Opinion ID: 1779017
Heading Depth: 1
Heading Rank: 3

Heading: the lower court erred in holding the indemnity agreement in violation of public policy.

Text: ¶ 7. Entergy contends that MPSC approval for inclusion of the indemnity clause in its Agreement for Service is sufficient to remove the contract from the definition of void as a matter of public policy. Under Section 77-3-2, the Mississippi Legislature created the MPSC in order to protect the public policy of Mississippi regarding the regulation of public utilities. Miss.Code Ann. § 77-3-2 (1991). The MPSC acts on behalf of the public in regulating utilities. South Cent. Bell v. Epps, 509 So.2d 886, 891 (Miss. 1987). [C]ertain administrative rules have the force of law. Tucker v. Hinds County, 558 So.2d 869, 875 (Miss.1990). This Court will not interfere with the rule-making power of an administrative agency, such as the MPSC, unless that agency exceeds the power granted to it by the legislature. Mississippi Pub. Serv. Comm'n v. Mississippi Power & Light Co., 593 So.2d 997, 1000 (Miss.1991). Entergy's position is that the circuit court's holding is the same as finding state law contrary to public policy. It asserts that the courts of this state should not interfere with the MPSC's power to that extent. The problem with this argument is that in approving Entergy's service agreement, the MPSC was not exercising its rule or public policy-making power. ¶ 8. However, even if the MPSC's order approving Entergy's contract language could be called a rule, we find that the MPSC exceeded its authority by approving the indemnity clause, because it violated Mississippi law regarding Entergy's responsibility in protecting the general public. Upholding the indemnity agreement could place the public in danger by allowing Entergy to escape liability for its own negligence in maintaining its power lines. The degree of diligence which a distributor of electricity must observe in the distribution of the dangerous agency of electricity is a very high degree of care. When human life is at stake due care under the prevailing circumstances requires that everything that gives reasonable promise of preserving life must be done regardless of difficulty or expense. Moreover, the degree of care increases as the danger increases. Mississippi Power & Light Co. v. Shepard, 285 So.2d 725, 729 (Miss.1973). We have previously held that violation of the eight-foot rule, now codified in Miss.Code Ann. § 45-15-1 et seq. and extended to ten feet, does not insulate the utility from liability for its own negligence in maintaining its electrical lines. White v. Mississippi Power & Light Co., 196 So.2d 343, 350 (Miss.1967); Mississippi Power & Light Co. v. Walters, 248 Miss. 206, 252-56, 158 So.2d 2, 20-22 (1963). Specifically, we have stated: The statute in our opinion does not change the rule that persons operating electrical systems transmitting deadly currents of electricity are required to exercise the highest degree of care in their construction and maintenance. The statute in our opinion was not enacted for the purpose of relieving the Power Company from its duty to exercise due care to place its high-tension wires a sufficient distance above the ground to guard against contact of any nature directly or indirectly that might ordinarily be anticipated. The precautionary measures prescribed in the act are prescribed especially for the protection of workmen who, in the performance of lawful work on premises occupied by high-tension wires, may be exposed to the dangers incident to the performance of the work assigned to them. Mississippi Power & Light Co. v. Walters, 248 Miss. 206, 254, 158 So.2d 2, 21 (1963). It is the general rule that a public utility or common carrier cannot contract against liability for his own negligence, and it may not be doubted that such a tort feasor may not recover under an indemnity agreement which impinges upon this rule. Illinois Cent. R.R. v. Standard Oil Co., 292 F.Supp. 337, 339-40 (S.D.Miss.1968). We hold that an indemnity clause in a utility service contract such as the one at issue here intrudes upon the public policy of this State requiring utilities to exercise the highest degree of care in constructing and maintaining electrical lines. We cannot allow a utility to contract away its well-established duty of protecting the general public. ¶ 9. Entergy points to Mississippi cases in which the courts have upheld broader indemnity clauses in public utility contracts. Lorenzen v. South Cent. Bell Tel. Co., 546 F.Supp. 694 (S.D.Miss.1982); Mississippi Power Co. v. Roubicek, 462 F.2d 412 (5th Cir.1972); Heritage Cablevision v. New Albany Elec. Power Sys., 646 So.2d 1305 (Miss. 1994). However, these cases are all distinguishable from the current case, because they involved contracts between the utility and non-customers, and therefore revolved around the negotiation of two private concerns, unaffected by the greater public policy consideration here. ¶ 10. Release from negligence contracts between public service companies and their customers have traditionally been held void as a matter of public policy (1) to discourage negligence by making wrongdoers pay damages, and (2) to protect those in need of goods or services from being overreached by others who have power to drive hard bargains. Bisso v. Inland Waterways Corp., 349 U.S. 85, 90-91, 75 S.Ct. 629, 99 L.Ed. 911 (1955). Where, as here, the customer has only one choice for an electrical provider, the danger of the utility overreaching through inclusion of an indemnity clause is increased. Other jurisdictions have therefore found such indemnity clauses to be void as a matter of public policy. Beachboard v. Southern Ry. Co., 16 N.C.App. 671, 193 S.E.2d 577, 583 (1972); Helmick v. Potomac Edison Co., 185 W.Va. 269, 406 S.E.2d 700, 707 (1991); Richardson-Wayland Elec. Corp. v. Virginia Elec. & Power Co., 219 Va. 198, 247 S.E.2d 465, 466-68 (1978). In contracts between the utility and its customers, where the utility's public duty to exercise a very high degree of care is invoked, we hold that indemnity provisions protecting the utility from its own negligence are void as a matter of public policy.