PORTLEY, Judge:
¶ 1 In this case we address whether a provision in a public utility's tariff,
¶ 2 US Airways operates a data center in Tempe. In January 2009, the owner of a nearby building entered into a contract with Skyline Steel, Inc. ("Skyline") to build carports in the parking lot adjacent to the data center. Skyline hired Arizona Blue Stake to locate and mark underground cables and power sources. Blue Stake notified Qwest, the owner of underground cable in the construction area, and Qwest hired ELM to search for and locate the cable.
¶ 3 ELM, however, was unable to locate Qwest's cable because Qwest's maps were inaccurate. Under its contract with Qwest, ELM was supposed to contact Qwest for further instructions, but did not. Instead, ELM marked the ground with a "no conflict" mark, which inaccurately indicated that the Qwest cable had been located and was outside the excavation site. Skyline saw the marking, began construction and promptly severed the cable serving the US Airways data center, causing a four-hour telecommunication service interruption at the center. The interruption was not to any services Qwest provided to the data center, but only from the telecommunication services of AT & T and Electronic Data Systems.
¶ 4 US Airways sued ELM, then added Qwest and Skyline as defendants. US Airways alleged the defendants were negligent by failing to use reasonable care to locate, identify, mark, or supervise the excavation around its underground cable; claimed Qwest was vicariously liable for ELM's work; and sought nearly two million dollars in damages resulting from the service interruption. Skyline subsequently settled with US Airways.
¶ 5 Qwest moved to dismiss for failure to state a claim pursuant to Arizona Rules of Civil Procedure ("Rule") 12(b)(6), arguing that Section 2.1.3(B) of its Federal Communications Commission ("FCC") tariff and Section 2.4.1(A) of its Arizona Corporation Commission ("ACC") tariff barred or significantly limited any liability to US Airways. After briefing and argument, the court granted Qwest's motion in part, finding that the FCC tariff applied and limited Qwest's liability for its negligence to the proportionate service charge as defined in the federal tariff. US Airways filed an unsuccessful motion for reconsideration.
¶ 6 ELM subsequently filed a motion for summary judgment arguing it owed no duty to US Airways and that it was entitled to
¶ 7 At the request of US Airways and Qwest, the court entered a judgment in favor of US Airways against Qwest for $586.40, which represented the limited damages US Airways could receive under the federal tariff. The court entered a judgment in favor of ELM. US Airways appealed both judgments and Qwest filed a cross-appeal.
¶ 8 US Airways challenges the rulings leading to both judgments. US Airways argues that the court erred by finding that Qwest's FCC tariff limited its liability to the $586.40. Specifically, US Airways contends that the tariff provision does not govern claims by non-customers, and its enforcement in this case is unconstitutional and violates public policy. US Airways also claims that the court erred in granting ELM's motion for summary judgment and finding that ELM's contractual duty to Qwest did not extend to US Airways because ELM voluntarily assumed Qwest's duty to identify and properly mark the underground facilities.
¶ 9 We independently review the grant of a motion to dismiss pursuant to Rule 12(b)(6). Coleman v. City of Mesa, 230 Ariz. 352, 355, ¶ 7, 284 P.3d 863, 866 (2012); N. Peak Constr., LLC v. Architecture Plus, Ltd., 227 Ariz. 165, 167, ¶ 13, 254 P.3d 404, 406 (App. 2011). "[W]e assume the truth of the allegations set forth in the complaint and uphold dismissal only if the plaintiff[] would not be entitled to relief under any facts susceptible of proof in the statement of the claim." ELM Ret. Ctr., LP v. Callaway, 226 Ariz. 287, 289, ¶ 5, 246 P.3d 938, 940 (App.2010) (quoting Mohave Disposal, Inc. v. City of Kingman, 186 Ariz. 343, 346, 922 P.2d 308, 311 (1996)).
¶ 10 US Airways contends that the tariff does not apply to its negligence claim because it is not a direct customer of Qwest. We disagree.
¶ 11 As a regulated public utility, Qwest's rates, rules, fees and responsibilities are governed by tariffs enacted and enforced by the FCC and the ACC.
¶ 12 Generally, Arizona, and other states, have held that a provision in a tariff that limits a public utility's liability for ordinary
¶ 13 There are, however, no Arizona cases addressing whether a tariff provision limiting liability for service interruption may be enforced against non-customers.
¶ 14 The telephone company moved to dismiss the action based on its tariff provision, which limited its liability to gross negligence or willful misconduct. Id. at 1231, 244 Cal.Rptr. 714. The trial court granted the motion. Id. On appeal, the court announced that the "limitation of liability provisions in a tariff are binding on the public generally," including a party who "is not a customer of the telephone utility but instead is a stranger." Id. at 1230, 244 Cal.Rptr. 714. After examining the tariff provision and California precedent, including Trammell v. Western Union Telegraph Co., 57 Cal.App.3d 538, 551-53, 129 Cal.Rptr. 361 (1976),
¶ 15 Moreover, Colich determined that the economic damages suffered by United Airlines arose "exclusively from an interruption to its telephone service," and fell within the protection of the tariff because it fell within "damages arising from ordinarily negligent mistakes, omissions, interruptions, delays, errors or defects in any of the services or facilities furnished by the [u]tility." Id. at 1235, 244 Cal.Rptr. 714 (internal quotation marks omitted). To hold otherwise, the court stated, would allow an end-run around the tariff and undermine the state's public policy to limit utilities' negligence liability. Id. at 1236, 244 Cal.Rptr. 714. Based on the court's holding, there was little doubt that the tariff provision limiting the utility's liability for ordinary negligence barred the third-party contractor's claim for equitable indemnity. Id.
¶ 16 Here, Qwest's FCC tariff expressly limits its liability for service interruptions unless the interruption was the direct result of Qwest's willful misconduct. The tariff provision, in relevant part, provides:
Qwest Corporation, Tariff F.C.C. No.1 § 2.1.3 (B)(1) (Oct. 2011) (emphasis added). The tariff provision applies to any claim, whether by customers "or by any others," as long as the claim is for damages "associated with the installation, provision, preemption, termination, maintenance, repair or restoration of service." Id. By including "any others," the tariff provision includes US Airways. Consequently, because US Airways seeks damages exclusively arising out of an interruption of its telecommunications services, the tariff provision limits Qwest's liability for ordinary negligence to the proportionate service charge, even though US Airways was not Qwest's direct customer for the interrupted services.
¶ 17 US Airways also argues that enforcement of Qwest's tariff provision is unconstitutional and violates public policy. Specifically, US Airways argues that enforcing the provision would violate the anti-abrogation clause of the Arizona Constitution.
¶ 18 Article 18, Section 6, of the Arizona Constitution states: "The right of action to recover damages for injuries shall never be abrogated, and the amount recovered shall not be subject to any statutory limitation." The anti-abrogation clause generally protects the right to file certain claims. In Lerner v. DMB Realty, LLC, we stated that "to be protected by the anti-abrogation clause, a cause of action must have existed at common law or have found its basis in the common law at the time the constitution was adopted." 234 Ariz. 397, 406, ¶ 36, 322 P.3d 909, 918 (App.2014) (quoting Dickey v. City of Flagstaff, 205 Ariz. 1, 3, ¶ 9, 66 P.3d 44, 46 (2003)) (internal quotation marks omitted). As a result, in assessing whether a claim is protected under the anti-abrogation clause, we first must determine whether the right to file a negligence claim was among "those wrongs traditionally recognized at common law" including "the right of people to seek remedy by due course of law for injury to their lands, goods, person, or reputation." Boswell v. Phoenix Newspapers, Inc., 152 Ariz. 9, 17-18, 730 P.2d 186, 194-95 (1986) (quoting Proposed Constitution of 1891, art. 2, § 15) (internal quotation marks omitted).
¶ 19 Although negligence actions are part of Arizona's common law, a negligence action against a public utility for service interruption or other economic losses is not. The parties did not cite, and we did not find, any common law cases that allowed a party to sue a utility for negligence for service interruption. To the contrary, twenty years after the Gadsden Purchase, which reconciled
256 U.S. at 572, 41 S.Ct. 584.
¶ 20 Our review of the case law reveals that before Arizona became a state there was no common law claim for ordinary negligence against a telegraph company or other public utility for damages exceeding the cost of service. And in 1912, when Arizona became a state, our constitution included a provision creating the ACC and giving the commission the power to "make reasonable rules, regulations, and orders, by which such [public service] corporations shall be governed in the transaction of business within the state." Ariz. Const. art. 15, § 3; see State v. Tucson Gas, Elec. Light & Power Co., 15 Ariz. 294, 138 P. 781 (1914); see also Ariz. Corp. Comm'n v. State ex rel. Woods, 171 Ariz. 286, 290-94, 830 P.2d 807, 811-15 (1992) (discussing ACC history). And we have upheld public utility provisions limiting the utility's liability for ordinary negligence. Sommer, 21 Ariz.App. at 387-88, 519 P.2d at 876-77; Olson, 119 Ariz. at 323, 580 P.2d at 784.
¶ 21 Arizona courts have never recognized a common law right for a person to sue a public utility for its ordinary negligence resulting in only economic damage where the utility has a tariff limiting its liability. The parties have cited no authority, nor have we found any, for the proposition that a customer or user of a telecommunications line may sue the owner of that line for negligence for service interruption.
¶ 22 Even if the anti-abrogation clause was applicable, enforcing the tariff provision limiting liability for ordinary negligence would not violate the anti-abrogation clause because the tariff provision does not abrogate US Airways' negligence action, but only limits its damages. See Ramirez v. Health Partners of S. Ariz., 193 Ariz. 325, 334-35, ¶ 32, 972 P.2d 658, 667-68 (App.1998) (finding the Uniform Anatomical Gift Act did not unconstitutionally abrogate an action to recover damages for injuries); see also Cronin v. Sheldon, 195 Ariz. 531, 538, ¶ 34, 991 P.2d 231, 238 (1999) ("We have held that article 18, § 6 precludes abrogation, but not regulation."); Jimenez v. Sears Roebuck & Co., 183 Ariz. 399, 407, 904 P.2d 861, 869 (1995) ("We long ago held that our constitution permits regulations effectively reducing
¶ 23 US Airways also maintains that Arizona public policy weighs against enforcing the tariff's provision limiting its damages. We disagree. "The courts have long recognized that limiting a public utility's liability benefits the public interest in the form of lower utility rates." Re U.S. West, 131 P.U.R.4th at 505 (citing Pilot Indus., 495 F.Supp. at 361). State public utility commissions establish reasonable rates with limited liability exposure in mind. Id. Therefore, public policy does not preclude the enforcement of the tariff provision limiting a public utility's liability for ordinary negligence.
¶ 24 US Airways argues that the superior court erred by granting ELM's motion for summary judgment and finding that ELM owed no duty of care to US Airways. US Airways contends that, by entering into a contract with Qwest, ELM voluntarily assumed Qwest's duty to identify and mark Qwest's underground facilities.
¶ 25 We review a grant of summary judgment de novo and view the facts in the light most favorable to the non-moving party. Edwards v. Bd. of Supervisors of Yavapai Cty., 224 Ariz. 221, 222, ¶ 8, 229 P.3d 233, 234 (App.2010) (citing Andrews v. Blake, 205 Ariz. 236, 240, ¶ 12, 69 P.3d 7, 11 (2003)). A court may grant summary judgment "if the pleadings, deposition, 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." Ariz. R. Civ. P. 56(c)(1) (2012). The determination of whether a genuine issue of material fact exists is based on the record made in the trial court. See Edwards, 224 Ariz. at 222, ¶ 8, 229 P.3d at 234 (citing Phoenix Baptist Hosp. & Med. Ctr., Inc. v. Aiken, 179 Ariz. 289, 292, 877 P.2d 1345, 1348 (App.1994)).
¶ 26 To establish a claim for negligence, a plaintiff must prove (1) a duty requiring the defendant to conform to a certain standard of care; (2) a breach of that standard of care by the defendant; (3) a causal connection between the defendant's conduct and the injury; and (4) actual damages. Gipson v. Kasey, 214 Ariz. 141, 143, ¶ 9, 150 P.3d 228, 230 (2007) (citing Ontiveros v. Borak, 136 Ariz. 500, 504, 667 P.2d 200, 204 (1983)). Whether a duty exists is a matter of law for the court to decide. Gipson, 214 Ariz. at 143, ¶ 9, 150 P.3d at 230 (citing Markowitz v. Ariz. Parks Bd., 146 Ariz. 352, 356, 706 P.2d 364, 368 (1985)). And "absent some duty, an action for negligence cannot be maintained." Id. at ¶ 11.
¶ 27 Duty is defined as an "obligation, recognized by law, which requires the defendant to conform to a particular standard of conduct in order to protect others against unreasonable risks of harm." Markowitz, 146 Ariz. at 354, 706 P.2d at 366 (citing Ontiveros, 136 Ariz. at 504, 667 P.2d at 204). A duty of care "may arise from special relationships based on contract, family relations, or conduct undertaken by the defendant" or from public policy considerations. Gipson, 214 Ariz. at 145, ¶¶ 18, 22, 150 P.3d at 232 (citing Stanley v. McCarver, 208 Ariz. 219, 221, ¶¶ 7, 8, 92 P.3d 849, 851 (2004)).
¶ 28 US Airways argues that ELM voluntarily assumed Qwest's duty to all users of the Qwest cable to properly locate and mark the location of the cable prior to Skyline's excavation. However, as the superior court noted in its ruling, US Airways conflates the issue of duty owed by ELM to Qwest as a direct beneficiary into one owed to US Airways as a third party beneficiary. ELM had no contractual or other relationship
¶ 29 Arizona law, following the Restatement, imposes a limited duty of reasonable care on a party who voluntarily undertakes to render services to another:
Restatement (Second) of Torts § 323 (1965); see also Lloyd v. State Farm Mut. Auto. Ins. Co., 176 Ariz. 247, 250, 860 P.2d 1300, 1303 (App.1992) (finding that although section 323 speaks of "physical harm," the "volunteer may be liable for economic harm as well"). And § 324A provides:
Restatement (Second) of Torts § 324A (1965).
¶ 30 Section 323 does not apply because ELM did not undertake any action on behalf of US Airways. See Luce v. State Title Agency, Inc., 190 Ariz. 500, 503-04, 950 P.2d 159, 162-63 (App.1997) (finding that § 323 did not apply because defendant title company did not undertake an action on behalf of appellants). And if we assume, without deciding, that US Airways was a third party beneficiary of the agreement between ELM and Qwest, § 324A would not impose a duty on ELM because US Airways only suffered economic harm, not physical harm, as a result of the service interruption.
¶ 31 On cross-appeal, Qwest argues that the court erred in finding that it owed a duty to US Airways. We review that question of law de novo. Stanley, 208 Ariz. at 221, ¶ 5, 92 P.3d at 851.
¶ 32 In denying US Airways' motion for partial summary judgment, the court held that Qwest, as the owner of the telecommunications cable, owed a duty to customers and users of the cable, including US Airways. The court relied on public policy considerations reflected in the Underground Facilities Act, commonly called Arizona's Blue Stake Law. A.R.S. §§ 40-360.21 to -360.32; see generally Gunnell v. Ariz. Pub. Serv. Co.,
¶ 33 Public policy may support the recognition of a duty of care. Gipson, 214 Ariz. at 145, ¶ 23, 150 P.3d at 232. Public policy may be found in statutes and common law. Id. at 146 n. 4, ¶ 24, 150 P.3d at 233 n. 4; e.g., Ontiveros, 136 Ariz. at 509, 667 P.2d at 209 (finding duty based on dram shop statutes); Estate of Maudsley v. Meta Servs., Inc., 227 Ariz. 430, 436, ¶ 21, 258 P.3d 248, 254 (App.2011) (finding duty based on mental health services statutes). A statute may establish a duty of care if it "is designed to protect the class of persons, in which the plaintiff is included, against the risk of the type of harm which has in fact occurred as a result of its violation." Gilbert, 232 Ariz. at 601, ¶ 14, 307 P.3d at 1028 (quoting Estate of Hernandez v. Ariz. Bd. of Regents, 177 Ariz. 244, 253, 866 P.2d 1330, 1339 (1994)) (quoting W. Page Keeton et al., Prosser and Keeton on the Law of Torts § 36, at 229-30 (5th ed.1984) (internal quotation marks omitted)).
¶ 34 Arizona's Blue Stake Law imposes an affirmative obligation on an "underground facilities operator"
Qwest does not dispute that the statute imposes an affirmative obligation to locate and mark its facilities, but argues that it did not owe a duty to US Airways because the Blue Stake Law authorizes a civil action for damages in favor of only utilities and excavators. See A.R.S. § 40-360.28(B).
¶ 35 The question, as explained by our supreme court, is not "whether the legislature established a statutory cause of action, but whether there is a `duty' or `obligation' imposed" by the statute. Ontiveros, 136 Ariz. at 510, 667 P.2d at 210 (finding that a duty of care may be found in a statute silent on the issue of civil liability). Here, the Blue Stake Law explicitly imposes a duty on Qwest, as an underground facilities operator, to carefully mark its underground cable. Therefore, the legislation was enacted, in part, to protect end users like US Airways. Accordingly, the superior court did not err by determining that Qwest owed U.S. Airways a duty based on the Blue Stake Law.
¶ 36 Based on the foregoing, we affirm the judgments granting Qwest's motion to dismiss and ELM's motion for summary judgment, and denying US Airways' cross-motion for summary judgment.
A.R.S. § 40-360.21.
