Defense Digest

One Call Or Last Call? Commonwealth Court Stops Property Owner's Celebration Early In Municipal Liability Case

The Pennsylvania Commonwealth Court recently addressed the duty of municipalities under Pennsylvania's "One Call" Law in Le'Nature's Inc. v Latrobe Municipal Authority and City of Latrobe, 2006 Pa. Commw. LEXIS 688 (December 28, 2006). In a classic case of "won the battle but lost the war," the municipality was found to owe a duty to property owners but was nonetheless immune under the Political Subdivision Tort Claims Act 42 Pa. C.S. § 8541 et seq. A good starting point for this brief discussion is an introduction to the parties.

Le'Nature's Inc. is a Delaware corporation with its principal place of business in Latrobe, Pennsylvania. Under Pennsylvania's "One Call" Act, it is the "Owner" defined as "any person who or which engages a contractor for construction or any other project which requires excavation or demolition work as herein defined." It contracted with TEDCO, a general contractor/construction company, to engage in work on its property.

TEDCO contracted with Shelly Drilling Company to drill and place caissons on the property. Both are considered "Contractors" under the law, which the Act defines as "any person who or which performs excavation or demolition work for himself or for another person." TEDCO employees contacted Pennsylvania's One Call line to inquire of "Facility Owners" regarding the location of utility lines and other facilities as required by the law. The defendant municipality, Latrobe, was one such "facility owner."

The Act defines "facility owner" as a "public utility or agency, political subdivision, municipality, authority, rural electric cooperative or other person or entity which owns or operates a line." In this case, the "line" was a sewer line owned by Latrobe. Needless to say, they failed to respond to the initial One Call request.

Within two working days of a timely request from a contractor, a facility owner is required to "mark, stake, locate or otherwise provide the position of the facility owner's underground lines." Latrobe argued, and the trial court accepted, that Latrobe did not owe a duty to the property owner but, rather, to the contractor. Le'Nature had argued in reply that the duty is owed to both the contractor and the property owner. It brought suit for the $1.6 million to repair damage to the lines and cover the cost of construction delays.

In concluding that the municipality (facility owner) did indeed owe a duty to the property owner, the court reasoned that under Latrobe's theory, an owner who sought to do work on his own property who called the One Call system would be owed no duty by the municipality merely because the owner was not a contractor. Citing to the specific language of the statute itself as a basis, the court ruled that this would be an "absurd result." The court held: "An 'owner' is owed a duty under this Act as a person who has an interest in the facility owner's response through the One Call system." If Le'Nature started the celebration at this point, however, it may well have missed the court's actual "last call" on this case.

Le'Nature ultimately paid the contractor to repair the damage to Latrobe's lines and all other damage that occurred as a result of the lines being damaged. Latrobe, arguing that it owed no duty to the property owner, also argued that it was entitled to immunity under Pennsylvania's Political Subdivision Tort Claims Act, 42 Pa. C.S. § 8541 et. seq. The Act provides immunity to municipalities in negligence suits, unless one of eight narrowly tailored exceptions is met. One of those exceptions is liability for sewer lines, like those damaged by Le'Nature's contractors.

Le'Nature argued to the court that the failure to respond to the One Call request created a dangerous condition covered by the exception. Not so fast, responded Latrobe, which put forth its own argument that the alleged dangerous condition was not the sewer itself but the lack of a response to the "One Call." The court agreed with the municipality that Le'Nature had failed to allege a dangerous condition of the sewer system itself such that Latrobe would be subject to liability under the Act. As such, Latrobe was entitled to immunity from suit.

While the court's ruling in Le'Nature would seem to suggest on its face that municipalities are totally immune from suit for failing to comply with the One Call Act, such is actually not the case. Facility owners who fail to register at all with the One Call system are liable for the costs of damages to their lines and may not pursue the contractor for these costs. Further, the Tort Claims Act provides protection for certain "negligent" acts, not willful or deliberate acts. A policy of not responding to any "One Call" request would certainly qualify as such a deliberate act. Municipalities unsure of their liability under the Act are encouraged to call their solicitor, or the Professional Liability Group at Marshall Dennehey.

* Chris Boyle is an associate in our King of Prussia, Pennsylvania, office and can be reached at (610) 354-8476 or cpboyle@mdwcg.com.