Clay Electric Cooperative, Inc. v. Johnson

We have for review Johnson v. Lance, Inc., 790 So.2d 1144 (Fla. 1st DCA 2001) (hereinafter “Johnson”), and Lance, Inc. v. Johnson, 790 So.2d 1163 (Fla. 1st DCA 2001) (hereinafter “Lance ”), based on conflict with Martinez v. Florida Power & Light Co., 785 So.2d 1251 (Fla. 3d DCA 2001) (hereinafter “Martinez ”), review granted, 819 So.2d 137 (Fla.2002). We have jurisdiction. Art. V, § 3(b)(3), Fla. Const.

I

While fourteen-year-old Dante Johnson was walking to his school bus stop during the early morning darkness on September 4, 1997, he was struck and killed by a truck in an area where a streetlight was inoperative. Dante’s grandmother, Delores Johnson, who was Dante’s caregiver, came upon the boy’s “mangled, bloodied body” at the scene and fainted. She later filed a negligence claim against the following defendants: the truck’s driver (“Ga-nas”), the truck’s owner (“Lance”), and the streetlight maintenance company (“Clay Electric”). Dante’s estate also filed suit against the same defendants and the two cases were consolidated.

Clay Electric filed an answer to the plaintiffs’ complaint and subsequently moved for summary judgment, which was granted:

The undisputed material facts, for purposes of this Order, after all reasonable inferences are resolved in favor of the other parties opposing the pending motion, are as follows:

(A) The decedent, Dante Johnson, was struck by a motor vehicle being driven by Defendant Larry Ganas. The collision occurred while the decedent walked on or near a public street.

(B) The collision occurred during the early morning hours while it remained very dark. The decedent was wearing dark clothing and was walking in the same direction that Defendant Ganas was driving.

(C) Defendant Ganas was alert and operating his vehicle in a prudent manner and his headlights were on and operating properly. His vision was not impaired or obstructed. Despite these facts, he was unable to see the decedent in time to take evasive actions that would have avoided the collision due to the extreme darkness at the site of the collision.

(D) Several years before the subject collision, the Jacksonville Electric Authority had installed lights along the street where the decedent was struck and killed.... Also, several years before the subject collision, Defendant Clay Electric entered into a contract with the Jacksonville Electric Authority which required that Defendant Clay Electric maintain the lights. That contract remained in force at the time of the collision and Defendant Clay Electric had been paid to maintain the lights.

(E) If the lights had been operating properly, Defendant Ganas would have seen the decedent in time to avoid the collision. The light nearest the site of the collision was not illuminated and it had not been illuminated for [some time] prior to the collision. Defendant Clay Electric, although being contractually obligated to maintain the light and having been paid to do so, failed to maintain the light. Defendant Clay Electric never instituted a system to regularly inspect the lights at night or to determine which lights needed replacement bulbs or repairs.

(F) The Court, having read the cases cited by the parties, concludes the Defendant Clay Electric did not have a legally recognized obligation to maintain the subject light for the benefit of the decedent.

Both Johnson and Dante’s estate appealed, and Lance filed a separate appeal.

The district court in Johnson addressed Johnson’s and the estate’s appeal and reversed. The district court in Lance then addressed Lance’s appeal and ruled in conformity with Johnson. Clay Electric sought review of both Johnson and Lance based on conflict with Martinez, another streetlight “maintenance” case wherein the district court affirmed the trial court’s judgment on the pleadings in favor of the electric company. Martinez sought review. We granted review in Johnson, Lance, and Martinez, consolidated Johnson and Lance, and reviewed Martinez separately. The issue posed in the present cases is whether, for purposes of this summary judgment, Clay Electric owed the plaintiffs a legally recognized duty to use reasonable care in maintaining the streetlights.

II

A

Florida Rule of Civil Procedure 1.510 sets forth the following criteria governing motions for summary judgment:

The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.

Fla. R. Civ. P. 1.510(c). A summary judgment deprives a party of his or her right to trial and must be exercised with restraint; any doubts must be resolved in favor of the nonmoving party. A trial court’s ruling on a motion for summary judgment posing a pure question of law is subject to de novo review.

Although the present cases involve an alleged contract between Clay Electric and the Jacksonville Electric Authority (“JEA”), the suits themselves are based on an allegation of negligence and the claims thus sound in tort. Traditionally, a cause of action based on negligence comprises four elements:

1. A duty, or obligation, recognized by the law, requiring the [defendant] to conform to a certain standard of conduct, for the protection of others against unreasonable risks.

2. A failure on the [defendant’s] part to conform to the standard required: a breach of the duty....

3. A reasonably close causal connection between the conduct and the resulting injury. This is what is commonly known as “legal cause,” or “proximate cause,” and which includes the notion of cause in fact.

4. Actual loss or damage....

Prosser and Keaton on the Law of Torts 164-65 (W. Page Keeton ed., 5th ed.1984).

The principle of “duty” is linked to the concept of foreseeability and 'may arise from four general sources:

(1) legislative enactments or administration regulations; (2) judicial interpretations of such enactments or regulations; (3) other judicial precedent; and (4) a duty arising from the general facts of the case.

McCain v. Fla. Power Corp., 593 So.2d 500, 503 n. 2 (Fla.1992). The present cases fall within the fourth category, i.e., the duty arises “from the general facts of the case.” To the extent the parties rely on an alleged contract between Clay Electric and JEA to support the proposition that Clay Electric owed, or did not owe, a legal duty to Dante, the contract itself is but one facet of the general facts of the case.

B

Whenever one undertakes to provide a service to others, whether one does so gratuitously or by contract, the individual who undertakes to provide the service — i.e., the “undertaker” — thereby assumes a duty to act carefully and to not put others at an undue risk of harm. This maxim, termed the “undertaker’s doctrine,” applies to both governmental and nongovernmental entities. The doctrine further applies not just to parties in privity with one another — i.e., the parties directly involved in an agreement or undertaking— but also to third parties. Florida courts have applied the doctrine to a variety of third-party, contract-based negligence claims and ruled that the defendants could be held liable, notwithstanding a lack of privity.

Section 324A of the Restatement sets forth the following standard for assessing liability in such cases:

One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of a third person or his things, is subject to liability to the third person for physical harm resulting from his failure to exercise reasonable care to protect his undertaking, if

(a)his failure to exercise reasonable care increases the risk of such harm, or

(b) he has undertaken to perform a duty owed by the other to the third person, or

(c) the harm is suffered because of reliance of the other or the third person upon the undertaking.

Restatement (Second) of Torts § 324A (1965).

This Court utilized the above standard in Union Park Memorial Chapel v. Hutt, 670 So.2d 64 (Fla.1996), wherein a husband and wife sued a funeral home after the wife was injured in a traffic accident while participating in a funeral procession. The Court determined that the funeral home’s actions in supervising the procession implicated both subsections (a) and (c), relating to “increased risk” and “reliance” respectively. The Court then held that, notwithstanding a lack of privity between the plaintiffs and the funeral home, the funeral home owed the plaintiffs a legal duty to act with reasonable care.

Ill

In the present cases, we conclude that the trial court erred in granting Clay Electric’s motion for summary judgment. Viewing the record, the undisputed facts, and all reasonable inferences therefrom in the light most favorable to the nonmoving parties, we hold that the plaintiffs have adequately shown that Clay Electric assumed a specific, legally recognized duty to the plaintiffs to act with due care in maintaining the streetlights.

First, long before the present accident took place, the City of Jacksonville determined that the 8500 block of Collins Road needed lighting,- and streetlights subsequently were installed. When Clay Electric undertook the maintenance of those lights, the company should have foreseen that proper maintenance was necessary for the protection of the plaintiffs. The streetlight at issue was located in a residential neighborhood, on a major roadway, and on the pathway to a school bus stop. There were no sidewalks in the area and the local children, on a daily basis, walked in the early morning darkness in the grassy strip along the roadway’s edge directly past the streetlight on their way to the bus stop.

Second, Clay Electric neglected to exercise due care in maintaining the streetlights. As noted above, the trial court found:

(E) If the lights had been operating properly, Defendant Ganas would have seen the decedent in time to avoid the collision. The light nearest the site of the collision was not illuminated and it had not been illuminated for [some time] prior to the collision. Defendant Clay Electric, although being contractually obligated to maintain the light and having been paid to do so, failed to maintain the light. Defendant Clay Electric never instituted a system to regularly inspect the lights at night or to determine which lights needed replacement bulbs or repairs.

Thus, at the time of the accident, Clay Electric had not instituted even the most rudimentary maintenance procedures.

And third, both the “increased risk” and “reliance” subsections are implicated here. Clay Electric’s failure to exercise due care in maintaining the streetlights caused the roadway to be cast in darkness, thus increasing the risk that Ganas would be unable to see Dante. Further, Clay Electric, in undertaking to maintain the streetlights, arguably caused Delores Johnson to rely on the fact that the lights would be operating properly and that Dante’s pathway to the school bus stop would be lighted. On this record, both “increased risk” and “reliance” pose viable issues to be decided by the trier-of-fact.

IV

A

Clay Electric first contends that the “increased risk” subsection is inapplicable here because Dante was no worse off with an inoperative streetlight than he would have been - with no light at all. This claim, however, misses the point. The plaintiffs did not allege that Clay Electric negligently installed the streetlights on an otherwise ««lighted street. Rather, they alleged that Clay Electric negligently maintained the streetlights on an otherwise lighted street. Construing the present record in the light most favorable to the plaintiffs, it appears that Clay Electric undertook the maintenance of operative streetlights on Collins Road, and it was the company’s subsequent negligence that resulted in the roadway being cast in darkness. This raises a jury question as to whether Clay Electric’s negligence increased the risk of harm to Dante.

We reject Clay Electric’s claim that our ruling will force utilities to continue their services in perpetuum once they undertake to maintain streetlights.. The Massachusetts Superior Court in Ahmed v. Burns, 12 Mass. L. Rptr. 191, 2000 WL 1511756 (Super.Ct.2000), noted that the municipality there took the following approach to a similar problem:

In 1991, as a cost saving measure, the town decided to turn off every other street light along Main Street, and instructed the [electric company] to do so. The street lights which were turned off were marked with orange caps so that the [electric company] and the town could identify the lights that were intentionally turned off.

Id. The court then ruled that the town’s decision “concerning the number of streetlights to turn on or off ... would be a discretionary decision that is exempt from [liability]” under the Massachusetts Tort Claims Act. Florida courts have recognized a similar exemption from liability for certain “discretionary” governmental acts.

B

Clay Electric also contends that the “reliance” subsection is inapplicable here because the record contains insufficient proof that the plaintiffs relied on the company’s actions. We disagree. Although witnesses stated that several streetlights in the area had been inoperative long before the present accident took place, nothing suggests that this fact was conveyed to, or known by, Dante’s caregiver. Instead, the record, when viewed in the light most favorable to the plaintiffs, raises a jury question as to whether Clay Electric, in undertaking the maintenance of operative streetlights in Dante’s neighborhood, induced Delores Johnson to forgo other precautions for Dante, such as driving him, or walking with him, to the school bus stop.

C

Clay Electric next contends that, under the reasoning of H.R. Moch Co. v. Rensselaer Water Co., 247 N.Y. 160, 159 N.E. 896 (1928), Clay Electric is immune from liability to third parties. We disagree. The relevant facts there were as follows:

The defendant, a waterworks company ... made a contract with the city of Rensselaer for the supply of water.... Water was to be furnished to the city for sewer flushing and street sprinkling; for service to schools and public buildings; and for service at fire hydrants.... While this contract was in force, a building caught fire. The flames, spreading to the plaintiffs warehouse near by, destroyed it and its contents. The defendant ... was promptly notified of the fire, “but omitted and neglected after such notice, to supply or furnish sufficient or adequate quantity of water, with adequate pressure to stay, suppress, or extinguish the fire before it reached the warehouse of the plaintiff, although the pressure and supply which the defendant ... had agreed to by said contract to supply and furnish, was adequate and sufficient to prevent the spread of the fire to and the destruction of the plaintiffs warehouse and its contents.”

Id. at 896-97. The New York court rejected the plaintiffs common law tort claim: “We are satisfied that liability would be unduly and indeed indefinitely extended by this enlargement of the zone of duty.”

We find Moeh inapplicable to the present cases. At the time Moeh was decided, i.e., three-quarters of a century ago, the body of law governing the undertaker’s doctrine was nascent and still ill-defined. The New York Court of Appeals, at that time, did not have the benefit of the Restatement or any other modern authority or precedent on this subject and did not address either “increased risk” or “reliance,” both of which are key factors limiting liability in the present cases. Instead, the court sought to limit liability by relying on — and adopting the analysis of — a turn-of-thg-century ■ fire -hydrant “installation” case, notwithstanding the fact that Mock itself was a “maintenance” case.

D

Clay Electric cites numerous streetlight “maintenance” cases from throughout the nation and claims that the weight of those cases compels a decision in its favor here. We disagree. First, nearly all the cited cases are lower appellate court decisions, not state high court décisionsi Second, many of the cited cases are dated, and the courts therein did not address either “increased risk” or “reliance.” Third, in those cases that did address “increased risk” and “reliance,” the courts’ analyses missed the mark and — like Clay Electric’s argument in the present cases — were more appropriate for “installation” cases. And finally, many of the cases from other states denied relief based on the appellate courts’ own reckoning that a contrary ruling would result in exorbitant rate hikes for consumers. In Florida, such rate-setting projections are best left to the legislative branch, as explained below.

E

Clay Electric claims that an adverse ruling in the present cases will violate public policy in the following way: (a) the ruling will open the floodgates to similar lawsuits against electric companies and other utilities; (b) utilities’ maintenance costs will increase sharply; (c) utilities’ liability insurance premiums also will increase sharply; (d) utilities will be forced to increase their consumer rates for electricity, water, and other basic services; (e) the adverse impact of those rate hikes on consumers will far outweigh any benefit of allowing the present plaintiffs to proceed with their claims; and finally, (f) such losses already are adequately covered by automobile insurance.

Although courts, where appropriate, will address existent public policy concerns, Clay Electric’s “floodgate” argument asks this Court to base its decision on pure speculation. The electric company cites no record evidence supporting its hypothesis. To permit meaningful review, this claim in fact would require a projection of future rate- hikes based on established rate-setting formulae governing the utility and insurance industries. No such assessment has been made here and, under Florida’s statutory scheme, such matters fall squarely within the purview of the legislative, not judicial, branch. If this Court were to attempt to evaluate Clay Electric’s “floodgate” hypothesis solely on the basis of the present record, we would be usurping the legislative prerogative and our efforts would amount to little more than a judicial “shot in the dark.”

V

In addressing a similar liability issue in a fire hydrant “maintenance” case, the New Jersey Supreme Court rejected the water company’s claim that utility companies cannot be held liable to third parties:

[T]he primary purpose of tort law is “that wronged persons should be compensated for their injuries and that those responsible for the wrong should bear the cost of their tortious conduct.” Moreover, forcing tortfeasors to pay for the harm they have wrought provides a proper incentive for reasonable conduct. A rule that denies water consumers a right of recovery for water-company negligence diminishes the incentive for water companies to perform maintenance that would prevent large ... losses. Since the applicable standard of liability is negligence, and not liability without fault, a water company that exercises due care will not be liable in tort. By acting non-negligently, water eompa-nies will decrease the risk of [property] damage and loss of life in ways property owners cannot, and, at the same time, minimize their own exposure to tort liability.

It is argued that a rule imposing liability on water companies for negligently failing to provide adequate water pressure to fire hydrants would expose water companies to extraordinary losses at great cost to the public that ultimately pays the water rates established by law. The fear of limitless liability and litigation has marked many advances in tort law. As we said in [a prior case], “[t]he answer to the allegation of unchecked liability is not the judicial obstruction of a fairly grounded claim for redress. Rather, it must be a more sedulous application of traditional concepts of duty and proximate causation to the facts of each case.” Reasonable care is not a standard beyond the reach of any enterprise.

Weinberg v. Dinger, 106 N.J. 469, 524 A.2d 366, 375-79 (1987) (footnote and citations omitted) (quoting People Express Airlines, Inc. v. Consolidated Rail Corp., 100 N.J. 246, 495 A.2d 107, 111 (1985)). We agree with this analysis, for it reflects our own precedent spanning the century.

The answer to the issue posed in the present cases lies not in the judicial obstruction of the plaintiffs’ claims, but in the sedulous, even-handed application of established principles of tort law. Reasonable care is not a standard that is beyond Clay Electric’s reach. We approve the decisions of the district court in Johnson v. Lance, Inc., 790 So.2d 1144 (Fla. 1st DCA 2001), and Lance, Inc. v. Johnson, 790 So.2d 1163 (Fla. 1st DCA 2001), as explained herein. We express no opinion as to the merits of the underlying negligence claims.

It is so ordered.

ANSTEAD, C.J., and PARIENTE, LEWIS, and QUINCE, JJ., concur.

PARIENTE, J., concurs specially with an opinion, in which ANSTEAD, C.J., and LEWIS, J., concur.

CANTERO, J., dissents with an opinion, in which WELLS, J., concurs.

. See Escobar v. Bill Currie Ford, Inc., 247 So.2d 311 (Fla.1971).

. See Major League Baseball v. Morsani, 790 So.2d 1071 (Fla.2001).

. See Restatement (Second) of Torts § 323 (1965).

. See, e.g., Dept. of Transp. v. Neilson, 419 So.2d 1071 (Fla.1982); Commercial Carrier Corp. v. Indian River County, 371 So.2d 1010 (Fla.1979).

. See, e.g., Union Park Mem'l Chapel v. Hutt, 670 So.2d 64 (Fla.1996); McCain v. Fla. Power Corp., 593 So.2d 500 (Fla.1992).

.See, e.g., First Fla. Bank v. Max Mitchell & Co., 558 So.2d 9 (Fla.1990); First Am. Title Ins. Co. v. First Title Serv. Co., 457 So.2d 467 (Fla.1984); A.R. Moyer, Inc. v. Graham, 285 So.2d 397 (Fla.1973); Smith Eng’g & Constr. Co. v. Cohn, 94 So.2d 826 (Fla.1957); Mugge v. Tampa Waterworks Co., 52 Fla. 371, 42 So. 81 (1906).

. See, e.g., Trianon Park Condo. Ass'n, Inc. v. City of Hialeah, 468 So.2d 912 (Fla.1985); Commercial Carrier Corp. v. Indian River County, 371 So.2d 1010 (Fla.1979).

. See Restatement (Second) of Torts § 324A cmt. e (1965).

. See German Alliance Ins. Co. v. Home Water Supply Co., 226 U.S. 220, 33 S.Ct. 32, 57 L.Ed. 195 (1912).

. In fact, Clay Electric cites only two state high court decisions, and one of those decisions was rendered more than a half-centuiy ago. Both cases involved factual scenarios far different from the present cases. See Fishbaugh v. Utah Power & Light, 969 P.2d 403 (Utah 1998) (involving a malfunctioning photocell that disabled an entire row of twenty-eight streetlights, which malfunction may have occurred just minutes before the accident); East Coast Freight Lines, Inc. v. Consolidated Gas, Electric Light & Power Co., 187 Md. 385, 50 A.2d 246 (1946) (involving a tractor-trailer colliding with both a light pole and another tractor-trailer).

. But see Sinclair v. Dunagan, 905 F.Supp. 208, 214 (D.N.J.1995) (finding no liability where an electric company undertook a simple program to “(1) replace bulbs upon notification of their failure, and (2) replace them routinely once every four years”).

. But cf. Weinberg v. Dinger, 106 N.J. 469, 524 A.2d 366, 376 (1987) ("In states that impose liability on water companies that fail to supply adequate pressure for fire fighting, the claims experience has been insubstantial and water companies have used insurance, self-insurance, and reserve funds to meet their obligations to claimants.”).

. See infra note 14.

. See ch. 350, Fla. Stat. (1997) (declaring that the Florida Public Service Commission is "an arm of the legislative branch of government" and setting forth criteria governing the commission); ch. 366, Fla. Stat. (1997) (declaring that the regulation of public utilities "shall be deemed to be an exercise of the police power of the state” and setting forth criteria governing such regulation); § 366.02(2), Fla. Stat. (1997) (defining "electric utility” as "any municipal electric utility, investor-owned electric utility, or rural electric cooperative which owns, maintains, or operates an electric generation, transmission, or distribution system within the state”); ch. 425, Fla. Stat. (1997) (setting forth the "Rural Electric Cooperative Law,” which establishes criteria governing the formation, operation, and distribution of revenues of such cooperatives); ch. 627, Fla. Stat. (1997) (declaring that a purpose of the Florida Insurance Code is "[t]o promote the public welfare by regulating insurance rates as herein provided”); see also In re Adv. Opinion to the Gov., 223 So.2d 35, 38 (Fla.1969) (recognizing "the inherent power of the Legislature to regulate these types of business enterprises involved in public service”).

. See Mugge v. Tampa Waterworks Co., 52 Fla. 371, 42 So. 81 (1906); see also Woodbury v. Tampa Waterworks Co., 57 Fla. 243, 49 So. 556 (1909).