Hatchigian, D. v. PECO/EXELON ( 2019 )

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
DAVID HATCHIGIAN IN THE SUPERIOR COURT
OF PENNSYLVANIA
Appellant
v.
PECO/EXELON AND MUNICIPAL
INSPECTION CORPORATION,
Appellees No. 142 EDA 2018
Appeal from the Order Entered December 18, 2017
in the Court of Common Pleas of Philadelphia County
Civil Division at No(s): August 2016 No. 16080065
BEFORE: SHOGAN, J., NICHOLS, J. and STRASSBURGER, J.*
MEMORANDUM BY STRASSBURGER, J.: FILED AUGUST 06, 2019
David Hatchigian appeals pro se from the order entered on December
18, 2017, which dismissed with prejudice the fourth amended complaint he
filed against PECO Energy Cornpany/Exelonl (PECO) and Municipal Inspection
Corporation (MIC).2 Upon review, we vacate the order and remand for
proceedings consistent with this memorandum.
1 "PECO jurisdictional public utility providing electric and gas service in
[] is a
the Commonwealth of Pennsylvania." Preliminary Objections, 10/30/2017, at
24.
'11 According to Hatchigian, PECO "is a subsidiary of the Exelon
Corporation." Fourth Amended Complaint, 8/21/2017, at 22. '11
2 According to Hatchigian, MIC "is a private third -party corporate entity,
approved by PECO to perform electrical inspections and provider of [sic]
certifications" and is located in Philadelphia. Fourth Amended Complaint,
8/21/2017, at 23. '11
* Retired Senior Judge assigned to the Superior Court.
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This case arises from a dispute between Hatchigian and PECO. We
summarize the facts as set forth by Hatchigian in his fourth amended
complaint. Hatchigian lives in and owns rental property in the city of
Philadelphia. He obtains his electricity from PECO. It is Hatchigian's position
that PECO's "inadequate termination and reconnection procedures leave [him
and others similarly situated] at the mercy of PECO when bargaining [for]
their right to residential electricity."3 Fourth Amended Complaint, 8/21/2017,
at '11 18. Specifically, Hatchigian claimed that PECO "refused a reconnection
pursuant to a certification requirement within the Electric Service Tariff filed
3 Hatchigian initially filed this action on behalf of himself and commenced the
action as a claim in the Philadelphia Municipal Court, where judgment was
entered in favor of PECO. Hatchigian then appealed to the Court of Common
Pleas, where Hatchigian began adding language in the nature of a class action.
See Complaint, 12/1/2016, at 1 (stating that this action is on behalf of
'11
himself and "other customers, landlords, and tenants whose electrical utility
services were terminated without warning, notice, or a hearing"). In his
second amended complaint, Hatchigian added numerous named plaintiffs,
including "John Does 1-20" and "all those similarly situated." Second Amended
Complaint, 5/11/2017, at 1. He maintains the same language in his fourth
amended complaint. See Fourth Amended Complaint, 8/21/2017, at 1.
Confusing matters further, Hatchigian claims this class action is being pursued
under the Federal Rules of Civil Procedure that govern class actions. See
Fourth Amended Complaint, 8/21/2017, at 69 (citing Federal Rules of Civil
'11
Procedure 23(a), 23(b)(2), and 23(b)(3)). Class action lawsuits in
Pennsylvania state courts are governed by Pa.R.C.P. 1701-1717. In any
event, determining whether this case is or is not a class action is not necessary
to our ultimate conclusion, and for ease of reference, we will refer to
Hatchigian as the only plaintiff/appellant.
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by PECO and on file with the Pennsylvania Public Utility Commission [(PUC)]."4
Id. at '11 50.
According to Hatchigian, "[o]n or about May 18, 2016[,] Hatchigian
received several phone calls from two different tenants complaining that all
electric[al service] was shut off [in their apartments.]" Id. at '11 51. Hatchigian
then contacted PECO, and claimed he was told that "electrical [service] had
been disconnected inadvertently but was in the process of being restored that
same day, with no need for Hatchigian to file for [] exemptions to reintroduce
service." Id. at '11 52. Hatchigian contended that "service was not restored as
promised" and PECO then "claimed that the apartment had been unoccupied
for six months and therefore a certificate from their electrical underwriter firm
was now required." Id. at '11 53. Hatchigian claimed that he "ordered
underwriter certification by [MIC]" and "paid a total of $130 to MIC as a
predicate for PECO's reintroduction of service." Id. at '11 54. Then, according
to Hatchigian, PECO continued to refuse to reconnect electrical service until
4The PUC is a statutory entity created and governed by the Public Utility Code.
See 66 Pa.C.S. §§ 101-3316. Additionally,
A tariff set of operating rules imposed by the State that a
is a
public utility must follow if it wishes to provide services to
customers. It is a public document which sets forth the schedule
of rates and services and rules, regulations and practices
regarding those services.
Sunrise Energy, LLC v. FirstEnergy Corp., 148 A.3d 894, 905 n.14 (Pa.
Cmwlth. 2016) (quoting PPL Electric Utilities Corp. v. Pennsylvania
Public Utility Commission, 912 A.2d 386, 402 (Pa. Cmwlth. 2006)
(emphasis added)).
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Hatchigian arranged for a "re -inspection of all of the electric wiring at the []
apartment." Id. at ¶ 57. Hatchigian contended he complied with all
instructions, but due to the service interruption, he was then in violation of
various Philadelphia municipal codes. Hatchigian averred that due to the units
not having electrical service, despite having made all necessary payments to
PECO, "new tenants were ultimately unable to move into the apartment on
time." Id. at ¶ 59. Hatchigian contended that
[b]y terminating [his] electrical service without warning despite
payment for service, [PECO was] negligent, breached the services
contract and an implied covenant of good faith and fair dealing
therein, violated [his] rights under and tortiously interfered with
[his] leases, violated the UTPCPL,[5] deprived [him] of [his]
property rights via an unconstitutional taking[,] and created a
public nuisance.
Id. at ¶ 64. Hatchigian requested several forms of relief including $100,000
from PECO. Id. at ¶ 131.
PECO filed preliminary objections to Hatchigian's fourth amended
complaint. It is PECO's position that Hatchigian's "underlying cause of action
is the contention that [PECO's] processes and procedures are insufficient and,
by design, these policies and procedures cause damage to utility customers."
Preliminary Objections, 10/30/2017, at ¶ 23. According to PECO, it is the PUC
that regulates the policies and procedures about which Hatchigian complains.
5 The UTPCPL is the Unfair Trade Practices and Consumer Protection Law. See
73 P.S. §§ 201-1 through 201-9.3. The purpose of the UTPCPL "is to protect
the public from-and indeed to eradicate-unfair or deceptive business
practices." Agliori v. Metro. Life Ins. Co., 879 A.2d 315, 318 (Pa. Super.
2005) (internal quotation marks omitted).
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Thus, according to PECO, the PUC was "the appropriate forum for the
adjudication of issues involving the reasonableness, adequacy and sufficiency
of public utility services." Id. at ¶ 33. Therefore, PECO claimed that the PUC
has "primary and exclusive jurisdiction" over Hatchigian's claims. Id. at ¶ 36.
On December 15, 2017, the trial court sustained PECO's preliminary
objections in part, concluding it lacked subject matter jurisdiction over this
matter. Specifically, the trial court concluded that Hatchigian's complaint
"challenges the service termination procedure employed by PECO." Trial Court
Opinion, 8/27/2018, at 4. Although some of Hatchigian's causes of action
sound in tort and contract, "[t]he overall thrust of the [c]omplaint ...
challenges [PECO's] termination procedures." Id. at 5. Accordingly, the trial
court concluded that "the redress [Hatchigian] seeks is exclusively within the
PUC's jurisdiction." Id. at 6. Therefore, the trial court sustained PECO's
preliminary objections on this basis and dismissed Hatchigian's complaint.
Hatchigian timely filed a notice of appeal. The trial court did not order
Hatchigian to file a statement of errors complained of on appeal pursuant to
Pa.R.A.P. 1925, but the trial court filed an opinion explaining its rationale for
dismissing the complaint. On appeal, Hatchigian first claims the trial court
erred in sustaining PECO's preliminary objections and dismissing the fourth
amended complaint for lack of subject matter jurisdiction. Hatchigian's Brief
at 14-52. We review this claim mindful of the following.
On an appeal from an [o]rder sustaining preliminary
objections, we accept as true all well -pleaded material facts set
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forth in the appellant's complaint and all reasonable inferences
which may be drawn from those facts. Where, as here, upholding
sustained preliminary objections would result in the dismissal of
an action, we may do so only in cases that are clear and free from
doubt. Any doubt should be resolved by a refusal to sustain the
objections.
[I]t well -settled that the question of subject matter
is
jurisdiction may be raised at any time, by any party, or by the
court sua sponte. Our standard of review is de novo, and our
scope of review is plenary. Generally, subject matter jurisdiction
has been defined as the court's power to hear cases of the class
to which the case at issue belongs.
Jurisdiction is the capacity to pronounce a judgment of the
law on an issue brought before the court through due process of
law. It is the right to adjudicate concerning the subject matter in
a given case.... Without such jurisdiction, there is no authority to
give judgment and one so entered is without force or effect. The
trial court has jurisdiction if it is competent to hear or determine
controversies of the general nature of the matter involved sub
judice. Jurisdiction lies if the court had power to enter upon the
inquiry, not whether it might ultimately decide that it could not
give relief in the particular case.
Estate of Gentry v. Diamond Rock Hill Realty, LLC, 111 A.3d 194, 198
(Pa. Super. 2015) (internal citations and quotation marks omitted).
We begin with analyzing the trial court's conclusion that the PUC has
primary jurisdiction over the matters set forth in Hatchigian's fourth amended
complaint.
It iswell -settled law that initial jurisdiction over matters
involving the reasonableness, adequacy or sufficiency of a public
utility's service, facilities or rates is vested in the PUC and not in
the courts. Matters relating to the tariff, the necessity of
equipment, deposits and the use of various types of services are
peculiarly within the expertise of the [PUC] and, as such, are
outside the original jurisdiction of the courts. When a utility's
failure to maintain reasonable and adequate service is alleged,
regardless of the form of the pleading in which the allegations are
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couched, it is for the PUC initially to determine whether the service
provided by the utility has fallen short of the statutory standard
required of it. It is equally clear that [t]he courts retain
jurisdiction of a suit for damages based on negligence or breach
of contract wherein a utility's performance of its legally imposed
and contractually adopted obligations are examined and applied
to a given set of facts. [O]nly where the available administrative
remedies are adequate with respect to the alleged injury sustained
and the relief requested should exhaustion of administrative
remedies be required before seeking damages in court.
Morrow v. Bell Tel. Co. of Pa., 479 A.2d 548, 554-55 (Pa. Super. 1984)
(internal citations and quotation marks omitted).
Hatchigian contends that the matters set forth in the fourth amended
complaint "are almost entirely questions of law and statutory construction
which the [trial] court is well versed in adjudicating." Hatchigian's Brief at 18.
Hatchigian further argues that even if the PUC has subject matter jurisdiction
over some of the claims set forth, the trial court should have stayed the court
proceeding, rather than dismissing it in its entirety. Id. at 21.
The Commonwealth Court considered similar issues in Pettko v. Pa.
Am. Water Co. (PAWC), 39 A.3d 473 (Pa. Cmwlth. 2012).6 In that case,
Pettko, on behalf of himself and others similarly situated, filed a complaint in
6We recognize that cases decided by the Commonwealth Court are not binding
precedent on this Court. See Kraus v. Taylor, 710 A.2d 1142, 1144 (Pa.
Super. 1998) ("Although we frequently turn to the wisdom of our colleagues
on the Commonwealth Court for guidance, the decisions of that court are not
binding on this Court."). Pettko was initially appealed to this Court, but this
Court transferred it to the Commonwealth Court. In its opinion, the
Commonwealth Court stated that there was "no basis" for it to assume
jurisdiction over the appeal, but since no party objected to the transfer, it
decided the case. Pettko, 39 A.3d at 476 n.2. Moreover, in its analysis, it
relied upon Pennsylvania Supreme Court and Superior Court cases.
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the Court of Common Pleas of Washington County against PAWC challenging
its "billing practices, including practices relating to certain rate increases
approved by the PUC, and PAWC's alleged practice of rounding up, rather than
down, amounts for various components of its bills." Id. at 475-76. Notably,
Pettko set forth claims for breach of contract, conversion, and violations of the
UTPCPL.
PAWC filed preliminary objections averring, inter alia, that the PUC
"has primary and exclusive jurisdiction over Pettko's complaint." Id. at 477.
The trial court agreed, "dismissed Pettko's complaint, and transferred the
matter to the PUC." Id. Pettko appealed.
On appeal, the Commonwealth Court analyzed first whether the PUC
has primary jurisdiction. In doing so, it set forth the following.
When a trial court calls upon an administrative agency to
exercise its primary jurisdiction and evaluate a particular pertinent
issue, and the agency renders a determination, that adjudicatory
action has a binding, collateral effect upon the trial court's
proceedings, unless a party successfully challenges the
determination through the appeal process. Such determinations
by administrative agencies, therefore, serve more than a merely
advisory function. As we stated in County of Erie v. Verizon
North, Inc., 879 A.2d 357 (Pa. Cmwlth. 2005), under the
doctrine of primary jurisdiction, a trial court may "refrain from
hearing a case" over which it might otherwise have jurisdiction,
"where protection of the integrity of [a] regulatory scheme
dictates that the parties preliminarily resort to the agency that
administers the scheme for the resolution of disputes." County of
Erie, 879 A.2d at 363. "Once the administrative tribunal has
determined the issues within its jurisdiction, then the temporarily
suspended civil litigation may continue, guided in scope and
direction by the nature and outcome of the agency
determination." Elkin[ v. Bell Telephone Co. of Pa., 420 A.2d
371, 377 (Pa. 1980)].
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Our Supreme Court, however, admonished trial courts not
to abdicate judicial responsibility, and summarized the
circumstances in which the primary jurisdiction doctrine applies,
as follows:
[W]here the subject matter is within an agency's
jurisdiction and where it is a complex matter requiring
special competence, with which the judge or jury
would not or could not be familiar, the proper
procedure is for the court to refer the matter to the
appropriate agency. Also weighing in the
consideration should be the need for uniformity and
consistency in agency policy and the legislative intent.
Where, on the other hand, the matter is not one
peculiarly within the agency's area of expertise, but is
one which the courts or jury are equally well -suited to
determine, the court must not abdicate its
responsibility. In such cases, it would be wasteful to
employ the bifurcated procedure of referral, as no
appreciable benefits would be forthcoming.
Id. (footnote omitted).
Additionally, in County of Erie this Court confirmed the
notion that the nature of the claims a plaintiff brings is not
necessarily determinative of the question of whether the doctrine
of primary jurisdiction applies. In County of Erie, we quoted the
Superior Court's decision in Morrow, [supra], as follows:
"[W]hen a utility's failure to maintain reasonable and adequate
service is alleged, regardless of the form of the pleading in which
the allegations are couched, it is for the PUC, initially, to determine
whether the service provided by the utility has fallen short of the
statutory standard required of it." County of Erie, 879 A.2d at
364 (quoting Morrow, 479 A.2d at 550-51).
Pettko, 39 A.3d at 479-80 (some citations omitted).
On appeal, Pettko claimed that his "UTPCPL and common law claims do
not implicate any regulatory matters within the PUC's subject matter
competency." Id. at 480. He argued that PAWC's conduct was deceptive, and
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adjudicating such a claim does "not require the exercise of the PUC's
expertise." Id. PAWC countered that Pettko's claims regarding PUC's "power
to regulate the rates a utility charges to a customer and the power to prescribe
regulations and practices with which utilities must comply" implicates the
primary jurisdiction of the PUC. Id. at 481. In addition, both Pettko and PAWC
referenced provisions of the tariff in making their arguments.
The Commonwealth Court analyzed the arguments presented and
concluded
that the question of whether a utility's manner of billing is in
compliance with a tariff is encompassed in the claims relating to
billing practices that Pettko has raised in his complaint.... If the
PUC reviews the tariff and PAWC's billing methodology and
concludes that the billing practices are compliant with the tariff,
the civil matter will be concluded, subject of course to appellate
review of the PUC's decision.
Id. at 482-83.
Thus, the Commonwealth Court determined that the PUC had primary
jurisdiction over the claim. The Commonwealth Court then went on to analyze
whether the PUC also had exclusive jurisdiction over the claim. "[U]nder the
doctrine of exhaustion of administrative remedies, an administrative agency
does not have exclusive jurisdiction unless it has the power to award relief
that will make a successful litigant whole." Id. at 484. The Commonwealth
Court concluded that although relief on some of Pettko's claims could be
provided by the PUC, it also concluded that relief on Pettko's UTPCPL claim
could not be granted by the PUC. The Commonwealth Court stated that, inter
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alia, the Public Utility Code "does not authorize the PUC to remedy fraudulent
conduct (unlike the UTPCPL)."Id. at 485. Thus, although the PUC had primary
jurisdiction over some of the claims set forth by Pettko, it did not have
exclusive jurisdiction over the UTPCPL claim "because the PUC has no power
to award relief, if it is appropriate, for that claim." Id. Accordingly, the
Commonwealth Court affirmed the trial court's order, concluding that the trial
court acted appropriately by transferring the matter to the PUC.
Applying this framework, we now turn to the case sub judice. As set
forth by the trial court, Hatchigian's primary complaint is that PECO either
failed to apply the provisions of its tariff to him and others similarly situated
or that the provisions of the tariff itself were unreasonable. See Fourth
Amended Complaint, 1111 24-33 (alleging that "[s]ection 9.2 of PECO's tariff"
"gives inadequate notice" to customers; and that "PECO's interpretation of
this tariff includes an unreasonable certification requirement"); id. at ¶ 39
(alleging that "PECO's exclusive reliance on computerized systems to execute
its broadly[ -]worded tariff makes the risk of erroneous deprivation [of
electrical service] substantial"); id. at ¶ 41 (alleging that "PECO is able to
collect customer funds pursuant to its tariff with impunity as if it were a public
agency, without any of the constraints in the [P]ublic [U]tility [C]ode;" and
id. at ¶ 46 (alleging that "PECO's one sided interpretation of the tariff
disregards the need to access channels for customer complaint in a meaningful
time and in a meaningful manner"). As the trial court concluded, it is these
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provisions that form the basis of Hatchigian's complaint. See Trial Court
Opinion, 8/27/2018, at 5 ("The overall thrust of the [c]omplaint ... challenges
[PECO's] termination procedures."). Hatchitgian's additional causes of action
all hinge on whether PECO either misinterpreted its tariff, applied the tariff to
Hatchigian unreasonably, or that the tariff itself is insufficient to provide due
process to PECO's customers.
It is well -settled that determinations regarding the adequacy and
application of a public utility tariff fall within the expertise of the PUC. See
Optimum Image, Inc. v. Philadelphia Elec. Co., 600 A.2d 553, 557 (Pa.
Super. 1991) ("Matters relating to tariff ... are within the particular expertise
of the PUC."); Morrow, 479 A.2d at 550 (same). In his brief, Hatchigian
acknowledges his complaint is two -fold: "(1) PECO and agents interfere[d]
with lease arrangements entered into by the Mandlord and [t]enant classes
and (2) PECO fail[ed] its duty to maintain a reasonable standard of care when
performing the disconnection and reconnection terms of the [s]ervice
[a]greement." Hatchigian's Brief at 31.
Instantly, there can be no doubt that resolution of the standard -of -care
issue will rely extensively upon whether the service agreement is in
compliance with the tariff. Such a determination is within the particular
expertise of the PUC. See State Farm Fire & Cas. Co. v. PECO, 54 A.3d
921, 927 (Pa. Super. 2012) (internal quotation marks omitted) (pointing out
that it is the "PUC's authority to determine the reasonableness of tariffs" and
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that the PUC has the "power to assess whether such provisions are compatible
with the [Public Utility C]ode and policies of the commission and consistent
with its regulatory scheme"). Moreover, to the extent that PECO is in
compliance with the tariff, and the tariff is reasonable, PECO cannot be
unreasonably interfering with a landlord -tenant relationship. Accordingly, we
hold that the PUC has primary jurisdiction over Hatchigian's complaint.
We now turn to consider whether the PUC has exclusive jurisdiction. As
in Pettko, Hatchigian raises a claim that PECO has violated the UTPCPL.
Accordingly, we hold that Hatchigian's UTPCPL claim does not fall within the
exclusive jurisdiction of the PUC, and the trial court erred in dismissing
Hatchigian's fourth amended complaint with prejudice. See Pettko, supra.In addition to the UTPCPL claim, Hatchigian also raises other claims, such as
an unconstitutional taking and public nuisance. To the extent that the PUC
finds in favor of Hatchigian and provides Hatchigian relief on the claims over
which it has jurisdiction, Appellant may then pursue his remaining claims in
the Court of Common Pleas.
Based on the foregoing, we vacate the order of the trial court and
remand for the entry of an order transferring the case to the PUC.
Order vacated. Case remanded. Jurisdiction relinquished.
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Judgment Entered.
Jseph D. Seletyn,
Prothonotary
Date: 8/6/19
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