Opinion ID: 1559080
Heading Depth: 2
Heading Rank: 1

Heading: The Company's Policies

Text: Facts relevant to this appeal occurred as early as 1985. In two separate incidents that year, a total of nine people died and others were injured when they were overcome by carbon monoxide in dwellings located in Mobile County and having natural-gas service supplied by the Company. In both incidents, the primary culprit was a customer-owned central-heating unit situated in a closet or hallway. In the first incident, carbon monoxide circulated throughout the residence because the blower door of the furnace had been removed, thereby allowing the blower to direct the products of furnace combustion throughout the building. The 1985 incidents resulted in a change in the Company's practices and policies toward customer-owned appliances that pose potential carbon-monoxide hazards. Until the 1985 incidents, the Company's practice was merely to place a red warning tag on any customer-owned appliance found to be hazardous. Although the service technician would take a copy of the warning tag to the Company's office, the Company, nevertheless, initiated gas service at the residence without any follow-up measures to ensure that repairs were ever made. As a result of the deaths and injuries in 1985, George Yon, then vice president of operations for the Company, conducted an evaluation of the effectiveness of the Company's warning practices. He discovered that  in thousands of cases  the customers had simply removed the red warning tags and continued to use the hazardous appliances in their unrepaired condition. Consequently, he amended the Company's policies and procedures in various written segments (hereinafter referred to collectively as the manual). As amended, the manual included a hazardous conditions checklist, which stated, in pertinent part: Listed below are hazardous conditions which, when encountered in the field, must result in the serviceman tagging an appliance out-of-service or refusing to turn gas on to the premises. Some situations will also require that the appliance be disconnected, such as:  Appliance producing unsafe levels of CO [carbon monoxide]  Faulty safety control  . . . .  Situations as described in . . . Hazardous Appliance Report. (Second emphasis added.) Regarding the Hazardous Appliance Report, sometimes referred to as a red tag, [1] the manual stated: This three-part form and envelope will be used by [the Company] to notify a customer that an appliance has been turned off due to a defective and unsafe condition. This form will be completed in triplicate including the obtaining of the customer's signature. The signature will provide evidence that the contents of the form have been explained to the customer and the customer has been given a copy. The top copy will be folded and placed in the unsealed envelope and attached to the defective appliance by the string provided. The middle copy will be turned in with the serviceman's service request order for that address. The third copy will be left with the customer or his representative. The customer shall be instructed either they or their contractor complete the form and mail to the [C]ompany in the self-addressed, postage-paid envelope attached to the appliance. If more than one appliance is defective at the same address, a separate report must be completed for each. Each day the Customer Service Assistant will be responsible for entering the `Red Tag' information into the computer utilizing the Company copies attached to the servicemen's service request orders. The `Hazardous Appliance Reports' will be kept on file in the Customer Service Dispatching Office. This document will be available at all times to field employees. . . . These forms will be maintained for no less than five (5) years. On customer or contractor copies received by mail which indicate the work has been completed, the word `Mail' will be entered into the tag file where the serviceman's work number normally appears. This action will not clear the appliance red tag from the computer files [emphasis in original]. Only our visual inspection will permit clearing from the red tag system files. Subsequently, if we return to the same service address for any reason, a `Red Tag' order form will be issued. It is the responsibility of the Serviceman to re-examine that appliance. If it has been repaired or replaced, he will issue a filed service request showing that he `removed' the tag. Upon receiving that day's service request forms, the Customer Service Assistant will update the `Red Tag File' showing the `Tag Removed.' However, if the appliance has not been repaired or replaced, the serviceman will proceed as follows: 1. If his order requires the meter to be turned on (including regular Turn-On, New Sets, Old Sets, etc.), he will turn on the meter and disconnect the faulty appliance, if possible. 2. If his order requires other services (including Routine Changes, Change for Test, etc.) and the meter is on, he will (if possible) disconnect the faulty appliance and notify the customer that repairs must be made, and that a report will be made to the Building Inspection Services. 3. No later than the next regular scheduled work day, a Service Department clerk will mail to the proper building inspection authority a copy of the `Hazardous Appliance Report' for that address. The clerk will then initial and date the original Company copy to indicate that the report has been mailed to the proper authorities. 4. All local and county building inspection authorities in our service area have indicated they will inspect the defective appliance(s) and instruct the owner/occupants to have the necessary repairs made within ten (10) days. If corrections have not been made within ten (10) days, they will instruct [the Company] to turn off the meter or disconnect the service.  (Emphasis added except as otherwise noted.) Each red tag contained 48 categories of hazardous conditions for which an appliance was to be turned off, with appropriate boxes to be checked by the service personnel, including the following: B2 ___ Badly corroded burners. . . . . S1 ___ Inoperative or disconnected controls affecting safe operation of an appliance. . . . . V4 ___ Products of combustion spill[ing] at [the] diverter. A key aspect of the Company's new policies contemplated the coordination of its service personnel with municipal building inspectors. According to Yon, he forged an agreement with the heads of building-inspection departments in all the municipalities in which the Company provided service, pursuant to which the inspectors would enforce customer compliance with the Company's new red-tag policies. Under this alleged arrangement, whenever a customer failed to satisfy the Company that a red-tagged appliance had been repaired or replaced, the Company would send a hazardous-appliance report to the appropriate building inspector, who, in turn, would inspect the premises and, if necessary, order the Company to discontinue natural-gas service to that customer until the repairs were made. However, the actual implementation of Yon's new policies encountered some logistical difficulties. Municipal officials complained that they did not have sufficient inspection personnel to investigate all the hazardous-appliance reports that were being sent them. Consequently, building inspectors requested that no more such reports be sent. Also, Yon's policy of refusing natural-gas service to customers who ignored red-tag warnings created tension with the Company's marketing division, which complained that strict enforcement by the service division was causing a reduction in the volume of the Company's natural-gas sales. Yon retired in 1987. Yon testified at trial that, at the time he retired, his policies were still in effect and were being enforced. Yon's successors, however, admittedly did not implement or enforce his written policies. In 2002, in particular, Alan Hobbs removed language from the manual requiring the Company to disconnect hazardous appliances.