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Great Northen Insurance Co. v. Eastern Propane Gas, Inc.

United States District Court, D. Massachusetts

March 28, 2017

GREAT NORTHERN INSURANCE COMPANY, a/s/o Anne Davis, Plaintiff,
v.
EASTERN PROPANE GAS, INC., Defendant.

          MEMORANDUM OF DECISION AND ORDER ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

          Judith Gail Dein United States Magistrate Judge

         I. INTRODUCTION

         The plaintiff alleges that on January 23, 2015, the water supply line at a home owned by its insured, Anne Davis, in Gloucester, Massachusetts, froze and ruptured, causing in excess of $700, 000.00 in damages at the property. The house was unoccupied at the time. Great Northern Insurance Company (“Great Northern”) insured the property, and paid the property damage claim. It brings this action as the insured's subrogee against Eastern Propane Gas, Inc. (“Eastern Propane”), the entity that provided propane gas to heat the property. The Complaint sounds in negligence and breach of contract.

         Eastern Propane provided liquid propane gas to the home on an automatic basis. The gas tank was empty by the time the property damage was discovered. It is Great Northern's theory that Eastern Propane either miscalculated or otherwise failed to deliver the amount of propane necessary for the property, and the home ran out of gas. As a result, according to Great Northern, the pipes froze and ruptured, causing the damage at issue. For its part, Eastern Propane's expert will testify that first the pipes froze and burst due to weather conditions, and then the hot water continued to leak out until the propane in the tank was depleted.

         This matter is presently before the court on the motion of Eastern Propane for “Summary Judgment on the Plaintiff's Action Seeking Consequential Damages” (Docket No. 32). Therein, Eastern Propane argues that even assuming Great Northern's theory is correct, and the pipes froze because the tank ran out of propane gas, it cannot be liable due to a provision in the contract it had with the homeowners. Specifically, the contract provides that “[i]n recognition that the depletion of the supply of LP gas at the Location varies with the usage demands of the Customer[s] . . . Eastern cannot and does not assume responsibility and is not accountable for the exhaustion of the LP Gas supply at the Location, or the consequences of its exhaustion, direct or indirect.” Great Northern contends that the contract provision has no application to the instant case, where the customer's needs did not fluctuate, but rather Eastern Propane allegedly miscalculated or simply failed to deliver the amount of fuel that should have been delivered.

         After consideration of the written and oral arguments of the parties, the motion for summary judgment is ALLOWED IN PART and DENIED IN PART. This court concludes that the breach of contract claim is barred by the above quoted provision. However, Great Northern may maintain an action against Eastern Propane for negligence in connection with calculating or delivering the proper amount of fuel that was needed at the home.

         II. STATEMENT OF FACTS[1]

         The Contract

         This action involves a house in Gloucester, Massachusetts. The house originally was owned by James S. Davis, who sold it to his wife Anne Davis for $1.00 on December 8, 1997. DF ¶¶ 1, 3. It was a summer vacation home and rarely occupied. Pl. Mem. (Docket No. 37) at 1. There was a caretaker hired to maintain and safeguard the property. DF ¶ 8.

         On October 25, 1999, the property owners entered into a contract with Eastern Propane entitled “Terms and Conditions of and for the Delivery and Supply of Liquified Petroleum Gas and Related Equipment and Parts” (the “Contract”). DF ¶ 4; Def. Ex. C. The parties agree that this is the only contract at issue in this litigation, that this is the contract that governs the supply of liquefied petroleum gas (“LP”) to the property, and that this is the contract on which plaintiff's breach of contract claim is based.[2] The parties also agree that the defendant's customers had the option of having Eastern Propane automatically deliver propane gas to their property on a schedule the company established based on its calculation of amounts of gas that would be needed, or the homeowner could request specific deliveries, or there could be some combination of the two. See Pl. Mem. at 4-5. It is undisputed that Eastern Propane was to automatically deliver gas to the Davis propery.[3]

         Remarkably, the Contract makes no mention of when gas would be delivered, or of an automatic delivery schedule, or of any obligation on the part of Eastern Propane to calculate the amount of gas that would be needed. Rather, the Contract focuses on the equipment being provided by Eastern Propane. The only references to gas delivery in the one page document are as follows:

         The undersigned has requested Eastern Propane Gas, Inc. (“Eastern”) to provide liquefied petroleum gas (“LP Gas”) and the following related equipment and parts (“Equipment”) to Jim Davis the Customer(s) at: 12 Mt. Locust Place Gloucoster [sic] MA (“the Location”):

Eastern will or has provided the LP Gas to the Customer(s) on a sale basis, the price being that established by Eastern and prevailing on the date of sale.
In recognition that the depletion of the supply of LP gas at the Location varies with the usage demands of the Customer(s), and that the Customer's(s') usage demands will fluctuate in relation to the Customer's(s') fuel requirements, Eastern cannot and does not assume responsibility and is not accountable for the exhaustion of the LP Gas supply at the Location, or the consequences of its exhaustion, direct or indirect.
I/We, the undersigned Customer(s), acknowledge that I/we have read and received a copy of the foregoing terms and conditions and agree that they accurately and fully represent the contractual understandings relating to the matters referenced.

Def. Ex. C (emphasis added). Thus, there are no references in the Contract to the automatic supply or delivery of LP gas. It is undisputed that Mr. and Mrs. Davis are sophisticated business people. DF ΒΆ 7. ...


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