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Howrey LLP
The
Arizona Court of Appeals has found an excavating contractor
liable for damages it caused to an unmarked pipe even after
the utility that owned the pipe denied ownership. Gunnell
v. Arizona Public Service Company, 199 Ariz. 382, 18
P.3d 176 (Ariz.Ct.Ap. 2001).
The
excavating contractor, Gunnell Construction, contracted
to perform excavation work for installation of a sewer line
in Cottonwood, Arizona. Before beginning excavation, Gunnell
notified the local Blue Stake Center and the Arizona Public
Service Company so they could mark the location of their
underground facilities near the sewer line.
After
the Blue Stake Center and Arizona Public Service had a chance
to stake existing underground utilities, Gunnell began excavating
and encountered an unmarked, unidentified galvanized steel
pipe. Believing the steel pipe was a water pipe, Gunnell
contracted both water companies in Cottonwood. Both water
companies denied ownership.
Based
on his experience that electric lines are not encased in
steel pipes and the denial of ownership by the water companies,
Gunnell concluded that the pipe was abandoned and continued
excavation. Gunnell's coworker, Jim Knox, cut into the pipe,
and an explosion occurred. The explosion seriously and permanently
injured both Gunnell and Knox.
Gunnell
informed Arizona Public Service that he had cut into an
unmarked, unidentified electric line. Arizona Public Service
responded that if the line was encased in a steel pipe,
it could not possibly belong to the utility. Arizona Public
Service later admitted that it owned the electric line and
that its employee in charge of blue staking had "just
missed it."
Gunnell
sued Arizona Public Service, alleging that the utility negligently
installed the electric line, failed to warn of the line's
location and inadequately blue-staked the area, injuring
Gunnell. Knox also sued the utility. Arizona Public Service
denied liability and counterclaimed, alleging that Gunnell
was liable for damage to the electric line and that Gunnell
should indemnify the utility in the suit filed by Knox.
The
Court of Appeals addressed two issues:
| 1. |
Did
Gunnell violate the Underground Facilities Act (Arizona
Revised Statutes §§40-360.21, et seq.)? |
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| 2. |
Does
the Underground Facilities Act allow application of
comparative negligence principles? |
First,
Gunnell contended that because Arizona Public Service failed
to properly mark its underground line, even after Gunnell
repeatedly requested that it do so, the utility was liable
for the resulting damages. The utility asserted that because
Gunnell failed to notify it when he encountered the unidentified
pipe, Gunnell was liable.
The
Court of Appeals found Gunnell liable because he failed
to find the true owner of the pipe. An excavator that encounters
an unmarked pipe should notify the owner and may not treat
the unmarked pipe as abandoned unless and until it complies
with the Underground Facilities Act's procedure for verifying
that an underground facility really has been abandoned.
Therefore, when the water companies disclaimed ownership,
Gunnell either should have contacted other utilities to
determine the owner of the pipe or should have contacted
the Blue Stake Center and followed its established method
for verifying whether the pipe was abandoned.
Second,
Gunnell contended that Arizona Public Service should be
held partially responsible for its failure to identify the
pipe. The Court of Appeals rejected the argument. If an
owner or the owner's agent fails to locate, mark or identify
an underground facility after a request and an excavator
encounters the facility, causing damage, liability rests
with the owner of the facility. If, as here, the excavator
encounters an unmarked facility without damaging it but
continues to excavate without further investigation, the
excavator does so at its own peril. Liability falls squarely
on the excavator's shoulders.
Accordingly,
Gunnell was responsible for all damages to the pipe. He
also was required to indemnify Arizona Public Service for
any damages suffered by third parties. Gunnell also was
held liable for the utility's attorney fees and costs.
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For more information about the issues covered in this report, please contact Paul Berning in our San Francisco office at 415-848-4996 or at paulberning@howrey.com or contact your Howrey attorney. For more information about Howrey's Construction Practice Group, click here.
©2002 Howrey LLP
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