Steam Plant, immediately adjacent to Boeing’s Renton plant. A substation interconnected the Shuffleton plant with the Boeing plant. Although the Shuffleton plant housed two large generators—either of which, when operating, could meet Boeing’s Renton plant’s electric service needs—Puget Power did not fire up either generator.

PROCEDURAL HISTORY

Boeing filed a claim with National Union for $4 million in business losses caused by the electric service interruption. Following various adjustments, National Union paid Boeing insurance proceeds of $2,958,631. National Union, as subrogees to Boeing’s business interruption losses, then filed a summons and complaint against Puget Power, the City of Seattle, and Snohomish County Public Utility District No. 1 to recover the insurance proceeds paid to Boeing—alleging negligence, breach of contract, breach of implied warranty of fitness for a particular use, and breach of statutory duties.

Puget Power moved for summary judgment dismissing it from the lawsuit, contending that its “continuity-of-service” tariff—incorporated by reference into its contract with Boeing—shields it from liability for service interruption damages caused by windstorms:

CONTINUITY OF SERVICE - Electric service is inherently subject to interruption, suspension, curtailment and fluctuation. Neither the Company nor any other person or entity shall have any liability to any Customer or any other person or entity for any interruption, suspension, curtailment, or fluctuation in service or for any loss or damage caused thereby if such interruption, suspension, curtailment, or fluctuation results from any of the following:
a. Causes beyond the Company’s reasonable control [169]*169including, but not limited to, fire, flood, drought, winds, acts of the elements[.]

Clerk’s Papers at 51-52. Alternatively, Puget Power contended that National Union failed to raise a genuine issue of material fact regarding Puget Power’s alleged negligence in failing to fire up the Shuffleton plant, stating: “Although not relevant to this motion which seeks dismissal of the claims asserted herein because of the clear tariff exemption, Puget Power’s construction, maintenance, and storm-related practices were, at the time of the Storm, as good as other power providers in the industry.” Clerk’s Papers at 23.

In response, National Union argued that Puget Power’s continuity-of-service tariff does not absolve it from liability for service interruption damages concurrently caused by circumstances beyond its reasonable control and its own negligence in failing to fire up the Shuffleton plant. National Union further argued that Puget Power’s failure to utilize the Shuffleton plant to supply Boeing with electric service during the windstorm-related service interruption raises genuine issues of material fact regarding Puget Power’s concurrent negligence. Puget Power then filed an affidavit, which the trial court struck based on the affiant’s lack of personal knowledge, stating that the Shuffleton plant could not have been used to supply Boeing with electric service during the windstorm-related service interruptions.

After ruling on the parties’ respective motions to strike, granting some of them and denying others, the trial court granted Puget Power’s motion for summary judgment, dismissing Puget Power from the lawsuit. National Union petitioned the Supreme Court for direct review. The Supreme Court denied National Union’s petition and transferred the appeal to this court.

On appeal, National Union continues to contend that Puget Power’s continuity-of-service tariff does not absolve Puget Power from liability for service interruption dam[170]*170ages concurrently caused by circumstances beyond its reasonable control and its own negligence. But National Union no longer contends that Puget Power’s general maintenance practices raise a genuine issue of material fact for trial. Rather, as National Union clearly states in its reply brief, its only contention on appeal is that Puget Power’s unexplained failure to use the Shuffleton plant to supply Boeing with electric service during the windstorm-related power outage raises a genuine issue of material fact regarding Puget Power’s alleged concurrent negligence:

The factual issue in dispute here is whether [Puget Power’s] failure to use Shuffleton to the end of avoiding or mitigating Boeing’s outage (as well as the outages of other customers) was a negligent breach of common law, contractual and statutory duties.

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National Union Insurance v. Puget Sound Power & Light
972 P.2d 481 (Court of Appeals of Washington, 1999)

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972 P.2d 481, 94 Wash. App. 163, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-union-insurance-v-puget-sound-power-light-washctapp-1999.