New Meadows Holding Co. v. Washington Water Power Co. , 34 Wash. App. 25 ( 1983 )

Munson, A.C.J.

On December 31, 1978, Mark Brown sustained serious burns when the home he rented from New Meadows Holding Company and owner Harvey Raugust (New Meadows) was destroyed by a fire. The fire began when Mr. Brown attempted to light his oil stove and unknowingly ignited natural gas leaking into his home underground from a damaged gas line several blocks away. The gas leak was allegedly caused in 1971 when Cableway, Inc. (Cableway), laying underground telephone cable for Pacific Northwest Bell (PNB), damaged a 2-inch gas transmission line owned by Washington Water Power (WWP). Several lawsuits ensued.

1. New Meadows sued WWP, PNB and Cableway. WWP answered and sought indemnity by cross claim from PNB and Cableway. PNB brought separate summary judgment motions against New Meadows and WWP asserting that both the claim and cross claim were barred by the statutes of limitation in RCW 4.16.300-.320. New Meadows did not contest that motion; WWP did contest it. Both judgments were granted. New Meadows and WWP appealed.

2. Mr. Brown sued WWP. New Meadows joined with him and amended its complaint to add a strict liability count. Both plaintiffs, New Meadows and Mr. Brown,¹ were granted summary judgment on the issue of strict liability. WWP sought discretionary review, which was granted. RAP 2.3(b). The appeals were placed on a parallel perfection schedule to be heard on the same day.

These appeals present two issues:

1. Whether New Meadows' claim and WWP's cross claim against PNB are barred by RCW 4.16.300-.320² because more than 6 years elapsed since the project was substantially completed.

2. Whether strict liability for abnormally dangerous activities should extend to natural gas companies for damages allegedly caused by a third party's interference with underground gas mains.

Statutes of Limitation

New Meadows did not contest PNB's motion for summary judgment; it has thus waived any claim it may have asserted against PNB.³ Curtis v. Seattle, 97 Wn.2d 59, 639 P.2d 1370 (1982); Shelton v. Farkas, 30 Wn. App. 549, 635 P.2d 1109 (1981). This court will not consider arguments raised for the first time on appeal. The court's dismissal of New Meadows' action against PNB is affirmed.

The only remaining question on this issue is whether this statute of limitation bars WWP's cross claim for indemnity should WWP be found liable in maintaining its gas line.

The purpose for such legislation was succinctly stated in Nevada Lakeshore Co. v. Diamond Elec., Inc., 89 Nev. 293, 295-96, 511 P.2d 113, 114 (1973):

The apparent purpose of NRS 11.205 [parallel statute to RCW 4.16.300-.320] is to afford ultimate repose and protection from liability for persons engaged in the designing, planning and construction of improvements to realty. Without protection such persons would be subject to liability for many years after they had lost control over the improvement or its use or maintenance.

Our courts have construed these statutes to bar claims for negligent construction brought after the 6-year period. Yakima Fruit & Cold Storage Co. v. Central Heating & Plumbing Co., 81 Wn.2d 528, 503 P.2d 108 (1972); Rodriguez v. Niemeyer, 23 Wn. App. 398, 595 P.2d 952 (1979).

WWP strenuously argues the construction statute of limitation does not apply to claims for damage to adjacent property and contends the proper statute of limitation is RCW 4.16.080(1).⁴ WWP is correct. In Vern J. Oja & Assocs. v. Washington Park Towers, Inc., 89 Wn.2d 72, 75-76, 569 P.2d 1141 (1977), the court stated:

In those cases involving damage to real property arising out of construction or activity on adjacent property, the cause of action accrues at the time the construction is completed if substantial damage has occurred at that time. If the damage has not occurred when the construction is completed, the action accrues when the first substantial injury is sustained thereafter.

Although WWP may have been substantially damaged when the gas line was struck (a question not answered here), New Meadows did not sustain damage until the fire occurred. New Meadows and Mr. Brown had no cause of action prior to the fire and should not be held to a statute of limitation designed to encompass only parties directly involved in the construction project. This reasoning is buttressed by Gazija v. Nicholas Jerns Co., 86 Wn.2d 215, 543 P.2d 338 (1975), where the court stated only the infliction of actual and appreciable damages causes an action to accrue. Gazija's logic clearly applies to this situation. Here the property was several blocks away from the underground gas line; damage to Mr. Brown and New Meadows did not result for 7 years. These parties had no notice of any potential risk, much less actual damage, until the fire occurred. The trial court erred in applying RCW 4.16.300-.320; the proper statute of limitation is RCW 4.16.080(1).

PNB's reliance on Washington Natural Gas Co. v. Tyee Constr. Co., 26 Wn. App. 235, 611 P.2d 1378 (1980) is misplaced. There, the issue of damage to adjacent property was not raised. Instead, Washington Natural Gas Company argued RCW 4.16.300-.320 did not apply because laying cable was not an improvement upon real property. The court held that it was.⁵ The facts there indicate Washington Natural Gas Company was aware of the construction and, had it used reasonable diligence, Gazija v. Nicholas Jerns Co., supra, it would have been aware of the damage much earlier than 9 years.

Moreover, Washington Natural Gas Co. is inapplicable because the present action did not arise from "any improvement upon real property." RCW 4.16.300. Neither the telephone cables nor the gas line were located upon New Meadows' property and therefore cannot be termed "betterments which are of a permanent nature and which add to the value of the property as real property." Siegloch v. Iroquois Mining Co., 106 Wash. 632, 636, 181 P. 51 (1919). In Washington Natural Gas Co. v. Tyee Constr. Co., supra, the lines were laid in a housing subdivision, directly adding to the value of that land and enhancing its use. The record indicates New Meadows' home, located 2 blocks away from the gas main line and telephone cables, was heated by oil. Nothing in the record shows the lines involved here were in any manner affixed to New Meadows' realty. See Yakima Fruit & Cold Storage Co. v. Central Heating & Plumbing Co., supra.

Strict Liability

WWP, joined by counsel for Washington Natural Gas Company (WNG) and the American Gas Association (AGA), as amici curiae, contend the trial court erred in holding them strictly liable⁶ for damages caused by the gas leak. Present Washington law imposes a negligence standard. Richey & Gilbert Co. v. Northwestern Natural Gas Corp., 16 Wn.2d 631, 134 P.2d 444 (1943); Senske v. Washington Gas & Elec. Co., 165 Wash. 1, 4 P.2d 523 (1931).

The doctrine of strict liability for abnormally dangerous activities was adopted in Washington as long ago as Patrick v. Smith, 75 Wash. 407, 134 P. 1076 (1913) (vibration damage to adjacent buildings caused by blasting). In Pacific Northwest Bell Tel. Co. v. Port of Seattle, 80 Wn.2d 59, 491 P.2d 1037 (1971), the court adopted Restatement (Second) of Torts § 520 (1977), as a guide in deciding what activity should be considered abnormally dangerous. We follow that analysis here.

Section 520 states:

In determining whether an activity is abnormally dangerous, the following factors are to be considered:

(a) existence of a high degree of risk of some harm to the person, land or chattels of others;

(b) likelihood that the harm that results from it will be great;

(c) inability to eliminate the risk by the exercise of reasonable care;

(d) extent to which the activity is not a matter of common usage;

(e) inappropriateness of the activity to the place where it is carried on; and

(f) extent to which its value to the community is outweighed by its dangerous attributes.

Comment / to section 520 states that all six factors are to be considered. While it is not necessary that all elements be present, ordinarily several are required for strict liability.

In the case at bar, several of the elements are present. Natural gas creates a high degree of risk and there is a likelihood of great harm should gas escape from gas lines.⁷

In the context of these facts, however, the final four elements are missing. Comment h to section 520 points out the inability to eliminate risk means that unavoidable risk remains even after all reasonable care has been taken to control it. This is not true of natural gas. If reasonable care is taken, natural gas will remain in the lines constructed to carry it and explosions and fires will not occur. The AGA brief points out that stringent regulation of natural gas distribution has reduced deaths by accident to less than 25 per year nationwide. Compared to traffic fatalities on the highways (51,676 in 1980), this record is impressive.

Second, the activity—transmission of natural gas by underground lines—is a matter of common usage which is appropriate to the place where it is carried on. The AGA brief notes that:

approximately 160 million people (or 70% of the total U.S. population) use pipeline gas for such residential needs as house or water heating, cooking and clothes drying. The natural gas industry provides about 35% of the total energy used by industry. Natural gas is also used by an estimated 3.4 million commercial establishments. . . .

. . . Over 700,000 miles of distribution pipelines crisscross communities in every state and the District of Columbia.

The transmission of natural gas by underground lines is a matter of common usage, is appropriate to the locale, and its value to the community outweighs its dangerous attributes. Therefore, natural gas transmission, while hazardous, is not an abnormally dangerous activity. Our research indicates no other jurisdiction has imposed strict liability for accidents arising out of gas transmission lines. See Annot., Liability of Gas Company for Personal Injury or Property Damage Caused by Gas Escaping From Mains in Street, 96 A.L.R.2d 1007 (1964), and cases cited therein. The reasoning of these cases parallels our own and is persuasive.

The cases relied on by New Meadows are not applicable. The facts of Vern J. Oja & Assocs. v. Washington Park Towers, Inc., supra (pile driving) and Langan v. Valicopters, Inc., 88 Wn.2d 855, 567 P.2d 218 (1977) (aerial agricultural spraying) are distinguishable. To the extent Siegler v. Kuhlman, 81 Wn.2d 448, 502 P.2d 1181 (1972) applies strict liability for an abnormally dangerous activity,⁸ the facts are entirely different. Siegler v. Kuhlman, supra at 459, contrasts the "quiet, relatively safe, routine procedure" of moving water underground described in Pacific Northwest Bell Tel. Co. v. Port of Seattle, supra, to "the extremely heightened activity" of transporting volatile gasoline down the freeway at high speed. Siegler v. Kuhlman, supra at 459. The facts here, although involving a gas product, fit the former description rather than the latter.

Further, Siegler was premised on the court's responsibility to see that justice is done. Because the fire had destroyed almost all of the evidence in Siegler, the plaintiffs were left without a remedy. Here, the cause of the fire is known and plaintiffs may seek damage under a negligence theory. Under these facts, there is no need to expand legal remedies.

PNB's summary judgment against New Meadows is affirmed. PNB's summary judgment on WWP's cross claim is reversed. New Meadows' summary judgment against WWP on the issue of strict liability is reversed and remanded for trial on the negligence issue. If WWP is found negligent, it may seek indemnity from PNB.

Green, J., concurs.

1 New Meadows and Mark Brown did not join, however, in the action against PNB. At oral argument, PNB stated Mr. Brown's damage action against it is pending in the trial court. Mr. Brown has a cause of action therefore against PNB and WWP.

2 RCW 4.16.300:

"RCW 4.16.300 through 4.16.320 shall apply to all claims or causes of action of any kind against any person, arising from such person having constructed, altered or repaired any improvement upon real property, or having performed or furnished any design, planning, surveying, architectural or construction or engineering services, or supervision or observation of construction, or administration of construction contracts for any construction, alteration or repair of any improvement upon real property."

RCW 4.16.310:

"All claims or causes of action as set forth in RCW 4.16.300 shall accrue, and the applicable statute of limitation shall begin to run only during the period within six years after substantial completion of construction, or during the period within six years after the termination of the services enumerated in RCW 4.16-.300, whichever is later. The phrase 'substantial completion of construction' shall mean the state of completion reached when an improvement upon real property may be used or occupied for its intended use. Any cause of action which has not accrued within six years after such substantial completion of construction, or within six years after such termination of services, whichever is later, shall be barred: Provided, That this limitation shall not be asserted as a defense by any owner, tenant or other person in possession and control of the improvement at the time such cause of action accrues."

RCW 4.16.320:

"Nothing in RCW 4.16.300 through 4.16.320 shall be construed as extending the period now permitted by law for bringing any kind of action."

3 New Meadows and WWP took the position here that WWP represented New Meadows at the hearing. Without documentation showing WWP had standing to represent New Meadows' claims, this position is untenable.

4 RCW 4.16.080(1) reads:

"Actions limited to three years. Within three years:

"(1) An action for waste or trespass upon real property; ..."

5 In Washington Natural Gas Co. v. Tyee Constr. Co., supra, Tyee maintained its cables were the improvement and Tyee had ceased to possess and control the improvement 9 years earlier. Thus, the RCW 4.16.310 proviso—"this limitation shall not be asserted as a defense by any owner, ... in possession and control of the improvement. . ."—did not apply. Here, PNB inconsistently asserts the telephone cable is the improvement for the purposes of the statute and the gas line is the improvement for the purposes of the proviso. Moreover, PNB is still in possession of the improvement by its use and control of the easement in conjunction with WWP.

6 W. Prosser, Torts § 75, at 494-95 (4th ed. 1971) states:

"This new policy [strict liability] frequently has found expression where the defendant's activity is unusual and abnormal in the community, and the danger which it threatens to others is unduly great—and particularly where the danger will be great even though the enterprise is conducted with every possible precaution. The basis of the liability is the defendant's intentional behavior in exposing those in his vicinity to such a risk. The conduct which is dealt with here occupies something of a middle ground. It is conduct which does not so far depart from social standards as to fall within the traditional boundaries of negligence—usually because the advantages which it offers to the defendant and to the community outweigh even the abnormal risk; but which is still so far socially unreasonable that the defendant is not allowed to carry it on without making good any actual harm which it does to his neighbors."

7 The risk herein measured is the danger of escaping gas. The activity is the transportation of gas by underground transmission pipes. Arguably, gas which escapes does not always present a high degree of risk nor will the harm always be great. For our analysis, however, the risk is great enough to require careful scrutiny of the activity.

8 Fout Justices from the 6-Justice majority stated they would not apply strict liability where the facts showed intervening causation. Restatement (Second) of Torts § 522 (1977) states that one carrying on an abnormally dangerous activity should not be absolved from liability even when there is an intervening force. The rationale is stated by comment a as:

The reason for imposing strict liability upon those who carry on abnormally dangerous activities is that they have for their own purposes created a risk that is not a usual incident of the ordinary life of the community. If the risk ripens into injury, it is immaterial that the harm occurs through the unexpectable action of a human being, an animal or a force of nature.

It is therefore unclear whether the doctrine of strict liability for an abnormally dangerous activity really applies to the facts of Siegler.