Peoples Gas Sys. v. Posen Constr., Inc., 2018 U.S. Dist. LEXIS 106427 (M.D. Fla. June 26, 2018)

In 2009 Posen Construction, Inc. (“Posen”), a road construction contractor, entered into a general contractor agreement with the Lee County Board of County Commissioners for a lane expansion and drainage system project in east Fort Myers, Florida (the “Project”). Peoples Gas System (“PGS”), an owner of natural gas distribution facilities throughout Florida, maintained gas pipelines underneath the Project site, which required caution when Posen worked around it. To that end, PGS marked the pipeline with flags, paint, and installed testing stations.

However, during the course of the Project, Posen learned that at certain locations construction would be impossible unless PGS removed portions of the pipeline. Therefore, in October 2010, Posen submitted a request to Sunshine One, a notification system whereby excavators obtain the location of underground utilities before excavation. In November 2010, a Posen employee, Mark Santos (“Santos”) was directed to excavate at a location that PGS maintained was not properly marked for the location of the gas pipeline. Santos struck and ruptured the pipeline and was severely injured as a result.

Santos sued PGS and Posen for his injuries and after Santos voluntarily dismissed Posen as a defendant, in 2017 Santos and PGS settled the claims. Around this time, PGS sued Posen in federal court for the same incident seeking damages for the cost to repair the pipeline on grounds of negligence, which the parties eventually settled. PGS then brought another lawsuit in Federal Court for statutory indemnity for monies paid to Santos under the settlement pursuant to Florida’s Underground Facility Damage Prevention and Safety Act (Fla. Stat. §§ 556.101-106) (the “Act”).

Posen moved to dismiss the lawsuit on grounds that the damages PGS sought were not a “loss” under the Act, and that the Act bestows no statutory right to indemnification. Relying on statutory interpretation rules and Florida law, the Court ruled that the Act contained no indemnification remedy, and therefore granted Posen’s motion to dismiss PGS’s complaint.

In reaching this conclusion, the Court first began by considering the Act’s purpose, which is to “aid the public by preventing injury to persons or property and the interruption of services resulting from damage to an underground facility caused by excavation or demolition operations.” Pursuant to the Act, excavators such as Posen are to notify member operators (i.e., utility companies like PGS) of their activities so operators can identify the location of their underground utility lines. If damage occurs despite the lines being property marked, the Act creates a rebuttable presumption of negligence and the excavator is liable “for the total sum of the losses to all member operators involved as those costs are normally computed.”

PGS argued that the Act’s use of the terms “losses” and “costs” can be read to include the settlement monies PGS paid to Santos. In considering this argument, the Court noted that these terms were not defined under the Act and there were no other cases directly on point; therefore the Court relied on principles of statutory interpretation and the plain language of the Act.

The Court reasoned that the Act’s description of “costs” as they are “normally computed” refers to losses of revenue associated with the damaged pipeline, or the personal injury costs itself, and that a claim for indemnity would not fit the plain meaning of the “normally computed cost.” This interpretation, the Court opined, is consistent with the Act’s purpose for “preventing injury to persons or property and the interruption of services.” PGS’s indemnification claim was neither a claim for personal injury or damaged equipment, and the Court was unwilling to conflate a direct claim for personal injury with an indemnification claim based on a personal injury, particularly since such an interpretation would be an abrogation by the courts of legislative power. The Court also noted that in several other Florida statutes, the legislature was explicit in creating a claim for indemnification. Therefore, despite the fact that the Act covers personal injury, the Court held that the Act does not support a claim for indemnification even though it arises from a personal injury and dismissed PGS’s lawsuit.