VB Apartments LLC v. Ameren Illinois Company

2021 IL App (4th) 200283-U

• Court: Appellate Court of Illinois
• Decided: March 8, 2021
• Docket: 4-20-0283
• Status: Unpublished

Opinion

NOTICE 2021 IL App (4th) 200283-U This Order was filed under Supreme FILED Court Rule 23 and is not precedent NO. 4-20-0283 March 8, 2021 except in the limited circumstances Carla Bender allowed under Rule 23(e)(1). IN THE APPELLATE COURT 4th District Appellate Court, IL OF ILLINOIS

FOURTH DISTRICT

VB APARTMENTS LLC, ) Appeal from Plaintiff-Appellant, ) Circuit Court of v. ) McLean County AMEREN ILLINOIS COMPANY, ) No. 14L87 Defendant-Appellee. ) ) Honorable ) Paul G. Lawrence, ) Judge Presiding.

JUSTICE HOLDER WHITE delivered the judgment of the court. Presiding Justice Knecht and Justice Turner concurred in the judgment.

ORDER ¶1 Held: The appellate court affirmed, concluding the trial court properly granted defendant’s motion for summary judgment.

¶2 In January 2015, plaintiff, VB Apartments, LLC, filed an amended complaint

pursuant to the Public Utilities Act (Act) (220 ILCS 5/1-101 et seq. (West 2014)). The

complaint alleged defendant, Ameren Illinois Company, negligently caused plaintiff damages in

excess of $50,000. In October 2018, defendant filed a motion for summary judgment. In

February 2020, the trial court granted the motion for summary judgment. In June 2020, the court

denied plaintiff’s motion to reconsider.

¶3 Plaintiff appeals, arguing the trial court erred by granting defendant’s motion for

summary judgment where (1) defendant’s tariff did not bar plaintiff’s claim; (2) the trial court

had jurisdiction over plaintiff’s claim, not the Illinois Commerce Commission (Commission); and (3) plaintiff’s claim was not barred by the economic-loss doctrine set forth in Moorman

Manufacturing Co. v. National Tank Co., 91 Ill. 2d 69, 435 N.E.2d 443 (1982). For the

following reasons, we affirm the trial court’s judgment.

¶4 I. BACKGROUND

¶5 In January 2015, plaintiff filed an amended complaint pursuant to the Act (220

ILCS 5/1-101 et seq. (West 2014)). The complaint alleged plaintiff installed a main breaker

designed to be the point of entry of electricity into a multiple-family residential property in

Normal, Illinois. An electrical contractor hired by plaintiff extended wire from the main breaker

to a transformer pole owned by defendant. According to the complaint, the connection of the

wire to the transformer was defendant’s sole and exclusive responsibility. The complaint alleged

defendant “negligently and carelessly utilized equipment and a methodology which was violative

of the provisions of the National Electric Safety Code ***, and as a direct and proximate result

of the negligent and illegal connection, naturally accumulating moisture was allowed to intrude

into the breaker, causing it to be damaged and resulting in disruptions of power service to the

improvements owned by [p]laintiff.”

¶6 The record establishes the following undisputed relevant facts. Plaintiff contacted

defendant to set up electrical service prior to the construction of its apartment building.

Defendant installed a utility pole and built a transformer bank. Plaintiff’s electrician installed a

main breaker and extended service conductors to the utility pole. Defendant connected the

service conductors to the transformer bank. Martin Behrens, defendant’s engineering supervisor,

stated the termination (where the service conductor connected to the transformer) was consistent

with the way defendant installed several other conductors. According to Behrens, at the

termination, “the lug actually squeezed the cable down to compress it to the point where there

-2- was virtually no, if any, space around the stranding of the conductors within the cable.” Plaintiff

alleged the exposed ends of the conductors allowed water to wick through the conductors,

ultimately contacting and damaging the electronic breaker. Behrens ultimately “suggested

covering the connections at the transformer[.]” At the same time the covers were installed, “butt

splices *** were installed on the service entrance conductors at the main switch” that could have

stopped the migration of water into the main switch.

¶7 The discharge of water into the breaker damaged the breaker and the conductors.

The damage to plaintiff’s equipment prevented the breaker from distributing electricity to the

apartment building 57 times between July 2012 and May 2013. Plaintiff alleged it replaced the

breaker at least three times, replaced the water-logged conductors, and spent more than 600

hours tending to the damage.

¶8 In October 2018, defendant filed a motion for summary judgment. The motion

for summary judgment argued plaintiff’s claim was (1) within the exclusive jurisdiction of the

Commission, (2) barred by the utility tariff, and (3) barred by the economic-loss doctrine. The

tariff included a limitation of liability provision, requiring defendant to “use reasonable diligence

in furnishing uninterrupted and regular [e]lectric [s]ervice, but will in no case be liable for

interruptions, deficiencies[,] or imperfections of said service, except to the extent of a pro rata

reduction of the monthly charges.” In February 2020, the trial court granted defendant’s motion

for summary judgment in its entirety.

¶9 In March 2020, plaintiff filed a motion to reconsider, arguing there was new

evidence and the trial court misapplied the law in its ruling. The trial court denied the motion to

reconsider. In making its ruling, the court relied on Sheffler v. Commonwealth Edison Co., 2011

IL 110166, 955 N.E.2d 1110, to determine the Commission had jurisdiction over plaintiff’s

-3- claims of inadequate service. The court concluded the utility tariff barred plaintiff’s claims

because plaintiff sought to recover for interruptions in service, which defendant was only liable

for to the extent of a pro rata reduction in charges. Finally, the court determined the

economic-loss doctrine applied to the provision of electrical services and barred plaintiff’s claim

because it related to a defeated commercial expectation.

¶ 10 This appeal followed.

¶ 11 II. ANALYSIS

¶ 12 On appeal, plaintiff argues the trial court erred by granting defendant’s motion for

summary judgment where (1) defendant’s tariff did not bar plaintiff’s claim; (2) the trial court

had jurisdiction over plaintiff’s claim, not the Commission; and (3) plaintiff’s claim was not

barred by the economic-loss doctrine set forth in Moorman, 91 Ill. 2d 69.

¶ 13 Summary judgment is appropriate where the pleadings, depositions, admissions,

and affidavits establish no genuine issue of material fact exists and the moving party is entitled to

judgment as a matter of law. Purtill v. Hess, 111 Ill. 2d 229, 240, 489 N.E.2d 867, 871 (1986).

“While use of the summary judgment procedure is to be encouraged as an aid in the expeditious

disposition of a lawsuit [citation], it is a drastic means of disposing of litigation and therefore

should be allowed only when the right of the moving party is clear and free from doubt.” Id. In

ruling on a motion for summary judgment, the court must view the evidence in the light most

favorable to the non-moving party. Boldini v. Owens Corning, 318 Ill. App. 3d 1167, 1170, 744

N.E.2d 370, 372 (2001). We review de novo an order granting summary judgment. Id.

¶ 14 A. Utility Tariff

-4- ¶ 15 Plaintiff first asserts the trial court erred by granting summary judgment based on

defendant’s utility tariff. Defendant contends the court properly determined the utility tariff

barred plaintiff’s claim.

¶ 16 “A tariff is a public document setting forth services being offered, the rates and

charges with respect to services, and the governing rules, regulations, and practices relating to

those services.” Sheffler, 2011 IL 110166, ¶ 28. When a tariff is filed with the Commission, it

binds the utility and the customer and governs their relationship. Id. A tariff approved by the

Commission becomes the law and has the force and effect of a statute. Id. “Tariff provisions are

usually referred to as liability limitations, which reflect the status of public utilities as regulated

monopolies whose operations are subject to extensive restrictions, the requirements of uniform,

nondiscriminatory rates, and the goal of universal service, achieved through the preservation of

utility prices that virtually all customers can afford.” Id. ¶ 29. A strictly regulated public

utility’s liability should be defined and limited so it may provide service at reasonable rates,

which is in part dependent on a rule limiting liability. Adams v. Northern Illinois Gas Co., 211

Ill. 2d 32, 57, 809 N.E.2d 1248, 1264 (2004).

¶ 17 Here, the utility tariff contained a limitation of liability that provides, in part, as

follows:

“The Company will use reasonable diligence in furnishing

uninterrupted and regular [e]lectric [s]ervice, but will in no case be

liable for interruptions, deficiencies[,] or imperfections of said

service, except to the extent of a pro rata reduction of the monthly

charges.

-5- The Company does not guarantee uninterrupted service and

shall not be liable for any damages, direct or otherwise, which the

Customer may sustain by reason of any failure or interruption of

service, increase or decrease in energy voltage or change in

character of energy, whether caused by accidents, repairs or other

causes except when caused by gross negligence on its part;

however, in no event shall the Company be liable for any loss by

Customer of production, revenues[,] or profits or for any

consequential damages whatsoever on account of any failure or

interruption of service or increase or decrease in energy voltage or

change in character of energy; nor shall the Company be liable for

damages that may be incurred by the use of electrical appliances or

the presence of the Company’s property on the Customer’s

Premises. Company is not responsible or liable for damage to

Customer’s motor or any other equipment or property caused by

conditions not due to negligence of Company. ***

***

The Company shall not be responsible nor liable for

electric energy from and after the point at which it first passes to

the wires or other equipment owned or controlled by the Customer,

and the Customer shall protect and save harmless Company for all

claims for injury or damage to Persons or property occurring

beyond said point, except where injury or damage shall be shown

-6- to have been occasioned solely by the negligence of the

Company.”

¶ 18 Plaintiff argues its claim is not barred by the tariff because the claims sound in

negligence and seek recovery for damages to its property. Defendant contends plaintiff ignores

the pro rata reduction clause, which limits defendant’s liability because plaintiff seeks damages

for interruptions in electrical service.

¶ 19 Plaintiff seeks damages for the time its officers spent responding to interruptions

in service, meetings concerning the outages and resetting of power, charges from the electrician

responding to outages, charges for displacement of tenants during outages, and credits to tenants

for food spoilage due to outages. The utility tariff limits defendant’s liability for service

interruptions to a reduced pro rata monthly service charge. Moreover, the clause plaintiff

selectively cites (“Company is not responsible or liable for damages to Customer’s motor or any

other equipment or property not due to the negligence of Company”) ignores a preceding clause

which provides:

“The Company does not guarantee uninterrupted service

and shall not be liable for any damages, direct or otherwise, which

the Customer may sustain by reason of any failure or interruption

of service, increase or decrease in energy voltage or change in

character of energy, whether caused by accidents, repairs or other

however, in no event shall the Company be liable for any loss by

consequential damages whatsoever on account of any failure or

-7- interruption of service or increase or decrease in energy voltage or

change in character of energy ***.” (Emphasis added.)

The utility tariff bars plaintiff’s claims for damages for its expenditures responding to service

interruptions, even if the claims are framed in terms of negligence. Accordingly, we conclude

the trial court did not err in granting defendant’s motion for summary judgment on this basis.

¶ 20 B. Jurisdiction

¶ 21 Plaintiff next asserts the trial court erred by granting summary judgment based on

its conclusion the Commission had exclusive jurisdiction over plaintiff’s claim. Defendant

contends the court properly determined the Commission had exclusive jurisdiction over

plaintiff’s claims for reparations.

¶ 22 The Act allows claims for civil damages to be filed in the circuit court:

“In case any public utility shall do, cause to be done or

permit to be done any act, matter or thing prohibited, forbidden or

declared to be unlawful, or shall omit to do any act, matter or thing

required to be done either by any provisions of this Act or any rule,

regulation, order or decision of the Commission, issued under

authority of this Act, the public utility shall be liable to the persons

or corporations affected thereby for all loss, damages or injury

caused thereby or resulting therefrom, and if the court shall find

that the act or omission was wilful, the court may in addition to the

actual damages, award damages for the sake of example and by the

way of punishment. An action to recover for such loss, damage or

-8- injury may be brought in the circuit court by any person or

corporation.” 220 ILCS 5/5-201 (West 2014).

However, the Commission has jurisdiction over claims for reparations. Sheffler, 2011 IL

110166, ¶ 42. “[A] claim is for reparations when the essence of the claim is that a utility has

charged too much for a service, while a claim is for civil damages when the essence of the

complaint is that the utility has done something else to wrong the plaintiff.” Id. Complaints

concerning the adequacy of a utility’s service fall within the Commission’s jurisdiction and

within the rubric of “reparations.” Id. ¶ 55.

¶ 23 In Sheffler, the plaintiffs brought a claim under the Act for damages resulting

from the utility’s alleged negligence. Id. ¶ 5. The Sheffler plaintiffs sought compensatory

damages for “personal injury, property damage and financial damages, including the loss of use

of property, and costs of repair and replacement of property.” Id. ¶ 44. The plaintiffs claimed

the electric company had a duty to provide continuous power and the utility was negligent due to

an inadequate process to warn customers of a power outage, a failure to timely restore power,

and a deficient infrastructure. Id. ¶¶ 51-52. The Illinois Supreme Court concluded “the nature of

the relief sought by plaintiffs is compensation for ComEd’s allegedly inadequate service, which

directly relates to the Commission’s rate-setting functions for electrical power services.” Id.

¶ 53.

¶ 24 Plaintiff attempts to distinguish Sheffler by arguing defendant in this case always

provided power but its negligent design and choice of equipment violated Commission rules and

damaged plaintiff’s equipment. As defendant correctly notes, the Sheffler plaintiffs argued the

damages were not merely caused by service interruptions but by the utility’s inadequate planning

and infrastructure. Id. ¶¶ 4-5. Similarly, plaintiff here seeks compensation for defendant’s

-9- allegedly inadequate service due to its choice of design and equipment. The Sheffler court

determined a complaint based on allegations concerning a utility’s infrastructure and provision of

electrical services and seeking relief based on defects in the provision of electrical services or the

repair of those services following a power outage was a complaint for reparations within the

exclusive jurisdiction of the Commission. Id. ¶ 56. In support of its argument, plaintiff cites

Durica v. Commonwealth Edison Co., 2015 Il App (1st) 140076, 30 N.E.3d 499. We find

Durica distinguishable because the plaintiffs’ claims in that case did not relate to the utility’s

failure to provide adequate services. Id. ¶ 41. Indeed, the Durica court distinguished Sheffler on

this basis, stating “[plaintiffs] do not allege that they were overcharged by ComEd or that

ComEd failed to provide adequate electricity services. Rather, they allege that ComEd

trespassed upon their property and seek to recover civil damages in tort, not reparations for rate

overcharges or inadequate service. Thus, the holding of Sheffler that the [Commission] has

jurisdiction over complaints seeking reparations for inadequate service does not compel

exclusive [Commission] jurisdiction in this case.” Id.

¶ 25 Plaintiff further attempts to distinguish Sheffler by pointing out the plaintiffs in

that case did not allege any violations of the National Electrical Safety Code. Plaintiff argues the

Commission adopted various provisions of the National Electrical Safety Code as its rules and

defendant violated those rules. 83 Ill. Adm. Code 305.20 (2003). Plaintiff asserts that, “pursuant

to the Public Utilities Act, [defendant] is liable for all loss, damages, or injury to [p]laintiff

caused by [defendant’s] violations.” (Emphasis in original). However, Sheffler made it very

clear that “courts focus on the nature of the relief sought rather than the basis for seeking relief in

determining whether an action falls within the jurisdiction of the Commission.” Sheffler, 2011

IL 110166, ¶ 50. Here, plaintiff seeks damages for inadequate service and power outages,

- 10 - including expenses associated with outages and the hours it spent dealing with repeated outages.

While defendant may have violated the Commission’s rules, the nature of the relief plaintiff

seeks falls within the jurisdiction of the Commission.

¶ 26 We conclude Sheffler applies in this case, where plaintiff’s claims concern the

adequacy of defendant’s service and fall within the Commission’s jurisdiction. Accordingly, the

trial court properly determined it lacked jurisdiction over plaintiff’s claims and granted

defendant’s motion for summary judgment. As we have determined the court properly granted

defendant’s motion for summary judgment because plaintiff’s claim was barred by the utility

tariff and the Commission had exclusive jurisdiction, we need not address the court’s decision

based on the economic-loss doctrine. Therefore, we affirm the judgment of the trial court.

¶ 27 III. CONCLUSION

¶ 28 For the reasons stated, we affirm the trial court’s judgment.

¶ 29 Affirmed.

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