LP Gas, July 2014

Limiting your liability Decision in Colorado offers road map for building defensible case I n the case of Safeco Insurance v Plateau Heating Air Conditioning et al Colorado became the first state to issue a published decision on a tort reform statute enacted to limit liability to propane companies There are now 18 states with various forms of law that attempt to limit the liability of propane companies following accidents caused by an alteration to the gas system of which they are not aware In the Colorado case an explosion occurred in a home on Feb 18 2011 The homeowners had asked Plateau HVAC to investigate low temperatures in the home in February 2008 An employee of Plateau came to the home to fix the problem and told the family he had removed a carbon monoxide detector but this was later discovered to be a gas detector He also told the family he had removed a shutoff valve at the second stage regulator and left it near the regulator In mid to late 2009 Action Gas Inc doing business as Independent Propane became the familys propane supplier Before initiating service it performed a tank site check and the associated form and later a residential gas inspection It supplied a 1000 gallon propane tank In the course of the subsequent lawsuit Independent Propane was added as a defendant with Plateau HVAC Independent sought to be dismissed from the case before much fact discovery was completed The court decided it had many unanswered questions that prevented it from granting the dismissal It was also required to see all facts in the light most favorable to the party opposing the dismissal The courts analysis of Colorados Columnist JOHN V McCOY limited liability statute for propane companies started with the acknowledgement that Independent Propane was a company doing business in Colorado under which the statute was intended to apply It then determined there was an alleged alteration modification or repair of propane equipment or propane appliance This would have been Plateaus removal of the propane safety monitoring system and gas shutoff valve The courts central focus was the propane companys lack of knowledge and consent to the alteration modification or repair of the gas system According to evidentiary testimony in the record an Independent Propane employee told an investigator that a solenoid valve found at the scene of the fire was not present when he did his pressure test in November 2009 Applicable law would require a solenoid shutoff valve on a furnace located in the basement such as this The court determined these facts created a factual dispute that precluded dismissal of the case against Independent Propane at an early stage The court was also asked to dismiss a breach of contract claim brought against Independent Propane by the plaintiff because it only presented conclusory allegations Colorado is a notice pleading state as compared to a fact pleading state All that is necessary to allege a claim is a short and plain statement of the claim showing that the pleader is entitled to relief Here the plaintiff simply alleged that Independent Propane had a contract with the plaintiff requiring it to inspect the propane system and it failed to do this resulting in damages The court said these allegations if true would form the basis for a breachof contract claim But the facts as developed in the case and at trial will ultimately determine if a breach of contract exists Finally the plaintiff claimed Independent Propane was negligent per se and violated Colorado law because it serviced a system that was below grade and did not include a gas detecting device Independent Propane claimed the cited rule was eliminated as of Nov 10 2009 and it did not deliver fuel to the home until Nov 24 2009 The plaintiff claimed the law was not eliminated until Jan 1 2010 Here the court sidestepped the issue by saying the plaintiff could still proceed with its negligence per se claim but it would not yet decide the effective date of the rules elimination A seasoned trial lawyer views this decision as a road map for building a defensible case as well as a predictor of the critical issues in the case To obtain a favorable result for the propane company its important to focus on the lack of knowledge of the altered system the limited duty to inspect and the elimination of the restriction on below grade installations to sometime before Independent Propane initiated propane service to the home Given this decision was rendered when the lawsuit was in its early stages other facts may develop that present good defense strategies LPG John V McCoy is with McCoy Leavitt Laskey LLC and his firm represents industry members nationally He can be reached at 262 522 7007 or jmccoy@ MLLlaw com 50 LPGas July 2014 www LPGasmagazine com