Opinion
NOT TO BE PUBLISHED
Super. Ct. No. 010000706
SIMS, Acting P. J.Four actions consolidated under this case number in the trial court (and under the name of a different lead plaintiff not party to this appeal) sought property damages from the wildfire that resulted when a tree fell onto a power line. Defendant Utility Tree Services, Inc. (Utility Tree) moved for summary judgment (or summary adjudication) on the complaints of plaintiff CHY Company (CHY) and plaintiff Elma Davis, as well as on the cross-complaints of Pacific Gas & Electric Company (PG&E) filed against it in those two actions. The trial court granted the motions, and the aggrieved parties filed their timely notices of appeal.
PG&E settled with plaintiff CHY and is no longer a party to that action, or to the appeal of plaintiff Davis.
The plaintiffs and PG&E contend that the trial court erred in limiting Utility Tree’s tree-inspection duties to a narrow scope of work pursuant to what the court termed a “collateral” oral contract with PG&E, regardless of any broader duties that might exist under general negligence principles, the pertinent statutes or regulations, or the written contract between PG&E and Utility Tree. We agree. Utility Tree did not establish the existence of any such independent oral contract as a matter of undisputed fact. We therefore will reverse the judgment and remand for further proceedings.
The Pleadings
We review a ruling on a motion for summary judgment de novo, with our initial task being to identify the allegations of the pleadings. (Rio Linda Unified School Dist. v. Superior Court (1997) 52 Cal.App.4th 732, 734-735 (Rio Linda).)
The complaints of plaintiffs CHY and Davis are essentially identical. PG&E owned, operated, and maintained power lines that crossed over the Pendola Ranch, specifically denominated the Pike City 110112kV Circuit (Pike City circuit). On behalf of PG&E, Utility Tree and another entity (WEC) performed vegetation clearance work, which included the identification and removal of hazard trees adjacent to the power lines. In the performance of their responsibilities, they failed to conduct inspections that were in compliance with the standard of care in the electrical utility industry, or with PG&E’s statutory obligations (see Pub. Res. Code, § 4293 (section 4293), as prescribed in their contracts with PG&E (with respect to which the plaintiffs were third-party beneficiaries) and in fulfillment of Utility Tree’s own statutory obligations. As a result, there was a failure to identify a 170-foot Ponderosa pine with clearly visible signs of decay. The tree fell upon the power lines in the Pike City circuit, causing a wildfire that burned across the property of the plaintiffs. The plaintiffs also contended that the fire was a trespass upon their properties.
This statute provides that “any person that owns, controls, operates, or maintains any electrical transmission or distribution line upon any mountainous land, or in forest-covered land . . . shall . . . maintain a clearance of the respective distances [that] are specified in this section in all directions between all vegetation and all conductors . . . . [¶] . . .[¶] . . . Dead trees, old decadent or rotten trees, trees weakened by decay or disease[,] and trees or portions thereof that are leaning toward the line[,] which may contact the line from the side or may fall on the line[,] shall be felled, cut, or trimmed so as to remove such hazard.” (§ 4293.)
In its two cross-complaints, PG&E sought express contractual indemnity for the claims of the plaintiffs based on its written contracts with Utility Tree. It also alleged its entitlement to recovery under various other theories, including “Equitable Indemnity, Comparative Indemnity and Contribution,” and “Implied Indemnity.”
Facts
Although we ordinarily would first examine the sufficiency of the evidence of the moving party to support judgment in its behalf and then determine if the opposing party has created a triable issue with respect to any of the material facts (Rio Linda, supra, 52 Cal.App.4th at pp. 734-735), this paradigm would be somewhat cumbersome in the present case with the multiplicity of parties. Also, the trial court blended the evidence and arguments of the various parties in its ruling. We shall generally do the same.
In October 1999, a 170-foot Ponderosa pine fell onto the Pike City circuit, electrical power lines that PG&E owned, operated, and maintained. This sparked a wildfire that consumed approximately 2,000 acres of the timberland of plaintiff CHY (which is in the business of growing, harvesting, and selling timber) and 100 acres on the land of plaintiff Davis (a family-owned property that includes a number of improvements). After the fire, an inspection of the tree revealed significant rot (amounting to 35 per cent of its circumference) and a scar from an earlier fire, but this would not have been visible from the easement for the power lines, which were 110 to 140 feet away.
We note that these facts surrounding the underlying incident and its effects do not appear in the separate statements of any of the parties, though all refer to them in their briefs. As all are in agreement, we will treat these as stipulations of fact for purposes of the present appeal. (Estate of Kretschmer (1965) 232 Cal.App.2d 789, 790.)
PG&E hires contractors both to inspect trees and vegetation located around its power lines, and to remove hazards identified in the course of the inspection process. In 1992, PG&E entered into a contract with Utility Tree for tree trimming, under which it was also required to conduct the inspections. The contract required that Utility Tree perform its work in compliance with all statutory and regulatory standards (including § 4293). Beginning in 1995, PG&E contracted with WEC to perform the inspection work, while Utility Tree continued to manage the vegetation and trees, retaining an obligation to notify PG&E about any trees that were an obvious hazard and make a recommendation about their removal (on which Utility Tree in fact acted). In 1999, PG&E and Utility Tree entered into a new contract continuing Utility Tree’s role of removing trees and vegetation. This contract specified once again that Utility must perform its work in compliance with all statutory and regulatory standards (in addition to those of PG&E), and though it did not “cover general pre-inspection work, which will be assigned to a separate PG&E contactor. . . . specific pre-inspection work may be assigned to the Contractor in writing by the AUA [area utility arborist], and [the] Contractor also is expected to perform its own pre-inspection upon receiving a PG&E Work Request to confirm the appropriateness of the Work Request [in] comply[ing] with all laws, regulations, and PG&E Vegetation management standards described in the paragraph above.” The contract precluded oral modifications or charges for extra work, unless confirmed in a written order from PG&E. It also contained an express indemnification provision.
In 1999, WEC was falling behind in the performance of its inspection duties because it did not have sufficient personnel. Nelson Money, the PG&E area utility arborist (AUA) who was overseeing the contract with Utility Tree, contacted Utility Tree’s field supervisor (Joe Rice) to ask if he would be willing to assign some of his employees to perform inspections on various circuits, including the Pike City circuit. Rice agreed to the proposal. Neither of the men discussed the standards that would govern the Utility Tree inspections, beyond Money’s request that Utility Tree assign employees who had previous inspection experience. Neither party asked for any written confirmation of this work request. As relayed to the manager of Utility Tree, PG&E was willing to pay the “time and materials” rate for inspections from the schedule in the 1999 Utility Tree contract, a higher rate than WEC received for its inspections. According to Money, Utility Tree was paid at this higher rate after inspecting the Pike City circuit in June 1999 (although no documentation supports this assertion, other than work requests that PG&E reprinted in 2001 that reference the 1999 contract and note that the lower “unit” rate did not apply; contemporaneous work requests did not include these notations). This was the last inspection before the fire.
There was evidence of Money’s uncommunicated beliefs of the manner in which the inspection should take place.
Money asserted at his deposition that he had the authority as AUA to assign special inspection work, and claimed he did not need to do this in writing, although he acknowledged that he also made regular use of a form called a “Contract Work Authorization” when requesting extra work of a contractor.
The only way in which an inspection could have identified the defects in the fallen tree would have been to circle it at arms’ length. Visual inspection from the PG&E easement would not have revealed them. Although not included in any of the separate statements of fact, the Utility Tree employee who conducted the inspection of the Pike City circuit stated in his deposition that he was told to remain within the easement unless he saw a tree tall enough to fall on the power lines that did not look healthy. He did not notice the tree that caused the fire. In his deposition the WEC manager also noted that one of its employees had inspected the same stretch in May 1998 without identifying the defects in the tree, because it would be uneconomical for its inspectors to approach every tree tall enough to fall on the power lines; therefore, WEC inspectors only approached those trees that visibly were dead, dying, or diseased.
Money expressed a similar opinion.
Utility Tree did not provide any evidence that the manner in which it conducted its inspection of the Pike City circuit complied with any prevailing standards of care. On the other hand, the plaintiffs introduced the declarations of experts on utility-arborist standards (and the publications prescribing these standards) expressing their opinions that the inspection did not satisfy these standards because it did not include a close-up examination of the tree.
Ruling
The trial court concluded that the conversation between Money and Rice created an independent oral agreement for inspections, because it did not find any evidence of the parties’ intent to waive the contractual bar on oral modifications, and therefore neither the statutory nor the PG&E standards contained in the written contract applied to Utility Tree. The trial court measured Utility Tree’s duty under this oral agreement by the unexpressed inspection expectations of Money in finding neither a breach of contract nor negligence. For this reason, it ruled that the evidence of utility-arborist standards of care was irrelevant. Finally, for the reasons expressed in an earlier order granting a motion on the pleadings against WEC, the court concluded that Utility Tree’s failure to identify the tree as a hazard was not conduct that would permit the plaintiffs to sue on a theory of trespass by fire.
“Per plaintiff[s’] response to Undisputed Material Facts Nos. 15 and 16 [the former of which is based on Money’s deposition testimony about his uncommunicated expectations about the way in which Utility Tree would perform its task], it is undisputed that Mr. Money asked for but a limited inspection . . . .”
Discussion
I
There is a distinction between an unwritten modification of a contract and evidence of an intent to waive a contractual term; the latter does not seek to change the substance of any of the contractual terms. (Miller & Lux, Inc. v. San Joaquin Light & Power Co. (1932) 120 Cal.App. 589, 608; compare Marani v. Jackson (1986) 183 Cal.App.3d 695, 705 [cannot introduce evidence to contradict the substance of a contractual term].) Therefore, a party may seek to prove waiver even if the contract precludes any unwritten modifications. (Ibid.; Biren v. Equality Emergency Medical Group, Inc. (2002) 102 Cal.App.4th 125, 141 [holding further that past practice and present conduct of parties may waive even a no-unwritten-modification provision]; Frank T. Hickey, Inc. v. Los Angeles Jewish Community Council (1955) 128 Cal.App.2d 676, 683 [conduct of parties may waive requirement that change orders be in writing].)
The trial court recognized these principles, but purported to find as an undisputed fact that neither Money nor Utility Tree intended to waive the requirement of a written authorization under the 1999 contract for Utility Tree to perform inspection services. We believe this to be an incorrect interpretation of the facts we have related above, particularly in light of the rule that we are to resolve all doubts in favor of the opposing party and against the moving party (6 Witkin, Cal. Procedure (5th ed. 2008), Proceedings Without Trial, §§ 244, 245, pp. 691-692).
The existence of the 1999 contract of itself would be a rational basis to infer that the parties were acting pursuant to its provisions but for the written authorization, even in the absence of any other evidence. It is not rational to believe that the parties to this lengthy contract that specifies their responsibilities in stultifying detail would suddenly seek to act on a whim pursuant to a new and independent oral contract, the only objectively manifested terms of which were that Utility Tree would provide experienced inspectors to supplement the work of WEC, and that (at least as communicated through Utility Tree’s chain of command) Utility Tree would receive the “time and materials” rate in its contract for the work (and, according to Money, was in fact paid at that rate). A contract of this skeletal nature would not allow a rational basis for a court to evaluate the scope of a party’s duty or assess damages in the event of a breach, and therefore would not be enforceable (Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761, 770), unless a court were to take into account the custom and practice of the utility-arborist industry to supply the missing terms (Varni Bros. Corp. v. Wine World, Inc. (1995) 35 Cal.App.4th 880, 889-890). But this would be permissible only in the absence of any dispute over whether these additional terms were to be part of the contract (ibid.), and there is conflicting evidence in this regard as well as to whether the express industry standards of the contract (reflected in the opinions of the experts) were the custom and practice, or the informal lower standards to which various Utility Tree, WEC, and PG&E employees attested.
That Utility Tree may disagree with this latter representation in Money’s declaration does not make it go away for purposes of summary judgment; it simply represents a disputed factual issue.
Utility Tree argues that the parties could not have intended that their oral agreement would incorporate the terms of the 1999 agreement because, in the view of Utility Tree, the 1999 agreement provides for tree trimming and not inspection services. We do not agree that the record shows without material factual dispute that the 1999 contract failed to include inspection services. Thus, the 1999 contract expressly incorporates by reference Specification 4335. Specification 4335 says, “specific pre-inspection work may be assigned to the Contractor in writing by the AUA [PG&E Area Utility Arborist] . . . .” Specification 4335 defines pre-inspection work as “[w]ork performed by a PG&E contractor identifying Vegetation Management tasks that must be completed around PG&E distribution electrical lines in compliance will all regulatory requirements and/or PG&E Vegetation Management standards.”
Triable issues of fact exist with respect to whether inspection of the culprit tree was required by regulatory requirements (including section 4293) and PG&E vegetation management standards.
However a trier of fact might ultimately resolve these questions, the facts certainly do not establish the existence of an independent oral agreement for conducting limited inspections as a matter of law. It was therefore error to grant summary judgment on this basis.
Since we do not find the existence of an oral contract proven as a matter of undisputed fact, we do not need to reach the issue of the standard of care that the trial court purported to apply pursuant to the oral contract. We note, however, that a contract cannot derogate the standard of due care. (Stonegate Homeowners Assn. v. Staben (2006) 144 Cal.App.4th 740, 744, 748-749 (Stonegate) [error to measure standard of due care against requirements in oral contract and exclude evidence of industry’s standard of care].)
II
This ends the matter for PG&E. Since Utility Tree was not entitled to summary judgment on the basis of an independent oral contract superseding the written agreement between it and PG&E as a matter of law, then PG&E is entitled to seek indemnification on the basis of the express provision in the 1999 contract. Given this viable theory of recovery, we do not need to consider the other theories of PG&E.
III
With respect to the plaintiffs, however, there remains the issue of Utility Tree’s legal duty to them (Utility Tree never having produced any evidence that it satisfied the standard of due care prevailing in its industry, or contended that its actions were not a proximate cause of the plaintiffs’ damages as a matter of law). Even though the trial court never addressed this issue, we must uphold the judgment if any other issue litigated in the trial court would support it. (California School of Culinary Arts v. Lujan (2003) 112 Cal.App.4th 16, 22.)
As an initial matter, Utility Tree attempts to characterize its conduct as involving nonfeasance rather than misfeasance, and asserts it therefore did not have any duty to act. However, the gist of the complaints are that Utility Tree improperly performed the inspections. This is misfeasance, not nonfeasance. (Polk v. City of Los Angeles (1945) 26 Cal.2d 519, 525-526 [failure to conduct adequate inspection of power lines is actionable].)
Utility Tree also attempts to argue for the first time on appeal that the plaintiffs did not produce any evidence of the deficiency in its inspection. Even if cognizable, this is not correct. The plaintiffs produced evidence in the form of the expert opinions that a proper inspection would have included a close-up examination of any tree tall enough to fall on the power lines.
“Liability for negligent conduct may . . . be imposed [only] where [the defendant owes] a duty of care . . . to the plaintiff or to a class of which the plaintiff is a member[, which] may arise through statute or by contract.” (J’Aire Corp. v. Gregory (1979) 24 Cal.3d 799, 803.) “It is settled that a contractor owes a duty to avoid injury to the person or property of third parties.” (Id. at p. 805; accord Stonegate Homeowners, supra, 144 Cal.App.4th at p. 748.) This is by virtue of the duty independent of the contract to refrain from injuring the person or property of another. (Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 515.) “[L]iability for negligence can exist without privity although the risk involved is only damage to property[;] . . . whether in a specific case the defendant will be held liable to a third person is a matter of policy and involves the balancing of . . . the extent to which the transaction was intended to affect the plaintiff, the foreseeability of harm . . ., the degree of certainty . . . of injury, the closeness of the connection between the defendant’s conduct and the injury . . ., and the policy of preventing future harm.” (Stewart v. Cox (1961) 55 Cal.2d 857, 863.)
A consideration of the factors leads to the conclusion that the facts (as they appear in the evidence underlying the motions) support an arguable finding of duty. While the prevention of disruption of electrical service from a fallen tree is one object of the contractual inspections, there is also the prevention of damages from an electrically sparked fire, which makes the protection of the class of landowners at risk from fire an intended object of the contract (even if not these specific plaintiffs). Utility Tree has not pointed to any facts that would make the spread of the fire to the plaintiffs’ property unforeseeable, nor is there any doubt that their property was injured. There is a direct connection between the failure to identify and remove the diseased tree and the fire resulting from its eventual fall onto the power lines. Finally, it would advance the policy of preventing forest fires to impose on the contractor charged with carrying out PG&E’s “very high duty” in constructing, operating, and maintaining its facilities (Atlas Assur. Co. v. State of California (1951) 102 Cal.App.2d 789, 797) a concurrent duty to third parties.
Having determined that Utility Tree owed the plaintiffs a duty of care under its contract with PG&E, we do not need to address the other theories of liability. Utility Tree would not have been entitled to summary adjudication on the issue of duty.
IV
The plaintiffs contend that the trial court erred in ruling that they could not proceed under a theory of trespass by fire. Neither they nor Utility Tree address the actual basis of the trial court’s ruling (that a failure to identify and remove a tree posing a hazard is not putting an agency into motion that expends its energy on another’s land, and therefore cannot be a trespass). Rather, they simply dispute whether Civil Code 3346 (which provides for the recovery of double damages in an action for an involuntary trespass that results in “wrongful injuries to timber, trees, or underwood upon the land of another”) applies to the present action. The parties also do not address whether this ruling on an alternative theory of liability is cognizable as basis for summary adjudication (see Code Civ. Proc., § 437c, subd. (f)(1)), such that they are entitled to review of the issue upon our reversal of the judgment.
In its earlier ruling, the trial court treated WEC’s motion for summary judgment as one for judgment on the pleadings. It did not make a similar express statement in the present ruling.
Putting aside the fact that their failure to provide any analysis of whether there is an underlying trespass forfeits our consideration of the issue (Imagistics Internat., Inc. v. Department of General Services (2007) 150 Cal.App.4th 581, 588, 591, fn. 8) and therefore makes the availability of the statutory damages a moot question, we will nonetheless discuss the point in the event the theory of trespass by fire resurfaces on remand.
In Gould v. Madonna (1970) 5 Cal.App.3d 404, we concluded that the legislative treatment of various statutes makes clear that the penalty provisions in this statute exclude damages to timber that result from a fire, because the Legislature removed fire damages from the ambit of predecessor penalty statutes and made them the express subject of a separate scheme (Health & Saf. Code, §§ 13007-13008) without including the availability of any penalty damages. (Madonna, supra, at pp. 406-408.) “That history indicates that the Legislature has set up a statutory scheme concerning timber fires completely separate from the scheme to meet the situation of the cutting or other type of injury to timber.” (Id. at p. 407.)
The parties appear to believe that our opinion precludes a theory of recovery based on trespass by means of fire, which is contrary to Elton v. Anheuser-Busch Beverage Group, Inc. (1996) 50 Cal.App.4th 1301 at pages 1306 through 1307 (no reason in law or logic to exclude trespass by fire when noise, vibration, particles, other instrumentalities, or “hacking” are actionable when put into motion without personal entry). They are wrong. We did not express any opinion on the theory under which a landowner may proceed for damages to trees. We simply concluded that the recoverable damages are limited to the actual damages without a punitive multiplier. (Cf. id. at p. 1308 [damages limited to actual losses from fire, but this does not limit recovery of legal fees as costs].) Therefore, the plaintiffs may not seek double damages under a theory of trespass.
Disposition
The judgment is reversed with directions to enter an order denying Utility Tree’s several motions. CHY Company, Inc., Elma Davis, and Pacific Gas & Electric Company shall recover costs of appeal. (Cal. Rules of Court, rule 8.278(a)(1).)
We concur: RAYE, J., HULL, J.