Pacific Indemn. Co. v. Deems , 2020 Ohio 250 ( 2020 )

[Cite as Pacific Indemn. Co. v. Deems, 2020-Ohio-250.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
Pacific Indemnity Company, :
Plaintiff-Appellant, :
No. 19AP-349
v. : (C.P.C. No. 18CV-3583)
Dorothy R. Deems et al., : (ACCELERATED CALENDAR)
Defendants-Appellees. :
D E C I S I O N
Rendered on January 28, 2020
On brief: Andrew R. Kasle, for appellant. Argued:
Andrew R. Kasle.
On brief: Reminger Co., LPA, Patrick Kasson, and
Kenton H. Steele, for appellees Asplundh Tree Expert LLC
and Ohio Power Company; Dickie, McCamey & Chilcote, P.C.,
and R. Leland Evans, for appellee Ohio Power Company.
Argued: Patrick Kasson.
APPEAL from the Franklin County Court of Common Pleas
BROWN, J.
{¶ 1} This is an appeal by plaintiff-appellant, Pacific Indemnity Company, from a
judgment of the Franklin County Court of Common Pleas granting the motion to dismiss
filed by defendants-appellees, Ohio Power Company ("OPC") and Asplundh Tree Expert,
LLC ("Asplundh").
{¶ 2} On May 9, 2018, appellant filed a complaint, naming as defendants
Dorothy R. Deems ("Deems"), American Electric Power ("AEP"), and Asplundh. The
complaint alleged the following facts. Pursuant to a policy of insurance, appellant is the
No. 19AP-349 2
insurer for property owned by Bradley and Lauren Cicalas (collectively "the Cicalas"). On
April 30, 2017, a tree on the property owned by Deems, located on South Columbia
Avenue, Bexley, blew over during a storm, falling onto the real property of the Cicalas,
located on South Parkview Avenue, Bexley (the "premises"). The tree damaged fencing
and landscaping on the premises, as well as some electrical power lines owned and
operated by AEP.
{¶ 3} According to the complaint, the Cicalas previously warned Deems and AEP
about the tree because it was "precariously leaning over" the premises and the power
lines. (Compl. at ¶ 4.) Despite such warning, no action was taken before the tree blew
over. Following the storm, work crews for AEP and/or Asplundh came to the premises to
remove the tree. It was alleged that, in removing the fallen tree, AEP and/or Asplundh
negligently caused additional damage to the premises' landscaping and sprinkler system.
Further, as a result of appellees' negligence, appellant was required to pay its insureds the
sum of $71,880.78, thereby subrogating itself to the rights and claims of the Cicalas.
{¶ 4} Asplundh and Deems filed answers to the complaint. On June 12, 2018, the
parties filed a stipulation and notice of substitution of OPC as the defendant and real
party in interest in place of AEP. On June 25, 2018, OPC filed its answer. On February 26,
2019, OPC and Asplundh filed a joint motion to dismiss or, in the alternative, for
summary judgment, asserting the trial court lacked jurisdiction over the claims as falling
within the exclusive jurisdiction of the Public Utilities Commission of Ohio ("PUCO"). On
March 15, 2019, appellant field a brief in opposition to the motion to dismiss. On April 5,
2019, OPC and Asplundh filed a reply.
{¶ 5} On May 1, 2019, the trial court filed a decision and entry granting the
motion to dismiss filed by OPC and Asplundh. The trial court dismissed the action for
lack of subject-matter jurisdiction, pursuant to Civ.R. 12(B)(1), finding the claims as
asserted by appellant "fall within the exclusive jurisdiction of PUCO." (Decision at 6.)
{¶ 6} On appeal, appellant sets forth the following assignment of error for this
court's review:
The Trial Court erred in dismissing Appellant's common law
tort claim since the PUCO does not have exclusive jurisdiction
over these claims, the claims do not involve a "service-
oriented" claim, a filed tariff nor a "practice" of the public
No. 19AP-349 3
utility and the PUCO does not have the expertise required or
authorized by Ohio law over these claims.
{¶ 7} Under its single assignment of error, appellant asserts the trial court erred
in dismissing its complaint, pursuant to Civ.R. 12(B)(1), based on the court's
determination that PUCO had exclusive jurisdiction over the claims. Appellant maintains
the complaint alleges a common-law claim of negligence, and that the expertise of PUCO
in interpreting regulations is not necessary to the resolution of the case. Appellant further
argues Asplundh is not a public utility subject to PUCO rules or jurisdiction.
{¶ 8} In general, "[s]ubject-matter jurisdiction involves ' "a court's power to hear
and decide a case on the merits and does not relate to the rights of the parties." ' " Moore
v. Ohio Dept. of Rehab. & Corr., 10th Dist. No. 18AP-599, 2019-Ohio-767, ¶ 4, quoting
Robinson v. Ohio Dept. of Rehab. & Corr., 10th Dist. No. 10AP-550, 2011-Ohio-713, ¶ 5,
quoting Vedder v. Warrensville Hts., 8th Dist. No. 81005, 2002-Ohio-5567, ¶ 14. In
considering a Civ.R. 12(B)(1) motion to dismiss for lack of subject-matter jurisdiction, a
trial court "determines whether the claim raises any action cognizable in that court." Id.,
citing Brown v. Ohio Tax Commr., 10th Dist. No. 11AP-349, 2012-Ohio-5768; Robinson
at ¶ 5. Further, "in making a determination regarding subject-matter jurisdiction, '[t]he
trial court is not confined to the allegations of the complaint,' and 'it may consider
material pertinent to such inquiry without converting the motion into one for summary
judgment.' " Id., quoting Southgate Dev. Corp. v. Columbia Gas Transm. Corp., 48 Ohio
St.2d 211 (1976), paragraph one of the syllabus. This court applies "a de novo standard
when we review a trial court's ruling on a Civ.R. 12(B)(1) motion to dismiss" for lack of
subject-matter jurisdiction. Id.
{¶ 9} In general, "PUCO has exclusive jurisdiction over most matters concerning
public utilities." Allstate Ins. Co. v. Cleveland Elec. Illum. Co., 119 Ohio St. 3d 301, 2008-
Ohio-3917, ¶ 5. The exclusive jurisdiction of PUCO "includes matters * * * such as rates
and charges, classifications, and service." Valentin v. Ohio Edison, 7th Dist. No. 11 MA
93, 2012-Ohio-2437, ¶ 9, citing Higgins v. Columbia Gas of Ohio, Inc., 136 Ohio App. 3d
198, 201 (7th Dist.2000).
{¶ 10} R.C. 4905.26 states in part:
Upon complaint in writing against any public utility by any
person * * * that any rate, fare, charge, toll, rental, schedule,
No. 19AP-349 4
classification, or service, * * * or service rendered * * * is in
any respect unjust, unreasonable, unjustly discriminatory,
unjustly preferential, or in violation of law, or that any
regulation, measurement, or practice affecting or relating to
any service furnished by the public utility, or in connection
with such service, is, or will be, in any respect unreasonable,
unjust, insufficient, unjustly discriminatory, or unjustly
preferential, or that any service is, or will be, inadequate or
cannot be obtained, * * * if it appears that reasonable grounds
for complaint are stated, the commission shall fix a time for
hearing and shall notify complainants and the public utility
thereof. The notice shall be served not less than fifteen days
before hearing and shall state the matters complained of. The
commission may adjourn such hearing from time to time.
{¶ 11} Thus, "R.C. 4905.26 confers exclusive jurisdiction on PUCO to determine
whether any 'service rendered' by a public utility or any 'practice affecting or relating to
any service furnished by a public utility, or in connection with such service' is in any
respect unjust, unreasonable, or in violation of law." Pro Se Commercial Properties v.
Illum. Co., 8th Dist. No. 92961, 2010-Ohio-516, ¶ 9. See also Jones v. Ohio Edison Co.,
11th Dist. No. 2014-A-0015, 2014-Ohio-5466, ¶ 9 (noting the Supreme Court of Ohio has
interpreted R.C. 4905.26 "to confer jurisdiction upon PUCO to hear all complaints
pertaining to service provided by a public utility, i.e., 'service complaints' ").
{¶ 12} In Corrigan v. Illum. Co., 122 Ohio St. 3d 265, 2009-Ohio-2524, ¶ 9,
quoting State ex rel. Ohio Edison Co. v. Shaker, 68 Ohio St. 3d 209, 211 (1994), the
Supreme Court held "[t]he broad jurisdiction of PUCO over service-related matters does
not affect 'the basic jurisdiction of the court of common pleas * * * in other areas of
possible claims against utilities, including pure tort and contract claims.' " In deciding
whether claims raised in a complaint are within the exclusive jurisdiction of PUCO or,
instead, are pure tort and contract claims, a court is "not limited by the allegations in the
complaint." Id. at ¶ 10. Rather, a court "must review the substance of the claims to
determine if service-related issues are involved." Id. Accordingly, "[c]asting the
allegations in the complaint to sound in tort or contract is not sufficient to confer
jurisdiction upon a trial court when the basic claim is one relating to service, a claim
which only the PUCO has jurisdiction to resolve." Higgins at 202.
No. 19AP-349 5
{¶ 13} In Allstate, the Supreme Court adopted a two-part test from Pacific
Indemn. Ins. Co. v. Illum. Co., 8th Dist. No. 82074, 2003-Ohio-3954, to determine
whether PUCO has exclusive jurisdiction over a case. The first part of the test "asks
whether PUCO's administrative expertise is required to resolve the issue in dispute."
Corrigan at ¶ 15. The second part of the test "is whether the act complained of constitutes
a practice normally authorized by the utility." Id. at ¶ 16. Further, " '[i]f the answer to
either question is in the negative, the claim is not within PUCO's exclusive jurisdiction.' "
Id. at ¶ 12, quoting Allstate at ¶ 12-13.
{¶ 14} Under the facts in Corrigan, the plaintiffs sued a defendant electric utility to
prevent the removal of a tree located within the utility's easement. In addressing whether
the removal of the tree fell within the exclusive jurisdiction of PUCO, the Supreme Court
considered provisions of the Ohio Administrative Code requiring utility companies "to
maintain their transmission equipment, which includes developing a program for
' "[r]ight-of-way vegetation control." ' " Mihiylov v. Ohio Edison Co., 9th Dist. No. 28140,
2017-Ohio-915, ¶ 6, quoting Corrigan at ¶ 15, quoting Ohio Adm. Code 4901:1-10-
27(E)(1)(f). In Corrigan, the Supreme Court held that a utility company's "decision to
remove a tree is governed by its vegetation-management plan, which is regulated by
PUCO." Id. at ¶ 15. The court thus concluded, as to the first part of the Allstate test, "that
PUCO's administrative expertise is required to resolve the issue of whether removal of a
tree is reasonable." Id. With respect to the second part of the Allstate test, the court in
Corrigan held that "[v]egetation management is necessary to maintain safe and reliable
electrical service." Id. at ¶ 16. The Supreme Court therefore concluded the case fell within
the exclusive jurisdiction of PUCO.
{¶ 15} In the present case, the trial court, in addressing the first question (i.e.,
whether PUCO's administrative expertise is required to resolve the issue in dispute),
deemed it "clear * * * that vegetation control is the heart of this case," as both OSP and
Asplundh "acted in response to the vegetation on Defendant Deems property and how it
might and did impact the surrounding electrical hardware." (Decision at 4.) The trial
court held that appellees' "actions in determining whether to remove the tree in 2015
when the Cicalas first noticed it and how they removed the tree in response to an electrical
No. 19AP-349 6
emergency in 2017 directly relate to the administrative code" and, therefore, "these issues
require PUCO's administrative expertise." (Decision at 5.)
{¶ 16} The evidence before the trial court included the affidavit of Jake Wilson, an
employee of Asplundh. In his affidavit, Wilson averred that the "decision to not remove
the tree located behind * * * S. Columbia Avenue, Bexley * * * was made in compliance
with guidelines for vegetation management provided by AEP." (Wilson Aff. at ¶ 5.)
Wilson further averred the "[m]ethods and practices used when removing downed trees
from power lines to re-establish electric service are authorized by guidelines provided by
AEP," and that the "methods and practices authorized by AEP's guidelines were used with
respect to removal of the downed tree * * * on May 30, 2017." (Wilson Aff. at ¶ 6-7.)
{¶ 17} As cited above, the court in Corrigan, in addressing the first question under
the Allstate test held that a utility company's "decision to remove a tree is governed by its
vegetation-management plan, which is regulated by PUCO" and, therefore, "PUCO's
administrative expertise is required to resolve the issue of whether removal of a tree is
reasonable." Corrigan at ¶ 15. The court in Corrigan made clear that "vegetation
management is manifestly service-related." Id. at ¶ 21.
{¶ 18} Based on the holding in Corrigan, we find no error with the trial court's
determination in this case that a utility company's decision whether to remove a tree,
made in accordance with OPC's vegetation-management guidelines, involves the expertise
of PUCO. Similarly, we agree with the trial court that the methods and manner in which
the fallen tree was removed from a power line to restore electric service implicates the
issue of whether the response by appellees complied with industry standards and
guidelines approved by PUCO. We therefore conclude the trial court, in addressing the
first question under Allstate, did not err in finding that PUCO's expertise is required to
resolve such issues. See Pro Se Commercial at ¶ 11 ("The determination of issues related
to applicable laws and regulations, industry practices and standards, is best accomplished
by PUCO with its expert staff technicians familiar with the utility commission
provisions.").
{¶ 19} We next consider the second part of the Allstate inquiry (i.e., whether the
acts complained of constitute a practice normally authorized by the utility). As previously
noted, in Corrigan, the Supreme Court held that "[v]egetation management is necessary
No. 19AP-349 7
to maintain safe and reliable electrical service." Id. at ¶ 16. In support, the Supreme
Court cited Ohio Adm.Code 4901:1-10-27, which requires electric utility owners to
"inspect" its facilities "in accordance with written programs" which " 'shall include * * *
[r]ight-of-way vegetation control.' " Id. at ¶ 15, quoting Ohio Adm.Code 4901:1-10-
27(D)(2) and (E)(1)(f).
{¶ 20} In the present case, the trial court relied on Corrigan in its determination
that the assessment of vegetation by experts based on generally accepted industry
practices and procedures, such as the action by Asplundh in 2015 in deciding whether to
remove the tree, implicated a practice normally authorized by the utility. We find no error
with that determination.
{¶ 21} As to the subsequent act of the utility in 2017, i.e., removing the tree to
restore electrical service, we note that Ohio Adm.Code 4901:1-10-27(E)(1) requires each
electric utility to "establish, maintain, and comply with written programs, policies,
procedures, and schedules for the inspection, maintenance, repair, and replacement of its
transmission and distribution circuits and equipment," and such programs are required
to "establish preventative requirements for the electric utility to maintain safe and reliable
service." Ohio Adm.Code 4901:1-10-27(E)(2) requires each electric utility to "file its
inspection, maintenance, repair and replacement programs." Ohio Adm.Code 4901:1-10-
08 sets forth requirements for electric utility companies in maintaining an emergency
plan, including policies and procedures for responding to power outages and restoring
service. Pursuant to Ohio Adm.Code 4901:1-10-08(C) "[e]ach electric utility shall follow
and implement the procedures in its emergency plan." Ohio Adm.Code 4901:1-10-08(A)
provides in part that each emergency plan shall include various elements, including "[a]
description of the electric utility's requirements for restoring service" (Ohio Adm.Code
4901:1-10-08(A)(3)), "[p]erformance objectives for telephone response time to customer
outage calls and procedures to accomplish those objectives" (Ohio Adm.Code 4901:1-10-
08(A)(9)), and "policy and procedures for outage response and restoration of service by
priority and a list of such priorities," including " 'live wire down' situations," and
"[r]estoring service to the facilities designated" under the administrative code (Ohio
Adm.Code 4901:1-10-08(A)(10)(a) and (b)). On review, we agree with the trial court's
determination that an emergency response by a utility in clearing a downed tree from a
No. 19AP-349 8
power line to restore electrical service constitutes a practice normally authorized by the
utility.
{¶ 22} Accordingly, based on this court's de novo review, we find no error with the
trial court's conclusion that the claims at issue involve vegetation management decisions
and service related issues within the exclusive jurisdiction of PUCO.
{¶ 23} As noted, appellant also contends Asplundh is not a public utility subject to
PUCO rules or jurisdiction. Appellant further maintains jurisdiction is proper in the
common pleas court because the claims raised involve a subrogation issue with respect to
the conduct of Asplundh.
{¶ 24} In response, Asplundh argues appellant ignores the provisions of R.C.
4905.55, which state in part: "The act, omission, or failure of any * * * agent * * * acting
for or employed by a public utility * * *, while acting within the scope of his employment,
is the act or failure of the public utility." Appellees also assert appellant did not raise a
subrogation issue before the trial court and, therefore, waived such argument for the first
time on appeal.
{¶ 25} At the outset, a review of the record supports appellees' contention that
appellant did not raise before the trial court an argument it now raises on appeal, i.e., the
contention that, because the case involves a subrogation claim, it presents a challenge to
the jurisdiction of PUCO. In general, "a litigant's failure to raise an issue before the trial
court waives the litigant's right to raise that issue on appeal." Gentile v. Ristas, 160 Ohio
App.3d 765, 2005-Ohio-2197, ¶ 74 (10th Dist.), citing Estate of Hood v. Rose, 153 Ohio
App.3d 199, 2003-Ohio-3268, ¶ 10 (4th Dist.). However, even considering the argument,
we agree with appellees that the decision in Allstate, relied on by appellant, does not stand
for the proposition that a subrogation claim is analyzed any differently from a claim
brought directly by homeowners against a utility company. While the court in Allstate
ultimately held that an insurer's claim of negligence was properly before the court of
common pleas (because the expertise of PUCO was not required), the court made clear
that "[t]his case comes down to a simple question: Is the claim underlying Allstate's
subrogation claim service-related or is it a pure common-law tort claim?" Allstate at ¶ 1.
As noted by OPC, the holding in Allstate was not based on the fact it had been brought by
a subrogated carrier, and we are aware of no cases distinguishing the holding in Corrigan
No. 19AP-349 9
on the basis that the claim was brought through subrogation as opposed to a direct claim
for liability.
{¶ 26} We also find unpersuasive appellant's contention that PUCO lacks
jurisdiction over Asplundh because it is a non-utility. As noted by appellees, various Ohio
courts have found that claims involving private tree trimming companies, when acting on
behalf of public utilities, are subject to the exclusive jurisdiction of PUCO. See, e.g.,
Delost v. Ohio Edison Co., 7th Dist. No. 10 MA 162, 2012-Ohio-4561, ¶ 25 (granting
summary judgment in favor of utility company and tree trimmer "even though [tree
trimmer] is not a public utility," where tree trimmer was performing vegetation
management services for utility and utility company's decision to cut down tree was a
vegetation management decision falling under the exclusive jurisdiction of PUCO);
Mihiylov at ¶ 8 (reversing trial court's denial of motion to dismiss by utility company and
tree trimming service based on reviewing court's determination that dispute "is within the
exclusive jurisdiction of PUCO").
{¶ 27} Accordingly, finding no error with the trial court's determination that the
claims involve service related issues within PUCO's exclusive jurisdiction, we further find
no error by the trial court in granting appellees' motion to dismiss, and we overrule
appellant's assignment of error.
{¶ 28} Based on the foregoing, appellant's single assignment of error is overruled,
and the judgment of the Franklin County Court of Common Pleas is affirmed.
Judgment affirmed.
DORRIAN and BEATTY BLUNT, JJ., concur.
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