Case Name: CHRISTY ADAMS, Special Adm'r of the Estate of Janice Adams, Deceased, Appellee, v. NORTHERN ILLINOIS GAS COMPANY, Appellant
Court: Illinois Supreme Court
Jurisdiction: Illinois
Decision Date: 2004-04-01
Citations: 211 Ill. 2d 32
Docket Number: No. 94748
Parties: CHRISTY ADAMS, Special Adm’r of the Estate of Janice Adams, Deceased, Appellee, v. NORTHERN ILLINOIS GAS COMPANY, Appellant.
Judges: 
Reporter: Illinois Reports, Second Series
Volume: 211
Pages: 32–90

Head Matter:
(No. 94748.
— Affirmed.)
CHRISTY ADAMS, Special Adm’r of the Estate of Janice Adams, Deceased, Appellee, v. NORTHERN ILLINOIS GAS COMPANY, Appellant.
Opinion filed April 1, 2004.
Rehearing denied May 24, 2004.
GARMAN, J., joined by FITZGERALD and THOMAS, JJ., dissenting.
Gino L. DiVito, of Tabet, DiVito & Rothstein, and Tyrone C. Fahner, Roger J. Kiley, George J. Tzanetopoulos, Robert M. Dow, Jr., and Joel D. Bertocchi, of Mayer, Brown, Rowe & Maw, L.L.E, all of Chicago, for appellant.
William F. Martin, of Hilfman, Fogel, Martin & Barr, EC., and Thomas R. Rakowski, of Connelly, Roberts & McGivney, L.L.C., all of Chicago, for appellee.
Barbara Bar an and Darren J. Hunter, of Ross & Hardies, of Chicago, for amici curiae The Peoples Gas Light & Coke Co. et al.

Opinion:
JUSTICE FREEMAN
delivered the opinion of the court:
Plaintiff, Christy Adams, as special administrator of the estate of Janice Adams, brought a wrongful-death action in the circuit court of Cook County against Northern Illinois Gas Company (NI-Gas). The circuit court granted NI-Gas' motion for summary judgment. The appellate court reversed the grant of summary judgment in favor of NI-Gas and remanded the cause for further proceedings. 333 Ill. App. 3d 215. We allowed NI-Gas' petition for leave to appeal (177 Ill. 2d R. 315(a)), and now affirm the appellate court.
BACKGROUND
The record contains the following pertinent evidence. Since 1971, Janice Adams (decedent) resided in a house located at 1294 Greenbay Avenue in Calumet City. Decedent's mother, Lucia Georgevich, bought the house, but decedent paid the mortgage and the utilities. Various appliances in the house, including a range, were fueled by natural gas.
On the evening of December 7, 1995, decedent arrived home, opened a door, and stepped inside. The house exploded and was engulfed in flames, causing her death.
First at the scene was the Calumet City fire department. Assistant chief Dan Smits and fire investigator Joe Ratkovich investigated the cause and origin of the explosion. Smits saw the fire and saw that the walls of the house had been blown out. He observed the body of decedent just inside what had been an entrance to the house. Smits inspected the gas meter, gas piping, and gas appliances and directed that all those items be removed and preserved.
The Calumet City fire department determined that the cause of the explosion and fire was the failure of the flexible brass gas connector that connected the kitchen range to the gas supply. The brand name of the connector was "Cobra." Failure of the connector permitted a large amount of natural gas to escape and accumulate in the house. When decedent entered the house and turned on an electric light, a small spark from the switch ignited the gas. The Illinois State Fire Marshall, the United States Bureau of Alcohol, Tobacco and Firearms, and the private fire investigator employed by the homeowner's insurance carrier also investigated the explosion and all agreed that it was caused by the failure of the gas connector to the range.
Plaintiff, one of decedent's daughters, brought a wrongful-death action in a two-count, first amended complaint. Count II named NI-Gas as a defendant. Plaintiff alleged that NI-Gas "knew that Cobra brand natural gas appliance connectors were defective and prone to failure resulting in natural gas leaks and explosions." Plaintiff alleged that NI-Gas "had a duty to warn its customers, including plaintiffs decedent, about the existence of Cobra brand natural gas appliance connectors and the dangers of natural gas leak, explosion and fire associated with these connectors." Plaintiff alleged that NI-Gas breached this duty to warn in that NI-Gas: failed to provide (a) any or (b) adequate warning; (c) used an ineffective means to inform customers; (d) failed to initiate an inspection program to identify and remove Cobra brand natural gas appliance connectors from customer homes and businesses; and (e) failed to properly inspect decedent's home "to cause the removal of the aforesaid Cobra brand connector."
The record includes the depositions of several opinion witnesses, including Charles Lamar, Wayne Genck, Norman Breyer, and Edward Karnes. Their testimony adduced the following additional evidence.
The connector in this case was manufactured by the Cobra Hose Company, which has been out of business since 1979. Made as early as 1953, Cobra connectors were widely used in Illinois and other states. The Cobra connector essentially was a corrugated flexible brass tube with threaded brass connectors at each end that connect a gas appliance to the hard pipe gas source. The threaded connectors were telescoped and fastened to the ends of the corrugated brass tube by a process known as brazing. The compound used in the brazing process is composed of phosphorized brazing alloys containing a substantial portion of phosphorous and a high percentage of copper.
It is undisputed that natural gas, in its original state, is odorless. The chemical ethyl mercaptan, which is a sulfur component, is added as an odorant to give natural gas its distinctive smell. In addition to sulfur that is intentionally added, natural gas itself produces sulfur compounds through intrinsic chemical reactions. By law, NI-Gas is required to supply odorized gas to its customers as a safety precaution, so that customers more easily can detect a gas leak. The natural gas that NI-Gas supplied to decedent was as the law required it to be.
However, when sulfur is added to natural gas, as in the present case, a chemical reaction begins to occur between the phosphorous brazing alloy and the sulfur. This chemical reaction causes the brazed joint to corrode and deteriorate. Over time, the deterioration of the brazed joint results in its separation from the corrugated tube and the consequent release of natural gas into the home. Even the naturally occurring sulfides in the gas are sufficient to cause the brazed connector eventually to fail.
In 1968, the American National Standards Institute (ANSI) revised its standards on gas connectors and banned phosphorous brazing. ANSI's Z21 subcommittee on connectors is the committee that has jurisdiction over all domestic standards for natural gas ranges, furnaces, water heaters, and connectors. The Z21 specifications were modified to warn that the use of brazing compounds that contain phosphorous can result in a brittle joint and can be deadly.
The record contains evidence that NI-Gas was aware of the potential danger in homes using Cobra connectors. In May 1976, NI-Gas' supervisor of Research Services reported to the Z21 subcommittee that the "sudden, mysterious separation of brass connectors and their brazed-on end fittings has been a concern of gas utility people for several years." In a letter dated December 14, 1979, the United States Consumer Product Safety Commission informed the American Gas Association (AGA) that Cobra connectors allegedly caused a number of fires in homes. According to the letter, while some jurisdictions did not allow the installation of Cobra connectors, many such connectors "may still be in service, and therefore may be susceptible to creating a significant hazard to the occupants of those residences equipped with such connectors." On December 19, the president of the AGA sent a letter to all its member companies, including NI-Gas, stating that the Commission had notified AGA that Cobra connectors had an increasing potential to fail over time.
The record also includes copies of "Consumer News" notices that NI-Gas sent to its customers. The August/ September 1978, June/July 1980, summer/fall 1981, and December 1981 notices indicated that an old connector could crack, creating an unsafe condition, when the appliance was moved. The December 1981, January 1985, May 1986, and June 1987 notices warned: "The U.S. Consumer Product Safety Commission has warned that certain appliance connectors manufactured prior to 1968 may be unsafe. If you are concerned, do not try to move the appliance to inspect the connector. Instead, call a qualified service agency of NI-Gas to make the inspection."
Also, NI-Gas knew that failed Cobra connectors were determined to have caused many explosions and fires within its service area, including Aurora, Evanston, and Rockford. In the 1970s there were a series of fires in the Village of South Holland associated with brazed connectors. Wayne Kortum, a volunteer firefighter in South Holland and a NI-Gas employee, informed NI-Gas supervisors at the Glenwood district office, the district that includes the decedent's home, about the connectors involved with these fires. Thereafter, Kortum attended a general meeting at the Glenwood office where NI-Gas supervisors informed him and other service employees that there were problems with brazed connectors and that the service employees should look for these connectors in customers' homes.
In November 1984, NI-Gas representatives participated in a meeting with officials from the Village of Skokie. The Skokie fire department had determined that several fires and an explosion in the Village were related to brazed connector failures. Carol Anderson, one of the NI-Gas attendees, testified that in the 1980s she was aware that brazed connectors were a hazard. According to John Agosti, a Skokie fire official, NI-Gas represented that it would notify its service and construction personnel about replacing brazed connectors. In turn, these employees would warn the NI-Gas customers with whom they came in contact.
Charles Henry, a trained NI-Gas serviceman, testified in a deposition as follows. NI-Gas instructed its service employees on the potential danger of Cobra connectors. When a NI-Gas employee encountered a brazed connector, the employee was required to tag the connector and advise the customer that the connector needed to be replaced as soon as possible.
Decedent's ex-husband, Leonard Adams, testified in a deposition as follows. He had observed NI-Gas employees read the gas meter in the utility room of decedent's home on occasion, but they did not examine anything in the house other than the meter. In 1978 or 1980, after having a new clothes drier installed by the appliance retailer, a gas leak was detected. Decedent telephoned NI-Gas. A NI-Gas employee came to the house and checked the gas pipe between the meter and the clothes drier. The employee discovered that the pipe was leaking and tightened it; he did not do anything else.
NI-Gas moved for summary judgment against plaintiff. NI-Gas contended that it did not owe decedent a legal duty to warn her that her Cobra connector was potentially hazardous because decedent owned the connector and not NI-Gas. The circuit court granted NI-Gas' motion for summary judgment against plaintiff.
Plaintiff appealed. Initially, the appellate court, with one justice dissenting, affirmed the grant of summary judgment in favor of NI-Gas, holding that NI-Gas did not owe decedent a legal duty. However, the appellate court modified its opinion upon denial of plaintiffs petition for rehearing. In its modified opinion, the appellate court, inter alia, reversed the grant of summary judgment in favor of NI-Gas. The appellate court held, "as a matter of law, that a utility company that has actual knowledge of a dangerous condition associated with the use of its product has a responsibility to its customers to warn them of that danger." 333 Ill. App. 3d at 224.
This court allowed NI-Gas' petition for leave to appeal. 177 Ill. 2d R. 315(a). We subsequently granted the People's Gas Light and Coke Company et al. leave to submit an amicus curiae brief in support of NI-Gas. See 155 Ill. 2d R. 345.
ANALYSIS
This matter is before us on the grant of summary judgment in favor of NI-Gas. The purpose of summary judgment is not to try a question of fact, but rather to determine whether a genuine issue of material fact exists. Happel v. Wal-Mart Stores, Inc., 199 Ill. 2d 179, 186 (2002); Gilbert v. Sycamore Municipal Hospital, 156 Ill. 2d 511, 517 (1993). Summary judgment is appropriate only where "the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." 735 ILCS 5/2 — 1005(c) (West 2002).
In determining whether a genuine issue as to any material fact exists, a court must construe the pleadings, depositions, admissions, and affidavits strictly against the movant and liberally in favor of the opponent. A triable issue precluding summary judgment exists where the material facts are disputed, or where, the material facts being undisputed, reasonable persons might draw different inferences from the undisputed facts. The use of the summary judgment procedure is to be encouraged as an aid in the expeditious disposition of a lawsuit. However, 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. Gilbert, 156 Ill. 2d at 518 (and cases cited therein); accord Espinoza v. Elgin, Joliet & Eastern Ry. Co., 165 Ill. 2d 107, 113-14 (1995). In appeals from summary judgment rulings, review is de novo. Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 102 (1992).
Plaintiff alleged negligence on the part of NI-Gas. To prevail in an action for negligence, the plaintiff must establish that the defendant owed a duty of care, that the defendant breached that duty, and that the plaintiff incurred injuries proximately caused by the breach. Espinoza, 165 Ill. 2d at 114; Ward v. K mart Corp., 136 Ill. 2d 132, 140 (1990). The existence of a duty is a question of law for the court to decide; however, the issues of breach and proximate cause are factual matters for a jury to decide (Thompson v. County of Cook, 154 Ill. 2d 374, 382 (1993)), provided there is a genuine issue of material fact regarding those issues (Espinoza, 165 Ill. 2d at 114).
In this case, the sole inquiry before us concerns the existence of a legal duty. Plaintiff asserts that NI-Gas owed decedent a duty to warn her that Cobra connectors were potentially hazardous. NI-Gas denies that it had such a duty because decedent owned the connector and not NI-Gas.
There can be no recovery in tort for negligence unless the defendant has breached a duty owed to the plaintiff. Boyd v. Racine Currency Exchange, Inc., 56 Ill. 2d 95, 97 (1973); accord LaFever v. Kemlite Co., 185 Ill. 2d 380, 388 (1998). Duty is a question of whether the defendant and the plaintiff stood in such a relationship to one another that the law imposed upon the defendant an obligation of reasonable conduct for the benefit of the plaintiff. In determining whether a duty exists, a court looks to certain relevant factors, including: (1) the reasonable forseeability that the defendant's conduct may injure another, (2) the likelihood of an injury occurring, (3) the magnitude of the burden of guarding against such injury, and (4) the consequences of placing that burden on the defendant. Happel, 199 Ill. 2d at 186-87; Ward, 136 Ill. 2d at 140-41; Kirk v. Michael Reese Hospital & Medical Center, 117 Ill. 2d 507, 526 (1987). In support of their respective positions, the parties invoke two sources of law: (1) the common law, and (2) NI-Gas' tariff on file with the Illinois Commerce Commission.
I. Common Law
American consumers have been using gas as fuel for illumination or heat for over a century. Courts from across the nation, including Illinois courts, long ago considered the factors in determining the existence of a duty with respect to the duties that gas distributors owe to their customers concerning escaping gas. The common law, which is always heedful of realities when it formulates rules to govern conduct (Graham v. North Carolina Butane Gas Co., 231 N.C. 680, 684-85, 58 S.E.2d 757, 761 (1950)), has established the following principles.
Gas is a dangerous substance or commodity when it is not under control. Metz v. Central Illinois Electric & Gas Co., 32 Ill. 2d 446, 450 (1965); McClure v. Hoopeston Gas & Electric Co., 303 Ill. 89, 97 (1922); accord Suiter v. Ohio Valley Gas Co., 10 Ohio St. 2d 77, 78, 225 N.E.2d 792, 793 (1967); Bellefuil v. Willmar Gas Co., 243 Minn. 123, 126, 66 N.W.2d 779, 782 (1954); Graham, 231 N.C. at 684, 58 S.E.2d at 761. However, a gas company is not liable as an insurer for injuries sustained as the result of the escape of gas. Rather, the company is liable for its negligence in permitting the gas to escape. Pappas v. Peoples Gas Light & Coke Co., 350 Ill. App. 541, 548 (1953); accord Bellefuil, 243 Minn. at 126, 66 N.W.2d at 782; Graham, 231 N.C. at 685, 58 S.E.2d at 761; 27A Am. Jur. 2d Energy & Power Sources § 368, at 278 (1996); 38A C.J.S. Gas § 119, at 143 (1996). Expressions of the degree of care that a gas company must exercise range from "reasonable" (see, e.g., Graham, 231 N.C. at 685, 58 S.E.2d at 761) to "high" (see, e.g., McClure, 303 Ill. at 97). This variety of expression simply means that a gas company must exercise a degree of care to prevent the escape of gas from its pipes commensurate with or proportional to the level of danger which it is the company's duty to avoid. Metz, 32 Ill. 2d at 450; Cosgrove v. Commonwealth Edison Co., 315 Ill. App. 3d 651, 654-55 (2000); accord Lewis v. Vermont Gas Corp., 121 Vt. 168, 182, 151 A.2d 297, 306 (1959); Doxstater v. Northwest Cities Gas Co., 65 Idaho 814, 826-27, 154 P.2d 498, 504 (1944); Bellefuil, 243 Minn. at 126, 66 N.W.2d at 782; 27A Am. Jur. 2d Energy & Power Sources § 373, at 281 (1996); 38A C.J.S. Gas § 120, at 145-46 (1996); L. Tellier, Annotation, Liability of Gas Co. for Injury or Damage Due to Defects in Service Lines on Consumer's Premises, 26 A.L.R2d 136, 146 (1952).
While a gas company must exercise the requisite degree of care so that no injury occurs in the distribution of gas while it is under the company's control, such responsibility is limited to the time the gas is in the company's own pipes. Doxstater, 65 Idaho at 827, 154 P.2d at 504 (collecting cases). In Illinois, the seminal example of the common law rule pertaining to gas distribution in a consumer's pipes and fixtures is Clare v. Bond County Gas Co., 356 Ill. 241 (1934).
In Clare, the plaintiff opened a shop and hired a plumber to install a gas stove for heat. After the installation, she noticed an offensive odor that irritated her eyes and gave her a headache. She notified the gas company. The president of the gas company visited the shop several times and made suggestions to remedy the situation. His suggestions were followed, but the problem continued. The smell was so strong in the closet where the gas meter was located that the plaintiff kept the door to the closet closed. Several weeks after the unsuccessful attempts to locate the source of the problem, a friend of the plaintiff was looking for a screwdriver. He lit a match to help him look for it in the dark closet. He opened the closet door and an explosion occurred. It was subsequently discovered that the gas pipe that ran beneath the floor contained holes caused by rust. The gas that escaped from the pipe had accumulated in the closet. Clare, 356 Ill. at 241-43. Appealing a judgment in favor of plaintiff, the gas company contended that "there was no evidence in the record to warrant the finding that it [the gas company] had notice and knowledge that the pipes were leaking and gas was escaping into the building; that without such notice or knowledge there was no duty incumbent upon it to shut off the gas supply." Clare, 356 Ill. at 243.
Reversing the judgment in favor of plaintiff, Clare relied on established common law: "In the absence of notice of defects it is not incumbent upon a gas company to exercise reasonable care to ascertain whether or not service pipes under the control of the property owner or the consumer are fit for the furnishing of gas." Clare, 356 Ill. at 244. Where a gas company does not install the pipes or fixtures on a customer's premises, and does not own them and has no control over them, the company is not responsible for their condition or for their maintenance, and as a result is not liable for injuries caused by a leak therein of which the company had no knowledge. Clare, 356 Ill. at 244 (collecting cases). Clare looked to the common law as it evolved up to that time and today continues to accord with our understanding of the common law rule. Accord Oliver v. Peoples Gas Light & Coke Co., 5 Ill. App. 3d 1093, 1099 (1972); accord Bellefuil, 243 Minn. at 126, 66 N.W.2d at 782 (discussing rule in context of gas appliances); Doxstater, 65 Idaho at 827-28, 154 P.2d at 504, quoting Kelley v. Public Service Co. of Northern Illinois, 300 Ill. App. 354, 362 (1939); 27A Am. Jur. 2d Energy & Power Sources § 394, 395 (1996) (stating rule in context of appliances); 27A Am. Jur. 2d Energy & Power Sources § 403 (1996) (stating general rule); 38A C.J.S. Gas § 123, at 151-53 (1996); 26 A.L.R.2d at 156.
Courts reason that a person's duty can extend no further than the person's right, power, and authority to implement it. Gas company employees do not have the right to enter the premises of their customers to inspect pipes or fixtures except upon the license or permission of the owner. Clare, 356 Ill. at 244. The consumer, by application for gas service, assumes the burden of inspecting and maintaining the pipes and fittings on the consumer's property in a manner reasonably suited to meet the required service. The company has the right to assume that the customer's interior system of pipes and fittings is sufficiently secure to permit the gas to be introduced with safety. Clare, 356 Ill. at 244-45 (collecting cases); accord Bellefuil, 243 Minn. at 126-27, 66 N.W.2d at 782-83; Graham, 231 N.C. at 685, 58 S.E.2d at 761; Moran Junior College v. Standard Oil Co. of California, 184 Wash. 543, 552, 52 P.2d 342, 346 (1935); 27A Am. Jur. 2d Energy & Power Sources § 403 (1996).
Courts also reason that, in a negligence action, knowledge of the facts out of which the duty to act arises is essential. In order that an act or omission may be regarded as negligent, the defendant must have knowledge, or ought to have known from the circumstances, that the allegedly negligent act or omission endangered another. Weber v. Interstate Light & Power Co., 268 Wis. 479, 482, 68 N.W.2d 39, 41 (1955). Accordingly, the common law rule of no duty of a gas company with respect to a consumer's pipes or fittings is premised on the gas company's lack of knowledge or notice of a gas leak. See, e.g., Clare, 356 Ill. at 244 (stating rule with proviso of gas company's lack of knowledge or notice); Bellefuil, 243 Minn. at 129, 66 N.W.2d at 784 ("the duty, by reason of actual or constructive notice of some dangerous condition, must arise before the gas company can be found negligent for its failure to inspect or shut off the gas supply").
Considering the requirement of the gas company's knowledge or notice of a gas leak, the exception to the common law rule is evident:
"Where it appears that a gas company has knowledge that gas is escaping in a building occupied by one of its consumers it becomes the duty of the gas company to shut off the gas supply until the necessary repairs have been made although the defective pipe or apparatus does not belong to the company and is not in its charge or custody." Clare, 356 Ill. at 243-44.
Accord Graham, 231 N.C. at 685, 58 S.E.2d at 761-62 (citing Clare); 27A Am. Jur. 2d Energy & Power Sources § 413, at 309-10 (1996); 38A C.J.S. Gas § 123, at 153-54 (1996); 26 A.L.R.2d at 150. In the specific context of gas appliances, courts have gone so far as to impose on a gas company that has knowledge of a gas leak a duty to inspect:
"[W]henever a gas company is in possession of facts that would suggest to a person of ordinary care and prudence that an appliance of a customer is leaking or is otherwise unsafe for the transportation of gas, the company has a duty to investigate, as a person of ordinary care and prudence similarly situated and handling such a dangerous substance would do, before it continues to furnish additional gas. The duty to exercise reasonable diligence to inspect or shut off the gas supply is measured by the likelihood of injury. Circumstances may be such as to require a gas company to investigate immediately and shut off the gas supply until repairs are made. The nature of the notice may also affect the extent of inspection necessary" Bellefuil, 243 Minn. at 128-29, 66 N.W.2d at 783-84.
It is clear that the knowledge that would impose on a gas company this duty is not limited to actual knowledge, but may include constructive knowledge or notice. It is sufficient if the gas company received facts which would have made the defects known to an ordinary prudent person. For example, Clare was rendered in the context of the gas company's denial of "notice or knowledge." (Emphasis added.) Clare, 356 Ill. at 243. Further, this court expressly — and correctly — stated the common law rule with the accepted proviso of a gas company's lack of knowledge (Clare, 356 Ill. at 243 ("Where it appears that a gas company has knowledge")) or notice (Clare, 356 Ill. at 244 ("In the absence of notice")). See Mrdalj v. Public Service Co. of Northern Illinois, 308 Ill. App. 424, 430 (1941); Kelley, 300 Ill. App. at 362; Kilmer v. Browning, 806 S.W.2d 75, 83 (Mo. App. 1991); Ruberg v. Skelly Oil Co., 297 N.W.2d 746, 751 (Minn. 1980); Fore v. United Natural Gas Co., 436 Pa. 499, 504-05, 261 A.2d 316, 318-19 (1970); Bellefuil, 243 Minn. at 128-29, 66 N.W.2d at 783-84.
Further, Clare was directed not only to actual gas leaks, but also to defects. Clare, 356 Ill. at 244 ("In the absence of notice of defects" (emphasis added)). "The rule in Illinois as to the liability of a gas company is such company is responsible for a customer's pipe if it has knowledge of a leak or of a possible defect therein." (Emphasis added.) Oliver, 5 Ill. App. 3d at 1099; accord Bellefuil, 243 Minn. at 128-29, 66 N.W.2d at 783-84 (speaking of a customer's gas appliance that "is leaking or is otherwise unsafe for the transportation of gas" (emphasis added)); 27A Am. Jur. 2d Energy & Power Sources § 413, at 310 (1996) (stating "that if a gas company has notice of a leak or defect in pipes or lines owned or controlled by a consumer, it is under a duty to notify the consumer and see that the leak or defect is repaired, or shut off the gas").
This common law rule and corresponding exception serve the concept that a gas company is not an insurer for any injury sustained as a result of escaping gas, but rather is liable only for its negligence. "To apply any other rule would make the gas supplier an insurer if anything went wrong with any of the appliances over which it had no control." Wilson v. Home Gas Co., 267 Minn. 162, 172, 125 N.W.2d 725, 732 (1964).
As the appellate court in this case recognized, Illinois courts have not addressed a gas company's duty to warn its customers of the possible deterioration of the customer's fixtures when they are damaged, in part, due to the gas product itself. 333 Ill. App. 3d at 220. However, addressing the same facts as in this case, two decisions from other jurisdictions recognize that gas companies who have notice of the danger caused by sulfides in their gas coming in contact with brazed connectors owe common law tort duties: Lemke v. Metropolitan Utilities District, 243 Neb. 633, 502 N.W.2d 80 (1993), and Halliburton v. Public Service Co. of Colorado, 804 P.2d 213 (Colo. App. 1990). We agree with the appellate court that these cases are instructive. 333 Ill. App. 3d at 220-22.
In Lemke, a gas explosion destroyed the home of Lorraine and Kenneth Lemke and severely injured Lorraine. Lemke, 243 Neb. at 634-37, 502 N.W.2d at 82-84. The trial court found that the cause of the explosion was a Cobra connector, which failed due to the interaction of the phosphorous brazing alloy and the gas. Although there was evidence that the Metropolitan Utilities District (MUD) installed thousands of Cobra connectors in the homes of MUD customers, there was no evidence that MUD installed the Cobra connector to the plaintiff's gas range. The court entered judgment in favor of plaintiffs. Lemke, 243 Neb. at 642, 502 N.W.2d at 86.
Appealing from the judgment, MUD contended "that it had no duty to notify its customers concerning a potential hazard from Cobra connectors, especially a customer who may not have purchased the connector from MUD." Lemke, 243 Neb. at 648, 502 N.W.2d at 90. The Nebraska Supreme Court rejected this contention.
The Lemke court reviewed its past statements of the earlier-discussed common law principles. The court concluded:
"Because a gas company has a nondelegable duty to exercise due care regarding natural gas supplied to a customer, a gas company's duty of care not only pertains to the company's distribution of gas through its pipelines, but extends to distribution through a customer's service line or gas appliance that the company knows, or should know, is unsafe for conducting or using gas." Lemke, 243 Neb. at 651, 502 N.W.2d at 91.
The court noted, as the record in this case shows, that the American Gas Association warned all of its members, including MUD, that Cobra connectors presented a danger in the distribution of natural gas. The court reasoned:
"When MUD received information about the dangerous condition or potential hazard involving Cobra connectors but did not disseminate this critical information to its customers who were using gas appliances with Cobra connectors, MUD effectively exerted control in a situation that could eventually culminate in injury to customers who continued to use gas supplied by MUD." Lemke, 243 Neb. at 648, 502 N.W.2d at 89.
According to the court, that information
"placed MUD on notice that its customers who had gas appliances with Cobra connectors would be endangered when the connector separated from a gas service line or appliance. Consequently, when MUD became aware that the distribution of gas through a Cobra connector presented a risk of injury to customers, MUD had the duty to use due care, such as issuance of a warning, to protect customers *." Lemke, 243 Neb. at 652, 502 N.W.2d at 92.
As in Lemke, NI-Gas' superior knowledge of the risks pertaining to Cobra connectors begat a duty of due care, such as issuing a warning to its customers.
In Halliburton, the Public Service Company of Colorado, similar to NI-Gas here, knew at least since the 1970s that a large number of brazed connectors failed because of the interaction of the brazed connector and the sulfides in the gas. The court cited four reasons to impose a duty on the gas company to inspect plaintiffs brazed connector: (1) the relatively insignificant amount of time and expense that defendant would have expended to evaluate the connector and take corrective action; (2) two service calls at plaintiffs home after the gas company knew of this hazard, which affected approximately 45,000 homes in the Denver area; (3) the likelihood of the connector failing and possibly causing an explosion unless corrective action were taken; and (4) defendant's expertise in dealing with such problems. The court continued: "The most compelling reason, however, for imposing a duty upon defendant is that its product, natural gas, which contained the corrosive ethyl mercaptan, was a substantial factor in causing the deterioration of the connector tube." (Emphasis in original.) Halliburton, 804 P.2d at 216.
At oral argument, plaintiff expressly clarified that the extent of NI-Gas' duty of reasonable care in this case should be to warn its customers of the dangers presented by its gas coming in contact with the brazed connectors. Thus, while no issue exists in this case regarding a duty to inspect every connector, we agree with the following from Halliburton: "When a party can reasonably foresee that its product will be used as an integral component of a defective and unreasonably dangerous product, there is a duty upon that party to undertake corrective action to alleviate, if possible, the hazard." Halliburton, 804 P.2d at 216. The duty is simply to use reasonable care in dealing with the hazard, including a duty to warn. Halliburton, 804 P.2d at 216-17. We agree with the appellate court that, "while not controlling, Halliburton is also instructive." 333 Ill. App. 3d at 222.
Halliburton and Lemke acknowledged the common law rule of a gas company's lack of duty toward a customer's equipment absent knowledge of a defect, but recognized that the gas suppliers in those cases had knowledge of the danger of their product being in contact with brazed connectors. Those cases also noted that the danger in question was not one normally associated with the product and consumers were not in a position to be aware of the danger without adequate warnings. Since the gas companies helped create the danger and had superior knowledge of the hazard, they owed a responsibility to their customers with respect to that danger.
We consider Halliburton and Lemke to represent a reasoned adaptation of the common law to address the exigency presented by brazed connectors. We recognize that "[t]he growth and adaptation of the common law to our contemporary concerns should not impose impracti cal burdens or impossible duties." Hensley v. Montgomery County, 25 Md. App. 361, 367, 334 A.2d 542, 545-46 (1975). However, it is equally clear that "[rjeasonable care is not a standard beyond the reach of any enterprise." Weinberg v. Dinger, 106 N.J. 469, 494, 524 A.2d 366, 379 (1987).
In the present case, as in Halliburton and Lemke, there is no dispute that NI-Gas had actual knowledge of the danger. NI-Gas knew that sulfides in the gas corroded brazed connectors, ultimately causing the connectors to leak gas; it was only a question of when the connector would fail. Based on its superior knowledge and the fact that it helped to create the dangerous condition, we hold that NI-Gas owed a common law duty of reasonable care with respect to the brazed connectors.
This holding is directed exclusively to the element of duty and is limited to the evidence contained in the present record. We repeat plaintiffs clarification at oral argument that NI-Gas' duty of reasonable care in this case consists only of warning and not inspection. We express no opinion as to the adequacy of NI-Gas' conduct in this case. It is for the trier of fact to determine whether NI-Gas' conduct met the standard of care required of it under the circumstances. Based on our disposition of this issue, we do not discuss other tort theories raised by the parties.
II. Tariff
NI-Gas and supporting amici contend that NI-Gas' tariff on file with the Illinois Commerce Commission "is the sole source" of its duties to its customers. NI-Gas points to the following provision of its tariff on file with the Commission at the time of the explosion:
"Equipment Furnished and Maintained by Customer.
All gas utilization equipment, piping, and vents furnished by the Customer shall be suitable for the purposes hereof and shall be. installed and maintained by the Customer at all times in accordance with accepted practice and in conformity with requirements of public health and safety, as set forth by the properly constituted authorities and by the Company.
The Company assumes no responsibility in connection with the installation, maintenance or operation of the Customer's equipment and reserves the right to discontinue service if such equipment is in unsatisfactory condition."
NI-Gas contends that the plain language of this provision bars imposition of a duty in this case.
A tariff is a public document setting forth services being offered; rates and charges with respect to services; and governing rules, regulations, and practices relating to those services. North River Insurance Co. v. Jones, 275 Ill. App. 3d 175, 185 (1995). The Public Utilities Act requires public utilities such as NI-Gas to file tariffs with the Illinois Commerce Commission. 220 ILCS 5/9 — 102 (West 1994). A tariff is usually drafted by the regulated utility, but when duly filed with the Commission, it binds both the utility and the customer and governs their relationship. See Danisco Ingredients USA, Inc. v. Kansas City Power & Light Co., 267 Kan. 760, 765, 986 P.2d 377, 381 (1999). Once the Commission approves a tariff, it "is a law, not a contract, and has the force and effect of a statute." Illinois Central Gulf R.R. Co. v. Sankey Brothers, Inc., 67 Ill. App. 3d 435, 439 (1978), aff'd, 78 Ill. 2d 56 (1979).
Illinois law in this area originates in federal law. In Western Union Telegraph Co. v. Esteve Brothers & Co., 256 U.S. 566, 571-72, 65 L. Ed. 1094, 1097-98, 41 S. Ct. 584, 586 (1921), the United States Supreme Court considered the legal effect of tariffs filed pursuant to the Interstate Commerce Act:
"The Act of 1910 [36 Stat. 539, 544] introduced a new principle into the legal relations of the telegraph companies with their patrons which dominated and modified the principles previously governing them. Before the act the companies had a common-law liability from which they might or might not extricate themselves according to views of policy prevailing in the several states. Thereafter, for all messages sent in interstate or foreign commerce, the outstanding consideration became that of uniformity and equality of rates. Uniformity demanded that the rate represent the whole duty and the whole liability of the company. It could not be varied by agreement; still less could it be varied by lack of agreement. The rate became, not as before a matter of contract by which a legal liability could be modified, but a matter of law by which a uniform liability was imposed."
Accord In re Illinois Bell Switching Station Litigation, 161 Ill. 2d 233, 249 (1994) (Miller, J., specially concurring); J. Meyer & Co. v. Illinois Bell Telephone Co., 88 Ill. App. 3d 53, 57 (1980) (both citing Esteve Brothers, 256 U.S. 566, 65 L. Ed. 1094, 41 S. Ct. 584).
The United States Supreme Court has described the federal filed-rate doctrine as follows: " 'The rights as defined by the tariff cannot be varied or enlarged by either contract or tort of the carrier. ' " American Telephone & Telegraph Co. v. Central Office Telephone, Inc., 524 U.S. 214, 227, 141 L. Ed. 2d 222, 236, 118 S. Ct. 1956, 1965 (1998), quoting Keogh v. Chicago & Northwestern Ry. Co., 260 U.S. 156, 163, 67 L. Ed. 183, 187, 43 S. Ct. 47, 49 (1922). The filed-rate doctrine serves two goals: prevention of price discrimination among rate payers, and preservation of the role of regulatory agencies in deciding reasonable rates for public utilities and services. Fax Telecommunicaciones, Inc. v. AT&T, 138 F.3d 479, 489 (2d Cir. 1998); Wegoland Ltd. v. NYNEX Corp., 27 F.3d 17, 19 (2d Cir. 1994); Qwest Corp v. Kelly, 204 Ariz. 25, 35, 59 P.3d 789, 799 (2002) (and cases cited therein); Lovejoy v. AT&T Corp., 92 Cal. App. 4th 85, 99, 111 Cal. Rptr. 2d 711, 721 (2001).
Tariff provisions, such as Ni-Gas' tariff, are usually referred to as liability limitations. See, e.g., Illinois Bell Switching Station Litigation, 161 Ill. 2d at 247 (Miller, J., specially concurring); Danisco, 267 Kan. at 768, 986 P.2d at 383. Liability limitations 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. Illinois Bell Switching Station, 161 Ill. 2d at 249 (Miller, J., specially concurring). The underlying theory of liability limitations is that, because a public utility is strictly regulated, its liability should be defined and limited so that it may be able to provide service at reasonable rates. A reasonable rate is in part dependent on a rule limiting liability. Illinois Bell Switching Station, 161 Ill. 2d at 244-46 (and cases cited therein); Danisco, 267 Kan. at 769, 986 P.2d at 384 (collecting cases). The goal is "to secure reasonable and just rates for all without undue preference or advantage to any. Since that end is attainable only by adherence to the approved rate, based upon an authorized classification, that rate 'represents the whole duty and the whole liability of the company.' " Western Union Telegraph Co. v. Priester, 276 U.S. 252, 259, 72 L. Ed. 555, 565, 48 S. Ct. 234, 235 (1928), quoting Esteve Brothers, 256 U.S. at 572, 65 L. Ed. at 1097, 41 S. Ct. at 586.
To be sure, in an action for negligence, the issue of a legal duty is generally distinguished from the issue of liability for breach of that duty. See, e.g., Thompson, 154 Ill. 2d at 382. However, a "plaintiff cannot prevail against a defendant who is under no duty and equally cannot prevail against a defendant who is immune and to that extent the two concepts are the same." 1 D. Dobbs, Law of Torts § 225, at 576 (2001). Illinois courts have long held that a tariff provision such as the one at issue in this case provides the source for, and determines the nature and extent of, a public utility's service obligations to its customers. Illinois Bell Switching Station, 161 Ill. 2d at 248 (Miller, J., specially concurring); J. Meyer & Co., 88 Ill. App. 3d at 55; Sarelas v. Illinois Bell Telephone Co., 42 Ill. App. 2d 372, 374-75 (1963).
"Nonetheless, all state law causes of action are not necessarily precluded." Pink Dot, Inc. v. Teleport Communications Group, 89 Cal. App. 4th 407, 416, 107 Cal. Rptr. 2d 392, 398 (2001). As explained in Adamson v. Worldcom Communications, Inc., 190 Or. App. 215, 222, 78 P.3d 577, 582 (2003):
"The filed-rate doctrine bars only an action that seeks to vary the terms of an applicable tariff. [Citation.] Thus, the effect of a tariff on a particular claim depends on the nature of the claim and the specific terms of the tariff. If the claim is one that implicates the provisions of a tariff, then the tariff controls according to its terms, which may either limit relief available or bar a claim entirely. But if the claim is unrelated to the tariff, then the claim is not limited or barred. In other words, merely because a tariff exists does not necessarily mean that a claim is barred."
In the context of the federal filed-rate doctrine, we are reminded: "In order for the filed rate doctrine to serve its purpose, therefore, it need pre-empt only those suits that seek to alter the terms and conditions provided for in the tariff." Central Office, 524 U.S. at 229, 141 L. Ed. 2d at 237, 118 S. Ct. at 1966 (Rehnquist, C.J., concurring). Further:
"The tariff does not govern * the entirety of the relationship between the common carrier and its customers. For example, it does not affect whatever duties state law might impose *. The filed rate doctrine's purpose is to ensure that the filed rates are the exclusive source of the terms and conditions by which the common carrier provides to its customers the services covered by the tariff. It does not serve as a shield against all actions based in state law." Central Office, 524 U.S. at 230-31, 141 L. Ed. 2d at 238, 118 S. Ct. at 1966-67 (Rehnquist, C.J., concurring).
Illinois law accords with this reasoning.
In 1921, the General Assembly enacted the Public Utilities Act (Ill. Rev. Stat. 1921, ch. lll2/3, par. 1 et seq.). This court has described the legislative intent of the Act as follows:
"The Public Utilities Act [citation], under which the Commerce Commission regulates all public utilities, was enacted to assure the provision of efficient and adequate utility service to the public at a reasonable cost. Because unrestrained competition prior to adoption of the Act had often resulted in the financial failure of many utilities, the Act adopted a policy of regulated monopoly to assure that utilities would be able to earn a reasonable rate of return on their investment and thus would be able to provide the required service." Local 777, DUOC, Seafarers International Union of North America v. Illinois Commerce Comm'n, 45 Ill. 2d 527, 535 (1970) (and cases cited therein).
This court also has observed: "it cannot be doubted that the Public Utilities Act supersedes the common law liability of the carrier so far as rates and unreasonable discrimination are concerned." (Emphasis added.) Terminal R.R. Ass'n of St. Louis v. Public Utilities Comm'n, 304 Ill. 312, 317 (1922). This court recognized: " 'The law is well settled in this State that the matter of rate regulation is essentially one of legislative control. The fixing of rates is not a judicial function *.' " Illinois Bell Telephone Co. v. Illinois Commerce Comm'n, 55 Ill. 2d 461, 469-70 (1973), quoting Produce Terminal Corp. v. Illinois Commerce Comm'n ex rel. Peoples Gas Light & Coke Co., 414 Ill. 582, 589 (1953).
However, this court in Pioneer Hi-Bred Corn Co. of Illinois v. Northern Illinois Gas Co., 61 Ill. 2d 6 (1975), applied the established common law duty analysis as explained in Clare to the defendant utility, which is the same defendant utility in this case. Pioneer Hi-Bred, 61 Ill. 2d at 12-14. In Pioneer Hi-Bred, plaintiff customer brought an action against NI-Gas to recover damages for an explosion and fire due to the failure of plaintiffs gas- fueled equipment. Plaintiff alleged, inter alia, common law negligence. The trial court refused plaintiffs proffered jury instruction that NI-Gas was negligent in that it failed to inspect the plaintiffs equipment. The jury found for NI-Gas. The appellate court reversed, holding that the trial court erred in refusing plaintiffs proffered jury instruction. This court reversed the appellate court and affirmed the judgment in favor of NI-Gas. Citing Clare, this court held that NI-Gas did not have a duty to inspect plaintiffs equipment and, therefore, plaintiffs proffered instruction was erroneous. Pioneer Hi-Bred, 61 Ill. 2d at 13-14.
We presume that the court in Pioneer Hi-Bred was not unaware of the federal filed-rate doctrine as explained in the above-cited Priester and Este ve Brothers decisions from the United States Supreme Court. Additionally, according to NI-Gas, the tariff at issue in this case has been on file with the Commission "[sjince at least 1955."
However, despite this court's prior decisions interpreting the Public Utilities Act and recognizing that rate regulation is not a judicial function, despite prior decisions from the United States Supreme Court establishing the federal filed-rate doctrine, and despite the existence of the specific tariff in this case, this court applied the established common law duty analysis to NI-Gas. Neither this court nor NI-Gas believed that this tariff precluded a common law analysis in a negligence action for personal injury.
Similarly, this court in Metz applied the common law doctrine of res ipsa loquitur to the defendant utility. Metz, 32 Ill. 2d at 448-52. Why did the appellate court and this court in each of these cases fail to mention the Public Utilities Act, the filed-rate doctrine, or any particular tariff? Because Illinois courts have recognized that where a utility tariff speaks to a specific duty, the tariff may be controlling; however, where the tariff does not address a particular situation, the common law applies and a common law duty analysis must be applied.
For example, in Sarelas, the defendant telephone company, due to a clerical error, disconnected one of the extensions of the plaintiff's office telephone for 21h hours. The plaintiff sued the telephone company and its president for damages, alleging that defendant owed him a duty of continuing service, and that defendant violated this duty by interrupting service. The trial court dismissed plaintiffs complaint. Sarelas, 42 Ill. App. 2d at 373-74.
On appeal, the appellate court held that the defendant's duty to plaintiff was based on the tariff that the defendant filed with the Illinois Commerce Commission. In so holding, the court reasoned:
"[T]he extent to which defendants owed plaintiff 'a legal duty' is determined by the particular provisions of the tariff on file with the commission; there is no contract in this case on which plaintiff can rely, nor are his allegations of a breach of duty sufficient to constitute a claim, in tort. He complains simply of the disconnection of his telephone extension, and claims a breach of duty which arises either from the tariff or not at all." (Emphasis added.) Sarelas, 42 Ill. App. 2d at 375.
In Sarelas, since the plaintiff could not plead a breach of duty sufficient to constitute a claim in tort, his duty was defined by the tariff. Sarelas clearly leaves open the existence of common law duties had the plaintiff been able to plead them.
More recently, in Cosgrove, our appellate court, applying a common law analysis, reinstated negligence and res ipsa loquitur counts against Ni-Gas. Cosgrove, 315 Ill. App. 3d at 654-57. The court concluded: "NI-Gas is 'subject to liability in tort' " pursuant to section 2 of the Joint Tortfeasor Contribution Act. Cosgrove, 315 Ill. App. 3d at 658, quoting 740 ILCS 100/2 (West 1998).
Indeed, Illinois case law reveals that Illinois courts have long applied common law principles to defendant utilities subsequent to the 1921 enactment of the Public Utilities Act and despite the existence of tariffs filed with the Illinois Commerce Commission. See, e.g., Metz, 32 Ill. 2d 446; Clare, 356 Ill. 241; Cosgrove, 315 Ill. App. 3d 651; Oliver, 5 Ill. App. 3d 1093; Mrdalj, 308 Ill. App. 424. Thus, whether NI-Gas' tariff bars plaintiffs cause of action depends on the nature of plaintiffs lawsuit and the meaning of the tariffs language.
In this case, NI-Gas contends that the appellate court's decision "cannot stand" in light of Illinois Bell Switching Station. We disagree, finding that case to be distinguishable. In Illinois Bell Switching Station, a telephone switching station caught fire, allegedly due to the negligent or willful failure of Illinois Bell to take fire prevention measures. The fire left many customers without telephone service for about a month. The customers filed a class action to seek to recover economic losses incurred due to that loss of service. Illinois Bell argued that its filed tariff defined the limits of its liability for interruptions in service. The class plaintiffs contended that the tariff should not bar their claims because the tariff was against public policy and conflicted with provisions of the Public Utilities Act. Illinois Bell Switching Station, 161 Ill. 2d at 242-43.
In holding that the tariff controlled in that case, this court found no duty on which to base the class plaintiffs' claims. This court initially noted that Illinois Bell was nowhere charged with the duty to provide completely uninterrupted service. Rather, its duty was to provide adequate, efficient, and reliable service, which is not tantamount to infallible service. Temporary disruptions may occur without reducing Bell's service to a level less than adequate, efficient, or reliable. Further, this court held that the exculpatory language in Bell's tariff properly limited claims from disruption of service to a rebate of the costs for the missed service, and concluded that the tariffs provision, which limited Bell's liability in the event of a service disruption, was not contrary to the Act. Illinois Bell Switching Station, 161 Ill. 2d at 243-44.
Unlike Illinois Bell Switching Station, where no duty existed on the part of Illinois Bell, we have concluded in this case that NI-Gas owed a duty to plaintiff. Further, in Illinois Bell Switching Station, the class plaintiffs contended that the tariff applied, but conflicted with the Public Utilities Act. However, in this case, plaintiff contends that NI-Gas' tariff, as written, does not apply to her claim, an issue that was never addressed in Illinois Bell Switching Station.
Turning to the NI-Gas tariff provision in this case, it is evident that the tariff essentially codifies the common law rule that a gas company has no duty with respect to a consumer's gas pipes and fittings, based on the consumer's responsibility for maintaining his or her own equipment and the company's lack of control and knowledge. See, e.g., Clare, 356 Ill. at 243-45 (stating common law rule). However, NI-Gas contends that the tariff provision eliminates the common law exception to this rule. According to NI-Gas, the tariff provision absolves it from any duty with respect to a consumer's pipes and equipment even if it has knowledge that a customer's appliance is leaking or is otherwise unsafe for the transportation of gas. See, e.g., Bellefuil, 243 Minn. at 128-29, 66 N.W.2d at 783-84 (stating common law exception).
We agree with the appellate court's rejection of this contention. 333 Ill. App. 3d at 223. Ni-Gas' position is untenable for several reasons.
Initially, allowing this cause of action to proceed would not contravene the above-stated policies underlying liability limitations. Plaintiff is not seeking rate preferences that are not accorded to other NI-Gas customers; she is not seeking to enforce "side agreements" which vary from our interpretation of the tariff. Rather, if proved, awarding damages on plaintiffs claim would neither discriminate against other NI-Gas customers nor involve the court in tariff setting. See, e.g., Lovejoy, 92 Cal. App. 4th at 101, 111 Cal. Rptr. 2d at 723; Day v. AT&T Corp., 63 Cal. App. 4th 325, 336, 74 Cal. Rptr. 2d 55, 62 (1998).
"Although a utility tariff is not a legislative enactment, its interpretation is governed by the rules of statutory construction." Bloom Township High School v. Illinois Commerce Comm'n, 309 Ill. App. 3d 163, 174 (1999); accord Danisco, 267 Kan. at 772, 986 P.2d at 385. The cardinal rule of interpreting statutes, to which all other canons and rules are subordinate, is to ascertain and give effect to the intent of the legislature. McNamee v. Federated Equipment & Supply Co., 181 Ill. 2d 415, 423 (1998); Illinois Bell Switching Station, 161 Ill. 2d at 246. Although a court should first consider the statutory language, a court must presume that the legislature, in enacting a statute, did not intend absurdity or injustice. McNamee, 181 Ill. 2d at 423-24; State Farm Fire & Casualty Co. v. Yapejian, 152 Ill. 2d 533, 540-41 (1992); Illinois Crime Investigating Comm'n v. Buccieri, 36 Ill. 2d 556, 561 (1967). "A statute or ordinance must receive a sensible construction, even though such construction qualifies the universality of its language." Illinois Bell Switching Station, 161 Ill. 2d at 246.
Specifically, as earlier noted, rate regulation is one of legislative control and is not a judicial function. Therefore, the right to review the conclusion of the Commission acting under authority delegated by the legislature is accordingly limited. This deference to the judgment of the Commission is especially appropriate in the area of setting rates. Illinois Bell, 55 Ill. 2d at 469-70 (and cases cited therein).
Applying these principles to the tariff provision at issue in this case, we conclude that the Commission did not intend to completely immunize NI-Gas with respect to a gas leak of which it has notice. It must be remembered:
"Public utilities do not enjoy a general tort immunity; they owe a duty of care to the general public. Thus, if a utility company recognizes that its conduct under certain circumstances creates an unreasonable risk of harm to another, it has a duty to take reasonable precautions to prevent that risk of harm from occurring." 64 Am. Jur. 2d Public Utilities § 14, at 456 (2001).
Remembering that gas is a dangerous substance and commodity (Metz, 32 Ill. 2d at 450; McClure, 303 Ill. at 97), the far-reaching consequences of NI-Gas' interpretation of this tariff provision are readily apparent. In effect, NI-Gas argues that if it had omitted language regarding duty and liability from its tariff, it would owe no duty whatsoever to anyone under any circumstances. The Commission's own decisions and orders belie such an unreasonable contention. See Nordine v. Illinois Power Co., 32 Ill. 2d 421, 428 (1965) (observing that orders and decisions of the Illinois Commerce Commission are public records "and as such we take judicial notice of them").
For example, in Citizens Utilities Co. of Illinois, No. 94 — 0481 (Illinois Commerce Comm'n September 13, 1995), the utility company (CUCI) filed with the Commission a revised tariff which proposed, inter alia, changes to its conditions of service. Regarding one such condition, the Commission observed: "CUCI proposes sweeping language for its fire protection service which would absolve it from any liability for damages of any nature to persons or property caused by fire. The Commission agrees with Staffs criticism of this proposal."
Indeed, the Commission has rejected the very argument that NI-Gas makes before this court. In Teleport Communications Group, Inc., No. 96 — AB—001 (Illinois Commerce Comm'n November 4, 1996), Teleport Communications Group, Inc. (TCG), filed a petition for arbitration with the Commission, seeking arbitration of the disputed portions of an interconnection agreement with Ameritech.
One disputed provision in the agreement required each party to indemnify the other against losses suffered by customers of the ultimate service provider. Ameritech's proposal would require Ameritech and TCG each to limit its liability, in the event of a transmission delay or defect, to an amount equivalent to the proportionate charge to the end user customer for the period of service during which the delay or defect occurred.
TCG responded that it should not be required to include a limitation of liability provision in contracts with its customers. The Commission noted that TCG's intention was "to assign the responsibility for loss to the party that has the ability to control or prevent the loss from occurring in the first place." Further, TCG viewed Ameritech's proposal as "insulating Ameritech from any harm caused by its actions. Ameritech would have no liability or responsibility to TCG or its customers, even if they are harmed by grossly negligent or deliberate wrongdoing." TCG believed that "Ameritech's position would give Ameritech the right to dictate, unilaterally, an important aspect of TCG's relationship with its customers." The Commission noted that its staff believed that Ameritech's proposal was "improper and should not be adopted."
The Commission rejected Ameritech's proposed indemnity provision, disagreeing with Ameritech's portrayal of its risks. The Commission reasoned that any claim against Ameritech by a TCG customer would have to be founded on contract or tort. The evidence showed that Ameritech did not anticipate having a contractual relationship with TCG's end users. Thus, the Commission reasoned, a TCG customer could not maintain a successful lawsuit against Ameritech based on a contract claim.
The Commission continued as follows:
"With respect to tort claims against Ameritech, the Illinois Supreme Court has spoken authoritatively on this very point. The Court in In Re Illinois Bell Switching Station Litigation * reaffirmed the Moorman doctrine. This doctrine stands for the proposition that under the common law purely economic damages are generally not recoverable in tort actions. Three exceptions were articulated (1) where the plaintiff has sustained damage resulting from a sudden or dangerous occurrence (2) where the plaintiffs damages are the proximate result of a defendant's intentional, false representation and (3) where the plaintiffs damages are a proximate result of a negligent misrepresentation by a defendant in the business of supplying information for the guidance of others in their business transactions. The Court held that a tort claim for economic damages incurred from a loss of service arising from a fire at an Illinois Bell switching station was precluded in the absence of any exceptions to the Moorman doctrine.
The Commission believes that the Moorman doctrine provides Ameritech with ample protection in the vast majority of situations it has identified in the record.
In its Brief * Ameritech maintains that the Proposed Arbitration Decision overlooks the substantial exposure to direct damages in tort left open by the Moorman doctrine. Essentially, Ameritech turns to potential claims for personal injury and property damage to demonstrate its exposure. Providing telecommunications services is not an inherently dangerous activity and it is difficult to imagine many scenarios in which Ameritech's provision of interconnection services will put third parties at risk. Even if such situations do arise, the public interest does not require that we attempt to insulate either party from the effects of its own improper conduct. We believe that it is entirely appropriate that a telecommunications carrier remain responsible for personal injury or property damage which results from its own negligence or willful misconduct. Moreover, as Staff noted there is no general rule or policy which allows the Commission to grant utilities limitations on liability for personal injury and property damage. This is particularly true with respect to utilities' conduct toward individuals who are not customers of the utility under tariff." (Emphasis added.)
The Commission concluded: "There is potential that [Ameritech's] proposal would shield Ameritech from responsibility for actions far beyond what is intended by the Commission's discretionary approval of limitations of liability in Ameritech's tariffs."
We agree with the Commission. The Commission stated: (1) it is entirely appropriate that a utility remain responsible for personal injury or property damage that results from its own negligence or willful misconduct, and (2) there is no general rule or policy that allows the Commission to grant utilities limitations on liability for personal injury and property damage. Although the dispute in Teleport involved Ameritech's relationship with third parties, i.e., TCG customers, the Commission's general statement of the public interest clearly refers also to a utility's relationship with its own customers.
These administrative decisions are examples of the Commission's rejection of the theory of absolute immunity that NI-Gas now proposes. We do likewise.
Additionally, if this tariff provision were a private contract, it would not be interpreted as permitting NI-Gas to absolve itself of any duty to its customers. See Reeder v. Western Gas & Power Co., 42 Wash. 2d 542, 551, 256 P.2d 825, 830 (1953) (stating that "it would be unreasonable and against public policy to approve such a contractual limitation on the duty to inspect in cases where the facts themselves suggest a duty to inspect"). Although a utility tariff is considered as a statute and not as a contract, we cannot interpret the tariff provision that NI-Gas wrote to completely absolve it of any duty in this regard, when we would not so interpret the same provision in a contract that NI-Gas wrote. See Bloom Township High School, 309 Ill. App. 3d at 175.
Also, this court has held that the Public Utilities Act is in derogation of the common law; accordingly, the Act is to be strictly construed in favor of persons sought to be subjected to its operation. Barthel v. Illinois Central Gulf R.R. Co., 74 Ill. 2d 213, 220-21 (1978). "Thus, the statute is to be strictly construed in favor of the utility company." Tucker v. Illinois Power Co., 232 Ill. App. 3d 15, 29 (1992). However, because the utility company drafts a tariff, it is generally accepted that language in a tariff, especially exculpatory language, is to be strictly construed against the utility company and in favor of the customer. See, e.g., Pink Dot, 89 Cal. App. 4th at 415, 107 Cal. Rptr. 2d at 397; Krasner v. New York State Electric & Gas Corp., 90 A.D.2d 921, 921-22, 457 N.Y.S.2d 927, 929 (1982); State Farm Fire & Casualty Co. v. Southern Bell Telephone & Telegraph Co., 245 Ga. 5, 7, 262 S.E.2d 895, 897 (1980).
Further, a court cannot construe a statute in derogation of the common law beyond what the words of the statute expresses or beyond what is necessarily implied from what is expressed. In construing statutes in derogation of the common law, a court will not presume that an innovation thereon was intended further than the innovation which the statute specifies or clearly implies. Russell v. Klein, 58 Ill. 2d 220, 225 (1974); Cedar Park Cemetery Ass'n v. Cooper, 408 Ill. 79, 82-83 (1951); Illinois-American Water Co. v. City of Peoria, 332 Ill. App. 3d 1098, 1105 (2002) ("Although the [Public Utilities] Act is in derogation of the common law and is to be strictly construed in favor of those sought to be subjected to its operation, the Act will not be extended any further than what the language of the statute absolutely requires by its express terms or by clear implication"). Illinois courts have limited all manner of statutes in derogation of the common law to their express language, in order to effect the least — rather than the most — change in the common law. See, e.g., Bush v. Squellati, 122 Ill. 2d 153 (1988) (interpreting Ill. Rev. Stat. 1985, ch. 40, par. 607(b)); Bag- craft Corp. v. Industrial Comm'n, 302 Ill. App. 3d 334 (1998) (interpreting 820 ILCS 305/11 (West 1996)).
For example, in Barthel, the plaintiffs brought a statutory cause of action against the defendant railroad seeking damages for personal injuries and wrongful death. Plaintiffs alleged that the railroad violated several regulations pertaining to the safety of railroad crossings. Relying on a strict and literal interpretation of the statutory language, the plaintiffs argued that the statute abrogated the common law defense of contributory negligence. As observed in Barthel:
"They [plaintiffs] argue that the cause of action, being a creature of the statute, bears no relation to the common law concepts of negligence and contributory negligence, and they conclude that since the statute does not provide that contributory negligence shall be a defense, it imposes strict liability on the utility for any violation." Barthel, 74 Ill. 2d at 220.
The Barthel court rejected this argument. Noting that the Act is in derogation of the common law, the court reasoned that tort principles would not be deemed abrogated unless it plainly appears that the intent of the statute is to do so. This court held that the statute did not abrogate the common law defense of contributory negligence, and that this common law defense was available to the railroad. Barthel, 74 Ill. 2d at 220-21.
In this case, applying the exact reasoning as applied in Barthel, we must conclude that NI-Gas' tariff did not abrogate the common law exception to the rule of a gas company's nonliability. Just as the statute in Barthel did not abrogate a common law defense, NI-Gas' tariff does not abrogate the common law exception. This rule of statutory construction cannot be used to provide common law doctrines to assist defendants, but withhold common law doctrines that assist plaintiffs.
Specifically, courts in other jurisdictions have avoided interpretations of utility tariffs that would abrogate the common law. For example, in National Food Stores, Inc. v. Union Electric Co., 494 S.W.2d 379 (Mo. App. 1973), the Missouri Court of Appeals found that the defendant electric utility owed a common law duty to plaintiff utility customer. National Food Stores, 494 S.W.2d at 381-83. The court then rejected the utility's contention that its filed tariff immunized it from common law liability for damages. The court strictly construed the tariff, and found that the plaintiffs allegations fell outside of the tariff's ambit. Acknowledging the tariff, the court emphasized: "the crucial point is that [the utility] cannot divorce itself from the consequences of its own failure to use ordinary care to avoid harm to its consumers." National Food Stores, 494 S.W.2d at 384. See also Satellite System, Inc. v. Birch Telecom of Oklahoma, Inc., 51 P.3d 585, 588 (Okla. 2002) (holding that Oklahoma legislature had not expressed intent that filed-tariff doctrine abolished common law fraud claim against utility); State Farm, 245 Ga. at 6-7, 262 S.E.2d at 896-97 (holding that utility tariffs limitations period did not abrogate general state law); Hall v. Consolidated Edison Corp., 104 Misc. 2d 565, 568-70, 428 N.Y.S.2d 837, 840-41 (1980) (holding that tariff did not relieve defendant utility company from its common law tort liability for termination of electrical service); Kroger Co. v. Appalachian Power Co., 244 Va. 560, 563, 565, 422 S.E.2d 757, 759-60 (1992) (interpreting utility tariff in accord with common law rule, observing that tariff would not shield utility company from "all liability in providing power to a customer beyond the delivery point").
As we earlier observed, the tariff provision in this case essentially codifies the common law rule that a gas company has no duty with respect to a consumer's gas pipes and fittings, based on the consumer's responsibility for his or her equipment, and the company's lack of knowledge and control. Absent express language that disavows the common law exception based on notice, we cannot say that it was eliminated by the tariff provision. See, e.g., Bush, 122 Ill. 2d at 161-62 (holding that the statutory provision "cannot, by its silence," be construed to change the applicable common law); Bagcraft Corp., 302 Ill. App. 3d at 340 (holding that without "specific language directing application" of a statutory provision to a scenario governed by the common law, "we cannot conclude that the legislature intended to abrogate an entire body of case law"). We note that our appellate court long ago rejected a gas company's invocation of the Public Utilities Act as a defense to its common law duty. See Mrdalj v. Public Service Co. of Northern Illinois, 308 Ill. App. 424, 430 (1941) (holding where gas company had been notified of odor of gas prior to explosion which killed property owner, gas company could not defend on ground that Public Utilities Act prohibited company from shutting off gas to make inspection, since where gas company has knowledge that gas is escaping in a building occupied by consumer it is gas company's duty to shut off gas supply until necessary repairs have been made). Based on the above-stated principles of statutory interpretation, this is precisely the situation "for the General Assembly and not this court" to abrogate NI-Gas' common law duty. See Bush, 122 Ill. 2d at 162.
We hold that NI-Gas' tariff provision did not absolve the company of its common law duty owed to plaintiff. While a gas company is not an insurer for any injury sustained as the result of escaping gas, the company is nonetheless liable for its negligence. See Pappas, 350 Ill. App. at 548.
CONCLUSION
Based on the present record, we have concluded solely that NI-Gas owed a duty to warn in this case. Accordingly, there remains a genuine issue of material fact as to whether NI-Gas breached this duty and, if so, whether this breach proximately caused plaintiffs injuries. Summary judgment was thus improper. See Happel, 199 Ill. 2d at 198. Therefore, we affirm the judgment of the appellate court, which reversed the circuit court's grant of summary judgment and remanded the cause for further proceedings.
Affirmed.
Count I named Georgevich as a defendant. Plaintiff alleged that Georgevich owed decedent "a duty of ordinary care to insure the aforesaid premises was reasonably safe for occupancy;" and that Georgevich breached this alleged duty by (a) failing "to inspect and/or cause the inspection of the aforesaid premises for fire safety and prevention;" and (b) permitting the occupancy of the house "when not reasonably safe to do so." Georgevich filed an unopposed motion for summary judgment against plaintiff. Georgevich contended that she had no duty of care with respect to decedent's house. She argued that although she owned decedent's house, it was in decedent's exclusive possession and control. The circuit court granted the motion.
The American National Standards Institute (ANSI) "is a voluntary membership organization that develops consensus standards nationally for a wide variety of devices and procedures." Thatcher v. TWA, 69 S.W.3d 533, 536 (Mo. App. 2002); accord Schultz v. Northeast Illinois Regional Commuter R.R. Corp., 201 Ill. 2d 260, 269 (2002).
NI-Gas also brought a contribution claim against Georgevich. If found liable to plaintiff, NI-Gas sought contribution from Georgevich in such amount that was attributable to Georgevich's relative fault. Georgevich subsequently moved for summary judgment on NI-Gas' contribution claim against her. After granting NI-Gas' motion for summary judgment against plaintiff, the circuit court ruled that Georgevich's motion for summary judgment on NI-Gas' contribution claim was moot.