Court Opinion

ID: 4966281
Source: CourtListenerOpinion
Date Created: 2021-09-24 16:18:44.346672+00
Date Added: 2024-06-11T08:16:09.110007
License: Public Domain

OPINION BY
SHOGAN, J.:
Appellant State Farm Fire and Casualty Company (“State Farm”), as subrogee to claims of its insured subrogors, Gary A. Bennett, Dennis Paul Bennett, Robert Winn, James and Marion Stotz, Mark Pet-tigrow and James Witek, appeals from the trial court’s March 23, 2011 orders denying State Farm’s Motion for Partial Summary Judgment and granting Appellee PECO’s Motion for Partial Summary Judgment. On appeal, State Farm challenges the trial court’s interpretation of the limitation of liability clause found in Rule 12.1 of PECO’s public utility tariff as restricting the amount of recovery by State Farm. For the reasons that follow, we affirm in part and vacate in part.
The trial court set forth the procedural and factual history as follows:
Around August 10, 2008, a “dangerous and defective” surge of electricity passed though the subrogors’ home electric meters and caused significant damage to their houses. Defendant, PECO Energy Company (“PECO”) asserts that the surge came from a bolt of lightning that struck a PECO facility and affected many residences in the subrogors’ area. Pursuant to the subrogor’s [sic] insurance policies, State Farm became subro-gated to their clients’ claims and filed suit against PECO for allowing an uncontrolled surge of electricity to reach the subrogors’ homes. The Complaint, filed April 17, 2009, contained the following counts: Count I, negligence; Count II, strict liability; Count III, breach of contract; and Count IV, breach of warranty.1
In their Answer and New Matter, PECO asserted that Rule 12.1 of their Public Utility Tariff serves as a limitation of all of State Farm’s claims. Rule 12.1 states in full:
12.1 LIMITATION ON LIABILITY FOR SERVICE INTERRUPTIONS AND VARIATIONS. The Company [PECO] does not guarantee continuous, regular and uninterrupted supply of service. The Company may, without liability, interrupt or limit the supply of service for the purpose of making repairs, changes, or improvements *924in any part of its system for the general good of the service or the safety of the public or for the purpose of preventing or limiting any actual or threatened instability or disturbance of the system. The Company is also not liable for any damages due to accident, strike, storm, riot, fire, flood, legal process, state or municipal interference, or any other cause beyond the Company’s control.
In all other circumstances, the liability of the Company to customers or other persons for damages, direct or consequential, including damage to computers and other electronic equipment and appliances, loss of business, or loss of production caused by any interruption, reversal, spike, surge or variation in supply or voltage, transient voltage, or any other failure in the supply of electricity shall in no event, unless caused by the willful and/or wanton misconduct of the Company, exceed an amount in liquidated damages equivalent to the greater of $500 or two times the charge to the customer for the service affected during the period in which such interruption, reversal, spike, surge or variation in supply or voltage, transient voltage, or any other failure of supply in electricity occurs. In addition no charge will be made to the customer for the affected service during the period in which such interruption, reversal, spike, surge or variation in supply or voltage, transient voltage, or any other failure in the supply of electricity occurs. A variety of protective devices and alternate power supplies that may prevent or limit such damage are available for purchase by the customer from third parties.
State Farm filed a motion for summary judgment on January 17, 2011 seeking a determination that Rule 12.1 is void as against public policy and PECO’s tariff defense does not apply to their claims of negligence, strict liability, and breach of contract. PECO filed a competing motion on January 20, 2011, arguing that the tariff should not be voided as against public policy and that all of State Farm’s claims are limited by Rule 12.1. This Court agreed with PECO, and accordingly issued Orders on March 23, 2011. State Farm has filed motions to certify for interlocutory appeal the Order denying their motion and the Order granting PECO’s motion.
Trial Court Opinion, 7/20/11, at 1-3.
On May 19, 2011, the trial court certified its orders for immediate appeal pursuant to Pa.R.A.P. 341(c). State Farm presents the following issues for this Court’s consideration on appeal:
(a) Whether PECO’s Tariffs Rule 12.1, which, according to express terms, purports to shield PECO, from any liability whatsoever for any damages caused by its own negligent and/or liability-producing conduct, is an exculpatory clause that is void as against public policy as a matter of law.
(b) Whether PECO’s Tariff applies to Plaintifi/Appellant’s causes of action in strict liability because PECO did not specifically disclaim strict liability in its Tariff as required by Pennsylvania law.
Appellant’s Brief at 6.
Our standard of review of a trial court’s order granting or denying summary judgment is as follows:
*925A reviewing court may disturb the order of the trial court only where it is established that the court committed an error of law or abused its discretion....
In evaluating the trial court’s decision to enter summary judgment, we focus on the legal standard articulated in the summary judgment rule. Pa.R.C.P. 1035.2. The rule states that where there is no genuine issue of material fact and the moving party is entitled to relief as a matter of law, summary judgment may be entered.... [W]e will view the record in the light most favorable to the non-moving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party.
Murphy v. Duquesne Univ. of The Holy Ghost, 565 Pa. 571, 777 A.2d 418, 429 (2001) (citations omitted). “When reviewing whether there are genuine issues of material fact, this Court’s standard of review is de novo; we need not defer to determinations made by lower courts; and our scope of review is plenary.” Gleason v. Borough of Moosic, 609 Pa. 353, 15 A.3d 479, 484 (2011). Insofar as State Farm challenges the denial of its motion seeking summary judgment, we must view the record in a light most favorable to PECO, as the non-moving party.
While the trial court has provided a succinct recitation of the facts and procedural history of this action, the uninitiated reader would be served by a brief discussion of the legal posture of this matter. We begin by noting that this Commonwealth’s Public Utility Commission (“PUC”) plays a unique role in the regulation of public utilities (like PECO) in the Commonwealth. Indeed, this Court has discussed previously the scope of the PUC’s jurisdiction as follows:
The extent of the PUC’s jurisdiction has been clearly outlined by the courts of this Commonwealth in the course of a long series of opinions. In Lansdale Borough v. Philadelphia Electric Co., 403 Pa. 647, 650-51, 170 A.2d 565, 567 (1961) the Supreme Court, after an extensive review of prior cases concerning PUC jurisdiction, concluded: ‘Initial jurisdiction in matters concerning the relationship between public utilities and the public is in the PUC-not in the courts. It has been so held involving rates, service, rules of service, extension and expansion, hazard to public safety due to use of utility facilities, installation of utility facilities, location of utility facilities, obtaining, alerting, dissolving, abandoning, selling or transferring any right, power, privilege, service, franchise or property and rights to serve particular territory.’ The exclusive regulatory jurisdiction conferred on the PUC in these areas permits evaluation and control of utility activities as they affect public service. No other entity can interfere with the commission’s performance of its function by making, additional or different requirements of a utility or by conducting an independent appraisal of a utility’s service to the public.
The question of utility policy as it affects the public is not now before this court, nor is the determination of the reasonableness or adequacy of Bell’s methods of providing service. This is an action for damages and the fact that the regulation of utility service is exclusively in the PUC’s jurisdiction does not remove from the court’s jurisdiction an action for damages based on a failure of service, any more than the PUC’s power to promulgate safety regulations prohibits the courts from hearing a claim for personal injuries resulting from unsafe utility equipment. The commission’s jurisdiction is limited to regulatory matters essential to utility service. The courts retain jurisdiction of a suit for dam*926ages based on negligence or breach of contract wherein a utility’s performance of its legally imposed and contractually adopted obligations are examined and applied to a given set of facts.
Behrend v. Bell Tel. Co., 242 Pa.Super. 47, 363 A.2d 1152, 1157-1158 (1976) (some citations omitted and emphasis added). Thus, the matter is properly before our courts. Id.
Turning to the matter in controversy, namely whether Rule 12.1 of PECO’s tariff constitutes a valid limitation of liability,1 we note that the Public Utility Code defines a utility’s “tariff’ as “All schedules of rates, all rules, regulations, practices, or contracts involving any rate or rates, including contracts for interchange of service .... ” 66 Pa.C.S.A. § 102. Our sister Court has explained tariffs as follows:
A tariff is a set of operating rules imposed by the State that a public utility must follow if it wishes to provide services to customers. It is a public document which sets forth the schedule of rates and services and rules, regulations and practices regarding those services. It is well settled that public utility tariffs must be applied consistently with their language. 66 Pa.C.S. § 1303. Public utility tariffs have the force and effect of law, and are binding on the customer as well as the utility. Pennsylvania Electric Co. v. Pennsylvania Public Utility Commission, 663 A.2d 281, 284 (Pa.Cmwlth.1995).
PPL Elec. Utilities Corp. v. Pennsylvania Public Utility Com’n, 912 A.2d 386, 402 (Pa.Cmwlth.2006) (emphasis added). With this as the legal backdrop, we proceed to discuss the merits of State Farm’s issues on appeal.
In support of its first issue, State Farm claims that Rule 12.1 of PECO’s tariff is exculpatory because it “expressly shields PECO from all liability for damages no matter their cause.” Appellant’s Brief at 11. Based on this Court’s analysis and holding in DeFrancesco v. W. Pa. Water Company, 329 Pa.Super. 508, 478 A.2d 1295 (1984) where we proscribe exculpatory clauses within a tariff as void against public policy, Appellant concludes that PECO’s tariff is likewise void. Id. (citing DeFrancesco, 478 A.2d at 1306). We disagree.
Several years before its decision in De-Francesco, this Court had occasion to review the limitation of liability provisions contained within a defendant telephone company’s tariff. Behrend v. Bell Telephone Company, 242 Pa.Super. 47, 363 A.2d 1152 (1976), vacated on other grounds, 473 Pa. 320, 374 A.2d 536 (1977). In Behrend, we were asked to determine whether the following tariff provision limiting Bell’s liability was void as against public policy:
The liability of the Telephone Company for damages arising out of failure to comply with a customer’s direction to install, restore or terminate service, or mistakes, omissions, interruptions, delays, or errors or defects in transmission, or failure or defects in the Telephone Company’s equipment (facilities) occurring in the course of furnishing service and not caused by the negligence of the customer ... shall in no event exceed an amount equivalent to the proportionate charge to the customer for the period of service during which such failure, mistake, omission, interruption, delay, or error or defect in transmission, or failure or defect in the Telephone Company’s equipment (facilities) occurs. *927The Telephone Company, except as provided herein, shall not be liable for damage claimed on account of errors in or omission from its directories nor for the result of the publication of such errors in the directory.... Claim for damages on account of interruptions to service due to errors in or omissions of directory listings will be limited to an amount equivalent to the proportionate charge for that part of the customer’s service which is impaired, but not to exceed one-half the local service charges for the service items affected for the period from the date of issuance of the directory in which the mistake occurred to the date of issuance of a new directory containing the proper listing.
Behrend, 363 A.2d at 1163.
In concluding that the foregoing limitation of liability clause was valid and enforceable, we recognized the PUC’s authority to determine the reasonableness of tariffs as well as its power to assess whether such provisions are “compatible with the [Public Utility C]ode and policies of the commission- and consistent with its regulatory scheme.” Behrend, 363 A.2d at 1166. Deferring to the PUC’s authority, and observing that the tariff had been properly filed with the PUC, we held that the limitation of liability provisions must be enforced. Id.
Appellant correctly directs that this Court, in DeFrancesco, reached the opposite conclusion with respect to the defendant water company’s limitation of liability clause found in its tariff. Appellant’s Brief at 15. However, in DeFrancesco, the Court was confronted with a limitation of liability clause patently different from that proffered in Behrend. Specifically, the limitation of liability clause in DeFrancesco stated:
Liability of Company
(a) The Company shall not in any way or under any circumstances be held responsible to any person or persons for any loss or damage for any deficiency in the pressure, volume or supply of water due to any cause whatsoever. The Company will undertake to use reasonable care and diligence in order to prevent and avoid interruptions and fluctuations in the service, but it cannot and does not guarantee that such will not occur.
(b) The Company shall in no event be liable for any damage or inconvenience caused by reason of any break, leak or defect in the Customer’s service pipe or fixtures.
DeFrancesco, 478 A.2d at 1305 (Spaeth, J., concurring opinion) (emphasis added).2 Because the limitation of liability clause in DeFrancesco disclaimed all liability, we held that it was exculpatory and continued our review, concluding that such a clause was void as against public policy. See id. at 1307 (reasoning that “it was the trial court’s responsibility initially, and ours on appeal, to determine the validity of [limitation of liability provision] as an exculpatory clause”).
Reading Behrend and DeFrancesco together, we glean a legal framework within which to assess the validity of clauses purporting to limit a utility company’s liability. A clause which limits but which does not entirely exempt a utility from liability is enforceable and will not be void on public policy grounds. Behrend, 363 A.2d at 1166. Conversely, a clause which is truly exculpatory in nature, in other words, one which absolves the utility *928of all liability, is void as against public policy. DeFrancesco, 478 A.2d at 1307. Although tariffs have the “force and effect of law,” they are not statutes subject to statutory interpretation. See Equitable Gas Co. v. Wade, 812 A.2d 715, 718 (Pa.Super.2002) (holding that because gas company’s tariff was not enacted by the Pennsylvania legislature, it was not a statute under Pennsylvania law). Accordingly, in order to properly measure scope of PECO’s clause limiting its liability, we must rely on rules of contract interpretation. See DeFrancesco, 478 A.2d at 1306-1307 (applying Section 195 of the Restatement (Second) of Contracts to determine whether tariffs limitation of liability clause is exculpatory).
When interpreting the language of a contract, the intention of the parties is a paramount consideration. Thomas Rigging & Constr. Co., Inc. v. Contraves, Inc., 798 A.2d 753, 755 (Pa.Super.2002). “In determining the intent of the parties to a written agreement, the court looks to what they have clearly expressed, for the law does not assume that the language of the contract was chosen carelessly.” Meeting House Lane, Ltd. v. Melso, 427 Pa.Super. 118, 628 A.2d 854, 857 (1993), appeal denied, 537 Pa. 633, 642 A.2d 486 (1994) (citations omitted).
When interpreting agreements containing clear and unambiguous terms, we need only examine the writing itself to give effect to the parties’ intent. Osial v. Cook, 803 A.2d 209, 213 (Pa.Super.2002). The language of a contract is unambiguous if we can determine its meaning “without any guide other than a knowledge of the simple facts on which, from the nature of the language in general, its meaning depends.” Baney v. Eoute, 784 A.2d 132, 136 (Pa.Super.2001). “When terms in a contract are not defined, we must construe the words in accordance with their natural, plain, and ordinary meaning.” Cordero v. Potomac Ins. Co. of Illinois, 794 A.2d 897, 900 (Pa.Super.2002). As the parties have the right to make their own contract, we will not modify the plain meaning of the words under the guise of interpretation or give the language a construction in conflict with the accepted meaning of the language used. Meeting House Lane, Ltd., 628 A.2d at 857.
On the contrary, the terms of a contract are ambiguous if the terms are reasonably or fairly susceptible of different constructions and are capable of being understood in more than one sense. Cordero, 794 A.2d at 900. Additionally, we will determine that the language is ambiguous if the language is “obscure in meaning through indefiniteness of expression or has a double meaning.” Baney, 784 A.2d at 136. Where the language of the contract is ambiguous, the provision is to be construed against the drafter. Cordero, 794 A.2d at 900.
Profit Wize Marketing v. Wiest, 812 A.2d 1270, 1274-1275 (Pa.Super.2002).
Turning to PECO’s Rule 12.1, we note that the following portions require this Court’s consideration:
12.1 LIMITATION ON LIABILITY FOR SERVICE INTERRUPTIONS AND VARIATIONS.
The Company is also not liable for any damages due to accident, strike, storm, riot, fire, flood, legal process, state or municipal interference, or any other cause beyond the Company’s control.
In all other circumstances, the liability of the Company to customers or other persons for damages, direct or consequential, including damage to com*929puters and other electronic equipment and appliances, loss of business, or loss of production caused by any interruption, reversal, spike, surge or variation in supply or voltage, transient voltage, or any other failure in the supply of electricity shall in no event, unless caused by the willful and/or wanton misconduct of the Company, exceed an amount in liquidated damages equivalent to the greater of $500 or two times the charge to the customer for the service affected during the period in which such interruption, reversal, spike, surge or variation in supply or voltage, transient voltage, or any other failure of supply in electricity occurs.
Plaintiffs Motion for Partial Summary Judgment, 9/13/10, at Exhibit D, ¶ 12.1 (emphasis added). The first paragraph clearly precludes PECO’s liability to State Farm for damages attributable to “accidents” or “cause[s] beyond [PECO]’s control.” Despite State Farm’s claims to the contrary, this clause does not resemble the exculpatory clause found in DeFrancesco. In particular, we note that this Court long ago opined the definition of the term “accident” as follows:
An accident has been defined as follows (quoting from the opinion of Mr. Justice Drew) in Lacey v. Washburn & Williams Co., 309 Pa. 574, 164 A. 724, 725: “The word ‘accident,’ as used in the act, must be interpreted in its usual, ordinary, popular sense. Webster has defined it as ‘an event that takes place without one’s foresight or expectation; an undesigned, sudden, and unexpected event; chance; contingency.’ * * * That which distinguishes an accident from other events is the element of being unforeseen; an accident is an occurrence which proceeds from an unknown cause, or which is an unusual effect of a known cause, and hence unexpected and unforeseen. The death of an employee, unless it is the result of some untoward happening, not expected or designed, a mishap or fortuitous happening, aside from the usual course of events, is not compensable under our statute.”
Fesenbek v. City of Philadelphia, 144 Pa.Super. 99, 18 A.2d 448, 450 (1941). Our Supreme Court, in discussing this definition of the term “accident,” noted, “It seems clear that an accident is the antithesis of something likely to occur, foreseeable in due course.” Casper v. American Guarantee & Liability Ins. Co., 408 Pa. 426, 431, 184 A.2d 247, 249 (1962).
In this case, defining what is not precluded by the liability limitation clause is as important as what it does preclude. Based on the above definition of “accident,” we conclude that the clause does not preclude recovery for the antithesis of an accident; namely, it does not proscribe events that are foreseeable. Indeed, “the foreseeability of the harm is an element of negligence.” Pegg v. General Motors Corp., 258 Pa.Super. 59, 391 A.2d 1074, 1085 (1978) (citing Noon v. Knavel, 234 Pa.Super. 198, 339 A.2d 545, 550 (1975)). Moreover, to the extent that the limitation of liability only precludes recovery for damages caused “outside [PECO’s] control,” recovery for damages attributable to causes within PECO’s control remain justi-ciable. Because PECO’s liability limitation clause does not preclude all claims against it, it is readily distinguishable from the clause found in DeFrancesco, and thus, is not exculpatory.
The second paragraph establishes two scenarios which serve solely to limit the amount of recovery. Under the default scenario, the amount of recovery is the liquidated amount of $500 or “two times the charge to the customer for the service affected during the period in which such interruption ... or any other failure of *930supply in electricity occurs,” whichever is greater. Plaintiffs Motion for Partial Summary Judgment, 9/13/10, at Exhibit D, ¶ 12.1. However, if State Farm can prove that the damage to the subrogors’ property was caused by PECO’s “willful and/or wanton misconduct,” the limitation on recovery is not implicated and State Farm is entitled to the recovery of those damages it may prove. Therefore, while Rule 12.1’s second paragraph may limit the amount of recovery, such does not amount to an exculpatory clause absolving PECO from all liability. Consequently, we agree with the trial court in this regard.3
In support of its second issue on appeal, State Farm claims the trial court erred in concluding that Rule 12.1 of PECO’s tariff disclaims any liability from claims sounding in strict liability. Appellant’s Brief at 23. State Farm relies, in part, on this Court’s decision in Schriner v. Pa. Power & Light Co., 348 Pa.Super. 177, 501 A.2d 1128 (1985), wherein we narrowly held:
if electricity “in a defective condition, unreasonably dangerous” passes through the meter of a user or consumer and into the stream of commerce, causing physical harm to the ultimate user or consumer, or to his property, the doctrine of strict liability in tort may be applied against the public utility which “engaged in the business of selling such a product,” which product “[was] expected to and [did] reach the user or consumer without substantial change in the condition in which it was sold.” Restatement (Second) of Torts § 402A(1).
Schriner, 501 A.2d at 1134. State Farm essentially argues that, because this Court recognizes strict liability as a cognizable cause of action against a utility company, PECO must expressly disclaim the same in order to avoid defending against the claim on the merits. Appellant’s Brief at 29-31.
The trial court, for its part, cursorily concludes that while “Rule 12.1 does not literally disclaim strict liability, its provisions reach widely enough to encompass strict liability....” Trial Court Opinion, 7/20/11, at 8 (emphasis added). In reaching its conclusion, the court notes that “State Farm has cited no applicable case which holds that the principles of strict liability usurp the PUC as the supreme law of the land.” We are constrained to conclude that the trial court’s analysis on this point is fundamentally mistaken. Irrespective of whether the PUC’s regulations, and the tariffs which it approves, have the effect of law, the court must nevertheless determine whether the limitation of liability clause found in those tariffs disclaims the particular cause of action sought by the plaintiff. Because we have previously held that a party may pursue a strict liability claim against an electricity provider, Schriner, 501 A.2d at 1134, the inquiry turns to whether the utility has disclaimed that form of liability.
The court is constrained to determine whether PECO’s tariff expressly disclaims “strict liability” or in some fashion articulates a disclaimer addressing our holding in Schriner. The trial court readily acknowledges that Rule 12.1 does not expressly disclaim strict liability. Trial Court Opinion, 7/20/11, at 8. However, in *931concluding that Rule 12.1 nonetheless disclaims strict liability, the court merely concludes “its provisions reach widely enough to encompass strict liability....” Id. Limited by our rules of contract interpretation, Profit Wize Marketing, 812 A.2d at 1274-1275, we must disagree with the trial court’s conclusion.
For PECO’s tariff to disclaim strict liability, Rule 12.1 must include some language purporting to disclaim liability for electricity which “[was] expected to and [did] reach the user or consumer without substantial change in the condition in which it was sold” and for electricity which possessed “a defective condition, unreasonably dangerous.” Schriner, 501 A.2d at 1134. Furthermore, we cannot agree with the trial court that the tariff provisions “reach widely enough to encompass strict liability.” Trial Court Opinion, 7/20/11, at 8. To the contrary, they address whether the cause was beyond the Company’s control and the foreseeability of the harm. As noted previously, foreseeability of harm is an element of negligence. Pegg, 391 A.2d at 1085. It is not, however, required for a cause of action sounding in strict liability. Berkebile v. Brantly Helicopter Corp., 462 Pa. 83, 97, 337 A.2d 893, 900 (1975). Insofar as Rule 12.1 is limited in its expression to harm which is and is not foreseeable, it cannot be read to further exculpate claims of strict liability. Because we conclude that Rule 12.1 does not disclaim a strict liability cause of action and we have previously held that a party may pursue the same against a utility company, we vacate the trial court’s order to the extent that it precludes State Farm from pursuing its strict liability claim.
Orders affirmed in part and vacated in part. Case remanded with instruction. Jurisdiction relinquished.
WECHT, J., files a Concurring and Dissenting Opinion.

 Originally, the only subrogors in this case were the Bennetts. On September 22, 2010, the parties stipulated to amend the caption and the complaint to reflect the addition of several of the Bennetts’ neighbors, the additional named subrogors. The Amended Complaint reflecting the additions was filed on October 18, 2010, but the substance of the claims was not changed.

. There is no dispute that Rule 12.1 is part of PECO's overall tariff.

. Although discussion concerning the validity of the defendant utility company’s liability limitation clause appears in Judge Spaeth’s concurring opinion, the analysis was adopted explicitly within the majority opinion. DeFrancesco, 478 A.2d at 1299.

. We observe that State Farm claims that Rule 12.1 is void insofar as it limits PECO’s financial exposure to $500.00, “thus essentially immunizing] PECO from all tort liability.” However, whether $500.00 or any particular amount is an appropriate limitation on recovery constitutes a question of reasonableness and is better suited for the PUC's consideration. See DeFrancesco, 478 A.2d at 1295 ("To determine the reasonableness of a limitation of liability requires striking a balance of 'benefits and burdens' see Behrend I, 242 Pa.Super. at 73, 363 A.2d at 1165, and to do that requires the PUC's expertise in ratemak-ing; the benefit of low rates is balanced against the burden of limited recovery”).